Introduction

For the fiscal year ended March 31, 2024, our net sales came to 503.0 billion yen. Operating profit amounted to 63.3 billion yen and ordinary profit amounted to 79.3 billion yen. Profit attributable to owners of parent was 51.0 billion yen.

We announced consolidated results forecasts for the fiscal year ending March 31, 2025 of 533.5 billion yen in net sales, 68.5 billion yen in operating profit, 86.5 billion yen in ordinary profit, 55.5 billion yen in profit attributable to owners of parent, and 183.08 yen in basic earnings per share.

During the fiscal year ended March 31, 2024, the domestic business achieved sales growth for the Yakult 1000 series, while the overseas business achieved sales growth in the Americas region. However, the continued effects of a downturn in business confidence in the Asia and Oceania region, and particularly in China, caused overall operating profit to decline year-on-year.

For the fiscal year ending March 31, 2025, we anticipate further growth in the domestic business, alongside continued growth for the Americas region in the overseas business. Our plans for the Asia and Oceania region assume that results in China will recover from the second half onward.

Our financial forecasts for the fiscal year ending March 31, 2025 are lower than the goals set for the final fiscal year of our medium-term management plan. The key factor contributing to these forecasts in the domestic business was lower-than-anticipated growth in sales of the Yakult 1000 series. The key factor in the overseas business was that our planning had not allowed for the sudden downturn in Chinese economic conditions.

In the fiscal year ended March 31, 2024, ROE fell below 10%, but it quickly recovered and we are targeting further improvement over the long term.

We are currently in the process of drawing up our next medium-term management plan. We will provide further information once the plan is ready for disclosure.

Dividends

Yakult’s policy regarding dividends places top priority on aiming to continuously increase payouts. In line with this policy, for the fiscal year ending March 31, 2025, we announced an additional dividend increase of 8.5 yen per share, for an annual dividend forecast of 64 yen, considering progress made in terms of performance.

Initiatives in each segment

Food and Beverage Business (Japan)

In the fiscal year ended March 31, 2024, the Yakult 1000 series drove higher sales and profits in the domestic business. Meanwhile, our inability to build a production and supply system that would support adequate sales promotion activities required us to be mindful of our maximum production capacity as we pursued our business activities.

However, in January 2024 we set our supply system in order by expanding production capacity, which had previously hindered sales. In the fiscal year ending March 31, 2025, therefore, we will conduct intensive sales promotion activities.

In terms of advertising activities, we are driving revenue higher through efforts to increase exposure focused on investing in advertisement of the Yakult 1000 series and communicating the superiority of our Lactobacillus casei strain Shirota¹, among other initiatives.
*1 Classified as Lacticaseibacillus paracasei strain Shirota as of April 2020.

Home Delivery Channel

We expanded production capacity for Yakult 1000, resulting in production capacity of around 2.85 million bottles per day as of March 31, 2024.

During the fiscal year ended March 31, 2024, the Yakult Ladies were unable to engage in activities that would increase new customers to the extent required. However, such activities have gradually picked up and we are ensuring that the Yakult Ladies conduct more value dissemination initiatives during the current fiscal year.

Also with regard to Yakult Delivery Net, we are gradually increasing the number of customers and steadily building up bottle sales by conducting campaigns and engaging in other initiatives.

Retail Store Channel

Production capacity for Y1000 was around 1.40 million bottles per day as of March 31, 2024. The number of bottles sold is also growing steadily.

In the fiscal year ended March 31, 2024, products remained absent on store shelves for a long time, which prevented us from engaging in proactive sales promotion. However, in the fiscal year ending March 31, 2025, we are able to embark on intensive sales promotion activities. As there is still ample potential for uncovering latent demand, we are further expanding the retail store channel and increasing the number of bottles sold per store.

For the New Yakult series, we revised the price from 40 yen to 48 yen per bottle in September 2023. Bottle sales declined as a result, so we are now strengthening market-based sales promotion and carrying on with steady value dissemination initiatives. We are working toward recovery in the number of bottles sold from the New Yakult series by proposing effective use of sales spaces to retail stores to remind customers of the value our products offer.

International Business

In the fiscal year ended March 31, 2024, economic activity returned to normal all over the world, fueling expectations of economic recovery and improved consumer sentiment. However, global economic recovery remained slow, with large disparities apparent among regions.

Some companies performed well, such as Yakult Vietnam and Yakult Australia in the Asia and Oceania region and Yakult S.A. De C.V. (Mexico) and Yakult U.S.A. in the Americas region. On the other hand, in Guangzhou Yakult Co., Ltd., Shanghai Yakult Co., Ltd., Yakult (China) Corporation and PT. Yakult Indonesia Persada, where sales volumes are large, a continuation of a cost-saving mentality among consumers impacted results. In Guangzhou Yakult Co., Ltd., Shanghai Yakult Co., Ltd. and Yakult (China) Corporation especially, persistently sluggish consumption and a changing market environment mean that time is required to shift to sales measures that will lead to a recovery in results. Companies with stable growth will continue to make up for companies with year-on-year decline, and we expect the overall growth rate to remain stalled for some time yet.

