Kewpie : Annual Report 2023（2,790KB）

Annual Report

2023

December 1, 2022 to November 30, 2023

Kewpie Corporation

The information contained in this report is derived from Kewpie Corporationʹs (the ʺCompanyʺ) Annual Securities Report in Japanese filed with the Commissioner of the Financial Services Agency on February 29, 2024 in accordance with the Financial Instruments and Exchange Law, and has been translated into English for the convenience of readers outside Japan.

Document Title:	Annual Securities Report
Corporate Name:	KEWPIE KABUSHIKI-KAISHA
English Corporate Name:	Kewpie Corporation
Name and Title of Representative:	Mitsuru Takamiya
	Representative Director
	President and Chief Executive Corporate Officer
Location of Head Office:	4-13, Shibuya 1-chome,Shibuya-ku,
	Tokyo 150-0002, Japan
Contact:	Takumi Tomita
	Corporate Officer
	In charge of Accounting and Finance
Telephone:	[phone]

Table of Contents

I.				Page
Outline of the Company	1
	1.	Principal Management Indexes	1
	2.	Nature of Business	3
	3.	Outline of Associated Companies	5
	4.	Employees	9
II.	Business Operations	11
	1.	Management Policy, Business Environment, Tasks Ahead, Etc	11
	2.	Sustainability Approach and Initiatives	15
	3	Operational Risks	24
	4.	Management Analysis of Financial Position, Operating Results and Cash Flows	32
	5.	Material Contracts	37
	6.	Research and Development	37
III.	Facilities and Equipment	42
	1.	Investments in Facilities and Equipment	42
	2.	Principal Facilities and Equipment	43
IV.	The Company	46
	1.	Shares	46
		(1) Number of authorized and issued shares	46
		(2)	Stock acquisition rights	46
		(3)	Exercise of bonds with stock acquisition rights containing a clause for exercise price
			revision	46
		(4)	Principal shareholders	47
	2.	Acquisition of the Company's Treasury Stock	48
	3.	Dividend Policy	49
	4.	Corporate Governance	50
V.	Financial Information	90
	Consolidated Financial Statements	91
		(1)	Consolidated financial statements	91
		(2)	Other	144
	Independent Auditors' Audit Report and Internal Control Audit Report	145
VI.	Stock Information of Reporting Company	149

Outline of the Company

1

1. Outline of the Company

1. Principal Management Indexes

1. Consolidated principal management indexes for the five years ended November 30, 2023

Period ended		Nov. 2019	Nov. 2020	Nov. 2021	Nov. 2022	Nov. 2023
Net sales	(millions of yen)	545,723	531,103	407,039	430,304	455,086
Ordinary income	(millions of yen)	33,275	28,989	29,698	27,249	20,490
Profit attributable to owners of parent	18,698	11,591	18,014	16,033	13,174
	(millions of yen)
Comprehensive income	(millions of yen)	17,646	14,347	24,546	32,635	23,989
Total net assets	(millions of yen)	276,753	287,356	269,301	294,623	311,303
Total assets	(millions of yen)	444,309	454,276	381,003	403,384	426,006
Net assets per share	(yen)	1,646.73	1,676.05	1,767.14	1,925.54	2,027.90
Earnings per share	(yen)	130.72	81.04	128.17	115.34	94.78
Earnings per share - diluted	(yen)	-	-	-	-	-
Equity ratio	(%)	53.0	52.8	64.5	66.4	66.2
Return on equity	(%)	8.1	4.9	7.4	6.2	4.8
Price earnings ratio	(times)	18.6	26.8	18.0	21.2	27.2
Cash flows from operating activities	43,916	34,955	38,533	27,199	23,725
	(millions of yen)
Cash flows from investing activities	(29,720)	(26,039)	(20,277)	(15,947)	(17,721)
	(millions of yen)
Cash flows from financing activities	(4,602)	5	(18,701)	(16,812)	(9,514)
	(millions of yen)
Cash and cash equivalents at the end of the fiscal	56,777	65,777	66,703	65,335	62,433
year	(millions of yen)
Number of regular full-time employees,	15,452	16,003	10,719	10,696	10,642
and average number of temporary employees
[9,404]	[9,268]	[5,166]	[5,089]	[4,811]
in brackets
(Notes) 1. Earnings per share - diluted is not presented because of no issue of potential shares.

