Amita Holdings Co., Ltd. · TSE:2195
Amita — FY2023 Earnings Presentation
63 slides from Amita's earnings presentation, Feb 22, 2024
Slide 1: Earnings Briefing for Fiscal Year Ended December 31, 2023
Earnings Briefing for the Fiscal Year Ended December 31, 2023 (FY 2023) February 22, 2024 AMITA HOLDINGS CO., LTD. (Stock code: 2195 on the Growth Market of the Tokyo Stock Exchange) © 2024 AMITA HOLDINGS CO., LTD. All Rights Reserved.
Slide 2: Review of the Business Development Phase from FY 2021 through 2023
Review of the Business Development 01 Phase from FY 2021 through 2023 KUMANO Eisuke Chairman and Chief Visionary Officer (CVO) AMITA HOLDINGS CO., LTD. © 2024 AMITA HOLDINGS CO., LTD. All Rights Reserved. 2
Slide 3: AMITA's Mission
AMITA's Mission AMITA is committed to achieving a sustainable society in which natural and relational capital will be enhanced in a virtuous circle as economy and society grow. March 2011 March 2022 Updated its Article of Announced its commitment to pursuing stakeholder- Incorporation to redefine th
Slide 4: AMITA's Long-Held Approach to Business Management
AMITA’s Long-Held Approach to Business Management Invest proactively in developing and providing industry- leading commercial solutions to unmet social needs Identified market needs Red ocean market ＝ Intense price competition AMITA identifies unmet social needs and invests proactively in providing
Slide 5: AMITA's History of Providing Industry-leading Commercial Solutions
AMITA’s History of Providing Industry-leading Commercial Solutions to Unmet Social Needs 1980 Social Increasing public demand for anti-pollution measures; soaring issue procurement costs of materials in a financial slump AMITA’s Closed-loop recycling of industrial waste and commercial byproducts Soc
Slide 6: Review of the Business Development Phase from FY 2021 through 2023
Review of the Business Development Phase from FY 2021 through 2023 2030 AMITA Group to establish the Social Systems Design Business 2027 Achievements AMITA Group to celebrate its We aggressively developed new service products and pursued 2030 strategic partnerships with others to step up our efforts
Slide 7: Changes in Market Environment and Social Needs in Japan
Changes in a Market Environment and Social Needs Emerging in Japan, Resulting from Social Volatility Externally Impact of increasingly serious climate change, resource depletion, and shrinking population ► Disruption in supply and distribution chains due to climate change, international conflicts, a
Slide 8: Linear Business Models of the post-industrial-revolution period
Linear Business Models that came into vogue during the post-industrial-revolution period... Industrial model Found in the auto and steel industries Linear business model Reliable inputs continually generate reliable outputs. Reliable Reliable inputs outputs Pursue business growth to ensure a continu
Slide 9: Nonlinear Business Models: But how can we manage them?
and are being replaced by ecosystem-like Nonlinear Business Models that remain relevant even in an era of less reliable and stable supply of materials. Found in e-commerce sites and Ecosystem-like model matching services Emerging economic driver Unreliable, unstable, and irregular: Characterized by
Slide 10: AMITA's strategy
Align several nonlinear business models into a larger linear model and pursue the best interests of the whole Example: A customer-loyalty ecosystem Aligning nonlinear business models Bring nonlinear business models together to reduce risks and into a larger linear model achieve greater synergy among
Slide 11: Social Systems Design Business
In FY 2021, we consolidated our legacy businesses into the Social Systems Design Business. Integrating nonlinear business models to a larger linear model to achieve maximum return on minimum investment AMITA’s conventional business AMITA’s transformed business Clients Cloud-based environmental manag
Slide 12: Our two core solutions to develop a sustainable market
