Medium-term management policy
Based on the four elements that make up the spirit of our founder – "食足世平 Shoku-soku Se-hei (Peace will come to the world when there is enough food.),””食創為世 Shoku-so Isei (create foods to serve society),”“美健賢食 Bi-ken Ken-shoku (Eat wisely for beauty and health)” and “食為聖職 Shoku-i Sei-shoku (Food related jobs are a sacred profession) - our aim is to become an “EARTH FOOD CREATOR,” as set out in the NISSIN FOODS Group Philosophy, through our commitment to creating food for the world around us. We go about our work in a “Creative” and “Unique” manner every day, and provide enjoyment of food for a “Global” audience, in order to make people all over the world “Happy.”
- *Market capitalization = Share price × Issued shares at end of year (after deduction of treasury shares)
To achieve the numerical targets under the Medium-Term Plan, we intend to implement the following five strategies in order to ensure profitability.
1. Promoting global branding
We intend to improve profitability by accelerating overseas expansion of CUP NOODLES, as a high value-added product that makes the most of our strengths as a company, and by increasing the number of units sold overseas by 50%. We intend to pinpoint the right approach for design, flavor and promotion, based on a clearly defined target market (young people with a certain standard of living), in order to penetrate the market more efficiently and effectively.
2. Focusing on priority overseas locations
We have earmarked BRICs (Brazil, Russia, India, China) as priority locations from two key perspectives, based on market appeal and opportunities for NISSIN FOODS Group. We are determined to secure profit growth in these areas.
In China, we are planning to further expand our growing sales area for high-margin CUP NOODLES products. In India, we are focusing on growth in bag-type instant noodle products in urban areas and on stepping up CUP NOODLES sales to the country’s rapidly-growing population of middle-income earners. In Brazil and Russia, we are aiming to build on solid foundations as market leader to expand the market for value-added cup-type instant noodle products, so that we can secure an even larger market share and increase profits.
- *1Income = Operating income + Equity method income
- *2Source: WINA/2014
- *3Source: NISSIN estimates based on data from various sources
3. Laying stronger foundations for our domestic profit base
In order to establish a business model that will be less susceptible to declining population numbers and other changes in population or consumer composition, we intend to focus more closely on the domestic market, with an emphasis on marketing, and we are also planning to invest in upgrading plants in order to save labor and improve food safety. By conducting these initiatives, we will lay stronger foundations for our instant noodle profit base in Japan, with the aim of becoming a “century brand company.
4. Establishing a second pillar that generates revenue and profit
We are stepping up initiatives aimed at developing our confectionary and cereal business into a second primary revenue and profit source, both in Japan and overseas. We intend to grow individual brands even further, strengthen cooperation based on technical synergy between the confectionery and cereal companies, expand overseas operations and make use of M&A to increase sales to around JPY 100 billion, including equity method companies.
In terms of chilled and frozen foods, and beverages, we are aiming to increase profit growth domestically, based on our efforts to establish brands throughout the previous medium-term period.
5. Developing and strengthening human resources for global management
Looking ahead to the future, we intend to step up human resource development measures within the group, including running a selection-based in-house university program, promoting diversity, and reinforcing overseas trainee systems. We are also planning to increase management human resources by recruiting from outside the group, in an effort to accelerate global management.
Within the Medium-Term Plan, we have set out numerical targets with an emphasis on “earning power through operations” and “value in capital markets,” as key requirements for “recognition as a global company.”
- *1Adjusted operating income = Operating income – Impact of retirement benefit accounting
- *2Market capitalization = Share price × Issued shares at end of year (after deduction of treasury shares)
- *3“Net income attributable to owners of parent” under Japanese accounting standards, “profit attributable to owners of the parent” under IFRS standards
- *4Adjusted EPS = Adjusted NOPAT*5 ÷ Average issued shares for the period (after deduction of treasury shares)
- *5Adjusted NOPAT = Adjusted operating income + Equity method gains or losses + Amortization of goodwill (including equity method companies) – Net income attributable to non-controlling interests