To Our Shareholders and Stakeholders

We are sincerely grateful for the continued support of our shareholders.
We at Morinaga Milk Group aim to continue delivering our unique “health value” and “tastiness and delightfulness” to realize an affluent society with forever brighter smiles, and to balance resolution of social issues and improvement of sales growth and profitability.

Achieved increase in sales and profit due to successful revenue measures to cover cost increases

The international situation and the economy remain uncertain due to the prolonged situation in Ukraine, trends in the Middle East, and tight monetary policy around the world. Although the domestic economy is on a gradual recovery path due to a pickup in economic activity from the infectious disease scourge and inbound tourist demand, the negative impact of higher prices on household finances and companies continues to require close monitoring.
Under these circumstances, based on the Medium-term Business Plan 2022–2024, the Morinaga Milk Group is striving to provide health value and tastiness and delightfulness that are unique to it. In particular, against the backdrop of increasing health needs in and outside Japan, the Group has been expanding products in the “five domains of wellness,” including yogurt and functional ingredients, that take into consideration various health issues.
On the other hand, the impact of cost increases from the fiscal year ended March 31, 2023 continued, and in particular, the trade prices for raw milk was raised three times in April, August, and December 2023, further increasing costs. To counter this situation, further efforts were made to absorb the costs such as by revising prices, improving the product mix through expansion of high-profit-margin businesses and products, and reviewing Group-wide costs.
In the Global Business, although profit decreased due to a reactionary decline in MILEI GmbH, we moved forward with initiatives aimed at achieving growth over the medium to long term, such as by steadily getting business plans underway at the M&A implemented in Pakistan, the U.S., and Vietnam.
As a result of these efforts, consolidated net sales increased 4.1% year-on-year to 547.1 billion yen, operating profit increased 16.3% to 27.8 billion yen, ordinary profit increased 11.4% to 28.1 billion yen, and profit attributable to owners of parent increased 263.3% to 61.3 billion yen, due in part to an extraordinary income of 65.7 billion yen recorded in the first quarter from the sale of the former Tokyo Plant site.

Aiming to achieve the Medium-term Business Plan 2022–2024 by mobilizing the Group's strengths

The Group established the Morinaga Milk Group 10-year Vision in April 2019, setting out its vision for the next 10 years. Under the vision, the Morinaga Milk Group sees itself one decade ahead in terms of becoming: “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,” based on which we have established targets for the fiscal year ending March 31, 2029, aiming to achieve: an “operating profit margin of at least 7%,” an “ROE of at least 10%,” and a “Global Business sales ratio of at least 15%.”
Underpinned by this vision, we have established three basic policies for the Medium-term Business Plan 2022–2024, which are: “achieving sustainable growth by increasing the added value of our business,” “further strengthening our business base with an eye on the future,” and “financial strategies focused on efficiency.” And it is carried out in conjunction with the “Sustainability Medium- to Long-Term Plan 2030.”
The fiscal year that ended in March 2024 was positioned as an important year for preparations to achieve Medium-Term Business Plan 2022–2024, and despite headwinds in the form of repeated trade price revisions for raw milk and raw material price increases, we worked to further strengthen our corporate structure and business, and achieved higher sales and profits. The fiscal year ending March 31, 2025, is the final year of the plan, and while it goes without saying that we will work to raise profitability in the domestic business, we will also accelerate such initiatives as establishing a foundation for further growth in the Global Business, improving efficiency and generating synergies.
Based on the idea of “financial strategies focused on efficiency,” which is one of the basic policies of Medium-Term Business Plan 2022–2024, we will move forward with action to implement management that is conscious of cost of capital and stock price. Within this, based on the balance sheet policy update, we will pursue the optimal capital structure and enhance returns to shareholders. In the fiscal year ended March 31, 2024, we increased the dividend per share by 15 yen from the previous fiscal year to 60 yen, and also acquired and canceled approximately ¥10 billion of treasury shares. For the fiscal year ending March 31, 2025, we plan to increase the dividend per share by 30 yen from the previous fiscal year to 90 yen, and to implement acquisitions and cancellations of treasury shares of ¥10.0 billion (upper limit) for the second consecutive year. To provide more opportunities for returns to shareholders, in addition to the current year-end dividend, we will introduce interim dividends with a dividend record date of September 30.
Although in these times it is difficult to see what lies ahead, we will push forward to complete Medium-Term Business Plan 2022–2024, and in turn realize the Morinaga Milk Group 10-Year Vision. I humbly request the continued support of all our shareholders.