Strengthening the Earnings Base of Our Core Business Strengthening - - PowerPoint PPT Presentation

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Presentation October 28, 2010

Strengthening the Earnings Base of Our Core Business Strengthening the Earnings Base of Our Core Business to Achieve the Medium Term Management Plan to Achieve the Medium Term Management Plan

– – Business Strategies for the Second Half of Business Strategies for the Second Half of the Fiscal Year Ending March 31, 2011 the Fiscal Year Ending March 31, 2011 – –

Overview Business Climate in the Second Half Becoming More Difficult, But Income Growth to Be Achieved

• n a Full Year Basis

Business Strategy: Logistics Business Strategy: Processed Foods Full Year Plan to Be Achieved with Revenue Growth in the Second Half Offsetting Nonperformance Expenses for New Plant Facilities in Thailand New Facilities for Chicken in Thailand to Incur Nonperformance Expenses Due to Delay in Permission to Start Operation With Enhanced Thai Facilities as Momentum, Processed Chicken Products to Make a Greater Push into the Global Market Commercial Use to Strengthen Action for Struggling Deli Counter Business While Developing New Needs Business Strategy: Marine Products & Meat and Poultry Reference Materials Segment Data

Table of Contents

Notes:

• 1. Figures shown in the graphs and charts in this presentation, unless otherwise specified, have been rounded off to the unit
• indicated. Certain figures have also been rounded up or down.
• 2. “E” indicates estimates.
• 3. “Previous E” indicates FY11/3 estimates announced on July 27, 2010 with first quarter results; “Initial E” indicates FY11/3

estimates announced on May 13, 2010 with results for the previous fiscal year (FY10/3).

• 4. “Q” indicates a fiscal quarter, e.g. Q2 is the second quarter.

Meat and Poultry to Regain Earnings Momentum Through a Review of Sales Channels and the Development of Processed Products Regional Storage and European Business to Remain Under Stress, but Logistics Network to Continue Improving Logistics Network to Post Income Growth on Expanded Contracts at TC and Improved Transport Efficiency New Facilities to Offer a One-Stop Service for Storage and Forwarding to Cold Storage Customers European Business to Remain Under Stress with Signs

• f Earnings Turnaround

1 2 3 4 5 11 6 7 8 9 10

Amounts less than 100 million yen are omitted

10/3 11/3 (Previous E) 11/3E 11/3 (Previous E) (Comparison) 10/3 (Comparison) Net Sales 4,381 4,394 4,352

• 42
• 1%

Operating Income 168 168 170 2 1% Recurring Income 154 150 160 10 4% Net Income 90 83 91 8 0% EPS 29 yen 27 yen 29 yen ROE 8% 7% 7%

1

(100 million yen)

• 1. Forecast net sales in fiscal year ending March 31, 2011 has been revised downward ¥4.2 billion, but forecast operating income

has been raised by ¥0.2 billion. (i) In net sales, Marine Products has been revised downward ¥2.5 billion, reflecting a prudent approach due to rising market price in the producing districts. Logistics has been revised downwards ¥1.6 billion. (ii) In operating income, Meat and Poultry has been revised downward ¥0.3 billion, reflecting the outbreak of foot-and-mouth disease, while Processed Foods and Marine Products has been revised upward ¥0.2 billion and ¥0.1 billion, respectively, thanks to a robust performance in the first half.

• 2. Overall recurring income has been revised upward ¥1.0 billion, mainly because of improved dividend income and interest

expenses, net.

Business Climate in the Second Half Becoming More Difficult, But Income Growth to Be Achieved on a Full Year Basis

20 26 47 45 60 45 3 9 10 9 12 9 7 3 9 9 6 82 79 73 76 82 73 40 37 38 27 26 38 2 4 3 2 3 2 4 6

• 4
• 2
• 4
• 5

151 168 170 166 188 168

• 25

25 50 75 100 125 150 175 200 225 09/3 10/3 11/3E 12/3P 13/3P 11/3 (Previous E) 100 million yen Fiscal year

Operating Income by Segment

1,740 1,621 1,603 1,750 1,800 1,606 761 672 670 700 710 695 925 776 770 860 900 770 1,423 1,390 1,402 1,528 1,578 1,418 74 70 67 62 61 71 66 69 63 69 73 64

• 244
• 217
• 223
• 247
• 254
• 230

4,745 4,381 4,352 4,722 4,868 4,394

• 500

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 09/3 10/3 11/3E 12/3P 13/3P 11/3 (Previous E) 100 million yen Fiscal year

Net Sales by Segment

Intercompany elimination and corporate Other Real estate Logistics Meat and poultry Marine products Processed foods Consolidated net sales

Business Strategy: Processed Foods

2

• 1. Revenues from household use are expected

to increase 1% on a full-year basis, reflecting excellent progress in the introduction of new autumn products at the store front against the fundamentally flat pace in the first half remained the same as a year ago.

