Tokyo Stock Exchange, Prime Market, Securities Code: 2004

Financial Results Briefing for FY2024(Ended March 31, 2024)

Showa Sangyo Co., Ltd.
President and CEO
Hideyuki Tsukagoshi
May 21, 2024

Agenda1

Overview of Financial Results for FY2024

2

Earnings Forecast for FY2025

3

Progress of Medium-Term Management Plan 23-25

Copyrightⓒ2024 SHOWA SANGYO Co., Ltd All Rights Reserved.

2

Overview of Consolidated Financial Results for FY2024(0.1 billions ofyen)

FY2023

Change(Year-on-Year)FY2024

Percentage ofchange(Year-on-Year)

3,350

3,463

113

3.4%

Operating profit

41

131

89

214.2%

Ordinary profit

65

165

100

153.8%

Profit

77

123

45

58.9%

Net sales■ Net sales (0.1 billions of yen)
3,350

3,463

50
594

45
594

2,705

2023.3

Key points of FY2024(+)

Recovery of inbound demand in line with theshift of COVID-19 to a Class 5 disease(+)

Focus on expanding sales channels bybusiness category and by customer,
strengthening proposals in sales channels inall categories, and selling at reasonable prices(+)

Increase in food segment sales due to higher
unit sales prices and higher sales volume(-)

In the animal feed segment, sales volume ofcompounded feed and eggs decreased due tothe spread of bird flu and heat waves■ Operating profit (0.1 billions of yen)
131

2,823

2024.3

7

Other

Animal
feed

41

Food

4
39
2023.3

1282024.3Copyrightⓒ2024 SHOWA SANGYO Co., Ltd All Rights Reserved.

3

Factors for Changes in Net Sales for FY2024
By segment

By factor(0.1 billions of yen)(0.1 billions of yen)
117

9

0

4

3,463

55

3,463
▲5
48
3,350

3,350

FY20232023

FY2024

▲4

Food
Food
Businessbusiness

Animal Feed
Business

Other

FY20242024

FY2024FY20232023
FY2024

Sales volume

Sales price

Eggs(Quantity +Price)

Change infiscal year end
(*)

Other

2024
FY2024FY2024* Change in fiscal year end: Central Flour Milling Co., Ltd. changed its fiscal year end from December toMarch (15-month fiscal period).
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4

Factors for Changes in Operating Profit for FY2024
By factor

By segment(0.1 billions of yen)(0.1 billions of yen)
54

88

3

131
▲2

7

131

Other

2024
FY2024FY2024▲23
51

41

FY20232023
FY2024

Food
Businessbusiness

Animal Feed
Business

Other

FY20242024

FY202441

0

FY20232023
FY2023

Sales volume

Sales unit
price

Costs

Selling,
general andadministrative
expenses

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5

By Segment: Foods Business(0.1 billions of yen)

Net sales
Operating profit

2023.32024.3

Change▶ Expansion of sales channels by strengthening proposals taking advantage of sales systems bybusiness type and by customer▶ Productivity improvement and cost reduction through Group-wide optimization of production sites

2,705

2,823

117

39

128

88

▶ Promotion of sales at fair prices in line with costs

Flour Milling Category(0.1 billions of yen)

3,000
2,500

▶ Strengthening of cooperation among 5 flour milling companies and 7 plants including groupcompanies▶ Improvement of Funabashi Premix No.2 Plant’s operation in line with optimization of production sites

Net sales
2,705

Net sales and profit Increase

2,823

Vegetable Oils Category

2,299

Net sales decrease and profit increase▶ Improvement in competitiveness and expansion of sales of rice bran oil and corn oil Implementation of capital and business alliance with Tsuji Oil Mills, and increase in production
efficiency of companies including Boso oil and fat▶ Expansion of sales of high-value-added products (functional vegetable oils and fats, soy protein)

