Meiji Holdings Co., Ltd. · TSE:2269

Meiji — FY2021 Earnings Presentation

54 slides from Meiji's earnings presentation, May 17, 2022

  1. Slide 1: Financial Results for FYE March 2022 (FY2021)

    Financial Results for FYE March 2022 (FY2021) (From April 1, 2021 to March 31, 2022) May 17, 2022 * Revenue recognition accounting standards are applied from the beginning of Q1 of FY2021. In this material, the figures for FY2020 is shown as before the standards, and the figures for FY2021 as after

  2. Slide 2: 1. Financial Summary for FY2021

    1. Financial Summary for FY2021 1 © Meiji Meiji Holdings HoldingsCo., Co., Ltd. Ltd. AllAll rights rights reserved. reserved.

  3. Slide 3: Summary for FY2021 Consolidated Results

    Summary for FY2021 Consolidated Results (JPY bn) FY2021 FY2020 FY2021 Results Results YoY Change vs. Plan Plan (Rev. on Feb. 9) -15.0% +0.4% Net sales 1,191.7 1,013.0 -178.6 +4.0 1,009.0 +0.6% (Reference: Net sales) 1,007.1* 1,013.0 +5.9 — ― -12.4% +3.2% Operating profit 106.0 92.9 -13.1 +2.9 90.0 O

  4. Slide 4: Food: Summary for FY2021

    Food：Summary for FY2021 (JPY bn) FY2021 FY2020 FY2021 Results Results YoY Change vs. Plan Plan (Rev. on Feb. 9) -17.4% +0.3% Net sales 999.6 826.0 -173.5 +2.4 823.6 -0.1% (Reference: Net sales) 826.5* 826.0 -0.4 — ― -13.1% +1.3% Operating profit 87.4 75.9 -11.4 +0.9 75.0 * Calculated as net sales af

  5. Slide 5: Pharmaceutical: Summary for FY2021

    Pharmaceutical: Summary for FY2021 (JPY bn) FY2021 FY2020 FY2021 Results Results YoY Change vs. Plan Plan (Rev. on Feb. 9) -2.9% +0.6% Net sales 193.6 187.9 -5.6 +1.1 186.8 +3.2% (Reference: Net sales) 182.1* 187.9 +5.8 — ― -2.3% +13.1% Operating profit 19.1 18.6 -0.4 +2.1 16.5 * Calculated as net s

  6. Slide 6: Progress for 2023 Medium-term Business Plan Meiji ROESG

    Progress for 2023 Medium-term Business Plan Meiji ROESG® Indicators ROE × Achieve ESG goals ＋ unique to Meiji ＝ The Meiji ROESG® Average of Achievement Add at the end FY2021 Result FY2019-2021 coefficient of FY2023 12.3 pt 12.3% x1.0 *Achieve 5: x1.2 Achieve 4: x1.0 Achieve <4: x0.8 Evaluation indic

  7. Slide 7: Progress for 2023 Medium-term Business Plan Meiji ROESG

    Progress for 2023 Medium-term Business Plan Meiji ROESG® Indicators ROE × Achieve ESG goals ＋ unique to Meiji ＝ The Meiji ROESG® Average of Achievement Add at the end FY2021 Result FY2019-2021 coefficient of FY2023 12.3 pt 12.3% x1.0 Indicator As of FY2021 Target for FY2023 Extend healthy life expec

  8. Slide 8: Summary for FY2021

    Summary for FY2021  Profit attributable to owners of parent increased significantly  Continued to face issues with growth potential of core businesses  Reviewed our business portfolio  Reduced cross-shareholdings stocks  Acquired treasury shares, ROE improved  Promoted initiatives: Our goal to

