T. Hasegawa Co., Ltd. · TSE:4958
T. Hasegawa — FY2023 Earnings Presentation
50 slides from T. Hasegawa's earnings presentation, Nov 22, 2023
Slide 1: Financial Results for the Fiscal Year Ended September 30, 2023
Financial Results for the Fiscal Year Ended September 30, 2023 November 22, 2023 T. HASEGAWA CO., LTD.
Slide 2: Contents
Contents I. Business Overview II. Overview of Financial Statements III. Business Environment IV. Management Policy V. Global Strategy VI. Medium-Term Three-Year Plan Overview VII. Capital Policy VIII. Basic Policy on IR Activities IX. Accompanying Materials 1
Slide 3: I. Business Overview
1) RS NN MAAN SAL © THASEGAWA CO, LTD. I. Business Overview
Slide 4: Flavor and Fragrance Business
Flavor and Fragrance Business Ingredients Products (Compounded Flavors and Fragrances) Natural aromatics Flavors 調合 Compounding Synthesized Formulas Fragrances aroma chemicals Integration of research and development capabilities Flavorists : Experts who formulate flavors Perfumers : Experts who form
Slide 5: II. Overview of Financial Statements
Ⅱ．Overview of Financial Statements 4
Slide 6: Market Environment
Market Environment Trends by Category (Domestic Market) ・ Fiscal Year Ended (FYE) September 30, 2023 (October 2022 to September 2023) Impact on Category Trend performance • Sales decrease due to price increases for small-sized drinks (PET bottles) and canned coffee drinks, despite contributions from
Slide 7: Summary of Consolidated Performance
Summary of Consolidated Performance • Yr/Yr Sales increased mainly because of an increase in sales of Chinese subsidiaries and U.S. subsidiaries (due to depreciation of the yen), and sales of T.Hasegawa on a non-consolidated basis Operating profit, ordinary profit, and net profit decreased mainly du
Slide 8: Net Sales by Segment
Net Sales by Segment • Sales growth factors Sales increased in Chinese subsidiaries, U.S. subsidiaries (due to depreciation of the yen), and T.Hasegawa on a non-consolidated basis (Million yen) Change FY 2022 FY 2023 Segment Factor Actual Actual Amount % Higher sales of U.S. subsidiaries (due to Fla
Slide 9: Net Sales by Group Company
Net Sales by Group Company • Sales growth factors Currency FY2022 FY2023 Yr/Yr Higher sales of Chinese subsidiaries, U.S. subsidiaries 1US$ ¥124.46 ¥138.98 Yen down 11.7% (due to depreciation of the yen) , and T.Hasegawa (non-consolidated) 1RMB ¥18.96 ¥19.68 Yen down 3.8% (Million Yen) 1MYR ¥28.90 ¥
Slide 10: Operating Profit by Group Company
Operating Profit by Group Company • Profit decline factors Currency FY2022 FY2023 Yr/Yr Decrease in operating profit of U.S. subsidiary 1US$ ¥124.46 ¥138.98 Yen down 11.7% and T.Hasegawa (non-consolidated) 1RMB ¥18.96 ¥19.68 Yen down 3.8% (Million Yen) 1MYR ¥28.90 ¥30.71 Yen down 6.3% FY2022 FY2023
Slide 11: Analysis of changes in operating profit
Analysis of changes in operating profit • Saw less decrease in profit than initially expected through price increases, despite higher cost-of-sales and a decrease in operating profit mainly due to the sharp rise in raw material prices (Million Yen) Profit ：百万 Profit Increase Decrease +356 +319 +289
Slide 12: III. Business Environment
1) RS NN MAAN SAL © THASEGAWA CO, LTD. If. Business Environment 11
Slide 13: Size of Global Flavors and Fragrances Market
Size of Global Flavors and Fragrances Market (Estimated by the Company) • Worldwide flavors and fragrances sales: Approx. 31.0 billion U.S. dollars (approx. 4.0 trillion yen) Europe, Africa, Middle East ‐ Market size: Approx. 11.3 billion U.S. dollars North America (approx. 1,480 billion yen)* ‐ Mar
Slide 14: Global Flavors and Fragrances Market
