Ajinomoto Co., Inc. · TSE:2802
Ajinomoto — FY2015 Earnings Presentation
57 slides from Ajinomoto's earnings presentation, May 12, 2015
Slide 1: Forecast for the Fiscal Year Ending March 31, 2016 (FY2015) and Outlook
Ajinomoto Co., Inc. Forecast for the Fiscal Year Ending March 31, 2016 (FY2015) and Outlook May 12, 2015 Masatoshi Ito President & CEO
Slide 2: Contents
Contents I. Overview of FY2015 Forecast FY2015 Forecast ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P2 Factors in Changes in FY2015 Operating Income Forecast ・・・・・・・・・ P3 FY2015 Forecast by Segment・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P4 Changes in Disclosed Business Classifications from FY2015・
Slide 3: I. Overview of FY2015 Forecast
I. Overview of FY2015 Forecast
Slide 4: FY2015 Forecast
FY2015 Forecast Net sales: Substantial increase from expansion of scale due to addition of Ajinomoto Windsor, Inc. (Windsor) and Ajinomoto General Foods, Inc. (AGF) to consolidation and growth in each business. Operating income: Increase as a shift to specialty products covered the decline in profit
Slide 5: Factors in Changes in FY2015 Operating Income Forecast
Factors in Changes in FY2015 Operating Income Forecast The impact of exchange rates will remain positive. Prices of fermentation raw materials and raw materials for food products are expected to rise. We will compensate for these factors with increased profitability in food products and healthcare-
Slide 6: FY2015 Forecast by Segment
FY2015 Forecast by Segment (¥ Billion) FY2015 FY2014 YoY Change O.P.% O.P.% O.P.% O.P.% Forecast ※ ※ Amount % Net sales 1,263.0 1,006.6 256.4 25% Japan Food Products 407.2 289.1 118.1 41% International Food Products 500.0 384.1 115.9 30% Life Support 157.5 149.1 8.4 6% Healthcare 135.7 120.9 14.8 12
Slide 7: Changes in Disclosed Business Classifications from FY2015
Changes in Disclosed Business Classifications from FY2015 We will change our disclosed business classifications in connection with a reorganization in line with the business fields established in the FY2014-2016 Medium-Term Management Plan. Business Classifications to FY2014 Business Classifications
Slide 8: FY2015 Forecast - Ordinary Income and Net Income
FY2015 Forecast - Ordinary Income and Net Income Forecast of record high net income, with increases in every stage of income FY2015 FY2014 (¥ Billion) Difference Main Factors Forecast Results Net sales 1,263.0 1,006.6 256.4 Operating income 82.0 74.5 7.5 Non-operating income (-:losses) 3.0 8.3 -5.3
Slide 9: Targeted Composition of Operating Income
Targeted Composition of Operating Income Raise earnings quality by controlling the ratio of bulk businesses and pursuing specialty Groupwide. 150.0 (¥ Billion) 150 Amortization of goodwill, etc. 10.0 of Windsor and AGF (¥7.0 billion) (Provisional figure for AGF). 9.0 （89.0） 91.0 Feed-use amino acids
Slide 10: Roadmap to a Genuine Global Specialty Company
Roadmap to a Genuine Global Specialty Company Accelerate growth to take aim at becoming one of the global top 10 companies. Achieve stable profit growth with a shift to specialty EPS growth of around 10%/year Transition to a global food Accelerate company growth momentum Become a top 10 Build founda
Slide 11: II-1. GROW: Accelerate Growth Momentum - Consumer Foods
II-1. GROW: Accelerate Growth Momentum Consumer Foods (Japan Food Products, International Food Products) (1) Promote Specialty with Original Ingredients and Technologies (2) Coffee, Non-Alcoholic Beverages and Powdered Drinks Business Strategy (3) International Food Products (4) Ajinomoto Windsor, I
Slide 12: Promote Specialty with Original Ingredients and Technologies
GROW: Accelerate Growth Momentum (Consumer Foods) (1) Promote Specialty with Original Ingredients and Technologies Continue to grow by utilizing Ajinomoto‟s original ingredients and technologies in all fields that make up deliciousness to offer unique customer value. Ajinomoto’s unique Ability to id
Slide 13: Product Innovation Based on Ajinomoto's Original Materials and Technologies
GROW: Accelerate Growth Momentum (Consumer Foods) (1) Promote Specialty with Original Ingredients and Technologies: Product Innovation Based on Ajinomoto‟s Original Materials and Technologies Identify components of delicious aroma and condense active ingredients with traditional brewing and fermenta
Slide 14: Creation of New Categories in Japan
GROW: Accelerate Growth Momentum (Consumer Foods) (1) Promote Specialty with Original Ingredients and Technologies: Creation of New Categories in Japan Cook Do® Flavor Paste Toss Sala® A new sprinkle-on salad seasoning that complements vegetables with herb, cheese and other aromas New seasoning in a
