Meiji Holdings Co., Ltd. · TSE:2269

Meiji — H1 FYE March 2015 Earnings Presentation

27 slides from Meiji's earnings presentation, Nov 18, 2014

  1. Slide 1: Financial Results for the First Half of FYE March 2015

    Financial Results - For the First Half of FYE March 2015 - November 18, 2014

  2. Slide 2: Contents

    Contents 1. FYE March 2015 Progress 2. Strategies by Segment 3. Realizing the 2020 Vision  Business forecasts and other forward-looking statements are based on information available at the time of the release of this presentation and reasonable assumptions made by the Company. Actual results could

  3. Slide 3: Medium-Term Management Plan

    Medium-Term Management Plan Basic policies Targets Higher profitability and strategic investments FYE March 2015 for future growth (Initial targets as of May 2012) 1. Strengthen and expand existing businesses Net sales 1.19 trillion yen (growth and priority businesses) 2. Foster growth businesses Op

  4. Slide 4: FYE March 2015 Full-year Plan Revisions to Reflect H1 Results

    ＨＤ FYE March 2015: Full-year Plan Revisions to Reflect H1 Results (¥ billion) (■Net sales: ¥ billion) (■Op. income: ¥ billion) 1,400 70 (Full-year) Initial Plan Revised Plan Net sales 1,140.0 1,141.0 “Higher Profitability” Management Integration 1,200 Business Reorganization 60 Op. income 37.5 41.5

  5. Slide 5: Food: Key Points of Strategies

    Food Key Points of Strategies  Continue structural reforms and cost reductions  Improve competitiveness of our priority businesses  Foster growth businesses (■Net sales: ¥ billion) (■Op. income: ¥ billion) 1,400 70 1,200 60 988.8 986.3 1,001.5 1,015.2 1,011.8 1,000 50 800 34.0 40 28.1 600 22.3 30

  6. Slide 6: Food: Full-year Forecast for Each Business

    Food Full-year Forecast for Each Business (¥ billion) Dairy Confectionery (■Net sales) (■Op. income) (■Net sales) (■Op. income)  Probiotics 200 20  Chocolate 600 60 yogurt 160 16 favorable favorable  Improving 400 40  Progress 120 12 business 27.9 25.3 with 80 7.6 8 efficiency 18.4 200 20 struct

  7. Slide 7: Food: Continue Structural Reforms and Cost Reductions

    Food Continue Structural Reforms and Cost Reductions Changes in Operating Income  Raw material costs are the +1.2 biggest factor in declining -4.1 +4.6 profit margin +4.3 (¥ billion) -5.0 +4.8 Initial Results (Breakdown) Plan 34.0 Dairy: 3.8 1st half (Results) 2nd half (Plan) H1 7.0 5.0 Confectione

  8. Slide 8: Continued Growth of Probiotics Yogurt

    Food Continued Growth of Probiotics Yogurt Trend in Sales of Probiotics Yogurt 15.3E (Full-year) (¥ billion) YoY changes +12% 80 +60% +40% 60 +20% R-1 launched +0% 40 12.3 13.3 14.3 15.3 LG21 launched Q4 H1 H2 H1 H2 H1 20 0  Favorable growth after rapid 01.3 02.3 03.3 04.3 05.3 06.3 07.3 08.3 09.3

  9. Slide 9: Grow Bulgaria Yogurt by Promoting Health Value

    Food Grow Bulgaria Yogurt by Promoting Health Value Trend in Sales of Bulgaria Yogurt (¥ billion) 15.3E (Full-year) Yogurt Market – Net sales by Type 80 -2% YoY change (excluding probiotics) +20% 60 +10% +0% 40 ‐10% Plain Drink Soft ‐20% 20 14.3 15.3 Q1 Q2 Q3 Q4 Q1 Q2  Market size: about ¥350bn 0 

