At the core of ITO EN's management philosophy is our
emphasis on and commitment to each and every customer
At ITO EN, we consider consumers, shareholders, retailers, suppliers, financial institutions, and local communities our customers. We have always regarded everyone involved with ITO EN to be our customer, and we earnestly strive to address our customers’ needs through the feedback received, and by taking the perspective of our customers as the foundation of our management strategies. We will continue to remain true to our longstanding principle of “Always Putting the Customer First” and pursue new possibilities and challenges.
During the fiscal year ended April 30, 2016 (May 1, 2015 - April 30, 2016), the beverage industry, adverse business conditions persisted amid an unpredictable business environment, an impact of inclement climate in summer, price declines fueled by increased competition, and stemming from lingering concerns over rising raw material and fuel costs resulting from the yen’s depreciation.
Under these business conditions, in keeping with the management principle of “Always Putting the Customer First,” the ITO EN Group vigorously engaged in business activities while constantly seeking to identify and address areas of customer dissatisfaction in the beverage market.
As a result, ITO EN recorded consolidated net sales of 465,579 million yen, up 8.1% from the previous fiscal year. On the earnings front, a review of expenses coupled with efficient management resulted in operating income of 17,243 million yen, up 51.4% year on year, ordinary income of 15,074 million yen, up 34.2%, and profit attributable to owners of parent of 8,615 million yen, up 18.1%.
Outlook for the fiscal year ending April 30, 2017
The ITO EN Group will closely adhere to the management principle of “Always Putting the Customers First” and strive to develop products and improve services to increase customers’ satisfaction. As we have celebrated the 30th anniversary of ITO EN’s launching of green tea beverages, the Group will strive to further improve its business performance by further strengthening “Oi Ocha,” the top brand in green tea beverages, enhancing other individual brands including “Kenko Mineraru Mugicha” (healthy mineral barley tea), “TULLY’S COFFEE,” “Ichinichibun no Yasai” (a day’s worth of vegetables), “Jujitsu-Yasai” (mixed vegetable and fruit beverage) and “TEAS’ TEA,” improving sales of leaf products centering on easy-to-use products, as well as establishing a marketing platform for route sales, pursuing comprehensive cost reductions, and creating Group-wide synergies. For the fiscal year ending April 30, 2017, ITO EN forecasts consolidated net sales of 471,500 million yen, a 1.3% increase from the fiscal year under review, operating income of 20,000 million yen, a 16.0% increase, ordinary income of 19,400 million yen, a 28.7% increase, and profit attributable to owners of parent of 11,800 million yen, a 37.0% increase.
Long-Term Management Vision
The Group continues to forge ahead based on our core management principle of “Always Putting the Customer First” and our long-term vision as a “Global Tea Company.” Within this context, we aim to provide, to customers around the world, quality in lifestyle that represents value, encompassing everything from the Art of Tea tradition to the most recent technological advances going forward. To this end, we shall solidify our domestic earnings base centering on our tea leaves and beverage segments, while at the same time strengthening our brands and creating Groupwide synergies―hereby achieving continued growth.
Moreover, our strategic investments aimed at establishing overseas business platforms will continue, securing Oi Ocha’s position as a global brand, and with respect to convenience products such as tea bags and powdered tea as well, we aim to achieve further penetration into markets around the world.
As one aspect of business development, since 2001 we have been devoting our efforts to the Tea-Producing Region Development Project for the stable procurement and more efficient production of high - quality domestic green tea raw materials, the nurturing of producers, and the active utilization of idle fields and orchards. Production volume is increasing each year, and we are proceeding with the objective of bringing 2,000 hectares of tea plantation area under cultivation.
Overseas, we are expanding active business development into fast-growing Southeast Asia and neighboring countries and regions.
Looking to the future, ITO EN will continue to contribute to society through a broad range of CSR programs. We will establish ourselves as a leader in the green tea sector, both in beverages and tea leaves, involved in everything from the development of tea-producing regions to the recycling of used tea leaves, as well as securing our position as a total beverage manufacturer in Japan. Irrespective of season, individual, location, or time, we aim to maintain ITO EN products as a constant companion to our customers, establishing the Company as a “Global Tea Company” that offers healthful abundance to the customers of the world by continuing to develop beverages, tea bags, and instant tea products as global brands.
Based on these initiatives, we are steadily developing our position as a globally trusted enterprise as we build toward the achievement of our medium- to long-term objective of 500 billion yen in sales.
ITO EN considers the continuous return of profits to shareholders one of its most important management priorities. We have established stable profit distribution as the basis for our profit distribution policy, and thus provide a continuous stream of dividends.
To offer our shareholders a new yield commodity, in September 2007 we issued preferred stock (Class-A preferred stock) with the stipulation that it cannot be converted to common stock, becoming the only listed company issuing such shares in Japan. The background for setting a dividend for preferred stock 25% higher than the dividend for common stock is the desire to offer individual investors a familiar yield commodity at a time when funds are flowing from savings to investments. We strive to satisfy expectations for shareholder returns as evidenced by our share-buyback program.
With regard to the policy of profit distribution, we will conduct, on an ongoing basis, consolidated dividend payout ratios of 40%, forming the foundation for stable profit distribution. We utilize internal reserves for purposes such as investment for corporate value enhancement, strive to increase corporate value―that is, shareholders’ investment value―and intend to actively return profits to investors through future business development.
In our efforts to achieve these goals, we look forward to continuing to earn the trust and support of our shareholders.