Meiji Holdings (2269): FY2025 Results Summary — Pharma Strength Offsets Food Miss, Net Income Falls on China Impairment

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In this article, FY2025 refers to Meiji Holdings’ fiscal year ended March 31, 2026, consistent with the company’s own FY2025 label in this presentation. Consolidated operating profit rose 10.2% YoY to JPY93.3bn, exceeding the company’s revised plan of JPY91.0bn, driven mainly by strong results in the Pharmaceutical segment. Net sales rose 1.7% to JPY1,173.6bn, coming in 0.3% below the revised plan. Profit attributable to owners of parent fell sharply, down 31.0% to JPY35.0bn, mainly due to impairment losses on fixed assets related to the China business and losses from structural reforms. In the Food segment, the company achieved sales volume growth in mainstay products and expanded new products amid ongoing price increases, but failed to achieve its full-year plan, which management described as a significant point of reflection. For FY2026, Meiji forecasts consolidated operating profit of JPY100.0bn as a critical target, and expects profit attributable to owners of parent to rebound 78.2% to JPY62.5bn.

Consolidated Results (Full-Year Actual)

Consolidated net sales increased 1.7% YoY to JPY1,173.6bn, 0.3% below the revised plan of JPY1,177.0bn (as of March). Overseas sales rose 5.3% to JPY161.3bn, 2.0% above the revised plan of JPY158.2bn. Operating profit increased 10.2% to JPY93.3bn, 2.5% above the revised plan of JPY91.0bn, with an operating profit margin of 7.9% (+0.6pt YoY, +0.2pt vs. plan). Profit attributable to owners of parent fell 31.0% YoY to JPY35.0bn, 3.9% below the revised plan of JPY36.5bn. EPS was JPY129.42, down JPY56.66 YoY and JPY5.26 below plan. The company noted that sales increased in both Food and Pharmaceutical segments, slightly below the plan as a whole; operating profit increased and exceeded plan, driven by the Pharmaceutical segment; and profit attributable to owners of parent dropped significantly, mainly due to impairment losses on fixed assets related to the China business and losses from structural reforms.

Item	FY2025 Results	FY2024 Results	FY2025 Revised Plan	YoY Change	vs. Plan
Net sales (JPY bn)	1,173.6	1,154.0	1,177.0	+1.7% / +19.6	-0.3% / -3.3
Overseas sales (JPY bn)	161.3	153.1	158.2	+5.3% / +8.1	+2.0% / +3.1
Operating profit (JPY bn)	93.3	84.7	91.0	+10.2% / +8.6	+2.5% / +2.3
Operating profit margin	7.9%	7.3%	7.7%	+0.6pt	+0.2pt
Profit attributable to owners of parent (JPY bn)	35.0	50.8	36.5	-31.0% / -15.7	-3.9% / -1.4
EPS (JPY)	129.42	186.08	134.68	-56.66	-5.26

Segment Results

In the Food segment, net sales rose 1.9% YoY to JPY942.8bn, 0.8% above the revised plan of JPY935.0bn, while operating profit increased 6.4% to JPY68.7bn but came in 3.2% below the revised plan of JPY71.0bn. The YoY operating profit increase of JPY4.1bn (Japan +JPY2.6bn, Overseas +JPY1.4bn) reflected a JPY48.5bn positive impact from price increases and a JPY19.4bn negative impact from changes in sales volume and product mix, partly offset by a JPY23.0bn increase in raw material costs (including cocoa beans and domestic raw milk) and increases in logistics, selling and indirect promotional costs. Profit growth in China contributed to the overseas increase amid progress on the profitability improvement plan, while profit in Japan increased mainly at the feed subsidiary. In the Pharmaceutical segment, net sales rose 1.1% YoY to JPY232.2bn, 4.5% below the revised plan of JPY243.3bn, while operating profit increased 23.1% to JPY30.4bn, 17.2% above the revised plan of JPY26.0bn. The YoY operating profit increase of JPY5.7bn reflected increased royalty income and decreased R&D and administrative expenses, partly offset by increased marketing expenses for newly launched products and a worsening product mix.

