Takara Holdings Inc. · TSE:2531
Takara — Q2 FY2024 Earnings Presentation
62 slides from Takara's earnings presentation, Nov 14, 2023
Slide 1: Financial results for the Second Quarter Ended September 30, 2023
Financial results for the Second Quarter Ended September 30, 2023 November 14, 2023 Takara Holdings Inc.
Slide 2: Contents
Contents Ⅰ. Financial results for the six months ended September 30, 2023 Ⅱ. Business strategy for the fiscal year ending March 31, 2024 １. Takara Shuzo ２. Takara Shuzo Int’l Group ３. Sustainability Ⅲ. Financial forecasts for the fiscal year ending March 31, 2024 2
Slide 3: Financial results for the Second Quarter Ended September 30, 2023
Ⅰ．Financial results for the Second Quarter Ended September 30, 2023
Slide 4: Takara Holdings (Consolidated) Statements of Income
Takara Holdings (Consolidated) Financial Performance for the Second Quarter Ended September 30, 2023 Consolidated Statements of Income （Millions of Yen） Effect of change Change from forecasts '24/3 2Q Change from '23/3 2Q in exchange rates announced on May, 2023 on net sales Actual Change YOY(%) Cha
Slide 5: Takara Holdings (Consolidated) Balance Sheets
Takara Holdings (Consolidated) Financial Performance for the Second Quarter Ended September 30, 2023 Consolidated Balance Sheets （Millions of Yen） '23/3 '24/3 2Q Change '23/3 '24/3 2Q Change Current assets 241,513 240,349 ▲ 1,164 Current liabilities 67,454 76,847 9,392 Cash and deposits 96,820 89,36
Slide 6: Consolidated Statements of Cash Flows
Takara Holdings (Consolidated) Financial Performance for the Second Quarter Ended September 30, 2023 Consolidated Statements of Cash Flows （Millions of Yen） '23/3 2Q '24/3 2Q Change Actual Actual cash flows from operating activities 7,231 14,922 7,691 cash flows from investing activities ▲ 9,553 ▲ 1
Slide 7: Takara Shuzo Financial Performance
Takara Shuzo Financial Performance for the Second Quarter Ended September 30, 2023 Statements of Income （Millions of Yen） Change from forecasts '24/3 2Q Change from '23/3 2Q announced on May, 2023 Actual Change YOY(%) Change Change(%) Shochu 17,469 ▲ 2,528 ▲ 12.6 95 ＋0.6 Sake 4,252 ▲ 445 ▲ 9.5 ▲ 203
Slide 8: Change in Operating Income, Takara Shuzo (Year-on-year)
Analysis of the Change in Operating Income for the Second Quarter Ended September 30, 2023 (Takara Shuzo)<Year-on-year> Thanks to the effect of price revisions, gross profit increased and operating income exceeded the year-earlier result ◆Year-on-year change in operating income (positive factors are
Slide 9: Change in Operating Income, Takara Shuzo (versus forecast)
Analysis of the Change in Operating Income for the Second Quarter Ended September 30, 2023 (Takara Shuzo)<versus the forecast on May> Operating income exceeded the forecast due to cost increase control and decreases in transportation costs and other selling, general and administrative expenses ◆ cha
Slide 10: Takara Shuzo Int'l Group Financial Performance
Takara Shuzo Int’l Group Financial Performance for the Second Quarter Ended September 30, 2023 Statements of Income （Millions of Yen） Effect of change Change from forecasts '24/3 2Q Change from '23/3 2Q in exchange rates announced on May, 2023 on net sales Actual Change YOY(%) Change Change(%) Chang
Slide 11: Change in Operating Income, Int'l Group (Year-on-year)
Analysis of the Change in Operating Income for the Second Quarter Ended September 30, 2023 (Takara Shuzo Int’l Group)<Year-on-year> Gross profit increased due to an increase in net sales, etc., which offset a rise in personnel expenses, etc. Operating income exceeded the year-earlier result ◆Year-on
Slide 12: Change in Operating Income, Int'l Group (versus forecast)
Analysis of the Change in Operating Income for the Second Quarter Ended September 30, 2023 (Takara Shuzo Int’l Group)<versus the forecast on May> Net sales fell below the forecast, resulting in lower gross profit, but operating income exceeded the forecast as selling, general and administrative expe
Slide 13: Business Strategy: Takara Shuzo
Ⅱ．Business Strategy for the fiscal year ending March 31, 2024 １．Takara Shuzo
Slide 14: Takara Shuzo: Key Strategic Themes
１. Takara Shuzo: Business Strategy in the Medium-Term Management Plan for 2025 Basic We will engage in thorough brand development, raise profit policy margins, and expand Washu into global markets ◆Key Strategic Themes ●Strengthen product and brand development capabilities to substantially boost pro
