Report for the First Six Months of the 45Th Term from May 1, 2016 to October 31, 2016
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Report for the First Six Months of the 45th Term From May 1, 2016 to October 31, 2016 Securities Code: 2910 To Our Shareholders Looking Back at the First Six Months of the 45th Term Kozo Iwata, Chairman, President and CEO During the first half of the 45th term, we achieved net sales and going forward, we will work to grasp the changes in the of 24,773 million yen (102.1% year-on-year) and operating consumption structure, and develop a new business plan income of 1,261 million yen (142.0% year-on-year), both of that takes into account not only existing actual stores, but which are record-high numbers. also the establishment of online shops and free standing I would like to offer my sincere thanks for the continued stores. support of our shareholders and customers during this We have expanded our facilities every nine years, first half of the term. Furthermore, I am truly happy that completing the first stage of the Shizuoka factory in 1991, we were able to achieve our goals without confronting the second stage in 2000, and the third stage in 2009. any major setbacks thanks to the earnest efforts of our As a response to possible significant changes in consumer employees. needs with regards to our products, brought about by The summer of 2016 not only brought a record-breaking changes in the consumption structure, with careful succession of excessively hot days, but also saw many planning, we are considering the fourth stage of the producing areas affected by flood damage and a lack of Shizuoka factory as well as expanding facilities at the Kobe sunlight due to heavy rains, including Hokkaido which factory. In an era where the working-age population is experienced major damage from the impact of three steadily declining, we are further automating our factories typhoons, the highest number ever to hit that region in and making greater quality improvements through recorded history. the skillful combination of handmade techniques and In the month of October alone, the impact from typhoons mechanization in order to save energy. affected approximately 15 million yen worth of net sales. After the Great Hanshin-Awaji Earthquake of 1995, we had Furthermore, the upsurge in vegetable prices led to an no option but to halt operations at the Kobe factory and increase of 15 million yen in the prices of raw materials. partially transfer production from Kobe to the Shizuoka However, the said upsurge in vegetable prices also turned factory as our alternative production site. Today, as we out to be the main factor of excellent results in our salad experience frequent earthquakes in various regions, sales, as we were able to stably supply them, which caused including the Kumamoto Earthquakes, we will use our an increase in net sales and contributed to profit. This is past experience in Kobe and proceed with upgrading both thanks to our producers, with whom we share a common our Shizuoka and Kobe factories as a part of our efforts in philosophy and values, and with whom we have built future risk management, to ensure alternate production at relationships of trust throughout the years. I admire their either factory to some extent in the event of such disaster. dedication, and I am grateful for their tremendous efforts The kanji Chinese characters for “meal” can be seen as and cooperation in ensuring the stable and consistent comprising three characters which can be interpreted as supply of secure, safe and high-quality raw materials. “improving people.” In the era we live in today, Japan is In the retail industry, stores located in railway station the first among developed nations to experience a super terminal buildings and in shopping areas within railway aging society with a declining birthrate. We are facing an stations were further developed, and compounds such as era where the relationship between food and health is malls, as well as online retailing, have become widespread. increasingly important to enjoy a healthy and fulfilling As a result, the consumption structure is changing significantly. life in the later years, which entails food education from The Company has also worked to further enhance customer childhood. We will change the dining table, a place where satisfaction. For example, we experimented with a new people gather, to become a place where people appreciate retailing method that sells packed products only, instead of healthy, delicious and enjoyable communication. the conventional method focused on face-to-face selling, in As the Mirai Salad Company, we shall not rest on the shopping areas within metropolitan railway stations such success of our first half