Medium-term Business Plan

“Compass Rose 2024”

Basic Strategy

Through business activities based on the Nichirei Group Sustainability Policy: The Nichirei Pledge (see illustration below), the Nichirei Group aims to improve economic and social value by conducting management that pursues capital efficiency while fulfilling its social responsibilities as a company that supports good eating habits and health.

Group Strategies

Realizing Sustainability Management

Help to resolve social issues through our business; pursue capital efficiency

(1)Create new value
  • Use cooling power to develop ingredients and provide products that offer new health value.
  • Utilize digital technology to provide new services and information that make meals better.
  • Promote innovation activities by creating frameworks for generating and cultivating new value.
(2)Strengthen ESG response
  • Implement ESG due diligence for core suppliers.
  • Expand use of renewable energy.
  • Continue to strengthen corporate governance.
  • Introduce an ESG index target achievement system for executive compensation.
(3)Conduct business portfolio management
  • Set cost of capital and target ROIC for each business.
  • Promote the PDCA cycle by setting KPIs for profit margin and asset turnover.
  • Consider business evaluation and resource allocation based on ROIC.
(4)Grow core businesses and improve low-profit businesses
  • Improve profitability of processed foods through pricing strategies.
  • Improve capital efficiency of temperature-controlled logistics by increasing third-party logistics, transportation and delivery and proactively utilizing assets held by other companies.
  • Restructure marine products business and rebuild the earnings base of the bioscience business.

Allocation of Management Resources

(A)Growth investment
  • ¥61.5 billion total Group growth investment

    Processed foods: ¥16.5 billion
    Temperature-controlled logistics: ¥43.5 billion

(B)Overseas expansion
  • ¥130.0 billion in overseas sales (+10%)

    Processed foods: ¥51.0 billion
    Temperature-controlled logistics: ¥63.8 billion

  • 20% overseas sales ratio
(C)New business
  • Allocate resources to R&D, DX and marketing to create new value
(D)Environmental measures
  • ¥29.2 billion investment in environmental measures

    Installation of solar power generation equipment
    Investment in equipment upgrade for conversion to natural refrigerants

(E)Promotion of IT and DX
  • ¥8.7 billion in information-related investment
  • Promote business innovation using digital technology
(F)Human resource development
  • Increase number of human resources with skills in digital technology, global operations and sustainability
  • Conduct initiatives for reskilling

Financial/Non-Financial Targets

Financial Targets FY2025 plan vs. FY2022 CAGR
Net sales 660 +57.3 3.1%
(Overseas sales) 130.0 +32.4 10.0%
Operating profit 37.0 +5.6 5.6%
(Operating margin) 5.6% +0.4 pts.
Ordinary profit 37.8 +6.1 6.1%
Profit attributable to owners of parent 24.5 +1.1 1.6%
Profit per share ¥190 or more
EBITDA 65.0 +12.5 7.4%
(EBITDA margin) 9.8% +1.1 pts.
ROIC 7% or higher
ROE 10% or higher
Non-Financial Targets
Creating new value
  • Provide high-value-added products
  • Create new businesses
Sustainable procurement
  • Procurement rate in accordance with guidelines
  • Implementation rate of ESG due diligence
Climate change countermeasures
  • 30% reduction in CO2 emissions
  • Natural refrigerant ratio
Securing and developing a diverse array of human resources
  • Ratio of female managers
  • Investment in education/training

Overview of Capital Expenditures

  • Strengthen competitive advantages by continuing concentrated investment in processed foods and temperature-controlled logistics to increase production capacity and number of storage facilities.
  • Increase investment in environmental measures to help achieve a sustainable society.

Capital Expenditures in Each Business Plan

Capital Expenditures in Each Business Plan

Capital Expenditures

Main Details
Processed foods:
¥38.7 billion
  • Increase production capacity for cooked rice products
  • Enhance production line for processed chicken and other products
  • Invest in environmental measures (elimination of CFCs, etc.)
  • Replace aging equipment
Temperature-controlled logistics:
¥64.9 billion
  • Build new refrigerated warehouses (metropolitan areas in Japan)
  • Invest in environmental measures (conversion to natural refrigerants, upgrades to energy-saving equipment, etc.)
  • Build new refrigerated warehouses (Europe)
Group total: ¥120.0 billion
Details of Investment in Environmental Measures
Investment in environmental measures:
Total ¥29.2 billion (including construction of new refrigerated warehouses)
  • Introduction of solar power generation equipment: ¥5.0 billion
  • Upgrading to natural refrigerant equipment: ¥11.3 billion
  • Upgrading to other energy-saving equipment, etc.

Financial Strategies

  • Allocate operating cash flow to investment in core businesses for future growth and returns to shareholders.
  • Provide ongoing, steady dividend increases with a target dividend on equity (DOE) of 3%.
  • Conduct flexible share buy-backs based on a comprehensive assessment of financial condition and the free cash flow outlook.
  • Set a D/E ratio of 0.5 as a yardstick from the viewpoint of financial soundness and capital efficiency.

Allocation of Operating Cash Flow (Plan)

Allocation of Operating Cash Flow (Plan)

Financial Condition and Cash Flow

(Billions of yen)

  POWER UP 2018 WeWill
Compass Rose 2024
Cash flows from investing activities 102.0 119.6 142.0
Cash flows from financing activities -49.6 -82.5 -109.0
Free cash flow 52.4 37.0 33.0
Dividends paid 11.7 17.7 21.0
Share buybacks 23.0 10.0
Total return ratio 60% 43%
D/E ratio (including leased debt) 0.5 times 0.5 times

Strategies by Business

  • Processed Foods Business
    Achieve sustainable growth by restoring profitability and establishing new profit drivers.
  • Marine Products Business
    Concentrate management resources on competitive products to improve capital efficiency and profitability.
  • Meat and Poultry Products Business
    Expand sales of differentiated products using “kodawari” ingredients*.
  • Temperature-controlled Logistics Business
    Help to resolve social issues and strengthen the business foundation for the next generation to improve future capital efficiency.

(Billions of yen)

    FY2022 results FY2025 plan vs. FY2022 CAGR
Net sales Processed Foods 244.2 275.0 +30.8 4.0%
Marine Products 67.7 44.0 -23.7 -13.4%
Meat and Poultry 80.3 95.0 +14.7 5.8%
Logistics 224.5 260.0 +35.5 5.0%
Real Estate 4.3 4.8 +0.4 3.6%
Other 4.2 6.7 +2.5 17.0%
Adjustment -22.6 -25.5 -2.9
Net sales 602.7 660.0 +57.3 3.1%
Operating profit Processed Foods 14.2 18.4 +4.2 8.9%
Marine Products 1.0 1.0 +0.0 1.5%
Meat and Poultry 1.2 2.0 +0.8 19.6%
Logistics 14.6 16.2 +1.6 3.5%
Real Estate 1.7 2.2 +0.5 10.0%
Other -0.3 0.5 +0.8
Adjustment -0.9 -3.3 -2.4
Operating profit 31.4 37.0 +5.6 5.6%

Consolidated Net Sales and Operating Profit

Consolidated Net Sales and Operating Profit