Making people’s lives around the world richer through foodNishimoto Co., Ltd.
Fiscal Year Ended December 2017
– Financial Results Supplementary Materials

February 14, 20182018 Nishimoto Wismettac Group All rights reserved.

Contents

Corporate Profile

P. 2

Summary of Financial Results
for the Fiscal Year Ended December 2017

P. 9

Forecast of Operating Results
for the Fiscal Year Ending December 2018

P. 15

Medium-term Business Plan
(Fiscal Year ending December 2018 –Fiscal Year ending December 2020)

P. 21

Appendix

P. 34

2018 Nishimoto Wismettac Group All rights reserved.

1

Corporate Profile◆ Two spheres symbolizing the Earth and Globalism Red is used to show Innovation, green represents
Nature Expresses the Company’s “lasting commitment tocreating healthier and richer lives through food”◆ Incorporates the letters “W” “M” and “C” from theCompany name2018 Nishimoto Wismettac Group All rights reserved.

< Wisdom >(Western knowledge)< Metta >(Eastern knowledge)(Metta means kindness or empathy in Pali, anancient Indian language)< Creativity > (Ability to create value)

Nishimoto Wismettac is a …

Global food distribution company groupcontributing to the development of“Food” worldwide
The Nishimoto Wismettac Group’s dream is to make a difference
to the lives of people around the world through food.
For more than a century since the inception of our business, ourgoal has been to increase satisfaction for even more customers,
making our dream come true through closer cooperation withGroup companies worldwide.
Tasty food brings happiness to people worldwide – the Nishimoto
Wismettac Group is moving forward with this in mind.

2018 Nishimoto Wismettac Group All rights reserved.

3

Nishimoto Wismettac: Corporate Profile
Founded in 1912, Nishimoto Wismettac has grown into a global company supplying food ingredientsand food products to markets worldwide
Company nameNishimoto Co., Ltd.

Head Office

Onward Park Building, 3-10-5 Nihonbashi, Chuo-ku, Tokyo

EstablishedMay 1912

Representative directors

Yoshiro Susaki, Chairman & CEO, Takayuki Kanai, President & COO

Number of Employees

1,638 (as of December 31, 2017)(including 1,372 in the Asian Food Global Business)
 Development and sale of Asian food worldwide

Business

Subsidiaries and Affiliates

Business Sites

 Importation and sale of fruit, vegetables and related processed products, and supply offood ingredients to food manufacturers and the restaurant sector
11 subsidiaries, five affiliates
46 worldwide (including 23 in North America)
Locations in Japan, the US, Canada, Singapore, Australia, Netherlands, UK, Germany,
France, China, Hong Kong and Thailand

Consolidated net sales

172.0 billion yen

Ordinary income

5.9 billion yen(FY ended December 2017)

59.0%(FY ended December 2017)

Shareholders’ equity ratio

2018 Nishimoto Wismettac Group All rights reserved.

(FY ended December 2017) *Overseas sales ratio 67.3%

4

Nishimoto Wismettac: Corporate History
Founded in 1912, Nishimoto has grown into a global company
supplying food ingredients and food products to markets worldwide

2017
Acquired company in Hong Kong
Invested in companies in Germany and France

2016
Acquired company in the UK
Acquired company in Hong Kong

Listed on the First
Section of the TSE
on September 29,
2017

2015
Established company in Canada
2014
Established company in the
Netherlands
2012
Established company in Australia

200
172.0

2011
Established company in Singapore
Fiscal year-end changed from March to
December

1921“Shirakiku” private brand registered as atrademark

1920
Seattle branch opened

158.2

158.3

160
140

2008
Established company inShanghai

1982
Acquired company in Hawaii

180

120
(*)

100
80

1912
Founded as the Nishimoto
General Store

60
40

Changes in Net Sales(billions of yen)

May 1912

20
FY Mar FY Mar FY Dec FY Dec FY Dec FY Dec FY Dec FY Dec FY Dec
2010
2011
2011
2012
2013
2014
2015
2016
2017

*FY Dec 2011 was a nine-month transitional period due to a change in fiscal year-end.
2018 Nishimoto Wismettac Group All rights reserved.

05Nishimoto Wismettac: Domestic and Overseas Business Sites
 Developing businesses worldwide with 46 global locations
 23 locations in the North American region (the U.S. and Canada)

1 Nishimoto Co., Ltd.
14 COMPTOIRS DES 3 CAPS SARL
13 SSP Konsumgüter TRADE & CONSULT GmbH

2
3

Nishimoto Trading Co., Ltd.

Calgary Office

Wismettac Foods, Inc.

11 Harro Foods Limited

Denver Office
Wismettac Asian
5 Foods, Inc. (Canada)
Las Vegas Office
Seattle Office

8 NTC Wismettac Europe B.V.
Nishimoto Trading Paris Representative
OfficeSacramento Office

9 Wismettac Foods Shanghai Co., Ltd.
10 Shanghai IPM Co., Ltd.
12 Nippon Foods Co., Ltd.

San Francisco Office4

Wismettac Asian
Foods, Inc.

Hawaii Office
Nishimoto Trading Kobe Office

Nishimoto Trading Bangkok Representative Office

Chicago Office
Toronto OfficeMontreal Office
Boston Office

New York Office
Washington, DC Office
Ohio OfficeMiami Office

San Diego Office

Wismettac Foods Kobe Office

Arizona OfficeOrlando OfficeAtlanta Office

Houston Office

6 NTC Wismettac Singapore Pte.Ltd.

Dallas Office
NTC Wismettac Australia Brisbane Office

7 NTC Wismettac Australia Pty Ltd.
NTC Wismettac Australia Perth Office

NTC Wismettac Australia Melbourne Office2018 Nishimoto Wismettac Group All rights reserved.

