Summary of Q&A for Results Briefing of the 1st Quarter of Fiscal Year 2024 held on August 6, 2024

It exceeded the plan by approximately 10-15%. The decrease in raw material prices mainly benefits the domestic food business.

Although it affects procurement costs and foreign subsidiaries' performance in currency translation, we believe the impact will be limited.

It is difficult to make a definitive statement on market prices, especially considering recent exchange rate fluctuations and the uncertain environment. However, the trout market has been recovering since the end of March, and we believe the outlook for further recovery is high. The business environment mainly revolves around harvesting northern fish cages, and with sea temperatures expected to rise toward the end of the year, significant improvement will be challenging. However, we will strive to stabilize costs by maintaining good aquaculture performance.

Overseas operations factored mainly until March, so expectations remained unchanged. Domestically, while upstream categories like fisheries and aquaculture struggled, the trading business performed better than expected.

It takes work to give a straightforward answer. However, in the food business, raw materials are sourced from our group's North American processing companies and external companies. Therefore, we believe this has had a positive impact overall.

Since surimi and fillets are distributed globally, we believe they are more affected by events such as the U.S. presidential election and European economic conditions than exchange rate movements.

The yen appreciation could be positive for the marine products business. Global cost reductions in products like salmon, trout, and shrimp could lead to changes in domestic market prices.

The domestic chilled business benefits from the effects of new consolidation. We will work on improving profitability by expanding the product development system and enhancing logistics systems through the integration implemented in April. Maintaining selling prices amid low and stable raw material prices for white-meat fish fillets has improved profit margins overseas. We aim to secure profits by implementing appropriate pricing adjustments and promoting sales.

The main factor was that the raw material prices for white-meat fish remained stable at lower levels than anticipated. Additionally, while we initially projected a significant increase in logistics costs, they did not rise to that extent by the end of the first quarter. Looking ahead, while we have secured low-cost white-meat fish raw materials until the third quarter, there is uncertainty about procurement beyond that, so future raw material trends could significantly impact profitability.

Volumes are progressing slightly above the previous year. Surimi processed products have seen increased sales volumes year-over-year, thanks to campaigns to increase the amount per pack. Canned marine products are struggling in sales volume and revenue due to rising raw material costs, while frozen foods outperformed last year.

We have established a system that can maintain profit margins by implementing revenue and expenditure management on an item-by-item basis, CCC management and inventory control. Additionally, efforts to reduce costs while maintaining a certain level of production volume will help maintain and improve profit margins.

We aim to improve profit margins by reducing the number of items through implementing revenue and expenditure management on an item-by-item basis, enhancing existing products, and improving productivity. Additionally, as part of our strategy to expand into new categories, we plan to increase sales significantly in frozen foods by introducing products such as "Manzoku Plate,"

We had planned to ship pharmaceutical raw materials to Europe during FY2023, but this has not been realized yet. This has led to increased production volumes, which reduced the manufacturing cost per kilogram, leading to improved profit margins in FY2024. Since we plan to maintain a certain production level this year, we do not anticipate a significant increase in manufacturing costs next year.