T. Hasegawa Co., Ltd. · TSE:4958
T. Hasegawa — FY2022 Earnings Presentation
47 slides from T. Hasegawa's earnings presentation, Nov 29, 2022
Slide 1: Financial Results for the Fiscal Year Ended September 30, 2022
Financial Results for the Fiscal Year Ended September 30, 2022 November 29, 2022 T. HASEGAWA CO., LTD.
Slide 2: Contents
Contents I. Business Overview II. Overview of Financial Statements III. Business Environment IV. Management Policy V. Global Strategy VI. Medium-Term Three-Year Plan Overview VII. Capital Policy VIII. Accident at the Itakura Facility IX. Accompanying Materials 1
Slide 3: I. Business Overview
Th BSNS A tek 8 At (© THASEGAWA CO, LTD. I. Business Overview
Slide 4: Flavor and Fragrance Business
Flavor and Fragrance Business Ingredients Products (Compounded Flavors and Fragrances) 1. Natural aromatics 3. Flavors Compounding 2. Synthesized aroma Formulas 4. Fragrances chemicals Integration of research and development capabilities • Flavorists: Experts who formulate flavors Perfumers: Experts
Slide 5: II. Overview of Financial Statements
II. Overview of Financial Statements 4
Slide 6: Market Environment: Trends by Category (Domestic Market)
Market Environment Trends by Category (Domestic Market) • Fiscal Year Ended (FYE) September 30, 2022 (October 2021 to September 2022) Category Trends • Personal products are recovering as COVID-19 related restrictions are eased • Good weather conditions during the peak demand period from July Bevera
Slide 7: Summary of Consolidated Performance
Summary of Consolidated Performance • YoY Sales increase mainly due to higher sales at U.S. subsidiaries (including MISSION), T. HASEGAWA (non-consolidated), and new consolidation of Thai and Taiwanese subsidiaries Operating profit, ordinary profit, and net profit increased mainly due to higher sale
Slide 8: Net Sales by Segment
Net Sales by Segment ・Sales growth factors Higher sales at U.S. subsidiaries (including MISSION) and T. HASEGAWA (non-consolidated) Newly consolidated Thai and Taiwanese subsidiaries from FY 2022 JPY million Change FY 2021 FY 2022 Segment Factor (actual) (actual) Amount % Higher sales at U.S. subsid
Slide 9: Net Sales by Group Company
Net Sales by Group Company • Sales growth factors Currency FY2021 FY2022 Change(%) Higher sales at U.S. subsidiaries (including 1US$ ¥107.50 ¥124.46 Yen down 15.8% MISSION) and T. HASEGAWA (non-consolidated) 1RMB ¥16.54 ¥18.96 Yen down 14.6% JPY million 1MYR ¥26.08 ¥28.90 Yen down 10.8% FY 2021 FY 2
Slide 10: Operating Profit by Group Company
Operating Profit by Group Company • Profit growth factors Currency FY2021 FY2022 Change(%) Higher operating profit at T. HASEGAWA (non- 1US$ ¥107.50 ¥124.46 Yen down 15.8% consolidated) 1RMB ¥16.54 ¥18.96 Yen down 14.6% JPY million 1MYR ¥26.08 ¥28.90 Yen down 10.8% FY 2021 FY 2022 (actual) (actual)
Slide 11: III. Business Environment
III. Business Environment 10
Slide 12: Size of Global Flavors and Fragrances Market (Our Estimate)
Size of Global Flavors and Fragrances Market (Our Estimate) ・Worldwide flavors and fragrances sales: Approx. USD 30.0 billion (approx. JPY 3.3 trillion) North America Europe, Africa, Middle East - Market size: Approx. USD 7.7 billion (approx. JPY 840 billion*) - Market size: Approx. USD 11.0 billion
Slide 13: Global Flavors and Fragrances Market (Our Estimate)
Global Flavors and Fragrances Market (Our Estimate) • Global flavors and fragrances market in 2021: Flat YoY Global Flavors and Fragrances Market (Our Estimate) USD million 40,000 CAGR (Compound Annual Growth Rate) 30,000 South 6.5% America Asia 3.5% 20,000 North 2.1% America 10,000 Europe, Africa a
Slide 14: Japanese Flavors and Fragrances Market Size
Japanese Flavors and Fragrances Market Size • Flavors account for approximately 80% of the Japanese flavors and fragrances market (approx. 50% of the global market) Japanese flavor and fragrance market sales (JPY billion) Breakdown of Flavors and Fragrances (FY2021) 3,000 フレーバー Flavors 2,500 フレグランス
Slide 15: IV. Management Policy
Th BSNS A tek 8 At (© THASEGAWA CO, LTD. IV. Management Policy 14
Slide 16: Management Policy Focus Areas
Management Policy Become an organization that takes on challenges Strengthen Proposal Capabilities Focus Promote Reform Areas Concentration and Selection Enhance Human Resources (Develop Human Resources, Hire Experienced Personnel) Accelerate Expansion in Overseas Market Strengthen Sustainability In
Slide 17: V. Global Strategy
Th BSNS A tek 8 At (© THASEGAWA CO, LTD. V. Global Strategy
Slide 18: Domestic Strategies
Domestic Strategies Basic Strategies: Expand market share by anticipating new market demand caused by declining birthrate and aging population, as well as growing health consciousness Fragrances 15% Current initiatives and progress • Strengthen collaboration between sales, research, and marketing de
Slide 19: Overseas Strategy - U.S.