  9. Slide 9: 2. Plan for FY2022 and Initiatives

    2. Plan for FY2022 and Initiatives 8 © Meiji Holdings Co., Ltd. All rights reserved.

  10. Slide 10: Achieve 2023 Medium-term Business Plan

    Achieve 2023 Medium-term Business Plan Recovering growth trajectory of core businesses is the top priority We will work on fostering new growth drivers Points for FY2022 Plan  Recover growth trajectory of core businesses, in particular:  Functional yogurt and yogurt  Domestic ethical pharmaceutic

  11. Slide 11: Consolidated Plan for FY2022

    Consolidated Plan for FY2022 (JPY bn) FY2022 FY2022 FY2022 YoY YoY YoY H1 Plan Change H2 Plan Change Plan Change +1.3% +3.1% +2.2% Consolidated Net sales 507.0 +6.2 528.5 +16.1 1,035.5 +22.4 -18.5% +20.9% -0.5% Operating profit 41.0 -9.3 51.5 +8.9 92.5 -0.4 Profit attributable to -15.4% -38.0% -28.5

  12. Slide 12: New growth domains

    Food: Create Value Based on Nutrition Statement Foster new growth domain by getting the idea from Advanced Nutrition  Build management foundation Maintain and Immune system improve oral function, Use DX Two-way to accelerate value creation communication Functional New growth domains cognitive Lacto

  13. Slide 13: Food: Create Value based on Nutrition Statement

    Food: Create Value based on Nutrition Statement Build management foundation to accelerate value creation In-house Value Create Program Accelerator Program • Meiji’s own initiative • Support startup companies • Create businesses that resolve issues • Collaborating with some • Evaluating two new busin

  14. Slide 14: Food: Initiatives against Cost Increase

    Food: Initiatives against Cost Increase Effects on operating profit in FY2022 Plan • Raw materials cost about JPY 12.5 billion • Energy cost about JPY 1.5 billion  Offset cost increase:  Price hike and amount reduction announced in March and April  Cost reduction  Weak consumer sentiment Take se

  15. Slide 15: Initiatives for Yogurt and Cheese Business

    Initiatives for Yogurt and Cheese Business (JPY bn) FY2022 FY2022 FY2022 H1 Plan YoY Change H2 Plan YoY Change Plan YoY Change +1.2% +7.8% +4.4% Net sales 108.9 +1.3 110.0 +7.9 219.0 +9.2 -9.2% +10.9% +0.1% Operating profit 16.9 -1.7 18.0 +1.7 34.9 +0.0  Market Forecast FY2022 YoY Sales* Plan chang

  16. Slide 16: Recover Growth Trajectory: Functional Yogurt and Yogurt

    Recover Growth Trajectory: Functional Yogurt and Yogurt Using our strength, R&D and technical expertise, extend the product life cycle while developing new products Yogurt Market About JPY 460 billion Functional yogurt • Focus on increasing new consumers • R-1: Launched Mitasukarada on April 12 Meij

  17. Slide 17: Recover Growth Trajectory: Functional Yogurt and Yogurt

    Recover Growth Trajectory: Functional Yogurt and Yogurt Activate yogurt market Intestinal epithelial barrier function, new health value of LB81  A healthy intestine has a defensive function called an intestinal epithelial barrier on the surface of the intestine. This layer protects the intestines f

  18. Slide 18: Initiatives for Nutrition Business

    Initiatives for Nutrition Business (JPY bn) FY2022 FY2022 FY2022 H1 Plan YoY Change H2 Plan YoY Change Plan YoY Change +7.3% +8.4% +7.8% Net sales 60.3 +4.0 57.8 +4.4 118.1 +8.5 -8.5% +18.0% +3.4% Operating profit 9.7 -0.9 10.2 +1.5 20.0 +0.6  Market forecast SAVAS launched in April • Sports protei

  19. Slide 19: Initiatives for Chocolate and Gummy Business

    Initiatives for Chocolate and Gummy Business (JPY bn) FY2022 FY2022 FY2022 H1 Plan YoY Change H2 Plan YoY Change Plan YoY Change +5.0% +5.2% +5.1% Net sales 44.1 +2.0 58.8 +2.9 103.0 +5.0 +1.3% +17.9% +12.9% Operating profit 3.8 +0.0 10.5 +1.5 14.3 +1.6  Market forecast • Chocolate: Negative growth

