2016-2018 Kewpie Group’s Medium-term Business Plan

Achieve Dramatic Growth
by Taking on New Group Challenges

January 8, 2016

Kewpie Corporation* Figures less than the units indicated have been rounded off.
Also, percentages and differences are calculated in units of one million yen.

＝ Contents ＝
1. 2016-2018 Medium-term Business Plan
・ Group Management Policies
・ Performance Targets
・ Domestic Expansion and Overseas Expansion
・ Performance Targets and Strategies
by Business Segment
・ Investments and Return to Shareholders
2. Fiscal 2016 Plan
3. Reference Materials-1-

2016-2018 Medium-term Business Plan
Build on growth investment in 2013-2015 Medium-term
Business Plan to achieve higher income【2013-2015 Medium-term Plan】【2016-2018 Medium-term Plan】【From 2019 】

Ongoing growth
New stage of growth
Reinforce growthinvestments
Capital investment total:
89.6 ¥bn
Operating income: 26.4 ¥bn

Operating income:to 30.0 ¥bn range-2-

Operating income:to above 40.0 ¥bnGroup Management Policies
Group’s new challenges leads to dramatic growthTake up challenges
in new fields
Enhance costcompetitiveness

Making the most of our uniquecapabilities and an ability
to create new products,
markets, and demand

Createadded value

Strengthen ourmanagement base<Concept for 2016-2018 (Eighth) Medium-term Business Plan>

Total

Address seventh and eighth plans as a set
and speed up Group cooperation

Domestic

Solidify Condiments Products Business and enhance capacity ofother businesses to generate income

Overseas

Lay a foundation for growth in new areas
while accelerating growth in China and Southeast Asia

Investment

Focus on domestic Condiments Products Business-4- expansion
and overseas-3-Performance Targets
625.0 billion yen in net sales and 35.5 billon yen in operating income
11/15

11/18 Target

Increase(Decrease)

Annual average
growth rate

552.0 ¥bn
514.3
37.7
26.4 ¥bn
22.4
4.0

625.0 ¥bn
560.5
64.5
35.5 ¥bn
28.4
7.1

73.0 ¥bn
46.2
26.8
9.1 ¥bn
6.0
3.1

4.2%
2.9
19.6
10.4%
8.2
21.1

4.8%

5.7%

0.9%

－

Ordinary Income

27.3 ¥bn

36.3 ¥bn

9.0 ¥bn

10.0%

Net income attributable toparent company shareholders

17.0 ¥bn

20.2 ¥bn

3.2 ¥bn

5.9%

ROE (Return on equity)

8.3%

8.5%

0.2%

－

ROA (Return on assets)

7.5%

8.6%

1.2%

－

45.5 ¥bn

53.0 ¥bn

7.5 ¥bn

5.2%

Net Sales
Domestic
Overseas *2
Operating Income
Domestic
Overseas *2
Operating Income Ratio

income +EBITDA (Operating
Depreciation expenses)*1*1. The figure used for fiscal 2015 sales has been corrected for the impact of the new accounting method.
*2. Overseas figures cover the period from October through September and include exports from Japan(exports from Japan cover the period from December through November).

-4-

Factors Causing Increase (Decrease) in Operating Income(¥bn)

Operating Income

11/15

11/18 Target

Difference

26.4

35.5

9.1

1.6

*1 Depreciation expenses

Creating growth
opportunities(2.5)

Marketing expenses

(3.4)

*2

(sales promotion expenses and advertising expenses)

R&D expenses(0.7)(excluding depreciation expenses)

Increase in gross profit resulting
from increase in net sales

Material costs, etc.
(1.5)

(2.5)

21.0
Material and energy costs

Impacts of fluctuations in
the hen’s egg market price

1.0(Egg Products business)

4.0

Improvement of total costs(11.9)
Total of decrease: 18.5

Others*2(including transportation and warehousing expenses, payroll expenses
and Distribution System business)

9.1

Total of increase: 27.6

*1. The impact due to changes in the depreciation method amounts to 2.8 billion yen.
*2. The figures used for sales promotion expenses and transportation and warehousing expenses for fiscal 2015 have been correctedby excluding sales.
-5-Key Points in Income Generation (Increase in Income for Five Domestic Food Segments)

Solidify Condiments Products business andenhance capacity of other segments to generate income【Operating income from five domestic food segments】(11/15 → 11/18)
(¥bn)
(0.3)

10.2

3.9

Five domestic
food segments
2016-2018
Medium-term
Business Plan
Total increase

2.7 0.2

11/15

Operating Income
6.0 ¥bn

Other four
segments: 5.8

Condiments
Products: 0.2

11/18 Target

10.4

00
(5.0)
0.0

50
5.0

Condiments Products

Egg Products

(5.0)
△
50
(5.0)

5.8

100
10.0

5.0

150
15.0

Delicatessen Products-6-

Processed Foods

0.7 0.9

200
20.0

250
25.0

Fine Chemical Products

Domestic Expansion
Strengthen income-generating capacity in Japanthrough Group cooperation【Themes for domestic expansion】
Group cooperation
Maximize Group strengths and create value【Main initiatives for domestic expansion】