Overseas Strategy - U.S. Basic Strategy: Increase sales in the savory, health, and beverage sectors, and achieve synergies from acquisitions Current initiatives and progress • Acquisition of MISSION by T. HASEGAWA U.S.A. INC.in December 2020 Flavors PMI completed by the end of September 2021 as or
Slide 20: Overseas Strategy - China
Overseas Strategy - China Basic Strategy: Grow earnings through various measures based on a stronger organizational foundation Fragrances 22% Current initiatives and progress • Utilize marketing functions Develop strategic approaches to customers, tap unentered sectors and potential demand Strengt
Slide 21: Overseas Strategy - Southeast Asia
Overseas Strategy - Southeast Asia Fragrances Basic Strategy: Increase sales through collaboration between manufacturing and sales bases in Malaysia (THKL) and 10% sales bases in Thailand and Indonesia Current initiatives and progress • Acquire sales personnel and strengthen organization for new cus
Slide 22: Basic Policies Related to Business Portfolio
Basic Policies Related to Business Portfolio • Develop our businesses based on three basic strategies: (1) Expand Compounded Flavors and Fragrances Sales, (2) Secure Profits in Domestic Market, and (3) Grow in Overseas Markets • Achieve abundant and healthy living through aromas and contribute to th
Slide 23: Summary of Global Strategies
Summary of Global Strategies • Strengthen collaboration between sales, research, and marketing departments under the Business Solutions Division • Focus on enhancing quality of sales activities and proposals Promote solution sales and further strengthen customer success Japan • Speed up R&D, creat
Slide 24: VI. Medium-Term Three-Year Plan Overview
VI. Medium-Term Three-Year Plan Overview 23
Slide 25: Medium-Term Three-Year Plan (Consolidated)
Medium-Term Three-Year Plan (Consolidated) Expect sales increase by promoting solution sales through strengthening collaboration between sales, T. HASEGAWA research, and marketing departments, strengthening R&D capabilities, and addressing expansion in non-consolidated flavor and fragrance applicati
Slide 26: Capital Expenditures, Depreciation, and R&D Expenses
Capital Expenditures, Depreciation, and R&D Expenses • T. HASEGAWA (non-consolidated) DX promotion and IT reform project: (Actual FY9/22: Approx. JPY 0.5 billion) (Plan: FY9/23: Approx. JPY 1.5 billion, FY9/24: Approx. JPY 0.8 billion, FY9/25: Approx. JPY 0.8 billion) • U.S. second plant constructio
Slide 27: VII. Capital Policy
Th BSNS A tek 8 At (© THASEGAWA CO, LTD. VII. Capital Policy
Slide 28: Capital Policy
Capital Policy Basic Policy • Maintain a level of shareholders' equity that will enable us to execute growth investments and appropriately respond to risks, in order to achieve sustainable growth in corporate value and maximize it going forward Policy on Use of Funds • Appropriately use funds, takin
Slide 29: Capital Policy: Shareholder Returns
Capital Policy Shareholder returns • Strive to return profits to shareholders in accordance with business performance, while also securing the necessary internal reserves to further strengthen the Group's management foundations and engage in future business development • Pay dividends from surplus t
Slide 30: Capital Policy: Sale of Investment Securities
Capital Policy Sale of Investment Securities (Completed) • February 4, 2022: Published “Notice Concerning Expected Recording of Gain on Sales of Investment Securities (Extraordinary Income)” • In FYE September 30, 2022, extraordinary income in accordance with the sales of investment securities publi
Slide 31: VIII. Accident at the Itakura Facility
VIII. Accident at the Itakura Facility 30
Slide 32: Accident at the Itakura Facility
Accident at the Itakura Facility A serious accident occurred at the Itakura Facility of the Fukaya Production Center in Japan on September 15, 2022, resulting in the death of an employee and the injuries of two others Accident overview/ causes of the accident • Carbon monoxide released from roasted
Slide 33: IX. Accompanying Materials
IX. Accompanying Materials 32
Slide 34: Top Companies by Share of Net Sales in the Global Flavors and Fragrances Market
Top 10 Companies by Share of Net Sales in the Global Flavors and Fragrances Market USD Million Company name Country Sales(2021Yr) Market Share 1 IFF U.S. 8,510 28.5% 2 Givaudan Switzerland 6,099 20.4% 3 Firmenich Switzerland 3,924 13.1% 4 Symrise Germany 3,242 10.9% 5 ADM Germany 3,189 10.7% 6 Mane
