Summary of Q&A for European Business Briefing Session held on March 18, 2024

There are risks related to raw materials processed in China from Russian raw materials and geopolitical risks such as a rise in fuel prices and a decline in consumption due to the Ukraine situation.

We believe this is because we selected targets over a long period. The company is also reducing risk by gradually acquiring more minor players. In the future, the top priority will be to fully use platforms such as the NORDIC model and Cité Marine's differentiation strategy.

Based on the company-wide target of operating profit of 5%, we aim for a higher profit margin in FY2023 than in FY2022.

Maxima and DENGSÖ are located in one of Europe's leading white-meat fish landing areas, and by dispersing their bases, they can provide a stable supply to their customers. Another strength is that the group can share production plants and supply networks. Flatfish's profit margin has improved as its sales customers have expanded. In addition to its home delivery business, Regal Fish is expanding into e-commerce.

Chilled products account for about half of our European food business.

The impact of lower raw material prices continues, and sales prices have increased compared to the same period last year. However, as the company is in a business environment where selling prices are reduced when raw material prices fall, the company has already reduced prices. Therefore, although the profit level in FY2023 was exceptionally high, from FY2024 onwards, the profit level will settle down to FY2021 and FY2022.

In FY2023, some factors pushed up profits, such as lower prices for marine raw materials and higher selling prices. If we maintain our current profit margins, we may lose our customers. Retaining existing customers is our top priority.

The company's products receive high evaluation based on the simultaneous pursuit of product differentiation and cost leadership. We have the production know-how to maximize productivity.

Nissui is the only seafood fry company with production plants worldwide, so we can respond to global companies. On the production side, labor-saving know-how is shared across the group. On the procurement side, information on raw material prices can be shared across the group to make optimal purchases.

We have already conducted trial sales. In Spain, the number of items has been gradually expanded, and in Italy, the product turnover rate is reasonable.

In France, most mass retailers are covered. The white-meat fish market is growing compared to other animal proteins, and the chilled product market is expected to grow as the convenience of chilled products is widespread. We estimate that Spain and Italy have a market potential of 30 to 50 % of the French market, but we need more time to judge as we have just started our efforts.

The market growth has decelerated compared to previous years. We predict that the market will be oligopoly by large companies in the future, so we would like to continue growing by targeting private supermarket brands and commercial use.