Meiji Holdings Co., Ltd. · TSE:2269

Meiji — FY2019 Earnings Presentation

51 slides from Meiji's earnings presentation, May 17, 2019

  1. Slide 1: Financial Results for FYE March 2019

    Financial Results for FYE March 2019 May 17, 2019

  2. Slide 2: Agenda

    Agenda 1. Overview for FYE March 2019 2. Outlook for FYE March 2020 3. 2020 Medium-Term Business Plan  Information in this material is not intended to solicit sale or purchase of shares in Meiji Holdings. The final decision relating to investments should be made based on the judgment of users thems

  3. Slide 3: 1. Overview for FYE March 2019

    1. Overview for FYE March 2019 3 ｜2019.5.17 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  4. Slide 4: Summary for FYE March 2019

    Summary for FYE March 2019 (JPY bn) FYE March FYE March FYE March Meiji HD (consolidated) 2018 Results 2019 Plan 2019 Results YoY Change vs. Plan +1.1% -0.9% Net sales 1,240.8 1,265.5 1,254.3 +13.5 -11.1 +3.9% -2.6% Operating income 94.6 101.0 98.3 +3.7 -2.6 Op. income margin 7.6% 8.0% 7.8% +0.2pt -

  5. Slide 5: 2. Outlook for FYE March 2020

    2. Outlook for FYE March 2020 5 ｜2019.5.17 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  6. Slide 6: Outlook for FYE March 2020

    Outlook for FYE March 2020 (JPY bn) FYE March 2019 FYE March 2020 Meiji HD (consolidated) Results Plan YoY Change +4.4% Net sales 1,254.3 1,309.0 +54.6 +9.8% Operating income 98.3 108.0 +9.6 Op. income margin 7.8% 8.3% +0.4pt Net income attributable to +9.1% shareholders of parent company 61.8 67.5

  7. Slide 7: Analysis of Operating Income for FYE March 2020: Food

    Food Analysis of Operating Income for FYE March 2020 FYE March FYE March (JPY bn) 2019 Results 2020 Plan YoY Change +3.2% Net sales 1,056.6 1,090.0 +33.3 +6.2% Operating income 84.7 90.0 +5.2 YoY Change in Operating Income (JPY bn) FYE 18年度実績 March 84.7 2019 Results Increase in sales of mainstay +10

  8. Slide 8: Analysis of Operating Income for FYE March 2020: Pharma

    Pharma Analysis of Operating Income for FYE March 2020 FYE March FYE March (JPY bn) 2019 Results 2020 Plan YoY Change +11.0% Net sales 198.6 220.5 +21.8 +29.9% Operating income 14.2 18.5 +4.2 YoY Change in Operating Income (JPY bn) FYE 18年度実績 March 14.2 2019 Results Sales growth in vaccine and mains

  9. Slide 9: Functional yogurt – Regain sales growth momentum

    Food Functional yogurt – Regain sales growth momentum Yogurt – Maintain sustainable sales growth Sales of ■ Functional yogurt Functional Yogurt ■ Yogurt JPY bn  Regain sales growth momentum 204.8 203.5 197.8  Productive and efficient communication with customers 84.1 84.9 90.6  Create attractive

  10. Slide 10: Expand chocolate market by increasing sales of dark chocolate

    Food Expand chocolate market by increasing sales of dark chocolate Sales of chocolate JPY bn  Boost sales of dark chocolate 104.0 104.1 95.4  Appeal health-value of Chocolate Kouka Increase brand recognition further  Oligosmart, new product for health conscious customers  Create new chocolate cu

  11. Slide 11: Sports Nutrition: Expand shelf space and grow significantly

    Food Sports Nutrition: Expand shelf space for our products and grow significantly Sales of ■ Sports Nutrition ■ SAVAS Milk 29.6  Expand sales channel to food retailers such (JPY bn) 25.8 as super market, in addition to sport shops 8.6 21.6 6.1  Cultivate customers such as people seeking 2.5 health

