Lacto Japan Co., Ltd. · TSE:3139
Lacto Japan — FY2024 Earnings Presentation
44 slides from Lacto Japan's earnings presentation, January 2025
Slide 1: FY11/2024 Financial Results Briefing
FY11/2024 Financial Results Briefing Lacto Japan Co., Ltd. January 2025 © Lacto Japan Co., Ltd. 1
Slide 2: INDEX
01 Consolidated Financial Results for FY11/2024 and Forecasts for FY11/2025 02 Aiming for Operations That Consider the Cost of Capital and Share Price 03 Dialogue with Shareholders and Investors INDEX 04 Overview of Operations for FY11/2024 05 Business Environment of Dairy Ingredients Sales 06 Initi
Slide 3: Consolidated Financial Results for FY11/2024 and Forecasts for FY11/2025
01 Consolidated Financial Results for FY11/2024 and Forecasts for FY11/2025 © Lacto Japan Co., Ltd. 3
Slide 4: Overview of Consolidated Financial Results for FY11/2024
Overview of Consolidated Financial Results for FY11/2024 ⚫ Net sales, ordinary profit, and profit attributable to owners of parent increased year on year and reached a record high ⚫ Ordinary profit and profit attributable to owners of parent reached the Corporate Business Plan NEXT-LJ 2025 final-yea
Slide 5: FY11/2024 Net Sales and Sales Volume by Business Division
FY11/2024 Net Sales and Sales Volume by Business Division (YoY changes) Dairy Ingredients and Cheese Business Division ◼Dairy Ingredients and Cheese Business Division Net sales 114,182 million yen YoY Change +2.1% ◼Others ◼Asia Business 1.5% 66.8% Sales volume 176,402 tons YoY Change +5.4% (Cheese M
Slide 6: Factors Contributing to YoY Changes in Net Sales and Ordinary Profit
Factors Contributing to YoY Changes in Net Sales and Ordinary Profit ⚫ Net sales: Increased YoY mainly because of an increase in sales volume ⚫ Ordinary profit: Benefited from increased sales and profit margin Net sales Ordinary profit (Domestic)The Dairy Ingredients and Cheese (¥mn) Business Divisi
Slide 7: Consolidated Balance Sheets
Consolidated Balance Sheets （Million Yen） End-November End-November Difference 2023 2024 Total current assets 67,068 75,826 8,758 Main points regarding YoY changes Cash and deposits 7,779 9,076 1,297 POINT Increase in notes and accounts Notes and accounts receivable 18,700 24,028 5,328 ❶ receivable/
Slide 8: Consolidated Statements of Cash Flow
Consolidated Statements of Cash Flow FY11/2024 (¥mn) Main points regarding YoY changes POINT Cash flows from operating activities 636 ❶ Operating CF ❶Cash flows from operating activities POINT positive owing to an increase in Cash flows from investing activities -596 ❷ profit before income taxes des
Slide 9: FY11/2025 Consolidated Earnings Forecasts
FY11/2025 Consolidated Earnings Forecasts ⚫ Both the Domestic Business and the Asian Business expect an increase in sales and profit as the operating environment continues to improve. FY11/2024 FY11/2023 Earnings forecast assumptions Results Forecast YoY increase YoY (%) (¥mn) ❶The Dairy Ingredients
Slide 10: Net Sales by Division
Net Sales by Division (¥mn) FY11/2023 FY11/2024 FY11/2025 Full-year 1Q 2Q 3Q 4Q FY-end 1Q 2Q 3Q 4Q FY-end forecast Dairy Ingredients and 27,594 29,196 26,367 28,687 111,845 28,124 30,807 28,577 26,672 114,182 119,600 Cheese Business YoY 25.3% 16.0% 4.8% 8.4% 13.2% 1.9% 5.5% 8.4% -7.0% 2.1% 4.7% Meat
Slide 11: Sales Volume by Business
Sales Volume by Business (tons) FY11/2023 FY11/2024 FY11/2025 Full-year 1Q 2Q 3Q 4Q FY-end 1Q 2Q 3Q 4Q FY-end forecast Dairy Ingredients and 40,578 44,757 39,464 42,622 167,421 45,583 45,515 43,043 42,259 176,402 177,400 Cheese Business YoY -13.2% -10.0% -11.6% 1.8% -8.5% 12.3% 1.7% 9.1% -0.9% 5.4%
Slide 12: Aiming for Operations That Consider the Cost of Capital and Share Price
02 Aiming for Operations That Consider the Cost of Capital and Share Price © Lacto Japan Co., Ltd. 12
Slide 13: Current Situation
Current Situation ⚫ The Company’s stock price increased significantly in FY11/2024, with a P/B ratio exceeding 1x. ⚫ The current P/E ratio is lower than pre-pandemic levels and the industry average (wholesale) of the Tokyo Stock Exchange Prime Market. However, we believe that the ratio could increas
Slide 14: Operations That Consider the Cost of Capital and Share Price
Operations That Consider the Cost of Capital and Share Price Challenges Initiatives • Introduction of ROIC as a management indicator for business divisions Implement sales strategy with an (Employees’ attitude is gradually changing. We plan to use it for personnel emphasis on profit margins evaluati
Slide 15: Dialogue with Shareholders and Investors
03 Dialogue with Shareholders and Investors © Lacto Japan Co., Ltd. 15
Slide 16: Dialogue with Shareholders and Investors
Dialogue with Shareholders and Investors ⚫ Currently,We hold regular dialogue with investors in Japan. Main events * FY11/2024 results Activities Event details Representative President, Executive Vice President Financial results briefing (full year and 2nd quarter) Twice (in charge of Investor & Pub
Slide 17: Dialogue with Shareholders and Investors: Key Dialogue
Dialogue with Shareholders and Investors ⚫ Details of dialogue with shareholders, investors, etc. (Examples of key dialogue) Questions and comments Summary of our responses from shareholders and investors Demand for domestic dairy ingredients, particularly those for commercial use, began to recover.