6

Major business segment: Asian Food Global Business Distribution of Asian food products with a focus on Japanese food around the world centering on North American.
Successful implementation of its own integrated operations from product development and planning to sales.

←Compliance with related laws and regulations→
Product development
and planning

Developing new
private brandproducts
and expanding
the private brandrange「Shirakiku」
accounts forabout 40%in terms of sales

Customs
Clearance

Purchasing

Wide rangeof sourced
products anddiversesupplier baseStorageandsorting

Delivery

Sales

Logistics capabilities and systems(about 8,300 items）

 Select the best producing region throughout the world Working with producers to develop products tailored tocustomer needs
 Implementing production and quality control systems thatcomply with local regulations

Marketing network
and North
Americanbusiness locations(23 locationsin North America)(37 locations
globally)

Developing products in line with customer needs

2018 Nishimoto Wismettac Group All rights reserved.

7

Major business segment: Agricultural & Seafood Products Trading Business Import and sale with a focus on fresh fruits and vegetables in the Japanese market.
 As a sole import agent of Sunkist Growers Inc. in Japan, maintain high market share of imported citrus. In particular, themarket share* of lemon is about 50% and orange is about 30%.

Main Products
Seafood
Domestic
国内シェア
market share:
約50％
roughly
50%

Seafood

Frozen Fruit andVegetables,
Canned Goods etc.

Frozenstrawberries

Other

Citrus fruit

Other
Other

LemonsPineapples
BananasOrangesBananasDomestic
国内シェア
market share:
約30％
roughly30%

Other
Grapefruit

Asparagus
Peppers

Other

Other

Vegetables

Avocados

GrapesCherries

Tropical
fruit

Kiwi
fruit

* Calculated based on Trade Statistics of Japan (Ministry of Finance) (2016)2018 Nishimoto Wismettac Group All rights reserved.

8

Summary of Financial Results
for the Fiscal Year Ended December 20172018 Nishimoto Wismettac Group All rights reserved.

Summary of Financial Results for the Fiscal Year Ended December 2017
(Unit: billions of yen, Percentage to net sales is stated in parentheses)

FY ended December
2016
Full-year
results

Full-year results
Net sales
Gross profit
OperatingOperating income
results
Ordinary income

FY ended December 2017

158.3

172.0

(100.0%)(100.0%)

27.9

29.8

(17.6%)(17.3%)

7.3

6.3(4.6%)(3.7%)

6.9

5.9(4.4%)(3.4%)

Year-on-year
rate
+8.7%
+6.8%
-13.7%-14.5%

Full-year
forecast

Compared tothe plan

169.4(100.0%)29.3(17.3%)

6.8(4.0%)

6.3(3.7%)

+1.9%
-7.5%
-6.2%

2.8

3.0

(1.8%)(1.8%)

Percentage of North America(Net sales)

59.0％

58.9%

-0.1 pt--

Percentage of North America(Operating income)

75.2％

78.6%

+3.5 pt--

ROWC *1

25.3%

20.3%

-5.0 pt--

Yen/Dollar exchange rate
(Average rate during the period)

108.84 yen

112.19 yen+3.35 yen

106.19 yen+6.00 yen

Net income per share *2

227.95 yen

236.37 yen+3.7%

258.08 yen-8.4%

Net income attributable toowners of parent

Group
KPI

+7.7%

3.3

+1.6%

(2.0%)-8.4%(*1) Operating income for FY 2017 / ([Working capital at the end of FY 2016 + Working capital at the end of FY 2017] / 2)(*2) The Company conducted a five-for-one common stock split on June 1, 2017. Net income per share was calculated on the assumption that the stock split has been
conducted at the beginning of FY 2016.
2018 Nishimoto Wismettac Group All rights reserved.

10

Operating income for the Fiscal Year ended December 2017 (Compared to the Previous Period)(billions of yen)

[Exchange rate (US$)]North
America

-0.75

7.32

Other thanNorth
America

Agricultural &Seafood
Products
Trading
Business

+0.22

-0.64

FY ended December 2016: 108.84 yen
FY ended December 2017: 112.19 yen

Other

Adjustment

+0.00

-0.00

Reference：Deviation from the forecast at thetime of listing(Operating income -0.51)
North America-0.73

Other than North America+0.12

Agricultural & Seafood Products Trading
Business

-0.40

Other

+0.04

Adjustment+0.20

FX (North America)+0.26

FY ended December
2016 results

2018 Nishimoto Wismettac Group All rights reserved.

FX (North
America)

+0.16

6.32

FY ended December
2017 results

11Operating results by segment for the Fiscal Year ended December 2017

Sales to external customers(billions of yen)

FY ended
December 2016
results

FY ended December 2017
Year-on-year rate

Full-year results

Asia Food Global Business

106.1

118.4

+11.6%

Agricultural & Seafood Products Trading
Business

48.3

49.6

+2.8%

Other business

3.8

3.9

+2.6%

158.3

172.0

+8.7%

Total
00

Operating income(billions of yen)

FY ended
December 2016
results

FY ended December 2017
Year-on-year rate

Full-year results

Asia Food Global Business

6.0

5.6

-6.0%

Agricultural & Seafood Products Trading
Business

1.0

0.4-60.1%

Other business

0.1

0.1

+5.7%

Total

7.3

6.3

-13.7%

2018 Nishimoto Wismettac Group All rights reserved.

12

Consolidated Balance Sheet (Summary)(billions of yen)

