Impact of COVID-19 on Dining-Out Demand, Capital Investment and Logistics

「Infectious disease could significantly affect the Company's operating results through a decline in the number of customers and customer locations caused by weak food service demand, including inbound consumption, as well as the cancellation or revision of customers' plans to open new stores or replace the Company's machinery at existing stores.」

「The Company's main users are food service businesses such as conveyor-belt sushi and rice-bowl chains, and prepared-food businesses such as supermarkets. The impact of infectious disease could significantly affect the Company's operating results through a decline in the number of customers and customer locations caused by weak food service demand, including inbound consumption, as well as the cancellation or revision of customers' plans to open new stores or replace the Company's machinery at existing stores.」

「In Japan, the business environment remains challenging for the food service and retail sectors due to higher raw material and energy prices. However, the shift to labor saving has continued, driven by the reclassification of COVID-19 to Category 5 in May 2023, the recovery in inbound demand and labor shortages, and product demand remained firm.」

「In Japan, the operating environment remains challenging for the food service and retail industries due to soaring raw material and energy prices. However, demand for the Company's products remained firm, supported by the reclassification of COVID-19 to Category 5 in May 2023, the recovery in inbound demand, and continued labor-saving efforts amid labor shortages.」

「Although Japan experienced a spread of the eighth wave of COVID-19, inbound demand is recovering as entry restrictions have been significantly eased since October, while, as with the seventh wave, no activity restrictions were imposed.」

「Although Japan experienced a rapid spread of the seventh wave of COVID-19, the situation has recently begun to settle, and inbound demand is expected to recover as entry restrictions are significantly eased and the yen weakens.」

「Although vaccination has begun, the domestic and international COVID-19 situation remains unpredictable, with concerns over the spread of highly infectious variants.」

「During the first 9 months of the fiscal year, economic conditions in Japan improved. Sentiment in the manufacturing sector improved on strong overseas demand and the easing of supply constraints, while sentiment in the non-manufacturing sector improved as service consumption recovered following the easing of activity restrictions. However, a full-scale recovery in corporate capital investment and consumption continued to depend on the COVID-19 situation, and concerns emerged over downside risks to the economy from the spread of new variants and shortages of semiconductors and other components.」

「Vaccination against COVID-19 is progressing, and as the easing of activity restrictions gathers pace, employment and income conditions are expected to recover gradually, creating an environment in which personal consumption is expected to recover.」

「There are also concerns about the spread of COVID-19 variants and shortages of semiconductors and other components, and these developments will require close monitoring.」

「Domestic revenue was affected in the first quarter by the spread of COVID-19, which led major customers, particularly in the food-service, retail and food manufacturing sectors, to review their capital investment plans, while corporate activity stagnated. From the second quarter onward, however, demand for the company’s products remained firm as heightened hygiene awareness among operators and end consumers, together with structural changes in the food-service industry such as the shift toward self-service and labor-saving operations associated with the expansion of takeout and delivery, accelerated the adoption of these measures. Overseas revenue was heavily affected in the first quarter by lockdowns, restrictions on movement and travel, and other measures implemented in response to the spread of COVID-19, as well as by logistics disruptions and declining capital investment appetite among major customers, particularly food-service and retail businesses handling Japanese food. From the second quarter onward, economic activity gradually began to resume, and revenue in North America, Europe and East Asia followed a recovery trend. However, the substantial impact of sluggish sales in Southeast Asia in the first and second quarters caused overseas revenue to fall below that of the same quarter of the previous year.」

「Although overseas sales in the first quarter were heavily affected by COVID-19, economic activity gradually began to resume in the second quarter, and sales followed a recovery trend. However, overseas sales fell below the cumulative total for the same quarter of the previous year due to stagnant sales in Asia.」

「Overseas sales fell substantially below the year-earlier quarter as many countries imposed lockdowns, restrictions on movement and travel restrictions, disrupting logistics networks and reducing capital-investment appetite among key customers, particularly food-service and retail businesses handling Japanese food. Sales declined especially in Asia.」

「The COVID-19 pandemic may significantly affect the company’s business performance through a decline in the number of customers and customer locations resulting from weak food-service demand, including inbound consumption, as well as the cancellation or revision of customers’ plans to open new locations and replace the company’s machinery at existing locations. In addition, if lockdowns, stay-at-home restrictions or similar measures are implemented in various countries, disruptions to domestic and international logistics networks may make it difficult to sell products in overseas markets and procure components, affecting the company’s business performance and potentially impeding business growth.」