2,000
1,500

Starches and sweeteners category

1,000
500
0

2022.32023.32024.3

Net sales and profit Increase▶ Expansion of sales of functional products (powdered corn syrup, crystalline glucose, acidic
oligosaccharide) Expansion of sales of functional products by strengthening and deepening BtoB marketing▶ Promotion of business structure reform including optimization of production sites integrated among
three group companies (Showa Sangyo, Shikishima Starch MFG, and San-ei Sucrochemical) andselection and concentration of product categories

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6

FY2024 Net Sales (by Food Business Category)(0.1 billion yen)

Reportable Segment
Foodbusiness

Animal Feed
Business

Other(Note 1)

Total

Total

Flour Milling Category

1,095

-

1,095

-

1,095

Vegetable Oils Category

978

-

978

-

978

Starches and sweeteners category

685

-

685

-

685

Other food categories (Note 2)

63

-

63

-

63

2,823

594

3,417

27

3,445

-

-

-

18

18

2,823

594

3,417

45

3,463

Revenue from contracts with customers
Other revenues
Net sales to external customers(Note 1)“Other” is the aggregation of business segments not included in the reportable segments and includes warehousing, real estate, plant factories,
insurance agency, automobile leasing, and other businesses.

(Note 2)“Other food category” includes sales of food products that do not belong to the Flour Milling, Vegetable oils, and Starches and sweeteners
categories.
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7

By Segment: Animal Feed Business2023.32024.3

Change

594

594

0

Operating profit

4

7

3

(0.1 billions of yen)

Net sales(0.1 billions of yen)

Net sales

594

600

Compound animal feed
▶ Promotion of sales at fair prices in line with costs▶ Expansion of sales through proposals for solutions to issues that customers (farms) need toaddress▶ Expansion of sales of high-value-added products, namely synthetic milk and oligosaccharide
mixed animal feed

Eggs and others
594

528

▶ Expansion and stabilization of profit through development of layered business integrated
between Showa Sangyo and Showa Keiran Development and sales of branded eggs taking advantage of synergy across the Group▶ Creation of new value through pursuit of technology to make feed from unused raw materials
 Conversion of waste generated at the Company and group plants into valuable resources

400

Initiatives for unused raw materials
200■ Social issues (ESG) ■0

Initiatives to contribute to the realizationof a recycling-oriented and sustainable
society by utilizing materials that areconventionally discarded

2022.32023.32024.3< Contribution from an ESG perspective >■ Value creation (corporate profits) ■Economic profits from converting nonvaluable items (items whose disposal
requires costs) into valuable items, andimprovement of customer value throughinitiatives with customers of otherbusinesses< Contribution in economic value >Copyrightⓒ2024 SHOWA SANGYO Co., Ltd All Rights Reserved.

8

Factors Affecting Cost
■ Cost environment [Raw materials, exchange rates, energy]
FY2024
April-June results

July-September
results

FY2025October-December
results

January-March
results

Assumptions

Wheat yen/t*1

72,53076,75076,75068,24068,460

Soybean ¢/Bu*2

1,501

1,440

1,333

1,295

1,235

Rapeseed C$/MT*3

793

745

748

657

625

Corn ¢/Bu*4

653

592

479

463

490

53.0
133.39103.2

48.9
140.0475.8

59.8
147.3589.1

62.7
146.8798.8

63.0
146.0093.2

Sea freight US$/t*5
Exchange rate Yen/US$ *6
LNG yen/kg*7
*1:
*2:
*3:
*4:

Average price of five brands three months prior to the relevant period
Average Chicago market price two months prior to the relevant period
Average ICE market price two months prior to the relevant period
Average Chicago market price two months prior to the relevant period*5: Average Panamax vessel of U.S. Gulf-Japan (based on corn)*6: TTM average two months prior to the relevant period*7: Average unit price calculated from value and quantity of imported goods in the
country of origin based on the actual monthly preliminary figures of Trade Statistics
of Japan disclosed two months prior to the relevant period■ Reference (cumulative total)(0.1 billions of yen)2024.3(1Q)

