Meiji Holdings Co., Ltd. · TSE:2269

Meiji — H1 FYE March 2020 Earnings Presentation

42 slides from Meiji's earnings presentation, Nov 12, 2019

  1. Slide 1: Financial Results for the First Half of FYE March 2020

    Financial Results - For the First Half of FYE March 2020 - November 12, 2019

  2. Slide 2: Agenda

    Agenda 1. Overview for the First Half 2. Outlook for the Second Half and Full-year 3. Overview of Business Results and Future Business Strategy  Information in this material is not intended to solicit sale or purchase of shares in Meiji Holdings.  Business forecasts and other forward-looking state

  3. Slide 3: 1. Overview for the First Half

    1. Overview for the First Half 3 ｜ Nov. 12, 2019 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  4. Slide 4: H1 Summary - FYE March 2020

    H1 Summary - FYE March 2020 (JPY bn) FYE March 2019 FYE March 2020 FYE March 2020 Meiji HD (consolidated) H1 Results H1 Plan H1 Results YoY Change Change vs. Plan +1.0% -1.1% Net sales 611.9 625.0 618.0 +6.1 -6.9 +8.5% +8.1% Operating income 43.8 44.0 47.5 +3.7 +3.5 Op. income margin 7.2% 7.0% 7.7%

  5. Slide 5: Food H1 Summary

    Food H1 Summary - FYE March 2020 (JPY bn) FYE March 2019 FYE March 2020 FYE March 2020 Food Segment H1 Results H1 Plan H1 Results YoY Change Change vs. Plan -0.3% -2.0% Net sales 524.8 534.0 523.2 -1.6 -10.7 +1.4% +1.4% Operating income 39.0 39.0 39.5 +0.5 +0.5 YoY Change in Operating Income (JPY bn

  6. Slide 6: Pharma H1 Summary

    Pharma H1 Summary - FYE March 2020 (JPY bn) FYE March 2019 FYE March 2020 FYE March 2020 Pharmaceutical Segment H1 Results H1 Plan H1 Results YoY Change Change vs. Plan +8.9% +3.6% Net sales 87.6 92.1 95.3 +7.7 +3.2 +60.8% +61.3% Operating income 5.1 5.1 8.2 +3.1 +3.1 YoY Change in Operating Income

  7. Slide 7: 2. Outlook for the Second Half and Full-year

    2. Outlook for the Second Half and Full-year 7 ｜ Nov. 12, 2019 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  8. Slide 8: Full-year Outlook - FYE March 2020

    Full-year Outlook - FYE March 2020 (JPY bn) FYE March 2019 FYE March 2020 Meiji HD (consolidated) Results Plan YoY Change +4.4% Net sales 1,254.3 1,309.0 +54.6 +9.8% Operating income 98.3 108.0 +9.6 Op. income margin 7.8% 8.3% +0.4pt Net income attributable to +9.1% 61.8 67.5 +5.6 shareholders of pa

  9. Slide 9: H2 Outlook

    H2 Outlook - FYE March 2020 (JPY bn) FYE March FYE March FYE March 2020 2020 2019 YoY H2 Plan H2 Plan H2 Results Change (as of May 13) (as of Nov. 8) +7.6% Net sales 642.4 684.0 690.9 +48.5 (consolidated) +10.8% Meiji HD Operating income 54.5 64.0 60.4 +5.8 Op. income margin 8.5% 9.4% 8.7% +0.2pt Ne

  10. Slide 10: 3. Overview of Business Results and Future Business Strategy

    3. Overview of Business Results and Future Business Strategy 10 ｜ Nov. 12, 2019 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  11. Slide 11: Food: Functional yogurt and yogurt

    Food Functional yogurt – Maintain sales results in previous FY Yogurt – Maintain sustainable sales growth Sales of ■ Functional yogurt Functional Yogurt ■ Yogurt （JPY bn）  Maintain previous year's results 203.5 204.8 197.8  Productive and efficient communication with customers 84.1 84.9 90.6  Cre

  12. Slide 12: Expand chocolate market by increasing sales of dark chocolate

    Food Expand chocolate market by increasing sales of dark chocolate Sales of chocolate （JPY bn）  Boost sales of dark chocolate for 104.0 95.4 104.1 health-consciousness customers  Appeal health-value of Chocolate Kouka and expand customer base  Increase brand recognition of popular Oligosmart by l

