To Our Shareholders and Stakeholders

I would like to take this opportunity to convey my heartfelt thanks to shareholders for their ongoing support.
The Morinaga Milk Group offers unique products derived from advanced milk technology to provide health value, tastiness, and delightfulness, achieving a balance between the resolution of societal issues and improvements in profitability, and contributing to the creation of a society in which people can enjoy happiness and fulfillment.

Address the short-term business environment while promoting strengthening of the profit base from a medium- to long-term perspective

Protracted international conflicts, changes in policy centered on Europe and the United States, and other factors pose downside risks to the global economy. In Japan, although improvements in the employment and income environment have led to a moderate recovery in business conditions, the negative impact of higher prices on household finances and companies has been persistent, and trends in the domestic and global situation continue to require close monitoring.
Under these circumstances, based on Medium-term Business Plan 2022–2024, we endeavored to provide health value and tastiness and delightfulness that are unique to the Morinaga Milk Group. In particular, against the backdrop of increasing health needs in and outside Japan, the Group continued to work on expanding products in the “five domains of wellness”—including yogurt and functional ingredients—that took into consideration various health issues, and on promoting the value of the Company’s own bifidobacteria.
Because we were also affected by higher costs in all aspects of operations, such as raw material prices, logistics costs, and personnel expenses, as in the previous fiscal year, the Group continued to pursue such initiatives as revising prices, improving product mix through the expansion of high profit-margin businesses and products, and reviewing Group-wide costs.
In the Global Business, we promoted initiatives focused on generating stable profit contributions from the core MILEI operations and expanding the probiotics business, and succeeded in achieving growth in profit for the business as a whole. Although recently acquired subsidiaries in Pakistan, the United States, and Vietnam recorded impairment losses driven mainly by significant changes in their business environments, we are moving ahead with initiatives to promote the optimal business development for each, in preparation for growth going forward.
As a result of these measures during the fiscal year under review, which was the final year of Medium-Term Business Plan 2022–2024, consolidated net sales rose 2.6% year on year to ¥561.2 billion, operating profit rose 6.5% year on year to ¥29.7 billion, and ordinary profit rose 6.3% year on year to ¥29.9 billion. On the other hand, profit attributable to owners of parent declined 91.1% year on year to ¥5.5 billion, despite the recording of extraordinary income derived from sales of investment securities (cross-shareholdings) and non-current assets (land). This was due to the ¥65.7 billion in extraordinary income recorded in the first quarter of the previous fiscal year resulting from the sale of the site of the former Tokyo Plant, and the recording of impairment losses at overseas subsidiaries.

Achieving the Morinaga Milk Group 10-year vision, and preparing for what we aim to become beyond that

In 2019, the Group created its 10-year Vision, outlining a plan for the next decade under which the Group aimed to become “a company that balances delicious and pleasurable food with health and nutrition,” “a global company that exerts a unique presence worldwide,” and “a company that persistently helps make social sustainability a reality,” which provided the basis for our efforts in Medium-term Business Plan 2022–2024.
The three years of Medium-Term Business Plan 2022–2024 saw various changes in the environment, including the spread and subsequent containment of COVID-19, prolonged international disputes, and the impact on household finances and corporate earnings of rising prices in Japan. In response, the Group took steps at each point in time to maintain and improve profitability, while simultaneously executing initiatives focused on the future. Although we fell slightly short of the numerical targets of ¥570.0 billion in consolidated net sales and ¥30.0 billion in operating profit, I have felt a strong response to the steady progress we have made in strengthening the business foundation and putting in place the pieces required for growth over the medium to long term. We also worked to strengthen shareholder returns, which were a management priority under Medium-Term Business Plan 2022–2024, not only by periodically acquiring and canceling treasury shares but also by increasing dividends every year. For FYE March 2025, we raised annual dividends per share to 90 yen, an increase of 30 yen from the previous fiscal year.
FYE March 2026 sees the start of the new Medium-Term Business Plan 2025–2028. The four years of Medium-term Business Plan 2025–2028 will also be a period for realizing the Morinaga Milk Group 10-year Vision, and for moving forward with initiatives aimed one step into the future, at transforming itself into “A Clearly Differentiated and Highly Profitable Company.” I believe that in order to overcome dizzying alterations in our environment and achieve a brighter future, we must transform ourselves ahead of such changes, meeting the expectations of our stakeholders, including shareholders, by opening up new paths and by continually challenging ourselves in the face of change. I humbly request your continued support.