Message from CEO
The Fuji Oil Group aims to create Plant-Based Food Solutions that use plant-based food ingredients to help resolve global social issues. We have traditionally used technology to pursue more advanced and higher-quality products. Now, the times demand that we offer not only the value of the products themselves, but also solutions to the issues faced by society at large. That is why we are pursuing solutions to social issues through the business of plant-based food ingredients, primarily those that use palm oil, cacao and soybean plants as their main raw material.
Having Released our FY2018 Earnings
We released our FY2018 earnings and our FY2019 plan on May 8, 2019.
FY2018 earnings resulted in net sales of 300.8 billion yen, operating profit of 18.5 billion yen, and net income of 11.6 billion yen. The fiscal year presented serious challenges for our Group. We faced special factors such as having recorded expenses related to the acquisition of Blommer in the U.S.A. and the lump-sum depreciation of residual fixed assets in China as part of our shift to uniform accounting standards. We also were impacted by factors such as natural disasters and extreme heat.
Looking at segment-specific earnings, the Oils and Fats business recorded significant profit increases in Japan and Europe. In the Confectionery & Bakery Ingredients business, Chocolate produced increased profits when excluding expenses related to the Blommer acquisition and Emulsified & Fermented Products recorded a significant increase in profits in China. However, that success was not enough to cover decreased profits from Preparations, which were impacted by dairy market prices. Furthermore, profits from Soy business declined on lower sales of soy protein foods.
Looking at area-specific earnings, Japan secured profits when excluding Blommer acquisition expenses and profits increased in China and Europe. However, profits were down in the Americas and Southeast Asia on decreased profits from Oils & Fats and Preparations.
From the perspective of our Medium-Term Management Plan, we positioned the second year of our plan as a year for development. In that sense, we focused on strengthening our core competence in preparation to engage in new areas. These initiatives included acquiring Blommer, the world's No. 3 company for industrial use chocolate, and Industrial Food Services in Australia. In China, we launched operations at a new margarine & filling plant. We also started production of sustainable oils and fats at UNIFUJI, a joint venture in Malaysia.
Our earnings forecast for FY2019 is net sale of 430 billion yen, operating profit of 25.5 billion yen, and net income of 17 billion yen. The elimination of special factors from Fy2018, with the addition of the Blommer PL to consolidated accounting and the change in the accounting period of overseas business, we are forecasting to increase sales and operating profits.
Amid a global environment lacking transparency and intensifying corporate competition, securing organic growth for existing businesses, achieving high-quality topline growth, and ensuring profit contributions from the Blommer consolidation will be core issues in FY2019. We will promote group management in all areas and businesses as we engage in a Group-wide effort to reduce costs by improving productivity and promoting workstyle reform. Our interest-bearing debt has increased due to large-scale acquisitions so we will also focus on improving our financial structure to generate free cash flow.
In a world of uncertainty where conventional concepts no longer apply, we will overcome disruption by maintaining a constant sense of urgency in our business management. In the third year of our Medium-Term Management Plan, we are focused on change and innovation. This will prove to be an incredibly important year in terms of Fuji Oil securing its position as a true global corporation. Every member of the Fuji Oil group is dedicated to producing results as we aim for 25.5 billion yen in operating profit as we head into the final year of our Medium-Term Management Plan, a year for achieving our goals.
I ask for your continued support and understanding.
President and CEO