Slide 15: Unique Ajinomoto Specialty Ingredients: Kokumi Substance
GROW: Accelerate Growth Momentum (Consumer Foods) (1) Promote Specialty with Original Ingredients and Technologies: Unique Ajinomoto Specialty Ingredients New kokumi substance glutamyl-valyl-glycine Search techniques using receptor Successful industrialization from combining technologies of Ajinomot
Slide 16: Accelerate Business Development with Ajinomoto General Foods
(2) Coffee, Non-Alcoholic Beverages and Powdered Drinks Business Strategy Accelerate Business Development with Ajinomoto General Foods, Inc. 273.0 Image of Business Scale Overseas: 199.0 83.0 Overseas Total of ready-to-drink coffee (¥ Billion) 173.0 45.0 59.0 and powdered drinks businesses Japan: 14
Slide 17: International Food Products: Five Stars
GROW: Accelerate Growth Momentum (Consumer Foods) (2) International Food Products Create country/area pillars to follow Japan with rapid growth originating in the “Five Stars” countries. Aim to Double/Triple Growth in “Five Stars” : Average 10% growth rate in FY2015 sales on a local currency basis a
Slide 18: International Food Products: Rising Stars
GROW: Accelerate Growth Momentum (Consumer Foods) (2) International Food Products Accelerate the creation of a foundation for rapid growth in the “Rising Stars.” Core initiatives for “Rising Stars” Africa/Middle East Europe/North America Rollout umami seasoning Strengthen product potential/estab
Slide 19: Basic Policy of Ajinomoto Windsor and Initiatives for FY2015
GROW: Accelerate Growth Momentum (Consumer Foods) (4) Basic Policy of New Company Ajinomoto Windsor, Inc. and Initiatives for FY2015 and Beyond Basic Policy: Achieve ¥100 billion or more in sales in the North American frozen foods business by FY2020 and establish the Ajinomoto Group as the clear No.
Slide 20: II-2. GROW: AminoScience
Ⅱ-2. GROW: Accelerate Growth Momentum AminoScience (1) Life Support (2) Healthcare
Slide 21: Life Support: Evolution into Specialty - Chemical Business
GROW: Accelerate Growth Momentum (AminoScience) (1) Life Support: Promote Customer-Driven Evolution into Specialty - Chemical Business - Expand non-PC applications for ABF to achieve stable growth. Begin sales of new functional material developed based on ABF technology (organic electroluminescent (
Slide 22: Pursue Specialty in the Healthcare Business Field
GROW: Accelerate Growth Momentum (AminoScience) (2) Pursue Specialty in the Healthcare Business Field Main Initiatives in FY2015 Plan Amino Acids for Pharmaceuticals and Foods Open up the specialty market with the world‟s first commercialization of a fermentation method for manufacturing L-Tyros
Slide 23: III. FIT: Further Business Structure Reinforcement
III. FIT: Further Business Structure Reinforcement (1) Shift from Bulk Commodities to Specialty Products (2) Technology for Fermentation Using Fewer Resources
Slide 24: Shift to Specialty Products in Bulk Commodities Business
FIT: Further Business Structure Reinforcement (1) Shift to Specialty Products in Bulk Commodities Business - Reducing Dependence on Bulk Products - Animal Nutrition (% of operating income) Animal Nutrition Commodities 32% in FY2014 ⇒ 50% in FY2015 68 50 40 （Lysine, Threonine, Tryptophan) Over Expand
Slide 25: Progress of Fermentation Technology Using Fewer Resources
FIT: Further Business Structure Reinforcement (2) Progress of Fermentation Technology Using Fewer Resources (R&D Leadership) - Achieved ¥4.0 Billion in Cost Reductions in FY2014 - Specific measures FY2011-2013 FY2014 FY2015 FY2016 Introduced in Brazil High performance （FY13/Q1） (Higher reduction rat
Slide 26: IV. Evolution of the Management Foundation - Corporate Governance
Ⅳ. Evolution of the Management Foundation - Corporate Governance -
Slide 27: Measures to Strengthen Corporate Governance
Evolution of the Management Foundation Measures to Strengthen Corporate Governance Response to the Corporate Governance Code (CGC) 1. Decision on Basic Policy Regarding Response to the CGC Based on the intent and spirit of the principles of the CGC, we plan to enhance and further strengthen our corp
Slide 28: Number of Managers by Region
Evolution of the Management Foundation Number of Managers by Region Status in FY2013 Male Female Total Percentage of females Japan Ajinomoto Co., Inc. 884 69 953 7% Group companies 1,409 48 1,457 3% Asia 563 298 861 35% Europe and Africa 210 74 284 26% The Americas 215 64 279 23% Total 3,281 553 3,8
Slide 29: V. FY2015 Financial Strategy
IV. FY2015 Financial Strategy
Slide 30: FY2015 Financial Strategy - Further Increase Shareholder Value