2024.3(2Q)

2024.3(3Q)2024.3(4Q)

Forecast for FY2025

Net sales

897

1,755

2,655

3,463

3,460

Operating profit

33

73

113

131

120

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9

Reinforcement of Core Businesses—Transformation to “Solution-Oriented” Sales
Development and restructuring of platforms for sustainable corporate development

2020-2021

2022■ Creation of Solution Sales
Department■ Strengthening of knowledge
management■ Segmentation andintegration of sales support
functions■ Sales skills training■ Strengthening of KGI andKPI management■ Digitization of invoices, etc.

2023

■ Company-wide
reorganization
Business modeltransformation
To be “different”
instead of “better”
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10Effects of Reorganization—Transformation to “Solution-Oriented” Sales
Sales organization that facilitates further synergies
among businesses

New organization[Solution-based sales organization by business category and customer]

Flour

CustomerCompanyC
Company
D

Sugar

Flour

Oil

Sugar

Business Division(Business Management)

CompanyA
CompanyB

Oil

Sales Division (Sales)

Proposed by salespersons
from different departments
Flour

Flour
milling

Vegetableoils

Starchesandsweeteners

Animal
feed

Oil

Sugar

Proposed by one salesperson
for all products
Flour

Oil

Sugar

Customers: Manufacturers / Food service / Deli food /Household / Export

Integration ofsales contacts

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11Effects of Reorganization—Transformation to “Solution-Oriented” Sales

Breaking free from volatility
Increasing products of
unparalleleddifferentiating quality

Creation of products thatsolve social issues

Improvement ofproblem-solving skills
Knowledge

Improvement ofhypothesis verifying skills for solving issues(What are the ideal raw materials, processes
and manufacturing methods?)

ActionContribute to solvingsocial issues faced by customers(labor shortage, food loss, etc.)

Human resource education:
Growth through on-site experience and in-house training
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12

Case study of Solution-based Sales (1)1. Fresh pasta solutions for food service

Wider range of proposals[Customer’s issue]■ In-store quality analysis from theconsumer’s perspective

Dried pasta

Immersed inwater

Consideration of improvement proposals
Pasta that has
absorbed water

By immersing the pasta in water...
Significantly reduces cooking time of dried pasta
noodles, which normally takes 7 to 8 minutes.
But...

 Elastic texture Improved flavor Boiling time in 1
minute range

Fresh
pasta

Optimally mixed flour

Production

Quality

Speed
While emphasis is placed on workability,
quality is sacrificed.

 Proposal of fresh pasta

Fresh pasta cooked in 1 minute range
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13

Case study of Solution-based Sales (2)2. Pasta (dried) solutions for food service

Proposal details[Customer request]■ In-depth study of raw materials andmanufacturing processes, which arefactors of deliciousness

We want to reduce serving time*1 andprovide delicious pasta with an al dente
texture.
*1

Considering an
improvement
plan

Dried pasta products that areusually boiled for about 8 minutes

It is difficult to reproduce an al dente
texture with frozen noodles.
Can’t we shorten serving times byreviewing the raw materials andprocesses of dried pasta noodles?

 Reviewing raw materials andpasta production processesRawmaterials

Selecting raw materials that areeasy to boil in a short time
(Patent pending: JP 2023-151390)

Pasta production
process

Adjusting pasta processing
conditions

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14

Case study of Solution-based Sales (3)3. Frying oils used in bakeries, etc.

Proposal details[Customer request]■ Quality analysis from the consumer’s
perspective
Consideration of improvement proposals

Take-out Maintaining crispness
 Reducing oil stains
 Moderate moistness

Semifluid fats

Want to keep curry bread crispy.
Want to prevent oil stains during take-out and productdisplay

Deterioration over time causes
quality deterioration.
 Achieving both reduction of time
deterioration and quality
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15

Case study of Solution-based Sales (4)4. Oils and fats for café beverages[Issue]There is a limit to the amount of
milk mixture to make anunsweetened or low-sugar latte.

