ENVALITH
株式会社 サカタのタネ logo

SAKATA SEED CORPORATION

1377・Prime Market・Fishery, Agriculture & Forestry

Official website
株式会社 サカタのタネ logo
SAKATA SEED CORPORATION1377

Business

Sakata Seed Corporation is a comprehensive seed company founded in 1913, engaged in the development, production, and sale of vegetable seeds, flower seeds, bulbs, seedlings, and agricultural and horticultural materials. The Group consists of 36 subsidiaries and 3 affiliated companies, operating four segments: domestic wholesale, overseas wholesale, retail, and landscaping/greening. Overseas wholesale accounts for approximately 77% of net sales, and the company has built a global structure with 32 local subsidiaries across North and Central America, South America, Europe, and Asia. Its main customers are seed companies and agricultural producers both in Japan and overseas, and it supports the global agricultural and horticultural industries through the continuous development and supply of proprietary bred varieties.

Business Model

The company continuously develops original varieties through a research structure of approximately 536 R&D personnel across 21 research farms in Japan and overseas, generating revenue by wholesaling to seed and seedling companies and agricultural producers both domestically and internationally. The intellectual property value of its varieties serves as the source of price competitiveness, achieving a high gross margin. 32 overseas subsidiaries are responsible for developing and selling varieties suited to the cultivation environments of each region, and with the added effect of foreign exchange translation, the company has a structure that accumulates earnings on a global scale.

Company Strengths

The company employs approximately 536 R&D personnel and operates research farms at 5 domestic and 16 overseas locations. R&D expenses for the fiscal year under review totaled ¥10,625 million. The company's strong variety development capabilities have also been recognized by external organizations, including the Minister of Agriculture, Forestry and Fisheries Award at the 75th All Japan Vegetable Variety Review Conference and the Chairman's Award of the Agriculture, Forestry and Fisheries Research Council at the commendation for meritorious contributors to private-sector agricultural, forestry and fisheries research and development.

In FY2025 (ended May 2025), the overseas wholesale business achieved external customer net sales of ¥71,977 million (up 5.8% year on year) and segment operating profit of ¥20,021 million (up 9.8% year on year). Vegetable seeds and flower seeds performed well in North and Central America, Europe, and South America, with region-focused variety development and sales through a network of 32 local subsidiaries supporting high profitability.

As of the end of FY2025 (ended May 2025), the equity ratio stood at 84.5%, maintaining a level above 80% for the fifth consecutive fiscal year. Against total assets of ¥190,986 million, net assets were ¥161,768 million, and cash and cash equivalents amounted to ¥22,445 million. The interest burden on interest-bearing debt remains sufficiently low as a proportion of expenditures, and the company's financial soundness stands at a notably high level even within the industry.

ENVALITH's Perspective

FY2026 (ending May 2026) saw all key metrics improve in tandem, with net sales of ¥104,280 million (up 12.2% year on year), operating profit of ¥13,122 million (up 7.1%), ordinary profit of ¥14,278 million (up 16.0%), and profit attributable to owners of parent of ¥12,163 million (up 25.2%). All items—net sales, operating profit, ordinary profit, and net profit—also exceeded the earnings forecast announced in January 2026. While it should be noted that the yen's depreciation (a positive impact of ¥6,929 million on net sales) as an external factor boosted results, growth on a local-currency basis was also confirmed in North/Central America, Europe, and South America, indicating genuine underlying growth.

The consolidated earnings forecast for FY2027 (ending May 2027) anticipates net sales of ¥110,000 million (up 5.5% year on year) and operating profit of ¥13,500 million (up 2.9%), representing higher sales and profit, while ordinary profit is forecast at ¥13,500 million (down 5.5%) and net profit at ¥10,000 million (down 17.8%), representing a profit decline. The main causes are the narrowing of foreign exchange gains as an external factor (assumed rates: US$1 = ¥155, €1 = ¥180) and the drop-off of special gains booked in the prior period, including a gain on sale of investment securities of ¥1,690 million and settlement income received of ¥550 million. Operating profit is expected to keep growing, and the decline in ordinary and net profit is largely attributable to one-time factors.

The retail business continued to post an operating loss in FY2026 (ending May 2026) of ¥440 million (widening from a loss of ¥256 million in the prior period), as the market downturn caused by poor weather and rising prices dealt a direct blow. Concretizing measures for structural earnings improvement remains an ongoing challenge. Meanwhile, the company announced in July 2026 its long-term management plan "PASSION2035," covering FY2027 (ending May 2027) through FY2036 (ending May 2036), and also clarified its shareholder return policy (annual dividend of ¥90 and a share buyback ceiling of ¥5,000 million). The plan's specific numerical targets and progress in execution will be key to future share price evaluation.

Growth Strategy

Concentration of breeding efforts on strategic items, global expansion through M&A, and promotion of the long-term management plan "PASSION2035"

The company concentrates breeding and sales resources on strategic items such as broccoli, tomato, pumpkin, squash, and eustoma, aiming to expand demand through the introduction of new varieties and re-evaluation of existing varieties. In FY2026 (ending May 2026), these items continued to drive performance, confirming the effectiveness of the strategy.

In July 2025, the company acquired Agritu Sementes Ltda. (development, production, and sale of onion seeds) in Brazil for an acquisition cost of ¥1,778 million, making it a consolidated subsidiary. The company aims to expand its presence in the Brazilian market and gain share in the onion seed market by leveraging the Agritu brand. Goodwill of ¥721 million and intangible fixed assets of ¥1,006 million were recorded.

Based on the 10-year long-term management plan "PASSION2035" announced in July 2026, the company resolved an annual dividend of ¥90 (forecast for FY2027, ending May 2027) and a share buyback with an upper limit of ¥5,000 million (up to 1 million shares). While continuing six consecutive years of dividend increases, the company aims to achieve a dividend on equity (DOE) target of 2.5%.

In line with overseas business expansion, the company is responding to increased headcount and rising wage levels, while continuing capital investment centered on ¥6,828 million in acquisitions of property, plant and equipment (FY2026, ending May 2026). Buildings and structures (net) increased by ¥5,928 million year on year, reflecting progress in developing production and research infrastructure.

Last updated: July 17, 2026