Our view of Sustainability at F&LC

Working together as One Company to share deliciousness and joy around the world

In 2024, I assumed the role of President and CEO and we adopted our slogan, “One Company.” This slogan is a guideline for our behavior as an organization, promoting unity within the Group and enhancing the customer experience. It also reflects the corporate culture we are developing for the future. To create One Company, we have been implementing three types of initiatives in FY2025, including the elimination of organizational silos (vertical divisions). First, we have enhanced collaboration between our international and domestic operations. Second, we have promoted the integrated management of the sales departments of our operating companies, stores and our head office departments. We are working together to provide our customers with greater experience value. Third, we have enhanced communication and information sharing between the head office departments. Our initiatives are wide-ranging. The goal of one initiative is to create a system that integrates data scattered across the company to support accurate decision-making.

I have consciously communicated with operating companies and department heads, which has improved communication between members of management. Since I joined the Group, I have valued the perspective of restaurant staff. I visit restaurants across the country every month and I talk with restaurant and area managers. There are often gaps between head office and front-line staff, and we consistently communicate to the front-line staff that the head office is collaborating with them. As a result, everyone in the company is now focused on delivering experiences that result in completely satisfied customers. I realize that awareness of this approach is growing.

I have visited restaurants in nine countries and regions. I appreciate the communication with both our Japanese staff and local staff overseas. In some regions, kaiten sushi is still a novel dining experience, but I have observed that local staff are energetic and lively, and they provide excellent customer service.

Aiming to enhance competitiveness and address social issues by procuring marine resources in a sustainable manner

In FY2025, results were strong, both domestically and internationally. Profit for the year was approximately 8.0 billion yen over our forecast at the end of FY2024. Akindo Sushiro in Japan performed well due to attractive products and campaigns. Additionally, the International Sushiro Business grew, primarily in China. These businesses significantly contributed to our strong results.

As the domestic restaurant market matures, Sushiro strives to fulfill its mission, “Sushi that fills you up. Sushi that fills your heart.” The openings of all 16 new restaurants were successful thanks to the collaboration of relevant departments. Our marketing strategy emphasizes not only competitive prices but also our brand value. As a result, we have seen an increase in both new and repeat customers. For example, the departments involved in purchasing, logistics, sales, restaurants, and advertising collaborated to effectively convey the essential elements of our brand value, including our commitment to freshness, through our restaurants and television. We have over 100 Sugidama restaurants around the world. In September 2024, we successfully opened our flagship Kaiten-sushi Misaki restaurant, called Flagship Misaki, in Ningyocho, Tokyo. Kyotaru’s profitability has been steadily improving as we close unprofitable stores and meticulously choose the locations where we will open new stores.

We have been expanding our International Sushiro Business in line with our medium-term management plan by opening stores tailored to the business environment in each country and region. Consequently, as of the end of September 2025, we have 234 restaurants in the international business, an increase of 52 restaurants from the previous year. In mainland China, we now have 63 restaurants. Sushiro’s growth rate in specific regions has reached 200%. The performance of our business in Southeast Asia has been strong. In Thailand, the number of restaurants has grown to 38, making it a key market that is driving growth. The Mandai Wildlife Reserve restaurant in Singapore is the first in Southeast Asia to implement Digiro digital screens, and this has attracted attention. The first Sushiro restaurant in Malaysia opened in February 2025. It has been performing well. I have noticed that an increasing number of people are looking forward to new stores opening in various cities.

Sakabayashi, a Sugidama restaurant in Boston, USA, has enhanced its flavors and public relations strategies, resulting in increased popularity among local customers. This was a successful example of creating an “ideal customer dining experience” for customers, leading to further expansion overseas.

We are examining the sustainability of marine and agricultural products as the management capital of our business. We opened a Sushiro restaurant called SUSHIRO To The Future: Expo Edition at Expo 2025 Osaka, Kansai, Japan. The concept for this restaurant was “Sustainable Sushi Sourcing: To the Future of a Sushi Restaurant in 2050.” As there is the potential for marine resources to become depleted, we wanted to show people that they will still be able to enjoy delicious sushi in the future. Given the growing significance of marine resources that are not reliant on the wild, we offered the Fish of Tomorrow series of dishes featuring only farmed fish. This series received positive feedback from customers, who felt like they were experiencing sushi from the future.

We have been working to adapt to the changes in the natural environment and make sustainable fishing possible. We invest in and form business alliances with companies that employ fish farming technologies to build a foundation for stable procurement. In the aquaculture business, Marineverse, a joint venture with a farming company that raises fry into adult fish, has been advancing aquaculture technology to ensure a stable supply of high-quality seafood. We plan to continue collaborating with bio-venture companies in the research and development in the area of fry and in other areas to address future social needs.

To address the urgent issue of supply instability caused by rising ocean temperatures, etc., we will strengthen our alliances with aquaculture farmers to stabilize procurement. We will pursue the sustainability of marine resources through a combination of long-term research efforts and short-term practical actions.