FY2015 Financial Strategy - Further Increase Shareholder Value – Increase profitability through business structure reinforcement and accelerated growth driver momentum. Emphasize ongoing shareholder returns while strengthening generation of cash flow and prioritizing investments for growth. Genera
Slide 31: Investments for Growth and Shareholder Returns
FY2015 Financial Strategy - Investments for Growth and Shareholder Returns – Prioritize use of operating cash flow for investments for growth and further enhance shareholder returns. Weighted Allocation Generate Free Cash Flow Shareholder Returns toward Investments for Growth Increase operating inco
Slide 32: VI. Ajinomoto Group Shared Value (ASV)
Ⅵ. Ajinomoto Group Shared Value (ASV)
Slide 33: Ajinomoto Group Shared Value (ASV)
Ajinomoto Group Shared Value (ASV) Ambition at Our Help Resolve Global Issues Create Economic Value Establishment (1909) Make a simple diet more Contribute to a healthy society in every Achieving social value is delicious and improve the region worldwide with delicious nutrition creating economic va
Slide 34: ASV - Circle for Sustainability
ASV – Circle for Sustainability – Lifestyles Helping to build a healthy society through delicious eating Supporting health with Nature AminoScience Manufacturing Nature Providing even greater Reducing the burden value with even fewer on the natural resources environment Blessings Technology to find
Slide 35: ASV: Circle for Sustainability - Feed-use Amino Acids
ASV: Specific Examples of the Circle for Sustainability - Feed-use amino acids - Promote healthy livestock by Ajinomoto Heartland, Inc. supplementing amino acids that Farms tend to be insufficient. Reduce cultivation of land by using feed with more corn, which has a higher yield Livestock per unit o
Slide 36: Copyright © 2015 Ajinomoto Co., Inc. All rights reserved.
Copyright © 2015 Ajinomoto Co., Inc. All rights reserved.
Slide 37: VII. Frozen Foods Business Strategy in FY2015
Ⅶ. Frozen Foods Business Strategy in FY2015 May 12, 2015 Hidetora Yoshimine, President Ajinomoto Frozen Foods Co., Inc.
Slide 38: Frozen Foods Business: FY2014 Review
(1) Frozen Foods Business: FY2014 Review Steady increase in sales with stable growth in Japan and substantial expansion overseas. Secured real operating income on par with the previous fiscal year, even with substantial impact from higher prices for raw materials and exchange rates. FY2014: Net sale
Slide 39: Basic Policy of the Frozen Foods Business
(2) Basic Policy of the Frozen Foods Business Build a larger, stronger business by broadly providing high-quality Japanese frozen food to contribute to people worldwide ◆ Expand the Ajinomoto Group‟s food products business globally, particularly business scale in the U.S. and Europe ◆ Strengthen ove
Slide 40: Targets of the Frozen Foods Business
(3) Targets of the Frozen Foods Business FY2015 Business Target ¥198.8 billion in net sales, approximately ¥4.0 billion in operating income (Operating income before amortization of goodwill, etc. of Windsor: approx. ¥8.5 billion, OP margin approx. 4.5%) Overseas ratio: Nearly 50% for both net sales
Slide 41: Frozen Foods Business in Japan: FY2015 Plan
(4) Frozen Foods Business in Japan: FY 2015 Plan FY2015 Plan: Increase frozen foods sales and income in Japan Net sales: ¥97.0 billion (+5% YoY) Operating income: approx. ¥4.0 billion (+18% YoY) ■ Respond to changes in consumers (low birthrate, aging society, smaller households, etc.) ■ Continuing n
Slide 42: Overseas Frozen Foods Business: FY2015 Plan
(5) Overseas Frozen Foods Business: FY 2015 Plan FY2015 Plan: Substantially expand the overseas frozen foods business Net sales: ¥101.8 billion (+211% YoY) Operating income: Not disclosed Note: Operating income before amortization of goodwill of Windsor: approx. ¥4.5 billion ■ Substantially expand b
Slide 43: Basic Policy of Ajinomoto Windsor and Initiatives for FY2015
(6) Basic Policy of New Company Ajinomoto Windsor, Inc. and Initiatives for FY2015 and Beyond the repost of Slide 16 Basic Policy: Achieve ¥100 billion or more in sales in the North American frozen foods business by FY2020 and establish the Ajinomoto Group as the clear No.1 in Japanese/Asian* foods
Slide 44: Specific Initiatives of Ajinomoto Windsor
(7) Specific Initiatives of Ajinomoto Windsor, Inc. Reinforce the business structure by promoting the growth of Japanese and Asian foods to build a highly profitable product portfolio Approx. USD 1,040 million CAGR 4.5% ● Make highly profitable Japanese and Asian foods about 60% of sales growth Appr
Slide 45: VIII. Coffee, Non-Alcoholic Beverages and Powdered Drinks Business Strategy
Ⅷ. Coffee, Non-Alcoholic Beverages and Powdered Drinks Business Strategy in FY2015 May 12, 2015 Keiichi Yokoyama, President Ajinomoto General Foods, Inc.
