Summary of the Q&A Session for the FY2025 Mid-Term Financial Results IR Briefing held on November 11, 2025

While we have not disclosed our first-half plan externally, results were reasonably above our internal targets.

There remains a high degree of uncertainty, particularly regarding consumer demand during the year-end shopping season and seafood consumption trends.

This is due to continued uncertainty in raw material costs and consumer conditions. Although our European Food Products Business benefited from lower raw material prices in the first half, such effects are unlikely to continue in the second half. The North American foodservice business is expected to remain challenging due to sluggish demand in the restaurant industry and higher prices for shrimp raw materials. In Japan, the Food Products Business is being affected by prolonged high rice prices, and despite price revisions, we expect a recovery in profits to take time. Additionally, consumer trends during the peak year-end season remain difficult to predict.

In aquaculture, we aim to leverage our technological strengths to drive improvement. In our overseas Food Products Business, we strive to address capacity constraints through new plant construction and expansion, thereby enhancing our global competitiveness. In the domestic Food Products Business, we plan to construct a new plant and to improve profitability, particularly in our chilled foods segment.

In the Marine Products Business, most of the increased production in the South American aquaculture business will materialize in FY2027, resulting in stronger profit growth. The Fine Chemicals Business is expected to see steady profit growth through expanded sales of pharmaceutical raw materials.

We are seeing progress across various aspects, including governance through more active discussions at the Board of Directors. Our seafood supply chain, from upstream raw materials to downstream consumers, has been well recognized externally. We feel confident that this progress reflects the Nissui Group's unified direction, which has enhanced Nissui's presence in the global arena. In the future, by deepening our international connections and expanding into untapped and emerging regions, we believe we can sustain our growth.

Given the supply-demand balance, we expect prices to remain at high levels. For Japanese amberjack, supply has decreased this year, resulting in higher prices; however, we anticipate a return to normal prices in the future.

The key areas to watch are the North American processing and the South American fishery segment, where challenges remain in improving profitability.

Due to reduced anchovy catch quotas in Peru, aquaculture costs may rise from the middle of next year. For now, we have secured the necessary raw materials, so we are not overly concerned, but countermeasures will be required going forward.

While market factors also play a role, we estimate that over 50% stems from our own initiatives. Efforts such as improving seed quality to enhance survival rates for salmon and implementing underwater feeding systems for Japanese amberjack have contributed significantly to improved performance.

While first-half results exceeded the plan, uncertainties remain for the second half. Although performance will not progress at the same pace, full-year profits are expected to exceed the plan. Note that the profit graph presented excludes consolidated adjustments, so it should not be interpreted as a simple significant increase.

We are actively strengthening seed production and expect the benefits to continue materializing in subsequent years. For uncontrollable factors such as rising sea temperatures, we will mitigate risks through operational diversification across multiple aquaculture sites. Given tight global supply amid robust demand, we do not expect significant price declines. However, with reduced anchovy quotas in Peru likely to raise fishmeal and fish oil prices, we aim to offset higher feed costs through lower fishmeal inclusion ratios and improved feeding efficiency.

In terms of production scale, domestic salmon output will expand from 3,000 MT to 10,000 MT by 2030, and South American salmon and trout from 30,000 MT to 50,000 MT. By enhancing seed production, Japanese amberjack is expected to increase from 2 million to 3 million fish. To achieve our FY2030 aquaculture sales target of 100 billion yen and operating profit of 10 billion yen, we aim to continue realizing incremental efficiency gains of several hundred million yen through internal initiatives that drive improvements.

The first half exceeded plan, but adverse weather poses downside risks to catches. Nevertheless, by continuing efforts to reduce losses, we expect to achieve the full-year plan.

Upside factors include potential price increases resulting from reduced white fish catch quotas and a decline in supply resulting from the partial ban on Russian products in Europe. We also expect lower fixed costs through processing diversification into non-pollock white fish species such as cod. The primary downside risk is the potential impact of U.S. tariffs, which could affect fish meal exports to China. Overall, we believe positive pricing factors will outweigh the negatives.

Sales volumes are increasing, though growth in total sales volume has slowed due to changes in package sizes and other factors.

While profit growth is expected to be smaller than in the first half, results should generally align with the plan. Key concerns include sluggish restaurant demand in North America and increased shrimp raw material costs resulting from tariffs.

As overall selling prices rise, some decline in sales volume is unavoidable. Our overseas Food Products Business strategy focuses on differentiation to secure profits. For example, in Europe, we are expanding chilled fried white fish where competition is limited. The North American household segment expands its market share by marketing its products as a high-quality brand. In contrast, our premium coating for seafood fry products in the U.K. has received high customer ratings. By differentiating and gradually increasing volume, we aim to offset raw material cost increases, albeit with some time lag. However, we remain cautious regarding volume declines in the North American foodservice business due to the consumption environment and will consider countermeasures accordingly.

We expect a challenging raw material environment with higher costs for key raw materials such as white fish and shrimp. In addition to pricing measures, we will work to mitigate cost increases by shifting toward more affordable fish species.