Nissin Foods Holdings Co., Ltd. · TSE:2897

Nissin Foods — FY2017 Earnings Presentation

48 slides from Nissin Foods's earnings presentation, May 16, 2017

  1. Slide 1: Financial Results for FY2017

    Financial Results for FY2017 for the fiscal year ended March 31, 2017 Announced on May 12, 2017 This material was released on May 16, 2017 for the results briefing （2897）

  2. Slide 2: Financial Results for FY2017 and Business Plan for FY2018

    Financial Results for FY2017 for the fiscal year ended March 31, 2017 and Business Plan for FY2018 for the fiscal year ending March 31, 2018 Director, CFO, and Managing Executive Officer Yukio Yokoyama

  3. Slide 3: Executive Summary

    2 Executive Summary Achieve the targets of the first year of the Mid-Term Business Plan 2021(“MTBP 2021”) FY2017 Mgmt. Domestic: Enhance marketing of instant noodles business and lay a foundation of the second pillar of earnings Policy Overseas: Global expansion based on “CUP NOODLES Strategy” and d

  4. Slide 4: Summary of FY2017 Financial Results

    3 FY2017 Summary of FY2017 Financial Results FY2017 FY2016 FY2017 （bil. yen） YoY Change vs. vs. Results YoY Change (%) Revised plan Revised plan Results Revised plan Sales 495.7 +27.6 +5.9% -4.3 -0.9% 468.1 500.0 Operating income 28.6 +2.2 +8.4% +0.8 +2.9% 26.4 27.8 Adjusted operating income＊ 32.9 +

  5. Slide 5: FY2017 Results: Sales Results by Segment

    4 FY2017 Results: Sales Results by Segment （bil. yen） FY2017 FY2016 Results YoY Change YoY Change (%) Results Instant Noodles 269.2 +4.0 +1.5% 265.2 NISSIN FOOD PRODUCTS 228.6 +4.9 +2.2% 223.6 MYOJO FOODS 40.6 -1.0 -2.4% 41.6 Chilled and frozen business 61.8 +2.0 +3.3% 59.8 Confectionery and beverag

  6. Slide 6: FY2017 Results: Operating Income Results by Segment

    5 FY2017 Results: Operating Income Results by Segment （bil. yen） FY2017 FY2016 Results YoY Change YoY Change (%) Results Instant Noodles 29.5 +4.1 +16.3% 25.3 NISSIN FOOD PRODUCTS 27.7 +3.7 +15.5% 24.0 MYOJO FOODS 1.8 +0.4 +30.0% 1.4 Chilled and frozen business 1.9 +1.2 +170.2% 0.7 Confectionery and

  7. Slide 7: FY2017 Analysis of Operating Income: Consolidated

    6 FY2017 Analysis of Operating Income: Consolidated Operating Income 28.6 bil yen（vs. FY2016: +2.2 bil yen） （bil. yen） Decrease factors Increase factors Increase/decrease of marginal profit A：Sales increase +6.5 B：CoGS ratio +5.0 C：Promotional expense ratio -0.9 D：Distribution cost ratio -0.2 Increa

  8. Slide 8: FY2017 Non-operating Income/Expense and Extraordinary Gain/Loss

    7 FY2017 Non-operating Income/Expense and Extraordinary Gain/Loss Figures in parentheses are the results （bil. yen） Major reasons of the FY ended Mar. 31, 2016 （bil. yen）  Non-operating income 6.1（6.8） • Interest income 0.8（0.9） Operating income 28.6 • Dividend income 1.4（1.4） • Gain from sales of

  9. Slide 9: FY2018 Business Plan: Summary of FY2018 Plan

    8 FY2018 Business Plan: Nissin Foods Group: Summary of FY2018 Plan The 2nd year of the MTBP 2021 is the phase of laying the groundwork for growth, in which an increase in overseas sales is the basis of the strategy. FY2018 FY2015 （bil. yen） Plan YoY Change YoY Change Results  Impact from retirement

