Amid a solid business environment, we forecast strong revenue growth of +9.1% for FY 3/2027. At the same time, the environment may present temporary difficulties regarding profit growth due to cost increases and higher depreciation associated with continued capital investment in overseas markets, which we view as a future area of growth. In terms of financing, we find ourselves increasingly operating in a world of interest rates. As external uncertainty rises and these trends are expected to continue for the time being, strengthening our sustainable cash-generating capability is the Group’s most important priority. To achieve this priority, while optimally allocating the cash we generate to enhance corporate value, is my responsibility as CFO.

In capital allocation, we give top priority to investments that support safety, quality, and stable supply, which are the very foundation of a food company. As part of this allocation, we select growth investments that are expected to deliver returns exceeding the cost of capital. We are tightening our selection criteria by, for example, raising the internal hurdle rate used in investment decisions. We will raise capital-allocation discipline across the entire company by carefully examining the return and risk of each project, curbing low-profitability investments, and reviewing the necessity and efficiency of capital expenditure projects assuming rising construction costs.

Regarding shareholder returns, on the premise of medium- to long-term profit growth and a stronger financial base, our basic policy is progressive dividends.

As for share buybacks, we will comprehensively consider factors such as the share price level, investment opportunities, and our capital structure, and where we judge such buybacks will contribute to capital efficiency and shareholder value, we will execute buybacks flexibly, drawing on external funding as needed. However, to ensure that prioritizing shareholder returns does not leave the investment needed for future growth underfunded, we will strike an appropriate balance with growth investment, strengthening financial governance and optimizing capital allocation.

With respect to inorganic growth investment as well, we acquired shares in a domestic operating company during FY 3/2026 and plan to acquire additional shares in an equity-method affiliate overseas in FY 3/2027. As an option alongside capital expenditure and shareholder returns, we will continue to examine projects that contribute to increasing shareholder value while maintaining financial discipline.

To make this kind of capital allocation possible, we are reducing our cross-shareholdings and, to diversify our funding sources and curb financial costs, we are developing a foundation for raising funds from the capital markets in addition to borrowing from financial institutions. By making balanced use of short- and long-term bond issuances, we are building a structure that enables stable and agile financial management.

*Based on cash flow. Amounts differ from separately disclosed capital expenditure figures

As the global leader in instant noodles, the NISSIN FOODS Group regards ensuring safety, quality, and stable supply as a social responsibility, and by maintaining an appropriate level of investment we will sustain and enhance our long-term brand value and earning power. Building on this foundation, we are strategically advancing investment in strengthening our overseas business, in high-value-added domains, as well as areas that will become future growth drivers. For these growth investments, our top priority is building supply systems in markets where demand growth is strong and expansion of cash-generating capability can be expected over the medium to long term.

Investment in new businesses will continue to be made within the range of 5% to 10% of core operating profit of existing businesses. While curbing excessive capital injection and raising the quality of our investments, our policy is to enhance capital efficiency for the Group as a whole, so as to create a virtuous cycle that contributes to profit.

Future capital investment will center on overseas markets, where there is significant room for the instant noodles market to grow. Right now, in Brazil, where market growth is remarkable and demand for cup-type instant noodles is expanding rapidly, we are expanding production capacity to maintain and strengthen our overwhelming No. 1 share position. We have scheduled a third plant to begin operations in 2027.

We are also carrying out phased investments to upgrade plants in Japan. In addition, to address the aging Kanto Plant, we acquired land in Ibaraki Prefecture in 2022 for the construction of a new plant. However, in light of soaring construction material costs, we have substantially revised the investment scale from the initial plan and, aiming to begin operations during FY 3/2030, plan to start construction in May 2027.

The Group views ROE as an important indicator in addition to sales and profit growth. To meet capital-market expectations, we raised our ROE target to 15% at the full-year results briefing for FY 3/2024. However, given the subsequent slowdown in profit growth due to factors such as higher depreciation, and the current situation in which the FY 3/2026 result was 9.1%, we have determined that achieving the target by 2030 is not realistic. We have therefore revised our approach to a phased one: first restoring ROE to 10% or higher by 2030, and then aiming for 15% over the long term. We understand that there are mechanisms to improve ROE by increasing leverage in the short term. However, these measures would heighten financial risk and could undermine growth-investment opportunities and the flexibility of our business portfolio. Therefore, we reached the decision under a policy of prioritizing medium- to long-term business growth over short-term improvement in the numbers. Going forward, while giving top priority to the investment needed for safety, quality, and stable supply, we will raise the quality of our business portfolio and optimally allocate the cash we generate, aiming for an ROE level of 15% over the long term.

From a cash flow perspective, we position EBITDA as an important indicator. Although EBITDA declined slightly in FY 3/2026, it continues to grow steadily. Our policy is to keep EBITDA in the 100 billion yen range and grow the measure consistently over time.

As CFO, what matters in setting and managing financial KPIs is not the figures themselves, but accurately grasping the underlying reality of capital efficiency and cash-generating capability. The core of our financial strategy going forward is to ensure a virtuous cycle in which current growth investments translate reliably into future profits, boosting returns, improving ROE, and creating greater scope for shareholder returns.