A strong start to the FY2027 plan will be tested for sustainability in H1

FY2027-Q1 revenue was ¥289.401 billion, up 5.8% year on year, while operating profit was ¥22.673 billion, up 27.7%. Ordinary profit was ¥24.790 billion, up 37.8%, and net income attributable to owners of the parent was ¥15.271 billion, up 51.3%, with profit growth outpacing the top line. Food generated revenue of ¥233.717 billion and segment profit of ¥15.170 billion, while pharmaceuticals generated revenue of ¥55.683 billion and segment profit of ¥8.438 billion.

The full-year plan calls for revenue of ¥1,212.000 billion, operating profit of ¥100.000 billion, ordinary profit of ¥101.000 billion and net income of ¥62.500 billion. At the end of Q1, progress stood at 23.9% for revenue and 22.7% for operating profit. Assuming simple quarterly progress of 25% each quarter, revenue was approximately 1.1 percentage points and operating profit approximately 2.3 points below the benchmark. This is not yet a level that would indicate a slowdown, but it will be necessary to confirm whether the gap can be closed in Q2.

FY2026 operating profit was ¥93.307 billion, making the FY2027 plan equivalent to 7.2% year-on-year growth. The Q1 operating margin was 7.83%, calculated by dividing ¥22.673 billion in operating profit by ¥289.401 billion in revenue, below the approximately 8.25% full-year target. The margin improved from approximately 6.49% in the year-earlier quarter, but the extent to which price revisions, cost reductions, production efficiencies and new pharmaceutical products build up in H1 will be important.

The Q1 disclosure did not provide a bridge breaking down the individual contributions from price revisions, raw-material costs, sales volume, new products and structural reforms. In FY2027-H1, it will be necessary to confirm not only the year-on-year change in operating profit, but also how far the company quantifies the drivers of earnings growth by food and pharmaceuticals, the impact of foreign exchange, cocoa raw-material costs and the transfer of the China business.