4977.T

• Updated Corporate Philosophy and Long-Term Strategy

  • Revised the company's philosophy system to return to the core origin of converting unused resources and byproducts into valuable goods, clarify the long-term desired position, and consolidate overlapping existing guidance.
  • Adopted a new purpose: "UPCYCLING for the Future", a new vision: "Lead in Asia. Challenge the World", and a new 3C value system (Connect, Create, Challenge) to guide daily operations, with the core goal of becoming the Asia No.1 gelatin and collagen company by sales.

• Core Competitive Advantages

  • Built long-term trust with customers through a 100+ year brand, consistent safe, high-quality products, and reliable stable supply.
  • Strong customer responsiveness, supported by high technical capability to meet customized demands, and relevant international certifications (Halal, Kosher) that support global expansion.
  • Strict end-to-end quality process management developed to meet Japan's high quality requirements, which can be leveraged for global market expansion.

• Core Growth Strategies

  • Strengthen global competitiveness: Build direct sales distribution for gelatin to expand Japanese competitive advantage into Asia, build a global agency network and strengthen branding for collagen peptide, invest in global talent development, expand production capacity at the competitive India site and evaluate new production sites, cut costs via raw material optimization and domestic production bottleneck improvements, and use alliances to expand sales, strengthen supply chain collaboration, and provide technical support to partners.
  • Accelerate globalization: Target dominant market share in Japan and Asia (including India) by strengthening cost competitiveness and customer responsiveness, and secure a stable market position in North America and Europe by leveraging core strengths.
  • Develop new growth drivers: Prioritize early commercialization of collagen microfiber (CMF), the company's proprietary mass-produced nanotechnology collagen product with potential medical applications, and target 8 billion yen in revenue from biomedical and new businesses by the 2033 March fiscal year.

• Financial and Operational Enablers

  • Capital allocation: Significantly increase strategic investment primarily for global capacity expansion, increase total planned cumulative operating cash flow to 41 billion yen over the 6-year period to 2033, allocate 25 billion yen to strategic investment (2.9x current levels) and 8 billion yen to shareholder returns (2.2x current levels), and raise the target dividend on equity (DOE) to 4.0% by 2033.
  • Strengthen foundational capabilities: Implement human capital management aligned with strategic goals, strengthen global headquarters functions, develop local and global talent, advance sustainability aligned with the company's upcycling purpose, and address prioritized material issues (environment, sourcing, diversity) to drive social impact and enterprise value growth.

• Operational Restructuring

  • Completed liquidation of Nitta Gelatin USA in July 2025, then resolved to dissolve the remaining North American holding company Nitta Gelatin Holding in August 2025 to streamline management and move to direct control from Japan, which triggered a one-time 1 billion yen corporate tax adjustment that boosted interim net profit.

• 2024-2026 Mid-Term Management Plan (final fiscal year 2027 March): All targets were upwardly revised:
  • Operating profit target raised from 3.5 billion yen to 4.5 billion yen
  • ROE target raised from 9.0% to 10.0%
  • ROIC target raised from 7.0% to 9.0%
  • Final year DOE target raised from 2.0% to 3.0%
• 2026 March fiscal year full year guidance:
  • Net profit attributable to parent shareholders was upwardly revised from 2.1 billion yen to 3.1 billion yen, driven by the 1 billion yen one-time corporate tax adjustment from the North American holding company liquidation
  • All other full-year financial forecasts were maintained at initial projected levels, with a confirmed full-year operating profit target of 4.0 billion yen
• Dividend guidance for 2026 March fiscal year was upwardly revised: Annual dividend per share raised from 24 yen to 30 yen (a 6 yen increase), bringing the projected full-year DOE to 2.5%, toward the mid-term final year target of 3.0%
• Long-term guidance for 2033 March fiscal year:
  • Targets set at 80 billion yen in consolidated revenue, 10 billion yen in operating profit, 12.5% operating margin, 13.0% ROE, and 12.0% ROIC
  • Targets 8 billion yen in revenue from the new biomedical and new business segment, and double overseas revenue with a large increase in the share of sales from Asia (including India)

1. Gelatin: -7.3% year-over-year revenue decline. Sales were down due to lower photo-grade gelatin sales in Japan and lapped prior year inventory liquidation after production shutdown in North America, but food and capsule-grade gelatin remained solid in Japan, and both soft and hard capsule-grade gelatin performed well in India. 2. Collagen Peptide: -2.1% year-over-year revenue decline. Sales decreased in Japan due to lower customer product demand, but demand for protein bar applications remained strong in North America, and demand stayed solid in India and other Asian markets. 3. Food Materials: -6.9% year-over-year revenue decline. The decrease was driven by ongoing product portfolio restructuring to improve overall profitability. 4. Biomedical: +11.6% year-over-year revenue growth. Japanese sales declined due to lower production volumes at a major customer, but overseas sales grew strongly to offset this decline. The overall company interim total revenue was 18.499 billion yen, -6.3% year-over-year, with operating profit of 2.324 billion yen (+9.2% YoY), ordinary profit of 2.388 billion yen (+21.2% YoY), and net profit attributable to parent shareholders of 2.214 billion yen (+171% YoY, boosted by a 1 billion yen corporate tax adjustment from North American holding company liquidation).

There is no explicit discussion of material current operational failures or new incremental risks in the provided transcript. The only external challenge noted is the need to compete against low-cost imported gelatin in global markets, which the company plans to address by leveraging its core strengths in quality, reliability, and customer responsiveness.

There is no question and answer section included in the provided transcript.