Message from Management to Investors

To Our Shareholders and Stakeholders

In 2017 we will celebrate the 100th anniversary of the founding of Morinaga Milk Industry. A company cannot survive without the trust of its many stakeholders, including shareholders, investors, customers, and suppliers. As we have in the past 100 years, we will work steadily and with humility to contribute to the creation of a society in which people can enjoy health and fulfillment. We fully intend to continue to be recognized as a company that is needed and trusted by our stakeholders over the next 100 years.
Every day, we work to deliver delicious products that contribute to various forms of value, including health and beauty, and enhancement of day-to-day life. We have pushed the boundaries of dairy-related research for decades. But, it only counts when it means something to stakeholders. So, while progress can be measured in many ways—one of course being financial—the best measure is the smiles on the faces of those we touch.

Major Income Growth in the Year Ended March 2016

As in the previous fiscal year, we faced challenging business conditions in the year ended March 2016. Those challenges included soaring prices for imported raw materials because of the weakness of the yen, as well as increases in the price of milk in Japan. One of the ways in which we adapted to this environment was to adjust the prices and quantities of some of our products.
Our products, including Thick Greek Yogurt PARTHENO and MOW ice cream, continued to benefit from strong consumer support. We also made steady progress with our continuing efforts to reduce operating costs. Despite the challenges in our business environment, we achieved substantial income growth. Consolidated net sales increased by 1.1% year on year to ¥601.5 billion, and operating income by 110.4% to ¥14.3 billion. Profit attributable to owners of parent was 154.0% higher at ¥10.6 billion.

Strong Start under the Medium-Term Management Plan—Results Exceed Forecasts

Our five-year medium-term management plan covers the period to the year ending March 2020. Our targets for the plan’s final year are net sales of ¥640 billion, operating income of ¥22.5 billion, and profit attributable to owners of parent of ¥12 billion.
The year ended March 2016 was the first year under the plan. We made an excellent start, with results exceeding our forecasts. If possible, we want to achieve our targets for the final year ahead of schedule.

Management Policies for the Next 100 Years

Since our founding in 1917, Morinaga Milk Industry has continued to provide a multiplicity of value to consumers, including delicious taste experiences, enjoyment, health, and new lifestyle ideas. We are determined to achieve growth over the next 100 years by continuing to create new value for the times ahead. We look forward to the continuing support and guidance of our stakeholders.

President and Representative Director

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