Nonetheless, the latent growth potential of our overseas business remains high, so we believe that efforts tailored to each individual company’s circumstances will prove successful and our overseas business as a whole will gradually improve, although it may take some time.

Yakult U.S.A. Inc.

In the United States, sales are continuously increasing on a stable basis. Growth has been boosted by a combination of market cultivation in six southwestern states and expansion of sales regions to central and eastern areas. The number of bottles sold per day now exceeds 700,000.

We expect production capacity at our first plant in the U.S., the California Plant, to reach its limit in a few years. We are therefore planning to construct a new plant in the southeast that will offer potential for improved distribution efficiency. Matters such as the products to be manufactured and the timing for the start of operations are currently under deliberation. We will provide further information once such details are decided.

Yakult S.A. De C.V. (Mexico)

The number of bottles sold has recovered to the level achieved in FY2019, before the COVID-19 pandemic, while the number of Yakult Ladies and number of stores selling our products are also increasing steadily.

Mexico has returned to its previous pace of growth through annual price revisions combined with year-on-year increases in the number of bottles sold, and will therefore continue contributing greatly to higher sales and profits in our Americas region.

Yakult Vietnam Co., Ltd. (Vietnam)

Expansion of sales channels progressed steadily and the number of bottles sold per day during the fiscal year ended March 31, 2024 exceeded 1 million for the first time.

In April 2024, we launched the low-calorie Yakult Light, further boosting exposure by increasing the number of products on offer. Given that both the home delivery and retail stores channels are in an expansion phase, continued growth can be expected from Yakult Vietnam Co., Ltd.

Guangzhou Yakult Co., Ltd., Shanghai Yakult Co., Ltd., Yakult (China) Corporation

In the fiscal year ended March 31, 2024, we expected the resumption of economic activities to result in higher bottle sales. However, the Chinese economy recovered more slowly than we expected and sluggish consumption has persisted.

During and after the COVID-19 pandemic, consumer behavior changed from high-volume purchasing in large stores to purchasing only the amount required in small and medium-sized stores. We are responding to this change by reviewing the structure of our delivery route networks. We reduced two-person delivery routes serving large stores and increased routes serving small and medium-sized stores that can be handled by one person. In addition, we are making progress in introducing “mini” routes using motorbikes, which enable more thorough coverage of a given area.

Given the increasing number of people who use e-commerce to shop, we opened flagship stores on major e-commerce platforms such as Tmall and JD.com (Jingdong). During the fiscal year ending March 31, 2025, we will increase the contribution of the e-commerce channel contribution to the total number of bottles sold.

In May 2024, we launched the new product Yakult Peach Flavor (Iron Plus). We will strive to increase revenue by raising the profile of our brand to stimulate new demand.

We believe that to improve consumer understanding of our products and ensure that Yakult penetrates further and becomes more firmly established in China, it is essential to expand the Yakult Ladies organization. As a medium- to long-term strategy, we are restructuring our home delivery operations to expand the organization by rolling out sales offices that can serve as models, thereby increasing the number of bottles sold via home delivery.

We envisage that deployment of a range of sales strategies will yield a recovery in results from the second half of the current fiscal year.

PT. Yakult Indonesia Persada

Sluggish consumption is still persisting and the number of bottles sold remains lower year-on-year. However, Yakult Ladies’ sales capabilities, which I previously cited as an internal factor contributing to this decline, have recovered to their pre-coronavirus levels due to our renewed commitment to in-person training.

We are currently focusing on restoring the number of bottles sold per Yakult Lady to its former level. We believe that stepping up efforts to increase the number of Yakult Ladies and rebuilding a robust Yakult Ladies organization will gradually produce results during the current fiscal year.

Expansion into new markets

We have made progress in terms of the expansion of our business domain as targeted in Yakult Group Global Vision 2030 and our medium-term management plan. In September 2023 we announced our plan to acquire Pokka Sapporo Food & Beverage Ltd.’s plant-based yogurt business, and in conjunction with this, we announced in March 2024 that we also plan to acquire the assets of Pokka Sapporo Gunma Plant No. 2. We judged that it would be best for the operational efficiency of both companies and for market expansion if Yakult acquired this manufacturing facility alongside the plant-based yogurt business and integrated manufacturing and sales. After our acquisition of the manufacturing facility planned for October 2024, we will commence the manufacture of Yakult products, thereby advancing our roll-out of food products utilizing plant-derived ingredients one step further.

Health-focused management

Yakult continuously strives to implement health-focused management, believing that, to evolve into a healthcare company, it is essential to create working environments in which our employees can work in good health and with enthusiasm for a long time.

Aiming to realize our corporate philosophy, we established a dedicated department that promotes health-focused management. Recently, in recognition of our management initiatives to promote employee health, we were recognized as a Health & Productivity Brand for the first time. In addition, we have been certified as a Health & Productivity Management Organization (White 500) for seven consecutive years now.

As a company that delivers good health to our customers, we will continue pursuing health-focused management and striving to increase our corporate value.

Hiroshi Narita,
President and Representative Director
Yakult Honsha Co., Ltd.