Slide 35: Top Companies by Share of Net Sales in the Japanese Flavors and Fragrances Market
Top 10 Companies by Share of Net Sales in the Japanese Flavors and Fragrances Market Others 14.3% Company T Company SI 32.5% 5.5% Company SO 6.1% Company O 11.2% Company G T. Hasegawa 11.9% 18.5% (As of Mar. 2022） *1 Market shares calculated by taking the total non-consolidated net sales of the top
Slide 36: Sales Breakdown
Sales Breakdown • The Company specializes in high value-added compounded flavors and fragrances • High-mix production: Sales of approximately 12,000 flavors and fragrances per year JPY million T. Hasegawa Company T (Consolidated） (Consolidated） FY ended in Sep. 2022 FY ended in Mar. 2022 Sales Share
Slide 37: Breakdown of Flavor Segment Customers by Industry
Breakdown of Flavor Segment Customers by Industry • Many sales are to the beverage industry, and sales are seasonal To other industries Approx. 11% To seasoning industry To beverage Approx. 10% industry Approx. 32% To instant noodle industry Approx. 9% To sweet and savory snacks To dairy industry in
Slide 38: Analysis of Changes in Consolidated Statement of Profit
Analysis of Changes in Consolidated Statement of Profit • Operating profit growth factors Increase sales at U.S. subsidiaries (including MISSION) and at T. HASEGAWA (non- consolidated) and improvement in cost-of-sales ratio are main factors JPY million FY2021 FY2022 Change (Cumulative (Cumulative Fa
Slide 39: Analysis of Changes in Consolidated Balance Sheet
Analysis of Changes in Consolidated Balance Sheet JPY million Sep. 30, 2021 Sep. 30, 2022 Change Factor • Increase in cash and cash equivalents: JPY 6,313 million Current assets 55,242 65,989 10,747 • Increase in inventories: JPY 2,761 million • Increase in accounts receivable - trade: JPY 1,658 mil
Slide 40: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows JPY million FY2021 FY2022 Change Major items in FY2022 • Income before income taxes: JPY 11,267 million • Depreciation: JPY 3,406 million Cash flows from • Amortization of goodwill: JPY 824 million 9,980 8,001 (1,979) • Gain on sales of investment securities: (2,
Slide 41: Capital Expenditures, Depreciation, Goodwill and R&D Expenses
Capital Expenditures, Depreciation, Goodwill and R&D Expenses (Consolidated) JPY million FY2022 Plan FY2022 Actual Progress Capital Investment 3,731 4,306 115.4% Depreciation & Amortization 3,429 3,406 99.3% Amortization of Goodwill 824 824 100.0% R&D Expenses 4,858 4,971 102.3% *Depreciation includ
Slide 42: T. HASEGAWA non-consolidated (Actual)
T. HASEGAWA non-consolidated (Actual) JPY million FY2021 FY2022 FY2022 Change (Actual) (May 11 Revised Plan) (Actual) YoY Vs. target Amount Share Amount Share Amount Share Amount % Amount % Net Sales 37,362 100.0% 38,500 100.0% 39,174 100.0% 1,812 4.9% 674 1.8% Cost-of-sales 22,834 61.1% 23,570 61.2
Slide 43: Consolidated U.S. Subsidiaries (Actual)
Consolidated U.S. Subsidiaries (Actual) *Consolidated statements of profit of the Company's two U.S. subsidiaries (T. HASEGAWA U.S.A., INC. and MISSION FLAVORS & FRAGRANCES, INC.) *MISSION FLAVORS & FRAGRANCES, INC.'s financial results for FY2021 are for 9 months from January to September 2021, and
Slide 44: Consolidated China Subsidiaries (Actual)
Consolidated China Subsidiaries (Actual) *Consolidated statements of profit of the Company's two consolidated subsidiaries in China (T. HASEGAWA FLAVOURS AND FRAGRANCES (SHANGHAI) CO., LTD. and T. HASEGAWA FLAVOURS (SUZHOU) CO., LTD.) JPY million FY2021 FY2022 Change JPY Basis Amount Share Amount Sh
Slide 45: Malaysian Subsidiaries (Actual)
Malaysian Subsidiaries (Actual) *Statement of profit of T HASEGAWA FLAVOURS (KUALA LUMPUR) SDN. BHD. JPY million FY2021 FY2022 Change JPY Basis Amount Share Amount Share YoY % Net Sales 998 100.0% 1,358 100.0% 359 36.0% Cost-of-sales 570 57.1% 748 55.1% 177 31.2% Gross profit 428 42.9% 610 44.9% 181
Slide 46: Medium-Term Three-Year Plan (Consolidated)
Medium-Term Three-Year Plan (Consolidated) JPY million FY2022 (Actual) FY2023 (Plan) FY2024 (Plan) FY2025 (Plan) Amount Share YoY Amount Share YoY Amount Share YoY Amount Share YoY Net Sales 62,398 100.0% 11.9% 66,000 100.0% 5.8% 68,000 100.0% 3.0% 71,200 100.0% 4.7% Cost-of-sales 36,776 58.9% 11.1%
Slide 47: Disclaimer
This presentation is based on data as of November 11, 2022, and was created with the intention of providing information on future management plans and results for the fiscal year ended September 30, 2022. The views expressed in this material are those of the Company at the time of preparation. No gu