Action to Implement Management that is
Conscious of Cost of Capital and Stock Price

Updated on May 23, 2025

Status of Relevant Initiatives

Management Conscious of Cost of Capital and Stock Price: Analysis of Current Situation

  • ROE and EPS improved mainly due to an increase in operating profit and the sale of cross-shareholdings
  • Share price growth has stalled, our PBR is below 1.0, and our PER remains low
  • ROE (%)

  • EPS (JPY)

  • PBR (Multiples)
  • PER (Multiples)
  • Calculated based on actual fiscal year-end results
  • The area enclosed by the dashed lines is excluded due to losses and/or abnormal values resulting from accounting issues associated with a subsidiary

Current Analysis of Capital Costs and Share Prices

  • Driven by profit growth and share buybacks, EPS grew 3.8-fold over the past 10 years
  • Meanwhile, our share price the share price rose only 1.2-fold during the same period. Our analysis attributes this gap to negative growth expectations

Current Analysis of PBR

  • Our return on capital is high compared to sector peers; issues are attributable to our PER, which reflects market expectations
  • Our analyses indicate low market expectations are due to perceptions of our growth potential, scale, liquidity, and approach to capital market engagement

Factors behind low expectations (issues raised during meetings with investors)

  • Growth potential of
    domestic food market
  • Market
    capitalization
  • Share
    liquidity
  • Balance sheet
    management
  • Conservative earnings
    projections

Balance Sheet Analysis

  • Investment securities decreased over three years while property, plant, and equipment remained level and current assets increased
  • Provided shareholder return of JPY14.0bn (JPY7.0bn in dividends and JPY7.4bn through share buybacks) and generated equity ratio increase of 5pp
  • ■ Assets

  • ■ Liabilities / Net Assets

Approach Toward Corporate Value Enhancement

  • Our PER is one of our most pressing strategic priorities
  • We aim to raise our anticipated rate of growth by improving earnings momentum (EPS), maintaining ROE, and strengthening investor communication

Medium-Term Management Plan 2027: Numerical Targets

(Billions of yen / %)
KPIs FY2024
actual		 FY2027
target
Growth potential Net sales 95.5 110.0
Profitability Operating profit
 Operating profit margin		 8.7
9.1%		 10.0
9.1%
EBITDA (Operating profit + depreciation) 11.9 14.2
Efficiency ROE 12.1% 10% or more
Shareholder return Payout ratio 30.3% 40% or more
Financial discipline Shareholder equity ratio 70.1% 60–65%
Governance Cross-shareholdings to net assets ratio 19.0% Less than 10%
Medium- to Long-Term Vision and Medium-Term Management Plan

Cash Allocation

  • Leveraging cash from operations and divestments of cross-shareholdings, we will proactively invest while enhancing shareholder return
  • When deemed in alignment with strategic needs or objectives, we will selectively utilize debt to finance strategic investments

Shareholder Return

  • We have raised our target consolidated dividend payout ratio
  • The Company will execute share buybacks with strategic flexibility

    • ■ Dividend policy

      Consolidated dividend payout ratio of
      at least 40%

    • ■ Share buybacks

      Conduct with strategic flexibility when deemed appropriate
      A FY2025 budget of JPY2.0bn has been allocated for share buybacks

  • ■ Dividends per Share (JPY) and Dividend Payout Ratio

Dividend

Key Points of Business Strategy and Non-Financial Strategy

Business strategy
    • To strengthen earning power and improve profitability over the medium to long term, we plan to invest approximately 2.5x more under Medium-Term Management Plan 2027 compared with the previous plan
    • Establish a strategic investment budget incorporating opportunities for mergers, acquisitions, and business alliances
  • Overseas
    • Expand our Overseas business—a key growth driver—through a new organizational structure integrating domestic operations
    • Restructure production lines in China and focus on rapidly ramping up operations at the new factory
  • Japan
    • The Domestic Food business aims to achieve a slightly higher growth rate than the overall processed food market
    • Strengthen solutions primarily targeting prepared meal, ready-to-eat product, and health-conscious markets
    • Enhance proposals that reduce food loss and provide functional alternatives for raw materials difficult to source reliably
    • Focus resources on core strengths in chemical products and promote value-added development
Non-financial strategy
  • Perform medium- to long-term research and development targeting the resolution of social issues
  • Establish HR systems consistent with our human capital policy
  • Strengthen group governance

IR

  • Under our previous medium-term plan, we established a suitable platform as a Prime Market-listed company
  • Under Medium-Term Management Plan 2027, we will reassess the strategic importance we ascribe to IR internally while striving to ensure a fair market valuation of our stock

■ Activities of Previous Medium-Term Plan

Steadily expanded our range of activities

Results achieved over three years
Disclosure enhancement
  • Began publishing integrated reports
  • Started disclosing information simultaneously in both Japanese and English
  • IR website redesign
Improving communication with investors
  • Annual engagement sessions: 25 → 98
  • Secured analyst coverage
  • Launched regular SR activities and overseas NDRs
  • Held more briefings for individual investors
Feedback for management
  • Delivered quarterly reports on dialogue content
  • Incorporated feedback into medium-term plan policies

■ Adjustment of IR System

References