Slide 18: Dialogue with Shareholders and Investors: Disclosure
Dialogue with Shareholders and Investors ⚫ We have expanded information disclosure in response to the feedback received during our dialogue with shareholders and investors. We also improved our disclosure format and information dissemination tools. ⚫ We plan to expand English-language disclosure and
Slide 19: Overview of Operations for FY11/2024
04 Overview of Operations for FY11/2024 © Lacto Japan Co., Ltd. 19
Slide 20: Overview of Each Division: Dairy Ingredients and Cheese
Overview of Each Division Dairy Ingredients and Cheese Business Division Business overview Net sales (¥mn) ◼ The leisure and food service industries experienced robust growth, leading to increased demand for food products for 111,845 114,182 commercial use and for ingredients for souvenir items. Dem
Slide 21: Japan's major dairy imports
Overview of Each Division ⚫ Japan’s major dairy imports * Figure for * Figure for FY2024 is for 7 FY2024 is for 7 months (From months (From (tons) Skim milk powder April through (tons) Butter April through October) October) through 50,000 25,000 Oct) 40,000 20,000 17,088 30,000 15,000 8,874 20,000 1
Slide 22: Overview of Each Division: Meat and Ingredients
Overview of Each Division Meat and Ingredients Division Business overview Net sales ◼ Competition with domestic meat has intensified because of high (¥mn) international market prices and the weak yen. The division achieved a record sales volume despite a challenging business 21,788 environment. 18,2
Slide 23: Overview of Each Division: Functional Food Ingredients
Overview of Each Division Functional Food Ingredients Division Business overview Net sales (¥mn) ◼ Sales of milk proteins, which are ingredients for protein products, continued to grow. Product sales also expanded 5,141 outside the sports-related sector. 3,917 ◼ As for sales of ingredients for prot
Slide 24: Overview of Each Division: Asian Business (Dairy Ingredients Sales)
Overview of Each Division Asian Business (Dairy Ingredients Sales Division) Business overview Net sales (¥mn) ◼ Demand for powdered milk mixtures had bottomed out in Japan, with the result that there were signs of recovery in sales of related ingredients. 21,584 18,922 ◼ Special products for Japane
Slide 25: Overview of Each Division: Asian Business (Cheese)
Overview of Each Division Asian Business (Cheese Manufacturing & Sales Division) Business overview Net sales (¥mn) ◼ We focused on expanding sales of natural cheese, for which the market is expected to expand. We increased sales of processed 5,594 natural cheese products for the food service indust
Slide 26: Business Environment (Mainly the Dairy Products Sales Business)
05 Business Environment (Mainly the Dairy Products Sales Business) © Lacto Japan Co., Ltd. 26
Slide 27: Business Environment for the Domestic Dairy Industry
Business Environment for the Domestic Dairy Industry ⚫ Progress has been made in the adjustment of the inventory of skim milk powder as dairy manufacturers and others continued to implement countermeasures and as domestic demand recovered. Estimated end-of-period inventory of skim milk power (tons)
Slide 28: Business Environment for the Domestic Dairy Industry
Business Environment for the Domestic Dairy Industry ⚫ The number of cattle breeders (dairy farmers) and the number of cattle both declined as the production cost increased. (households) Number of cattle breeders (milk cows) (thousand cows) Number of cattle raised (nationwide total) 10,000 1,450 8,5
Slide 29: Business environment for the domestic dairy industry
Business environment for the domestic dairy industry ⚫ A total of 60% of Japanese dairy farmers are in the red, and half are considering quitting ⚫ The number of dairy farms contracted with designated organizations fell below 10,000 for the first time in October 2024. 5.5% Operating in the red 4.7%
Slide 30: International Market Prices for Dairy Products
International Market Prices for Dairy Products ⚫ International market prices of butter soared toward the second half of 2024, while the prices of cheese and skim milk powder remained stable. (EUR/ton) International market prices for major dairy products 9,000 Sep. 2024 8,100 Jun. 2022 7,270 8,000 De