Slide 15: Initiatives of Product Development: New Brands
1. Initiatives of Product development Unearth potential needs to provide a new and unprecedented quality of liquor and New added value brands *Launch around one carefully-selected item in each category over three years Takara Hon-mirin “Zeitaku Kome Koji” <made with 100% Japanese rice> released on A
Slide 16: Initiatives of Product Development: Existing Brands
1. Initiatives of Product development Implement focused brand maintenance and renewal, including initiatives for Existing growth, maintenance, and termination. brands Aim to improve profit margins by adding value through enhanced quality and the revision of product specifications ◆Elimination and co
Slide 17: Brand Development Policy
1. Brand Development Policy in the Medium-Term Management Plan for 2025 Brand We will develop stronger brands through increased expenditure development on promotion, etc. for the eight key brands ◆Eight key brands ・Gokujo <Takara Shochu> ・Takara Shochu Highball and Takara Karakuchi Zero Ball ・Sho Ch
Slide 18: Sales Results of Eight Key Brands
1. Initiatives of Brand Development In the first half of the fiscal year ending March 31, 2024, total net sales of the eight key brands were 3% higher than the year-earlier result. Gross profit expanded by 118% ◆Sales results of eight key brands for ‘24/3 1H (Millions of yen) Year-on-year ‘23/3 1H ‘
Slide 19: Takara Shochu Highball
1. Initiatives of Brand Development <Takara Shochu Highball> We run a BS program to convey the product’s “cheap saloons concept,” while working to create deeper fan experiences and acquire new users by featuring no carbs and strengthening sales of the alcohol content 5% series ◇Promote “cheap saloon
Slide 20: Sho Chiku Bai Shirakabegura MIO Sparkling Sake
1. Initiatives of Brand Development <Sho Chiku Bai Shirakabegura “MIO” Sparkling Sake> Introduce limited products that meet various needs to MIO and MIO CLEAR, two pillar items, to revitalize the brand, while implementing initiatives to acquire demand from inbound tourists ◇ Introduce limited produc
Slide 21: Takara Karakuchi Zero Ball
1. Initiatives of Brand Development <Takara Karakuchi Zero Ball> Appointed Shuzo Matsuoka again as the face of the product advertisement. Continuing from August, started running terrestrial TV commercials and digital advertisement in November to gain greater recognition ◇Gain greater recognition thr
Slide 22: Sho Chiku Bai Subaru and ISAINA
1. Initiatives of Brand Development <Sho Chiku Bai “Subaru”> <ISAINA> To revitalize the market of “Fragrant Washu,” we ran a newspaper advertisement of Subaru, promoted ISAINA mixed with soda water at bars and restaurants along with digital advertisement, and acquired users ◇Drive buying motives tar
Slide 23: Other Initiatives: High-added-value Sake and Inbound Tourists
1. Other Initiatives <High-added-value Japanese sake><Washu for inbound tourists> Released high-added-value products from Sho Chiku Bai, the Japanese sake brand representing the nation, which conveys the “joy” and “tastiness” of drinking sake both domestically and internationally. Launched also prod
Slide 24: Business Strategy: Takara Shuzo Int'l Group
Ⅱ．Business Strategy for the fiscal year ending March 31, 2024 ２． Takara Shuzo Int’l Group
Slide 25: Market Environment: Growth of Export Market
2. Market Environment: Growth of Export Market Exports of Japan’s agricultural, forestry and fishery products and foods are increasing every year. Growth in 2022 showed a year-on-year growth of 114.3% ◇Trends in exports of Japan’s agricultural, forestry and fishery products and foods 1,600 1,400 bil
Slide 26: Growth of Alcoholic Beverages and Japanese Sake Exports
2. Market Environment: Growth of Alcoholic Beverages and Japanese Sake Alcoholic beverages are showing the same trend and further market expansion is expected. Japanese sake category is also growing ◇Alcoholic beverages exports ◇Japanese sake exports (Billions of yen) (Billions of yen) 160 50 140 45
Slide 27: Growth of Japanese Restaurants Abroad
2. Market Environment: Growth of Japanese Restaurants Abroad The number of Japanese restaurants in the world is rapidly growing, 3.4 times larger than that 10 years ago ＜2013＞ ＜2019＞ ＜2021＞ ＜2023＞ Approx. → Approx. → Approx. → Approx. 55,000 156,000 159,000 187,000 * Upper numbers are from 2023, low