  12. Slide 12: Steady growth in growth areas

    Food Steady growth in 3 Growth areas Sales (JPY bn)  Cheese market grew due to the strong 35.2 36.6 37.3 demand of natural cheese Cheese  Increase sales of Meiji Hokkaido Camembert Cheese - its production FY3/18 17年度 FY3/19 18年度 FY3/20E 19年度 capacity has expanded （予） 43.0 45.1 44.9 Frozen dessert

  13. Slide 13: Three businesses in China: Pursue significant growth

    Food Three businesses in China: Pursue significant growth Sales of  Milk and Yogurt ■ Confectionary ■ Ice cream • Chilled milk market glows steadily ■ Milk and Yogurt (RMB mm) • Expand production capacity and increase sales of 1077 both commercial products and products for 933 319 professional use

  14. Slide 14: Improving Profitability in Milk Business Steadily

    Food Improving Profitability in Milk Business Steadily Cap Improvement 1. New packaging Launched from Kyushu area in April 2019 Recovering sales of Meiji Oishii Gyunyuu • Light-blocking package – Keeps fresh flavor Conventional outer lid Conventional inner lid • Resealable packaging – Clean and user

  15. Slide 15: Increase sales: Bilanoa gain share and sell vaccines

    Pharma Increase sales: Bilanoa gain share and sell vaccines Domestic sales of  Bilanoa: Anti-allergic drug ■ Influenza vaccine ■ Others Gain 10% market share by FYE March 2021 ■ Generic drugs • Provide substantial and Target market share for Bilanoa Bilanoa ■ Reflex, Sycrest and Bilanoa in systemic

  16. Slide 16: Medreich: Grow CMO/CDMO Business Steadily

    Pharma Medreich: Grow CMO/CDMO Business Steadily Sales of Medreich Group Sales breakdown (USD MM) in FY3/20E Complete acquisition Generic Drug in February 2015 225 11% 201 186 171 170 173 CMO/CDMO 89% FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 FY3/20E FY3/21 14年度 15年度 16年度 17年度 18年度 19年度 20年度 CMO: Contract

  17. Slide 17: Medium-Term Business Plan for KM Biologics

    Pharma Medium-Term Business Plan for KM Biologics Basic Concept Recover Credibility  Become credible company by all stakeholders  Set up concrete Key Strategies and manage progress Key Strategies Strategies for each Division 1. Governance/ Robust Quality • Appropriate decision making and suitable

  18. Slide 18: Cooperate with marketing partner and regain market share

    Pharma Cooperate with marketing partner and regain market share Net sales and operating income 500 KM Biologics(non-consolidated)  Increase market share for influenza Human vaccine Net sales Operating income 140 400 JPY bn 39.5 120 vaccine, child vaccine – Cooperation w/Meiji Seika Pharma 31.2 100

  19. Slide 19: FYE March 2020 Cash flow and returns to shareholders

    FYE March 2020 Cash flow and returns to shareholders FY3/20 (JPY bn) Plan YoY change Main factors for the change Cash flows from 107.9 -4.2 • Tax payment operations • Increase in Capital expenditures Food 86.1 (+24.7 YoY) Cash flow from -99.5 +0.7 Pharma 12.9 (+3.3 YoY) investing activities • Reacti

  20. Slide 20: 3. 2020 Medium-Term Business Plan

    3. 2020 Medium-Term Business Plan 20 ｜2019.5.17 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  21. Slide 21: 2026 Vision – Realizing Sustainable Growth and Enhancing Corporate Value

    2026 Vision – Realizing Sustainable Growth and Enhancing Corporate Value Key Strategies To promote; 1. Secure an overwhelming • Use external resources advantage in core businesses • Increase productivity 2. Establish growth foundation in significantly overseas markets 3. New challenges in the health

  22. Slide 22: Progress of 2020 Medium-Term Business Plan: Management platform

    Progress of 2020 Medium-Term Business Plan  Co-Creation Center, new research lab., established value in health Propose new • Create unique value to extend healthy lifespan by care domain combining expertise built up in the food and pharmaceutical businesses • Collect and utilize cutting edge knowle