Create added value

Enhancecost competitiveness

Generate value
tailored to needs

Improve efficiency of
production, sales, anddistribution

Utilize and open up
sales channels

Technological innovationin manufacturing

Strengthen proposals forcore products

Strengthen procurement
capacity for raw materials-7-

Potential in Domestic Expansion【Awareness】
Growing focus
on health
Latent potential ofvegetables and saladcondiments

Needs for high quality
Cultivate the ability topropose new menus andthe Aohata brandDescription
Market changes andconditions
Potentials for
Kewpie Group

Optimize unique
attributes of the Group,
which has a broad anddeep reach inhomemade foods,
ready-made foods, andrestaurant markets【Environment】
Shift in food outside of
the home
Potentials for delicatessen,
packaged salads, smallcapacity condiments, andfood for seniors

Employee shortages atrestaurants and others
Greater need forprimary processing for
eggs and vegetables【Sales channels】

Diversifying buying
opportunities

Presence of untapped
segments

Greater utilization of theGroup’s diverse sales
channels and functions

Strengthen proposals
targeting eggs forhousehold use, cut
vegetables for commercial
use, and seafood and meat

Utilize investments and foundations made in 2013-2015 Medium-term
Business Plan and take up challenges with Group cooperation-8-

Overseas Expansion
Lay a foundation for growth in new areas
while accelerating growth in China and Southeast Asia
Utilize the technology built up in Japan
to expand new categories

Expand sales of mayonnaise and dressing withability to make proposals that capture area needs

Popularize theKewpie brandStrengthen initiatives in expansion area
through exports【Overseas expansion: Net sales】 (11/15 →11/18)
China
Southeast Asia

2016-2018 Medium-term Plan:
Total increase

60.0
60
40.0
40

China
Southeast Asia

Net sales: 26.8 ¥bn

(¥bn)

80
80.0

【Overseas expansion: Operating income】 (11/15 →11/18)

China/Southeast Asia

37.7

(¥bn)

64.5

8
8.0
6.0
6

18.4 ¥bn

4.0
4

20.0
20

2.0
2

0.0
0

0.0
0

11/15

11/18 Target

2016-2018 Medium-term Plan:
Total increase

Operating income: 3.1 ¥bn
China/Southeast Asia

4.0

3.3 ¥bn

11/15* The figure used for fiscal 2015 sales has been corrected for the impact of the new accounting method.
* Overseas figures cover the period from October through September and include exports from Japan(exports from Japan cover the period from December through November).

-9-

7.1

11/18 Target

Main Initiatives by Overseas Area
Achieve growth with “expansion in China, Southeast Asia and North America”
and “reinforcement of expansion area with exports”【China】◇ Cultivate consumer market with new foodscene proposals and product expansion
tailored for each area
・Reinforce sales promotions through eventsand advertising・Expand products tailored to area needs◇ Cultivate each business category withsolution proposals and expand products
aimed at the food service business・Capturing Chinese food business・Capturing global restaurant chains【Southeast Asia】◇ Increase number of stores at which Kewpie hashighest share of sales floor◇ Speed up expansion into global restaurant chains◇ Expand exports to neighboring countries, Oceania,
and the Middle East

11/18
Target【North America】◇ Expand sales channels for Kewpie brand products◇ Expand sales channels in Egg Products business

11/18
Target◇ Accelerate development of new categories
・Expand development of processed egg
products
・Launch initiatives with salads

11/18 Net sales 26.6 ¥bn (12.4 ¥bn)
Target Operating income 4.2 ¥bn (2.5 ¥bn)
* The figure used for fiscal 2015 sales has been corrected for the impact of the
new accounting method.
* Figures other than exports from Japan cover the period from October throughSeptember.
* The figures in parentheses indicate the total increase/decrease in the 2016-2018
Medium-term Business Plan (difference between 11/18 target and 11/15 result).

Net sales 13.9 ¥bn (6.0 ¥bn)
Operating income 0.8 ¥bn (0.8 ¥bn)

Net sales 18.9 ¥bn (6.0 ¥bn)
Operating income 1.4 ¥bn ((0.5) ¥bn)

【Exports and new】

◇ Expand sales of condiments products in Europe instages◇ Use strategic products to strengthen expansion in
40 countries to which Kewpie already exports

11/18
Target-10-

Net sales 5.1 ¥bn (2.4 ¥bn)
Operating income 0.6 ¥bn (0.3 ¥bn)

Performance Targets andStrategies by Business Segment-11-Performance Targets by Business Segment
Delicatessen Products Business and overseas expansion
drive increases in sales and income
Sales by Segment(¥bn)

Operating Income by Segment(Corrected)

11/18
TargetIncrease(Decrease)

11/15

11/18
TargetIncrease(Decrease)

Total

552.0

625.0

73.0

26.4

35.5

9.1

Condiments Products

142.7

178.0

35.3

12.5

16.2

3.7

Egg Products

104.8

114.0

9.2

5.4

6.6

1.2

Delicatessen Products

101.9

125.0

23.1

2.7

5.0

2.3

Processed Foods

57.7

55.0

(2.7)

(0.3)

0.7

1.0

Fine Chemical
Products

11.3

12.5

1.2

0.4

1.3

0.9

Distribution System

127.7

135.0

7.3

4.8

5.5

0.7

Common Business
Operations

5.9

5.5

(0.4)

0.9

0.2

(0.7)

11/15

* The figure used for fiscal 2015 sales has been corrected for the impact of the new accounting method.