End ofDecember 2016

End ofDecember 2017

Amount/rate ofincrease (decrease)

Main reasonsfor changes

Current assets

65.1

75.6

+10.5

Cash and deposits (+6.9),
Accounts receivable-trade (+1.2),
Inventories (+1.9)

Non-current assets

7.5

8.6

+1.1

Shares of subsidiaries andassociates (+2.0), Impairment andAmortization of goodwill (-0.9)

72.7

84.3

+11.6

Current liabilities

18.8

19.6

+0.8

Non-current
liabilities

14.9

14.9

0.0

Total liabilities

33.7

34.5

+0.8

Total net assets

38.9

49.7

+10.8

Total liabilities and net
assets

72.7

84.3

+11.6

Shareholders’ equity
ratio

53.6%

59.0%

+5.4 pt

Current ratio

345.9%

385.1%+39.2 pt

Total assets

2018 Nishimoto Wismettac Group All rights reserved.

Increase due to IPO (+8.3),
Net income (+3.1)

13

Consolidated Statement of Cash Flows (Summary)(billions of yen)

FY ended
December 2016

FY ended
December 2017

Changes yearon-year

Cash flows from operating activities

3.8

1.3

-2.4

Cash flows from investing activities

-6.9

-1.4

+5.4

M&A in FY 2016 (-4.3)

Cash flows from financing activities

8.9

8.5

-0.3

IPO (+8.3)（Borrowing of long-term loans
in 2016 [+9.6])

Translation adjustments

-0.6

-0.2

+0.3

FY ended
December 2016

FY ended
December 2017

Changes yearon-year

Beginning balance

17.7

22.9

+5.1

Changes during the period

5.1

8.3

+3.2

Ending balance

22.9

31.2

+8.3

Cash and cash equivalents

2018 Nishimoto Wismettac Group All rights reserved.

Main reasonsfor changes

Main reasonsfor changes

14Forecast of Operating Results
for the Fiscal Year Ending December 20182018 Nishimoto Wismettac Group All rights reserved.

Approach in the Fiscal Year Ending December 2018
Achievements and issues in FY 2017
<Asian Food Global Business>
 In the North American region, the sales plan (yendenominated) was achieved; however, a delay is
occurring in the mid- and long-term challenges andinvestments (addition of manpower, logistics andselling system development, promotion of streamlining,new business).
 In other regions, progress has been made basically asplanned although progress differs between
corporations. It is expected that they are becoming
profitable.

<Agricultural & Seafood Products
Trading Business>
 The fruits and vegetables business, which is a main
business, did not achieve the plan in terms of operating
income. Challenges are to develop an alternative
system from the viewpoint of profit to prepare forchanges in the market environment and pricefluctuations.
 In other businesses (freezing, fishery, agriculture,export), progress has been made basically as planned.
Handling of domestic food items is getting into fullswing.

2018 Nishimoto Wismettac Group All rights reserved.

Approach in FY 2018
<Asian Food Global Business>
 In the North American region, aim at a stable profit
contribution by maintaining a stable growth of theexisting businesses as well as promoting structuralreforms and streamlining.
 In other regions, stabilize the businesses that arebecoming profitable.
 Balance the structural reforms (Private Branding,system changes, etc.) of existing businesses andchallenge to new businesses. (In regard to new
businesses, only expenses are taken into
consideration)<Agricultural & Seafood Products
Trading Business>
 Rebuilding of the fruits and vegetables business
・・・Response to price fluctuations, development ofalternative production areas and food items.
 Increase in revenues in businesses other than the fruits
and vegetables business・・・Development of anearnings structure that do not depend only on fruits andvegetables → Expansion of handling other food items.
 Further focus on an export and an offshore trade.

16

Forecast of Financial Results for the Fiscal Year Ending December 2018
(Unit: billions of yen, Percentage to net sales is stated in parentheses)

FY ended December
2017
Full-year results
Net sales
Gross profit

Operatingresults

Operating income
Ordinary income

First half of FY Changes yearon-year
forecast

172.0

92.3

(100.0%)(100.0%)

29.8

15.7

(17.3%)(17.1%)

6.3

3.1(3.7%)(3.4%)

5.9

3.1(3.4%)(3.4%)

+6.6%
+7.1%

-2.8%
+2.2%

Full-year
forecast

184.8(100.0%)31.9(17.3%)

6.7(3.7%)

6.6(3.6%)

+7.4%
+7.1%

+7.1%
+12.9%

3.0

2.1(2.4%)

Percentage of North America(Net sales)

58.9%

-

-

57.3%

-1.6 pt

Percentage of North America(Operating income)

78.6%

-

-

77.3%

-1.4 pt

ROWC *1

20.3%

-

-

21.8%

+1.5 pt

Yen/Dollar exchange rate
(Average rate during the period)

112.19 yen

110.00 yen-2.37yen

110.00 yen-2.19 yen

Net income per share *2

236.37 yen

151.93 yen+31.0%

324.98 yen+37.5%Group
KPI+50.5%

4.6

Changes yearon-year(1.8%)Net income attributable toowners of parent

(*1)
(*2)

FY ending December 2018

(2.5%)+52.1%

Operating income for FY 2017 / ([Working capital at the end of FY 2016 + Working capital at the end of FY 2017] / 2)
The Company conducted a five-for-one common stock split on June 1, 2017. Net income per share was calculated on the assumption that the stock split has been
conducted at the beginning of FY 2016.

