Ajinomoto (2802) Q2 2025 earnings summary

Executive summary

• Achieved record-high interim sales and business profit for FY2024, with double-digit business profit growth year-over-year, even excluding currency effects; full-year sales and profit forecasts were revised upward.

• Growth was driven by strong performance in Functional Materials, Bio-Pharma Services, and overseas Seasonings and Foods, while domestic coffee and frozen foods faced margin pressure from rising raw material costs and a weaker yen.

• Announced a two-for-one stock split and share repurchase up to JPY 40 billion, totaling JPY 90 billion for FY2024, reflecting a proactive return of cash to shareholders.

• Emphasized evolving corporate culture and employee engagement to achieve the 2030 roadmap.

• Consolidated sales rose 8% year-over-year to ¥744.2 billion for the first half, with business profit up 13% to ¥86.9 billion.

Financial highlights

• First-half sales reached ¥744.2 billion (108% of FY2023), with business profit at ¥86.9 billion (113% of FY2023); profit attributable to owners was ¥50.2 billion (108% of FY2023).

• Second-quarter sales were ¥378.7 billion (108% of FY2023), and business profit was ¥43.8 billion (130% of FY2023).

• Upwardly revised FY2024 sales forecast to ¥1,532.5 billion (106% of FY2023) and business profit to ¥160.0 billion (108% of FY2023); profit attributable to owners for FY2024 forecast at ¥95.0 billion (109% of FY2023).

• Functional materials segment expected to exceed previous record highs in both sales and profit, with strong contributions from large pharma contracts and proprietary technologies.

• Currency translation contributed ¥21.9 billion to sales and ¥3.9 billion to business profit in the first half.

Outlook and guidance

• Full-year sales and business profit forecasts revised upward; coffee business in Japan remains a challenge due to persistent raw material cost increases and currency effects.

• Functional Materials and Healthcare segments expected to maintain strong momentum; mid- to long-term initiatives include shifting coffee portfolio toward sticks and powder drinks.

• Overseas food and frozen food businesses expected to maintain organic growth, with ongoing investments in marketing and product innovation.

• ROE for FY2024 revised forecast at approximately 13%, below the 18% FY2025/2030 target; focus on improving productivity, margins, and financial leverage.

• FY2024 assumed exchange rate for H2: ¥145/USD.