Sakata Seed Corporation (1377): FY2025 Results Summary — Record Sales and Profits, and the Launch of PASSION2035

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: Sakata Seed Corporation closes its books on May 31. This article covers the most recently completed fiscal year, the year ended May 31, 2026 (June 1, 2025 – May 31, 2026), which the company labels “the Year Ended May 2026” or “Year 2026”; this site classifies that period as FY2025. Company labels are retained in the text and tables below.

Sakata Seed Corporation reported consolidated results for the year ended May 2026 in its English-language presentation “Financial Highlights Material for the Year Ended May 2026,” dated July 23, 2026. Sales rose 12.2% to 104,280 million yen and operating profit rose 7.1% to 13,122 million yen, with the company recording its highest ever sales, operating profit and ordinary profit. Net profit increased 25.2% to 12,163 million yen. Alongside the results, Sakata Seed announced its new long-term business plan, PASSION2035.

Consolidated Results (Full-Year Actual)

The company describes the year as an increase in both sales and profit, with record highs for sales, operating profit and ordinary profit. Gross profit rose 7,847 million yen to 66,334 million yen and the gross profit margin improved from 62.9% to 63.6%. R&D expenses increased 21.8% to 12,938 million yen, equal to 12.4% of sales, and other SGA expenses rose 13.1% to 40,273 million yen. Total SGA expenses increased 6,983 million yen to 53,212 million yen, mainly on higher personnel expenses and depreciation. The presentation puts the impact of foreign exchange on sales at plus 6,929 million yen, with average rates for overseas subsidiaries moving from 149.53 yen to 159.93 yen per US dollar and from 162.03 yen to 183.44 yen per euro. Net profit growth was driven by higher sales, improved gross profit margins and increased non-operating profit. Figures are in millions of yen unless otherwise noted.

Item	Year 2026	Year 2025	Difference	Difference (%)
Sales	104,280	92,920	11,360	12.2%
Gross profit	66,334	58,486	7,847	13.4%
Gross profit margin	63.6%	62.9%	–	–
R&D expenses	12,938	10,625	2,313	21.8%
R&D ratio against sales	12.4%	11.4%	–	–
Other SGA expenses	40,273	35,603	4,670	13.1%
Operating profit	13,122	12,257	864	7.1%
Ordinary profit	14,278	12,311	1,966	16.0%
Net profit	12,163	9,711	2,451	25.2%
Yen / USD (yen)	159.93	149.53	+10.40	–
Yen / EUR (yen)	183.44	162.03	+21.41	–

Segment Results

Both the domestic wholesale and overseas wholesale segments posted increases in sales and profit. Overseas wholesale sales rose 15.1% to 82,862 million yen with operating profit of 20,981 million yen, and domestic wholesale sales rose 4.2% to 13,193 million yen with operating profit of 4,835 million yen. Retail sales fell 10.3% to 4,062 million yen and the segment’s operating loss widened to 440 million yen. The Other segment, which covers landscaping and garden construction and similar activities, grew sales 11.0% to 4,161 million yen with operating profit up 74.6% to 184 million yen.

Segment	Sales Year 2026	Sales Year 2025	Sales difference	Sales difference (%)	Operating profit Year 2026	Operating profit Year 2025	Operating profit difference	Operating profit difference (%)
Domestic wholesale	13,193	12,661	531	4.2%	4,835	4,760	74	1.6%
Overseas wholesale	82,862	71,977	10,885	15.1%	20,981	20,021	960	4.8%
Retail sales	4,062	4,531	(468)	(10.3%)	(440)	(256)	(184)	–
Other (Landscaping & Garden Construction etc.)	4,161	3,749	411	11.0%	184	105	78	74.6%
Subtotal	104,280	92,920	11,360	12.2%	25,560	24,631	928	3.8%
Elimination	–	–	–	–	(12,437)	(12,373)	(64)	–
Total	104,280	92,920	11,360	12.2%	13,122	12,257	864	7.1%

Sales by Region and Product

Sales increased in every region on a yen basis, although Asia declined in terms of local currencies due to weak market conditions. Japan grew on higher wholesale vegetable seed sales, materials and landscaping and garden construction. North and Central America and Europe and the Middle East both grew in vegetable and flower seeds, while South America benefited in part from the acquisition of Agritu Sementes. By product, vegetable seeds contributed the largest increase, at 7,661 million yen, with flower seeds up 1,228 million yen and materials up 103 million yen. In the breakdown of external sales for the year, vegetable seeds accounted for 72% of the total, flower seeds 13%, materials 5%, young plants 2% and others 8%; by region, North and Central America and Europe and the Middle East each accounted for 25%, Japan 21%, Asia 15%, South America 10% and others 4%.

Region	Unit	Year 2026	Year 2025	Difference	Difference (%)
Japan	Million JPY	21,417	20,942	+475	+2.3%
North & Central America	1,000 USD	162,047	152,771	+9,276	+6.1%
Europe & Middle East	1,000 EUR	141,777	131,764	+10,013	+7.6%
South America	1,000 BRL	342,925	309,854	+33,071	+10.7%
Asia	Million JPY	15,995	15,913	+82	+0.5%
Others (Africa & Oceania)	Million JPY	4,501	3,824	+677	+17.7%

On a yen basis after eliminating internal transactions, the year-on-year increase in sales of 11,360 million yen broke down as follows: North and Central America plus 3,072 million yen, Europe and the Middle East plus 4,657 million yen, South America plus 2,395 million yen, Asia plus 82 million yen, other regions plus 677 million yen, and Japan plus 475 million yen. Major capital expenditures for the year included the expansion and renovation of the Kakegawa Research Center at 1.2 billion JPY.

