Meiji (2269) Q2 2025 earnings summary

Executive summary

• Net sales for H1 FY2024 rose 4.2% year-on-year to ¥569.0 billion, with growth in both food and pharmaceutical segments, and operating profit stable at ¥44.3–44.4 billion; profit attributable to owners declined 3.8% to ¥26.8–26.9 billion, mainly due to lower extraordinary gains and absence of prior year subsidiary sale gains.

• Pharmaceuticals offset food margin pressure, with significant profit increase in the segment.

• The company is executing its 2026 Medium-Term Business Plan, focusing on value-added products, cost absorption, and global product development.

• The board resolved to cancel 11.26 million treasury shares (3.8% of issued shares) on November 18, 2024.

Financial highlights

• H1 FY2024 net sales: ¥569.0 billion (+4.2% YoY); operating profit: ¥44.3–44.4 billion (flat YoY); net profit: ¥26.8–26.9 billion (-3.8% YoY); EPS: ¥97.66.

• Food segment net sales rose 2.2% to ¥455.4 billion, with operating profit down 6.9% to ¥27.6 billion due to higher raw material and logistics costs.

• Pharmaceutical segment net sales increased 12.9% to ¥113.8 billion, and operating profit rose 16.7% to ¥18.5 billion, driven by antibacterial drugs, new product launches, and cost reductions.

• Full-year FY2024 plan remains unchanged: net sales ¥1,159.0 billion (+4.8% YoY), operating profit ¥86.0 billion (+2.0% YoY), net profit ¥50.0 billion (-1.3% YoY); cash dividends per share planned at ¥100.

• Free cash flow for H1: -¥8.4 billion; full-year expected at ¥1.0 billion, down sharply from FY2023.

Outlook and guidance

• No change to consolidated full-year plan; company aims to achieve initial targets through market-adapted measures.

• Second half consolidated net sales projected at ¥589.9 billion (+5.5% YoY), operating profit at ¥41.6 billion (+4.3%), with food segment profit expected to rise and pharma segment sales to decrease.

• Food segment to address cocoa cost increases with B2B and B2C price hikes and product mix improvements.

• Pharmaceutical segment expects strong domestic drug sales and continued R&D investment, but faces lower second-half profit due to early influenza vaccine shipments and reduced COVID vaccine demand.