Slide 31: Initiatives for FY11/2025
06 Initiatives for FY11/2025 © Lacto Japan Co., Ltd. 31
Slide 32: Business Environment and Initiatives: Dairy Ingredients and Cheese
Business Environment and Initiatives for FY11/2025 Dairy Ingredients and Cheese Business Division Business ⚫ Expected full-scale recovery in demand for imported dairy ingredients environment ⚫ Impact of price revision on cheese and other food products ⚫ Strengthen sales of high-protein ingredients a
Slide 33: Business Environment and Initiatives: Meat and Ingredients
Business Environment and Initiatives for FY11/2025 Meat and Ingredients Division Business ⚫ Expected ongoing demand for U.S. pork environment ⚫ Increasing demand for processed foods in Japan ⚫ Strengthen collaboration with U.S. suppliers and expand sales of pork by capitalizing on product appeal ⚫ S
Slide 34: Business Environment and Initiatives: Functional Food Ingredients
Business Environment and Initiatives for FY11/2025 Functional Food Ingredients Division ⚫ Increasing need for differentiation of protein products Business environment ⚫ Health-food boom spreading to Asia ⚫ Expand sales of protein ingredients by offering various shapes and specifications Initiatives
Slide 35: Business Environment and Initiatives: Asian Business (Dairy Ingredients)
Business Environment and Initiatives for FY11/2025 Asian Business (Dairy Ingredients Sales Division) ⚫ Expected recovery in demand for powdered milk mixtures in Japan Business environment ⚫ Expected recovery and increase in demand for dairy products in Southeast Asian countries ⚫ Strengthen sales o
Slide 36: Business Environment and Initiatives: Asian Business (Cheese)
Business Environment and Initiatives for FY11/2025 Asian Business (Cheese Manufacturing & Sales Division) ⚫ Japanese restaurant chains’ aggressive expansion in Asia Business environment ⚫ It is estimated that profitability may improve due to lower ingredient prices ⚫ Strengthen production and sales
Slide 37: Overview of the new Singapore factory
(Reference) Overview of the new Singapore factory New plant: visual representation Construction progress (January 2025) Construction progress (January 2025) Overview of the plant New plant Location Senoko, Sembawang Production Maximum capacity: 10,000 tons Existing plant volume Floor space Approxima
Slide 38: Progress of the Corporate Business Plan NEXT-LJ 2025
07 Progress of the Corporate Business Plan NEXT-LJ 2025 © Lacto Japan Co., Ltd. 38
Slide 39: Basic Policy
Basic Policy ⚫ Focus on strengthening the foundation for growth during the three-year period from FY11/2023 to FY11/2025 as the first step toward achieving the long-term vision Base Growth Challenge Build next-generation Evolution of existing business Expansion of Asian business businesses Stable su
Slide 40: Progress of business growth measures
Progress of business growth measures ⚫ Implement each measure steadily in accordance with the basic policies Base Growth Challenge Evolution of existing businesses Expansion of the Asian Business Establishment of next-generation businesses Diversification of supply sources Expansion of the Cheese Ne
Slide 41: Progress in business performance
Progress in business performance ⚫ We raised the final-year targets of the Corporate Business Plan NEXT-LJ 2025 Corporate Business Plan NEXT-LJ 2025 FY11/2025 FY11/2022 FY11/2023 FY11/2024 FY11/2025 FY11/2025 (Revised Vs. FY11/2022 (Results) (Results) (Results) (Initial targets) (Forecast) targets)
Slide 42: Dividend Policy
Dividend Policy ⚫ The basic policy on shareholder returns is to increase dividends as we continue to improve the dividend payout ratio. Changes in dividends and the dividend payout ratio (yen) 120 35.0% Policy on shareholder returns 30.2% 30.0% ◼ We regard the appropriate return of profits to our 10
Slide 43: Caution
Caution This document contains forward-looking statements regarding the Company’s strategies and future performance. These statements reflect our current views and expectations and are subject to risks and uncertainties. Actual performance may differ depending on changes in our operating environment
Slide 44: Lacto Japan
hed) Lacto Japan