Ezaki Glico Co., Ltd. · TSE:2206

Ezaki Glico — FY2019 Earnings Presentation

37 slides from Ezaki Glico's earnings presentation, Feb 27, 2020

1. Slide 1: Glico Group Financial Results for the Fiscal Year Ended December 31, 2019

   [Notes of caution] te This documents is an English translation of the Japanese original. In the event of any differences BULTc fie kk or inconsistencies between the Japanese and English versions, the Japanese language version G 0 e shall take precedence. Glico Group Financial Results For the Fiscal

2. Slide 2: Contents

   Contents I. FYE December 2019 Earnings Report P. 3 – 19 II. FYE December 2020 Earnings Forecast P.20 – 31 (Supplemental Materials) P.32 – 36 ©2020 Ezaki Glico Co., Ltd. All Rights Reserved 2

3. Slide 3: I. FYE December 2019 Earnings Report

   I. FYE December 2019 Earnings Report ©2020 Ezaki Glico Co., Ltd. All Rights Reserved 3

4. Slide 4: Summary of FYE December 2019 Performance

   Summary of FYE December 2019 Performance Grice 1. Both domestic and overseas business achieved increases, and consolidate net sales increased by 1.2% YoY. @ Although Milk and Dairy Products continued to struggle in FYE Dec. 2019, domestic business achieved growth with contributions increased revenue

5. Slide 5: Status of Net Sales and Income

   Status of Net Sales and Income  Net sales: Both domestic and overseas business achieved increases, and a YoY increase of 1.2% was posted for the entire consolidated Group.  Operating income: Operating income fell -2.1% YoY, in part due to decreased revenues in the Ice Cream business in the first h

6. Slide 6: Status of Operating Income

   Status of Operating Income (Unit: 100 million yen) FYE Mar. 2019 Results Sales FYE Dec. 2019 Sales (following Ratio Results Ratio adjustment) % % Net sales 2,848 100.0 2,882 100.0 Cost of sales 1,484 52.1 1,501 52.1 Gross profit 1,365 47.9 1,381 47.9 Freight and charges 242 8.5 249 8.6 Sales promoti

7. Slide 7: Factors of Increases (Decreases) in Operating Income

   Factors of Increases (Decreases) in Operating Income Giice. Change from previous period ™@ On the domestic side, although increased net sales, a lower sales promotion ratio, and lower advertising expenses were factors that increased operating income, fluctuations in raw material prices and increased

8. Slide 8: Impact of Raw Material Cost Fluctuations on Costs

   Impact of Raw Material Cost Fluctuations on Costs  FYE Dec. ’19 results Although prices decreased for oils and fats and sugars, overall procurement costs for the Group rose by 300 million yen YoY due to increased prices for paper containers, cardboard, etc.  FYE Dec. '20 forecast Price increases a

9. Slide 9: Status of Net Sales by Segment

   Status of Net Sales by Segment  Despite severe results for Milk and Dairy Products, domestic business achieved an increase of 0.7% YoY that was driven by Confectioneries and Ice Cream.  Overseas business continued to post an increase from the previous period (4.1% growth based on local currencies)

10. Slide 10: Status of Operating Income by Segment

    Status of Operating Income by Segment  Despite a strong showing by Confectioneries, the domestic segment posted a year-on-year decrease of 200 million yen that was partly the result of a decrease in Ice Cream attributable to the cool summer in the first half. (Unit: 100 million yen) FYE Mar. 2019 R

11. Slide 11: Domestic Business: Situation by Category

    Domestic Business: Situation by Category G%«>- Category Chocolate Cookies Ice Cream Yoghurt Drinking Milk Infant Formula Health Net sales (% of previous period) 34.8 billion yen (+5.4%) 20.0 billion yen (+1.6%) 73.4 billion yen (+3.2%) *2 15.7 billion yen (—5.7%) 20.6 billion yen (—8.3%) 4.0 billion

12. Slide 12: Domestic Business: Situation by Category (Chocolate/Cookies)

    Domestic Business: Situation by Category . (Chocolate/Cookies) piss Chocolate category Chocolate Market Net Sales wh FYE Ma S19 (for eran dust \ en jar. ‘ollowing adjustmen ; - (Intage SRI) oF Chocolate category - net sales are set as 100) Unit: 100 million yen var 00 million yen 450 FYE Mar. '19 (f

