True to nature,the flavor of KAGOME

Japanese

Points of Business Performance

FY2023 Highlight (IFRS)

Million yen

2022/12

2023/12

YoY

YoY rate

Revenue

205,618

224,730

19,112

9.3%

Operating income

12,808

19,476

6,668

52.1%

Net income attributable to shareholders of parent

9,116

10,432

1,316

14.4%

【Revenue / Operating income / Net income attributable to shareholders of parent】

The Company aims to become a “strong company capable of sustainable growth, using food as a means of resolving social issues” under the four-year Mid-Term Management Plan starting from the fiscal year ended December 2022. The Company will work on the basic strategy that is to achieve sustainable growth by taking four actions (“1. Promote behavioral change in terms of vegetable intake,” “2. Change to fan-based marketing,” “3. Pursue both organic and inorganic growth,” and “4. Strengthen the Group's management foundation and foster a culture for tackling challenges”) that are organically connected, in an effort to further enhance corporate value. In the fiscal year under review (January 1 to December 31, 2023), the Company continued to face a severe management environment amid surging raw materials prices worldwide. Japan, in particular, continued to face an uncertain situation regarding the future outlook because of consumers’ heightened awareness toward cutting costs caused by inflation. In the Domestic Processed Food Business, prices of certain products in vegetable beverages and tomato condiments were revised in response to a substantial increase in cost of sales including mainstay raw materials. Although demand dampened after these revisions, sales were strong in the food category and category of institutional and industrial use, leading to higher revenue. Meanwhile, soaring raw materials prices resulted in a decline in core operating income. In contrast, the International Business recorded higher profit on higher revenue from rising selling prices of tomato paste and strong sales to food service companies. In addition, in the Domestic Agri-Business, impairment losses on fixed assets of 2,236 million yen were recorded as a result of comprehensively taking into account uncertainties in the fresh tomatoes market due to weather conditions and rising costs associated with soaring energy and fertilizer prices. Accordingly, revenue in the fiscal year under review increased to 224,730 million yen, up 9.3% year on year, and core operating income increased to 19,476 million yen, up 52.1% compared to the previous fiscal year. Operating income increased to 17,472 million yen, up 37.0% year on year, and net income attributable to shareholders of parent increased to 10,432 million yen, up 14.4% compared to the previous fiscal year.

Forecast (IFRS)

FY2024 Earnings Forecast

Revenue

Core operating income

Operating income

Net income attributable to shareholders of parent

2024/12

289,000

17,000

26,000

18,000

・The Company is working to achieve its Mid-Term Management Plan by fiscal 2025, aiming to become a “strong company capable of sustainable growth, using food as a means of resolving social issues” under its vision of transitioning from a tomato company to a vegetable company.
・For the fiscal year ending December 31, 2024, our management policy is to achieve a recovery in profits in the domestic business and accelerate the growth in the international business. In the domestic business, the Company mainly expects that the purchase price of natural farm-produced materials it procures and logistics costs will continue to rise. The Company will nimbly review selling prices and seek to create demand by adding value to products (boost value) and disseminating their value. In the international business, the Company will work to strengthen cooperation with overseas Group companies and endeavor to build a sustainable tomato processing business from a global perspective. In addition, as stated in the timely disclosure dated January 26, 2024, “Notice of Additional Acquisition of Equity Stake in (and Conversion into a Consolidated Subsidiary of) Ingomar Packing Company, LLC and Other Relevant Matters,” the Company has made Ingomar Packing Company, LLC a consolidated subsidiary. This move will strengthen the value chain of the Company’s tomato processing business in the U.S. and further grow its international business.

  1. 1. This forecast for 2020 is based on International Financial Reporting Standards (IFRS) because Kagome started using these standards in 2019.
  2. 2. Rebates involving sales are deducted directly from revenue. In prior years, rebates were included in selling, general and administrative expenses.
  3. 3. Core operating income is an indicator of earnings from continuing operations. This income is revenue minus the cost of sales and selling, general and administrative expenses and includes equity gains of affiliated companies.