  10. Slide 10: FY2018 Business Plan: Sales By Business Segment

    9 FY2018 Business Plan: Sales By Business Segment （bil. yen） FY2018 FY2017 Plan YoY Change YoY Change (%) Results Instant Noodles 273.3 +4.1 +1.5% 269.2 NISSIN FOOD PRODUCTS 231.3 +2.7 +1.2% 228.6 MYOJO FOODS 42.0 +1.4 +3.4% 40.6 Chilled and frozen business 63.5 +1.7 +2.8% 61.8 Confectionery and bev

  11. Slide 11: FY2018 Business Plan: Operating Income By Business Segment

    10 FY2018 Business Plan: Operating Income By Business Segment （bil. yen） FY2018 FY2017 Plan YoY Change YoY Change (%) Results Instant Noodles 29.9 +0.4 +1.5% 29.5 NISSIN FOOD PRODUCTS 28.0 +0.3 +1.1% 27.7 MYOJO FOODS 1.9 +0.1 +6.5% 1.8 Chilled and frozen business 1.9 +0.0 +0.2% 1.9 Confectionery and

  12. Slide 12: FY2018 Analysis of Operating Income: Consolidated

    11 FY2018 Analysis of Operating Income: Consolidated Operating Income: 34.0 bil. yen（vs. FY2017: +5.4 bil yen） （bil. yen） Decrease factors Increase factors Increase/decrease of marginal profit A：Sales increase +7.6 B：CoGS ratio -1.6 C：Promotional expense ratio +0.2 D：Distribution cost ratio +0.7 Inc

  13. Slide 13: FY2018 Business plan: Investment Plan, and Financial and Capital Policies

    12 FY2018 Business plan: Investment Plan, and Financial and Capital Policies Capital Investment （bil. yen） Plan for FY2017 FY2018 Five Year (Plan)  Domestic Capital Investment 150.0 36.3 65.0-75.0 − Investment aimed at saving labor and strengthening safety/security management in the instant noodle

  14. Slide 14: Shareholder Returns (Dividends)

    13 FY2018 Business plan: Investment Plan, and Financial and Capital Policies Shareholder Returns （Dividends）  Dividend increase reflecting favorable financial performance, with an aim for achieving average payout ratio of 40% or above  FY2017 Dividend increase 1H: 40 yen, Year-end : 45 yen （5 yen

  15. Slide 15: Medium-Term Business Plan 2021 Review of the First Year and Strategies from the Second Year

    14 Medium-Term Business Plan 2021 Review of the First Year and Strategies from the Second Year Representative Director, President and CEO Koki Ando

  16. Slide 16: Mid-term Plan FY2021 KPIs and Financial Targets

    15 Mid-term Plan FY2021 KPIs and Financial Targets Setting out KPI based on “earning power through operations” and “value in capital markets” (market capitalization), as requirements for “recognition as a global company” FY2016 FY2017 FY2021 Results Reference Targets J-GAAP J-GAAP IFRS standards Ear

  17. Slide 17: Mid-term Plan Progress of Major KPIs: Market Capitalization

    16 Mid-term Plan Progress of major KPIs  Market capitalization Expanded favorably toward 1 trillion yen in FY2021 （bil. yen） Market capitalization: Market base 1,200.0 Market capitalization: After deduction of treasury shares 1 tri. 1,000.0 Mid-term Plan KPI FY2021: 1 trillion yen 800.0 725.0 694.2

  18. Slide 18: Mid-term Plan Progress of Major KPIs: Sales, Adjusted Operating Income

    17 Mid-term Plan Progress of Major KPIs  Sales  Adjusted operating income Steady growth for FY2021 Exceeded the plan in FY2017 Mid-term Plan KPI Mid-term Plan KPI FY2021: 600.0 bil yen FY2021: 40.0 bil yen （bil. yen） （J-GAAP） （bil. yen） （J-GAAP） 700.0 45.0 600.0 40.0 40.0 600.0 520.0 33.4 495.7 35