  23. Slide 23: Progress of 2020 Medium-Term Business Plan: Responsibility

    Progress of 2020 Medium-Term Business Plan  Strive toward decarburization • Expand scope of disclosure Promote Corporate Social Caring • Establish data collection system for overseas for the subsidiaries earth Responsibility • Build photovoltaic facilities at Tokachi Factory and Kyushu Factory in F

  24. Slide 24: Progress of 2020 Medium-Term Business Plan: Responsibility

    Progress of 2020 Medium-Term Business Plan  Develop Procurement Guidelines for cocoa, palm oil, paper • Promote the use of FSC forest-certified paper and Promote Corporate Social recycle paper based on Paper Procurement Procurement Sustainable Guideline • Develop action plan for replacement to RSPO

  25. Slide 25: 2020 Medium-Term Business Plan Management Targets

    2020 Medium-Term Business Plan Management Targets (JPY bn) FY3/2021 Target Consolidated net sales 1,350.0 Consolidated operating 125.0 Growth income (income ratio) (9.3%) Profitability Sale of overseas business 142.0 Operating income of overseas business 9.5 ROA 11% level Efficiency Safety D/E ratio

  26. Slide 26: Appendix: Financial data

    Appendix: Financial data 26 ｜2019.5.17 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  27. Slide 27: FYE March 2019

    FYE March 2019 27 ｜2019.5.17 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  28. Slide 28: Analysis of Operating Income for FYE March 2019

    Analysis of Operating Income for FYE March 2019 (JPY bn) Consolidated Results Food Pharma Other FYE March 2018 17年度 94.6 84.1 11.0 -0.5 Due to increased/ decreased売上増減 sales -0.8 -3.2 +2.4 ― Decrease due to NHI 薬価改定 drug price revision -12.1 ― -12.1 ― Change in原価の変動 COG sold +11.3 (*1) +2.3 +9.0 ― C

  29. Slide 29: Food Results of FYE March 2019

    Food Results of FYE March 2019 FY3/18 FY3/19 FY3/19 (JPY bn) Results Plan Results YoY Change vs. Plan -1.6% -1.0% Net sales 1,073.6 1,067.1 1,056.6 -17.0 -10.4 Operating +0.7% -3.8% 84.1 88.1 84.7 +0.5 -3.3 income YoY Change in Operating Income (JPY bn) FYE 17年度 March 84.1 2018 -3.2 :Decrease in sal

  30. Slide 30: Food: Results 2019

    Food Results for FYE March 2019 FY3/18 FY3/19 FY3/19 (JPY bn) Results Plan Results YoY Change vs. Plan Fermented Dairy -2.5% -0.7% Net sales 338.5 332.4 330.1 Fresh and -8.3 -2.2 -8.1% -2.2% Operating income 52.0 48.9 47.8 -4.2 -1.0 +1.4% +0.1% Net sales 174.1 176.4 176.5 Processed +2.3 +0.0 Food +1

  31. Slide 31: Food: Subsidiaries FYE March 2019 Summary

    Food 食品 FYE March 2019 Summary FY3/18 FY3/19 FY3/19 (JPY bn) Results Plan Results YoY chnge vs. Plan +1.3% -0.6% Net sales 84.1 85.7 85.1 Nutrition +1.0 -0.5 +4.6% -2.5% Operating income 12.4 13.3 12.9 +0.5 -0.3 +8.5% -3.8% Overseas Net sales 43.4 49.0 47.1 +3.7 -1.8 +76.2% +21.7% Operating income 0

  32. Slide 32: Sales by Main Products - FYE March 2019

    Food 食品 Sales by Main Products - FYE March 2019 Results Plan Results (JPY bn) FY3/18 FY3/19 FY3/20 YoY Change vs. Plan Yogurt 84.1 88.0 84.9 +0.9% -3.5% Meiji Bulgaria Yogurt 77.9 81.2 78.8 +1.1% -2.9% Probiotic yogurt 119.4 117.3 112.9 -5.5% -3.8% Drinking milk 107.1 106.5 108.3 +1.1% +1.6% Meiji O

  33. Slide 33: Analysis of Operating Income FYE March 2019

    Food 食品 Analysis of Operating Income FYE March 2019 Food Fresh and Other Processed Corporate (JPY bn) Segment Fermented Confectionery Nutrition Overseas Domestic Food Expenses Total Dairy Subsidiaries FY3/18 Operating income 84.1 52.0 7.4 19.7 12.4 0.7 4.3 -12.4 Due to increased/ decreased sales -3.