-12-

Condiments Products Business【2016-2018 Medium-term Themes】

All dishes with vegetable
Drive market and expand revenue
with a business model promoting
vegetable consumption(¥bn)
Net Sales
Operating
IncomeOperating
Income Ratio*1. The figure used for fiscal 2015 sales has been corrected for the impact of the new
accounting method.

11/18
Increase
Target (Decrease)

178.0
16.2

*1

35.3

Factors behind changes in operating income (11/15 difference)(2.2)
Increase in gross profit resulting
from increase in net sales

(1.6)

3.7

Improvement of total costs

9.1%

0.3%

Growth costs(depreciation expenses, etc.)

(¥bn)

13.2
Material costs, etc.
(raw materials, energy, etc.)

1.5
Others(7.2)(including transportation and warehousing
expenses, payroll expenses
and Distribution System business)*2. The numbers in parentheses refer to the difference in Operating income between the
11/18 target and the 11/15 result. Figures are expressed in units of billion yen.

【Create new demand】 (0.4)

【Lead market in Japan and overseas】 (3.3)

・ Meet new needs for small-volume products andexpand developed fields and sales channels◇ Sustainable growth of domestic markets

・ Cultivate new condiments products such as Asian
products with test marketing・ Develop new food style by the Group, spreadthis new style in the homemade foods, readymade foods, and restaurant businesses, andexpand the market【Operate production anddistribution based on demand】

・ Improve ability to generate profits by raisingcompetitiveness of core products and rigorously
distinguishing between items

・ Improve production efficiency of core products
through concentrated production and meet diverse
needs through a multiproduct variable quantity
production line (Kobe Factory to begin operating inJanuary 2017)◇ Build on overseas expansion
・ Cultivate markets with proposals tailored to・ Accurately ascertain production, sales, anddistribution information and appropriately manage
the inventory

area needs-13-Condiments Products Business (Expand Demand With New Salad Styles)
New ways of eating tailored to needs
make it fun to eat delicious vegetables
Healthy food

New menu

Simple cooking

Custom-made

Dip

Salad made by combining ingredients tosuit one’s own preferences

Eat vegetables easily bytopping with a sauce

Four newsalad styles
One plate

Pickles

Vegetables in a wide
variety of menus

Pickle seasonal andcolorful vegetables

Romaine lettuce
Encourage consumers to
eat unfamiliar ingredients ina wide range of menus

Simultaneously deploy menus consistent in the homemade foods, ready-madefoods and restaurant markets, and expand demands for mayonnaise and dressings-14-

Egg Products Business
(¥bn)

11/18
TargetNet Sales

114.0【2016-2018 Medium-term Themes】

Continue to enhance the valueof the Egg Products Businessworldwide through innovation

Increase(Decrease)*1

9.2

Factors behind changes in operating income (11/15 difference)
Growth costs(depreciation expenses, etc.)
Increase in gross profit resulting
from increase in net sales

2.0

Material costs, etc.

Operating
Income

6.6

1.2

5.8%

0.7%

1.0

(Impacts of fluctuations in the
hen’s egg market price, etc.)

Improvement of total costs

Operating
Income Ratio

(¥bn)

0.4

0.5
Others(2.7)(including transportation and warehousing
expenses, payroll expenses
and Distribution System business)*2. The numbers in parentheses refer to the difference in Operating income between the
11/18 target and the 11/15 result. Figures are expressed in units of billion yen.

*1. The figure used for fiscal 2015 sales has been corrected for the impact of the new
accounting method.

【Expand into household-use market】 (0.2)

【Expand existing businesses】 (1.0)◇ Utilize new plant as much as possible andcultivate commercial shell egg market

・ Create products offering new value such as
delicious taste, convenience, and uniqueness・ Use the new plant’s functions to find ways tomeet customer needs and create optimal
products
・ Utilize the Group’s sales channels and strengthen
expansion into growing markets◇ Further reinforce core products with
innovations in production methods【Strengthen operating base】
・ Build domestic and overseas systems that are notvulnerable to market fluctuations
・ Pursue cost reductions through versatile workers
and streamlining

・ Establish production methods emphasizing
delicious taste and ease of use-15-

Egg Products Business (Expand Existing Businesses)
Extensively cultivatecommercial shell egg market

Expand into household-use market

Target sales growth of more than
130% by utilizing new factory

Target sales growth exceeding
500% by expanding sales channels
and launching new products

Index(Assuming that
11/15 = 100)