Slide 28: Regular and Popular Japanese Food Menus
2. Market Environment: Regular and Popular Japanese Food Menus Salmon, tuna and young yellowtail are popular sushi toppings. In noodles, ramen became established as a regular menu, while udon is also advancing Popular Japanese Food Menus① Sushi Salmon Tuna young yellowtail Popular Japanese Food Menu
Slide 29: Evolved Japanese Food Menus
2. Market Environment: Evolved Japanese Food Menus Overseas, strongly flavored menus and foods with crispy texture are gaining popularity. California roll born from Japanese restaurants is now evolving into crunchy roll, dragon roll and other Crunchy roll Dragon roll Rolled sushi using a ・Topped wit
Slide 30: Group Company's Transaction Case
2. Takara Shuzo Int’l Group: Group Company’s Transaction Case Although Japanese foods are mainly used at Japanese restaurants, they are increasingly adopted by various types of cuisine, such as Western, Asian and fusion cuisine ■Composition of our customer bars and restaurants Fusion cuisine: 2% (11
Slide 31: Int'l Group Business Strategy: Basic Policy
2. Takara Shuzo Int’l Group: Business Strategy in the Medium-Term Management Plan for 2025 We will achieve revenue growth for the whole Group through the rapid Basic growth of the Washu and Japanese food wholesale business and the policy stable growth of Western-style liquor business ◆Business Strat
Slide 32: Overseas Alcoholic Beverages Business (Washu) Strategy
2. Overseas Alcoholic Beverages Business (Washu) : Business Strategy in the Medium-Term Management Plan for 2025 Business We will aim for the rapid growth of the Washu business, maximizing Policy synergies between Takara Shuzo and overseas Group companies ●Develop innovating products and new product
Slide 33: Washu Product Development: High-added-value Sake
2. Overseas Alcoholic Beverages Business (Washu) : <Initiatives of Product development> To nurture a high-quality brand image globally, launch high-added-value products from Sho Chiku Bai brand in overseas markets Takara Takara Shuzo Shuzo Int’l Group ◇Japanese sake exclusively for export For Hong K
Slide 34: TaKaRa CHU-HI Launch in the U.S.
2. Overseas Alcoholic Beverages Business (Washu) : <Initiatives of Product development> In the U.S., which is the largest ready-to-drink products market, we released TaKaRa CHU-HI, a canned chu-hi product that meets the local needs Takara Takara Shuzo Shuzo Int’l Group A Japanese-born Chu-Hi with an
Slide 35: Initiatives of MIO
2. Overseas Alcoholic Beverages Business (Washu) : <Initiatives of “Mio”> Strengthen the MIO lineup in overseas markets and launch exclusive overseas MIO products for the U.S., Asia and Europe Takara Takara Shuzo Shuzo Int’l Group ◇MIO exclusive overseas products ◇Export volume of Sho Chiku Bai Shir
Slide 36: Global Promotion of MIO at Events
2. Overseas Alcoholic Beverages Business (Washu) : <Initiatives of “Mio”> Step up the global promotion of MIO by opening booths at events in the U.K., Hong Kong and other We set up a special booth to market Sho Chiku Bai “Mio” sparkling sake at the HYPER JAPAN, UK’s biggest J-culture event, and Food
Slide 37: Initiatives of Innovative SAKE Brewing
2. Overseas Alcoholic Beverages Business (Washu) : <Initiatives of “Innovative SAKE” brewing> Invested in WAKAZE and acquired 80% of the shares issued and outstanding of Ontario Limited in Canada. By combining the realm of “Innovative SAKE” brewing to that of “traditional washu” brewing, we create n
Slide 38: Japanese Food Wholesale Business Strategy: North America
2. Japanese Food Wholesale Business : Business Strategy in the Medium-Term Management Plan for 2025 We will promote the diversification of sales channels, pioneer new areas, and develop Business and cultivate differentiated products to achieve rapid growth significantly exceeding Policy market growt
Slide 39: Initiatives in North America: Minamoto Wholesale Acquisition
2. Japanese Food Wholesale Business : <Initiatives in North America area> Mutual Trading Co., Inc. in the U.S. acquired all membership interests in Minamoto Wholesale Limited, LLC, a Japanese food wholesaler based in Texas (October 2023) to strengthen its sales and improve distribution efficiency in
Slide 40: Initiatives in North America: New Houston Site