  34. Slide 34: Pharma Results of FYE March 2019

    Pharma Results of FYE March 2019 FY3/18 FY3/19 FY3/19 (JPY bn) Results Plan Results YoY vs. Plan +17.9% -0.7% Net sales 168.4 200.0 198.6 +30.2 -1.3 Operating +29.2% +5.5% 11.0 13.5 14.2 +3.2 +0.7 income KM Biologics Results (Non-consolidated) YoY Change in Operating Income Net sales JPY 31.2 bn, Op

  35. Slide 35: Pharma: Domestic, Overseas, KM Biologics

    Pharma Results for FYE March 2019 FY3/18 FY3/19 FY3/19 (JPY bn) Results Plan Results YoY vs. Plan +1.3% +1.0% Domestic Net sales 129.0 129.4 130.6 +1.6 +1.2 +50.0% +5.7% Op. income 6.6 9.4 9.9 +3.3 +0.5 +4.1% -3.9% Overseas Net sales 39.4 42.6 41.0 +1.6 -1.6 -51.5% +94.0% Op. income 4.4 1.1 2.1 -2.2

  36. Slide 36: Consolidated Statements of Comprehensive Income for FY3/19

    Consolidated Statements of Comprehensive Income for FY3/19 Results （単位：億円） (JPY bn) FY3/19 YoY change Main factors for the change Net sales +1.1% 1,254.3 +13.5 ― Details on p28-35 Operating income +3.9% 98.3 +3.7 ― Details on p28-35 Non-operating income +7.1% 3.8 +0.2 Foreign exchange gain: -0.8 FY3

  37. Slide 37: Consolidated Balance Sheets for FYE March 2019

    Consolidated Balance Sheets for FYE March 2019 Results (JPY bn) FY3/19 YoY change Main factors for the change Goods and products: +18.8, Raw materials and supplies: +9.3, Due to +10.0% Current assets 421.4 +38.4 consolidation of KM Biologics Notes and accounts receivable: +6.4 Buildings and structur

  38. Slide 38: Consolidated Statement of Cash Flow, Return to shareholders

    Consolidated Statement of Cash Flow for FY3/19, Return to shareholders Results (JPY bn) FY3/19 YoY change Main factors for the change Cash flows from Increase in income due to decrease in trade receivables: +11.9 112.1 +3.3 operating activities Increase in payments due to decrease in trade payable:

  39. Slide 39: Outlook for FYE March 2020

    Outlook for FYE March 2020 39 ｜2019.5.17 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  40. Slide 40: Consolidated plan 2020

    Consolidated plan for FYE March 2020 First Second Full (JPY bn) Half YoY Half YoY Year YoY +2.1% +6.5% +4.4% Net sales 625.0 +13.0 684.0 +41.5 1,309.0 +54.6 Operating +0.4% +17.3% +9.8% Consolidated 44.0 +0.1 64.0 +9.4 108.0 +9.6 income +2.6% +14.6% +9.3% Ordinary income 45.0 +1.1 64.0 +8.1 109.0 +9

  41. Slide 41: Plan by Business in Food Segment 2020

    Food Plan by Business in Food Segment for FYE March 2020 First Second Full (JPY bn) Half YoY Half YoY Year YoY Fermented Dairy +0.4% +0.6% +0.5% Net sales 166.2 165.5 331.8 Fresh and +0.7 +0.9 +1.6 Operating -1.3% +5.0% +2.1% 22.1 -0.2 26.7 +1.3 48.8 +1.0 income -0.6% +2.4% +0.9% Processed Net sales

