Nichirei : Medium-term Business Plan WeWill 2021 (102KB/2 pages)PDF

Financial Strategy

Medium-term Business Plan WeWill 2021

In an increasingly unstable global economy, continuing volatility is expected in exchange rates, raw material prices and energy costs. In Japan, as a labor shortage drives up various costs, greater diversification of consumer behavior is expected due to changes in household composition and lifestyles.

• Under this medium-term business plan, we are making capital expenditures for growth and infrastructure enhancement, mainly in the processed foods and temperature-controlled logistics businesses, while maintaining an accurate understanding of the changing business environment. By doing so, we aim to realize sustainable profit growth and create new value that supports good eating habits and health.

General Strategy

1. Realize sustainable profit growth
2. Improve capital efficiency and expand shareholder returns
3. Create new value that supports eating habits and health

Investment strategy

1. Proactive capital investment to enhance competitiveness
2. Strengthen initiatives from a long-term perspective

Financial strategy

1. Improve financial soundness
2. Enhance shareholder returns

Strategies by Business ▼Pages 44-57

Operating profit/Depreciation and amortization/EBITDA

	(Billions of yen)
60.0											57.2
50.0			49.4			52.6
								22.2
			19.7
40.0
		18.4
															.６
30.0											%
									profit	CAGR	approx
20.0		Operating
					32.9			35.0
					31.0
10.0
0
					2020			2021					2022 (FY)
															(Plan)
		Operating profit			Depreciation and amortization		EBITDA

Note: Fiscal years (FY) indicate years ended March 31.

Consolidated Targets

Billions of Yen	FY2020 Result	FY2021 Result	FY2022 Plan	Year-on-Year Change	Growth Rate
Net sales	584.9	572.8	600.0	27.2	4.8%
Overseas sales
79.7	76.9	77.3	0.4	0.5%
incl. in above
Operating profit
31.0	32.9	35.0	2.1	6.2%
Operating profit/
5.3%	5.8%	5.8%	0.0%	-
Net sales
Profit
19.6	21.2	23.0	1.8	8.4%
EBITDA
49.4	52.6	57.2	4.6	8.7%
ROE
10.9%	10.9%	10% or higher	-	-
EPS
¥146.16	¥159.19	¥172.59	¥13.40	8.4%

42 Nichirei Group Integrated Report 2021

Progress of Main Measures

Main Measures	Progress over Two Years and Outlook

Management

Increase profitability by strengthening the management base and reforming the business structure

Accelerate expansion of overseas business

Allocate resources for sustainable growth

Strengthen measures for longer-term growth

Contribute to the realization of a sustainable society by resolving social issues through our businesses

Improve capital efficiency and expand shareholder returns

• Continued earnings growth in mainstay processed food and logistics businesses amid a rapidly changing business environment
• Adapted to "new normal" and achieved expanded sales, leading to sustainable growth
• Improving earnings in marine products and bioscience remains an issue
• Despite impact from COVID-19, results in the United States and Europe remain firm
• Expansion in overseas sales expected to fall short of plan
• Investments made to expand production capacity and for large-scale refrigerated warehouses
• Content of investments revised in response to changes in the business environment, but three-year total for capital expenditures projected to be in line with plan
• Built Innovation Management System (IMS) and launched new business development
• Operations reforms in the logistics business proceeding according to plan, while pursuing more efficient and advanced operations, focusing on digital transformation (DX) for the corporate group as a whole
• Material matters for the corporate group identified, with Group targets and KPIs set for the current fiscal year and incorporated into the business plan
• Further strengthen response to ESG related issues to meet growing social pressure
• Dividend level raised and stable dividend maintained
• ROE projected to remain at 10% or higher during the business plan period

Strategy Financial Story Creation Value Strategy

Main Measures for FY2022

1	Respond to changes in the business environment due to COVID-19,
focusing on expanding sales and cost management

Business

Sales expansion using new approach

Strict cost management

Capital expenditures for sustainable growth

• Strengthening existing mainstay products and services
• Focus on measures for growing business categories and new market development
• Utilize IT to enhance efficiency, and spend funds effectively
• Invest as planned in R&D and human resource development for the foundations of growth
• Steadily make growth investments in Japan and overseas, and invest to strengthen business foundations

Achieving for Initiatives Strategy Society Sustainable a

2 New business creation/Strengthen ESG response

New business creation

Strengthen ESG response

• Provide business development acceleration support (acceleration program) based on IMS, and promote commercialization of new ideas
• For climate change measures, implement low-carbon policies and pursue a response based on the TCFD declaration
• Focus on further measures for "sustainable food procurement" with consideration for the environment and human rights

Data

Nichirei Group Integrated Report 2021 43