2. Japanese Food Wholesale Business : <Initiatives in North America area> Plan to open new sites in Houston, Texas in autumn 2024. This plan is designed to penetrate the southeast area and further strengthen sales in a southern metropolitan area and its suburbs in Texas 〇Positional relations of citi
Slide 41: Initiatives in North America: Expanded Site Network
2. Japanese Food Wholesale Business : <Initiatives in North America area> The addition of Yamasho, Inc., K Sea Trading and Minamoto Wholesale Limited, LLC to the Group has expanded our network from 9 sites in 8 states to 13 sites in 11 states ・Number of sites as of December 2022: ・ Number of sites a
Slide 42: Trend in Sales of Mutual Trading Co., Inc.
2. Japanese Food Wholesale Business : <Initiatives in North America area> Baseline sales of Mutual Trading Co., Inc. have been expanding and are expected to grow further thanks to the additional portion earned by companies that joined the Group 〇Trend in sales of Mutual Trading Co., Inc. M&A account
Slide 43: Differentiated Products and Sales Channel Diversification
2. Japanese Food Wholesale Business : <Initiatives in North America area> Mutual Trading Co., Inc. is expanding differentiated products offerings, developing key products and promoting diversification of sales channels ●Changed specification of foods for professional use and packaged them into small
Slide 44: Japanese Food Wholesale Strategy: Europe
2. Japanese Food Wholesale Business : Business Strategy in the Medium-Term Management Plan for 2025 Area strategy: Europe ●Firmly maintain our top market share in Europe and aim for further growth ・Expand our access and capture demand from independent bars and restaurants ・Develop the retail and com
Slide 45: FOODEX SAS and Cominport New Warehouse
2. Japanese Food Wholesale Business : Business Strategy in the Medium-Term Management Plan for 2025 FOODEX SAS (France) is introducing new products and acquiring accounts of new independent stores. Cominport Distribución S.L. (Spain) started construction to open a new warehouse ●Introducing new prod
Slide 46: Overseas Alcoholic Beverages (Western-style Liquor) Strategy
2. Overseas Alcoholic Beverages Business (Western-style liquor) : Business Strategy in the Medium-Term Management Plan for 2025 Business We aim to boost the value of our brands, such as Tomatin and policy Blanton’s, and achieve stable earnings growth 〇Age International Net sales ◇Age International（K
Slide 47: Business Strategy: Sustainability
Ⅱ．Business Strategy for the fiscal year ending March 31, 2024 ３． Sustainability
Slide 48: Sustainability: Providing Products and Services, Schools
３. Sustainability: Resolve social issues through the business of providing products and services Promoting initiatives to bolster awareness and acceptance of Japanese food culture by conveying the appeal and new value of washu and Japanese food, etc. Schools operated by Mutual Trading Co., Inc. are
Slide 49: Sustainability: Sustainable Packaging at Takara Bio
３. Sustainability: Resolve social issues through the business of providing products and services Takara Bio Group adopted paper boxes or pouches made of aluminum-free PET film for packaging reagents, its mainstay products Shifted to packages Switched from one side using FSC-certified aluminum pouch
Slide 50: Sustainability: CO2 Emissions Targets and Progress
３. Sustainability: Enhance the value chain that supports resolving social issues Promoting initiatives to utilize gas-fired boilers, adopt solar panels, and use CO₂-free electricity ＜Targets and Progress in 2022＞ ◇CO₂ Emissions target at ◇CO₂ emission reduction targets Takara Shuzo and Takara Shuzo
Slide 51: Sustainability: Alcohol Content Disclosure and Human Rights Due Diligence
３. Sustainability: Enhance the value chain that supports resolving social issues Working to add information on the amount of alcohol contained in our products for consumers. Implementing human rights due diligence processes, including interviews with suppliers <Disclosure of the amount of alcohol co
Slide 52: Financial Forecasts for the Fiscal Year Ending March 31, 2024
Ⅲ．Financial Forecasts for the fisical year ending March 31, 2024
Slide 53: Takara Shuzo Forecasts for the Second Half
Takara Shuzo Financial Forecasts for the Second half of the fiscal year ending March 31, 2024 Consolidated Statements of Income （Millions of Yen） Change from Change from forecasts '24/3 2nd Half '23/3 2nd Half announced on May, 2023 Forecast Change Change(%) Change Change(%) Shochu 16,185 ▲ 414 ▲ 2.
