Kirin Holdings Co. Ltd. · TSE:2503
Kirin — H1 2008 Earnings Presentation
58 slides from Kirin's earnings presentation, August 2008
Slide 1: 2008 interim results presentation
2008 interim results presentation Interim period of the fiscal year ending December 31, 2008 August 2008 KIRIN HOLDINGS COMPANY, LIMITED
Slide 2: Contents
Contents Overall operations 2008 interim results overview and 2008 forecasts Management summary for H1 review and full-year Trends in interim performance Alcohol beverages segment review Full-year results and 2008 forecasts Soft drinks and foods segment review Consolidated interim sales and operatin
Slide 3: Management summary 2008 H1 review
Management summary 2008 H1 review Revenues under pressure from larger than expected rise in the cost of raw materials and energy on a global scale Environment Consumer lifestyles are growing more conservative and shifting towards lower-priced goods Achieved record-high consolidated sales and each in
Slide 4: Management summary: 2008 full-year plan
Management summary: 2008 full-year plan 2008 full-year plan Forecasts have been revised, based on first half performance and the current business environment Kirin Brewery: aiming to reach initial op. income targets by rigorous cost control, despite of lowering volume targets Kirin Beverage: sales a
Slide 5: 2008 H1 Review by segment
2008 H1 Review by segment ©
Slide 6: 2008 H1: Alcohol segment
2008 H1: Alcohol segment Billion yen; consolidated 2008 results 2007 results % change Change Operating income is stated prior to all Alcohol Sales 545.3 548.1 (0.5%) (2.8) company/eliminations Operating 42.5 32.9 29.1% 9.6 income Large profit increase driven by strong performance from Lion Nathan, s
Slide 7: 2008 H1: Soft drinks and foods segment
2008 H1: Soft drinks and foods segment Billion yen; consolidated 2008 results 2007 results Change % Change in yen Operating income is stated prior to all Soft drinks and Sales 344.0 222.6 +54.6% 121.4 company/eliminations foods Operating income (5.6) 4.0 -- (9.6) Earnings declined due to high materi
Slide 8: 2008 H1: Pharmaceuticals segment
2008 H1: Pharmaceuticals segment Billion yen; consolidated 2008 results 2007 results Change % Change in yen Operating income is stated prior to all company/eliminations Sales 69.6 31.4 +121.3% 38.2 Pharma Operating income 10.9 4.8 +124.4% 6.1 Large increase in sales and earnings from consolidation o
Slide 9: 2008 H1: Other businesses segment review
2008 H1: Other businesses segment review Operating income is Billion yen; consolidated 2008 results 2007 results Change % Change in yen stated prior to all company/eliminations Other Sales 88.7 33.7 +162.8 55.0 Operating income 7.3 2.2 +227.6 5.1 *Results for 2007 have been restated in line with new
Slide 10: 2008 full year Key issues by segment
2008 full year Key issues by segment ©
Slide 11: Alcohol segment: Key issues for 2008 H2
Alcohol segment: Key issues for 2008 H2 Billion yen; consolidated 2008 results 2007 results Change % Change in yen Operating income is stated prior to all Alcohol Sales 1,185.0 1,189.4 (0.4%) (4.4) company/eliminations Operating income 104.5 96.5 +8.2% 7.9 Kirin Brewery aiming to achieve initial ope
Slide 12: Alcohol segment: 2008 sales forecasts for Kirin Brewery
Alcohol segment: 2008 sales forecasts for Kirin Brewery (as revised) 2007 full-year results 2008 full-year forecast 2008 full-year forecast Industry (mid-term revision) (initial) 2007 figures based on taxed Beer, happo-shu, (0.3%) Approx. (3 4%) Approx. (2%) volumes (excluding RTDs). 2008 forecasts
Slide 13: Soft drinks and Food segment: Key issues for 2008 H2