Slide 46: Overview of the Coffee Market
(1) Overview of the Coffee Market Coffee Market in Japan (2013) Manufacturers‟ shipments: ¥1.6 trillion, consumer purchase price: ¥2.8 trillion Coffee bean consumption volume: 450,000 tons, 4th in the world (world total 9 million tons) Cups per person/year: (10g/cup) 351 cups (Western Europe:
Slide 47: Characteristics of the Dry Coffee Market
(1) Overview of the Coffee Market Characteristic of the Dry Coffee Market The personal category (stick-type, personal regular) is expanding, and unit price is high Sales of instant coffee in jars has fallen by half but refill-type sales have quadrupled over 10 years Growth over 10 Years in the
Slide 48: Initiatives of AGF
(2) Initiatives of AGF Vision/Basic Policy Aim to be Japan‟s best-loved non-alcoholic beverage manufacturer Aim to be a collaborative enterprise that grows by generating value together with customers, based on creating fans Work for previously unattainable combined R&D and overseas business d
Slide 49: Themes for Future Initiatives with Ajinomoto: Combined R&D
(3) Themes for Future Initiatives with Ajinomoto the repost of Slide 13 Accelerate Combined R&D and Overseas Business Development with Ajinomoto Group Synergy Image of Business Scale 273.0 Overseas: (¥ Billion) 199.0 83.0 Overseas Total of ready-to-drink coffee 173.0 and powdered drinks businesses 4
Slide 50: Ready-to-Drink Coffee/Powdered Drinks: Overseas Expansion
(3) Themes for Future Initiatives with Ajinomoto Ready-to-Drink Coffee/Powdered Drinks: Accelerate Business Expansion Overseas Orientation of Initiatives for Overseas Business (1) Strengthen competitiveness (quality, cost) in countries/regions where Ajinomoto already does business Use AGF‟s tec
Slide 51: IX. Animal Nutrition Business Strategy in FY2015
Ⅸ. Animal Nutrition Business Strategy in FY2015 May 12, 2015 Yoichiro Togashi, President Ajinomoto Animal Nutrition Group, Inc.
Slide 52: Animal Nutrition: Medium-Term Plan Targets and Market Environment
Animal Nutrition Business Strategy in FY2015 - FY2014-2016 Medium-Term Management Plan Targets and FY2015 Market Environment - Net Sales and Operating Income Plan （単位：億円） 2014年度 FY2014 2014年度 FY2014 2015年度 FY2015 2016年度 FY2016 2020年度 FY2020 (Plan) (Actual) (Plan) (Plan target) (Plan target) (計画) (実績
Slide 53: Structural Reform for Continuous Business Growth
Animal Nutrition Business Strategy in FY2015 - Review of Basic Strategies of FY2014-2016 Medium-Term Management Plan and FY2015 Plan - Conduct structural reform for continuous business growth FY2014 Review FY2015 Plan (1) Expand specialty businesses (1) Expand specialty businesses ◆ AjiPro®-L ◆ AjiP
Slide 54: Animal Nutrition: FY2015 Operating Income Plan
Animal Nutrition Business Strategy in FY2015 - FY2015 Operating Income Plan - Strengthen competitiveness of Expand specialty businesses commodity businesses (50% or more of total) • Strengthen cost competitiveness by • Expand sales of AjiPro®-L for dairy cows introducing new technologies, etc. • Exp
Slide 55: Reference: Assumptions of FY2015 Forecast
Reference Assumptions of FY2015 Forecast
Slide 56: Assumptions of FY2015 Forecast
【Reference】 Assumptions of FY2015 Forecast Foreign exchange rates (vs JPY) Feed-use amino acids 1) Estimated market size (Thousand MT) Sensitivity of translation effects to full Avg. rate year O.P. FY2013 FY2014 FY2015 (Forecast) USD 115.0 ±\1 → approx. \100 million Lysine 2,100 2,300 around 2,350 E
Slide 57: Eat Well, Live Well.
Eat Well, Live Well. AJINQOMOTO. > Forward-looking statements, such as business performance forecasts, made in these materials are based on management’s estimates, assumptions and projections at the time of publication. A number of factors could cause actual results to differ materially from expecta