• 2. For commercial-use products, revenues

declined 8% in the first half with the impact

• f the termination of OEM procurement of

certain chicken products, which continued from the previous fiscal year, and delays in the recovery of other prepared products for commercial use, but revenues are likely to increase 11% in the second half, and 1% on a full year basis, with expanded sales of chicken, mainly at year-end holiday sales, by securing products through OEM to offset the delay in the start-up of the new plant in Thailand.

• 3. Operating income in the first half rose 2.1

billion yen from a year ago, thanks to the improved profitability of chicken products and reduced fixed expenses. We expect an increase of 0.1 billion yen in operating income in the second half as well, or 2.1 billion yen on a full year basis. This will be achieved by expanding sales of chicken products, which will absorb expenses related to nonperforming assets in Thailand.

Business Strategy: Processed Foods

20 30 40 50 60

• v

• s

Fiscal year ending March 31, 2011: 47 (E) Lower profit margin: -3 Delay in start-up of Thai plant: -5 Improved productivity in domestic factories: 2 Increases in revenues from pre-cooked frozen foods: 4 Improved fixed costs: 3 Lower profit margin: -1 Decreases in revenues from pre-cooked frozen foods: -3 Improved productivity in domestic factories: 1 Lower chicken procurement costs: 12 Other: 6 Improved fixed costs: 5 Fiscal year ended March 31, 2010: 26

100 million yen

Actual Results: First Half Forecasts: Second Half

Pre-cooked Frozen Foods Pre-cooked Frozen Foods

Year-on-year Change Income in Processed Foods Business

Full Year Plan to Be Achieved with Revenue Growth in the Second Half Offsetting Nonperformance Expenses for New Plant Facilities in Thailand

Net Sales and Operating Margin of Processed Foods

461 464 468 516 527 481 869 774 894 770 104 79 52 53 57 46 306 304 309 1,740 1,621 1,603 1,750 1,800 782 866 322 301 315 1,606 1.1% 1.6% 2.9% 2.6% 3.3% 2.8% 500 1,000 1,500 2,000 2,500 09/3 10/3 11/3E 12/3P 13/3P 11/3 (Previous E) Fiscal Year 100 million yen 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Pre-cooked frozen foods for househould use Pre-cooked frozen foods for commercial use Health value Other Operating margin

3

タイ２工場の月間生産トン数計画 500 1,000 1,500 2,000 2,500 3,000 3,500 10/7 10/8 10/9 10/10 10/11 10/12 11/1 11/2 11/3 11/4 11/5 11/6 Initial plan Revised plan unit: ton

タイ２工場の月間生産トン数計画

Business Strategy: Processed Foods

Details of Enhanced Production Capacity of the Two In-House factories in Thailand

New Facilities for Chicken in Thailand to Incur Nonperformance Expenses Due to Delay in Permission to Start Operation

• 1. In the current fiscal year ending March 31,

2011, the construction/expansion of production facilities for processed chicken products at two plants in Thailand were completed in August. Permission for

• peration was granted by the Ministry of

Agriculture, Forestry and Fisheries, until late October, however, which is later than initially assumed, and the start of operation will hence be postponed by three months compared to the plan.

• 2. Year-end demand will be covered by

products procured through OEM and production increases at existing lines and a deviation from our sales plan is not anticipated.

• 3. Compared to the initial plan at the beginning
• f the current fiscal year, the nonperformance
• f new facilities and additions will reduce
• perating income for the current fiscal year

by ¥0.5 billion.

• 4. The degree of workers’ proficiency in

slaughter work at GFN will affect operating rates so that reaching the targeted levels may be delayed until the next fiscal year, depending on future conditions.