2018 Nishimoto Wismettac Group All rights reserved.

17

Operating Income for the Fiscal Year ending December 2018 (Compared to the Previous Period)[Exchange rate (US$)]North
America

Other thanNorth
America

+0.23

+0.40

(billions of yen)

FY ended December 2017: 112.19 yen
FY ended December 2018: 110.00 yen

Agricultural &Seafood
Products
Trading
Business

Other

+0.34

+0.02

Political
expenses-0.30

Adjustment for
consolidation

FX (North
America)

-0.15

-0.09

6.32

6.77

FY ended December
2017 results

FY ended December
2018 forecast

2018 Nishimoto Wismettac Group All rights reserved.

18

Forecast of Operating Results by Segment for the Fiscal Year ending December 2018

Sales to external customers(billions of yen)

FY ended
December 2017
Full-year results

FY ending December 2018
First half of FY
forecast

Changes year-onyear

Full-year forecast

Changes year-onyear

Asia Food Global Business

118.4

61.0

+5.3%

125.4

+5.9%

Agricultural & Seafood
Products Trading Business

49.6

29.1

+8.1%

54.8

+10.5%

Other business

3.9

2.0

+25.1%

4.5+13.6%

172.0

92.3

+6.6%

184.8

+7.4%

Total

Operating income(billions of yen)

FY ended
December 2017
Full-year results

FY ending December 2018
First half of FY
forecast

Changes year-onyear

Full-year forecast

Changes year-onyear

Asia Food Global Business

5.6

2.8

-8.6%

6.2

+9.6%

Agricultural & Seafood
Products Trading Business

0.4

0.4

+205.0%0.7+79.0%

Other business

0.1

0.0

-

0.1

+12.3%

Adjustment(including political expenses)

0.0

-0.2

-

-0.4

-

Total

6.3

3.1

-2.8%

6.7

+7.1%

2018 Nishimoto Wismettac Group All rights reserved.

19

Changes in operating results of the Asian Food Global BusinessNorth American region

Other regions

130.0
All segments
12% increaseyear-on-year

Net Sales (billions of yen)

120.0

17.0

110.0

All segments
6% increase
Year-on-year

19.4(14% increaseyear-on-year)(33% increaseyear-on-year)

100.0

12.7

90.0
80.0

101.4
70.0

93.3

(9% increase
Year-on-year)

105.9(4% increaseyear-on-year)

60.0
50.0
FY ended December 2016
results2018 Nishimoto Wismettac Group All rights reserved.

FY ended December 2017
results

FY ending December 2018
forecast

20

Medium-term Business Plan
(Fiscal Year ending December 2018 – Fiscal Year ending December 2020)2018 Nishimoto Wismettac Group All rights reserved.

The company’s long-term vision

Growth as the Group that overcame environmental changes

Great changes in the businessenvironment

Distribution

Customerorientation(Preference)

2018 Nishimoto Wismettac Group All rights reserved.

Changes in customer value

Food
items

The Company’s long-term vision

To become the “Only One”
company in the global food
distribution industry, that develops
the most appropriate business“platform” in each country andregion where the Company
operates business, as well as
expands multiple “content”(similar to a business model) on
the “platform.”

22

Basic Policy of the Medium-term Business Plan On the premise of stable growth of existing businesses, build up a “foundation” of new businesses and “cultivate” them

Existing businessStable growth Mature North American market
 Domestic fruits and vegetables
business
 Contribution to profit by global
development in regions other thanNorth America

Improvement inproductivity andtechnologicalinnovation in the
agricultural, fishery andlivestock industry“Agritech”

Diversification ofneeds
Rise of the millennial
generation/Different
culture2018 Nishimoto Wismettac Group All rights reserved.

New business
From B2B(C) to B2B,
promote the following: Attract corporate demand Develop and expand new content
 Export fruits and vegetables fromJapan and arranges an offshoretrade Strengthen the platform

Amazon effectDistribution
innovation/Contradiction
and coexistence ofinternet and reality

New technology inlogistics
Internet of Things(IoT)/Artificial
Intelligence (AI)23

Growth strategy of the Asian Food Global Business
Existing business: Restructuring of the platform and improvement of the existing content
 (1) Stable growth in North America and execution of fundamental reform of the distribution and logistics expense structure (2) Further promotion of Private Branding and product cost reduction measures…Improvement of the gross profit margin ratio (3) Contribution to profit by locations other than North America

New business: Pursuit and development of new content
 Commercialization of “VALUE, from Japan to the world”…Development of products and distribution channels by business category ofcustomers and by theme(“Ready-to-Eat Meal,” “Products for vegan,” “Gourmet/delicious,” “Health and presymptomatic disease,” etc.)

Consideration of investment

Development of new content…Establishment of the product headquarters
Logistics reform…Addition of specialized staff and investment in human resources
Big data, AI, IoT, introduction of new logistics technology…Incorporation into system development

Current status of business
Strengths

Weaknesses Platform in North America (marketing, logistics network, power ofbrand)
 Product portfolio content responding to market needs
 Ability to comply with food and trade-related laws and regulations
 Integrated system: Procurement and purchase → trade and customs
clearance → sorting and delivery

 Heavy dependence on the North American region
 Logistics structure depending on manpower Lagging in digitalization of the market data, etc.
 Development of the R&D function is in progress

Opportunities

Threats

 Further expansion and globalization of Japanese food demand as wellas entry into the Asian food market
 Japanese food → Distribution channel for business use, healthoriented, food service market
 Expansion of distribution channels from shops and individual stores tochain stores and business areas
 Big data, AI, IoT and technological innovation such as logistics
technology → fundamental innovation of business efficiency

 Increase in newcomers to the Japanese food market
 Substantial increase in logistics expenses
 Possibility of entry of internet mail order retailers (Amazon effect, etc.)2018 Nishimoto Wismettac Group All rights reserved.