13. Slide 13: Domestic Business: Situation by Category (Ice Cream/Yoghurt)

    Domestic Business: Situation by Category : (Ice Cream/Yoghurt) pice Ice Cream category Ice Cream Market Net Sales Net Sales by Brand (Intage SRI) - Ice Cream category - (*When FYE Mar. '19 (following adjustment) Unit: 100 million yen Unit: 100 million yen net sales are set as 100) 4,000 <7 7% 800 FY

14. Slide 14: Domestic Business: Situation by Category (Drinking Milk/Infant Formula)

    Domestic Business: Situation by Category . (Drinking Milk/Infant Formula) Gpice Drinking Milk category Drinking Milk Market Net Sales Cafe Ole Net Sales (Intage SRI) - Drinking milk category - (‘When FYE Mar. ‘19 (following adjustment) Unit: 100 million yen Unit: 100 million yen net sales are set as

15. Slide 15: Overseas Business: Region-Specific Net Sales and Operating Income

    Overseas Business: Region-Specific Net Sales and Operating Income ◆China (Unit: 1 million CNY) FYE Dec. 2018 FYE Dec. 2019 FYE Dec. 2019 Change from Change from Results Forecast Results Previous Period Forecast (%) (%) Net sales 1,598 1,642 1,652 ＋3.3 ＋0.6 Operating income 78 71 99 ＋26.8 ＋39.8 ◆ASEA

16. Slide 16: China Glico

    China Glico @ |n 2019, China’s cookie market grew 3.1% compared to the previous year. Glico’s net sales posted 1,652 million CNY or +3.3% compared to the previous year based on local currencies. @ During FY2019, the prices of "Pejoy"(April), "Pretz"(July), and "Pocky"(August) were raised. There was

17. Slide 17: China: Online

    China: Online Grice m= In 2019, the EC market in China’s cookie market grew 20.4% compared to the previous year. m@ Campaigns within Alibaba, JD.com, and other sites were actively obtained by levering Glico’s marketing and innovation. This simultaneously brought higher sales/brand recognition and br

18. Slide 18: ASEAN

    ASEAN Grice m@ The company continued aggressive marketing investment to solidify its business foundation during FY2019. Net sales continued their trend from the first half by also achieving Net sales in ASEAN (Includes powdered milk in Vietnam) double-digit growth in the second half. Full-year net s

19. Slide 19: U.S.A.

    U.S.A. Grice m@ The FY2019 net sales of Ezaki Glico USA, Glico’s local subsidiary in the U.S. confectionery business, increased by 12.7% year on year to 64 million USD based on local currencies, as the company continued to expand distribution to American retailers. m™ The company implemented active

20. Slide 20: II. FYE December 2020 Earnings Forecast

    II. FYE December 2020 Earnings Forecast ©2020 Ezaki Glico Co., Ltd. All Rights Reserved 20

21. Slide 21: Three Mainstays of Glico's Growth Strategy

    Review of FYE December 2019 and Future Initiatives (Domestic) Three Mainstays of Glico’s Growth Strategy 1. Rebuild by concentrating on core brands and aiming for continuous growth of long-selling brands 2. Achieve continuous growth of sales of added-value health brands. 3. Create and expand new hab

22. Slide 22: FYE December 2019 Initiatives (1)

    FYE December 2019 Initiatives (1) Giico. Concentration on core brands: Rebuilding to achieve continuous growth of long-selling brands 1. Fundamental product renewal of base SKU V-shaped recovery with Pretz flagship 3SKU Double-digit sales growth through the full year 2. Marketing innovation of base

23. Slide 23: FYE December 2019 Initiatives (1): Brands to Receive Special Attention

    FYE December 2019 Initiatives (1): Brands to Receive Special Attention Concentration on core brands: Rebuilding to achieve continuous growth of long-selling brands “BifiX” Through renewal to “rejuvenate the intestines” with BifiX bacteria × dietary fiber inulin, further accelerate base + added-funct

24. Slide 24: FYE December 2019 Initiatives (2)

    FYE December 2019 Initiatives (2) Achieve continuous growth of sales of added-value health brands (1) Double-digit growth through the full year for “GABA” and “LIBERA” (2) Double-digit growth for the fifth consecutive year and market share of at least 90% for “Almond Koka” (3) Recovery from poor sal

25. Slide 25: FYE December 2019 Initiatives (3)

    FYE December 2019 Initiatives (3) Grice Sinner ofthe pone Nikkei Superior Products and /Sales of a “milk carton nipple” that lets babies drink liquid milk rvices Aw: al . Nikkei MJ Award of Excellence” {Lower Disaster straight from the package ieee “Chu-Chu Nipple for Milk Cartons” by JEX Co., Ltd.,

