To Our Shareholders and Investors

The Japanese economy continues to recover moderately, partly due to the effect of government policies, with an improving employment and income environment. This trend is expected to continue in the future. Looking ahead, there are risks that a downturn global economic conditions due to uncertain overseas interest rate trends and other factors could have a negative impact on the Japanese economy. In addition, it is necessary to pay close attention to the impact of rising commodity prices, situation in the Middle East, changes in the financial and capital markets, and other factors.

In the food industry, dining industry demand has been showing signs of recovery, partly because of an increase in inbound demand. However, a challenging management environment has persisted due to rising raw material prices and logistics costs globally. In addition, the impact that improvements to income through wage hikes and other actions will have on consumer sentiment is unclear.

Amid this business environment, the Megmilk Snow Brand Group (the “Group”) is advancing efforts based on the Megmilk Snow Brand Group Medium-Term Management Plan 2025 (FY2023 to FY2025) with initiatives for “Creating seeds for new growth,” “Expanding quantity by utilizing platform” and “Strengthening and supporting domestic dairy farming production platform” as three pillars for the Group’s business strategy.

In FY2024, the second year of the plan, we established “MOVE” as the theme of the Megmilk Snow Brand Group Management Policy 2024, while positioning and actively pursuing key action items, chiefly (1) Creating seeds for new growth, (2) Expanding quantity by utilizing platform, (3) Strengthening and supporting domestic dairy farming production platform, (4) Promoting an infrastructure strategy, and (5) Tackling sustainability issues.

As a result, for the six months ended September 30, 2024, net sales amounted to 311,653 million yen (up 2.0% YoY), operating profit came to 11,819 million yen (up 5.1% YoY), ordinary profit totaled 12,754 million yen (up 4.2% YoY), and profit attributable to owners of parent was 9,134 million yen (up 18.6% YoY).

The Group defines its purpose as “To achieve food sustainability by leveraging our extensive expertise and functions (the milk value chain) developed through dairy, in line with our founding spirit of Kendo Kenmin ‘a healthy earth ensures human health’.” To tackle the important social issue of achieving food sustainability, we ourselves need to be solid and resilient. We also understand the importance of meeting the expectations of shareholders and investors while continually providing value to all stakeholders. To accomplish this, the Group recognizes the need to strongly commit to further raising profitability and enhancing capital efficiency.

Looking ahead, we appreciate your ongoing support for the initiatives of the Group as it looks toward the future of the dairy industry while striving to enhance corporate value.