24

Growth strategy of the Asian Food Global Business (Existing): (1) Stable growth and execution of
fundamental reform of the distribution and logistics expense structure Stable growth in North America and execution of fundamental reform of the distribution and logistics expense structure<Improvement in income - conceptual diagram>（％）

Stable growthat about 5%

100
Private Branding/cost reduction

80

Current…B2B/C• Sales: Stable growth at about 5%• Cost of sales: Private Branding, cost
reduction through joint procurement• Logistics expenses: Cost reduction bylogistics reforms
New…B2B, addition of content• New investment: Incorporate only
expenditures with a focus on investment in
human resources

60

40
Logistics reform

20

New
investment

Stable growth ofoperating income0

Current

After implementing
measures

Operating income

New investment

Logistics expenses

Expenses such as personnel expenses

Cost of sales

Increase in sales

2018 Nishimoto Wismettac Group All rights reserved.

 Realization of growth in stable operating
income from existing business (Operating
income to net sales will improve after
realization of the new business)

25

Growth strategy of the Asian Food Global Business (Existing): (2) Further promotion of PB
and product cost reduction measures
Further promotion of Private Branding and product cost reduction measures…improvement of the gross profit
margin ratio

Percentage of PB
and NB to net sales

Identifying customer needs and using global
producing regions and producer network to develop
new productsCompany’s
exclusive
sales
products

National
brand

Component ratio
On a net sales
basis

of PB products that satisfy the
1. Development
customer needs

Privatebrand

Percentage to sales: about 40%- Further improve the percentage
implementing the measuresdescribed on the right2018 Nishimoto Wismettac Group All rights reserved.

reduction and stable supply by
2. Costcollaborating with major manufacturers
Take advantage of economies of scale bycollaborating with major manufacturers, ensure
maintenance of a stable supply source and provide
real PB products to customers

3. Local production of PB products
Decrease in cost and various expenses by local
production in regions where products are sold, anddecrease in regulation risks such as import custom
clearance.

26

Growth strategy of the Asian Food Global Business (Existing): (3) Contribution to profit bylocations other than North America
We aim to maintain growth in North America by carefully taking advantage of current growth opportunities
Also, using our existing network of business sites, we aim to transfer our strengths
in North America to other markets around the world and replicate our results worldwide

NORTH AMERICAEUROPE

Company’s integrated distribution system and know-howthat have been cultivated in the North America business

ASIA

2018 Nishimoto Wismettac Group All rights reserved.

27

Changes in Operating Results of the Asian Food Global Business and Its Plan:
North America region and other Regions

170.0

North American region

All segments
19% increase
Year-on-year

Other regions

Net Sales (billions of yen)

160.0
150.0
140.0

All segments
6% increaseyear-on-year

130.0

42.5

22.2

120.0

19.4

110.0
100.0

All segments
6% increaseyear-on-year

17.0

12.7

90.0
80.0
70.0

93.3

101.4

105.9

FY ended
December2017 results

FY ending
December
2018 forecast

111.2

116.8

60.0
50.0
FY ended
December
2016 results
2018 Nishimoto Wismettac Group All rights reserved.

FY ending
December2019 plan

FY ending
December2020 plan28

Growth Strategy of the Agricultural & Seafood Products Trading Business
Existing business・・・Mainly fresh fruits and vegetables
 Steady profit growth in the stable growth market…increase in the share by further strengthening the sales force

New business Sales of domestic fruits and vegetables in overseas markets and sales of foreign fruits and vegetables in overseas markets (offshore
trade)
 Development of new products and new distribution channels of agricultural processed products, as well as expansion of handlingdomestic products
 Domestic sales of Asian food with a focus on fishery products…Gaining share in the “Japanese market,” which is the biggest market forJapanese food, could mean gaining share in the Japanese food markets in the world
Consideration of investment…Strengthening the fundamental “procurement power”
Secure domestic producers of fruits and vegetables, promote their branding and collaborate with them, as well as
develop new food items
Strengthen domestic sales of Asian food ingredients (increase in sales → buying power)
Invest in food ingredients resources

Status of the business
Strengths
 Relationship with prominent growers such as Sunkist
 Top-class share in imported citrus
 Sales power of food ingredients in Japanese food markets all over
the world

Weaknesses
 Sharp changes in revenue and expenditure in the industry as awhole due to price fluctuations
 Mature market of fruits and vegetables in Japan

Opportunities
 Expansion (export) of handling domestic fruits and vegetables
 Aging of domestic producers and increasing number of agricultural
corporations
 Easing of regulations in a variety of handling operations
 Expansion of distribution channels by equipping processing andlogistics functions
 Domestic sales of Asian food
 Investment in food ingredients resources

Threats
 Expansion of direct procurement by domestic sellers (major
retailers, etc.)
 Decline in the purchasing power in Japan (falling population,
increase in demand in emerging countries)⇔ This could be a strength of the Group that has a worldwide
distribution network.

2018 Nishimoto Wismettac Group All rights reserved.

29

Medium-term Business Plan: Changes in Net Sales and Operating Income
 Aim to achieve the medium-term business plan by steady growth of the existing businesses The figures of the plan only include the existing businesses. New businesses only incorporate
expenses.

