Q&A Summary from the President's Small Group Meeting Held on May 28, 2026

While Nissui possesses strengths cultivated over its long history, we also recognize that our existing systems can sometimes make change difficult. Against this backdrop, I have consistently communicated the importance of changing what needs to be changed and discontinuing what no longer adds value. FY2026 marks the second year of our Medium-Term Management Plan and the fifth year of our nine-year long-term vision. We are now entering a phase where the achievements made thus far must be translated into execution. We will clearly define the initiatives required to realize our long-term vision and steadily advance them.

One example is our approach to personnel allocation and resource allocation. Traditionally, when labor shortages arose, the response tended to be hiring additional employees. However, we must reassess which businesses should receive priority in resource allocation and what types of talent should be deployed where, based on the company's long-term vision.

We believe that the stock market continues to perceive our earnings volatility as relatively high, which has limited investor confidence. We are working to strengthen our value chain so that fluctuations in market conditions can be absorbed across different businesses, but we have not communicated this effectively enough. We will clarify the key points and communicate our strategic direction and the likelihood of successful execution in a more understandable manner.

Discussions are progressing, but implementation has not yet advanced sufficiently. While it is important to proceed carefully in light of our historical background, we intend to present a clearer direction in the next Medium-Term Management Plan. We will enhance our responsiveness to a rapidly changing environment through collaboration and capital alliances, among other initiatives.

Since assuming a management role, I have become increasingly aware of challenges that previously did not receive sufficient attention. While the executive team shares a stronger sense of urgency, I cannot yet say that this awareness has fully permeated to the department manager level, and some traditional ways of thinking remain.

Nissui has expanded globally by connecting regional businesses and brands centered on white-meat fish under the concept of "Global Links." Since clarifying this strategy, group integration and synergies have strengthened and have contributed to recent earnings improvements. However, challenges remain in increasing recognition outside the industry and establishing these capabilities as sustainable competitive advantages. Through our brand strategy and global collaboration, we aim to enhance the value of the Nissui Group with white-meat fish as a core pillar.

While the foundation for integrated group management is steadily being established, a key challenge is determining the appropriate level of governance while maintaining the trust of group companies. From a human resources perspective, developing the next generation of management talent is also an important issue.

The International Business Development Department is responsible for managing these initiatives. Meetings involving CEOs and senior executives of overseas subsidiaries are held three times a year to share challenges and opportunities. While it is difficult to quantify synergies precisely, we will continue exploring ways to communicate the nature and impact of these initiatives more effectively.

We have been making investments, including participation in a fund focused on Africa. From a medium- to long-term perspective, we believe it is important to explore how we can expand into markets beyond North America and Europe.

In the near term, ROIC is expected to remain relatively flat due to the impact of ongoing investments. However, we view these investments as essential for future profitability improvements. Over the long term, we aim to improve ROIC across the entire company. Our investment decision-making process has also evolved from being primarily focused on profit and loss considerations to placing greater emphasis on capital allocation requirements and capital efficiency.

While continuing to make growth investments, we aim to achieve an ROE of approximately 10% or higher.

Companies differ in their sense of urgency, but in the food industry, aging facilities and the need for plant renewal may accelerate consolidation. We believe the companies that will remain competitive are those that possess both strong talent and technological capabilities.

While resource prices fluctuate, retail prices for consumer products do not always move in parallel. By managing the entire value chain from upstream to downstream as an integrated business, we can offset weakness in one area with strength in another and thereby mitigate the impact of volatility.

To manage resource and raw material risks, it is essential to align procurement, sales, and alternative sourcing strategies with changing supply-demand conditions. By avoiding excessive dependence on specific raw materials and securing alternative species, aquaculture production, and supply sources from different regions, we can diversify price, volume, and supply risks across the value chain.

We expect ROIC in the Marine Products Business to improve from FY2026 onward as investment levels normalize and earnings grow. While some businesses currently generate relatively low returns, they also play important roles in supporting our global supply network. Those businesses will first aim to achieve profitability, after which we will determine their future direction based on the progress made.

The key is to convert our strengths in resource access into value creation throughout the entire value chain. In addition to enhancing product value, we will focus on areas where we can increase distribution-related value within global markets, thereby maximizing value creation originating from resource access.

Progress is on track. Synergies and improvements in feed costs have already started to contribute positively to earnings. PMI is also progressing smoothly, with no significant issues identified to date. The acquired company has many talented employees whose operational expertise and marketing capabilities provide valuable learning opportunities for our group. Collaboration among employees is also advancing, generating meaningful group-wide synergies.

It is difficult to provide specific figures at this stage. However, we expect aquaculture to become a significant earnings contributor by FY2030. We intend to provide more concrete guidance in our next Medium-Term Management Plan.

The company has not yet obtained ASC certification, but we will pursue certification if necessary. We view ASC certification not primarily as a means of improving pricing but rather as a way to expand market access, particularly in regions such as Europe.

While there is potential at a small scale, significant challenges remain regarding profitability and production efficiency before large-scale commercial operations become viable.

Kitakyushu is an important production base, and we believe investment in a new factory is necessary. At the same time, we will pursue factory restructuring and operational improvements to enhance profitability over the long term.

There remains considerable room for improvement. We will continue to carefully review and rationalize products that have been maintained based on historical practices, taking current business conditions into account.

We believe there is still significant room for improvement, and decisions regarding the appropriate level of OEM usage will be made carefully on a category-by-category basis. As many facilities are expected to reach renewal decision points around FY2030, we will further develop our factory restructuring strategy.

Pharmaceutical raw materials offer growth potential in Asia. Functional foods are also expected to begin sales in Asia during the second half of FY2026, and we anticipate future growth opportunities in the region.

We regard the general distribution as a core infrastructure function supporting our businesses. We are currently defining our long-term vision by assessing which functions should remain in-house and where external partnerships can create greater value.