Rebuilding the Wholesale Business’s Production and Operating Structure and Improving Profitability

「As a result, revenue from the external sales business rose 2.5% year on year to ¥20,071 million, and segment profit was ¥368 million, compared with a segment loss of ¥178 million in the same period of the previous year.」

「As a result, net sales in the external sales business decreased 12.0% year on year to ¥39,233 million. On the earnings front, in addition to the decline in sales, the impact of temporary cost increases was substantial despite the focus on developing the production structure, resulting in a segment loss of ¥113 million, compared with segment income of ¥945 million in the previous fiscal year.」

「As a result, revenue from the external sales business fell 14.5% year on year to ¥19,568 million. In terms of earnings, in addition to lower revenue, the business was affected by temporary cost increases associated with a policy-driven review of the production structure, resulting in a segment loss of ¥178 million, compared with segment profit of ¥819 million in the same period of the previous year.」

「In the external sales business, against the backdrop of deeper collaboration with Pan Pacific International Holdings Corporation, which began in earnest in March 2023, we reorganized 4 plants into a dedicated production structure for the company, including by coordinating production items among the plants. We also rebuilt manufacturing capacity through capital investment, including upgrades to frozen and chilled production lines, and established dedicated operations tailored to product characteristics.」

「As a result, external sales revenue increased 7.3% year on year to ¥22,889 million. In terms of profitability, higher production efficiency resulting from the introduction of labour-saving equipment and continued improvement activities in plant operations, in addition to higher revenue, contributed to a 4.2% year-on-year increase in segment profit to ¥819 million.」

「As a result, external sales revenue increased 10.4% year on year to ¥11,392 million. In terms of profitability, continued improvement activities in plant operations, in addition to higher revenue, contributed to a 13.0% year-on-year increase in segment profit to ¥436 million.」

「As a result, wholesale-business sales rose 12.9% year on year to ¥43.344 billion. In terms of profit, continued improvement initiatives in factory operations steadily produced results, resulting in segment profit of ¥1.271 billion, up 99.9% from the previous fiscal year.」

「As a result, external sales revenue increased 12.4% year on year to ¥32,573 million, and segment profit increased 108.4% to ¥1,144 million, as continued improvement activities in plant operations steadily produced results in addition to the increase in revenue.」

「As a result, external sales revenue increased 9.3% year on year to ¥10,316 million, and segment profit increased 130.3% to ¥385 million, supported by continued efforts to optimise the cost structure in addition to higher revenue.」

「At our principal business partner, 株式会社ファミリーマート, the effects of promotional campaigns across various categories led to significant growth in some categories, which reached 125% of the previous year's level. In addition, following longstanding discussions with other prepared-food manufacturers, we succeeded in reducing the number of products manufactured while maintaining production volumes, thereby improving production efficiency.」

「As a result, external sales revenue increased 7.1% year on year to ¥28,954 million. In terms of profitability, in addition to higher revenue, the effects of optimising products manufactured at our own and third-party plants and expense reviews resulted in segment profit of ¥549 million, compared with segment profit of ¥35 million in the same period of the previous year.」

「As a result, external sales revenue increased 5.4% year on year to ¥19,056 million. In terms of profitability, in addition to higher revenue, the effects of reallocating products manufactured among plants and expense reviews resulted in segment profit of ¥288 million, compared with a segment loss of ¥31 million in the same period of the previous year.」

「As a result, external sales revenue increased 6.8% year on year to ¥9,430 million. In terms of profitability, in addition to higher revenue, the effects of the Kanto-area plant restructuring carried out in October last year and expense reviews resulted in segment profit of ¥167 million, compared with a segment loss of ¥108 million in the same period of the previous year.」

「In terms of profitability, in addition to higher revenue, the effects of the plant restructuring in the Kanto area carried out in October last year and expense reviews resulted in segment profit of ¥167 million, compared with a segment loss of ¥108 million in the same period of the previous year.」

「Accordingly, we believe that the external sales business significantly improved profitability from the previous fiscal year and was able to return to profitability.」

「As a result, external sales revenue increased 0.8% year on year to ¥27,014 million. In terms of profitability, in addition to the recovery in revenue, improvements in production efficiency from plant restructuring and the closure of the unprofitable Niigata Plant (Konan Ward, Niigata City) in March 2021 reduced the loss, resulting in segment profit of ¥35 million, compared with a segment loss of ¥812 million in the same period of the previous year.」