  13. Slide 13: Sports Nutrition: Increase sales by expanding product lines

    Food Sports Nutrition: Increase sales by expanding product lines Sales of ■ Sports Nutrition  SAVAS powder sales favorable for new flavors, 34.0 ■ SAVAS Milk Green Tea and Yogurt. In the second half, start (JPY bn) production at a new factory to improve quality and 25.8 13.0 launch new product line

  14. Slide 14: Sales of Meiji Hokkaido Tokachi Cheese grew steadily

    Food Sales of Meiji Hokkaido Tokachi Cheese grew steadily Sales of ■ Hokkaido Tokachi Cheese  Sales grew significantly for Hokkaido ■ Others （JPY bn） Tokachi Smart Cheese due to expansion 37.3 35.2 36.6 of product lines  Hokkaido Tokachi Camembert Cheese sales favorable. Launched new Smoked 22.0 2

  15. Slide 15: Overseas business: growth of three businesses in China

    Food Overseas business Continuing significant growth of three businesses in China Meiji’s Sales  Milk and Yogurt ■ Confectionary ■ Ice cream ■ Chilled milk and Yogurt  Chilled milk sales favorable for both consumer 1,077 （RMB mm） 933 and commercial products 762 268 319  Sales of newly launched yo

  16. Slide 16: Structural Reform in Milk Business Progressing Steadily

    Food Structural Reform in Milk Business Progressing Steadily Sales of Milk （except for SAVAS Milk） ■ Meiji Oishii Gyunyuu ■ Others 1. Develop value added products （JPY bn） • Launched Meiji Oishii Low Fat 104.6 102.2 96.2 Meiji Oishii Milk Calcium 46.9 46.0 38.8 Using raw milk manufactured by patente

  17. Slide 17: Pharma: Vaccines

    Pharma Japan: Grew due to Sales of Vaccine Products, Offset Drug Price Revision Sales of ■ Influenza vaccine  Shipped Influenza HA Vaccine KMB ■ Bilanoa ahead of schedule in first half. On par ■ Reflex with plans for full year. Expecting less Vaccines （JPY bn） product returns 14.3  Increase shares

  18. Slide 18: Medreich: CMO/CDMO Business Favorable

    Pharma Medreich: CMO/CDMO Business Favorable, Grow Business for Japanese Market Sales of Medreich Group （USD mm） 225  Completed reorganization of Oversees Market 186 201 production system at India plant. Ready to increase production  Business growing due to increased orders from existing clients a

  19. Slide 19: Boost cooperation with marketing partner and regain market share

    Pharma Boost cooperation with marketing partner and regain market share Net sales and operating income 500 KM Biologics(non-consolidated) 140 Sales Breakdown FY3/20E （JPY bn） 39.5 400 Net sales 120 1% Veterinary Operating income 31.2 100 vaccine 300 ≈≈≈≈≈≈ 80 10% 16.8 ≈≈≈≈≈≈ Blood Plasma 200 60 3.4

  20. Slide 20: Progress in Pipeline Products

    Pharma Progress in Pipeline Products*1  Anti-Parkinson's disease drug Equfina Tablets (general name: Safinamide mesylate): Approved for manufacturing and sales Pharmaceuticals in Japan (September 20, 2019*2)  Start sales from November after NHI price listing  Manufacturing by Meiji Seika Pharma a

  21. Slide 21: ESG Topics

    ＥＳＧトピックス  July 2019 Established Group Human Rights Meeting Strengthening human rights due diligence initiatives  July 2019 Designated as a TCFD Climate Risk and Opportunity Scenario Analysis Support Project by the MOE  September 2019 Published Integrated Report 2019 Special Feature: Working Towar

  22. Slide 22: Appendix: Financial data

    Appendix: Financial data 22 ｜ Nov. 12, 2019 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  23. Slide 23: H1 Results - FYE March 2020

    H1 Results - FYE March 2020 FYE March (JPY bn) 2020 YoY Change Main Factors for Change H1 Results +1.0% Net sales 618.0 +6.1 ― (See P4-6 for details by segment) +8.5% Operating income 47.5 +3.7 ― (See P4-6 for details by segment) +109.1% Non-operating income 3.1 - Insurance income (+1.2) +1.6 +34.1%