What we achieve

Creating and refining the source of brand value through domestic and international collaboration

In my work, I value honing my individual skills as a professional, making honest decisions, and always respecting those around me. Our work is a team effort. Communication is essential, and we provide service to our customers. I became acutely aware of this when I was restructuring our Hong Kong business and managing a Taiwanese operation in my previous job. Even if I could utilize my own marketing know-how, nothing would be accomplished without local knowledge and the cooperation of my staff. I have seen countless times how treating staff with respect and sharing small successes together transformed their perspectives and made their work more enjoyable. The most important thing is to work from the same perspective as the staff on the ground. With this belief in mind, after joining the Group, I volunteered to work anonymously at major domestic brand locations, including Sushiro, Kyotaru, Kaiten Sushi Misaki, and Sugitama Sushi. Although it was only a two-week period, everything was a learning experience, from washing the sushi to making sushi and skinning the fish in the kitchen, and even serving customers in the dining area. Through these tasks, I became aware of the struggles of the staff working on-site and the issues that needed improvement, and at the same time, I was able to feel the joy and significance of seeing the smiles of the customers in person, making it a very rewarding experience.

As Representative Director, President and CEO, I would like to steadily advance our medium-term management plan while also working to strengthen our brand power. To achieve this, it is important to make a commitment to our customers after thoroughly refining our product procurement, which is the source of our brand value; store operations that enhance the customer experience; quality control, hygiene management; and activities that emphasize compliance. This is because I believe that it is only when our customers experience these things and support us that we can create brand value and lead to business growth.

As our overseas business expands, our domestic and overseas businesses will collaborate on various initiatives. We have adopted “One Company” as our organizational guideline, and rather than thinking of our domestic and overseas businesses as separate entities, we have established an organizational structure that allows for synergistic effects, such as having overseas executives concurrently serve in Japan and domestic executives concurrently serve in overseas positions. We will also promote seamless collaboration between our headquarters and our operating companies. Currently, F&LC’s Product Division provides global product procurement services, and we will further strengthen this in the future. In terms of marketing, F&LC’s headquarters will lead the overall brand management and strive to enhance brand value. Meanwhile, we believe that campaigns and sales promotions in each country and region need to be carried out by local members who understand the culture and customs and have a deep understanding of the local area. We plan to pursue marketing activities from both perspectives.

Leveraging the strengths of humans as a growth driver, and fostering an environment where diverse human resources can thrive

We believe that individuals are the driving force behind the growth of a company, and we focus on human capital management. We emphasize the importance of ensuring that diverse human resources are actively engaged in our business. Individuals from diverse backgrounds are actively playing roles in our company. We believe new value is created when individual employees are able to leverage their strengths and they feel that they are participating in the organization while being their authentic selves. This approach allows us to deliver strong business results and contribute positively to society. We are committed to developing workplaces where everyone can work with enthusiasm. Approximately 60% of our domestic employees (including part-time workers) are women. This is a relatively high percentage. We embrace diverse working styles and take on challenges to create systems that empower more women to assume active roles.

We are working to enhance rewards and expand our human resources development programs, which include a level-specific training program, an internal recruitment system, and a career declaration system. These initiatives have enhanced our corporate culture, which has resulted in more new graduates applying for jobs and a reduction in employee turnover. We are committed to developing a supportive working environment for our restaurant employees. At Sushiro restaurants, we are actively implementing the Auto Waiter®, which enables us to deliver customer orders via a touch panel directly at customers’ tables. We are also installing automatic conveyors in the kitchens. These initiatives reduce delivery time and employee workload.

To expand our international business, we apply things that we have learned from our experience in Japan operating overseas restaurants and support the growth of each local staff member. We are dedicated to providing “tasty sushi for the heart” to customers around the world as we continue to grow our business.

Leveraging the strengths of our Japanese business to expand our international business and maximize our corporate value

We aim to enhance our earning power to increase corporate value. Our targets for FY2026 are net sales of 485 billion yen, EBITDA of 59.5 billion yen, and an operating profit margin of 8.4%. We aim to achieve net sales of 1 trillion yen or more and an operating profit margin of 10% or higher in FY2035.

In the international business, we are committed to developing the brands we have cultivated in Japan and sharing them with customers around the world. We aim to achieve net sales in our international business that are 35% of our total net sales and operate 300 to 320 restaurants overseas by the end of the current fiscal year, the final year of our medium-term management plan. In Japan, we will continue to remodel restaurants and optimize our restaurant portfolio to achieve further growth.

Regarding capital allocation, we will continue to expand our restaurants and businesses. We will invest in the development of our human resources and our core headquarters functions that support growth. Additionally, we will invest in upstream processes, such as purchasing and logistics, while considering shareholder return.

We have changed our governance system to establish a management structure that emphasizes monitoring business performance, starting with the FY2021 General Meeting of Shareholders. The Board of Directors serves as the central leadership team. It is primarily composed of the President & CEO and outside directors who have significant expertise and management experience. In the previous fiscal year, the Board of Directors engaged in dynamic discussions primarily on the direction of management and financial strategies. Board members including outside directors discussed the rationale and importance of financial indicator targets while setting them, including the targets of an equity ratio of 25% and EPS of 180 yen. The Board of Directors carefully analyzed ROIC by business and by country or region at monthly meetings to continually evaluate capital efficiency. Going forward, the Board will primarily discuss medium- to long-term strategic issues and aim for corporate growth while receiving advice as appropriate.