Changes and forecasts
in sales through cultivation ofcommercial shell egg market

Index(Assuming that
11/15 = 100)

140

Changes and forecasts
in sales to household-use market

600

130

500

Operation of Tokyo Plant

120

400

110

300

100

200

90

100

80

0
11/13

11/14

11/15

11/13 11/14 11/15 11/16 11/17 11/18
Plan Target Target

11/16 11/17 11/18
Plan Target Target-16-

Delicatessen Products Business【2016-2018 Medium-term Themes】

Challenges and reinforcementof system expected 10 years
from now
Reap the benefits from the results ofinvestments made in line with the
2013-2015 Medium-term Business Plan(¥bn)
Net Sales

11/18
Increase
Target (Decrease)

125.0

Operating
IncomeOperating
Income Ratio*1. The figure used for fiscal 2015 sales has been corrected for the impact of the
new accounting method.

5.0

*1

23.1

Factors behind changes in operating income (11/15 difference)
(¥bn)

(0.2)
Increase in gross profit resulting
from increase in net sales

(0.5)

2.3

Improvement of total costs

4.0%

1.3%

Growth costs(depreciation expenses, etc.)

4.3
Material costs, etc.
(raw materials, energy, etc.)

1.0
Others(2.4)(including transportation and warehousing
expenses, payroll expenses
and Distribution System business)*2. The numbers in parentheses refer to the difference in Operating income between the
11/18 target and the 11/15 result. Figures are expressed in units of billion yen.

【Take up the challenge of entering new fields】【Accelerate growth in three areas】◇ Cut vegetables (1.1)

・ Expand salad demand by opening up restaurant
specializing in salads

・ Drive the household-use market by creating newvalue and improving cost competitiveness・ In commercial-use market, identify customer
needs and develop differentiated products【Structural reforms in businesses】◇ Delicatessen foods (0.3)
・ Expand delivery route on a nationwide scale

・ Break away from labor-intensive model(labor-saving, automation)

・ Cultivate new sales channels such as
restaurants and offices

・ Strengthen cooperative system with others in thesame industry
・ Strengthen ability to procure raw materials
through affiliations with producers◇ Cooked rice (0.9)
・ Cooked rice for mass retail stores shifts tofull-fledged development-17-

Delicatessen Products Business (Business Structural Reforms)
Build a new model for the Delicatessen Products Business for the future
Strengthen cooperative system withothers in the same industry

Break away from labor-intensive model

Build a new line of
cut vegetables
Productivity doubles

Share production andfocus on areas of strength
Sales
Deria Foods

Energy consumption
Down 25%

Production

Grade improves byreducing damage tovegetables

Each company ofDelicatessen Products Business

Use of robots
Use of robots for work requiring labor

Salad

Cooperatingcompanies

Cooperatingcompanies

Cooperatingcompanies

Simmered dishNoodles

Fried foods

Establish a quality assurance systemthat includes cooperating companies

Merits・Concentrates on areas of strength, and raise productivity
・Strengthens product line-up and enables production
increase・Cooperating companies use sales route for Deria Foods
Robot loading products

Build an efficient supply system
and revitalize the market

Robot loading onigiri-18-Processed Foods Business【2016-2018 Medium-term Themes】

Refine techniques andenhance business value
Businesses that offer good taste,kindness, and convenience withtechnology

(¥bn)

11/18
Increase
Target (Decrease)

Net Sales

55.0

Operating
Income0.7

Operating
Income Ratio*1. The figure used for fiscal 2015 sales has been corrected for the impact of the new
accounting method.

1.3%

*1

(2.7)
1.0
－

Factors behind changes in operating income (11/15 difference)
(¥bn)

(0.1)
Increase in gross profit resulting
from increase in net sales(0.4)

Growth costs(depreciation expenses, etc.)

0.3
Material costs, etc.
(raw materials, energy, etc.)

1.0

Improvement of total costs
Others(including transportation and warehousing
expenses, payroll expenses
and Distribution System business)

0.2*2. The numbers in parentheses refer to the difference in Operating income between the
11/18 target and the 11/15 result. Figures are expressed in units of billion yen.

【Develop existing products】 (0.1)

【New growth for processed foods】◇ Strengthen Aohata structure (0.5)
・Refine taste and strengthen sales with
innovations to core products

・ Incorporate sales promotion methods utilizing theInternet and other means and raise namerecognition for upcoming products

・Focus in on industry-use sauce products thatcan be differentiated・ Create new value with an emphasis on the qualityof raw materials and production methods

・Product development utilizing the strengths of
new products developed by Kewpie【Strengthen revenue foundation ofbusinesses】 (0.3)◇ Group expansion into senior food market (0.1)
・Raise name recognition and expand sales
channels for “Yasashii Kondate” (Gentle Menu)
and soft food for the elderly at home・ Bring unprofitable categories into the black again
or pull out
・ Raise productivity by concentrating productionlines and optimizing lines overall

・Expand frozen “Yawaraka Okazu” (Soft Food)for nursing home food-19-

Processed Foods Business (Strengthen Aohata’s Structure)■Revitalize the market with the developmentof new 55 jams