  19. Slide 19: Mid-term Plan Progress of Major KPIs: Net Income, Adjusted EPS

    18 Mid-term Plan Progress of Major KPIs  Net income  Adjusted EPS Exceeded the plan in FY2017 Exceeded the plan in FY2017 Mid-term Plan KPI Mid-term Plan KPI FY2021: 33.0 bil yen CAGR 10% or higher （bil. yen） （IFRS standards） （IFRS standards） Extraordinary gain （yen） 35.0 from Brazil consolidation

  20. Slide 20: Mid-term Plan Progress of Major KPIs: ROE, Payout Ratio

    19 Mid-term Plan Progress of Major KPIs  ROE  Payout Ratio Aim for 8% or higher in FY2021 Aim for 40% or higher in mid-term average Mid-term Plan KPI Mid-term Plan KPI FY2021: 8.0% or higher 5 years average: 40% or higher 10.0% Incl. Extraordinary gain from Brazil 100 45% 9.0% consolidation 8.0% 3

  21. Slide 21: Key Strategy Themes to Achieve Targets

    20 Medium-Term Business Plan Key Strategy Themes to Achieve Targets • Focusing on five key themes in pursuit of business profitability Domestic Overseas 1 Next Promoting Instant noodles stage Global Branding 3 2 Focusing on priority Business Laying stronger overseas locations foundations for our dom

  22. Slide 22: Promoting Global Branding: Globalize CUP NOODLES

    21 Strategic Theme 1 Promoting Global Branding ＞ Globalize CUP NOODLES  Overseas total CUP NOODLES sales volume (servings) ＋3％ Mid-term Plan KPI vs. FY2016 (3/16) Up 50% 3/11 3/12 3/13 3/14 3/15 3/16 3/17 3/18 3/19 3/20 3/21 Indonesia Europe India Renewal and price Renewal in July Renewal in Septem

  23. Slide 23: Promoting Global Branding: Globalize CUP NOODLES by region

    22 Strategic Theme 1 Promoting Global Branding ＞ Globalize CUP NOODLES  Europe  U.S. • Adopt ECO cup（plan） in Jul. 2017 • Product renewal in line with consumer demand in Jul. 2016 Upgrade the brand value of CUP NOODLES 34％ (Less sodium. No added MSG*, No artificial flavors） ＊Contains small amounts

  24. Slide 24: Focusing on Priority Locations: Brazil

    23 Strategic Theme 2 Focusing on Priority Locations：BRICs  Brazil Cup/Bag instant noodle composition (unit base） Nissin’s market share (unit base） Worldwide average Brazil market  Brazil Nissin CY2016 CY2020  Others Cup type 3% 37% 21% Cup type US$8,727 63% 10% Bag type 79% Overwhelming share Bag

  25. Slide 25: Focusing on Priority Locations: India

    24 Strategic Theme 2 Focusing on Priority Locations：BRICs 8 metropolitans Population Instant noodle market size  India 2011 Extended UA （000’ people） 100 million (unit base） servings Industry-wide Delhi 21,753 60.0 voluntary recall 50.0 1.3 bil. Greater Mumbai 20,748 40.0 people Kolkata 14,618 30.0

  26. Slide 26: Focusing on Priority Locations: China

    25 Strategic Theme 2 Focusing on Priority Locations：BRICs Instant noodle market of tall cup-type  China 100 million servings Instant noodle market (unit base） (unit base） 400 300 1.4 bil. people 200 Large population 100 38.5 bil. servings/year 0 ’13 3/14 ’14 3/15 ’15 3/16 ’16 3/17 3/15 3/16 3/17 

  27. Slide 27: Laying stronger foundations for our domestic profit base

    26 Strategic Theme 3 Laying stronger foundations for our domestic profit base  Developing the domestic instant noodles market Retention of Expand female senior consumers consumers Approach next Cater to loyal users generation There still is a lot of room to expand Japanese instant noodles market •

