Overview of “Fiscal 2026 Medium-Term Management Plan (Breaking Through Toward 2028)” and Progress
The basic concept of the Fiscal 2026 Medium-Term Management Plan (the “medium-term plan”) is to “strengthen core businesses and stabilize earnings structure.” This represents our efforts to strengthen our core businesses by continuing to provide long-term support throughout the entire supply chain as a solutions partner for the fishing and marine products industries, and to stabilize our earnings structure by restructuring our business portfolio to achieve a better balance. We will also actively consider M&A as a way to achieve these aspirations.
In addition, we implemented various awareness-raising measures, including town hall-style meetings, as well as communicated and shared our plans and ideas with the entire Group, aiming to create a new medium-term management plan that all employees would understand and take ownership of.
Strengthen core businesses and stabilize earnings structure
| 01 | Support the marine products industry supply chain |
|---|---|
| 02 | Restructure the business portfolio |
| 03 | Actively implement M&A to expand business |
Positioning of long-term vision and medium-term management plan
In formulating the medium-term plan, in order to respond to the paradigm shift occurring in the marine products industry and future changes in the business environment that are difficult to predict, we have shifted our planning from a past-driven, cumulative approach to a backcasting approach.
Specifically, while pursuing our unchanging corporate philosophy, we envisioned the society we want to realize and our ideal state in 10 years, and defined our Purpose as “From Ocean To Dining, Challenges For The Better Future.” For each business, we analyzed the business environment 10 years in the future and formulated a long-term vision, then worked backwards from there to create plans and strategies. For this reason, we are positioning the medium-term plan as a three-year period for making a breakthrough, with an eye toward 10 years in the future.
Transformation of business portfolio
The main focus of our measures will be to grow profits and stabilize the earnings structure. The first is to further develop the earnings base established under the previous medium-term management plan and continue building upon it with the medium-term plan, and to accelerate the pace of profit growth towards the medium- to long-term target of 7.7 billion yen in operating profit. The second is to transform our current earnings structure, which relies on the Food Business for roughly half of its profits. We aim to make it more stable by expanding the Marine Business and Machinery Business, ultimately creating three well-balanced pillars.
Additionally, we conducted a business feasibility assessment that took into account the Company’s raison d’être over the medium to long term, market expansion forecasts for each product and business, and the advantages of our products, and classified them into four areas. We will continue to manage each area in a way that suits its characteristics and move forward with business portfolio restructuring.
Operating profit target values
KPI
In addition to ROE, we will also use ROIC and D/E ratio as key management indicators. Our targets are an ROIC of 4.5% or more to emphasize capital efficiency, and a D/E ratio within 1.0 to maintain a sound financial position.
Over the three-year period of the medium-term plan, we will raise operating profit to the 4.0 billion yen range and further solidify our foothold for unlocking significant growth thereafter.
| Results for fiscal year ended March 31, 2026 | Targets for fiscal year ending March 31, 2028 | Targets for fiscal year ending March 31, 2035 | |
|---|---|---|---|
| Net sales (Millions of yen) | 139,779 | 155,000 | 230,000 |
| Operating profit (Millions of yen) | 2,758 | 4,300 | 7,700 |
| Ordinary profit (Millions of yen) | 3,018 | 4,500 | 7,900 |
| ROE | 6.8% | 10.0% or more | 12.0% or more |
| ROIC | 3.3% | 4.5% or more | 6.0% or more |
| D/E ratio | 0.8 | 1.0 or less | 0.9 or less |
Investment strategy
The cash allocation structure envisioned for the medium to long term (10 years) involves utilizing operating cash flow and borrowings to make active growth investments and return profits to shareholders.
Key points of the new medium-term plan over the next three years include focusing on business areas and products for future growth over the next 10 years, with plans for significant capital investments and M&A activities, along with additional external funding through borrowings.
- *Diagram of cash allocation over the next 10 years
Dividend policy
Looking at our medium- to long-term dividend policy for the next three and ten years, during the new medium-term plan, we will maintain our basic policy of stable dividends as before, while continuing our effective progressive dividend policy. Our intention is to raise the payout ratio to 35% or more by FY2027, three years from now. We will also consider rolling out shareholder benefits and share buybacks, which have been requested by many investors.
With regard to shareholder return measures from a medium- to long-term perspective, we will actively return profits to shareholders, targeting a payout ratio of 40% or more and a DOE of 4% or more as soon as possible. This, however, will depend on business performance trends.
Future outlook
Although we expect that the economy will continue to recover moderately amid the progress of aggressive fiscal and economic measures, we must pay close attention to how the further escalation of global geopolitical risks, including the situation in the Middle East, will affect the supply of energy, the supply of raw materials themselves, and even manufacturing costs.