■ Steady growth of “Marugoto Kajitsu” products
Net Sales (¥bn)

All 55 jam products to be updated in spring 2016
・ Flavor that users will never get
tired of・ Shift to volumes that can easily
be used up
・ Overhaul of design

2.7

3.0

2.3
0.4

Consistent cap design
for all items■Develop new variety ideal for processing,
Yume Tsuzuki (“Continuing Dream”)

Up 200%0.9

1.5

11/13 11/14 11/15 11/16 11/17 11/18
Plan Target Target■Strengthen ability to procure imported raw
materials
Strawberry fields ownedby raw material company
in Chile, a subsidiary of
Aohata・ Still have a good smell evenprocessed
・ Able to enjoy every last grain
・ Easy to harvest
・ High disease resistance

Improved taste andproductivity

Improved productivity
with the development ofa device for hulling
strawberries

Applications
announced in July 2015

Expand into production regions andprepare for new product development-20-Fine Chemical Products Business【2016-2018 Medium-term Themes】

Achieve 10% of operating
income ratio by rebuilding
revenue foundation(¥bn)
Net Sales

11/18
Increase
Target (Decrease)

12.5

Operating
IncomeOperating
Income Ratio

1.3

*1

1.2
0.9

Factors behind changes in operating income (11/15 difference)
(¥bn)

(0.3)

Growth costs(depreciation expenses, etc.)

Increase in gross profit resulting
from increase in net sales

Material costs, etc.
(raw materials, energy, etc.)
Improvement of total costs

1.2
0.0
0.1
Others

10.0%

6.9%

(0.1)

(including transportation and warehousing
expenses, payroll expenses
and Distribution System business)*1. The figure used for fiscal 2015 sales has been corrected for the impact of the new
accounting method.

*2. The numbers in parentheses refer to the difference in Operating income between the
11/18 target and the 11/15 result. Figures are expressed in units of billion yen.

【Specialize in value-added products】【Strengthen sales on BtoC route】 (0.3)(0.2)

・ Expand customer base by cultivating sales
channels・ Speed up expansion of hyaluronic acid bystrengthening overseas sales system

・ Endeavour to spread awareness of productfunctionality by using multiple advertising media

・ Create new value of ingredients and reinforce
proposal capacity【Rebuild raw material procurement system】(0.4)

・ Begin formulation development targeting the
medical field with the aim of beginning sales infiscal 2018

・ Reduce risk of fluctuations in raw material prices
by setting up multiple purchasing systems globally・ Improve procurement costs by strengthening
efforts with raw material suppliers-21-Fine Chemical Products Business (Specialize in Value-added Products and Strengthen Sales on BtoC route)【Specialize in value-added products】【New value creation for ingredients】【Formulations of proprietary ingredients】

・ Add new functions to shell membrane with new
production methods

・ Develop formulations in medical field, primarily
using hyaluronic acid and egg yolk lecithin, andbegin sales on a full scale

・ Develop anti-norovirus ingredients (derived fromegg whites)・ Develop new market based on functions of acetic
acid bacteria【Strengthen sales on BtoC route】
・ Reinforcement by expanding into video advertising・ New initiatives targeting young people throughnew products

Advertising in newspapers

Collaborations withwomen’s magazines&
Embracing challenge ofstore sales＋
Reinforcement ofInternet advertising
Challenge of video advertising

Hiaromoisture 240

Hiarobeauty(Food with function claims launched in June 2015)(Food with function claims to be launched in March 2016)-22-

Distribution System Business【2016-18 Medium-term Themes】
Shift to new growth stage, using
strengthened operating base
Aim for sustainable improvements toprofitability by cultivating
existing businesses(¥bn)
Net Sales

11/18
Increase
Target (Decrease)

135.0

Operating
IncomeOperating
Income Ratio

5.5

0.7

4.0%

0.3%

*The numbers in parentheses refer to the difference in Operating income between the
11/18 target and the 11/15 result. Figures are expressed in units of billion yen.

(¥bn)

Depreciation expenses, etc.
Contributions to income
from growth areas

(0.3)

0.1
0.5
Energy, etc. (fuel, electricity)

1.3

Improvements in streamlining(0.9)

Others (reorganization, etc.)*Operating income in the Distribution System business is included in “Others”
for factors causing increase (decrease).

【Improve distribution quality andtechnology capacity】【Further strengthen operating base】◇ Strengthen earning capacity

7.3

Factors behind changes in operating income (11/15 difference)(0.6)

・ Create an appealing workplace/strengthen staff
hiring and development

・ Reinforce competitiveness by thoroughly
reducing costs

・ Create unique services and technology

・ Reduce and discontinue supplemental workand collect appropriate fees・ Introduce and expand quality management
indicators◇ Reorganize base network
・ Strengthen area function【New developments for growth】 (0.1)

・ Attract demand in Tokyo metropolitan area andKansai area

・ Comprehensive outsourcing for customers’
operations◇ Rebuild transportation function

・ Strengthen consulting services (domestic andoverseas)・ Strengthen trunk line transportation capacity
・ Optimize small-lot transport-23-

Investments and Return to Shareholders
2016-2018 Cash flows from operating activities

120.0 billion yen

Capital Investments

Return to Shareholders● Forecast of about 90 billion
yen over three years● Dividend payout ratio ofover 30%● In the Food Business, theCondiments Products
Business (Kobe Factory, etc.)
and overseas expansion are
given priority.