Global Flavors and Fragrances Market (Estimated by the Company) • Global flavors and fragrances market in 2022: Grew approx. 3% Yr/Yr Global Flavors and Fragrances Market (Estimated by the Company) (Million US$) 40,000 CAGR 30,000 South America 6.9% Asia 3.9% 20,000 North America 2.5% 10,000 Europe,
Slide 15: Japanese Flavors and Fragrances Market Size
Japanese Flavors and Fragrances Market Size • Flavors account for approximately 80% of the Japanese flavors and fragrances market (approx. 50% of the global market) Japanese flavors and fragrances Breakdown of flavors and fragrances market sales (Billion yen) (FY2022) Source of reference : Japan Fla
Slide 16: IV. Management Policy
1) RS NN MAAN SAL © THASEGAWA CO, LTD. IV. Management Policy 15
Slide 17: Management Policy
Management Policy Become an Organization that takes on challenges Strengthen Proposal Capabilities Focus Areas Promote Reform Concentration and Selection Promote Human Capital Management Accelerate Expansion in Overseas Market Strengthen Sustainability Initiatives Basic Strategies Expand Compounded
Slide 18: V. Global Strategy
1) RS NN MAAN SAL © THASEGAWA CO, LTD. V. Global Strategy
Slide 19: Domestic Strategies
Domestic Strategies Basic Strategy: Expand market share by anticipating new market demand caused by Fragrances declining birthrate and aging population, as well as growing health consciousness 15％ Current initiatives and progress Promote solution sales • Strengthen collaboration between sales, resea
Slide 20: Promote human capital management
Promote human capital management Continue to examine and take improvement measures, considering human resources as capital ⇒ Maximize the value of human resources to increase the mid- to long-term corporate value Combination of management Promotion of human resource strategies and HR strategies educ
Slide 21: Overseas Strategy –U.S.–
Overseas Strategy –U.S.– Basic Strategy: Increase sales in the savory, health, and beverage sectors Current initiatives and progress Realization of • Realize a synergetic effect of the completed merger of THUSA and MISSION MISSION synergies • Promotion of second plant construction plan as part of me
Slide 22: Overseas Strategy –China–
Overseas Strategy –China– Fragrances Basic Strategy: Grow earnings through various measures based on a stronger organizational foundation 20％ Current initiatives and progress • Utilize marketing functions ⇒ Develop strategic approaches to customers, tap unentered sectors and Strengthen sales potenti
Slide 23: Overseas Strategy –Southeast Asia–
Overseas Strategy –Southeast Asia– Basic Strategy: Increase sales through collaboration between manufacturing and sales bases in Malaysia (THKL) and sales sites in Thailand and Indonesia Fragrances 8％ Current initiatives and progress • Acquire sales personnel and strengthen organization for new cust
Slide 24: Basic Policies Related to Business Portfolio
Basic Policies Related to Business Portfolio • Develop the businesses based on three basic strategies: (1) Expand Compounded Flavors and Fragrances Sales, (2) Secure Profits in Domestic Market, and (3) Growth in Overseas Market • Achieve abundant and healthy living through aromas and contribute to t
Slide 25: Summary of Global Strategies
Summary of Global Strategies • Strengthen collaboration between sales, research, and marketing departments under the Business Solutions Division • Speed up R&D and create new value • Focus on the development of flavors to substitute for food ingredients and strengthen Japan response to SDGs • Promot
Slide 26: VI. Medium-Term Three-Year Plan Overview
VI. Medium-Term Three-Year Plan Overview 25
Slide 27: Medium-Term Three-Year Plan (Consolidated)
