Kirin Holdings Co. Ltd. · TSE:2503
Kirin — 2013 Mizuho Investment Conference
33 slides from Kirin's conference presentation, September 2013
Slide 1: Increase shareholder value through organic growth
Increase shareholder value through organic growth 2013 Mizuho Investment Conference September, 2013 Kirin Holdings Company, Limited 1
Slide 2: Management summary
Management summary 2013-2015MTBP Overseas integrated beverages: Key Group driver - Expand profit contribution Domestic integrated beverages: Enhance core competitive strengths Raise shareholder value through steady cash flow generation and improved profitability Normalized EBITDA：Mid-single di
Slide 3: KV2021, FY2013-2015 Medium-term Business Plan
KV2021 KV2021,, FY2013-2015 Medium FY2013-2015 -term Business Plan Medium-term 3
Slide 4: Well-balanced, global business portfolio
Others Well-balanced, global business portfolio Pharmaceuticals Japan and Bio-chemicals integrated beverages 27％ Normalized 32％ EBITDA 2013(E) 314.0bn Overseas integrated beverages 41％ Emerging ～High growth～ Emerging Developed ～Large scale・ High growth～ ～Stable ・High profitability～ Beer #2 Carbonate
Slide 5: Building on KV2015 towards a new stage
Building on KV2015 towards a new stage; generate steady, strong results Moving Forward 2019-2021 2016-2018 Stepping Out 2013-2015 2010-2012 2007-2009 KV2015 KV2021 Secured overseas integrated Grow Japan integrated beverages beverages business foundation business Strengthened cost competitivene
Slide 6: KV2021 Business model
KV2021 Business model Sustainably increase enterprise value through organic growth ～Leverage diversity and co-create brand value with consumers and communities～ Organic Pursue organic growth within the areas developed under KV2015 High value Produce strong results and increase enterprise value Susta
Slide 7: Three-year shift to organic growth
Growth strategy / 2013-2015 MTBP Organic Three-year shift to organic growth Overseas integrated beverage business, the driver of Group growth, work to strengthen the core elements of the Japan integrated beverage business Generate stable cash flow Target: Mid single-digit CAGR in normalized EBITDA*
Slide 8: Further growth through fostering strong brands
Further growth through fostering strong brands New business structure of integrated beverages business in Japan (From Jan. 2013) Kirin Alcoholic beverages Soft drinks Kirin Brewery Mercian Kirin Beverage Optimize resource allocation beyond alcohol and soft drinks framework Pursue brand-centered ma
Slide 9: Further strengthen cost competitiveness
Further strengthen cost competitiveness 2010-2012 Medium-term Business Plan 2013-2015 Medium-term Business Plan Created cross-group cost synergies Under the new management structure we will continue measures Greatly exceeded projections to improve cost competitiveness Original projection over ¥20 bi
Slide 10: Financial strategy / 2013-2015 MTBP
Financial strategy / 2013-2015 MTBP Enhance shareholder returns Steadily reduce debt and increase financial flexibility <Cash flow during 2013MTBP> Enhance returns to Operating Cash Flow shareholders ¥700bn plus Increase dividends in line with growth in normalized EPS Consolidated payout ratio
Slide 11: Strong cash generation
Strong cash generation Continuing to produce stable, high levels of cash flow （Million yen) 300,000 ¥700bn ¥700bn plus plus Operating Cash Flow 200,000 100,000 0 ▲ 100,000 ▲ 200,000 Approx. Approx. ▲ 300,000 ¥300bn ¥300bn Investment Cash Flow ▲ 400,000 2006 2007 2008 2009 2010 2011 2012 2013 - 2015(
Slide 12: Plan for 2013
Plan for 2013 12
Slide 13: 2013 Basic policy: First year in shift to organic growth
2013 Basic policy: First year in shift to organic growth Realize overall Group sales and profit growth by building on overseas growth and focusing on restoring growth in Japan MTBP quantitative targets 2013 Target (Revised) Mid single-digit CAGR in normalized EBITDA* 314.0 billion yen (up 2.2% YoY)
Slide 14: FY2013 financial targets
FY2013 financial targets Sales 2,280.0bn yen +4.3% YoY Operating Income before amortization of goodwill etc 205.8bn yen +1.6.% YoY Operating margin : 9.0% Indices of major subsidiaries Sales Operating Operating (Billion yen) profit margin Kirin Brewery 439.6 * 64.3 ** 14.6% Kirin Beverage 351.4 6.1
Slide 15: FY2013 financial strategies
FY2013 financial strategies Allocate free cash flow in accordance with MTBP 2013-2015 financial policy Operating Enhance returns to OperatingCash cashFlow flow shareholders ¥220.0bn Planned annual dividend of ¥36 per share (up ¥7) Consider responsive returns FCF to shareholders, including ¥220.0bn
Slide 16: Further enhance shareholder returns
Further enhance shareholder returns Changes in dividend per share 2013-2015 2013-2015 （¥） Medium-term Medium-term Plan Plan 40 35 Increase dividends in line with 30 growth in normalized EPS Consolidated payout ratio of 25 30% 20 Additional returns to 36 shareholders, including 15 29 27 share buyba
Slide 17: From CSR to CSV
From CSR to CSV In support of Kirin’s brand-centered management approach—through which Kirin aims to deepen engagement with stakeholders and take its CSR activities to the next level—Kirin is adopting a CSV approach to business. With CSV, Kirin aims to create value together with a wide range of stak
Slide 18: Second quarter & annual revised forecast of FY2013
Second quarter & annual revised forecast of FY2013 18
Slide 19: Summary for second quarter of FY2013
Summary for second quarter of FY2013 Increased sales and profits in the first half over previous year, and the highest sales ever Company performance driven by overseas top-line growth, and initiatives for renewed growth in Japan steadily implemented Net income targets set at the start of year
Slide 20: Second quarter performance highlights
Second quarter performance highlights YoY increased sales and profits driven by overseas top-line growth FY2013 Q2 FY2012 Q2 YoY change (Billion yen) (Billion yen) (Billion yen) (%) Japan integrated beverages 538.6 541.1 (2.4) (0.5) Sales and Operating Income Overseas integrated beverages 347.2 292.