  20. Slide 20: Initiatives for Overseas Business

    Initiatives for Overseas Business (JPY bn) FY2022 FY2022 FY2022 H1 Plan YoY Change H2 Plan YoY Change Plan YoY Change +12.3% +16.5% +14.5% Net sales 28.1 +3.0 32.0 +4.5 60.2 +7.6 ― ― ― Operating profit -0.7 -1.0 -0.2 +1.1 -0.9 +0.0  Overall Increase in sale Net Sales by Region (JPY bn) Unchanged in

  21. Slide 21: Foster New Growth Drivers in Overseas Market

    Foster New Growth Drivers in Overseas Market Increase sale of functional yogurt in China Prospect for sales increase x3 x6 FY2021 21年度 FY2023 23年度 FY2026 26年度 Jan. 2023 Meiji Dairies (Tianjin) Oct. 2023 Meiji Food (Guangzhou) will start operation Live commerce linked Attractive floor display and  1

  22. Slide 22: Pharmaceutical: Strengthen Structural Reforms

    Pharmaceutical: Strengthen Structural Reforms Concentrate management resources in infectious disease domain, our area of strength Establish competitive advantage as a top company for vaccines and drugs for infectious diseases Strengthen vaccine business Rebuild domestic pharmaceutical business  Con

  23. Slide 23: Pharmaceutical: Development of Inactivated COVID-19 Vaccine (KD-414)

    Pharmaceutical: Development of Inactivated COVID-19 Vaccine (KD-414) 2022 2023 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 12 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 12 P 1/2 clinical study (Safety study, n=210) P 2/3 clinical study (immunogenic study, n=2,000） Third inoculation Early Adults Efficacy and Safety submission* P 3 clinica

  24. Slide 24: Initiatives for Human Vaccine Business

    Initiatives for Human Vaccine Business (JPY bn) FY2022 FY2022 FY2022 H1 Plan YoY Change H2 Plan YoY Change Plan YoY Change -12.9% +6.9% -3.6% Net sales 19.8 -2.9 21.4 +1.3 41.2 -1.5 -62.0% -9.6% -49.3% Operating profit 3.3 -5.3 2.5 -0.2 5.8 -5.6  Points for FY2022 Plan • Net sales from contract man

  25. Slide 25: Initiatives for Domestic Ethical Pharmaceutical Business

    Initiatives for Domestic Ethical Pharmaceutical Business (JPY bn) FY2022 FY2022 FY2022 H1 Plan YoY Change H2 Plan YoY Change Plan YoY Change +5.8% +6.2% +6.0% Net sales 45.2 +2.4 51.0 +2.9 96.2 +5.4 +18.8% +208.7% +117.5% Operating profit 2.1 +0.3 5.9 +3.9 8.0 +4.3  Points for FY2022 Plan # of Rece

  26. Slide 26: Initiatives for Overseas Business

    Initiatives for Overseas Business (JPY bn) FY2022 FY2022 FY2022 H1 Plan YoY Change H2 Plan YoY Change Plan YoY Change +10.3% +7.8% +9.0% Net sales 21.3 +1.9 22.7 +1.6 44.0 +3.6 +45.4% -34.9% -10.1% Operating profit 1.8 +0.5 1.8 -0.9 3.6 -0.4  Points for FY2022 Plan Expand production capacity in Med

  27. Slide 27: Foster New Domain

    Foster New Domain Promote Open innovation and business-academia collaboration Create health value unique to the Meiji Group Open innovation Business-academia collaboration  California Cultured Inc. (USA)  Juntendo University Co-create functional products Collaborative research to develop the first