Medium-Term Three-Year Plan (Consolidated) Expect sales increase by promoting solution sales through strengthening collaboration between sales, T.HASEGAWA research, and marketing departments, strengthening R&D capabilities, and addressing expansion in non-consolidated flavor and fragrance applicatio
Slide 28: Capital Expenditures, Depreciation, and R&D Expenses
Capital Expenditures, Depreciation, and R&D Expenses • T.Hasegawa (non-consolidated) DX promotion and IT reform project Actual: FY2022 Approx. 0.5 billion yen, FY2023 Approx. 0.5 billion yen Plan: FY2024 Approx. 1.0 billion yen, FY2025 Approx. 1.5 billion yen, FY2026 Approx. 1.5 billion yen • T.Hase
Slide 29: VII. Capital Policy
Th BSNS A tek 8 At (© THASEGAWA CO, LTD. VII. Capital Policy
Slide 30: Capital Policy
Capital Policy Basic Policy • Maintain a level of shareholders' equity that will enable us to execute growth investments and appropriately respond to risks, in order to achieve sustainable growth in corporate value and maximize it going forward Policy on Use of Funds • Appropriately use funds, takin
Slide 31: Capital Policy: Shareholder Returns
Capital Policy Shareholder Returns • Strive to return profits to shareholders in accordance with business performance, while also securing the necessary internal reserves to further strengthen the Group's management foundations and engage in future business development • Pay dividends from surplus t
Slide 32: Capital Policy: Sale of Investment Securities
Capital Policy Sale of Investment Securities (Completed) • February 3, 2023 : Published “Notice Concerning Expected Recording of Gain on Sales of Investment Securities (Extraordinary Income)” • Recorded extraordinary gains on sales of investment securities related to the press release for FY2023 [Re
Slide 33: VIII. Basic Policy on IR Activities
Ⅷ．Basic Policy on IR Activities 32
Slide 34: Basic Policy on IR Activities
Basic Policy on IR Activities Established IR department in Corporate Planning Div. to strengthen Basic Policy IR activities and secured opportunities for proactive dialogue Our initiatives • Actively respond to requests for • High foreign ownership individual interviews ↓ • Hold meetings with foreig
Slide 35: IX. Accompanying Materials
Ⅸ．Accompanying Materials 34
Slide 36: Top Companies by Share of Global Flavors and Fragrances Market
Top 10 Companies by Share of Net Sales in the Global Flavors and Fragrances Market Million US$ Company name Country Sales (2022Yr) Market Share 1 IFF U.S. 9,130 26.3% 2 Givaudan Switzerland 7,454 21.4% 3 Firmenich Switzerland 4,946 14.2% 4 Symrise Germany 4,835 13.9% 5 ADM Germany 3,769 10.8% 6 Mane
Slide 37: Top Companies by Share of Japanese Market
Top 10 Companies by Share of Net Sales in the Japanese Flavors and Fragrances Market Others 14.1% FY2022：14.3% Company T Company SI 33.4% 5.8% FY2022：32.5% FY2022：5.5% Company SO 5.9% FY2022: 6.1% Company O 10.6% FY2022：11.2% T.Hasegawa Company G 18.5% 11.7% FY2022：18.5% FY2022：11.9% (As of Mar. 202
Slide 38: Sales Breakdown
Sales Breakdown • The Company specializes in high value-added compounded flavors and fragrances • High-mix production: Sales of approximately 12,000 flavors and fragrances per year (Million yen) T. Hasegawa Company T (Consolidated） (Consolidated） FY ended in Sep. 2023 FY ended in Mar. 2023 Sales Sha
Slide 39: Breakdown of Flavor Segment Customers by Industry
Breakdown of Flavor Segment Customers by Industry • Many sales are to the beverage industry, and sales are seasonal To other industries Approx. 11% To seasoning industry To beverage Approx. 11% industry Approx. 32% To instant noodle industry Approx. 9% To sweet and savory snacks industry To dairy in
Slide 40: Analysis of Changes in Consolidated Statement of Profit