Slide 21: Annual sales forecast (Revised on August 1, 2013)
Annual sales forecast (Revised on August 1, 2013) Net income targets unchanged despite downward revision in pharmaceuticals and subsidiary’s share transfer FY2013 Difference to Revised Initial YoY change Major differences to initial forecast forecast forecast (Billion yen) (%) (Billion yen) (Billion
Slide 22: Updated quantitative targets
Updated quantitative targets Normalized EBITDA (Billion yen) Normalized EPS (Billion yen) FY2013 FY2013 FY2013 FY2013 FY2013 FY2013 Revised Initial Revised Initial Q2 Q2 forecast forecast forecast forecast Operating income 60.4 150.0 155.0 Net income 59.6 90.0 90.0 Depreciation 49.5 106.0 106.0 Good
Slide 23: Q2 review and issues for the achievement of annual targets
Q2 review and issues for the achievement of annual targets Favorable overseas growth and steady implementation of measures for renewed growth in Japan Japan: Increasing brand value Achievements Achievements Steady development of new measures for a stronger brands from a medium-term perspective Achie
Slide 24: Japan integrated beverages: Q2 results
Japan integrated beverages: Q2 results Steady development of new measures for stronger brands YoY YoY Created drinking styles with new brand FY2013 Q2 FY2012 Q2 change change communication (Billion yen) (Billion yen) (Billion yen) (%) Concept Kirin Brewery 333.6 344.8 (11.1) (3.2) shop Shop front Ki
Slide 25: Japan integrated beverages: Annual forecast
Japan integrated beverages: Annual forecast Achieve top-line goals by boosting key brands. Minimize cost increases due to changes in circumstances Improve trend in Nodogoshi Nama sales FY2013 Difference YoY YoY Maximize impact of new brand communication by boost Revised to initial change change Fore
Slide 26: Lion: Q2 results
Lion: Q2 results Good progress in the Australian alcohol business boosts Lion’s performance, and group earnings increase realized F2013 Q2 F2012 Q2 YoY change Y o Y change（％） Leading market in Craft Beer Bn Yen Mil AUD Bn Yen Mil AUD Bn Yen Mil AUD Yen basis AUD basis Alcohol 131.5 1,445 98.6 1,197
Slide 27: Lion: Annual forecast
Lion: Annual forecast Aiming for the achievement of the original profit target FY2013 Difference to YoY change YoY change (%) Revised Forecast initial forecast Bn yen Mil AUD Bn yen Mil AUD Bn yen Mil AUD Yen basis AUD basis Alcohol 248.9 2,677 13.5 61 59.1 350 31.2 15.1 Soft Drink 234.3 2,519 2.5 (
Slide 28: Brasil Kirin: Q2 results
Brasil Kirin: Q2 results Achieved growth exceeding market by further boosting brand strengths through strategic investment FY2013 Q2 FY2012 Q2 YoY change YoY change (%) Bn yen Mil BRL Bn yen Mil BRL Bn yen Mil BRL Yen basis BRL basis Sales 84.0 1,798 69.8 1,627 14.1 170 20.3 10.5 Sales volumes Opera
Slide 29: Brasil Kirin: Annual forecast
Brasil Kirin: Annual forecast Achieve the year goal of income by further reinforcement of sales and thorough cost control FY2013 Difference to initial YoY change YoY change (%) Revised forecast forecast Bn yen Mil BRL Bn yen Mil BRL Bn yen Mil BRL Yen basis BRL basis Sales 183.5 3,990 6.6 (122) 34.7
Slide 30: Kyowa Hakko Kirin: Q2 results and annual forecast
Kyowa Hakko Kirin: Q2 results and annual forecast Increased sales and profits. Steady sales of pharmaceuticals domestically, and extensional growth of core products overseas. FY2013 Q2 FY2013 revised forecast YoY Difference to YoY change YoY YoY change Billion yen change Billion yen initial forecast
Slide 31: Kyowa Hakko Kirin: Mid-term business plan 2013-2015
Kyowa Hakko Kirin: Mid-term business plan 2013-2015 Basic strategy of MTBP 2013-2015 Further strengthen competitiveness in Japan through our category-based strategy - Implement product portfolio management in each category from R&D to S&M - Realize sustainable growth while enhancing productivity
Slide 32: Southeast Asia and China
Southeast Asia and China Kirin (China) Investment China Resources Kirin Beverages (Greater China) Company Interfood (Vietnam) Siam Kirin Beverage (Thailand) Kirin Holdings Singapore (Indonesia) Begin test-marketing of San Miguel Brewery (Philippines) Kirin Gogo-no-Kocha Tea Break Philippines Maintai
Slide 33: This material is intended for informational purposes only
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