Soft drinks and Food segment: Key issues for 2008 H2 Billion yen; consolidated 2008 results 2007 results Change % Change in yen Operating income is stated prior to all Soft drinks and Sales 731.0 474.5 +54.0 256.5 company/eliminations foods Operating income 14.2 16.0 (11.4%) (1.8) Targeting higher e
Slide 14: Soft drinks segment: 2008 sales outlook (revised)
Soft drinks segment: 2008 sales outlook (revised) Category 2008 1H 2008 Topics Industry forecast Green tea total 97 98 Export volumes decreasing slightly. Consumer sentiment on a recovery trend. Sales volume basis Oolong tea total 90 93 Similar levels to 2006. Blended and other teas 97 99 Total rema
Slide 15: Pharmaceutical segment: Initiatives for 2008
Pharmaceutical segment: Initiatives for 2008 Billion yen; consolidated 2008 targets 2007 results Change % Change in yen Pharmaceuticals Sales 175.0 69.9 +150.3% 105.1 Operating income is Operating income 34.4 13.0 +164.6% 21.4 stated prior to all company/eliminations Consolidation of Kyowa Hakko wil
Slide 16: Pharmaceuticals pipeline (Kyowa Hakko)
Pharmaceuticals pipeline (Kyowa Hakko) Stage In-house Category Code name Indication Formulation or Remarks Japan Other countries licensed Sublingual KW-2246 Ph Cancer pain Orexo tablet Cancer Humanized anti-body* KW-0761 Ph Injection In-house (Hematologic tumor) Phase I KW-2449 in China Cancer Oral
Slide 17: Pharmaceuticals pipeline (Kirin Pharma)
Pharmaceuticals pipeline (Kirin Pharma) Stage In-house or Category Product Code Indication Formulation licensed Remarks Japan Other countries Long-acting stimulator of red blood cell production. KRN321 Anemia Launched in July, 2007 as a therapeutic Ph (After chemotherapy Injection Kirin-Amgen NESP f
Slide 18: Other segment: Initiatives for 2008
Other segment: Initiatives for 2008 Billion yen; consolidated 2008 targets 2007 results Change % Change in yen Other Sales 239.0 67.2 +255.6% 171.8 Operating income is stated prior to all Operating income 16.4 6.3 +159.1% 10.1 company/eliminations Consolidation of Kyowa Hakko will also contribute to
Slide 19: 2008 interim results overview and full-year forecasts
2008 interim results overview 2008 full-year forecasts (Consolidated) ©
Slide 20: Trends in interim performance
Trends in interim performance Consolidated Consolidated 120 1,000 100 800 80 600 60 400 40 200 20 0 0 billion yen) 03 H1 04 H1 05 H1 06 H1 07H1 08H1 03 H1 04 H1 05 H1 06 H1 07 H1 08 H1 Sales 732.8 759.4 740.2 782.7 836.0 1,047.8 Operating income 37.5 44.8 37.5 44.9 42.8 47.5 Ordinary income 39.0 42.
Slide 21: Full-year results and 2008 forecasts
Full-year results and 2008 forecasts Consolidated Consolidated 24,000 3,000 2,700 22,000 2,400 20,000 2,100 1,800 18,000 1,500 16,000 1,200 900 14,000 600 12,000 300 0 10,000 03 04 05 06 07 08 est. billion yen) 03 04 05 06 07 08 est. Sales 1,597.5 1,654.8 1,632.2 1,665.9 1,801.1 2,330.0 Operating in
Slide 22: Consolidated interim sales and operating income by segment
Consolidated interim sales and operating income by segment Sales boosted by consolidation of Kyowa Hakko and National Foods. Large increases in soft drinks and foods, pharma and other. Alcohol (2.8) 2007 2008 SD, Foods 121.4 Pharma 38.2 836.0 bn 1,047.8bn billion yen) Other 55.0 Total 211.8 Op. inco
Slide 23: Consolidated forecast sales and operating income by segment
Consolidated forecast sales and operating income by segment Sales boosted by consolidation of Kyowa Hakko and National Foods. Large increases in soft drinks and foods, pharma and other. Alcohol (4.4) 2007 Soft drinks, foods 256.5 2008 est. Pharma 105.1 billion yen) 1,801.1 Other 171.8 2,330.0 Total
Slide 24: Profit breakdown for interim result (Alcohol Beverages)