  28. Slide 28: Laying stronger foundations: Investment for plant upgrade

    27 Strategic Theme 3 Laying stronger foundations for our domestic profit base  Investment for upgrade of plant • Nissin Food Products: Construct a new Kansai Plant Total capex amount 57.5 bil. Yen （plan） Increase production efficiency for medium- and long- term sustainable profit growth  Automatio

  29. Slide 29: Establishing a Second Primary Earning Source

    Establishing a Second Primary Earning Source ＞Confectionery/ 28 Strategic Theme 4 Chilled and frozen Food/ Beverage Business • Solidifying presence in the cereal market  Confectionery and Cereal Business  Better profitability by premiumizing Granola • Comprehensive strength as conf. biz.  Improve

  30. Slide 30: Progress of Confectionery, Chilled and Frozen Food, Beverage Businesses

    Establishing a Second Primary Earning Source＞Confectionery/ 29 Strategic Theme 4 Chilled and frozen Food/ Beverage Business  Progress of Confectionery, Chilled and frozen Food, Beverage businesses combined • Target to achieve 132.3 bil. yen sales by organic growth only • Target to achieve 5.2 bil.

  31. Slide 31: Developing and Strengthening Human Resources for Global Management

    30 Strategic Theme 5 Developing and Strengthening Human Resources for Global Management  Development and improvement of global human resources • Recruit competent college graduates Global “SAMURAI” Academy • Develop A-class human resources through employee education Catalyst Trainee schemes: Send e

  32. Slide 32: Third-party Evaluation: Value Improvement of NISSIN Group Brands

    31 Third-party Evaluation Value Improvement of NISSIN Group Brands Randstad Award 2017 2016 TV commercial Employer Brand Likability Ranking Ranking of attractiveness as workplace Compiled by monthly TV commercial likability research for 12 months Food industry NISSIN FOODS HOLDINGS NISSIN FOOD PRODU

  33. Slide 33: APPENDIX 1

    APPENDIX 1 Financial Results for FY2017 (for the fiscal year ended March 31, 2017) and Business Plan for FY2018 (for the fiscal year ending March 31, 2018)

  34. Slide 34: FY2017 Sales Contribution by Segment

    33 FY2017 Sales Contribution by Segment Segment Impact Major Factor （bil. yen ） NISSIN Cup-type: Core brands (Cup Noodles series, Donbei series, FY2017 Sales 468.1 FOOD PRODUCTS +4.9 Nissin Yakisoba U.F.O. series) contributed to sales: +4% Bag-type: Decreased due to market shrinkage: -7% NISSIN FOOD

  35. Slide 35: FY2017 Operating Income Contribution by Segment

    34 FY2017 Operating Income Contribution by Segment （bil. yen ） Segment Impact Major Factor FY2017 Sales 26.4 NISSIN FOOD +3.7 +: Sales, CoGS ratio, Depreciation., Advertisement, Subsidiaries - : Higher promotional costs by product mix change, general expenses PRODUCTS NISSIN FOOD PRODUCTS +3.7 MYOJO

  36. Slide 36: FY2017 Analysis of Operating Income: Domestic/Overseas

    35 FY2017 Analysis of Operating Income: Domestic/Overseas Domestic YoY change Decrease factors Increase factors  Change of CoGS ratio （bil. yen） + CoGS ratio improvement: lower raw material（+2.3） and fuel A：Sales increase （Domestic） +4.5 cost, and improved productivity Increase/decrease of marginal

  37. Slide 37: FY2018 Domestic Businesses: Management Policy (1)

    36 FY2018 Domestic Businesses: Management Policy (1) NISSIN FOOD PRODUCTS Generate cash and enhance profitability  Challenge to be a 100-year brand company • Enhance major brands of cup-type noodles further • Strong promotion of “Chicken Ramen, ” with which the company was founded. CUP NOODLE CY201

  38. Slide 38: FY2018 Domestic Businesses: Management Policy (2)

    37 FY2018 Domestic Businesses: Management Policy (2) Nissin Chilled Foods Nurture value-added brands and leverage technologies  Upgrade brand status in a variety of genre • Ramen: Value-added products • Yakisoba: “Futomen Yakisoba” brand Gyoretsu-no-dekiru- Tsuke-men-no- mise tatsujin Maze men  De