  10. Slide 10: Confectionery Sales Growth and Increased Efficiency

    Food Confectionery Sales Growth and Increased Efficiency Trend in Sales of Chocolate 15.3E (Full-year) Chocolate sales – YoY change +2% (¥ billion) Chocolate Total Long-sellers 100 +10% +5% 80 +0% ‐5% 60 13.3 14.3 15.3 H1 H2 H1 H2 H1 40  Long-sellers (*) driving entire growth 11.3 12.3 13.3 14.3 15

  11. Slide 11: New Plant Launched to Expand Business for Enteral Formula

    Food New Plant Launched to Expand Business for Enteral Formula An image for Expanding Enteral Formula Market (¥ billion)  Promising markets Hospitals/Nursing Homes Commercial 80  Utilize our strengths to win No. 1 share 60  Nutritional engineering technology 40  Wide variety of product lineup fo

  12. Slide 12: Develop China Business

    Food Develop China Business Total Sales of Overseas business Dairy  Yogurt sales favorable (¥ billion) 61.0 (Breakdown)  Increase amount of (Breakdown) 60 Non-consolidated Exports companies 40 39.0 Affiliates 20.9 accounted for by 9.0 China distribution through mass equity method 30.0 Asia retaile

  13. Slide 13: Pharma: Key Points of Strategies

    Pharma Key Points of Strategies  Grow domestic pharmaceuticals business  Expand “Specialty & Generics” strategy globally (■Net sales: ¥ billion) (■Op. income: ¥ billion) 200 40 150 135.1 131.6 30 124.2 125.2 127.3 100 20 50 7.5 8.1 8.3 10 6.4 7.6 0 0 11.3 12.3 13.3 14.3 15.3E 13 ｜ Nov. 18, 2014 ｜

  14. Slide 14: Changes in Pharmaceuticals Market Environment

    Pharma Changes in Pharmaceuticals Market Environment Future Population Estimates (as of Jan. 2012)  The number of elderly will grow despite 128,057 （1,000 people） 120,000 124,100 116,618 decline in total population. 29,484 (23%) 36,124  The number of prescriptions are (29%) 36,849 Elderly 100,000

  15. Slide 15: Keep Growing Domestic Pharmaceuticals Business

    Pharma Keep Growing Domestic Pharmaceuticals Business (¥ billion) Trend in Consolidated Net Sales Sales by Business NHI drug price 160 revisions Agricultural Chemicals and Veterinary Drugs (¥ billion) Ethical Pharmaceuticals 140 135.1 131.6 60 125.2127.3 7.0 5.7 120 40 52.6 51.0 100 20 14.3 H1 15.3

  16. Slide 16: Global Business Expansion and Low-cost Operations

    Pharma Global Business Expansion and Low-cost Operations Background Aim and benefit of Medreich buyout Trend in Consolidated Results of Medrich (■Net sales: US$ million) ■Op. income: US$ million) Low production costs GE business is expected to grow significantly but faces global pricing and cost com

  17. Slide 17: Promote Effective Use of R&D Costs and Development

    Pharma Promote Effective Use of R&D Costs and Development ◆In-house R&D pipeline FYE March 2014 FYE March 2015 ME1111 [Antionychomycosis] ◆ PhaseⅠ PhaseⅡ Infectious (Overseas) (Overseas) diseases ME1100 Arbekacin [HABP/VABP] ◆ PhaseⅠ (Overseas) OP0595 [β-lactamase inhibitor] ◆ PhaseⅠ SME3110 Fluvoxa

  18. Slide 18: Realizing the 2020 Vision

    ＨＤ Realizing the 2020 Vision FY2009-2011 FY2012-2014 FY2015-2017 FY2018-2020 - Growth of existing Higher profitability Development businesses - Pursuit of integration and Acceleration of growth into a global company synergies strategic investments - Develop an organizational Realizing for future gro

  19. Slide 19: For the next 100 years, Contribute to Tastiness, Enjoyment, Health and Reassurance

    For the next 100 years, Contribute to “Tastiness, Enjoyment, Health and Reassurance” 19 ｜ Nov. 18, 2014 ｜ Copyright © 2014 Meiji Holdings Co., Ltd. All rights reserved.