 Proposal of dextrin (powdered cornsyrup) and oils/fats
Dextrin(powdered corn syrup)

Various oils and fats+

Wider range of proposals
・ Lack of milk flavor in latte・ Poor mixture balance of coffee andmilk■ Dextrin (powdered corn syrup)
 Flavor (adding milk flavor)■ Oils and fats
 Richness (adding milk fat)

Enhanced milkiness andflavor balance
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16

Agenda1

Overview of Financial Results for FY2024

2

Earnings Forecast for FY2025

3

Progress of Medium-Term Management Plan 23-25

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17

Earnings Forecast for FY2025

FY2024FY2025 forecast(0.1 billions of yen)

Change(Year-on-Year)

Percentage ofchange(Year-on-Year)0.1％

Net sales

3,463

3,460

3

Food

2,823

2,830

6

Animal feed

594

580

1４

Other

45

50

4

Operating profit

131

120

11

Food

128

115

13

Animal feed

7

8

1

Other

13

13

0

Company-wide expenses, etc.

17

17

-

Ordinary profit

165

130

35

21.5%

Profit

123

110

13

11.0％

8.7％

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18

Earnings Forecast for FY2025 (by Segment)
Change in net sales

Change in operating profit(0.1 billions of yen)(0.1 billions of yen)

131
3,463

4

6

3,460
1

▲14

0.2

120

Other

FY2025(forecast)

▲13

2024
FY2024FY2024

Animal FeedFoodbusiness
Business
Business

Other

FY2025(forecast)

2024
FY2024FY2024

Food
Food
Animal Feed
Businessbusiness
Business

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19

FY2025 Priority Measures▶ Enhancement of proposal-oriented sales taking advantage of sales systems by business type and by customer▶ Continuation and verification of productivity improvement and cost reduction through optimization of production sites
throughout the Group▶ Expansion of sales of high-value-added products and continuation of sales at reasonable prices in line with costs

Food business

Strengthening of premix production■ Flour Milling Category▶ Integration into Funabashi Premix No.2 Plant and continued collaboration withgroup companies Improvement of operation efficiency and optimization of production sites▶ Continuation of integrated business structural reform among four groupcompanies in baked bread business Productivity improvement and food waste reduction through thorough costmanagement■ Vegetable Oils Category

Kobe Plant(35,000 t/year)
Okumoto Flour
Milling(28,000 t/year)

Itako Plant(37,000 t/year)
Funabashi Food
Plant
(35,000 t/year)

Funabashi Premix No. 2
Plant (28,000 t/year) Nearly double that ofprevious facility

Secured163,000 t/year production capacity Group-wide▶ Improvement of the vegetable oil business base and management of oil portfolio
 Competitiveness improvement and sales expansion of corn oil and rice bran oil through strengthening alliance with Boso
oil and fat and Tsuji Oil Mills▶ Expansion of sales of high-value-added products (functional vegetable oils and fats, soy protein) Promoting product development and solution proposals to cope with challenges of each sales channel
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20

FY2025 Priority Measures■ Starches and sweeteners category▶ Promotion of differentiation strategies
 Expansion of sales of distinctive product lines (low-decomposition candy, powdered corn syrup, etc.)
 Marketing and customer development with health appeal▶ Integration and streamlining of production sites among three group companies (Showa Sangyo,
Shikishima Starch MFG, and San-ei Sucrochemical)
 Utilization of mutual supply system among group companies and optimization of production sites
Shikishima Continued promotion of business structure reforms, including product category selection and
SHIKISHIMAStarchconcentration
MFG