Our two core solutions to develop a sustainable market 01 02 MEGURU STATION® Assisting businesses in achieving greater corporate sustainability Resource-collection site that promotes mutually supportive and creating new businesses engagement among community residents and provides comprehensive solut
Slide 13: Five Key Strategies during the Business Development Phase
Five Key Strategies AMITA Pursued during the Business Development Phase from FY 2021 through 2023 Strategy Maximize the sales opportunities for Strategy our service products and solutions 02 Sales strategy 03 Organizational strategy Make greater use of inbound marketing to Convert sustainability nee
Slide 14: Achievement in Relationship Building during the Business Development Phase
Achievement in Relationship Building during the Business Development Phase FY 2020 Established a cross-industry corporate alliance to drive a As of May 2020* As of February 22, 2024 circular economy. 11corporate members 59 corporate members (J-CEP) See page 38 *K-CEP, the predecessor of J-CEP, estab
Slide 15: Reassessing Our Sales and Product Strategies
Reassessing Our Sales and Product Strategies: Slow in signing clients to project contracts Our five key strategies proved effective in creating the need for greater corporate Achievements sustainability among businesses. and challenges in FY 2023 While we received constant inquiries about Cyano Proj
Slide 16: Reassessing Our Organizational Strategy
Reassessing Our Organizational Strategy: Slow in transforming AMITA into a solid profit-generating organization Employees were slow in embracing the five strategies for better managing fast-changing business Challenges in environments and in shifting their mindsets to act on them. FY 2023 We failed
Slide 17: Consolidated Financial Results for FY 2023
Consolidated Financial Results for 02 FY 2023 SUETSUGU Takahide President and Chief Integrated Operations Officer (CIOO) AMITA HOLDINGS CO., LTD. © 2024 AMITA HOLDINGS CO., LTD. All Rights Reserved. 17
Slide 18: Financial Results for FY 2023: Updated Guidance
Financial Results for FY 2023: Updated Guidance We downgraded our guidance for FY 2023 as shown below: ► As businesses rescheduled the implementation of their ESG initiatives due to changing business environments, we signed fewer corporate clients than expected to Cyano Project contracts. In additio
Slide 19: Financial Results for FY 2023: YoY Changes
Financial Results for FY 2023: YoY Changes (In millions of yen; amounts rounded down to the nearest million yen) FY 2022 results FY 2023 results YoY change (Percentage change) Net sales 4,824 4,536 -288 (-6.0%) SG&A expenses 1,527 1,665 +137 (+9.0%) Operating profit 609 472 -137 (-22.6%) Ordinary pr
Slide 20: Financial Results for FY 2023: Year-end Dividend
Financial Results for FY 2023: Year-end Dividend We have set the year-end dividend rate at 4.00 yen for FY 2023, unchanged from the initial guidance. FY 2022 FY 2023 Record date December 31, 2022 December 31, 2023 Dividend rate 3.00 yen (Dividend payout ratio: 9.9%) 4.00 yen (Dividend payout ratio:
Slide 21: Abbreviated Consolidated Balance Sheet
Abbreviated Consolidated Balance Sheet (In millions of yen; amounts rounded down to the nearest million yen) As of December 31, 2022 As of December 31, 2023 YoY change Current assets 2,769 3,838 +1,068 Assets Non-current assets 2,054 2,337 +282 Total assets 4,824 6,175 +1,351 Current liabilities 1,2
Slide 22: Abbreviated Consolidated Statement of Cash Flows
Abbreviated Consolidated Statement of Cash Flows (In millions of yen; amounts rounded down to the nearest million yen) FY 2022 results FY 2023 results YoY change Net cash provided by operating activities 585 725 +140 Net cash provided by (used in) investing (69) (441) -371 activities Net cash provid
Slide 23: Key Financial Metrics
Key Financial Metrics Note: Effective at the beginning of FY 2022, the Company adopted the Accounting Note: Effective at the beginning of FY 2022, the Company adopted the Accounting Operating profit margin (%) Standard for Revenue Recognition. Ordinary profit margin (%) Standard for Revenue Recognit
Slide 24: Actions to Increase AMITA's Enterprise Value
