Ajinomoto Co., Inc. · TSE:2802
Ajinomoto — H1 FY2017 Earnings Presentation
24 slides from Ajinomoto's earnings presentation, Nov 9, 2017
Slide 1: Forecast for FY2017 (Ending March 31, 2018) with Outlook
Ajinomoto Co., Inc. (2802) Forecast for FY2017 (Ending March 31, 2018) with Outlook Takaaki Nishii President & CEO November 9, 2017
Slide 2: Contents
Contents I. Financial Statements for the Interim Period Ended September 30, 2017 and FY2017 Forecast II. Initiatives for Achieving the FY2017–2019 Medium-Term Management Plan III. FY2017 Financial Strategy Appendix: Consolidated Results Interim Period Ended September 30, 2017 FY2017 Forecast by Segm
Slide 3: Contents
Contents I. Financial Statements for the Interim Period Ended September 30, 2017 and FY2017 Forecast II. Initiatives for Achieving the FY2017–2019 Medium-Term Management Plan III. FY2017 Financial Strategy
Slide 4: I-1. Financial Statements for the Interim Period Ended September 30, 2017
I-1. Financial Statements for the Interim Period Ended September 30, 2017 Year-on-Year (% increase/decrease) From July to September, both revenue and profit increased. Year-on-Year Sales Business profit (% increase/decrease) 1Q-FY17 +1% -0% 2Q-FY17 +7% +10% 1H-FY17 +4% +5% Excluding currency transla
Slide 5: I-2. FY2017 Forecast
I-2. FY2017 Forecast (¥ bil.) Although some businesses still have issues, due to (¥ bil.) 1,187.0 120 improvement of global costs for fermentation raw 1,091.1 materials expect results in line with initial forecast. 1,000 100 102.0 FY17 FY2016 96.8 YoY 80 (¥ Billion) Forecast Actual Sales 1,187.0 1,0
Slide 6: I-3. FY2017 Assumed Exchange Rate and Exchange Rate Sensitivity
I-3. FY2017 Assumed Exchange Rate and Exchange Rate Sensitivity Assumed exchange rate (vs. JPY) * Average rate during the period FY17 FY16 FY17 FY17 Actual FY17-19 Initial * Forecast forecast Targets 2Q 1Q Actual MTP USD 111.04 108.34 100.0 111.00 111.09 108.3 100.0 EUR 126.32 118.74 110.0 130.37 12
Slide 7: I-4. Factors Influencing FY2017 Business Profit (YoY)
I-4. Factors Influencing FY2017 Business Profit (YoY) FY17 initial forecast FY17 forecast (May 11, 2017 announcement) (November 7, 2017 announcement ) Exchange rate Exchange rate $=¥108.3 $=¥111.0 110 110 Primarily a re-reading of the market for fermentation raw materials and fuels 105 105 -5.2 10.4
Slide 8: I-5. FY2017 Forecast
I-5. FY2017 Forecast We expect to achieve profit attributable to owners of the parent company in line with the initial forecast. FY17 FY16 (¥ Billion) -: losses Difference Main factors Forecast Actual Sales 1,187.0 1,091.1 95.9 Business profit 102.0 96.8 5.2 Other operating income & expenses (-: los
Slide 9: Contents
Contents I. Financial Statements for the Interim Period Ended September 30, 2017 and FY2017 Forecast II. Initiatives for Achieving the FY2017–2019 Medium-Term Management Plan III. FY2017 Financial Strategy
Slide 10: II-1. Forecast by Segment
II-1. Forecast by Segment (¥ Billion) $ = ¥108.3 $ = ¥111.04 $ = ¥108.3 17-19 MTP: $ = ¥100 FY2017 FY2017 FY2016 YoY Change FY2019 Initial forecast Forecast Actual B.P.% B.P.% B.P.% (B)-(C) (B)/(C) Plan B.P.% (A) (B)* (C) Sales 1,187.0 1,187.0 1,091.1 95.8 8% 1,311.2 Japan Food Products 403.7 403.7
Slide 11: II-2. International Consumer Foods
II-2. International Consumer Foods Weak sales growth on local currency basis in Thailand and North America, which carry the International Food Products (Seasonings & Processed Foods) and International Frozen Foods businesses. Will work to recover in the second half, but expect to be below initial fo
Slide 12: II-3. International Consumer Foods: Thailand
II-3. International Consumer Foods: Thailand Net sales on local Seasonings & Processed FY17 1H summary currency base (YoY Foods total Thailand change) + 6% - 1% Seasonings business increased share, but sales Seasonings +7% +1% flat overall due to Processed Foods -2% -2% intensification in competitio
Slide 13: II-4. International Consumer Foods: North America