Monthly production plan at two Thai plants (tonnage)

Surapon Nichirei Foods Co., Ltd. (SUNIF) Kabinburi Plant Newly added production lines GFPT Nichirei (GFN) New plant Location Kabinburi, Prachinburi Province Nongyai, Chonburi Province Invested amount ¥1.5 billion (Facility area: 8,500 square meters) ¥6.6 billion (Facility area: 42,000 square meters) Annual productio n capacity Newly added lines: 7,000 tons per year (25,000 tons per year for overall chicken products, including existing lines) 18,000 tons per year (currently 2 lines, with room for additional 27,000 tons) Features Capable of handling from small lots to large lots in accordance with needs Achieved integration by connecting slaughter facilities (material processing plant) and processing plant

家禽調整品の対外輸出量とシェア 50 100 150 200 250 300 350 400 450 2001 2002 2003 2004 2005 2006 2007 2008 0% 5% 10% 15% 20% 25% 30% 35% 40%

Export volume from Thailand Export volume from China Thailand’s share of exports China’s share of exports

4 Business Strategy: Processed Foods

Export/Import Volumes of Prepared Poultry Products in 2008

Source: UN Comtrade, Agriculture & Livestock Industries Corporation (Breakdown of Japan’s imports)

Approximation of Nichirei’s share in export from Thailand (based on 2008 data) Current share: approx. 5%  After full operation of new facilities: approx. 10%  after expansion at GFN: approx. 15%

Export Import

Thailand

400,000 tons

Brazil

172,000 tons

China

165,000 tons

Japan

314,000 tons

Europe

England 229,000 tons Germany 152,000 tons Holland

94,000 tons

• Incl. Thailand 180,000 tons
• Incl. China 128,000 tons

With Enhanced Thai Facilities as Momentum, Processed Chicken Products to Make a Greater Push into the Global Market

• 1. The global presence of Thailand as an exporter of processed chicken products is rising every year. This is a

reflection of the following factors: (i) Its location is suitable for exports both to Asia and Europe. (ii) Chicken farming is widely practiced in Thailand and it already has the infrastructure, including facilities and feed.

• 2. Chicken meat exporters in Thailand supply chicken-leg-meat products to Japan and export chicken-breast-meat

products to Europe, maximizing profits by matching supply with demand.

• 3. Expansion of sales channels into Europe and Asia will be sought through GFN, leveraging its advantage of having

slaughter facilities to utilize breasts and other parts in the next fiscal year and beyond. Use of the uninstalled three lines in the future should increase the Nichirei Group’s share of export s (on a 2008 export basis) to approximately 15%.

Prepared poultry products: export volumes and shares

unit: thousand tons

Year

70% 80% 90% 100% 110% 120% 130%

09/3-Q1 09/3-Q2 09/3-Q3 09/3-Q4 10/3-Q1 10/3-Q2 10/3-Q3 10/3-Q4 11/3-Q1 11/3-Q2 11/3-H2

Pre-cooked frozen foods for househould use Pre-cooked frozen foods for commercial use (excluding chicken products) Commercial chicken products

ti

チェーンストア惣菜販売額 前年比推移

• 8
• 6
• 4
• 2

2 4 6 08/1 08/2 08/3 08/4 08/5 08/6 08/7 08/8 08/9 08/10 08/11 08/12 09/1 09/2 09/3 09/4 09/5 09/6 09/7 09/8 09/9 09/10 09/11 09/12 10/1 10/2 10/3 10/4 10/5 10/6 10/7 10/8 ％

5 Business Strategy: Processed Foods

Year-on-Year Change in Sales of Pre-cooked Frozen Foods

Commercial Use to Strengthen Action for Struggling Deli Counter Business While Developing New Needs

• 1. Year-on-year falls in results have persisted since 2009 at the deli counters of mass retailers, our

main customers in the commercial market. However, changes are becoming evident in selling space solutions with a focus on not only price but also on topicality.

• 2. Under these circumstances, we will continue our efforts to stimulate sales through planning and

proposing improved operations and local production for local consumption, in addition to offering the new and reasonably priced products like we have introduced in the past.

• 3. Meanwhile, we have started to introduce new category products, such as frozen breads and frozen

Japanese sweets, aiming to develop new markets. In addition, by enabling faster and more differentiated product development through stronger ties with users, we will focus on operational efficiency to meet the needs of our customers.