Financial Actions to Increase AMITA’s Enterprise Value Topic_01 We intend to bolster our business performance and keep shareholders and investors well informed as part of our efforts to increase our enterprise value. Better business FY 2024 performance AMITA’s enterprise value AMITA’s stock price Up
Slide 25: Canceled Share Acquisition Rights to Raise Funds
Financial Canceled Share Acquisition Rights to Raise Funds Topic_02 We have canceled share acquisition rights after reviewing our capital policy and taking into consideration a projected market environment, our stock price performance, and the number of exercised share acquisition rights to date. Up
Slide 26: Business Achievements in FY 2023
03 Business Achievements in FY 2023 SUETSUGU Takahide President and CIOO AMITA HOLDINGS CO., LTD. © 2024 AMITA HOLDINGS CO., LTD. All Rights Reserved. 26
Slide 27: Major Business Achievements in FY 2023
Major Business Achievements in FY 2023 Continued to provide businesses with integrated 01 assistance in transition strategy, including Cyano Project for achieving greater corporate sustainability. Entered into partnership in waste management 02 to establish a joint venture with the Sumitomo Mitsui F
Slide 28: AMITA Group's Key Initiatives and Actions Undertaken in FY 2023
AMITA Group's Key Initiatives and Actions Undertaken in FY 2023 Jan. 5 Mar. 23 Jul. 27 • Company-wide BPR project launched, assisted by generative AI solutions. • Group structure realigned. • New president of AMITA HOLDINGS appointed. • AMIDAO CORPORATION Two new non-executive directors appointed. e
Slide 29: Japanese Market Updates
Japanese Market Updates ► In 2023, more businesses recognized circular economy (CE), carbon neutrality (CN), and Background nature positivity (NP) as the three key drivers for sustainable business. ► The need to comply with the TNFD (Taskforce on Nature-related Financial Disclosures) framework has b
Slide 30: Integrated assistance in transition strategy (1)
Topic 01 Assisted corporate clients in transition strategies to meet their growing need for greater corporate sustainability. Integrated assistance in transition strategy (1) Providing end-to-end assistance in developing and implementing a transition strategy for greater corporate sustainability, in
Slide 31: 24 corporate clients signed up to Cyano Project
Topic 01 While slow in signing new clients to Cyano Project, we delivered on the signed contracts. Integrated assistance in transition strategy (2) Data It took increasingly longer to close contracts with 24 corporate clients signed up to Cyano Project in clients, and we signed fewer clients to Cyan
Slide 32: Factory Support Service Package
Started providing end-to-end support to clients' factory operations to Topic 01 assist them in reducing environmental impact and achieving greater Integrated assistance sustainability across supply chains. in transition strategy (3) November Overview 2023 Released the Factory Support Service Package
Slide 33: Recycling of industrial waste into alternative fuels
Stepped up the recycling of industrial waste into alternative fuels to Topic 01 meet growing need for sustainable procurement practices among Integrated assistance businesses. in transition strategy (4) ► More and more manufacturers were seeking alternative raw materials and fuels to Background repl
Slide 34: Environmental assessments for forest and fishery resources
Conducted an increasing number of environmental assessments for Topic 01 clients to meet their growing need for sustainable management of Integrated assistance forest and fishery resources. in transition strategy (5) Number of FSC® CoC Assessments AMITA's share of the Conducted by AMITA Number of bu
Slide 35: Partnership for better waste management
Pursued partnerships that leverage our environmental management Topic 02 support services to assist businesses in switching to circular Partnership for better operations. waste management ► Corporate clients faced chronic labor shortages and were seriously in need of staff well- Background versed in
Slide 36: Working toward establishing the MEGURU PLATFORM by 2030 (1)
