■Summary

Kenko Mayonnaise ＜2915＞ is a food manufacturer consisting of the condiment/processed food business of Kenko Mayonnaise itself, which handles salads and side dishes, mayonnaise dressings, processed egg products, etc., and side dish-related businesses, etc. composed of consolidated subsidiaries.

1. Summary of financial results for the interim period ending March 31, 2025

Consolidated financial results for the interim period ending 2025/3 (2024/4/9) were 46455 million yen, up 6.1% from the same period last year in terms of sales, and 3194 million yen, up 308.0% from the same period in operating income, both of which hit record highs for the interim period. Sales remained strong for the restaurant industry, up 10.0% from the same period, partly due to the expansion of inbound demand, and also remained strong for mass retailers and convenience stores. By product, processed egg products, which had fallen in the same period last year, recovered rapidly with a 26.9% increase due to the resolution of egg shortages, and became the driving force behind the increase in sales. On the profit side, it was a profit increase factor of 1035 million yen due to price revisions, 775 million yen due to reduced raw material costs, and 654 million yen due to improvements in production efficiency, and cost increases such as labor costs were absorbed.

2. Earnings Forecast for the Fiscal Year Ending March 2025

Financial results for the fiscal year ending 2025/3 are expected to be 92000 million yen, up 3.7% from the previous fiscal year in terms of sales, and 4500 million yen, up 52.6% from the same period in operating income. In the second half of the fiscal year, in addition to not having a price revision effect, an increase in raw material prices such as eggs and packaging materials, and an increase in policy costs for the operation of new core systems and strategies in medium- to long-term management plans, the profit level falls compared to the mid-term period, but it is expected that the highest profit will be updated for the first time in 7 fiscal years in the full fiscal year. Sales for the second half of the year are planned to increase by over 1% compared to the same period last year, but there is no change in market trends such as the restaurant industry, etc., and we believe that there is room for a slight increase in sales.

3. Overview of the medium- to long-term management plan “KENKO Vision 2035”

The company announced the medium- to long-term management plan “KENKO Vision 2035” until the fiscal year ending 2036/3. With the vision of “becoming the best in the world with salad dishes,” we are working on drastic reforms and further improvement of corporate value. The first phase will be 4 years until the 2028/3 fiscal year, and business structural reforms will be promoted. Specifically, in addition to improving brand power by raising the NB (national brand) ratio from about 30% in the previous fiscal year to 50%, we will work to expand EC business, promote overseas business, and create new businesses. In addition, we will improve work efficiency by promoting DX, and improve production efficiency by reorganizing factories and organizing and integrating product items. Since investment amounts related to these business structural reforms are planned to focus on the latter two years, the operating profit target for the fiscal year ending 2028/3 was conservatively formulated at 3.3 billion yen or more, but the profit level for the fiscal year ending 2025/3 is expected to exceed 4 billion yen. Therefore, while prioritizing implementation of business structural reforms for profit levels for the fiscal year ending 2026/3 and beyond, it is expected that profit levels will aim to maintain at least the level of the 2025/3 fiscal year. From the fiscal year ending 2029/3 onwards, the effects of business structural reforms are expected to become apparent and transition to a growth period, and we aim for sales of 125 billion yen or more, operating income of 7.5 billion yen or more, operating profit margin of 6% or more, and ROE of 8% or more for the fiscal year ending 2036/3.

4. Shareholder return policy

The company has a policy of implementing dividends based on DOE (dividend on shareholders' equity) in order to continue stable dividends that are not affected by changes in performance. The first phase (up to 2028/3) of the medium- to long-term management plan will gradually raise the level to DOE 1.5% or more, the second phase (up to the fiscal year ending 2032/3) is 2.0% or more, and the third phase (up to the fiscal year ending 2036/3) is 2.5% or more. Based on the same policy, the dividend per share for the fiscal year ending 2025/3 is planned to be 38.0 yen, which is an 8.0 yen increase from the previous fiscal year. We have also introduced a shareholder benefit program, and as of the end of March every year, we present our products (equivalent to 1,000 yen or 2,500 yen) to shareholders holding 100 shares or more according to the number of shares held.

■Key Points

・There was a significant increase in profit for the interim period ending 2025/3 due to price revisions and improvements in production efficiency

・Earnings for the fiscal year ending 2025/3 hit record highs for the first time in 7 fiscal years

・We aim for sales of 125 billion yen or more and an operating profit margin of 6% or more for the fiscal year ending 2036/3 through business structural reforms and productivity improvements through DX

・The plan is to gradually raise DOE standards for dividends

(Author: FISCO Visiting Analyst Joe Sato)