  28. Slide 28: Strengthen Human Capital Management

    Strengthen Human Capital Management Support Creation of Health Value Unique to the Meiji Group Established Group Human Capital Committee in April 2022 Aim to foster human resources who respect diversity and can lead reform The Board of Directors Reporting Monitoring and instruction Management Meetin

  29. Slide 29: Strengthen and Enhance the Group Governance

    Strengthen and Enhance the Group Governance Nomination and Compensation Committee  January 2022 Outside Director chairs the committees Nomination Committee: Mariko Matsumura Compensation Committee: Masaya Kawata Improve Effectiveness and Transparency of the Board of Directors  FY2022 Introduced th

  30. Slide 30: Initiatives to Maintain and Restoration of Biodiversity

    Initiatives to Maintain and Restoration of Biodiversity The Meiji Group is built on the abundant gifts of nature, including raw milk and cocoa Based on this recognition, we work to contribute to the realization of the society that coexists in harmony with nature, by participating in various external

  31. Slide 31: 3. Financial Strategy and Returns to Shareholders

    3. Financial Strategy and Returns to Shareholders 30 © Meiji Holdings Co., Ltd. All rights reserved.

  32. Slide 32: Plan for FY2022

    Plan for FY2022 (JPY bn) FY2021 FY2022 Results Plan YoY Change +2.2% Net sales 1,013.0 1,035.5 +22.4 -0.5% Operating profit 92.9 92.5 -0.4 Op. profit margin 9.2% 8.9% -0.2 pt -28.5% Profit attributable to owners of parent 87.4 62.5 -24.9 EPS (JPY) 607.24 433.76 -173.48 Cash dividends per share (JPY)

  33. Slide 33: Cash Flows and Returns to Shareholders

    Cash Flows and Returns to Shareholders Financial Strategy and Capital Rationing  FY2021 Result • No change in capital expenditure plans but Cash flows Capital payment timing shifted in some cases from operating expenditures • Approx. JPY 50 bn cash inflow on transfer of DM activities Bio stock and

  34. Slide 34: 2023 Medium-term Business Plan: Promote the Meiji ROESG Management

    2023 Medium-term Business Plan Promote the Meiji ROESG® Management Effectively Convert business management to achieve both ROE improvement and ESG enhancement without any compromises Indicators ROE × Achieve ESG goals ＋ unique to Meiji ＝ The Meiji ROESG® Target for Depending on Every Target for FY20

  35. Slide 35: Appendices

    Appendices 34 © Meiji Holdings Co., Ltd. All rights reserved.

  36. Slide 36: KPIs for 2023 Medium Term Business Plan

    KPIs for 2023 Medium Term Business Plan (JPY bn.) FY2023 FY2020 FY2021 FY2022 Target Results Results YoY Change Plan YoY Change (In May 2021) Meiji ROESG® 9 pt 12.3 pt — — — 13 pt +0.6% +2.2% Consolidated net sales 1,007.1* 1,013.0 +5.9 1,035.5 +22.4 1,080.0 -0.1% +1.7% Food segment 826.5* 826.0 -0.

  37. Slide 37: Consolidated Financial Results for FY2021

    Consolidated Financial Results for FY2021 (JPY bn) FY2021 Results YoY Change Main factors for the change -15.0% Net sales 1,013.0 -178.6 ― Details on pages 2-4 -12.4% Operating profit 92.9 -13.1 ― Details on pages 2-4 -22.3% - Subsidy income (-0.7) - Foreign exchange gains (-0.3) Non-operating profi

  38. Slide 38: Financial Position as of March 2022

    Financial Position as of March 2022 (JPY bn) Results as of Mar. 2022 YoY Change Main Factors for Change +6.9% - Cash and deposits (+27.0) Current assets 455.6 +29.5 - Allowance for doubtful accounts (+2.2) +3.3% Non-current assets 661.8 +20.9 - Machinery and equipment (+18.0) +4.7% Total assets 1,11