Profit breakdown for interim result (Alcohol Beverages) Alcohol Kirin Brewery Increase in marginal profit 2.5 Sales decrease in beer (67) thousand KL, (7.5) beverages of alcohol beverages Sales decrease in happo-shu (2) thousand KL, (0.2) Sales increase in new genre 19 thousand KL, 2.0 Sales increas
Slide 25: Profit breakdown for interim result (Soft Drinks and Foods)
Profit breakdown for interim result (Soft Drinks and Foods) Soft drinks and Kirin Beverage Difference in volume of 1.3 Increase in sales volume 1,210 thousands cases Foods sales Cost reduction 0.5 Improvement of production efficiency at its own factories, etc. Increase in raw material (1.2) cost Inc
Slide 26: Profit breakdown for interim result (Pharmaceuticals and Others)
Profit breakdown for interim result (Pharmaceuticals and Others) Pharmaceuticals Kyowa Hakko and Kirin Pharma *4 5.7 Increase in gross profit 29.2 Increase in R&D expenses (9.7) Increase in other expenses (12.4) Amortization of goodwill (1.4) Effect of organizational change 0.4 *2 FY2007 the 1st Hal
Slide 27: Profit breakdown for interim result (Op. income and ordinary income)
Profit breakdown for interim result (Op. income and ordinary income) FY2007 the 1st Half Actual 42.8 => FY2008 the 1st half Increase in operating income 4.7 Actual 47.5 Financial profit (loss), net (5.3) (3.4) => (8.7) Equity in earnings of affiliates (3.1) San Miguel (2.2) (Including elimination of
Slide 28: Exchange rate for overseas company
Exchange rate for overseas company (1H 08 and full year) 2007 The 1st 2008 The 1st half half Exchange rate for overseas company (Actual) (Actual) Lion Nathan (AUD) ¥93.10 ¥98.11 National Foods (AUD) - ¥97.59 San Miguel (PHP) ¥2.44 ¥2.61 2007 2008 Exchange rate for overseas company Actual Forecast Li
Slide 29: Profit breakdown for full year forecast (Alcohol Beverages)
Profit breakdown for full year forecast (Alcohol Beverages) Alcohol Kirin Brewery Increase in marginal profit 11.6 Sales decrease in beer (97) thousand KL, (11.2) beverages of alcohol beverages Sales increase in happo-shu 10 thousand KL, 0.9 Sales increase in new genre 29 thousand KL, 3.1 Sales incr
Slide 30: Profit breakdown for full year forecast (Soft Drinks)
Profit breakdown for full year forecast (Soft Drinks) Soft drinks and Kirin Beverage Difference in volume of 8.7 Increase in sales volume 8,540 thousands cases Foods sales Cost reduction 1.2 Improvement of production efficiency at its own factories, etc. Increase in raw material (3.8) cost Decrease
Slide 31: Profit breakdown for full year forecast (Pharmaceuticals and Others)
Profit breakdown for full year forecast (Pharmaceuticals and Others) Pharmaceuticals Kyowa Hakko and Kirin Pharma 21.0 Increase in gross profit 78.7 Increase in R&D expenses (20.8) Increase in other expenses (32.6) Amortization of goodwill (4.3) Effect of organizational change 0.4 *2 FY2007 Annual A
Slide 32: Profit breakdown for full year forecast (Op. income and ordinary income)
Profit breakdown for full year forecast (Op. income and ordinary income) FY2007 Annual Actual 120.6 => FY2008 Annual Increase in operating income 31.4 Forecast 152.0 Non-operating Financial profit, net (9.7) (5.3) => (15.0) income and Equity in earnings of affiliates (3.5) Kyowa Hakko (1.2) (Includi
Slide 33: Major overseas subsidiaries and partners
Major overseas subsidiaries and partners ©
Slide 34: Lion Nathan results overview
Lion Nathan results overview 2008 H1 results (Oct. 2007 – Mar. 2008) Unit: A$ million Net sales: 1,144.1 (increase of 7.8% on the previous comparable period) Group sales increased 7.8% from acquisition of J. Boag (3 months worth of sales reflected in the consolidate financial report), strong sales,
