Kirin Holdings Co. Ltd. · TSE:2503
Kirin — Bank of America Merrill Lynch Japan Conference 2009
26 slides from Kirin's conference presentation, Sep 16, 2009
Slide 1: Kirin's road ahead: achieving a quantum leap in growth
Bank of America Merrill Lynch Japan Conference 2009 Kirin's road ahead : achieving a quantum leap in growth Kirin Holdings Company, Limited Kazuyasu Kato, President and CEO September 16, 2009 1
Slide 2: Content
Content • KV2015: Kirin’s long-term operating framework • ＫＶ2015: Progress report • Our approach to M&A • Kirin’s next medium-term business plan • CCT （Cross Company Teams） • Management integration with Suntory 2
Slide 3: 1. KV2015: Kirin's long-term operating framework
1. KV2015: Kirin’s long-term operating framework 3
Slide 4: Kirin's history: From growth to stagnation…to renewed growth
Kirin’s history: From growth to stagnation…to renewed growth 70% 60% 14 years with market share 2001: 50% 60% + Lost market lead Market 40% share 1990: Launch of Market 60% + Ichiban Shibori share 30% 50% + Market 1998: Launch of 2005: Launch of 20% leader Tanrei Nodogoshi 10% 0% 1955 1960 1965 1970
Slide 5: Kirin Group Vision 2015 (KV2015)
Kirin Group Vision 2015 (KV2015) KV2015 ・ Nurture close links with customers through products that provide the enjoyment of food and health ・ Integrate our expertise in fermentation and biotechnology, manufacturing, and research and marketing to create value and offer distinctive products of the hig
Slide 6: Unique business model as an integrated beverages group
Unique business model as an integrated beverages group Fusing the alcohol and soft drink value chains to create value As consumer preferences diversify and the market distinction between alcohol and soft drinks blurs, Kirin is integrating the alcohol and soft drink value chains Beer business model
Slide 7: 2. KV2015 progress report
2. KV2015 progress report 7
Slide 8: Major growth initiatives have continued
Major growth initiatives have continued 2009 * 100% Lion Nathan * 48% San Miguel Brewery 2008 * 100% Dairy Farmers 2007 * 100% National Foods * Kyowa Hakko Kirin * Mercian Corporation International sales on track to reach 30% by 2015 8
Slide 9: Integrated beverages group strategy
Integrated beverages group strategy Organically fusing the alcohol and soft drink value chains domestically and overseas in everything from product development through to sales Corporate value / customer Company Customers satisfaction R&D Production Distribution Sales Marketing Alcohol Demand and pr
Slide 10: Internationalizing our business
Internationalizing our business Differentiating Kirin from global beer companies by pursuing Net sales composition (excluding liquor tax) a unique business model that Integrates alcohol and soft drink operations 2015 target: Approx. 30％ 2008：2７％ 2006：18％ Expanding in East Asia economic sphere an
Slide 11: Highlights 1: Building a strong presence in Oceania
Highlights 1: Building a strong presence in Oceania Also pursuing integrated beverage group strategy in Australia LN and NF will be aligned under a holding company from October 21 and a new management structure will be put in place Kirin is becoming the biggest food and beverage groups in Austra
Slide 12: Highlights 2: Gaining traction in revitalizing Kirin Brewery
Highlights 2: Gaining traction in revitalizing Kirin Brewery Targeting 3 specific areas to develop business and succeed with evidence-based marketing Return to core brands→ Increasing consumer health Changes to alcohol market→ consciousness→ １. Strengthening flagship ２. Boosting response to ３. Expan
Slide 13: Highlights 3: Integration of Kyowa Hakko and Kirin Pharma
Highlights 3: Integration of Kyowa Hakko and Kirin Pharma Established Kyowa Hakko Kirin in October 2008 through merger of Kyowa Hakko and Kirin Pharma Developing innovative pharmaceuticals using cutting-edge antibody technology with a focus on cancer, kidney disease and immunology; aiming to dev
Slide 14: Sales composition by business segment
Sales composition by business segment Diversification and internationalization is creating a more balanced portfolio Stable cash flow generation High potential in overseas markets Alcohol beverages 48% 33% Soft drinks and foods ■ Main companies ■ Main companies • Kirin Brewery • Kirin Beverage • M
Slide 15: KV2015: Progress and key issues
KV2015: Progress and key issues Major investments have met sales targets ahead of plan ⇒ profitability is now key focus Moving to further stage of development with horizontal application of 3 growth patterns 《Led by operating companies》 《Cooperation between HC and operating companies》 《Led by ho
Slide 16: 3. Our approach to M&A
3. Our approach to M&A 16
Slide 17: Kirin's M&A Policy
Kirin’s M&A Policy 1. Able to contribute to customers in arena of food & health 2. Able to create win—win scenario where 1＋1 ＝more than 2 3. Undertaken on a friendly basis ＊Assess projects from the ground up: see it for yourself, on site ＊Target companies with solid markets, stability and top lines
Slide 18: M&A Outcomes
M&A Outcomes 10/2006 10/2006 Kirin Kirin Beverage Beverage 100% 100% ¥75.0 ¥75.0 bn bn 12/2006 12/2006 Mercian Mercian Corp. Corp. business business & & capital capital alliance alliance ¥25.0 ¥25.0 bn bn 11/2007 11/2007 Acecook Acecook joint joint beverage beverage business business in Vietnam ¥3.5
Slide 19: Financial strategy to support growth
Financial strategy to support growth Source investment funding for growth primarily externally Rigorously review balance sheet to increase asset efficiency (make effective use of borrowing, liquidize assets) Maximize cash flow Share buybacks Considered in context of Growth Shareholder financia
Slide 20: 4. Next medium-term business plan
4. Next medium-term business plan 20
Slide 21: Priorities and direction of 2010 medium-term business plan
Priorities and direction of 2010 medium-term business plan 2015 Group Vision ・ Nurture close links with customers through products that provide the enjoyment of food and health ・ Integrate our expertise in fermentation and biotechnology, manufacturing, and research and marketing to create value and
Slide 22: 5. CCT (Cross Company Team)
5. CCT（Cross Company Team） 22
Slide 23: Cross Company Team (CCT)
Cross Company Team (CCT) ●Monitor synergy creation through continuation of Cross Company Teams (CCT) initiative, in which KH directors act as project leaders ●CCTs address issues that would be difficult for operating companies to resolve in isolation (e.g. optimization of business locations, busines
Slide 24: 6. Business integration with Suntory
6. Business integration with Suntory 24
Slide 25: Business integration with Suntory
Business integration with Suntory ■ Background： Background Fits integrated beverages group strategy and other aims of KV2015 Brings growth beyond KV2015 into reach Constructive discussions continuing ■ Approach in 2010 medium-term business plan: Still in negotiation with Suntory; timing and conditio
Slide 26: This material is intended for informational purposes only
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