Topic 03 Started developing a circular economy model Working toward establishing in public-private-academic collaboration. the MEGURU PLATFORM by 2030 (1) Key initiatives MEGURU PLATFORM undertaken Establish a virtuous circle of manufacturing and in FY 2023 consumption, in which tangibles, informati
Slide 37: MEGURU STATION operated in three municipalities
Topic 03 Operated MEGURU STATION® in three municipalities and began Working toward establishing talks with another about its community-wide deployment. the MEGURU PLATFORM by 2030 (2) Case Kobe, Hyogo Prefecture 2 locations * *AMITA provided MEGURU STATION® know-how to Kobe City Case when launching
Slide 38: Cross-industry collaboration on plastic waste circulation
Topic 03 Broader cross-industry public-private-academic collaboration in Working toward establishing developing a circulation model for plastic waste the MEGURU PLATFORM by 2030 (3) Dozens of corporate members of J-CEP have joined Japan Clean Ocean Material Alliance (CLOMA), which has 511 forces to
Slide 39: Participation in a national circular economy project (SIP)
Topic 03 Participated in a national project to develop a circular economy Working toward establishing model. the MEGURU PLATFORM by 2030 (4) July 2023 AMITA selected to work on the SIP, sponsored by the Cabinet Office. Overview Tasked with coordinating with other businesses, groups, and municipaliti
Slide 40: Accelerate developing a circular economy model
Topic 03 Working more closely with corporate partners, industry groups, and Working toward establishing municipalities to develop a circular economy model the MEGURU PLATFORM by 2030 (5) Actions for FY 2024 Leverage our role as a member of an R&D project under the SIP to bring together other SIP, J-
Slide 41: Sustainability needs growing fast globally
Topic 04 Sustainability needs growing fast globally Develop and expand business outside Japan (1) ► Asian countries place a high priority on achieving CE, CN, and NP, just as Japan does. Background Their pressing challenge is to achieve low-carbon operations in their industrial sectors, which supply
Slide 42: Operating the Social Systems Design Business outside Japan
Topic 04 Operating the Social Systems Design Business outside Japan Develop and expand business outside Japan (2) Action for FY 2024 April 2024 To rename our Malaysian subsidiary to AMITA CIRCULAR DESIGN SDN. BHD., which will serve as the Group's regional headquarters in the Asia-Pacific. ► Accelera
Slide 43: Updates on Business Development and Expansion in Asia
Topic 04 Updates on Our Business Development and Expansion in Asia Develop and expand business outside Japan (3) Malaysia Indonesia Palau From 2017 Operating the closed-loop recycling May 2023 Signed an MOU with PT October 2023 AMITA selected to participate in an onward of industrial waste. Indoceme
Slide 44: AMITA Group Companies for FY 2024
Wholly-owned subsidiary Transition strategy business AMITA Group Companies ► Assist businesses in achieving greater corporate sustainability ► Assist municipalities in achieving greater community sustainability for FY 2024 AMITA CORPORATION ► Develop the Social Systems Design Business outside Japan
Slide 45: Key Initiatives for FY 2024
Key Initiatives for FY 2024 Sign more corporate clients to Cyano Project 01 by revisiting our sales strategy and service offerings and shoring up our marketing to bolster the project contract closure rate Develop and offer services for assisting businesses in achieving 02 circular operations by esta
Slide 46: AMITA Group's Updated Medium- and Long-Term Management Plan
AMITA Group's Updated Medium- and Long-Term Management Plan 04 to support AMITA Vision 2030 KUMANO Eisuke Chairman and CVO AMITA HOLDINGS CO., LTD. © 2024 AMITA HOLDINGS CO., LTD. All Rights Reserved. 46
Slide 47: Themes of WEF annual meetings in Davos for the past five years
Themes of WEF* annual meetings in Davos for the past five years *World Economic Forum 2024 Rebuilding Trust Reinforcing the fundamental principles of transparency, consistency, and accountability 2023 Cooperation in a Fragmented World Polycrisis (a cluster of related global risks with Keyword compou
Slide 48: What are the common vision and methodology businesses must embrace?