1. In the fiscal year ended November 30, 2021, the Company finalized the provisional accounting treatment for business combinations. Accordingly, the principal management indexes pertaining to the fiscal year ended November 30, 2020 have been retroactively adjusted to reflect the finalization of the provisional accounting treatment.
2. In the fiscal year ended November 30, 2021, K.R.S. Corporation (ʺKRSʺ) and its subsidiaries have changed from being consolidated subsidiaries to being affiliated companies accounted for by the equity method, as the Company sold part of the shares of KRS.
3. The Company has adopted the ʺAccounting Standard for Revenue Recognitionʺ (ASBJ Statement No. 29, March 31, 2020) and relevant guidance effective as of the beginning of the fiscal year ended November 30, 2022. Accordingly, the principal management indexes pertaining to the fiscal year ended November 30, 2022 onward have been adjusted to reflect the adoption of said accounting standard and relevant guidance.

2 Outline of the Company

1. Non-consolidatedprincipal management indexes for the five years ended November 30, 2023

Period ended			Nov. 2019	Nov. 2020	Nov. 2021	Nov. 2022	Nov. 2023
Net sales	(millions of yen)	192,881	176,734	178,513	184,084	192,867
Ordinary income	(millions of yen)	17,245	16,214	15,518	15,110	9,496
Profit	(millions of yen)	12,453	9,794	11,009	12,644	9,776
Paid-in capital	(millions of yen)	24,104	24,104	24,104	24,104	24,104
Total number of issued shares			150,000,000	150,000,000	141,500,000	141,500,000	141,500,000
Total net assets	(millions of yen)	153,101	156,326	151,519	158,264	163,565
Total assets	(millions of yen)	259,373	250,929	254,560	252,832	257,028
Net assets per share		(yen)	1,070.33	1,092.88	1,090.03	1,138.56	1,176.71
Annual dividends per share, and interim		45.0	40.0	47.0	47.0	50.0
dividends per share in brackets	(yen)	[20.0]	[20.0]	[20.0]	[20.0]	[23.0]
Earnings per share		(yen)	87.06	68.47	78.33	90.96	70.33
Earnings per share - diluted		(yen)	-	-	-	-	-
Equity ratio		(%)	59.0	62.3	59.5	62.6	63.6
Return on equity		(%)	8.3	6.3	7.2	8.2	6.1
Price earnings ratio		(times)	27.9	31.8	29.5	26.9	36.7
Dividend payout ratio		(%)	51.7	58.4	60.0	51.7	71.1
Number of regular full-time employees,		2,447	2,426	2,394	2,408	2,332
and average number of temporary employees
[738]	[569]	[537]	[538]	[499]
in brackets
Total shareholder return			89.9	82.0	88.6	95.3	101.9
(Comparative index: Dividend-included
[104.5]	[110.6]	[124.1]	[131.2]	[161.0]
TOPIX)		(%)
Highest stock price		(yen)	2,782	2,496	2,813	2,558	2,648
Lowest stock price		(yen)	2,303	1,783	2,123	2,083	2,116

(Notes) 1. Earnings per share - diluted is not presented because of no issue of potential shares.

1. The highest and lowest stock prices are those of the Prime Market of the Tokyo Stock Exchange from April 4, 2022, and of the First Section of the Tokyo Stock Exchange before that date.
2. The Company has adopted the ʺAccounting Standard for Revenue Recognitionʺ (ASBJ Statement No. 29, March 31, 2020) and relevant guidance effective as of the beginning of the fiscal year ended November 30, 2022. Accordingly, the principal management indexes pertaining to the fiscal year ended November 30, 2022 onward have been adjusted to reflect the adoption of said accounting standard and relevant guidance.

