Ajinomoto Co.,Inc. Q4 FY2026 earnings call

· CEO Nakamura presented on FY26 forecast and initiatives for enhancing corporate value. · In fiscal 2025, sales and business profit set new records, with healthcare and others, food products businesses seeing profit increases. · In FY2026, expected new records in sales and business profit, with growth planned in seasoning and food, frozen food, and bio-infinite chemicals businesses. · Under new executive structure, will raise human resources and organization capabilities, evolve ASDB initiatives, and continue endeavors to achieve 2030 roadmap ahead of schedule. · Explained financial results analysis, including differences in business profit between fiscal 24 and 25 by segment. · Discussed overseas B2C business growth, frozen food business details including recall situation and mid-term plan, functional materials business progress, biopharma services and ingredients business status, etc.

In fiscal 2025, sales were 1 trillion 583.7 billion yen, setting a new record, with business profit at 181.1 billion yen also a new record. Seasoning and food: Despite revenue decrease in solutions and ingredients, secured increased revenue overall from sauce and seasoning business in Japan and overseas and coffee business in Japan, business profit increased by 8.9 billion yen. Frozen food: Overall sales on par with previous year but business profit decreased due to temporary factors in North America like tariffs, SNAP program impact, cold waves, and product recalls. Healthcare and others: Business profit had significant increase, with functional materials, amino acids for pharmaceuticals and food, and CDMO services seeing profit growth.

· Expect to again post new records in both sales and business profit in fiscal 2026, reaching 108% of previous fiscal year level. · Expect increased revenue and profit in all segments of seasoning and food, frozen foods, and healthcare and others. · Profit attributable to the owners of the parent company is expected to be 120 billion yen. · Impact of Middle East situation on procurement costs is not incorporated in forecast, with potential impact of about 30 billion yen, and will respond flexibly to minimize impact. · Plan to achieve new records in sales and business profit in 2026, with growth in various segments, and will update on Middle East impact quarterly.

· Risk in procurement area: Restrictions on procurement of packaging materials and other inputs due to supply tightness, primarily in food product business. · Risk in cost area: Increases in prices of main raw materials, sub-raw materials, food ingredients, NAFTA prices, energy prices (electricity, gas), logistics and transportation costs. Need to address through cost reduction and flexible pricing.

Q: Regarding ABF, what proportion of AI applications demand for ABF and contribution in 2030?

A: AI applications account for 15 to 20% currently, potentially doubling from 2030, with existing AI servers and networks continuing to be mainstay demand for 2031 onwards.

Q: For functional materials, any sign of slowdown or cost higher than previous year?

A: Based on customers' information and WSTS, plan is a bit conservative, and will update plan based on latest information.

Q: Gap between EPS and normalized EPS?

A: Big gap in FY24 due to sales of Altea and its impairment, and other factors like foreign exchange effects, equipment and facilities writing off.

Q: Impact of Middle East situation, details and countermeasures?

A: Negative impact estimated at 30 billion yen, will take proper measures including cost reduction and flexible pricing.

Q: Biopharma services business profit increase difference from last year?

A: Steadily making progress, with small molecules capturing good customers, Agiface and other media molecule business growing, Forge making great contribution with larger number of customers and commercialization progress.

Q: ABF capacity and scope for growth?

A: Current capacity of Kawasaki and Gunma plants is full but can grow, GIFU plant to start operation in FY2032 to meet demand after 2030.

Q: Cost of goods sold pressure impact on business divisions and seasonal price increase timings?

A: Impact on main and sub-materials, all businesses affected, but each division differently, and will update on Middle East impact quarterly.

Q: Functional materials price philosophy and track record?

A: No track record of universal price increases due to raw material costs, co-create with customers and decide prices case-by-case.

Q: Middle East impact compared to Ukraine case and capability to pass on costs?

A: Middle East situation changing day by day, rolling forecast reflects situation, and will look into acceptability of price increases.

Q: Fourth quarter sauce and seasonings profit increase reason and plan for this year?

A: Profit increase in fourth quarter due to several factors, and plan to make growth investment like marketing to create more profit next year.

Q: Frozen food ROIC and potential?

A: Aim to improve ROIC by 3% plus from current level by 2030, and will work on three directions to enhance frozen food business.