  39. Slide 39: Consolidated Cash Flows for FY2021

    Consolidated Cash Flows for FY2021 (JPY bn) FY2021 Results YoY Change Main Factors for Change - Profit before income taxes (+25.2) Cash flows from operating - Increase in trade payables (+11.1) activities 127.5 +3.8 - Loss (gain) on sale of shares of subsidiaries and associates (-34.0) - Proceeds fr

  40. Slide 40: Analysis of Consolidated Operating Profit – FY2021

    Analysis of Consolidated Operating Profit – FY2021 (JPY bn) Consolidated Operating Profit Food Pharma Other Results -- FY2020 106.0 87.4 19.1 -0.5 Due to increased/decreased sales -2.7 -8.1 +5.4 ― Impact of drug price revision -5.0 ― -5.0 ― Changes in marketing expenses -3.6 *1 -4.5 +0.9 ― Changes i

  41. Slide 41: Analysis of Consolidated Operating Profit – FY2022

    Analysis of Consolidated Operating Profit – FY2022 (JPY bn) Consolidated Operating Profit Food Pharma Other Results -- FY2021 92.9 75.9 18.6 -1.7 Duer to increased/decreased sales +27.1 *1 +22.1 +5.0 ― Impact of drug price revision -5.0 ― -5.0 ― Changes in costs of goods sold -10.7 *2 -11.5 +0.8 ― C

  42. Slide 42: Food: Net sales and Operating Profit by Business

    Food: Net sales and Operating Profit by Business (JPY bn) FY2021 FY2022 Result Plan YoY Change +4.4% Net sales 209.7 219.0 +9.2 Yogurt and Cheese +0.1% Op. Profit 34.9 34.9 +0.0 +7.8% Net sales 109.6 118.1 +8.5 Nutrition +3.4% Op. Profit 19.3 20.0 +0.6 +5.1% Net sales 98.0 103.0 +5.0 Chocolate and G

  43. Slide 43: Food: Net sales and Operating Profit by Business

    Food: Net sales and Operating Profit by Business (JPY bn) FY2021 FY2022 Result Plan YoY Change -1.5% Net sales 58.2 57.4 -0.8 Frozen dessert & ready meal +27.7% Op. Profit 2.9 3.7 +0.8 +14.5% Net sales 52.6 60.2 +7.6 Overseas ― Op. Profit -1.0 -0.9 +0.0 -9.2% Net sales 155.7 141.5 -14.2 Other/ domes

  44. Slide 44: Food: Analysis of Op. Profit by Business – FY2021

    Food: Analysis of Op. Profit by Business – FY2021 (JPY bn) Food Chocolate Frozen Other/ Yogurt & Drinking Segment Nutrition & B to B dessert & Overseas domestic Cheese milk subsidiaries Total gummy ready meal Full-year Operating Profit – FY2020 Result 87.4 47.6 17.7 11.7 -1.2 1.7 3.6 1.2 4.8 Due to

  45. Slide 45: Food: Analysis of Op. Profit by Business – FY2022

    Food: Analysis of Op. Profit by Business – FY2022 (JPY bn) Food Chocolate Frozen Other/ Yogurt & Drinking Segment Nutrition & B to B dessert & Overseas domestic Cheese milk subsidiaries Total gummy ready meal Full-year Operating Profit – FY2021 Result 75.9 34.9 19.3 12.6 -0.7 2.7 2.9 -1.0 5.0 Due to

  46. Slide 46: Food: Sales by Main Products

    Food: Sales by Main Products (JPY bn) FY2020 FY2021 FY2022 Results Results YoY vs. Plan Plan YoY Change (Rev. on Feb. 9) Change Yogurt 84.4 81.8 -3.1% -0.3% 83.5 +2.1% Functional yogurt 112.0 98.0 -12.5% +0.2% 102.6 +4.7% Cheese 31.1 29.1 -6.4% -1.3% 28.0 -3.5% Chocolate 96.0 96.3 +0.3% -0.3% 100.3