II-4. International Consumer Foods: North America FY17 1H summary Net sales on local currency base mostly level YoY. Key Asian food products expanding as expected but impact from reduced business with large OEMs and fewer special orders. Asian food Growth of 6% due to increased handling of new produ
Slide 14: II-5. Healthcare
II-5. Healthcare FY17 1H summary YoY sales +8%, business profit -48%. Impact of production adjustments by large pharmaceutical companies, expect full year revenue increase but profit decrease. 1. Amino acids for pharmaceuticals and foods: BtoB Because we supply raw materials to customers, shipments
Slide 15: II-6. Animal Nutrition
II-6. Animal Nutrition Business Profit FY16 FY17 FY19 FY20– Actual Forecast Plan • Shift in production from threonine to Active collaboration and alliances Contribute to production of sustainable food resources tryptophan in N.A. going smoothly. Effect from positive change in sales price of tryptoph
Slide 16: II-7. Initiatives to Build a New Foundation for Growth
II-7. Initiatives to Build a New Foundation for Growth In progress, based on the policies of the FY2017–2019 MTP. Timing Country Project (acquisition completion base) Amount Strategy April Turkey Acquisition of all shares of Örgen Gida Establish European Approx. ¥6.1 bil. Sanayi ve Ticaret A.Ş. base
Slide 17: II-8. First Entry into U.S. Medical Foods Market
II-8. First Entry into U.S. Medical Foods* Market Ajinomoto Makes a U.S. Medical Food Company a Wholly Owned Subsidiary Summary (Press release dated November 9, 2017) 1. Target segment: Other business in the Healthcare segment 2. Main details: (1) Acquisition of shares of North American firm Cambroo
Slide 18: II-9. Restructuring Production in Japan
II-9. Restructuring Production in Japan Ajinomoto Group to Restructure Seasonings and Processed Foods Production System in Japan Summary (Press release dated September 29, 2017) 1. Purpose: realize world-class production with the introduction of the latest technology 2. Main details: (1) Consolidati
Slide 19: II-10. Enhancing Our Corporate Brand
II-10. Enhancing Our Corporate Brand Introduction of the Ajinomoto Group Global Brand Logo (AGB) Thoughts behind the design Ajinomoto is the Essence of Taste ⇒ Essence of Umami The infinity symbol + “A” Incorporates three ambitions: the investigation, mastery and spread of “taste (Aji)”; the evoluti
Slide 20: II-11. Non-financial (ESG) Initiatives
II-11. Non-financial (ESG) Initiatives ASV* Value Creation Progress of Initiatives Stories *ASV; Ajinomoto Group Creating Shared Value 1 June July Oct. We contribute to health and well- July being by utilizing our leading-edge Formulated Nutrition Policy and Nutrition bioscience and fine chemical St
Slide 21: II-12. Roadmap to a Genuine Global Specialty Company
II-12. Roadmap to a "Genuine Global Specialty Company" Sustainable value creation as a Become a global top 10 class company with robust business structure Genuine Global Specialty Company ¥150 bil. Global top 10 class ¥130 bil. food company level1) Sustained growth as a Become a global global top 10
Slide 22: Contents
Contents I. Financial Statements for the Interim Period Ended September 30, 2017 and FY2017 Forecast II. Initiatives for Achieving the FY2017–2019 Medium-Term Management Plan III. FY2017 Financial Strategy
Slide 23: III. FY2017 Financial Strategy
III. FY2017 Financial Strategy Based on the policies of the FY2017–2019 MTP, generate cash flow, invest for growth and provide stable shareholder returns Cash Flow Investments for Growth Shareholder Returns Payout ratio: target 30% per FY Operating cash flow: Engage in integrated management of FY16
Slide 24: Forward-looking statements, such as business performance forecasts, made in This material includes
Forward-looking statements, such as business performance forecasts, made in these materials are based on management's estimates, assumptions and projections at the time of publication. A number of factors could cause actual results to differ materially from expectations. This material includes s