Slide 35: Inclusion of Lion Nathan in Kirin's consolidated results
Inclusion of Lion Nathan in Kirin’s consolidated results (billion yen) Operating Ordinary Consolidated 2008 H1 Sales income income Net income net income Average rates during period as used in Lion Nathan P&L LN P/L 110.0 27.6 23.5 16.1 7.4 2008 H1 1A$ = ¥98.11 Amortization of consol. Adjust 2007 H1
Slide 36: National Foods 2008 interim results
National Foods 2008 interim results 2008 H1 764 6% GROSS SALES 1,281 8% NET SALES 1,059 9% EBIT 2 -95% % to Net Sales 0% EBITDA 21 -64% % to Net Sales 2% ©
Slide 37: National Foods 2008 H1 analysis of operating income (EBIT)
National Foods 2008 H1 analysis of operating income (EBIT) Large impact from milk costs in drought, distribution costs from high oil prices. Targeted efficiency by reducing overheard costs but EBIT decreased A$39m. $m 110 95 18 80 65 38 77 50 35 35 20 41 12 4 9 5 6 2 1 -10 2007 interim Milk price Mi
Slide 38: National Foods 2008 interim results review by segment
National Foods 2008 interim results review by segment 2008 H1 2007 H1 Change Comment Total Volume in million liters, sales in $AU million Sales volume 765 725 40 Net sales 1,059 968 91 Milk Sales volume 435 399 36 Volumes increased from new PB contracts with volume outlets and sales up on 2007 Net s
Slide 39: National Foods 2008 full-year forecasts
National Foods 2008 full-year forecasts 2008 est. 1,503 2% GROSS SALES 2,608 6% NET SALES 2,143 7% EBIT 100 -15% % to Net Sales 5% EBITDA 143 -8% % to Net Sales 7% ©
Slide 40: National Foods 2008 full-year operating income (EBIT) forecast
National Foods 2008 full-year operating income EBIT) forecast For 2008 H2, raw milk cost increases expected to ease, with improving trend in profits as price increases take effect. Control of SG&A and other expenses expected to reduce decrease on 2007 to $AU17 million. $m 250 225 19 200 175 114 87 1
Slide 41: National Foods 2008 full-year forecasts by segment
National Foods 2008 full-year forecasts by segment 2008 2007 YoY change Comment Total Volume in million liters, sales in $AU million Sales volume 1,503 1,466 37 Net sales 2,143 2,006 137 Milk Sales volume 857 800 57 PBs from volume outlets expected to continue driving volumes. Net sales 974 863 111
Slide 42: National Foods 2008 interim and full-year brand contribution by segment
National Foods 2008 interim and full-year brand contribution by segment In H1, raw milk price increases limited brand contribution from milk segment to 26%. Return on milk price increases expected to bring recover to 37% for the full year. 2008 H1 results 2008 full-year estimate (Revised) Juice Dair
Slide 43: San Miguel results overview
San Miguel results overview As of Aug. 2008 Business progress and topics Sold National Foods in Dec. 2007 and J. Boag & Son Pty Limited in Jan. 2008 (Gain from sale recorded as net income for the period Oct. 2007 to Mar. 2008) Conducted an IPO for San Miguel Brewery Inc. (SMB), on May 12. About 5% o
Slide 44: Inclusion of San Miguel in Kirin's consolidated results
Inclusion of San Miguel in Kirin’s consolidated results 2008 H1 SMC P&L 218.8 16.5 30.8 32.8 (billion* yen) 6.5 Equity in earnings of af f iliates* 6.5 6.5 6.5 Average rates during the period Amortization of as used in SMC P&L inv estment 2008 1H 1PHP= ¥2.61 amount dif f erences (1.0) (1.0) (1.0) 20
Slide 45: Appendix
BOLE RRM ee KIRIN Appendix
Slide 46: Results of Operations
Results of Operations (¥ billions) 2007 2008 The 1st half Actual Annual Actual The 1st half Actual Annual Forecast (year-on-year rate) Sales 836.0 6.8% 1,801.1 8.1% 1,047.8 25.3% 2,330.0 29.4% Operating income 42.8 (4.7%) 120.6 3.7% 47.5 10.9% 152.0 26.0% Ordinary income 45.6 (3.1%) 123.3 2.1% 47.6