Analysis of Changes in Consolidated Statement of Profit • Operating profit decline factors Mainly due to deterioration in the cost of sales ratio and increase in SG&A expenses (Million yen) 前期 当期 Change 増減 FY2022 FY2023 Factor 要因 (Actual) （実績） (Actual) （実績） 金額 ％ Amount 中国子会社、米国子会社（円安の影響）、当社単体の売上増加 H
Slide 41: Analysis of Changes in Consolidated Balance Sheet
Analysis of Changes in Consolidated Balance Sheet (Million yen) FY2022 FY2023 Change Factor • Increase in cash and cash equivalents: 3,348 million yen Current assets • Increase in Trade receivables: 1,141 million yen Non-current • Increase in property, plant and equipment: 1,562 million yen assets •
Slide 42: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows (Million yen) 前期 FY2022 当期 FY2023 増減 Change 当期の主要科目 Factor ・税金等調整前四半期純利益 9,322百万円 • Profit before income taxes: 9,322 million yen ・減価償却費 • Depreciation:3,700百万円 3,700 million yen Cash flows from 営業活動による • Amortization of912百万円 ・のれん償却額 goodwill: 912 million yen op
Slide 43: Capital Expenditures, Depreciation, and R&D Expenses (Consolidated)
Capital Expenditures, Depreciation, and R&D Expenses (Consolidated) (Million yen) FY2023 FY2023 Progress Plan Actual (%) Capital 6,404 4,256 66.5% Investment Depreciation 3,705 3,700 99.9% & Amortization Amortization 912 912 100.0% of Goodwill R&D 5,316 5,247 98.7% Expenses * Depreciation includes a
Slide 44: T.Hasegawa non-consolidated (Actual)
T.Hasegawa non-consolidated (Actual) (Million yen) FY2022 FY2023 FY2023 Change (actual) (targets revised on August 7,2023) (actual) Yr/Yr Vs. target Amount Share Amount Share Amount Share Amount ％ Amount ％ Net sales 39,174 100.0% 39,700 100.0% 39,711 100.0% 537 1.4% 11 0.0% Cost of sales 23,368 59.7
Slide 45: Consolidated U.S. Subsidiaries (Actual)
Consolidated U.S. Subsidiaries (Actual) * Consolidated statements of profit of the Company's two U.S. subsidiaries (T.HASEGAWA U.S.A., INC. and MISSION FLAVORS & FRAGRANCES, INC.) (Million yen) FY2022 FY2023 Yr/Yr Yen Basis Amount Share Amount Share Amount ％ Net Sales 12,157 100.0% 12,720 100.0% 562
Slide 46: Consolidated Chinese Subsidiaries (Actual)
Consolidated Chinese Subsidiaries (Actual) * Consolidated statements of profit of the Company's two consolidated subsidiaries in China (T.HASEGAWA FLAVOURS AND FRAGRANCES (SHANGHAI) CO., LTD. and T.HASEGAWA FLAVOURS (SUZHOU) CO., LTD.) (Million yen) FY2022 FY2023 Yr/Yr Yen Basis Amount Share Amount
Slide 47: Malaysian Subsidiary (Actual)
Malaysian Subsidiary (Actual) * Statement of profit of T.HASEGAWA FLAVOURS (KUALA LUMPUR) SDN. BHD. (Million yen) FY2022 FY2023 Yr/Yr Yen Basis Amount Share Amount Share Amount ％ Net Sales 1,358 100.0% 1,686 100.0% 328 24.2% Cost of sales 748 55.1% 948 56.2% 200 26.8% Gross profit 610 44.9% 738 43.8
Slide 48: Global Strategy - Actual and Plan by Region
Global Strategy - Actual and Plan by Region T. HASEGAWA Non-consolidated (Billion yen) U.S. (Million US$) 2024 2025 2026 2024 2025 2026 2021 2022 2023 2021 2022 2023 （Plan） （Plan） （Plan） （Plan） （Plan） （Plan） Net Sales 37.3 39.1 39.7 40.4 41.4 43.0 Net Sales 85.4 97.6 91.5 95.8 100.1 104.6 Operating
Slide 49: Medium-Term Three-Year Plan (Consolidated)
Medium-Term Three-Year Plan (Consolidated) （Million yen） FY23（Actual） FY24（Plan） FY25（Plan） FY26（Plan） Amount Share % Amount Share % Amount Share % Amount Share % Net Sales 64,874 100.0% 4.0% 66,500 100.0% 2.5% 68,500 100.0% 3.0% 71,500 100.0% 4.4% Cost of Sales 39,185 60.4% 6.6% 39,070 58.8% -0.3%
Slide 50: Disclaimer
This presentation is based on data as of November 10, 2023, and was created with the intention of providing information on future management plans and results for the second quarter of the fiscal year ending September 30, 2023. The views expressed in this material are those of the Company at the tim