Medium-Term Management Plan (Fiscal 2016-2018)
Considering the mounting instability in the global economy, we expect that fluctuations in exchange rates, energy prices, and other costs will continue. In Japan, we anticipate that labor shortages will become more severe due to demographic changes, while consumption patterns will diversify with changes in family composition.
The new business plan aims to contribute to the resolution of social issues through business expansion, while accurately gauging the changes in the operating environment to ensure stable and steady growth. It will continue capital expenditures in the Processed Foods and Logistics businesses as the previous plan did, and enhance enterprise value by strengthening the foundations for the growth of the corporate group.
- Ensure sustainable earnings growth and raise capital efficiency.
- Pursue continued expansion in scale for overseas business.
- Further enhance the Nichirei Group's capabilities for quality assurance.
- Continue to strengthen corporate governance and other ESG-related efforts.
- Focus more intently on utilizing diverse personnel
Fiscal 2018 Group Targets (Revised on Nov 1, 2016)
|Net sales:||567.0 billion yen|
|Operating income:||28.6 billion yen|
|Net income:||18.2 billion yen|
|Total capital investment over three years (including leasing)||90.5 billion yen|
Capital from operating cash flow and asset liquidation will be utilized for investments for growth and strengthening business foundations, and for shareholder returns through dividends and stock buy-backs.
The basic policy for shareholder returns is to emphasize maintaining a stable dividend based on the consolidated dividend on equity (DOE) ratio, and to conduct flexible share buy-backs in consideration of capital efficiency.
- ROE is forecast to be greater than 10%.
- Provide a continual, stable dividend with a target DOE of 2.5%.
- Consider share buy-backs of around 10 million shares (approx. 7% of total issued shares).*
*Based on the number of total issued shares prior to the share consolidation, which is planned as of October 1, 2016. Also, a partial advance buy-back already started in March 2016.
Strategies for Operating Companies
1 Processed Foods (Nichirei Foods Group)
- Optimize the domestic production structure to raise asset efficiency and profit margins.
- Develop products and expand sales activities to meet diversifying consumption patterns.
- Expand business operations overseas, concentrating mainly on North America.
2 Marine Products and Meat & Poultry Products (Nichirei Fresh Group)
- Establish a stable earnings structure centered on differentiated merchandise and optimally processed products.
3 Logistics (Nichirei Logistics Group)
- Expand the scale of the logistics network business.
- Increase earnings by maximizing utilization of principal storage facilities in major urban areas, and of transport functions in regional areas.
- Expand the business foundation overseas, mainly on Europe.
4 Biosciences (Nichirei Biosciences)
- Accelerate development of molecular diagnostic agents for cancer.
Fiscal 2018 Net Sales and Operating Income by Segment
|Segment||Net sales||Operating income|
|Processed Foods||215.0 billion yen||14.0 billion yen|
|Marine Products||75.0 billion yen||0.8 billion yen|
|Meat & Poultry Products||85.0 billion yen||0.8 billion yen|
|Logistics||203.0 billion yen||11.0 billion yen|
|Real Estate||4.5 billion yen||2.0 billion yen|
|Others||6.1 billion yen||0.6 billion yen|
|Adjustments||(21.6) billion yen||(0.6) billion yen|
|Total||567.0 billion yen||28.6 billion yen|