230.0

Net sales(billions of yen)

229.0

Operating income

9.0

220.0

9.0
8.0

198.9

200.0
190.0

184.8

7.7
7.0

180.0

172.0
170.0
160.0
150.0

Operating income

Net Sales

210.0

6.7
6.3
US$ 1 =
JPY 112.19

6.0

US$ 1 =
JPY 110

US$ 1 =
JPY 110

US$ 1 =
JPY 110140.0

5.0
FY ended December
2017 results

2018 Nishimoto Wismettac Group All rights reserved.

FY ending December
2018 forecast

FY ending December
2019 plan

FY ending December
2020 plan

30

Medium-term Business Plan: Net Sales and Operating Income by Segment(billions of yen)

Net sales

FY ended
December
2017
Results

FY ending
December 2018
Forecast

FY ending
December 2019

Changes yearon-year

FY ending
December 2020

Changes yearon-year

Plan

Changes yearon-year

Plan

Asia Food Global Business

118.4

125.4

+5.9%

133.5

+6.5%

159.3

+19.3%

Agricultural & Seafood
Products Trading Business

49.6

54.8

+10.5%

60.5+10.4%

64.4

+6.5%

Other business

3.9

4.5

+13.6%

4.8

+6.6%

5.1

+6.5%

172.0

184.8

+7.4%

198.9

+7.6%

229.0

+15.1%

Total(billions of yen)

Operating income

FY ended
December
2017
Results

FY ending
December 2018
Forecast

FY ending
December 2019

Changes yearon-year

FY ending
December 2020

Changes yearon-year

Plan

Changes yearon-year

Plan

Asia Food Global Business

5.6

6.2

+9.6%

6.7

+7.3%

7.7

+15.8%

Agricultural & Seafood
Products Trading Business

0.4

0.7

+79.0%

0.9+19.1%

1.0+16.0%

Other business

0.1

0.1

+12.3%

0.2+43.7%

0.3+16.0%

Adjustment

0.0

-0.4

-

-0.1

-

-0.1

-

Total

6.3

6.7

+7.1%

7.7

+14.6%

9.0+16.1%

2018 Nishimoto Wismettac Group All rights reserved.

31

Plan for Net Sales by region
Plan to expand sales in regions other than the North American region
FY ending December
2020 (Plan)FY ended December
2017

Japan
33%

Japan
30%
Net sales
172 billion
yen

Australia
and Asia
5% Europe

3%

2018 Nishimoto Wismettac Group All rights reserved.

Net sales
229 billion
yen

North
America

59%
Australia
and Asia
8%

North
America51%

Europe11%32

Policy of Returning Profits to Shareholders[Policy] In regard to profit distribution, the Company’s basic policy is to continue stable dividends while striving to maintain retained
earnings for developing future businesses and improving financial strength.
 The Company considers the payout ratio to be an important index and aims at maintaining a consolidated payout ratio of
about 30% every year.
 The Company schedules to make a dividend payment twice a year (year-end and interim).
 The amount of dividend for the fiscal year ending December 2018 is planned to be 95 yen per year (40 yen for interim
and 55 yen for year-end).

Dividend per share
95 yen(yen)

100

70 yen75

Payout ratio
ofAbout 30%

55
Year-end
dividend

50

40

25

Interimdividend
0
FY ended December
2017 (Results)

2018 Nishimoto Wismettac Group All rights reserved.

FY ending December
2018 (Forecast)33

Appendix

2018 Nishimoto Wismettac Group All rights reserved.

(Reference) Net Sales by Region(billions of yen)

FY ended
December 2015
Actualresults

FY ended
December 2016

Component
ratio

Actualresults

FY ended
December 2017

Component
ratio

Actualresults

Component
ratio

North America

99.7

63.0%

93.3

59.0%

101.4

58.9%

Europe

0.1

0.1%

3.1

2.0%

5.2

3.1%

Asia/Australia

4.8

3.0%

5.8

3.7%

9.0

5.3%

Japan

53.5

33.8%

55.9

35.4%

56.3

32.7%

Total

158.2

100%

158.3

100%

172.0

100%

2018 Nishimoto Wismettac Group All rights reserved.

35

(Reference) Characteristics of the Company Group: Compliance with Food Regulations
The Group has minimized regulatory risk and other negative factors by building a group-wide system to comply with thewide range of different local regulations in the value chain
Main regulations(US examples)

Product development
and planning

Customs
Clearance

Food Safety
Modernization Act(FSMA) Prevention and control of food safety hazards
 HARPC (HACCP + prevention and control) Inspection program for Regulations governing hygiene control at transport firms
overseas suppliers

HACCP

 Seafood HACCP (manufacturing) Seafood HACCP program (storage, sorting, delivery, sales)

Other regulations

 Bioterrorism Act
 Low-acid canned foods program The Code of Federal Regulations
 National Shellfish Sanitation Program

Purchasing

Storage andsorting

DeliverySales California laws
(Proposition 65)

Internal company systems
FSMA

HACCP

 Monitor suppliers (onsite checks,
documents)
 Certification of qualified prevention andcontrol personnel
 Instructions for suppliers
 US Agent (Bioterrorism Act) Certification of qualified prevention and control personnel(head office, regional offices)

HACCP management (storage, sorting, delivery, sales)
Recall program and other systems established
HACCP training for staff
Third-party certification (offices) Regulation and product label double-check system – systemization

Other regulations< Internal Food Safety(FS) Framework >Risk Management Capabilities
Board of Directors
Managing entire supply chain to prevent health hazards

Weekly/monthly reports
FS Management Office

Ability to comply with food regulations

Weekly reports

Offices
Weeklyreports

Working with importing and exporting countries toaddress new and existing regulations

Asian Food Global
Business FS manager

Agricultural & Seafood
Products Trading BusinessFS manager

Domestic business FS
manager

Asian Food Global
Business FS staff

Agricultural & Seafood Products
Trading Business FS staff

Domestic businessdivisions FS staff

2018 Nishimoto Wismettac Group All rights reserved.

Compliance
Legally compliant and consistently high moral
standards as a food product company

36

(Reference) Characteristics of the Asian Food Global Business: Group of Products Handled

The Group imports Japanese and other Asian food ingredients and products from the US, Japan, China,
Southeast Asia and other markets and sells roughly 8,300 items (as of FY ended December 2017) tocustomers worldwide, mainly in North America

Main Products
Chopsticks,
containers, etc.