  42. Slide 42: Plan by Business in Food Segment: Subsidiaries

    Food Plan by Business in Food Segment for FYE March 2020 First Second Full (JPY bn) Half YoY Half YoY Year YoY +13.5% +13.0% +13.2% Net sales 24.6 28.7 53.4 Overseas +2.9 +3.3 +6.2 Operating +0.5% +4.3% +2.8% 0.5 +0.0 0.7 +0.0 1.2 +0.0 income Other Domestic +2.1% +6.0% +4.0% Net sales 154.3 152.7 30

  43. Slide 43: Plan by Business in Pharmaceutical Segment 2020

    Pharma Plan by Business in Pharmaceutical Segment for FYE March 2020 First Second Full (JPY bn) Half YoY Half YoY Year YoY +10.2% +28.7% +20.4% Net sales 64.1 93.2 157.3 Domestic +5.9 +20.7 +26.7 Operating +7.3% +18.8% +13.9% 4.4 +0.3 6.8 +1.0 11.3 +1.3 income +3.3% +14.1% +8.7% Net sales 21.2 23.2

  44. Slide 44: Analysis of Consolidated Operating Income for FYE March 2020

    Pharma Analysis of Consolidated Operating Income for FYE March 2020 (JPY bn) Consolidated Plan Food Pharma Other FYE March 18年度実績 2019 98.3 84.7 14.2 -0.6 Due to increased/ 売上増減 decreased sales +14.2 +10.4 +3.8 ― Changes in cost of 原価の変動 -5.5(*1) -2.3 -3.2 ― goods sold Changes in other 経費等の増減 -6.1 (

  45. Slide 45: Appendices: Topics

    Appendices: Topics 45 ｜2019.5.17 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved.

  46. Slide 46: Continue Structural Reforms to Improve Productivity

    Food Continue Structural Reforms to Improve Productivity Strategy Status • Create production structure optimal to • Improved production system business strategy Camembert cheese, drinking milk, Production • Promote labor-saving chocolate • Solve issues to create ideal production • Integrated product

  47. Slide 47: Key Currencies and Our Average Exchange Rates

    Key Currencies and Our Average Exchange Rates Key Currencies and Our Average Exchange Rates Foreign exchange target USD EUR RMB For FYE March 2020 (JPY) (JPY) 140.00 USD 110 130.45 133.09 132.96 129.39 129.89 129.19 125.70 120.81 123.14 120.00 EUR 130 113.76 111.61 111.38 112.74 111.55 112.83 108.85

  48. Slide 48: Market Trends in Imported Raw Materials Prices

    Market Trends in Imported Raw Materials Prices (USD/MT) Nonfat Dry Milk (USD/MT) Cheese 2,500 4,500 4,000 2,000 3,500 1,500 3,000 1,000 2,500 (GBP/MT) Cacao beans (Cent/Bushel) Sugar 2,500 25 2,000 20 1,500 15 1,000 10 500 5 48 ｜2019.5.17 ｜ Copyright © Meiji Holdings Co., Ltd. All rights reserved. （

  49. Slide 49: R&D Pipeline

    R&D Pipeline R&D Pipeline (◆: compounds discovered in-house) FY3/19 FY3/20 FY3/21 ME1111 [Antionychomycosis] ◆ Phase II Infectious diseases ME1100 Arbekacin inhalation [HABP/VABP] ◆ P Ib (Overseas) OP0595 [β-lactamase inhibitor] ◆ PI PI Single agent with β-Lactams disorders ME2125 Safinamide [Anti-P

  50. Slide 50: R&D Pipeline

    R&D Pipeline R&D Pipeline (◆: compounds discovered in-house) FY3/19 FY3/20 FY3/21 Agricultural chemicals ME5382 [Insecticide] ◆ Applied Applied Approve (Overseas) ME5343 [Insecticide] Licensing agreement with BASF ◆* Applied Approved (Overseas) (Overseas) ANM-138 [Insecticide] Joint development with

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Meiji Holdings — FY2019 Earnings Presentation on 6ix