● Flexible acquisition ofTreasury stock is considered

New Expansion● Investments in new
businesses and M&A shall beconsidered, depending on the
project● Necessary resource isconsidered for each project
and financing is carried out
while maintaining soundfinancial conditions【Reference】 Conditions in 2013-2015 Medium-term Business Plan (Cash flows from operating activities: 89.9 ¥bn)

89.6 billion yen

Dividend Payout ratio ofover 25%-24-

3.7 billion yen

Standard for Dividend Decisions and Policy on Return to Shareholders【Policy on Return to Shareholders】
・ Dividends are our top priority, and we aim to continue providing stable dividends.
・ The acquisition and retirement of Treasury stock is considered as necessary while considering the stock
price movements and the financial conditions.

【Standard for dividend decisions】
Dividend payout ratio of over 25% ⇒ Over 30%(DOE of over 1.8% ⇒ Target of 2.2%)
Standard for dividend decisions

Dividends (yen)Dividend payout ratio (%)

40

Commemorative dividend (¥1) tocommemorate the 90th anniversary oflaunching Kewpie mayonnaise

35

26%

10

26%

26%

24%

20
15

30%
30%

30
25

Dividend
payout ratio
over 30%

20

22

23

11/12

11/13

11/14

Ordinary dividends

29

Dividend
payout ratio
over 25%

11/15 Plan

Commemorative dividends
-25-

25%

30

11/16 Forecast

11/17

Dividend payout ratio

11/18

20%

Fiscal 2016 Plan

-26-

Fiscal 2016 Plan
23 billion yen increase in net sales and 1.6 billion yen increase in operating income
11/15

11/16 Plan

Change YoY

Increase(Decrease)552.0 ¥bn

575.0 ¥bn

4.2%

23.0 ¥bn

514.3

530.5

3.1

16.1

37.7

44.5

18.2

6.9

26.4 ¥bn

28.0 ¥bn

5.9%

1.6 ¥bn

22.4

23.7

5.6

1.3

4.0

4.3

7.6

0.3

Operating Income Ratio

4.8%

4.9%

－

0.1%

Ordinary Income

27.3 ¥bn

29.1 ¥bn

6.6%

1.8 ¥bn

Net income attributable toparent company
shareholders

17.0 ¥bn

15.0 ¥bn(11.9)%(2.0) ¥bn

ROE (Return on equity)

8.3%

6.8%

－

(1.5)%ROA (Return on assets)

7.5%

7.6%

－

0.1%

45.5 ¥bn

46.1 ¥bn

1.3%

0.5 ¥bn*1

Net Sales
Domestic
Overseas*2

Operating Income
Domestic
Overseas*2

income +EBITDA (Operating
Depreciation expenses)*1. The figure used for fiscal 2015 sales has been corrected for the impact of the new accounting method.
*2. Overseas figures cover the period from October through September and include exports from Japan(exports from Japan cover the period from December through November).

-27-

Fiscal 2016 Plan by Business Segment
Despite higher primary raw material costs, we expect the
Delicatessen Products Business to lead growth in sales and income
Net sales by business segment
11/15(Corrected)

Total

11/16 Plan(¥bn)

Operating income by business segment

Increase(Decrease)

11/15

11/16 Plan

Increase(Decrease)

552.0

575.0

23.0

26.4

28.0

1.6

Condiments Products

142.7

153.0

10.3

12.5

12.6

0.1

Egg Products

104.8

110.0

5.2

5.4

5.5

0.1

Delicatessen Products

101.9

114.0

12.1

2.7

4.1

1.4

Processed Foods

57.7

52.5

(5.2)

(0.3)

(0.2)

0.1

Fine Chemical Products

11.3

12.0

0.7

0.4

0.7

0.3

Distribution System

127.7

128.5

0.8

4.8

5.0

0.2

5.9

5.0

(0.9)

0.9

0.3

(0.6)

Common Business Operations

Fine Chemical Products

The cost of raw materials is rising, but we stimulate demand to increase, particularly for dressings,
and expect income to grow.
We expect sales and income growth as a result of a shift to value-added products and the expansion
into the household-use market.
We expect higher sales and income by increasing sales from the utilization of the new plant, as wellas labor-saving achieved with the production line.
We will continue to work to improve income in unprofitable categories while expanding sales ofbread-related products and nursing care foods.
Income will be improved through growth in hyaluronic acid sales and mail-order sales and therebuilding of a raw material procurement system.

Distribution System

In addition to setting up a base network, we will work to curb distribution costs, etc.

Condiments Products
Egg Products
Delicatessen Products
Processed Foods* The figure used for fiscal 2015 sales has been corrected for the impact of the new accounting method.