Source: Japan Chain Stores Association

Year on Year Change in Sales Amounts of Prepared Foods by Chain Stores

Business Strategy: Marine Products & Meat and Poultry

6 Business Strategy: Marine Products & Meat and Poultry

• 1. Marine Products Business

(i) Profits rose in the first half, helped by a stronger yen, but for the second half we have adopted a policy of prudent purchasing given rising market prices in producing districts as a result of a poor catch because of bad weather. This will result in full year operating income of only ¥1.0 billion. (ii) Initiatives in the medium plan, such as placing more weight on business resources with required processing characteristics and quality-conscious raw materials that are close to user routes, are progressing well.

• 2. Meat and Poultry business

(i) The impact of foot-and-mouth disease and the extremely hot weather, the main causes of declining profits in the first half, has eased, and the revenue environment looks set to gradually recover. As a result, we expect profits in the second half to be in line with plans. (ii) We will likely remain under stress given that mass retailers, our major sales channels, shift to lower price items. We will regain earnings momentum by developing processed products and overseas business resources that meet customer quality requirements and that are also attractively priced. We will also expand sales channels into the restaurant, delicatessen and “home meal replacement” markets, consumers' cooperatives, and other areas.

Meat and Poultry to Regain Earnings Momentum Through a Review of Sales Channels and the Development of Processed Products

• 14
• 10
• 17
• 4
• 5

3 9 10 9 12 8 4 3 6 6 7 3 9 9 910 900 811 747 747 761 672 670 700 710 759 847 846 809 839 925 776 770 860 900 100 200 300 400 500 600 700 800 900 1000

• 20
• 10

10 20 30 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3E 12/3P 13/3P Sales: 100 million yen Operating income : 100 million yen

Fiscal Year

Sales/Operating Income of Marine Products/Meat and Poultry Business

Marine Products: operating income Meat and Poultry: operating income Marine Products: sales Meat and Poultry: sales

Business Strategy: Logistics

7

Logistics: Operating Income by Sub-Segment

19 20 27 26 26 26 50 53 43 45 48 44

• 4

7 13 17 7 6 10

• 5
• 5
• 3
• 1
• 4

73 76 82 73 79 82

• 20

20 40 60 80 100 09/3 10/3 11/3E 12/3P 13/3P 11/3 (Previous E) Fiscal Year 100 million yen Logistics network Regional storage Overseas Other, inter-segment Total operating income

Business Strategy: Logistics

Regional Storage and European Business to Remain Under Stress, but Logistics Network to Continue Improving

• 1. Full year sales are forecasted to increase 1% year on year and operating income to decline ¥0.6 billion.
• 2. In Logistics Network, sales are anticipated to increase 3%, thanks to setting up of new transfer centers and

expansion of business, with operating income forecast to rise ¥0.7 billion, owing partly to improved transport efficiency.

• 3. In Regional Storage, cargo movements are strong and shipments are recovering. However, turnover rates have

remained high due to cargo owners’ inventory reductions, and the capacity utilization rate is trending downward . We expect sales to decline 2% due to price competition and continuing challenges in the operating environment. Operating income is set to decrease ¥1.0 billion, mainly because of higher depreciation cost associated with the establishment of large facilities.

• 4. In the overseas business, sales declined 3% with a decrease in operating income of ¥0.1 billion due to the effect of

foreign currency translation adjustment, which reflected a weak euro, decline in storage and forwarding of cargos, and fierce price competition.

Logistics: Net Sales by Sub-Segment

722 753 774 809 844 772 462 452 444 492 497 451 224 165 161 206 217 168 27 1,423 1,390 1,402 1,528 1,578 1,418 20 21 23 20 15 500 1,000 1,500 09/3 10/3 11/3E 12/3P 13/3P 11/3 (Previous E) Fiscal Year 100 million yen

Logistics network Regional storage Overseas Other

8 11 12 14 19 21 24 24 25 23 24 26 27

5 10 15 20 25 30 01/3 02/3 03/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3E 12/3P 13/3P (Number of locations)

8 Business Strategy: Logistics

Logistics Network to Post Income Growth on Expanded Contracts at TC and Improved Transport Efficiency

• 1. Sales are forecast to increase 7% for transfer centers (TC) contracted by supermarket distribution

centers, reflecting expanded operations for Maruetsu in the first half, followed by the launch of a center for handling goods shipped at room temperatures for a major drugstore in the second half. In the next fiscal year, contracts at TC will include those for Halows and others.

