Year-End Report April 1, 2018 to March 31, 2019
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To Our Shareholders The 195th Period Year-end Report April 1, 2018 to March 31, 2019 CONTENTS Interview with President ....................................... 1 Topics ................................................................ 5 Product Profiles.................................................... 7 Consolidated Financial Results............................. 9 Company Profile and Share Information ............. 10 Back Cover: Annual Shareholders Meeting: Notice of Resolutions Shareholder Information Securities Code: 2001 strengthening its business foundation for the purpose of wheat flour in June and December 2018, respectively. reducing costs. We are promoting vigorous investment in As a result, both shipped volume and sales of wheat flour promising fields and re-establishment of production sites, with exceeded the level for the previous year. Shipped volume the aim of achieving sustainable growth. and sales of wheat bran, a byproduct, also exceeded the previous year’s level. Looking back at FY2019, what do you think of In the Food segment, net sales grew due to increased sales of Interview with President Q the business environment? food ingredients, processed food and frozen food products, as well as the expansion of the ready-made meals business. As a result, consolidated net sales for the fiscal year In the Other segments, net sales exceeded the previous To Our Shareholders A under review increased by 3.7% year on year to year’s level as a result of an increase in inquiries about ¥335,399 million, operating income increased by 11.5% to large-scale construction work in the engineering business. With the delivery of this “Year-end Report for the 195th Period” to you, we would ¥11,222 million, ordinary income increased by 10.1% to Regarding the year-end dividend, we have decided to pay Representative Director, ¥13,065 million, and profit attributable to owners of parent ¥17 per share (annual dividend of ¥32 per share), up ¥2 like to express our sincere appreciation for your continued support. President and COO Masayuki Kondo increased by 10.5% to ¥8,455 million. The Flour Milling, Nippon Flour Mills Co., Ltd. (NIPPN) announced, on May 10, 2019, its (ordinary dividend), to show our acknowledgement of Food and Other segments all reported increases in net sales continuous support from our shareholders. consolidated financial results for the fiscal year ended March 31, 2019 (FY2019). and profits. I will explain about the outcome in FY2019 and outlook of FY2020. In line with the increase of government sales prices (tax inclusive) of imported wheat by 3.5% and by 2.2% on Interview with President average for the five key products in April and October 2018, respectively, we revised the sales prices of commercial-use FY2019 Business Summary and Future Outlook Achieving a revenue increase for the eighth consecutive year while continuing aggressive FY2019 Consolidated Financial Highlights FY2020 Full-Year Forecasts (April 1, 2018 to March 31, 2019) (From April 1, 2019 to March 31, 2020) investment in growth areas, and expecting further revenue growth ¥350.0 billion Net Sales ¥335.3 billion Net Income per ¥108.78 Net Sales Looking back at FY2019, what do you think of about possible slowing of the world economy increased, and (Up 3.7% y-o-y) Share (Up 4.4% y-o-y) Q the business environment? the effect on the outlook of the Japanese economy is a Operating concern. Operating Income ¥11.2 billion Total Assets ¥293.3 billion ¥12.0 billion (Up 11.5% y-o-y) Income (Up 6.9% y-o-y) During the fiscal year ended March 31, 2019, the The food industry is operating in a challenging A Japanese economy remained on a moderate recovery environment due to labor shortages and an increase in Ordinary Income ¥13.0 billion Net Assets ¥154.9 billion Ordinary ¥13.5 billion track, supported by improvements in corporate earnings and logistics, materials and other costs, amid the prevailing (Up 10.1% y-o-y) Income (Up 3.3% y-o-y) the labor market owing to the impact of the government’s frugality of consumers. economic policy and the Bank of Japan’s ongoing monetary In these circumstances, in order to respond to the unceasingly Profit Attributable Net Assets per Profit Attributable ¥8.4 billion ¥1,961.17 ¥9.0 billion easing. However, triggered by the change in the tone of the changing business environment, in Japan, the Group is to Owners of Parent (Up 10.5% y-o-y) Share to Owners of Parent (Up 6.4% y-o-y) Chinese economy due to the U.S.