business results. We will further as “RF1 in Lumine Shinjuku,” and “RF1 in Tokyo Station focus our energies as well as remain diligent in our City GranSta.” Moreover, in the Kansai area, for stores such management while upholding our values of “health, as “RF1 in Hankyu Department Store Umeda,” we installed security and safety, deliciousness, freshness, service and cases to display packed products at the customers’ eye-level environment.” and within easy reach, in order to save customers the stress We look forward to the continued patronage, support and of queuing and to prevent product imbalance. Next year, cooperation of all our shareholders. January 2017 1 *The numbers for the first six months of the 41st term are our non-consolidated results, Financial Highlights because we did not have consolidated subsidiaries at that time. We developed our lineup of packaged products so that customers can shop quickly even during the evening rush hour, and continued the introduction of multi-level open cases at POINT stores located in railway station terminal buildings and in shopping areas within railway 1 stations in our aim of creating sales floors that satisfy our customers. We worked on new product development in order to increase the number of items purchased per customer and creating new demand. In conjunction with this, we made proposals for high POINT value-added products with strictly selected ingredients and cooking methods for the “O-bon” 2 Festival in summer and the consecutive public holidays in autumn when people gather together. Although the number of customers visiting our stores temporarily decreased due to unseasonable weather, including the series of typhoons that hit during August, our focus on POINT sales of salad products, which are the Company’s forte, combined with upsurge in vegetable 3 prices since September, led to increases in net sales and operating income. Net income attributable Net sales Operating income to owners of the parent 24,773million yen 1,261million yen 890million yen (Year-on-year increase of 2.1%) (Year-on-year increase of 42.0%) (Year-on-year increase of 63.9%) (Millions of yen) ■■ First six months ■ Full year (Millions of yen) ■■ First six months ■ Full year (Millions of yen) ■■ First six months ■ Full year 60,000 3,000 2,000 2,548 48,835 48,956 48,877 49,935 1,621 1,500 1,894 1,976 40,000 2,000 1,185 1,641 1,000 881 935 890 23,586 23,983 23,660 24,272 24,773 1,261 20,000 1,000 888 543 616 562 604 500 365 321 297 0 0 0 The 41st The 42nd The 43rd The 44th The 45th The 41st The 42nd The 43rd The 44th The 45th The 41st The 42nd The 43rd The 44th The 45th term term term term term term term term term term term term term term term Overview of Factors affecting consolidated balance sheets consolidated cash flows Dividends per share (Millions of yen) (Millions of yen) ■ Increase ■ Decrease (yen) ■■ Interim ■ Year-end 50.0 Total Total liabilities Effect of Total Total liabilities Cash flows from 50 assets assets and net assets and net assets exchange rate 45.0 operating activities change on cash and 30,945 31,104 30,945 31,104 1,565 cash equivalents 40.0 40.0 40 Current liabilities Current liabilities 11,377 (8) 11,701 5,568 5,133 Cash flows Cash flows Current Current from investing 32.0 from financing 27.0 assets assets Non-current activities 30 25.0 Non-current activities 22.0 22.0 (Estimate) 17,096 17,161 liabilities liabilities (707) (525) 438 567 20 Net assets Net assets 16.0 24,937 25,403 (Estimate) Non-current Non-current assets assets Cash and Cash and 10 18.0 18.0 18.0 18.0 13,848 13,942 cash equivalents cash equivalents at beginning of period at end of period 9.0 0 The 44th The end of The 44th The end of The first half of the 45th term The 41st The 42nd The 43rd The 44th The 45th term the second quarter term the second quarter term term term term term of the 45th term of the 45th term The Company executed a two-for-one stock split The end of the second quarter of the 45th term effective May 1, 2016. The dividends figures stated Equity ratio: 81.7% for the periods prior to the 44th term are the actual Net assets per share: 956.44 yen amounts before the stock split. 2 Net Sales by Brand for the First Six Months of the 45th Term (Consolidated) ● We proposed healthy diets and healthy Net eating habits centered on salad, with sales16,677million yen the theme of food and health, by (Year-on-year decrease of 0.2%) distributing leaflets educating consumers about food combinations and the value of seasonal ingredients, as well as widely communicating Composition ratio of net sales health-related information. 67.3% ● At the time when vegetable prices RF1 soared, our 3 0-ingredient green salad 167 stores and other mainstay products were popular among many of our customers.