-28-

Reference Materials-29-Reference: Accounting Changes and Others (From First Quarter of the Fiscal Year Ending November 2016)【Changes to standards for recording net sales】
From first quarter of the fiscal year ending November 2016
【Before change】 Sales promotion expenses etc. were posted as “marketing costs”
when the cost was finalized.
【After change】

When sales are posted, it is deduced from “net sales”(previously recorded and disclosed under net sales and sales promotion expenses [including some
distribution expenses]).

Impact in fiscal year ended November 2015 Net sales: (26.2) ¥bn Operating income: 0.0 ¥bn
Figures after reclassification of results in fiscal year ended November 2015 may change since the audit
has not yet been completed and retroactive application has only been partially completed. The finalized
figures will be released when the first quarter results are announced.

【Changes to depreciation method for fixed assets】
From first quarter of the fiscal year ending November 2016
【Before change】 Declining balance method【After change】
Straight-line method(Methods for evaluating useful life and residual value have also been reviewed.)

Impact on profit/loss compared to previous method
Fiscal year ending November 2016: Operating income: 2.0 ¥bn
Fiscal year ending November 2018: Operating income: 2.8 ¥bn
However, these figures may change depending on investment conditions.
-30-Reference: Factors Causing Increase (Decrease) in Operating Income in Fiscal 2016(¥bn)

Operating Income

11/15

11/16 Plan

Difference

26.4

28.0

1.6

*1 Depreciation

Creating growth
opportunities
(0.1)

1.0

expensesMarketing expenses

(1.0)

*2

(sales promotion expenses and advertising expenses)(0.1)

R&D costs

Increase in gross profit resulting
from increase in net sales

6.7

Material costs, etc.
(2.8)(excluding depreciation expenses)(2.3)

Material and energy costs(0.5)

Impacts of fluctuations in the hen’s egg market price(Egg Products business)

1.3

Improvement of total costs(3.5)
Total of decrease: 7.4

Others*2(including transportation and warehousing expenses, payroll expenses
and Distribution System business)

1.6

Total of increase: 9.0*1. The impact due to changes in the depreciation method amounts to 2.0 billion yen.
*2. The figures used for sales promotion expenses and distribution expenses for fiscal 2015 have been corrected by excluding sales.

-31-Reference: Conditions in Markets for Major Raw Materials(¥/kg)【Average institutional-use market price (tank truck base) of
refined soybean and coleseed oils for processed oils and fats】

230

2015 actual2016 indicator

220
210
200
190
1Q

2Q

3Q

4Q

【Benchmark price for medium-sized eggs, Tokyo market】(¥/kg)

2015 actual2016 indicator

280
260
240
220
200

1Q

2Q

3Q
-32-

4Q

Reference: Performance Trends
(¥bn)

11/12

11/13

11/14

11/15

11/16 Plan 11/18 Target《New accounting method》
142.7
12.5
104.8
5.4
101.9
2.7
57.7
(0.3)
11.3
0.4
127.7
4.8
5.9
0.9
552.0
26.4

Condiments Products
Egg Products
Delicatessen Products
Processed Foods
Fine Chemical Products
Distribution System
Common Business Operations

Total

153.0
12.6
110.0
5.5
114.0
4.1
52.5
(0.2)
12.0
0.7
128.5
5.0
5.0
0.3
575.0
28.0

《Former accounting method》
Condiments Products
Egg Products
Delicatessen Products
Processed Foods
Fine Chemical Products
Distribution System
Common Business Operations

Total

138.6
11.5
85.6
4.9
91.6
3.1
59.1
(1.0)
8.3
1.0
115.7
3.2
6.2
0.8
505.0
23.4

145.4
11.5
91.2
3.4
98.0
3.5
58.4
(0.9)
9.7
0.9
120.3
3.2
7.6
0.8
530.5
22.4
-33-

151.5
11.5
99.5
3.8
102.2
3.3
57.2
0.2
10.7
1.0
126.8
3.6
5.5
1.0
553.4
24.3

157.1
12.5
104.8
5.4
109.1
2.7
62.3
(0.3)
11.3
0.4
127.7
4.8
5.9
0.9
578.2
26.4

Note: The figures for net sales are shown in the upper row andthe figures for operating income are shown in the lower row.

178.0
16.2
114.0
6.6
125.0
5.0
55.0
0.7
12.5
1.3
135.0
5.5
5.5
0.2
625.0
35.5

Reference: Capital Investments and Main SG&A Expenses(¥bn)
11/16 Plan 11/18 Target

11/12

11/13

11/14

11/15

Capital Investments

20.9

27.1

30.1

32.4

39.1

22.4

Depreciation Expenses

14.1

14.6

16.1

19.1

18.1

17.5

4.1

4.8

7.2

Sales
Promotion
Expenses

New accounting
methodFormer accounting
methodAdvertising Expenses
Transportation
andWarehousing
Expenses

19.5

20.5

21.4

23.5

7.9

7.9

8.0

8.7

9.0

9.0

26.5

28.4

32.3

New accounting
methodFormer accounting
method

28.9

30.5

32.0

33.3

Payroll Expenses

24.3

25.4

26.5

28.7

30.4

34.3

R&D Expenses

3.4

3.7

3.9

4.2

4.3

5.0

* The depreciation method for fixed assets was changed from the declining balance method to the straight-line methodfrom fiscal 2016.