  20. Slide 20: Appendix

    Appendix 20 ｜ Nov. 18, 2014 ｜ Copyright © 2014 Meiji Holdings Co., Ltd. All rights reserved.

  21. Slide 21: 15.3 H1: Consolidated Earnings

    15.3 H1: Consolidated Earnings (¥ billion) Initial YoY change Change vs. plan Results Plan （Rate） （Amount） （Rate） （Amount） Meiji HD Net sales 555.0 559.2 -0.7% -3.7 +0.8% +4.2 【consolidated】 Operating income 14.4 18.9 +19.4% +3.0 +31.8% +4.5 Ordinary income 14.6 19.6 +9.9% +1.7 +34.8% +5.0 Net incom

  22. Slide 22: 15.3 H1: Analysis of Consolidated Op. Income

    15.3 H1: Analysis of Consolidated Op. Income (¥ billion) （By segment） H1 Results Food Pharma Other H1 Results - FYE March 2014 15.8 13.3 2.4 0.1 Due to increased/decreased +6.7 +4.3 +2.4 ― sales NHI drug price revision -4.3 ― -4.3 ― Procurement costs of raw materials -5.0 -5.0 0.0 ― Cost increase -1

  23. Slide 23: 15.3 Full-year: Consolidated Earnings Forecasts

    15.3 Full-year: Consolidated Earnings Forecasts (¥ billion) H1 H2 Full-year Results YoY Change Initial Plan Revised Plan YoY Change Initial Plan Revised Plan YoY Change Meiji HD -0.7% -0.6% -0.6% 【consolidated】 Net sales 559.2 -3.7 585.0 581.8 -3.2 1,140.0 1,141.0 -6.9 Operating +19.4% +9.2% +13.7%

  24. Slide 24: 15.3 Full-year: Consolidated Earnings Forecasts in Food Segment

    15.3 Full-year: Consolidated Earnings Forecasts in Food Segment (¥ billion) H1 H2 Full-year Results YoY Change Initial Plan Revised Plan YoY Change Initial Plan Revised Plan YoY Change -2.5% -2.0% -2.2% Net sales 313.3 311.6 311.2 624.6 624.5 -7.9 -6.2 -14.1 Dairy Operating +18.3% +2.6% +10.2% incom

  25. Slide 25: 15.3 Full-year: Analysis of Consolidated Op. Income

    15.3 Full-year: Analysis of Consolidated Op. Income (¥ billion) （By segment） Full-year (Revised Plan) Food Pharma Other Results - FYE March 2014 36.4 28.1 8.3 0.0 Due to increased/decreased sales +11.2 +5.5 +5.7 ― NHI drug price revision -9.2 ― -9.2 ― Procurement costs of raw materials -9.1 -9.1 0.0

  26. Slide 26: Financial Position

    Financial Position (As of March 2014) (As of September 2014) (¥ billion) Total Assets: 779.4 Total Assets: 793.7 Results (YoY change) Results (YoY change) Notes and 261.4 Cash and accounts 102.5 (+8.2) 329.0 18.2 (-1.3) payable deposits Current Current Notes and Liabilities Short-term accounts 158.4

  27. Slide 27: CAPEX, Depreciation, Cash Flows, Returns to Shareholders

    CAPEX, Depreciation, Cash Flows, Returns to Shareholders (¥ billion) FYE March 2013 FYE March 2014 FYE March 2015 Initial Plan Full-year Full-year (13.3-15.3) H1 Results Full-year Plan Results Results Capital expenditures 37.6 47.0 28.4 55.0 161.7 Depreciation and amortization 40.8 40.9 19.9 42.1 12

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