「As a result, external sales revenue increased 2.3% year on year to ¥18,071 million. In terms of profitability, in addition to the recovery in revenue, improvements in production efficiency from plant restructuring and the closure of the unprofitable Niigata Plant (Konan Ward, Niigata City) in March 2021 reduced the loss, resulting in a segment loss of ¥31 million, compared with a segment loss of ¥639 million in the same period of the previous year.」

「Meanwhile, we began deliveries to supermarkets as a new customer and sought to improve plant utilisation and productivity by consolidating the products manufactured at plants in the Chukyo region. We also focused on expanding products for the tenant business and improving productivity by converting the Fukuroi Plant, one of the plants in the Chukyo region, into a central kitchen dedicated to the tenant business in March 2021. As a result, external sales revenue increased 3.1% year on year to ¥8,822 million. In addition to acquiring the aforementioned new customer and restructuring the plants, we reduced the loss by closing the unprofitable Niigata Plant (Konan Ward, Niigata City) in March 2021, resulting in a segment loss of ¥108 million, compared with a segment loss of ¥428 million in the same period of the previous year.」

「In the external sales business, to improve plant utilisation and productivity, we converted the Fukuroi Plant, one of the plants dedicated to 株式会社ファミリーマート, into "Fukuroi Factory," a central kitchen dedicated to the tenant business, in March 2021. As a result, external sales revenue fell 17.2% year on year to ¥35,153 million, while the business reported a segment loss of ¥1,137 million, compared with segment profit of ¥76 million in the previous fiscal year.」

「As a result, external sales revenue fell 17.9% year on year to ¥26,780 million. Although we continued to reduce expenses, the impact of lower revenue was substantial, resulting in a segment loss of ¥812 million, compared with segment profit of ¥248 million in the same period of the previous year.」

「In terms of profitability, although we continued to reduce expenses, the impact of lower revenue was substantial, resulting in a segment loss of ¥639 million, compared with segment profit of ¥293 million in the same period of the previous year.」

「As a result, external sales revenue fell 25.9% year on year to ¥8,549 million. Although we advanced expense reductions, the impact of lower revenue was substantial, resulting in a segment loss of ¥428 million, compared with segment profit of ¥188 million in the same period of the previous year.」

「In operations, we continued to focus on inventory management and waste prevention, worked to improve gross margins, and closed the underperforming Akita Plant (Akita City, Akita Prefecture) in June 2019. We also worked to instil cost awareness and share information on successful practices promptly. As a result, external sales revenue was ¥42,497 million, compared with ¥42,043 million in the previous fiscal year, while the business returned to profitability, reporting segment profit of ¥76 million versus a loss of ¥558 million in the previous fiscal year. Escaping from a loss-making structure that had continued for several years and achieving profitability was viewed as proof that our previous efforts had not been misguided and as something that would give those responsible for operating the plants significant confidence.」

「In the external sales business, revenue remained sluggish due to a decline in the number of convenience-store delivery locations and the consolidation and closure of logistics centres, but profitability improved substantially as a result of continued efforts to optimise expenses, including improving gross margins through more precise plant operations and reducing labour costs, as well as the contribution from closing the underperforming Akita Plant (Akita City, Akita Prefecture) at the end of June. As a result, external sales revenue was ¥32,639 million, compared with ¥34,931 million in the same period of the previous year, while segment profit was ¥248 million, compared with a segment loss of ¥341 million in the same period of the previous year.」

「In terms of profitability, we worked to improve the precision of plant operations through ongoing reviews of the cost structure and strengthened manufacturing controls, while improving gross margins and optimising expenses, including personnel costs. We also worked to rebuild the earnings base, including by closing the underperforming Akita Plant (Akita City, Akita Prefecture) at the end of June. As a result, external sales revenue was ¥22,480 million, compared with ¥23,468 million in the same period of the previous year, but continuing cost-structure optimisation contributed to segment profit of ¥293 million, compared with a segment loss of ¥281 million in the same period of the previous year.」