Slide 47: Sales Details
Sales Details 2007 2008 The 1st half Actual Annual Actual The 1st half Actual Annual Forecast Sales volume (year-on-year rate) Increase Increase Increase Increase Alcohol beverages Thousand KL (Decrease) Thousand KL (Decrease) Thousand KL (Decrease) Thousand KL (Decrease) Beer, Happo-shu, and New ge
Slide 48: Major Expense and Others
Major Expense and Others (¥ billions) 2007 2008 The 1st half Actual Annual Actual The 1st half Actual Annual Forecast Sales promotion 83.6 181.4 92.2 268.0 Advertising 38.5 69.0 41.1 (Sales promotion and advertising expenses include in the above) Kirin Brewery Domestic alcohol beverages Sales promot
Slide 49: Major Fluctuations of Balance Sheets
Major Fluctuations of Balance Sheets ¥ billions) 2007 2008 Increase The 1st The 1st Reference (Decrease) half Actual half Actual ASSETS Current Assets Increase due to addition of newly consolidated Notes and accounts 318.2 388.9 70.7 subsidiaries * and decrease due to the 1st half-end of receivable,
Slide 50: Quantitative targets
Guide to Kirin Group Consolidated Financial Indices (¥ billions) 2008 Annual 2009 2008 2007 2008 The 1st Forecast Revised Annual Actual half Actual Disclosed on medium-term Forecast April 30, 2008 business plan Consolidated Including liquor tax 1,801.1 1,047.8 2,400.0 2,330.0 2,500.0 Quantitative ta
Slide 51: Information by Segment
Information by Segment <FY2008> (¥ billions) Alcohol Soft drinks and Eliminations or Pharmaceuticals Others Total beverages Foods Corporate The 1st Annual The 1st Annual The 1st Annual The 1st Annual The 1st Annual The 1st Annual half Actual Forecast half Actual Forecast half Actual Forecast half Ac
Slide 52: Results of operations by Major Companies: FY2008 first half actual
Results of operations by Major Companies (Consolidated) <FY2008 The first half Actual> (¥ billions) Operating Ordinary Consolidated Sales Net income income income Net income Kirin Brewery (consolidated subsidiary) *1 384.7 15.2 - - - Mercian (consolidated subsidiary) 43.5 (0.3) (0.3) (0.2) (0.1) Lio
Slide 53: FY2008 Forecasts
<FY2008 Forecasts> (¥ billions) Operating Ordinary Consolidated Sales Net income income income Net income Kirin Brewery (consolidated subsidiary) *1 882.8 56.0 - - - Mercian (consolidated subsidiary) 98.0 1.6 1.5 1.2 0.6 Lion Nathan (consolidated subsidiary) *2 192.7 45.7 36.7 27.6 12.7 Brand amorti
Slide 54: Sales Details of Alcohol Beverages (Kirin Brewery)
Sales Details of Alcohol Beverages (Kirin Brewery Company, Limited) 2007 2008 The 1st half Actual Annual Actual The 1st half Actual Annual Forecast Sales volume Thousand KL Increase Thousand KL Increase Thousand KL Increase Thousand KL Increase (Decrease) (Decrease) (Decrease) (Decrease) (year-on-ye
Slide 55: Sales Details of Soft Drink Beverages: Category
Sales Details of Soft Drink Beverages (Kirin Beverage Group) <Category > ©
Slide 56: Sales Details of Soft Drink Beverages: Container type
Sales Details of Soft Drink Beverages (Kirin Beverage Group) <Container type > ©
Slide 57: Sales Details of Pharmaceuticals
Sales Details of Pharmaceuticals (KYOWA HAKKO KOGYO CO., LTD. and Kirin Pharma Company, Ltd.) (¥ billions) 2007 2008 The 1st half Actual Annual Actual The 1st half Actual Annual Forecast ESPO ® / NESP ® 19.8 44.9 15.7 41.0 GRAN ® / Neu-up ® 6.4 14.8 6.6 16.0 Coniel ® - - 6.0 17.6 Allelock ® - - 5.1
Slide 58: This material is intended for informational purposes only
This material is intended for informational purposes only and is not a solicitation or offer to buy or sell securities or related financial instruments. ©
Kirin Holdings Company — H1 2008 Earnings Presentation on 6ix