26. Slide 26: Net Sales and Income Forecast

    Net Sales and Income Forecast  Net sales: We forecast a significant increase in net sales by overseas business. For domestic business, we forecast increases in net sales particularly in Ice Cream and Confectioneries. We forecast a 3.5% increase year on year throughout the consolidated Group.  Oper

27. Slide 27: Operating Income Forecast

    Operating Income Forecast (Unit: 100 million yen) FYE Dec. 2019 Results FYE Dec. 2020 Sales Ratio Sales Ratio (following Forecast % % adjustment) Net sales 3,537 100.0 3,660 100.0 Cost of sales 1,860 52.6 1,902 52.0 Gross profit 1,677 47.4 1,758 48.0 Freight and charges 313 8.8 320 8.7 Sales promoti

28. Slide 28: Factors of Increases (Decreases) in Operating Income

    Factors of Increases (Decreases) in Operating Income Grice Change from previous period = Domestically, although SG&A expenses are expected to increase, higher profits are forecasted overall due to increased earnings attributable to higher net sales and cost reductions from “fluctuation in compositio

29. Slide 29: Net Sales Forecast by Segment

    Net Sales Forecast by Segment  For domestic business, we forecast increases primarily in the Confectioneries, Ice Cream and Other segments.  The Overseas segment will strive to achieve significant increases. (Unit: 100 million yen) FYE Dec. FYE Dec. 2019 FYE Dec. 2019 Change from FYE Dec. Change f

30. Slide 30: Operating Income Forecast by Segment

    Operating Income Forecast by Segment  Although we expect operating income to decrease in the Milk and Dairy Products segment, we forecast increases in the Confectioneries and Food Products, Ice Cream, and Overseas segments and a year-on-year increase of 1.7 billion yen for the entire consolidated G

31. Slide 31: Overseas Business: Region-Specific Net Sales and Operating Income Forecast

    Overseas Business: Region-Specific Net Sales and Operating Income Forecast ◆China (Unit: 1 million CNY) FYE Dec. 2019 FYE Dec. 2019 FYE Dec. 2020 Change from FYE Dec. 2020 Change from 1H Results Results 1H Forecast Previous Forecast Previous (Jan. to Jun. 2019) (Jan. to Dec. 2019) (Jan. to Jun. 2020

32. Slide 32: TTM Currency Rate

    Supplemental Materials TTM Currency Rate USD EUR THB CNY 100KRW 100IDR 3/31 112.68 127.70 3.19 17.39 9.86 0.85 6/30 102.91 114.39 2.93 15.46 8.96 0.79 2016 9/30 101.12 113.36 2.91 15.14 9.17 0.78 12/31 116.49 122.70 3.24 16.76 9.68 0.87 3/31 112.19 119.79 3.26 16.29 10.04 0.84 6/30 112.00 127.97 3.2

33. Slide 33: Supplemental Materials: Net Sales by Category

    Supplemental Materials Net Sales by Category Glico Segment Category Chocolate (including “Pocky”) Confectioneries Cookies (including “Pretz”) and Food Food products Products Other Total Ice cream, wholesale subsidiaries Ice Cream Total Yoghurt Drinking Milk Milk and Dairy __ Fruit juices, Carbonated

34. Slide 34: Status of Balance Sheet

    Supplemental Materials Status of Ba ance Sheet Glico m@ Net worth ratio : 61.4% (end of March 2019) — 62.0% (end of December 2019) 817 1,802 1,683 1,595 Assets Major account items D 2 oO Oo D oO ~ = oO [= =) oO 807 Non-current assets Cash and deposits Notes and accounts receivable Securities Invento

35. Slide 35: Status of Cash Flows

    Supplemental Materials Status of Cash Flows (Unit: 100 million yen) FYE Mar. 2016 FYE Mar. 2017 FYE Mar. 2018 FYE Mar. 2019 FYE Dec. 2019 Results Results Results Results Results Cash flows from operating 177 296 315 203 174 activities Cash flows from investing ー138 ー141 ー250 ー87 ー91 activities FCF 3

36. Slide 36: Capital Investments, Depreciation, and R&D Expenditures

    Supplemental Materials Capital Investments, Depreciation, and R&D Expenditures Grice Capital investment total Confectioneries and Food Products Ice Cream Milk and Dairy Products Food Ingredients Overseas business Other Investment and lending to unconsolidated subsidiaries System investments Total of

37. Slide 37: Notes of caution

    [Notes of caution] *Current Glico and Glico Group plans, forecasts, and initiatives indicated in these materials reflect determinations made based on information available at the present time. As such, this information may include major risks and uncertainties. Please note that actual performance ma

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