Summary of Q&A for Results Briefing of Fiscal Year 2025 held on May 19, 2026

The potential increase in costs is estimated at up to approximately JPY 9.0 billion. This estimate assumes a prolonged Middle East conflict leading to higher fuel costs, logistics expenses, and packaging material prices, and reflects the impact in the absence of any countermeasures. The impact is expected to be roughly evenly split between the Marine Products Business and the Food Products Business. Regionally, the impact is expected to be greater in Japan, as four months of the overseas January-December fiscal period have already passed. However, the Company intends to absorb these cost increases through price revisions and packaging optimization measures, and therefore currently believes the likelihood of a material impact on profits is low.

In formulating the FY2026 plan, the Company considered various uncertainties in business operations, not limited to the Middle East situation, and established a target of JPY 42.5 billion in operating profit. While a higher profit level has been anticipated, the plan incorporates a certain level of risk assumptions.

While we refrain from disclosing specific amounts by business, risks have been broadly incorporated across each business in arriving at the FY2026 operating profit target of JPY 42.5 billion.

In the Marine Products Business, the contribution from the acquired South American aquaculture companies is expected to be significant. Although depreciation expenses will increase, we believe all businesses retain substantial growth potential, including strengthened production infrastructure in domestic and overseas food businesses and ongoing structural reforms in the Fine Chemicals Business. Accordingly, we believe the Group can achieve sustained overall growth.

If global cost inflation continues, fish prices are also likely to trend upward. Supply remains relatively tight while demand remains strong. In particular, prolonged instability in the Middle East leading to higher fuel costs is expected to increase costs across the seafood industry. Although there are concerns in Japan regarding shifts to other protein sources, we believe there remains significant room for expansion in global seafood consumption overall, and therefore do not anticipate a major decline in demand.

Overseas operations in the Marine Products Business have progressed steadily in the first quarter. In the South American aquaculture business, improvements in aquaculture performance and favorable market conditions, including sales prices, are supporting progress in line with the plan. In the North American processing business, profitability is improving through strong demand centered in Europe as well as self-help measures such as increasing the fillet production ratio.

Contributions are expected from both Salmones Antártica ("SA") and Yadran. Yadran is expected to record gains from the assessment of the fish in stock as raw fish cost normalize, while SA is expected to benefit from both increased harvest volumes and the assessment gain of the fish in stock.

Yadran recorded losses in FY2024 and FY2025; however, improvement initiatives are progressing and beginning to show results, and the Company aims to achieve profitability in FY2026. Yadran has strong earnings potential given its scale of over 30,000 MT in annual harvest volume, although some improvement measures may require approximately couple of years to fully materialize. In FY2027, the Company aims to further normalize aquaculture performance and generate stable profits.

SA's harvest volume is planned to increase from approximately 35,000 MT in FY2025 to close to 40,000 MT in FY2026. This reflects improvements in aquaculture performance and optimization of cage operations.

We have identified the major loss factors, including feed costs, labor expenses, outsourcing costs, and mortality rates caused by fish diseases, and improvement measures are already underway. While profitability in the first half of FY2026 may still be difficult, we believe full-year profitability is achievable.

For domestic salmon and trout aquaculture, the Company is expanding production in the Sanriku area; for Japanese amberjack, it is developing hatcheries and key production bases; and for tuna, it is increasing the ratio of short-cycle farming. At present, there is no need to revise volume targets. Regarding harvest volume expansion, foundational investments such as aquaculture equipment installation and aquaculture development are being implemented in phases, and we expect the pace of volume growth to accelerate from FY2028 onward.

We recognize rising fish meal prices as a significant risk factor for the aquaculture business. However, because these cost increases affect the entire industry, the environment is relatively conducive to passing costs on to market prices. Unless feed prices rise excessively, we believe a certain degree of price pass-through is possible. The earnings impact is expected to become more apparent from around mid-FY2027, and we expect higher costs to be gradually reflected in market prices as elevated cost conditions become more structural.

Regarding the consumer environment, we recognize a certain risk that sales volumes may decline following price revisions. Price increases are being implemented both domestically and overseas while seeking customer understanding, although we recognize that reduced sales volumes and lower factory utilization rates represent certain risks.

In both Japan and North America, household-use and food service businesses complement each other, and we aim to raise overall profitability levels.

For the North American household-use food business, the plan reflects higher costs associated with the startup of a new factory and increased depreciation expenses. For the food service business, it incorporates weakness resulting from contraction in the food service market.

The Company is expanding its product lineup beyond seafood products to include other proteins and pickles, among others, and aims to increase sales through SKU expansion.

Prices for petroleum-derived organic solvents are rising; however, there are no procurement issues at present, and we do not view this as a risk severe enough to materially impact business performance.

Because pharmaceutical prices cannot easily be raised, the basic approach is to absorb costs through internal improvement efforts. On the other hand, inventory holding periods are relatively long, meaning the impact is not expected to become immediately significant in FY2026.

In FY2025, sales of pharmaceutical raw material performed steadily; however, profits fell below expectations due to rising costs. In FY2026, cost reductions are expected through productivity improvements and better absorption of fixed costs resulting from expanded pharmaceutical raw material sales, which will be the primary drivers of profit improvement. Meanwhile, mail order sales of functional foods are expected to remain challenging, limiting the extent of revenue growth.

We believe the business can achieve an operating profit margin exceeding 10%. However, uncertainties such as rising raw material prices remain, and it will be necessary to continue strengthening responses to procurement risks.

We recognize that the business will continue facing challenges for the time being due to rising construction material costs, higher interest burdens, and increased depreciation expenses associated with capital investments. At the same time, the General Distribution Business is an important infrastructure supporting the Food Products Business. Therefore, we are carefully considering its future direction within overall portfolio management, including options such as continuing ownership, partnerships, and joint operations with other companies. The direction will be discussed during the formulation of the next medium-term management plan.

We aim to achieve the FY2030 operating profit target of JPY 50.0 billion ahead of schedule; however, we are not yet in a position to specify the timing of achievement.

While investment levels have exceeded the original plan due to the Yadran acquisition, we intend to carefully select investments while improving operating cash flow through Yadran's earnings recovery and asset divestment. We intend to continue investing in key focus areas such as aquaculture and overseas businesses, while allocating management resources based on portfolio considerations and formulating investment plans accordingly.