Despite this environment, the Group will continue to provide technology and services, based on our history of taking on challenges that has allowed us to flexibly adapt to changes over more than a century in business and the experiences we have cultivated during that time, in response to the paradigm shift occurring in the marine products industry, in order to maintain stable corporate operations and growth toward achieving the goals of the Fiscal 2026 Medium-Term Management Plan (Breaking Through Toward 2028).
Specifically, we will focus on being a solutions partner in our core marine products industry business, while simultaneously building new pillars such as aquaculture, environmental and resource conservation, and food processing machinery. In turn, by actively investing in growth domains and restructuring our business portfolio to create a more balanced earnings structure, we aim to connect individual strengths to organizational strengths, pursue the best solutions, and become a company that creates new value for the future.
Topic 1Toward in-house development of land-based aquaculture systems
As part of our initiatives to promote the sustainable use and stable supply of fishery resources, we launched a demonstration project in Kuji City, Iwate Prefecture, with the objective to manufacture recirculating land-based aquaculture equipment in-house. In this demonstration testing, water injection and trial operation began in March 2026, and stable operation of water quality and circulation functions was confirmed in early April 2026. Subsequently, we introduced coho salmon, and are currently conducting aquaculture tests in parallel for each growth phase, from juvenile to adult fish.
Topic 2Enhancing the added value of seafood processing
An example of strengthening seafood processing during FY2026 is the development of the Sabamaru Series. These products are meticulously crafted, using only the finest mackerel raw materials, which are inspected by our staff on-site in Norway. These products utilize a special manufacturing method called saltwater misting, which maximizes the flavor of the mackerel. We will continue to proactively introduce new products.
After town hall-style meetings
Among the various internal initiatives we are implementing to ensure the medium-term management plan is understood, we are in particular conducting town hall-style meetings to promote understanding of our Purpose. Our intention is to envision the future of our businesses from a backcasting perspective, starting 10 years into the future, and to firmly understand the paradigm shifts occurring in the industry, while also instilling within the Company the sentiment embodied in our Purpose: “Encouraging proactive ‘challenges’ from each and every employee.” In the first fiscal year (FY2025), company officers, including the President, directly explained the contents of the medium-term management plan to employees at all departments and all consolidated subsidiaries. In addition to question-and-answer sessions, they also exchanged opinions on the future of the Nichimo Group and each of its businesses. The effectiveness of this initiative (i.e., the degree of understanding and penetration within the Company) has been confirmed through the company-wide assessment conducted annually. Furthermore, the insights gained from directly listening to the voices of employees are shared among officers and used to improve future company operations.
Participant voices
Review of results
In the most recent company-wide assessment, the third such one, we were able to confirm a certain level of effectiveness from implementing town hall-style meetings. In the “Company-wide/Management” category, which was a benchmark item for understanding the company-wide vision and Purpose, employee understanding and acceptance improved, and the positive response rate increased by more than 5 percentage points compared to the previous year. Looking at the assessment results in more detail, out of a total of 136 questions, there were seven questions where the positive response rate increased by 10 percentage points or more. These included “The management vision and growth strategy are clear,” “The Company is actively working on challenges for transformation,” and “Discussions are taking place on the medium- to long-term ideal state of businesses.” Positive responses were observed in areas that were key points in the medium-term management plan and town hall-style meetings from a backcasting perspective. While the improvements are not yet significant, we believe we have successfully established a clear path towards internalizing the medium-term management plan and achieving its targets.
Internal steps for disseminating the medium-term management plan and Purpose
Implementation policy for FY2026
While we achieved some positive results in disseminating the medium-term management plan within the Company in FY2025, our initiatives are still only halfway complete, and in FY2026 we will continue to implement various measures based on the following two pillars.
Town hall-style meetings
We believe that further communication is necessary to effectively disseminate our medium- to long-term vision and Purpose, and therefore, we will continue to hold town hall-style meetings in FY2026. Compared to the previous term, where explanations mainly came from management, in FY2026 we want to go a step further and use a review of the first fiscal year of each department’s medium-term management plan as a starting point to carefully confirm the opinions and concerns of each person in charge, thereby aligning the perspectives of management and frontline operations, not to mention enhancing the sense of unity and agility of the entire Group.
Manager training
We have resumed our management training program in FY2026, which had been suspended since the COVID-19 pandemic, and will continue to work on enhancing the capabilities of our managers. In particular, section managers are required to act as a bridge between management and our frontline operations, translating higher-level policies into operational levels, while also detecting changes on the ground and reporting them to management. They are key players in achieving the medium- to long-term vision. The management climate for section managers is changing significantly due to factors such as stricter compliance and shifts in the career aspirations of younger employees. Accordingly, we will ensure that managers continue to update their knowledge and skills.