Showa

Starchesandsweeteners
San-eiAnimal Feed Business▶ Promotion of measures for profit and loss stabilization
 Expansion of sales of high-value-added products, namely synthetic milk
and oligosaccharide mixed animal feed
 Expansion of sales through proposals for solutions for issues that farms
need to address▶ Expansion of profit scale through development of layered business strategy
integrated between Showa Sangyo and Showa Keiran Development and sales of value-added eggs (brand eggs) and sales
expansion of hot-spring eggs
▶ Creation of new value through pursuit of technology to make feed from unused
raw materials
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21

Agenda1

Overview of Financial Results for FY2024

2

Earnings Forecast for FY2025

3

Progress of Medium-Term Management Plan 23-25

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22

Five Key Strategies of Medium-Term Management Plan 23-25
1 Strengthening Our Core Businesses

2 Expansion of Business Fields

1. Evolution of the “Grain Solution”- Enhancement of sales by transformation into“one-stop” sales system
2. Expansion of business and enhancement of
profitability through Group collaboration
3. Optimization of product composition
4. Expansion of value-added products sales through adifferentiation strategy
5. Strengthening stable procurement

1. Expansion of overseas businesses bystrengthening existing businesses in the ASEAN
region and developing new businesses
2. Strengthening of export business
3. Expansion of frozen food businesses
4. Challenge to new businesses- Plant-based food
- Fine chemicals, oleochemicals

Sophistication of sustainability management to support our Group’s sustainable growth3

Reducing Burden on theEnvironment

4 Rebuilding Our Platform

5

Enforcing Stakeholder
Engagement

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23

Quantitative Effects of Priority Measures[Actual results for FY2024 (ordinary profit basis)]■ Targets for the FY2024–2026 Medium-term Management
Plan (compared with FY2023 results): +2.7 billion yen

Key Strategy (1) Strengthening of Our Core Businesses:+3.9 billion yen
1. Evolution of the “Grain Solution”+0.3 billion yen

2. Expansion of business and enhancement of profitability
through Group collaboration+1.7 billion yen

3. Optimization of product composition+0.6 billion yen

4. Expansion of value-added products sales through adifferentiation strategy+1.3 billion yen▶ Aiming for further evolution of grain solutions by leveraging our sales
system by business category and customer to provide one-stop sales
for products in various categories to meet customer needs▶ Further reduction of costs through a Group-wide reforming of businessstructure in response to rising costs▶ Establishment of a system for the vertical launch of Showa Sangyo
International Vietnam

Key Strategy (2) Expansion of Our Business Fields:
0.1 billion yen+0.1 billion yen

2. Expansion of frozen food businesses

Key Strategy (1):Strengthening of Our Core Businesses

Key Strategy (2):Expansion of Our Business Fields■ Targets for the FY2024–2026 Medium-Term Management
Plan (compared with FY2023 results): +0.8 billion yen

1. Expansion of overseas businesses[Measures for FY2025 and beyond]0■ Targets for the FY2024–2026 Medium-Term Management
Plan (compared with FY2023 results): +3.0 billion yen

Recovery of business environment, responding tobusiness environmental changes: +4.9 billion yen
1. Recovery of sales volume+0.5 billion yen

2. Appropriate price revision+4.4 billion yen▶ Expansion of export businesses▶ Challenges to new overseas businesses

Recovery of business environment, responding tobusiness environmental changes▶ Recovery in sales volume of edible oils and premixes, which had
declined due to the COVID-19 pandemic and soaring prices

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24Return to Shareholders (Dividends)
Change in dividends per share and dividend payout ratio
Dividends

Dividends (yen)Dividend payout ratio(%)

Dividend payout ratio

80

60.0
49.7

70

50.0

60
30.0

40

40.0

*1

50

30.9

27.9

26.1

*2

21.7

24.3

30

30.0
20.0

20
10.0

10
0

60

65

65

60

65

80

80

2019.32020.32021.32022.32023.32024.3

FY2025 (forecast)

We will continue a long-term stabledividend payout witha target payout ratio of 30%.