Slide 54: Takara Shuzo Int'l Group Forecasts for the Second Half
Takara Shuzo Int’l Group Financial Forecasts for the Second half of the fiscal year ending March 31, 2024 Consolidated Statements of Income （Millions of Yen） Effect of change Change from Change from forecasts '24/3 2nd Half in exchange rates '23/3 2nd Half announced on May, 2023 on net sales Forecas
Slide 55: Takara Shuzo Forecasts for the Fiscal Year
Takara Shuzo Financial Forecasts for the fiscal year ending March 31, 2024 Consolidated Statements of Income （Millions of Yen） Change from forecasts '24/3 Change from '23/3 announced on May, 2023 Forecast Change YOY(%) Change Change(%) Shochu 33,655 ▲ 2,942 ▲ 8.0 254 ＋0.8 Sake 11,358 ▲ 787 ▲ 6.5 ▲ 1
Slide 56: Takara Shuzo Int'l Group Forecasts for the Fiscal Year
Takara Shuzo Int’l Group Financial Forecasts for the Second half of the fiscal year ending March 31, 2024 Consolidated Statements of Income （Millions of Yen） Effect of change Change from forecasts '24/3 Change from '23/3 in exchange rates announced on May, 2023 on net sales Forecast Change YOY(%) Ch
Slide 57: Takara Holdings (Consolidated) Financial Forecasts
Takara Holdings (Consolidated) Financial Forecasts for the fiscal year ending March 31, 2024 Consolidated Statements of Income （Millions of Yen） Effect of change Change from forecasts '24/3 Change from '23/3 in exchange rates announced on May, 2023 on net sales Forecast Change YOY(%) Change Change(%
Slide 58: Consolidated Financial Targets
Takara Holdings (Consolidated) Financial Targets Forecasts for the fiscal year ending March 31, 2024 ‘24/3 Forecasts ‘26/3 Targets Percentage of net sales from 55.3％ 60.0％ overseas operations Percentage of net sales from overseas operations 54.3％ 60.0％ (except for Takara Bio Group) ROE 7.0% 9.0% or
Slide 59: Impact of Exchange Rate Fluctuations
Impact of Exchange Rate Fluctuations for the fiscal year ending March 31, 2024 Although the yen is expected to weaken against each currency compared to the previous fiscal year, impact of exchange rate fluctuations will be insignificant for Takara Shuzo and Takara Shuzo Int’l Group in aggregate ◇Sta
Slide 60: Financial and Shareholder Return Policies
Financial and Shareholder Return Policies Financial policy ＜Medium-Term Management Plan for 2025＞ Create cashflow by increasing the efficiency of assets and through the sale of strategic shareholdings while enhancing global cash management, for the purpose of accelerating investments in growth and h
Slide 61: Smiles in Life
Smiles in Life ～Smiles are Life’s Treasures ～ We will progressively achieve our vision of “Smiles in Life ~ Smiles are Life’s Treasures ~” by contributing to a well-balanced diet for people around the world through Washu and Japanese food, and by supporting healthy lifestyles through our biomedical
Slide 62: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation, other than those based on historical fact, concerning the current plans, prospects, strategies and expectations of the Company and its Group represent forecasts of future results. While such statements are based on the conclusions of manage