-China trade war, concerns 1 2 Please tell us about how you are responding to higher sales. Please tell us about your initiatives for For the year ending March 31, 2020, management forecasts Q to the diversifying needs for food. Strong demand for flaxseed-related food products, which Q environmental protection. consolidated net sales of ¥350.0 billion (up 4.4% year on contribute to extension of healthy life expectancy, an year), operating profit of ¥12.0 billion (up 6.9% year on In the home-use product category, in the context of important indicator in an aging society, continued, and we In the frozen food operations, we are expanding use year), ordinary profit of ¥13.5 billion (up 3.3% year on A consumers’ increasing desire to spend less time offered a wide range of products, from raw materials to A of paper trays made of environmentally friendly raw year) and profit attributable to owners of parent of ¥9.0 cooking, we launched the Cho-hayayude series of processed foods. materials, such as PEFC-certified paper, for pasta billion (up 6.4% year on year). Interview with short pasta that is ready after boiling for just 80 seconds, and rice dishes. President the fastest product of its kind in the industry. Please tell us about the developments Moreover, we have expanded the scope of our ISO14001 Finally, do you have messages for In the home-use frozen foods category, we introduced new Q regarding the international business. certification for environmental management systems to Q shareholders? products featuring distinctive ingredients in the Oh’my cover our headquarters and all eight factories. Premium series that has the biggest sales in the Regarding the international business, the While striving to further strengthen competitiveness single-portion frozen pasta market. In addition, in the A construction of a premix plant for Nippon Flour What is your outlook regarding the A in each business field and expanding the Yokubari Plate series of complete well-balanced meals Mills (Shanghai, Jinshan) Co., Ltd. to meet growing Q performance in FY2020? international business, the Group will continue to consisting of a main dish and staples, we introduced demand for premix products in China was completed and it embrace new challenges with the aim of becoming a products suitable for breakfast. As a result of offering of started operation. In Thailand, NIPPN (Thailand) Co., Ltd., The food industry is facing various issues, among multifaceted global food enterprise. products corresponding to various dining scenarios, sales of a subsidiary, increased premix production capacity. A which labor shortages and the consequent rise in We will also continue strengthening our systems ensuring home-use frozen foods greatly exceeded the level for the Moreover, the construction of a frozen food production labor costs are particularly pressing. Meanwhile, in view of food safety and reliability for consumers and stable previous year. facility is planned. the shifting patterns of personal consumption, companies distribution. In the ready-made meals business, the construction of new need to respond swiftly in a market environment Your further support is greatly appreciated. plants started in the previous year was completed, leading undergoing structural change. Net Sales by Segment Changes in Consolidated Net Sales Capital Expenditure and Depreciation (FY2019) Flour Milling Segment Food Segment Other Segment Capital Expenditure Capital Other Segment (¥ billion) (¥ billion) (¥ billion) (¥ billion) Expenditure Depreciation 20 120 250 40 36.9 ¥36.9 billion 103.0 102.7 33.7 34.0 (11%) Flour Milling Segment 96.9 97.7 15.9 200 191.6 195.6 31.1 Ready-made 177.4 182.2 30 15 ¥102.7 billion Meals (31%) 80 12.0 Consolidated 150 10.1 Net Sales 20 10 Frozen Foods ¥335.3 billion 100 7.4 7.7 7.7 40 7.5 7.7 7.7 7.4 Food Segment 10 5 Ingredients 50 ¥195.6 billion (58%) Processed 0 0 0 0 Foods FY2016 FY2017 FY2018 FY2019 FY2016 FY2017 FY2018 FY2019 FY2016 FY2017 FY2018 FY2019 FY2016 FY2017 FY2018 FY2019 * Figures are rounded down to the nearest billion yen. 3 4 Topics The Group increased premix production capacity overseas. Notice of “Cookery Workshops for Shareholders 2019 Nagoya ” We are holding the Cookery Workshops for Shareholders, which have always been popular among participants, in Nagoya for the first time in two years. Each shareholder may bring up to one guest. We look forward to receiving your applications. Established supply systems in China and Thailand Date & time Friday, October 18, 2019 10:30 to 13:30 (Doors open at 10:10) The ending time may slightly vary more or less. Capacity 28 participants Construction of the premix plant of Nippon Flour Mills (Shang- Course details You will practice cooking, watch demonstrations and enjoy brief tastings with our products. hai, Jinshan) Co., Ltd. (hereinafter “Jinshan Nippn”) was Planned menu You will practice cooking dishes. Menu may change. completed and it started operation in October 2018. In Topics Thailand, NIPPN (Thailand) Co., Ltd. (hereinafter “NPT”), a subsidiary, increased premix production capacity. In China, in addition to the existing Nippon Flour Mills (Shang- hai) Co., Ltd, the construction of a premix plant of Jinshan • Salad with mashed tofu dressing • Anchovy tomato sauce with boiled • Marinated fried chicken with • Roasted green tea pound cake Subsidiary in China, Nippon Flour mackerel tartar sauce with sugar-glazed azuki beans Nippn (annual production capacity of 8,400 tons) increased Mills (Shanghai Jinshan) Co., Ltd.