• 2. Sales for the transport business are expected to cover revenues lost in the first half, through

increases in volumes of frozen food handled and by offering efficient distribution solutions to local manufacturers and restaurants.

• 3. In addition to the contribution by revenue growth, profit growth is anticipated based on improved

profitability resulting from a reduction in the number of vehicles and improved load efficiency through integrated management and the assignment of vehicles by regional block.

Sales of Logistics Network by Segment Number of TC (Transfer Center) Locations

233 279 290 302 321 344 380 389 261 269 277 299 286 285 317 337 138 140 142 121 146 145 112 118 632 688 709 722 753 774 809 844 100 200 300 400 500 600 700 800 900

06/3 07/3 08/3 09/3 10/3 11/3E 12/3P 13/3P 100 million yen

ＴＣ Transport Other Fiscal Year Fiscal Year

50 100 150 200 250 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

April May June July August September October November December January February March

総合在庫率と一般保管入庫量の推移

FY09 Intake volume FY10 Intake volume FY09 Utilization rate FY10 Utilization rate

9

総合在庫率と一般保管入庫量の推移

Business Strategy: Logistics

Consistent management of storage and forwarding for 365 days a year and 24 hours a day Large storage space Wide freight handling space

Customers of regional storage business

Regional storage business

Higashi-Ogishima DC

One-stop service for storage and forwarding

Nationwide trunk route transport + Local delivery network

Logistics Network business

New Facilities to Offer a One-Stop Service for Storage and Forwarding to Cold Storage Customers

• 1. Higashi-Ogishima Distribution Center (DC), which will commence operation in February next year, represents a

new business model for offering forwarding service to cold storage customers in Regional Storage business. (i) Higashi-Ogishima DC has a large storage space of 42,000 tons and extensive freight handling space of 3,200 square meters, unmatched by conventional cold storage. Use of nationwide forwarding networks (trunk route transport and local delivery network) in Logistics Network will enable the offering of a one-stop service for storage and forwarding to customers, including major restaurants. (ii) With Higashi-Ogishima DC as the core of the Kanto area, we aim to increase revenues by offering forwarding services to customers in Regional Storage. This will contribute to improvement of shipment consolidation ability in Regional Storage.

• 2. Fukuoka-Higashihama DC, which started operation in August this year, is based on the same concept and offers

storage and forwarding services to customers in Northern Kyushu area.

Aim of Higashi-Ogishima DC

Changes in cold storage capacity utilization rate and general storage intake volume

Utilization rate (%) Intake volume (thousand ton)

10 Business Strategy: Logistics

• 1. Business in Europe has experienced declines in freight and cargo storage, stemming from the recession and the

weak euro, as well as fierce price competition.

• 2. However, inventory volume at cold storage facilities specializing in frozen juice has surpassed the level of the

previous year, delivering a solid performance. Chicken imports, which constitute our major cargo, are expected to rise in the second half.

• 3. The acquisition of Godfroy companies was postponed from the original plan in April to July. The company is

expected to contribute to the Group’s performance from the second half. Synergies with other Group companies will be sought in the future.

European Business to Remain Under Stress with Signs of Earnings Turnaround

Business type Company Name Location and Operations Overview and Specialty First Half Conditions and Issues Second Half Conditions and Response Hiwa Rotterdam Port Cols Storagte B.V. Netherlands, Port of Rotterdam Storage of fruit juice Specializes in fruit juice; Quality testing; De-drumming and blending facilities Juice imports have been rising in step with growing consumption as a result of extremely hot weather. Inventory volumes are large and a steady recovery is in evidence. Juice imports are expected to remain intact in the second half, and performance should improve. Eurofrigo B.V. Netherlands, Port of Rotterdam Refrigerated storage Mainly handles meat, marine products and frozen vegetables; Includes animal quarantine Intake and inventory volumes fell with the delay in chicken imports by major customers, and this has been accompanied by fierce price competition. The import license obtained should contribute to an increase in volumes of chicken handled. The focus will be on the consolidation of shipments of marine products. Eurofrigo Venlo B.V. Netherlands Refrigerated storage at inland locations Mainly stores agriculture products, also handles PVB films Processing of PVB films used in new buildings and automobile glass has picked up, but inventory volumes are falling. Inventory volumes of frozen vegetables also declined due to crop failures as a result of extremely hot weather. The focus will be on contracts for processing PVB