-34-

Reference： Mayonnaise/Dressings Changes in Net Sales (including overseas)
(¥bn)

01.

11/12

11/13

11/14

11/15

11/16 Plan 11/18 Target《New accounting method》
Mayonnaise

58.4

62.5

69.9

Dressings

49.2

55.0

64.5

Total

107.6

117.4

134.4

《Former accounting method》
Mayonnaise

59.0

60.5

63.4

67.5

Dressings

46.4

49.6

51.2

54.0

Total

105.4

110.1

114.6

121.5

(¥bn)

New accounting method

150.0

100.0
Mayonnaise
Dressings
50.0

0.0* The graph for fiscal 2015 uses figures corrected for the impact due to the new accounting method.

-35-

Reference: Results and Indicators in Major Markets
(¥)

11/15
Results

11/16
Indicators

11/18
Indicators

Average Price of Institutional
Use (Tank Truck Base) for
Processed Oil and Fats (per kg)

206

210

215

Medium-Sized Egg, Tokyo
Market Average Price (per kg)

227

235

205

USD exchange rate
(average during period)(per $1)

119

125

130

RMB exchange rate
(average during period)(per RMB1)

19

20

20

-36-

Reference: ROE/ROA Trends(%)

ROE(Return on equity)

ROA(Return on assets)
(%)

11/12

11/13

11/14

11/15

11/16 Plan

11/18
Target

7.4

7.1

7.0

8.3

6.8

8.5

8.4

7.4

7.3

7.5

7.6

8.6

(%)

【ROE Trend】

9.0【ROA Trend】

9.0

8.0

8.0

7.0

7.0

6.0

6.0

5.0

5.0
11/12

11/13

11/14

11/15

11/12

11/16 Plan 11/18 Target

11/13

11/14

11/15

11/16 Plan

11/18 Target

(¥bn)

11/12

11/13

11/14

11/15

11/16
Plan

(¥bn)

11/12

11/13

11/14

11/15

11/16
Plan

Net income

12.3

12.6

13.4

17.0

15.0

Ordinary income

24.5

23.7

25.4

27.3

29.1

Shareholders’equity

170.9

184.2

195.1

214.1

225.8

Total assets

306.5

334.7

357.0

372.4

392.0

* 11/16 Plan for the net income is the net income attributable to parent company shareholders.

-37-Reference: Social and Environmental Activities
As a member of the local community, we are involved in a wide range of activities
Food education
activities

Socialcontributions

Environmental
conservation

Conveying the enjoyment
and importance of foodOngoing activities
continued for the long term

Appreciate the blessings ofnature and value resources

Support for
Tohoku’s reconstruction

Efficient use of food leftovers

Mayonnaise class“On-site” classes aimed at teaching the enjoyment offood and the importance of consuming vegetables

Learn about vegetables and mayonnaise andexperience the difference with factory products bymaking mayonnaise
Held in 400 elementary schools in fiscal 2015, with
about 20,000 children participating

Open kitchen (factory tour)
We have offered factory tours since 1961 in the
belief that the factory is just an extension of thefamily kitchen

Approximately 100,000 visitors came in fiscal 2015,
including the Mayoterrace (tour facility)

Expansion from support activities to help restore area
affected by earthquake taken just after the earthquake
to activities aimed at restoring the community

Hold cooking classes using local foods to build
community in areas affected by the earthquake(Minamisanriku)

Bellmark campaign(educational support)

Reuse of leftovers such as egg shells andvegetables remaining after manufacturing process

Egg shells usedin calcium
supplement
foods

Potato skins
used inlivestock feed

Leftovervegetables usedin cloth dyes

Kewpie Forest(forest conservation)

Assist the Bellmark campaign which supports a wide
range of social education activities

Forest conservation activities in Fujihokuroku,
Fujiyoshida, Yamanashi Prefecture, where aGroup factory is locatedSympathized with the Bellmark campaign’s purpose,
we have expanded sponsoring and educational
support for the affected regions since the campaign’s
start in 1960.

The forest has been thinned and trees have beenplanted since 2007, and forest conservation
activities aim at developing a rich source of water-38-

Note:
With the exception of historical events, information in Kewpie Corporation’s
present plan, forecast, strategy, and beliefs reported in this handout refers toforecasts of future performance. It is reported based on judgments made by the
management of Kewpie Corporation, referring to available information as of thedate hereof. Readers are asked not to rely completely on performance
forecasts contained herein.
Although this handout is made with extreme care, we assume no responsibility
whatsoever for any damages resulting from possible errors in the contents.
Also, this handout is not intended to solicit investment. Please make any
investment decisions according to your own judgment.

-39-