Outline of the Company

3

2. Nature of Business

The Kewpie Group (the ʺGroupʺ) consists of the Company, fifty-seven (57) consolidated subsidiaries, twenty-six (26) affiliated companies, and one other associated company. The Groupʹs principal businesses are manufacturing and wholesaling of food products.

The business categories of the Group and the position of the Company and these principal associated companies in the relevant businesses are summarized below.

The business categories shown below are the same categories as the reporting segments.

Business category	The Company and principal	Major handling items / services
associated companies
	Kewpie Corporation
	Kpack Co., Ltd.	Mayonnaise and dressings
Retail Market	Dispen Pak Japan Co., Inc.
Deria Foods Co., Ltd.	Salads, delicatessen foods and others
	Shunsai Deli Co., Ltd.
	Salad Club, Inc.	Packaged salads and others
	Kewpie Corporation	Mayonnaise and dressings
Food Service	Kewpie Egg Corporation	Liquid egg, egg products and others
Zen-noh Kewpie Egg-station Co., Ltd.
	Kewpie Jyozo Co., Ltd.	Vinegar and others
	Kewpie Corporation
	Hangzhou Kewpie Corporation
Overseas	BEIJING KEWPIE CO., LTD.	Mayonnaise and dressings
	Q&B FOODS, INC.
	KEWPIE (THAILAND) CO., LTD.
Fruit Solutions	Aohata Corporation	Jams, fruit processed foods and others
Fine Chemicals	Kewpie Corporation	Hyaluronic acid and others
Common Business	Shiba Seisakusyo Co., Ltd.	Sale of food production equipment

The Group Business Network chart on the next page shows the relationships of the business activities of Group companies.

Aohata Corporation, a consolidated subsidiary, is listed on the Standard Market of the Tokyo Stock Exchange.

4 Outline of the Company

(Group Business Network)

Business partners

Retail Market

Kewpie Corporation Deria Foods Co., Ltd.

Salad Club, Inc.

Shunsai Deli Co., Ltd.

Kpack Co., Ltd.

Potato Delica Co., Ltd. Seto Delica Co., Ltd.

Hanshin Delica Co., Ltd. Dispen Pak Japan Co., Inc.

Other

Kewpie Group

Food Service

Kewpie Corporation

Kewpie Egg Corporation

Zen-noh Kewpie Egg-station Co., Ltd. Kewpie-Egg World Trading Co., Ltd.

Kewpie Jyozo Co., Ltd.

Co-op Foods Co., Ltd.

Deft Co., Ltd.

Other

Overseas

Kewpie Corporation

Hangzhou Kewpie Corporation

Q&B FOODS, INC.

BEIJING KEWPIE CO., LTD.

KEWPIE (THAILAND) CO., LTD.

KEWPIE VIETNAM CO., LTD. KEWPIE MALAYSIA SDN. BHD.

Other

Fruit Solutions

Aohata Corporation

Fine Chemicals

Kewpie Corporation

Tou Kewpie Co., Ltd.

Common Business

Kewpie Corporation

San-ei Provisions Co., Ltd.

TO AD KEWPIE CO., LTD. Shiba Seisakusyo Co., Ltd.

K.System Co., Ltd.