*1:

*2:

0.0

The dividend payout ratio for the fiscal year ending March 2021 does not include
the impact of negative goodwill gains.
If included, the ratio will be 20.3%
Dividend payout ratio before cancellation of treasury shares

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25

Capital Allocation (3-year-aggregate) (Fiscal 2024–2026)
Revised capital allocation plan based on FY2024 results and FY2025 forecast, as well as capital policy
Cash in(Reference) Initial plan
3-year Cumulative Cash Flows
Cash in

Shareholder return

56 billion yen

Growth investment
Operating cash flow

Cash out

33 billion yen

70 billion yen

In addition to stable shareholder dividends, wepurchased treasury shares in order to flexibly
return profits to shareholders, taking into accountprofits for FY2024 and other factors.

Shareholder
return33 billion yen

Capital investment
for maintenance andrenewalCapitalinvestment for
maintenance andrenewalReduction of assets
3 to 4 billion yen

・ Sale of Motoyawata Building
・ Appropriate reduction of cross shareholdings
based on holding criteria

Reduction ofassetsShareholder return
6 billion yen

Operatingcash flow

Cash in11 billion yen

Cash out

Growthinvestment

Major progress

Cash out

23 billion yen

Funding
9 to 10 billion yen

Redemption of SB
7 billion yen(69 billion yen)

(69 billion yen)

Reduction of assets
3.5 to 4.5 billion yen

29 billion yen

5.5 to 6.5 billion yen

Redemption of straightbonds (SB): 7 billion yen(80 billion yen)

(80 billion yen)

Funding

Growth investment
Capital investment
for maintenanceand renewal

Appropriate investment for growth as well as
maintenance/renewal investment for stablemanufacturing, taking into account the overall
financial situation and business environment[Main growth investments]
・ Formed capital and business alliance with Tsuji
Oil Mills Co., Ltd.
・ Installed new multi-story automated warehousefor flour milling at Kobe Plant
・ Installed biomass-powered boiler at Kashima
Plant

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26

Reference Material

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27

Overview of Consolidated Balance Sheet
Consolidated Balance Sheet
Current assets
Cash and deposits
Trade receivables
Inventories
Other
Non-current assets/Deferred assets

FY2023
1,234
62
553
587
32
1,242

(0.1 billions of yen)
FY2024
Change
1,227
▲7
81
19
614
61
487
▲ 100
44
11
1,394
151

Property, plant and equipment/
Intangible assets

874

905

30

Investments and other assets
Total assets

367
2,477

488
2,622

120
144

FY2023
1,314
324
603
18
367
1,163
1,037
92
33
2,477

FY2024
1,289
263
533
24
468
1,332
1,139
156
36
2,622

Change
▲ 24
▲ 60
▲ 69
5
101
168
101
64
2
144

Liabilities
Trade payables
Interest-bearing debt
Provisions
Other
Net assets
Shareholders’ equity
Comprehensive income and otherNon-controlling interests
Total liabilities and net assets

Change in inventories

359(0.1 billions of yen)

467

587
487

277
2020

2021

2022

Change in interest-bearing debt

441

518

2021

2022

2023

2024

(0.1 billions of yen)

603
533

293
2020

2023

2024

Change in capital adequacy ratio

49.2

46.7

45.7

45.6

49.4

2020

2021

2022

2023

2024

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28

Cash Flows(0.1 billions of yen)
FY2023

Profit before income taxes
Depreciation <Non-cash items>
Impairment losses <Non-cash items>
Change in working capital (trade receivables, inventories, trade payables)
Income taxes paid/refund
Other
Cash flows from operating activities
Acquisition of property, plant and equipment
Sale of property, plant and equipment
Acquisition of investment securities
Sale of investment securities
Other
Cash flows from investment activities
Free cash flow
Short-term borrowings, commercial papers, long-term borrowings
Dividends paid
Other
Cash flows from financing activities
Cash and cash equivalents at end of period

