To Our Shareholders and Investors

The Japanese economy continues to recover moderately, partly due to the effect of government policies, with an improving employment and income environment. This trend is expected to continue in the future. In terms of the future outlook, amid continuing global monetary tightening it is necessary to pay close attention to the impact of conflicts in Ukraine and the Middle East, and fluctuations in the financial and capital markets.

In the food industry, dining industry demand has been showing signs of recovery, partly because of an increase in inbound demand. On the other hand, although the momentum of sharply rising costs such as global raw materials and energy prices has eased, prices for various products remain high, impacting the purchasing behavior of consumers.

Amid this business environment, the Megmilk Snow Brand Group (the “Group”) has started the Megmilk Snow Brand Group’s Medium-term Management Plan 2025 with initiatives for “Creating seeds for new growth,” “Expanding quantity by utilizing infrastructure” and “Strengthening and supporting the domestic dairy production base” as three pillars for the Group’s business strategy.

In FY2023, the first year of the Medium-term Management Plan 2025, we prioritized and actively pursued key initiatives, namely “responding to higher costs” through improved productivity in all value chains, the review of the cost structure and appropriate price formation, “Maintenance and expansion of the top line” in response to environmental changes and “Creation of seeds for new growth and the launch of related initiatives” including overseas with a focus on Asia and in the EC business. In addition to the price revisions implemented since last year having taken root, we directed initiatives including the strengthening of marketing activities, driving both net sales and operating profit in the fiscal year ended March 31, 2024 to improvements over the previous year.

As a result, for the consolidated fiscal year under review, net sales amounted to 605,424 million yen (up 3.6% YoY), operating profit came to 18,460 million yen (up 41.4% YoY), ordinary profit totaled 19,888 million yen (up 37.3% YoY), and profit attributable to owners of parent was 19,430 million yen (up 112.8% YoY).

The Group’s Purpose is “To achieve food sustainability by leveraging our extensive expertise and functions (the milk value chain) developed through dairy, in line with our founding spirit of Kendo Kenmin ‘a healthy earth ensures human health’.” To this end, we will further explore the potential of dairy, continue to develop appealing dairy products and strengthen social systems that connect dairy farming to our customers. We will also utilize plant-based ingredients and food tech in the milk value chain, expanding new food options and possibilities and spreading those innovations overseas in a bid to bring food sustainability to the world.

We appreciate your continued unwavering support of the Group as we take these new steps forward.