Other

Outline of the Company

5

3. Outline of Associated Companies

1. Parent companyNot applicable.
2. Consolidated subsidiaries

							Relationship with the Company
		Paid-in		Percentage
			Interlocking
Trade name	Address	capital/	Business	of our	directors		Finance	Operating	Lease
equity	lines	voting	(D) or		from the
			transactions	transactions
		investment		rights	corporate		Company
					auditors (A)
Kewpie Egg	Chofu-shi,	350	Production and sale		D or A	1	1,339	Purchase of products and	Leases of
Corporation	million	of liquid, frozen and	100.0	million	offices and
(Notes 1 & 4)	Tokyo	yen	processed egg		Employees	7	yen	raw materials, etc.	factories
Deria Foods Co.,	Chofu-shi,	50	Sale of salads and		D or A	3		Sale of goods and	Leases of
Ltd.	million	100.0	None
Tokyo	delicatessen foods	Employees	6	products	offices
(Notes 1 & 4)	yen
Kewpie Jyozo Co.,	Chofu-shi,	100	Production and sale		D or A	1		Purchase of products and	Leases of
million	100.0	None
Ltd.	Tokyo	of vinegar	Employees	4	raw materials	offices
yen
San-ei Provisions	Chofu-shi,	57	Sale of products for					Sale of products and	Leases of
million	66.2	Employees	4	None
Co., Ltd.	Tokyo	food service use	purchase of raw materials	offices
yen
		50	Production and sale				102
Co-op Foods Co.,	Chofu-shi,	of bottled, canned					Leases of
million	100.0	Employees	3	million	Purchase of products
Ltd.	Tokyo	and retort pouch	offices
yen				yen
		foods
Co-op Foods Co.,	Kumamoto-shi,	10	Production,	51.0	D or A	1
million	processing and sale	None	None	None
Ltd.	Kumamoto	(51.0)	Employee	1
yen	of foods
Zen-noh Kewpie	Goka-machi,	100	Production and sale		D or A	2	1,449		Leases of
Egg-station Co.,	Sashima-gun,	million	of dried egg and	51.4	million	Purchase of raw materials
Employees	3	factories
Ltd.	Ibaraki	yen	liquid egg		yen
		4,800
Q&B FOODS, INC.	California, USA	thousand	Production and sale	100.0	Employees	3	None	None	None
		U.S.	of condiments	(100.0)
		dollars
KIFUKI U.S.A.		7.17	Investment in and
Delaware, USA	U.S.	management of U.S.	100.0	Employees	2	None	None	None
CO., INC.
	dollars	associates
Soka Delica Co.,	Soka-shi,	98	Production and sale				260	Sale of goods and
million	100.0	Employees	5	million	None
Ltd.	Saitama	of delicatessen foods	products
yen				yen
Hashikami	Hashikami-cho,	10	Production and					Consignment of	Leases of
Kewpie	Sannohe-gun,	million	processing of foods;	100.0	Employees	2	None
production	factories
Co., Ltd.	Aomori	yen	outsourced work
Dispen Pak Japan	Minami-	140	Production and sale		D or A	1			Leases of
Ashigara-shi,	million	of foods, subdividing	51.0	None	Purchase of products	offices and
Co., Inc.	Employees	4
Kanagawa	yen	and packing work				factories
Shiba Seisakusyo	Kawasaki-ku,	20	Production of					Purchase of machinery
Kawasaki-shi,	million	machinery and	100.0	Employees	4	None	None
Co., Ltd.	and equipment
Kanagawa	yen	equipment
Potato Delica Co.,	Azumino-shi,	50	Production of frozen	100.0			604		Leases of
million	Employees	6	million	Purchase of products
Ltd.	Nagano	and chilled foods	(0.9)	factories
yen			yen
	Shibuya-ku,	10	Sale of condiments,					Sale of goods and	Leases of
Deft Co., Ltd.	million	frozen and processed	100.0	Employees	4	None
Tokyo	products	offices
	yen	foods
	Machida-shi,	50	Consigned clerical					Consignment of clerical	Leases of
K.System Co., Ltd.	million	80.0	Employees	4	None
Tokyo	work	work	offices
	yen