Alcohol

Rice

Confectionery
Agricultural
products

Seafood products

Sauces andseasoning

Processed
food products2018 Nishimoto Wismettac Group All rights reserved.

37

(Reference) Characteristics of the Asian Food Global Business: Logistics Capabilities and Systems,
Marketing Network and North American Business Sites
The Group provides rapid, attentive customer service through sales teams tailored to the characteristics of each customer andthrough product delivery schedules based on customer needs

Marketing network and North Americanbusiness sites

Logistics capabilities and systems
 Small-lot distribution and delivery using the Group’s
own logistics network

 Sales teams with personnel who speak the samelanguages as restaurant owners in North America

 Three temperature zones (ambient, chilled, frozen)

 A network of 23 sales offices(covering major cities)

 Rigorous inventory management
 Delivery trucks based at all offices in North America

 Customer database and ability to analyze
characteristics of each customer and local market

12 Calgary Office
13 Denver Office
1 Vancouver Office

2 Las Vegas Office
3 Seattle Office
4 Sacramento Office
5 San Francisco Office
6 Los Angeles Office

14 Chicago Office

15 Toronto Office
16 Montreal Office
17 Boston Office
18 New York Office
19 Washington, DC Office
20 Ohio Office

7 Hawaii Office
8 San Diego Office
9 Arizona Office

21 Miami Office
22 Orlando Office

23 Atlanta Office

10 Houston Office
11 Dallas Office2018 Nishimoto Wismettac Group All rights reserved.

38

(Reference) External Environment Surrounding the Asian Food Global Business:
Changes in the population by race in North America
The population of Asian-Americans in the United States increased and the ratio to the total population also increased.
CaucasianPacific Islander American

African American
Other

Asian American
Ratio of Asian Americans

Native American(million)
500

10%
9.3%
9.0%
7.8%

389

380

400

300

8.2%

281
22
10
35 3.6%347
335
11 6.4%
321
5.9%
10
309
22
8 5.5% 20
18
28
47
45
15 4.8% 42

359 6.9%
13
25
49

9%

8.6%

398

417

407
23

26

19

20
34

39

27

32

37

30
52

54

56

58

60

51

3707.3%
15

17

7%
6%
5%

39

200

100

8%

4%

211

224

248

255

262

267

272

275

278

281

285

283

3%
2%
1%

0

2000

2010

2015
Estimate

2020
Forecast

2025
Forecast

2030
Forecast

2035
Forecast

2040
Forecast

2045
Forecast

2050
Forecast

2055
Forecast

2060
Forecast

0%

Source: U.S. Census Bureau “2010 Census Summary,” “2000 Census Summary,” “2014 National Population Projections”
2018 Nishimoto Wismettac Group All rights reserved.

39

(Reference) External Environment Surrounding the Asian Food Global Business:
Increasing Number of Japanese Restaurants
The number of overseas Japanese food restaurants has been increasing:
About 24,000 (in 2006)  about 55,000 (in 2013)  about 89,000 (in 2015)  about 118,000 (in 2017)
North America
Russia25,300 (1.5x increase)(17,000)

2,400 (2.0x increase)(1,200)Europe12,200 (2.2x increase)(5,500)Asia
Middle East
950 (3.8x increase)(250)

69,300 (2.6x increase)(27,000)

Latin America
Africa4,600 (1.6x increase)(2,900)350 (2.3x increase)(150)

Oceania
2,400 (3.4x increase)(700)
Source: Ministry of Agriculture, Forestry and Fisheries estimates, based on Ministry of Foreign Affairs research*Approximate number of restaurants as of 2017; figures in first brackets show increase from 2013, figures in second brackets shown number of restaurants as of 2013.

2018 Nishimoto Wismettac Group All rights reserved.

40

(Reference) External Environment Surrounding the Asian Food Global Business:
Impact of Inbound Tourism

Visits to Japan are encouraging people to seek out Japanese foodwhen they return to their own countries
Survey of visitors to Japan: “What do you want to do on your next visit to Japan?” (multiple responses allowed)
 “Eat Japanese food” the most common response

54.6%

Eat Japanese food

44.5%

Visit natural and picturesque places

43.0%

Shopping

41.7%

Hot springs

30.6%

Bustling area / Busy street

27.1%

Experience four seasons (cherry blossom viewing, leaf peeping, snow, etc.)

25.6%

Japanese history / Traditional culture experience

23.7%

Stay in Ryokan (Japanese inn)

22.5%

Drink Japanese wine (Nihonshu, Shochu, etc.)
Theme park

20.9%

Experience Japanese daily life

20.4%
17.7%

Picture gallery / Museum
Nature experience tour / Agricultural and fishing villages experience

15.0%

Skiing and snowboarding

14.0%

Enjoy Japanese pop culture

12.0%Stage appreciation (Kabuki, play, music, etc.)

11.3%

Visit places noted in connection with movies and animation

9.0%

Watching sports (Sumo [Japanese wrestling], soccer, etc.)

8.1%

Other sports (golf, etc.)
Medical treatment / Physical checkup
2018 Nishimoto Wismettac Group All rights reserved.