Segment	Metric	FY2025 Results	FY2024 Results	FY2025 Revised Plan
Food	Net sales (JPY bn)	942.8	925.5	935.0
Food	Operating profit (JPY bn)	68.7	64.6	71.0
Pharmaceutical	Net sales (JPY bn)	232.2	229.6	243.3
Pharmaceutical	Operating profit (JPY bn)	30.4	24.7	26.0

FY2026 Forecast

For FY2026, Meiji forecasts consolidated net sales of JPY1,212.0bn (+3.3% YoY), including overseas sales of JPY182.8bn (+13.4%), and operating profit of JPY100.0bn (+7.2%), with an operating profit margin of 8.3% (+0.3pt). Profit attributable to owners of parent is forecast to increase 78.2% to JPY62.5bn, mainly due to the rebound from extraordinary losses recorded in FY2025, including the impairment loss related to the China business, although a certain level of extraordinary losses is incorporated into FY2026 projections reflecting continued progress of structural reforms. EPS is forecast at JPY230.61 (+JPY101.19), and Meiji ROESG is forecast at 7.8pt (+1.6pt). By segment, the Food segment forecasts net sales of JPY953.9bn (+1.2%) and operating profit of JPY74.0bn (+7.6%), while the Pharmaceutical segment forecasts net sales of JPY259.3bn (+11.7%) and operating profit of JPY33.0bn (+8.4%); HD/Elimination is forecast at net sales of JPY-1.3bn and operating profit of JPY-7.0bn. On a half-year basis, the company plans H1 consolidated operating profit of JPY45.0bn (+9.9%) and H2 of JPY55.0bn (+5.0%).

Item	FY2026 Full-year Plan	FY2025 Results	YoY Change
Net sales (JPY bn)	1,212.0	1,173.6	+3.3% / +38.3
(Overseas) Net sales (JPY bn)	182.8	161.3	+13.4% / +21.5
Operating profit (JPY bn)	100.0	93.3	+7.2% / +6.6
Operating profit margin	8.3%	7.9%	+0.3pt
Profit attributable to owners of parent (JPY bn)	62.5	35.0	+78.2% / +27.4
EPS (JPY)	230.61	129.42	+101.19
Cash dividends per share (JPY)	110	105	+5
Meiji ROESG	7.8pt	6.1pt	+1.6pt

Shareholder Returns

Cash dividends per share were JPY105 for FY2025 (dividend payout ratio 81.1%, total payout ratio 81.1%), and the company plans to raise the FY2026 dividend to JPY110 per share (dividend payout ratio and total payout ratio both 47.7%). Following the dividend increase in FY2025, Meiji approved an additional dividend increase for FY2026 and stated it aims to achieve stable and continuous enhancement of shareholder returns going forward, taking into account profit levels and cash flow. Under the three-year cash allocation policy for the 2026 Medium-Term Business Plan, the company plans cash flows from operating activities of approximately JPY350bn and own-capital sources (asset reduction/capital procurement) of JPY80bn or more, to be allocated to strategic and regular investment of approximately JPY350bn and returns to shareholders of approximately JPY120bn or more. Capital expenditures are planned at JPY129.0bn for FY2026 (Food JPY89.7bn, Pharma JPY38.8bn), up from JPY103.7bn in FY2025, and cash flows from operating activities are forecast at JPY103.0bn, up from JPY56.5bn in FY2025.

Item	FY2024	FY2025	FY2026 Plan
Dividend per share (JPY)	100	105	110
Total payout ratio	112.8%	81.1%	47.7%
Dividend payout ratio	53.7%	81.1%	47.7%

Medium-Term Plan / Structural Reforms

Meiji stated that achievement of the initial targets set in its 2026 Medium-Term Business Plan is expected to be difficult, and in light of this reality, the company will aim to achieve consolidated operating profit of JPY100.0bn as a critical target while pursuing agile measures such as price increases, company-wide structural reforms, and new growth initiatives. The company aims for an early return to a growth trajectory and a swift recovery to an ROE level of approximately 10%, with FY2025 ROE at 4.6% and the FY2026 plan at 8.0% (consolidated ROIC 7.8% in FY2025, planned at 8.0% for FY2026). As part of structural reforms, Meiji is reconstructing its Food segment production structure: following the establishment of new plants in Hokkaido and Kanagawa, the company decided to close five existing plants, discontinue production at Shikoku Meiji (Kagawa and Matsuyama plants), and terminate the rental and leasing of vending machines by March 2027. Total cost reductions from production system optimization are estimated at approximately JPY5.0bn (vs. FY2024). In the Pharmaceutical segment, Meiji is progressing discussions toward establishing Pharmatech Co-creation Platform, Inc. (tentative name), with Daito Co., Ltd. as the largest shareholder, together with Meiji Seika Pharma and one other co-investor, and has concluded a master agreement aimed at the succession of the generic pharmaceutical business of KYORIN Pharmaceutical Co., Ltd. to the new platform, with the parties aiming to conclude a final agreement in September 2026.

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