  39. Slide 39: FY2018 Domestic Businesses: Management Policy (3)

    38 FY2018 Domestic Businesses: Management Policy (3) Promote growth with the growth business (Granola) and the starting business Nissin Cisco (Confectionery) as a pair of wheels  Cereal business • Differentiate from the competition by promoting “high quality” and “healthiness” • Increase product li

  40. Slide 40: FY2018 Overseas Businesses: Management Policy (1)

    39 FY2018 Overseas Businesses: Management Policy (1) The Americas Cater to changes of the market and enhance CUP NOODLES strategy in Brazil  U.S. Renewal in the second • Product development and renewal in line with consumer demand quarter of • Expand sales of existing brands and enhance profit base

  41. Slide 41: FY2018 Overseas Businesses: Management Policy (2)

    40 FY2018 Overseas Businesses: Management Policy (2) Asia Focus on growth segments and enhance CUP NOODLES brand  India • Expand sales of “CUP NOODLES” primarily at eight metropolitans • Improve store shelf coverage ratio and turnover ratio of bag-type products  Thailand CUP NOODLES Top Ramen • Ap

  42. Slide 42: FY2018 Analysis of Operating Income: Domestic/Overseas

    41 FY2018 Analysis of Operating Income: Domestic/Overseas YoY change Domestic （bil. yen）  Sales increase Decrease factors Increase factors ＋ Impact from 8.8 bil. yen sales increase （Domestic）  Change of CoGS ratio Increase/decrease of marginal profit A：Sales increase +2.5 （Overseas） +4.7 ＋ Raw mat

  43. Slide 43: APPENDIX 2

    APPENDIX 2 Medium-Term Business Plan FY2021 Review of the first year and strategy from the second year

  44. Slide 44: Prepare for future risks: Safety and security, natural disasters

    43 Solve issues Prepare for future risks  Safety and security  Large-scale natural disasters Core element of food product manufacturer BCP • Establishing a double-checking system to inspect • Supplying products in an emergency is part of the social products from each factory at the Global Food res

  45. Slide 45: ESG activities

    44 ＥＳＧ ESG activities Mid-term Environmental Targets to be achieved by FY2021 Restructuring way of working Energy conservation and measures To free the workplace of long working hours to reduce global warming • Ensure that all lights are out at 10:00 p.m. on weekdays GHG (CO2) emissions caused by bu

  46. Slide 46: Progress of KPIs by business segment under J-GAAP -1

    45 Mid-term Plan Progress of KPIs by business segment under J-GAAP -1 The Americas Sales Operating income (bil. Yen) (bil. Yen) Operating 100.0 Brazil consolidation 7.0 Brazil consolidation 営業利益 income 10% 6.4 （1H only） （1H only） OPM 9% 90.0 80.8 6.0 +11.9 +0.7 7.9% 80.0 8% 67.0 5.0 7% 70.0 60.4 60.

  47. Slide 47: Progress of KPIs by business segment under J-GAAP -2

    46 Mid-term Plan Progress of KPIs by business segment under J-GAAP -2 Operating Asia Sales income (bil. Yen) (bil. Yen) Operating 25.0 24.1 1.0 営業利益 income 2.2% 5% OPM 0.5 0% 20.0 (2.0) (1.4) (1.3) 0.5 0.0 3/16 3/17 3/18(Plan) 3/19 3/20 3/21( E ) -5% 15.0 (0.5) -10% 12.0 (1.0) (10.5%) 10.0 -15% 9.0

  48. Slide 48: NISSIN FOODS HOLDINGS CO., LTD.

    Information in this material is not intended to solicit sales or purchase of NISSIN FOODS HOLDINGS stock shares. The comments and estimates in this document are based on the company’s judgment at the time of publication and their accuracy is not guaranteed. They are subject to change without notice

Nissin Foods Holdings — FY2017 Earnings Presentation on 6ix