109
99
4
△ 189
△ 11
△ 41
△ 29
△ 98
61
△ 12
‐
△ 11
△ 61
△ 90
85
△ 20
△3
61
62

FY2024

166
102
‐
△ 22
△ 35
26
237
△ 108
2
△0
8
△ ２６
△ 124
113
△ 69
△ 21
△2
△ 94
81

Change

57
3
△4
166
△ 24
67
266
△9
△ 59
12
8
△ 14
△ 62
204
△ 154
△1
0
△ 155
19

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29

Change in Capital Investment and Depreciation(Progress and Forecast for FY2025)(0.1 billions of yen)

200
150
100

144
125

146

123
75

76 79

78 85

2017.32018.32019.397
81

872020.32021.3

99

101

94

100

103

108

2024.32025.3(forecast)

50
0Capital Investment

2022.32023.3

Depreciation

Major Capital Investments<FY2025>▶ Renewal of multi-story automated warehouse forflour milling......

Improvement and streamlining of logistics functions
 Scheduled to begin operations in February 2026

▶ Installation of biomass-powered boiler......

Projected reduction of approx. 37,000 tons/year of CO2 emissions
 Operation scheduled for FY2027▶ Update of oil and fat refining facilities......

Renewal is complete and existing facilities are being removed.

▶ Update of facilities at San-ei Sucrochemical Co., Ltd.

......

Construction work to update and improve aged facilities
Copyrightⓒ2024 SHOWA SANGYO Co., Ltd All Rights Reserved.

30

R&D Expenses (Progress and Forecast for Current Fiscal Year)(0.1 billions of yen)
40

29

30

26

27

27

2023.32024.3

24
22

21

22

22

2019.32020.320

1002017.32018.32021.32022.32025.3(forecast)

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31

Financial KPIs of Medium-Term Management Plan FY2024–2026
Introduced (1) ROIC and (2) CCC as new business management indicators and theirprogress is controlled as financial KPIs.
(1) ROIC

Upgrading business portfolio management by evaluating businesses and developing management
resource allocation rules(2) CCC

Promoting cash flow based management by defining improvement items and managing them on amonthly basis*2:

FY2024
results

Targets of Medium-Term
Management Plan
FY2024–2026

165

130

10.2

7.0 or higher

Ordinary profit(0.1 billions of yen)

65

ROE

(%)

7.1

ROIC *2

(%)

1.8

5.3

4.0 or higher

CCC(Days)

91

87.3

75

0.48

0.35

0.6 or less

NET D/E Ratio*1:

FY2023
results*1

In FY2023, there was a gain on sales of non-current assets (extraordinary income) of approximately 5.2 billion yen from thesale of the Shosan Ageo Building.
Definition of ROIC: ROIC = Operating profit after tax / Invested capital (interest-bearing debt (net) + equity capital). The
operating profit after tax is calculated assuming that income taxes are 30% of operating profit.
Copyrightⓒ2024 SHOWA SANGYO Co., Ltd All Rights Reserved.

32

Non-financial KPIs
Medium-termManagement Plan
objectives

Showa Sangyo Group
Environmental targets

Reduction of
CO2 emissions▲30% or more

FY2031▲46% or more

Reduction of food loss

▲30% or more

Environmental targets▲9% or more

Medium-term Management Plan objectives

Promotion of D&I

・ Percentage of female employees in managerial
positions:
FY2026 10% or more

Promotion of strategic
human capital investment

・ Reskilling investment amount:
Twice or more in FY2026 (compared with FY2022)

Increased employee
engagement

・ Engagement score:
Targets to be announced during the period ofMedium-Term Plan FY2024–2026

Compared with FY2014

FY2026▲30% or more

Compared with FY2019

Reduction ofwater consumption(basic unit)

Human capital management

FY2031▲12% or more

Compared with FY2020

FY2031▲25% or more

Reduction of plastic
usage (basic unit)▲7% or more

Digitalization strategy

Medium-term Management Plan objectives

Compared with FY2014

RD&E strategy

Medium-term Management Plan objectives

Promotion ofdigitalization

・ Digitalization promotion expenses: 4.5 billion yen
over 3 years(Growth investment: 1.2 billion yen)