Forecast for the Year Ending May 2027

For the year ending May 2027 the company expects an increase in sales and operating profit but a decrease in ordinary profit and net profit. Sales are forecast at 110,000 million yen, up 5.5%, with operating profit of 13,500 million yen, up 2.9%. Ordinary profit is forecast at 13,500 million yen, down 5.5%, and net profit at 10,000 million yen, down 17.8%. The forecast assumes exchange rates for overseas subsidiaries of 155.00 yen per US dollar and 180.00 yen per euro, and the company estimates that a 1 yen currency fluctuation would affect expected operating profit by 102 million yen for the US dollar and 21 million yen for the euro. SGA expenses are forecast at 55,300 million yen, up 2,087 million yen, on higher personnel expenses, depreciation, and experiment and research expenses. Capital expenditure of 8.1 billion JPY is expected. From the year ending May 2027 the company will change its sales breakdown from product-based to business-based categories (Vegetables, Flowers and Environment), and will reallocate the “Others” region into the Europe and Middle East and Asia regions, which become EMEA and Asia Pacific.

Item	Year 2027 Forecast	Year 2026 (Actual)	Difference	Difference (%)
Sales	110,000	104,280	5,719	5.5%
Gross profit	68,800	66,334	2,465	3.7%
Gross profit margin	62.5%	63.6%	–	–
R&D expenses	13,256	12,938	318	2.5%
Ratio against sales	12.0%	12.4%	–	–
Other SGA expenses	42,044	40,273	1,771	4.4%
Operating profit	13,500	13,122	377	2.9%
Ordinary profit	13,500	14,278	(778)	(5.5%)
Net profit	10,000	12,163	(2,163)	(17.8%)
Yen / USD (yen)	155.00	159.93	–	–
Yen / EUR (yen)	180.00	183.44	–	–

Shareholder Returns

The proposed year-end dividend for the year 2026 is 50 JPY per share, 10 JPY more than the earlier forecast, bringing the annual dividend to 85 JPY per share, an increase of 10 JPY over the year 2025 and the sixth consecutive year of dividend increase. The dividend on shareholders’ equity ratio rose from 2.3% to 2.5%. For the year 2027 the company projects an annual dividend of 90 JPY per share. Under PASSION2035, the dividend policy is to carry out stable shareholder returns with a dividend on shareholders’ equity ratio of at least 2.5% and a benchmark dividend payout ratio of 35%, and, to achieve ROE of 8%, to implement flexible share repurchases with a benchmark total return ratio of 60% for the period from the year ending May 2027 through the year ending May 2031.

On July 13, 2026 the Board of Directors resolved on an own share repurchase plan for the year ending May 2027, to enhance shareholder returns and improve capital efficiency. The plan covers common shares up to an upper limit of 1 million shares, equal to 2.36% of the total number of issued shares excluding treasury shares of 42,336,255, with a total acquisition price of up to 5.0 billion yen. The acquisition period runs from August 3, 2026 to May 28, 2027, using market purchases including off-auction own share repurchase transactions (ToSTNeT-3). Through this repurchase the company expects the total return ratio for the year ending May 2027 to be 88%.

Long-Term Business Plan PASSION2035

Sakata Seed announced PASSION2035, a long-term business plan subtitled “Accelerating Growth Investment and Strengthening Equity Management,” with the key statement “Cultivating Tomorrow’s Harvest with You” and a core concept the company calls Integrated Autonomy, combining global integration with regional autonomy. The plan is positioned as a foundation-building phase followed by a value-creation phase, with the ambition of driving the evolution of the seed industry as the “world’s most trusted partner.” Exchange rate assumptions for the targets are 150 yen per US dollar and 160 yen per euro.

KPI	2026/05 (actual)	2031/05 target	2036/05 target
Net sales	104.3 billion yen	140.0 billion yen	200.0 billion yen
Operating profit	13.1 billion yen	19.5 billion yen	35.0 billion yen
Operating profit margin	12.6%	13.9%	17.5%
Profit	12.2 billion yen	15.5 billion yen	28.0 billion yen
ROE	7.2%	At least 8%	At least 10%

The company plans a total of 50.0 billion yen in growth investments over the five years to the year ending May 2031, and intends to move its equity ratio from 82.3% at May 2026 into the 60s. For cumulative cash allocation over 2027/05 to 2031/05, inflows comprise operating cash flow of approximately 88.0 billion yen and borrowings and similar of approximately 48.0 billion yen; outflows comprise investment to strengthen the foundation of approximately 30.0 billion yen, growth investment of approximately 50.0 billion yen or higher (of which 12.0 billion yen is expenses), shareholder returns of approximately 38.0 billion yen or higher, and an increase in working capital. Growth investment is split roughly 30% strategic investment and 70% expansion investment. On the balance sheet, current assets of 129.2 billion yen and non-current assets of 87.6 billion yen at May 2026, against net assets of 179.0 billion yen and liabilities of 37.8 billion yen, are planned to become approximately 160.0 billion yen and approximately 120.0 billion yen respectively by May 2031. WACC as of 2026/05 is stated at 6.0-7.0%, and the company intends to use leverage to reduce WACC toward an optimal equity level.

By business, the vegetable business net sales targets are 844 at 2026/05 (actual), 1,146 at 2031/05 and 1,635 at 2036/05 in units of 100 millions of yen, addressing strategic crops, market share, product portfolio, the value chain and the agri-support business, with broccoli, tomatoes and peppers designated as strategic crops common to all regions. The flower business targets 155, 200 and 300 on the same basis, aiming to become one of the world’s top three comprehensive flower suppliers by 2035 under a globally integrated “ONE HOUSE” management concept. The environment business targets 41, 54 and 65 on the same basis, using GREEN x EXPO 2027 and related opportunities to expand market share and build a stable earnings structure.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.