6 Outline of the Company

							Relationship with the Company
		Paid-in		Percentage
			Interlocking
Trade name	Address	capital/	Business	of our	directors		Finance	Operating	Lease
equity	lines	voting	(D) or		from the
			transactions	transactions
		investment		rights	corporate		Company
					auditors (A)
	Goka-machi,	30	Production and sale		D or A	1			Leases of
Kpack Co., Ltd.	Sashima-gun,	million	100.0	None	Purchase of products
of condiments	Employees	6	offices
	Ibaraki	yen
Tosu Kewpie Co.,		10	Production and					Consignment of	Leases of
Tosu-shi, Saga	million	processing of foods;	100.0	Employees	2	None
Ltd.	production	factories
	yen	outsourced work
Hangzhou Kewpie	Zhejiang	140	Production and sale	72.0
million	Employees	6	None	None	None
Corporation	Province, China	of condiments	(72.0)
yuan
Seto Delica Co.,		30	Production and sale	100.0			300	Sale of goods and
Seto-shi, Aichi	million	Employees	2	million	None
Ltd.	of delicatessen foods	(100.0)	products
	yen			yen
Ishikari Delica Co.,	Teine-ku,	30	Production and sale	100.0				Sale of goods and
Sapporo-shi,	million	Employees	3	None	None
Ltd.	of delicatessen foods	(100.0)	products
Hokkaido	yen
Hanshin Delica	Itami-shi,	10	Production and sale	100.0				Sale of goods and	Leases of
million	Employees	6	None
Co., Ltd.	Hyogo	of delicatessen foods	(100.0)	products	factories
yen
	Chofu-shi,	300	Processing and sale		D or A	2		Sale of goods and	Leases of
Salad Club, Inc.	million	51.0	None	offices and
Tokyo	of fresh vegetables	Employees	2	products
	yen			factories
BEIJING KEWPIE		211	Production and sale	72.0
CO., LTD.	Beijing, China	million	Employees	6	None	None	None
of condiments	(72.0)
(Note 1)		yuan
Tosu Delica Co.,		10	Production and sale	100.0				Sale of goods and	Leases of
Tosu-shi, Saga	million	Employees	4	None
Ltd.	of delicatessen foods	(100.0)	products	factories
	yen
Kewpie Ai Co.,	Machida-shi,	30	Consigned clerical					Consignment of clerical	Leases of
million	100.0	Employees	5	None
Ltd.	Tokyo	work	work	offices
yen
Kitakami Delica	Kitakami-shi,	20	Production and sale	100.0				Sale of goods and
million	Employees	5	None	None
Co., Ltd.	Iwate	of delicatessen foods	(100.0)	products
yen
	Shibuya-ku,	10	Planning, production						Leases of
K.SS Co., Ltd.	million	and services for sales	100.0	Employees	4	None	Consignment of sales
Tokyo	offices
	yen	promotion
KEWPIE		268	Production and sale
(THAILAND) CO.,	Bangkok,	of condiments,		D or A	2
million	45.3	None	None	None
LTD.	Thailand	vinegar, salads and	Employees	4
baht
(Note 5)		processed foods
Shunsai Deli Co.,	Akishima-shi,	20	Production and sale	100.0				Sale of goods and	Leases of
million	Employees	8	None
Ltd.	Tokyo	of delicatessen foods	(100.0)	products	factories
yen
KEWPIE	Malacca,	57	Production and sale
MALAYSIA	million	70.0	Employees	4	None	None	None
Malaysia	of condiments
SDN. BHD.	ringgit
KEWPIE	Binh Duong,	256.4	Production and sale					Sale of goods and
VIETNAM CO.,	billion	80.0	Employees	4	None	None
Vietnam	of condiments	products
LTD.	dong
PT KEWPIE	West Java,	532.9	Production and sale	60.0
INDONESIA	billion	Employees	3	None	None	None
Indonesia	of condiments	(1.7)
(Note 1)	rupiah
Kewpie-Egg	Chofu-shi,	100	Sale of egg and	100.0					Leases of
World Trading	million	Employees	5	None	Purchase of raw materials
Tokyo	processed egg	(51.0)	offices
Co., Ltd.	yen
Green Message	Yamato-shi,	100	Processing and sale		D or A	1	535
million	51.0	million	Sale of products	None
Co., Ltd.	Kanagawa	of fresh vegetables	Employees	4
yen		yen
Tou Kewpie Co.,	Shibuya-ku,	10						Sale of goods and
million	Mail-order business	70.0	Employees	4	None	None
Ltd.	Tokyo	products
yen