Expansion ofBusiness Fields

・ Strengthening of research and development in thefrozen foods business and new business fields
・ Improvement of technical capabilities of overseas
production sites[Key measures (1)]Introduction of multifaceted analytical DB
and Dashboard

・ Sales transformation through effective use ofcustomer information(Customer analysis  enhanced customer
proposals)
・ Cost reduction: -60 million yen/year

Utilization of IT and
AI technologies

・ Promotion of smart factories[Key measures (2)]Development of
human resources topromote DX・ Future DX human resources: 100 trained・ Cost reduction through deployment of “No-code
development tools”: -70 million yen/year

Cost reduction throughproduction improvement
activities

・ Cost savings:
1 billion yen or more in 3-year cumulative total

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33

Change in Quarterly Net Sales and Operating Profit
2Q

1Q(millions of yen)

4Q

3Q

2023.32024.3

Change2023.32024.3

Change2023.32024.3

Change2023.32024.3

ChangeFood

65,69573,665

7,969

65,93569,864

3,928

72,53973,545

1,005

66,382

65,252▲1,130

Animal feed

13,781

14,967

1,185

15,447

14,726▲721

15,962

15,318▲644

14,235

14,450

215

Other

1,210

1,166

▲44

1,339

1,192

▲147

1,233

1,108

▲124

1,289

1,100

▲189

Total

80,68889,7999,111

82,72285,7833,060

89,73589,972237

81,90780,803▲1,104

Food

1,973

3,353

1,380

242

3,967

3,724

2,088

3,889

1,800

▲329

1,639

1,968

Animal feed

▲104

▲7

97

259

126

▲133

186

197

10

60

396

336

307

302

▲4

392

357

▲34

384

352

▲32

313

307

▲5

Company-wide
expenses, etc.

▲360

▲336

24

▲392

▲412

▲19

▲415

▲471

▲56

▲422

▲516

▲94

Total

1,815

3,313

1,497

502

4,039

3,537

2,244

3,966

1,722

▲377

1,827

2,205

Net sales

Operating Other
profitCopyrightⓒ2023 SHOWA SANGYO Co., Ltd All Rights Reserved.

34

[Reference] Activities related to IR (FY2024)
We promote IR activities with the aim of ensuring that all stakeholders have a correct understanding of thedirection the Group is heading in.
In accordance with the “Fair Disclosure Rules,” our basic stance is to disclose information promptly, and we will
respond to the requests of our stakeholders by providing information accurately, promptly, and proactively.
Activity

Results

Description

Financial results briefing foranalysts

Twice

Explanation of financial results and initiatives for institutional investors
and securities analysts in May (4Q) and November (2Q)

Plant tours for analysts

Once

Guided tour of our mainstay Kashima Plant (silos, wharf, manufacturing
process, etc.)

Individual IR for analysts

29 cases

Explanation of business activities, financial results, and initiatives for
institutional investors and securities analysts on a case-by-case basis

Company presentation for
individual investors

Once

Individual explanation offinancial results for major
shareholders

Five times

Explanation of business activities, business models, shareholder returns,
etc. for individual investors
Individual explanation of financial results and initiatives in May (4Q)

Copyrightⓒ2024 SHOWA SANGYO Co., Ltd All Rights Reserved.

35

Notes regarding forecasts and projections
The figures included in this material are formulated based on information currently available and certain assumptions judged to be reasonable. As this material contains potential
risks and uncertainties, we do not guarantee its achievement or future performance.
Furthermore, as actual results, etc., may also significantly differ from initial projections and plans mentioned in this material, you should refrain from making investment decisions
based solely on this material.
Showa Sangyo Group will not necessarily review the Medium-Term Management Plan or assume any obligation to do so, regardless of future information, events or consequences
caused by them.

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36