  24. Slide 24: Analysis of Consolidated Operating Income

    H1 Results - FYE March 2020 Analysis of Consolidated Operating Income (JPY bn) Consolidated Results Food Pharma Other H1 Results -- FYE March 2019 43.8 39.0 5.1 -0.3 Due to increased/decreased sales +3.5 +3.8 -0.3 ― Changes in costs of goods sold -0.4(*1) -1.4 +1.0 ― Changes in other SG&A expenses -

  25. Slide 25: Financial Position as of September 2019

    Financial Position as of September 2020 Results as of (JPY bn) Sep. 2019 YoY Change Main Factors for Change -2.7% - Notes and accounts receivable (-11.1) Current assets 410.1 -11.3 - Cash and deposits (-2.3) - Goods and products (+7.4) +1.4% - Construction in progress (+6.3) - Buildings and structur

  26. Slide 26: Cash Flows and Shareholders' Return

    H1 Results - FYE March 2020: Cash Flows and Shareholders’ Return FYE March (JPY bn) 2020 YoY Main Factors for Change H1 Results Change - Decrease in notes and accounts payable (-14.1) - Decrease in profit before income taxes (-5.8) - Increase in inventories (-4.3) Net cash flow from - Amortization o

  27. Slide 27: Plan - FYE March 2020 by Segment

    Plan - FYE March 2020 First Half Second Half Full Year (JPY bn) Results YoY Plan YoY YoY Plan Change (as of Nov. 8) change Change +1.0% +7.6% +4.4% Net sales 618.0 +6.1 690.9 +48.5 1,309.0 +54.6 Meiji Holdings +8.5% +10.8% +9.8% Operating income 47.5 +3.7 60.4 +5.8 108.0 +9.6 +11.1% +7.9% +9.3% Op.

  28. Slide 28: Plan by Business in Food Segment

    Food Plan by Business in Food Segment - FYE March 2020 First Half Second Half Full Year (JPY bn) YoY Plan YoY YoY Results Plan Change (as of Nov. 8) change Change Fermented Dairy -1.9% +2.9% +0.5% Net sales 162.4 169.3 331.8 Fresh and -3.0 +4.7 +1.6 -7.4% +10.3% +2.1% Operating income 20.7 28.0 48.8

  29. Slide 29: Plan by Business in Food Segment (continued)

    Food Plan by Business in Food Segment - FYE March 2020 First Half Second Half Full Year (JPY bn) YoY Plan YoY YoY Results Plan Change (as of Nov. 8) change Change +6.9% +18.5% +13.2% Net sales 23.2 30.1 53.4 Overseas +1.5 +4.7 +6.2 Operating +62.1% -38.3% +2.8% 0.8 +0.3 0.4 -0.2 1.2 +0.0 income Othe

  30. Slide 30: Food: Analysis of Operating Income - H1

    Food Analysis of Operating Income - H1 FYE March 2020 Food Fresh and Other (JPY bn) Processed Corporate Segment Fermented Confectionery Nutrition Overseas Domestic Food Expenses Total Dairy Subsidiaries H1 Op. Income – 39.0 22.4 4.3 6.2 7.2 0.5 2.3 -4.1 FYE March 2019 Due to increased/ decreased sal

  31. Slide 31: Food H1 Results - Sales by Mainstay Products

    Food H1 Results - FYE March 2020 Sales by Mainstay Products FYE March FYE March FYE March (JPY bn) 2019 H1 2020 H1 2020 H1 YoY vs. Results Plan Results Change H1 Plan Yogurt 45.0 47.4 43.3 -3.7% -8.7% Meiji Bulgaria Yogurt 41.9 41.5 39.6 -5.3% -4.4% Functional yogurt 52.1 52.1 49.5 -5.0% -4.9% Drink

  32. Slide 32: Plan by Business in Pharmaceutical Segment

    Pharma Plan by Business in Pharmaceutical Segment for FYE March 2020 First Half Second Half Full Year (JPY bn) YoY Plan YoY YoY Results Plan Change (as of Nov. 8) Change Change +12.7% +26.5% +20.4% Net sales 65.7 91.6 157.3 Domestic +7.4 +19.1 +26.7 Operating +28.8% +3.1% +13.9% 5.3 +1.2 5.9 +0.1 11

