Investor Relations
Management Principle
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’ ne eds 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 long-standing principle of “Always Putting the Customer First” and pursue new possibilities and challenges.
Performance
For the beverage industry as a whole, the business environment remains adverse
In the fiscal year under review, ended April 30, 2011, Japan’s economy fell short of a full-scale recovery. Although an uptrend in personal consumption appeared in some sectors due to improvement in corporate profits, the difficult employment situation continued. In the beverage industry, the business environment remained adverse. Although sales volume developed favorably amid record-high summer temperatures nationwide, the gradual decline in the prices of goods continued, and the Great East Japan Earthquake also had a negative impact on business.
Consolidated net sales developed favorably in the fiscal year under review, rising 5.6% year on year
Given the business conditions, during the year under review ITO EN continued to work to identify and address any discontent among our customers in keeping with the principle of “Always Putting the Customer First.” We engaged in the development of products that aim to delight customers in accordance with our five basic development concepts, “natural,” “healthy,” “safe,” “well-designed,” and “delicious,” and strove to provide customer-focused services. We worked to further strengthen individual brands including Oi Ocha, Tennen Mineral Mugicha (natural mineral barley tea), and Jujitsu Yasai (vegetables galore). We also actively pursued synergies within the Group through products such as the TEAS’ TEA NEW YORK line of black teas that deliver experiences in flavor and aroma developed jointly with ITO EN (North America) INC. and TULLY’S COFFEE BARISTA’S CHOICE, a canned coffee that has inherited the superb quality for which Tully’s Coffee Japan Co., Ltd., is renowned. As a result, consolidated net sales for the year rose 5.6% from the previous year to ¥351,692 million.
Consolidated sales and earnings increased in the fiscal year ended April 30, 2011
Operating income increased 42.0% year on year to ¥17,679 million as a result of efforts to increase operating efficiency, coupled with rigorous cost-reduction activities and increased cost effectiveness. Ordinary income rose 41.5% to ¥16,526 million due to efforts to improve profitability at consolidated subsidiaries. Net income rose 28.0% to ¥7,675 million, marking an increase in both sales and earnings in the fiscal year ended April 30, 2011.
Medium- to Long-Term Business Plan
ITO EN forecasts higher consolidated sales and earnings again in the fiscal year ending April 30, 2012
In the aftermath of the Great East Japan Earthquake, factors such as radiation contamination, power supply outages, and deterioration of consumer confidence are expected to have a prolonged negative impact on Japan’s economy and on our business to some extent. In these circumstances, the ITO EN Group will adhere more than ever to the principle of “Always Putting the Customer First,” and work to further improve the Group’s overall business performance by striving for product development and service improvements that will bring customers greater satisfaction. In addition, we will boldly enter new business sectors. For instance, we will engage in the dairy products business together with Chichiyasu Company, which became a member of the ITO EN Group in May 2011, and pursue the expansion of the chilled products business by engaging in new product development and marketing, leveraging ITO EN’s sales power and Chichiyasu’s technical capabilities. Through these activities, in the fiscal year ending April 30, 2012, we forecast net sales to rise 2.4% year on year to ¥360.0 billion, operating income to rise 1.8% to ¥18.0 billion, ordinary income to rise 2.9% to ¥17.0 billion, and net income to rise 4.2% to ¥8.0 billion.
As one of the targets of the medium-term business plan, we aim to achieve record-high operating income in the fiscal year ending April 30, 2014
At the briefing on business results for the fiscal year ended April 30, 2011, ITO EN announced a medium-term business plan to achieve the long-term management vision for the three-year period ending 2014. The specific goals given high-priority in the plan are the fundamental reinforcement of existing business sectors, the pursuit of new growth, and transformation to a highly profitable business structure. In the plan, we have set targets of consolidated net sales of ¥400.0 billion or higher and record-high operating income of ¥23.0 billion in the fiscal year ending April 20, 2014.
We will maintain a dividend payout ratio of 40% or higher
As milestones on the way to achieving the long-term management vision, we have set targets of consolidated net sales of ¥500.0 billion and an operating income ratio of 8%, and we will implement a united, Groupwide effort to establish a new business base. ITO EN regards the continuous return of profits to our shareholders as a top management priority. We make stable profit distribution the basis of our profit distribution policy and will continue to provide dividends based on the criterion of a consolidated payout ratio of 40% or higher. The Company intends to use internal reserves for investments to increase corporate value, in other words, the value of our shareholders’ investments, and actively pursue shareholder returns through future business development.
ITO EN seeks to become a global tea company
We plan to contribute to society by fulfilling our corporate responsibilities and establishing our position as a full-line beverage company and market leader in green tea, in both ready-to-drink beverage and tea leaf forms, and rank first or second in overall market share in Japan. We also seek to chart a course to become a global tea company whose products are always readily available regardless of season, individual preference, place, or time. An important mission for the future is to spread the word about green tea, an integral aspect of Japan’s food culture, to people around the world.
July 26, 2011