Outline of the Company

7

							Relationship with the Company
		Paid-in		Percentage
			Interlocking
Trade name	Address	capital/	Business	of our	directors		Finance	Operating	Lease
equity	lines	voting	(D) or		from the
			transactions	transactions
		investment		rights	corporate		Company
					auditors (A)
Aohata	Takehara-shi,	915	Production and sale	44.8					Leases of
Corporation	million	of jams and fruit	None		None	Purchase of products
Hiroshima	[11.1]		offices
(Notes 3, 5 & 6)	yen	processed foods
Nantong Kewpie	Jiangsu	184	Production and sale	72.0
Corporation	Province,	million	of vinegar, processed	Employees	6	None	None	None
(72.0)
(Note 1)	China	yuan	egg and salads
							Liabilities
Mosso Kewpie		160,300					for
	thousand	Production and sale				guarantee
Poland Sp. z o.o.	Puchały, Poland	100.0	Employees	4	None	None
(Note 1)		Polish	of condiments				1,774
	zloty					million
							yen
TO AD KEWPIE	Shibuya-ku,	4	Agency service for					Advertising agency	Leases of
CO., LTD.	million	advertising, publicity,	50.0	Employees	4	None
Tokyo	services	offices
(Note 5)	yen	and exhibitions
			Financial
Kewpie China		723	management and
	business
Corporation	Beijing, China	million	100.0	Employees	5	None	None	None
management of the
(Note 1)		yuan
	Companyʹs local
			subsidiaries in China
Guangzhou		270
Kewpie	Guangdong	Production and sale	72.0
million	Employees	6	None	None	None
Corporation	Province, China	of condiments	(72.0)
yuan
(Note 1)
							Liabilities
		50					for
Kewpie	Manila,					guarantee
million	Sale of condiments	100.0	Employees	3	None	None
Philippines, Inc.	Philippines	peso					117
						million
							yen
Tsukuba Egg	Tsukuba-shi,	100	Production and sale	51.0
Processing	million	Employees	2	None	None	None
Ibaraki	of processed egg	(51.0)
Corporation	yen
KEWPIE	Singapore,	1 million						Sale of goods and
SINGAPORE PTE.	Singapore	Sale of condiments	80.0	Employees	2	None	None
Singapore	products
LTD.	dollars
Kewpie Trading	Amsterdam,	181					242
thousand	Sale of condiments	100.0	Employees	3	million	Sale of products	None
Europe B.V.	the Netherlands
		Euro					yen

(3) Equity-method affiliates

							Relationship with the Company
		Paid-in		Percentage
			Interlocking
Trade name	Address	capital/	Business	of our	directors		Finance	Operating	Lease
equity	lines	voting	(D) or		from the
			transactions	transactions
		investment		rights	corporate		Company
					auditors (A)
Summit Oil Mill	Mihama-ku,	97	Production of		D or A	1		Sale of products and
Chiba-shi,	million	49.0	None	None
Co., Ltd.	vegetable oil	Employee	1	purchase of raw materials
Chiba	yen
Kunimi	Kunisaki-shi,	80	Production and sale				65
Nosankako	million	of frozen and chilled	20.6	Employees	2	million	Purchase of products	None
Oita
Co., Ltd.	yen	foods				yen
			Plan, development,						Leases of
To Solutions Co.,	Chofu-shi,	90	sale, maintenance					Consignment of	offices and
million	and operations	20.0	Employees	3	None	rental of
Ltd.	Tokyo	calculation work, etc.
yen	support of computer					office
			systems						equipment