  33. Slide 33: Food H2 Outlook

    Food H2 Outlook - FYE March 2020 FYE March 2019 FYE March 2020 (JPY bn) H2 Results H2 Plan Food Segment (as of Nov. 8) YoY Change +6.6% Net sales 531.8 566.7 +34.9 +10.3% Operating income 45.7 50.4 +4.6 (JPY bn) YoY Change in Operating Income H2 Results -- FYE March 2019 45.7 +6.6 : Growth in sales

  34. Slide 34: Pharma H2 Outlook

    Pharma H2 Outlook - FYE March 2020 (JPY bn) FYE March 2020 FYE March 2019 H2 Plan Pharmaceutical H2 Results (as of Nov. 8) YoY Change Segment +12.6% Net sales 111.0 125.1 +14.0 +12.5% Operating income 9.1 10.2 +1.1 (JPY bn) YoY Change in Operating Income H2 Results -- FYE March 2019 9.1 -3.8 : Decre

  35. Slide 35: Full-year Plan: Analysis of Consolidated Operating Income

    Full-year Plan - FYE March 2020: Analysis of Consolidated Operating Income (JPY bn) Consolidated Plan Food Pharma Other Results -- FYE March 84.7 14.2 -0.6 2019 98.3 Due to +10.4 +6.0 ― increased/decreased sales +16.4 Decrease due to NHI drug price reduction -3.8 ― -3.8 ― Changes in costs of goods s

  36. Slide 36: Cash flow and returns to shareholders

    FYE March 2020 Cash flow and returns to shareholders FY3/20 (JPY bn) YoY Plan Main factors for the change change Cash flows from 107.9 -4.2 - Increase in tax payment operations - Increase in capital expenditures Food 86.1 (+24.7 YoY) Cash flow from -99.5 +0.7 Pharma 12.9 (+3.3 YoY) investing activit

  37. Slide 37: Key Currencies and Our Average Exchange Rates

    Key Currencies and Our Average Exchange Rates Key Currencies and Our Average Exchange Rates Foreign exchange target USD EUR RMB For FYE March 2020 (JPY) (JPY) 140.00 USD 110 130.45 133.09 132.96 129.39 129.89 129.19 123.14 125.70 123.29 119.83 120.00 EUR 130 111.61 111.38 112.74 108.85 112.83 110.46

  38. Slide 38: Appendix: Topics

    Appendix: Topics 38 ｜ Nov. 12, 2019 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  39. Slide 39: Market Trends in Imported Raw Materials Prices

    Market Trends in Imported Raw Materials Prices (USD/MT) Nonfat Dry Milk (USD/MT) Cheese 3,000 4,500 4,000 2,500 3,500 2,000 3,000 1,500 2,500 (GBP/MT) Cocoa Beans (Cent/Bushel) Sugar 2,500 20 2,000 15 1,500 10 1,000 5 500 0 39 ｜ Nov. 12, 2019 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserve

  40. Slide 40: R&D Pipeline

    R&D Pipeline R&D Pipeline (◆: compounds discovered in-house) FY3/20 FY3/21 FY3/22 ME1111 [Antionychomycosis] ◆ Phase II Infectious diseases ME1100 Arbekacin inhalation [HABP/VABP] ◆ P Ib (Overseas) OP0595 [β-lactamase inhibitor] ◆ PI with β-Lactams disorders ME2125 Safinamide [Anti-Parkinson’s disea

  41. Slide 41: R&D Pipeline: Agricultural chemicals and veterinary drugs

    R&D Pipeline R&D Pipeline (◆: compounds discovered in-house) FY3/20 FY3/21 FY3/22 Agricultural chemicals ME5382 [Insecticide/Flupyrimin] ◆ Applied Approved (Overseas) ME5343 [Insecticide] Licensing agreement with BASF ◆* Approved (Overseas) ANM-138 [Insecticide] Joint development with Nippon Kayaku

  42. Slide 42: 42

    42

Meiji Holdings — H1 FYE March 2020 Earnings Presentation on 6ix