  47. Slide 47: Pharmaceutical: Net sales and Op. Profit by Business

    Pharmaceutical: Net sales and Op. Profit by Business (JPY bn) FY2021 FY2022 Result Plan YoY Change +6.0% Net sales 90.7 96.2 +5.4 Domestic ethical pharmaceuticals +117.5% Op. Profit 3.6 8.0 +4.3 +9.0% Net sales 40.3 44.0 +3.6 Overseas ethical pharmaceuticals -10.1% Op. Profit 4.0 3.6 -0.4 -3.6% Net

  48. Slide 48: Pharmaceutical: Net sales and Op. Profit by Business

    Pharmaceutical: Net sales and Op. Profit by Business (JPY bn) Pharma Domestic Overseas Human Veterinary Segment pharma- pharma- vaccine drug* Total ceuticals ceuticals Full-year Operating Profit – FY2021 18.6 3.6 4.0 11.4 -0.4 Result Due to increased/decreased sales +5.0 +8.0 +0.1 +0.3 -3.3 Impact o

  49. Slide 49: Pharmaceutical: R&D Pipeline - Infectious diseases

    Pharmaceutical: R&D Pipeline - 1 ■ Japan ■Overseas R&D Pipeline (◆: discovered in-house) FY2021 FY2022 FY2023 Infectious diseases ME1100 Arbekacin inhalation [HABP/VABP] ◆ P Ib OP0595 Nacubactam [β-lactamase inhibitor] ◆ PI with β- Phase III Lactams [Relapsed or refractory Adult T-cell leukemia/lymp

  50. Slide 50: Pharmaceutical: R&D Pipeline - Human vaccines

    Pharmaceutical: R&D Pipeline - 2 ■ Japan ■Overseas R&D Pipeline (◆: discovered in-house) FY2021 FY2022 FY2023 Phase III Applied Approve KD-370 [Pentavalent vaccine against diphtheria, tetanus, pertussis, polio, and haemophilus influenza type b] Phase II Human vaccines Phase I/II Phase II/III KD-414

  51. Slide 51: Pharmaceutical: R&D Pipeline - Veterinary drugs

    Pharmaceutical: R&D Pipeline - 3 ■ Japan ■Overseas R&D Pipeline (◆: discovered in-house) FY2021 FY2022 FY2023 ME4136 [Injectable antibacterial drugs] Approved ME4137 [Injectable antibacterial drugs for cattle use] Applied Approve ME4137 [Injectable antibacterial drugs for swine use] Applied Approve

  52. Slide 52: Key Currencies and Our Average Exchange Rates

    Key Currencies and Our Average Exchange Rates USD EUR RMB (JPY) Foreign exchange 140.00 128.10 131.78 130.31 130.39 target for FY2022 125.70 123.29 123.71 124.41 119.83 120.65 120.68 118.94 (JPY) 120.00 USD 120 113.60 110.46 110.00 110.00 110.47 100.00 107.70 108.98 109.22 107.74 105.88 104.45 106.2

  53. Slide 53: Market Prices of Main Raw Materials Imported

    Market Prices of Main Raw Materials Imported (USD/MT) Nonfat Dry Milk (USD/MT) Cheese 4,500 7,000 4,000 6,000 3,500 5,000 3,000 4,000 2,500 3,000 2,000 1,500 2,000 (GBP/MT) Cocoa (USD/ｌｂ) Sugar 2,500 25 2,000 20 1,500 15 1,000 10 500 5 52 © Meiji Holdings Co., Ltd. All rights reserved. Source: Bloom

  54. Slide 54:  Information in this material is not intended to solicit sale or purchase of

     Information in this material is not intended to solicit sale or purchase of shares in Meiji Holdings. The final decision relating to investments should be made based on the judgment of users themselves.  Business forecasts and other forward-looking statements are based on information available at

Meiji Holdings — FY2021 Earnings Presentation on 6ix