Summary of Q&A for Results Briefing of Fiscal Year 2024 held on May 16,2025

In terms of completion basis, capital investments are expected to peak in FY2025, decrease in FY2026, and increase again in FY2027. On a payment basis, we anticipate a consistent level of cash outflow through FY 2026.

The policy outlined in the Medium-Term Management Plan has not been changed. While the total return ratio for a single year may fluctuate, our policy is to steadily provide stable dividends and achieve a cumulative total return ratio of 40% or more over 3 years, including share buybacks.

Share buybacks in connection with the reduction of cross-shareholdings depend partly on the intentions of our counterparties, and further requests could make this possible. Multiple companies requested simultaneously on this occasion, so we conducted a tender offer. In addition to such cases, we will consider share buybacks as a general shareholder return policy, responding appropriately as circumstances warrant.

For FY 2025, we plan to record a certain loss level due to the costs associated with the vessel reduction. As these costs will be reduced in FY2026, we expect a specific profit contribution. Regarding the full-scale improvement in profitability after the reduction, we aim to build a stable profit structure from FY 2027, including through improvements in product mix.

The catch for the first half of the season is progressing according to plan. We have restructured our collaborative framework with fishing vessels to ensure a stable supply of high-quality raw materials. In addition, capital investments have increased the fillet ratio to over 50%. Personnel management is also proceeding as planned, and we have a solid prospect of achieving profit improvement of several billion yen.

In addition to improving the quality of raw materials, we are promoting higher market prices, emphasizing the superiority of our North American products, and increasing sales of high-value-added products.

We are implementing substantial reforms to the cost structure at production plants, including improvements in labor efficiency, to streamline operations and focus on our core businesses. While there are still some challenges for Unisea on a standalone basis, we view this business as a key operation supplying high-value-added raw materials in North America, Europe, Asia, and the Nissui Group. We intend to maximize group-wide synergies.

Progress to date is ahead of plan, and we believe achieving our full-year targets is well within reach. While land-based processing businesses such as the North American processing business face structural profitability challenges, we generate synergies by enhancing group-wide access to resources and expanding global sales of high-value-added products. As such, the overall value remains high. We will continue concentrating on our core businesses and streamlining operations to establish a stable profit structure by FY2027.

In the United States, consumers are shifting from higher-priced seafood products to more affordable items, but there is no significant downward trend. The situation varies by category; for example, the consumption of South American salmon is strong, but competition with chicken in the frozen food service category is impacting the demand for shrimp. The situation could change depending on the full implementation of Trump tariffs.

At present, sales volumes of low-priced processed surimi products and fish sausages are increasing, and foodservice frozen foods remain steady, supported by inbound demand. In contrast, products with higher price points or larger price increases see weaker demand for retail frozen foods. As the most recent price increases are still recent, it is difficult to assess their full impact accurately, but we do not recognize any significant overall risks at this stage.

There were previously a few differences in profitability among categories. However, home-use frozen foods such as grilled rice balls and pilaf have declined due to surging raw material costs, especially rice prices. As a result, we are considering further price revisions for rice-based products. We will continue implementing revenue and expenditure management on an item-by-item basis, including reviewing underperforming items.

We expect a significant profit contribution in the latter half of the Medium-Term Management Plan, driven by increased raw material sales in line with our partner Mochida Pharmaceutical's expansion of authorized generics and new dosage form, cost reductions using domestic fish oil, and expanded sales in the European market.