「In the external sales business, we worked to increase delivery volumes through promotions at FamilyMart stores, including the "¥100 Onigiri Sale" and the "¥50 Off Bento Sale," and sought to acquire new delivery locations by starting transactions with Yodogawa Consumers' Cooperative in April for meal delivery services. These efforts did not lift the business overall. As a result, external sales revenue remained at ¥11,546 million, compared with ¥11,723 million in the same period of the previous year, but continuing reviews of plant operations contributed to optimising the cost structure, resulting in segment profit of ¥188 million, compared with a segment loss of ¥175 million in the same period of the previous year.」

「We worked to reduce labour costs by standardising the production structure at each plant and improving manufacturing efficiency through labour saving, while also reviewing the balance between the number of products manufactured and sales at each plant and seeking to acquire higher-margin products, with the aim of achieving an early return to profitability across the business.」

「To restore profitability across the external sales business, we consolidated production sites by closing the Tsu Plant at the end of March 2018 and the Mita Plant at the end of July 2018, while continuing to improve manufacturing efficiency and gross margins through reviews of plant operations. As a result, external sales revenue increased 1.3% year on year to ¥34,931 million. Although the business continued to post a loss, the loss was significantly reduced from the same period of the previous year to a segment loss of ¥341 million, compared with a segment loss of ¥2,503 million in the same period of the previous year.」

「In plant operations, we closed the Tsu Plant at the end of March and the Mita Plant at the end of July, focused on improving productivity at surrounding plants, and continued efforts to improve manufacturing efficiency and gross margins to restore profitability across the external sales business. As a result, external sales revenue increased 3.1% year on year to ¥23,468 million. Although the business continued to post a loss, the loss was significantly reduced to a segment loss of ¥281 million, compared with a segment loss of ¥1,868 million in the same period of the previous year.」

「In the external sales business, delivery volumes remained solid because promotional campaigns at convenience stores, including the "¥100 Onigiri Sale" and the "¥30 Off Two Onigiri or Sushi Items Sale," were implemented effectively. In plant operations, we focused on improving manufacturing efficiency and reducing costs, while working to reduce waste and improve gross margins. As a result, external sales revenue increased 10.5% year on year to ¥11,723 million. Although the business continued to post a loss, the loss was significantly reduced through higher sales, cost reviews and improved productivity at surrounding plants following the closure of a plant at the end of the previous fiscal year, resulting in a segment loss of ¥175 million, compared with a segment loss of ¥1,382 million in the same period of the previous year.」

「As a further measure for the next fiscal year, we comprehensively determined that closing one plant and transferring its production to nearby plants would lead to a recovery in profitability across the external sales business by significantly improving the low productivity of each plant, and accordingly closed the Tsu Plant (Tsu City, Mie Prefecture) on 31 March 2018.」

「In the external sales business, our first priority continued to be the prompt improvement of manufacturing efficiency, which had declined following the product integration between FamilyMart and Circle K Sunkus implemented from January 2017. At each plant, we reviewed manufacturing methods and improved staff allocation to raise manufacturing efficiency, optimised the temporary staffing deployed in large numbers to avoid disruption during the initial integration, and processed in-house the vegetables used in prepared sandwiches and salads, thereby reducing waste, improving gross margins and controlling expenses. However, further measures were needed to restore performance, and temporary closures caused by sign changes at delivery stores, as well as more store closures than expected, resulted in continued downward revisions to sales at each plant, so we did not achieve a significant recovery in performance.」

「In addition, we worked to improve manufacturing efficiency by increasing the accuracy of order forecasts from franchise stores and improving staff allocation, optimise the temporary staffing that had been deployed in large numbers to avoid disruption during the initial integration, and process in-house the vegetables used in prepared sandwiches and salads, steadily reducing waste, improving gross margins and controlling expenses. However, expenses remained high, mainly because the planned sales targets for each plant had not been achieved, and we did not achieve a significant recovery in performance.」

「In the external sales business, our first priority was to promptly recover the decline in sales and address the deterioration in manufacturing efficiency resulting from the product integration between FamilyMart and Circle K Sunkus implemented from January 2017. We worked to improve profitability by increasing the accuracy of order forecasts from franchise stores and gradually reducing the large number of dispatched workers brought in to avoid disruption at the plants to appropriate staffing levels, but sales remained sluggish and expenses remained high, so we did not achieve a significant recovery in performance.」

「In the external sales business, we will review all aspects of our business activities, promptly rebuild our production and operating structures, work to improve profit margins, and seek to expand our delivery share in the convenience store-related business.」