• films. Cost savings will be sought through such

means as the cancellation of lease contracts to adjust for excess warehouse capacity with the expiration of the lease. Frigo Logistics Sp. Zo.o. Poland Refrigerated storage Purchased a cold storage facility in 2005; Mainly handles transport of ice cream and frozen foods. Performance has been robust thanks to the increased handling of ice cream due to the extremely hot weather. Vegetables, which were expected to fill empty storage space after shipments of ice cream, suffered from poor harvests due to bad weather. The focus will continue to be on shipment consolidation. Cost savings will be sought to offset declines in volumes handled. Thermotraffic GmbH (Germany) Facility in Germany ships throughout Europe The very hot weather contributed to an increase in the handling of ice cream, but price competition has been fierce. Cost cutting will be sought using lower- cost vehicles from Eastern Europe. A service to transport custom goods in containers will be launched as a means to increase earnings strength. Thermotraffic Holland B.V. (Netherlands) Facility in Netherlands focuses on freight forwarding Revenues both from the customs clearance and the delivery business decreased due to a delay in chicken imports by major customers and price competition has become fierce. The import license obtained will likely increase volumes of chicken handled. Godfroy companies Conducting forwarding and cold storage business in northern France Storage and delivery throughout France of imported cargo, processed marine products, frozen foods, and other products － The acquisition of Godfroy was completed in July and will contribute to performance starting in the second half. Synergies with Group companies in the Netherlands and Germany will be sought. Cold Storage Freight Forwarding Freight forwarding and shipping throughout Europe

Reference Materials Reference Materials

Reference Data

11

Sales and Operating Income by Segment

09/3 10/3 11/3 (E) 12/3 (P) 13/3 (P) 11/3 (Previous E) (Net Sales) Processed Foods 1,740 1,621 1603 1,750 1,800 1,606 Marine Products 761 672 670 700 710 695 Meat and Poultry Products 925 776 770 860 900 770 Logistics 1,423 1,390 1402 1,528 1,578 1,418 Real Estate 74 70 67 62 61 71 Other 66 69 63 69 73 64 Intercompany Elimination and Corporate

• 244
• 217
• 223
• 247
• 254
• 230

Total 4,745 4,381 4352 4,722 4,868 4,394 (Operating Income) Processed Foods 20 26 47 45 60 45 Marine Products 3 9 10 9 12 9 Meat and Poultry Products 7 3 9 9 6 Logistics 82 79 73 76 82 73 Real Estate 40 37 38 27 26 38 Other 2 4 3 2 3 2 Intercompany Elimination and Corporate 4 6

• 4
• 2
• 4
• 5

Total 151 168 170 166 188 168 (Amounts are rounded off to the nearest 100 million yen.)

Forward-Looking Statements

Aside from historical facts, Nichirei’s present plans, forecasts and strategies as outlined in this publication consist of forward- looking statements about future business performance. These forecasts of future business performance and explanations of future business activities may or may not include words such as “believe,” “expect,” “plan,” “strategy,” “estimate,” “anticipate” or other similar expressions. These statements are based on the information available to Nichirei management at the time of publication. Actual results may differ materially from these forecasts for a variety of reasons, and readers are therefore advised to refrain from making investment decisions based solely on these forward-looking statements. Nichirei will not necessarily revise its forward-looking statements in accordance with new information, future events, and other results. Risks and uncertainties that could affect Nichirei’s actual business results include, but are not limited to: (1) Changes in the economic conditions and business environment that may affect the Nichirei Group’s business activities. (2) Foreign exchange rate risks, especially as regards the US dollar and the euro. (3) Risks associated with the practicability of maintaining quality controls throughout the process from product development, procurement of raw materials, production, and sale. (4) Risks associated with the practicability of development of new products and services. (5) Risks associated with the practicability of growth strategies and implementation of low-cost systems. (6) Risks associated with the practicability of achieving benefits through alliances with outside companies. (7) Contingency risks. However, factors that may affect the performance of the Nichirei Group are not limited to those listed above. Further, risks and uncertainties include the possibility of future events that may have a serious and unpredictable impact on the Group. This publication is provided for the sole purpose of enhancing the reader’s understanding of the Nichirei Group, and should not be taken as a recommendation regarding investment decisions.