What are the common vision and methodology that businesses must embrace to succeed in the next decade? © 2024 AMITA HOLDINGS CO., LTD. All Rights Reserved. 48
Slide 49: Great realignment anticipated in the global business arena
Great realignment anticipated in the global business arena Global supply chains to remain unreliable and unstable In the past A reliable supply of resources and materials has driven market growth. 2024 and beyond Shrinking markets render the principle of the economies of scale irrelevant. ► Increasi
Slide 50: Glocal businesses and Local businesses
Glocal businesses Local businesses ► Procure traceable raw materials from established ► Procure a wide variety of ESG-compliant raw local producers and suppliers (culturally relevant materials and components from local suppliers Procurement Procurement procurement) ► Emerging smart factories ► Produ
Slide 51: Mounting Challenges Facing Japanese Businesses
Mounting Challenges Facing Japanese Businesses Global average Challenge Rising variable costs Challenge Rising fixed coast Challenge Shrinking market Japan Soaring materials prices, Africa 01 growing procurement risks 02 Soaring labor costs 03 Shrinking population Oceania South America Asia Crude Oi
Slide 52: A novel strategy for a transition to a circular business model
Apply a circular design approach to business to boost the turnover Emerging enterprise needs A novel strategy for a transition to a circular business model AMITA intends to play a leading role in developing a circular market—a new and promising frontier—in the geographically small Japan. © 2024 AMIT
Slide 53: AMITA Group's Medium-Term Management Plan for FY 2024 and 25
AMITA Group’s Medium-Term Management Plan for FY 2024 and 2025 Transform our business by aligning nonlinear business models into a larger linear model to make our revenue stream more robust and sustainable AMITA’s conventional business AMITA’s transformed business Clients Enhance corporate Enhance c
Slide 54: Key Strategies for the Groundwork Phase in FY 2024 and 2025
Key Strategies for the Groundwork Phase in FY 2024 and 2025 Maximize the sales opportunities for Strategy our service products and solutions Strategy 02 Sales strategy Strategy Convert sustainability needs into business opportunities 03 Organizational strategy Upgrade our marketing operations 01 Pro
Slide 55: Expand the Advantage and Scope of Cyano Project
Expand the Advantage and Scope of Cyano Project Step up corporate communication, including industry and public relations, to engage more corporate clients and develop long-term partnerships with them plays the role of a circular "Do Tank" and client Three key drivers for Consulting service Cross-fun
Slide 56: Introducing AMITA's Co-Creation City Initiative
Introducing AMITA's Co-Creation City Initiative to build a sustainable community based on greater engagement and resource circulation Build a circular, sustainable community that fosters greater engagement, diversity, and cultural identity Co-Creation City To be implemented in: Joint community devel
Slide 57: MEGURU COMPLEX addresses communities' waste-management challenges
MEGURU COMPLEX addresses communities' waste-management challenges Communities' challenges Recycle combustible municipal waste into usable resources, eliminating the need for incineration and land-filling Incinerating municipal waste ◼ Incinerating water-containing waste, such as food waste (80% MEGU
Slide 58: AMITA's Updated Road Map through 2030
AMITA's Updated Road Map through 2030 2030 AMITA Group to Future-design Road map announced in 2020 Updated road map establish the Social Company Systems Design Business AMITA Group to establish the Social 2027 Systems Design AMITA Group to Business 2030 celebrate its 50th anniversary 2029 AMITA Grou
Slide 59: Six-Year Management Plan for FY 2025 through 2030
Six-Year Management Plan for FY 2025 through 2030 We have updated our revenue and profit targets as shown below, reflecting changes in our operating environment brought about by recent geopolitical developments, including the Russia-Ukraine conflict and the clash between Israel and Hamas. Earlier ta
Slide 60: Financial Targets for the Groundwork Phase in FY 2024 and 25
Financial Targets for the Groundwork Phase in FY 2024 and 2025 (In millions of yen; amounts rounded down to the nearest million yen) FY 2023 results FY 2024 targets FY 2025 targets Net sales 4,536 4,809 5,070 Operating profit 472 540 651 Ordinary profit 530 599 731 Profit 308 371 489 Operating profi
Slide 61: By FY 2030, AMITA aspires to become a leading circular platform player
Home living Businesses Resources MEGURU STATION® Information MEGURU FACTORY Resource-collection site that promotes Facility that turns collected traceable resources into value-added circular By FY 2030, AMITA aspires to become a mutually supportive engagement among community residents materials Esta
Slide 62: AMITA Vision 2030
AMITA Vision 2030: AMITA's initiative and commitment to creating an ecosystem society by 2030 An ecosystem society is a circular society that promotes the circular use of land and resources to maximize their value. It is a relationship-driven society in which natural and relational capital will be T
Slide 63: AMITA's Five Commitments to Earn and Retain Public Trust
AMITA's Five Commitments to Earn and Retain Public Trust 1. AMITA delivers on "Our Mission.” 2. AMITA remains autonomous. 3. AMITA delivers social good in the belief that a team of ordinary people can do something extraordinary. 4. AMITA stays at the forefront of achieving an ecosystem society in wh