Ajinomoto Co., Inc.

For the first three quarters of FY2025, Ajinomoto reported sales of JPY 1,164.1 billion and business profit of JPY 145.9 billion, with both described as record highs; sales were 101% of FY2024 and business profit was 105% of FY2024, both excluding currency translation and on the same basis as reported. In the October-December quarter, business profit increased to 115% year over year, and management said all businesses including Seasonings and Foods, Frozen Foods, and Healthcare posted sales and profit growth. For the full year FY2025, sales were revised slightly downward overall, while business profit and profit attributable to owners of the parent were revised upward, helped by stronger Healthcare and an expected gain on partial sale of fixed assets that exceeded the original assumption. Management also said Functional Materials ABF sales are now expected to grow 28% for the full year, and the FY2025 ASV indicators call for ROE of approximately 18% on a substantive basis, organic growth of approximately 5%, and an EBITDA margin of 17%.

Masataka Kaji emphasized that the third quarter marked an acceleration in growth after a flat first half, with record cumulative results and broad-based improvement across businesses. Strategically, he framed the company as focused on sustainable growth in Seasonings and Foods, significant growth in Bio & Fine Chemicals, and moving toward the 2030 roadmap ahead of schedule. His tone was confident and constructive, but he repeatedly noted that some quarterly swings remain, especially in CDMO and Frozen Foods, and that execution through the fourth quarter matters.

Kaji walked through the main drivers of business profit growth, citing a JPY 4.8 billion increase from higher sales and a JPY 18.6 billion increase from gross margin improvement, with support from overseas seasonings, domestic coffee, functional materials, pharmaceutical amino acids, and CDMO. He said SG&A is rising because the company is expanding investment in intangible assets and other areas to support the 2030 roadmap. On capital allocation, he said the one-off cash from the headquarters land/building sale means cash could end the year above the initial JPY 90 billion target, but management does not intend to hold excess cash and will use it, with share repurchases among the options already underway.

Analysts pressed on whether Functional Materials’ strong third quarter was sustainable, and management said a Taiwan hurricane delayed some shipments into October, but the bigger driver was strong high-end demand and a favorable mix; Kaji said there is no change to the revenue structure, though quarterly variability can occur. Questions on CDMO focused on the large AJIPHASE shipment expected in Japan in the fourth quarter; management said the shipment is scheduled with customers and is reflected in the revised plan, while some downside came from consultant costs tied to accelerated commercialization. Analysts also probed margins in the Americas frozen foods and seasonings businesses, where management pointed to a weak November in the U.S. from a government shutdown, and to Brazil/Latin America market weakness rather than ongoing factory downtime.