6.5% Source: Japan Tourism Agency “Consumption trend of foreign nationals visiting
3.5%

Japan for the period from October to December 2017 (flash report)”
issued in January 2018

41

(Reference) External environment surrounding the Agricultural & Seafood Products Trading Business:
Export Promotion by the Government
The Japanese government is also supporting efforts to grow the value of agricultural, forestry, fishery and food product exports
Export strategies by country and product
PLAN
Develop export strategy

DO

Goal is to increase the value ofagricultural, forestry, fishery andfood product exports to 1 trillion
yen by 2020

Support businesses andprepare export
environment in line withstrategies

ACT

CHECK

Adjust export strategies
by country and productbased on export
outcomes

Use national businessgroups to assess
outcomes and revise
strategy as needed< 2020 Export Value Target >1 trillion yen
Seafood products
350 billion yen
Processed food products
500 billion yen< 2012 Export Value >Roughly 450 billion yen
Seafood products
170 billion yen

Work on branding, create system to rapidly grant hygiene permits(EU, Russia, Southeast Asia, Africa, etc.)

Processed food products
130 billion yen

Increase exports of ingredients from Japan due to growth in Japanese food culture andfood businesses overseas (EU, Russia, Southeast Asia, China, Middle East, Brazil, India,
etc.)

Rice/processed rice products
13 billion yen

Polish rice in local and sell rice to food service sectors, focus on processed rice products
such as sake (Taiwan, Australia, EU, Russia, etc.)

Forestry products
12 billion yen

Increase exports of Japanese forestry products through growth in Japanese style homes(China, South Korea, etc.)

Flowers
8 billion yen

Work with local growers to create a distribution network, build a “Japan Brand” (EU,
Russia, Singapore, Canada, etc.)

Fruit and vegetables
8 billion yen

Strategically develop new markets, establish year-round supply network (EU, Russia,
Southeast Asia, Middle East, etc.)

Beef
5 billion yen

Focus promotion efforts on Europe and the US, promote sales of different beef cuts (EU,US, Hong Kong, Singapore, Thailand, Canada, UAE, etc.)

Tea
5 billion yen

Increase sales leveraging efforts to cultivate Japanese diet and food culture, promotehealth benefits (EU, Russia, US, etc.)

Rice/processed riceproducts
60 billion yen
Forestry products
25 billion yen
Flowers
15 billion yen
Fruit and vegetables
25 billion yen
Beef
25 billion yen
Tea
15 billion yen

Source: Ministry of Agriculture, Forestry and Fisheries (August 2013)2018 Nishimoto Wismettac Group All rights reserved.

42

(Reference) External environment surrounding the Agricultural & Seafood Products Trading Business:
Export Promotion by the Government (Continued)

Change in agricultural, forestry, fishery and food products export value The export value of agricultural, forestry, fishery and food products has risen for four consecutive years since 2013, reaching 750.2 billion yen in 2016
 Export value totaled 715.8 billion yen in Jan–Nov 2017, up 6.8% year-on-year Under the Cabinet Office’s “Economic Measures for Realizing Investment for the Future” (finalized August 2016), the government is aiming to achieve its
2020 1 trillion yen export value target one year early in 2019
Government targeting export value of
1 trillion yen in 20191¥1
trillionyentrillion00

1 1000.0
trillion yen(billions of yen)

Fishery products

900.0

Forest products

800.0

Agricultural products

+0.7%
YoY

745.1

750.2

(715.8)(669.9)

700.0

611.7
600.0

275.7

550.5

264.0

+6.8%
YoY

242.8
235.7

500.0

233.7

449.7

26.3

221.6

26.8
24.1

400.0
21.1

169.8

300.0

31.8

15.2
11.8

200.0
268.0

313.6

443.1

459.3

2015

2016

356.9

410.2

441.2

100.0
0.0
2012

2013

2014

Source: Ministry of Agriculture, Forestry and Fisheries;
promoting export of agricultural, forestry fishery and food products (January 2018)2018 Nishimoto Wismettac Group All rights reserved.

2016(January
November)

2017(January
November)

2019
平成31年
2019年

43

Making people’s lives around the world richer through foodNishimoto Co., Ltd.

2018 Nishimoto Wismettac Group All rights reserved.

Disclaimer
These materials are intended to provide financial information, management information, etc. of Nishimoto Co.,
Ltd. and its affiliated companies (hereinafter collectively referred to as “the Company”), but the Company
makes no representation or warranty regarding the content of these materials.

The plans, strategies, operating results forecasts, etc. of the Company in these materials may include
information on forward-looking statements, which are based on information currently available to the Company,
and include risks and uncertain elements in relation to economic trends, competition in the industry, market
demand, foreign exchange rates, taxation system, various systems, etc. Therefore, actual operating resultsthat will be published in the future may differ due to these elements, and the Company does not assume any
liability for any damage arising from the use of information in these materials. Furthermore, the Company isunder no obligation to revise and publish future forecasts in these materials based on new information or future
events.
The Company pays close attention when preparing these materials; however, if there are any errors in theinformation presented, falsification of data by a third party, or any failure arising from download of data, etc.,
the Company does not assume any liability for any damage caused by such actions for any reason
whatsoever. We appreciate your understanding regarding this matter.

The information in these materials is not intended to solicit investments. When any investment is actuallymade, please refrain from completely relying on the information in these materials to make an investment
decision, and make the decision based on your own judgment.
[Contact]
Nishimoto Co., Ltd.
Management Planning Department
TEL：03-6870-20152018 Nishimoto Wismettac Group All rights reserved.