Kirin Holdings Co. Ltd. · TSE:2503
Kirin — H1 2009 Earnings Presentation
57 slides from Kirin's earnings presentation, Aug 6, 2009
Slide 1: 2009 interim results presentation
2009 interim results presentation Interim period of the fiscal year ending December 31, 2009 August 6, 2009 2008年8月4日 August 2009 KIRIN HOLDINGS COMPANY, LIMITED 1
Slide 2: Contents
Contents Overall management Major overseas subsidiaries and partners ◆ Management summary ◆ National Foods results ◆ Lion Nathan results, progress on the deal 2009 H1 results overview and full-year forecasts ◆ San Miguel results, progress on the deal ◆ Trends in H1 performance, full-year forecasts ・
Slide 3: Management summary: 2009 H1 results and key issues going forward
Management summary ～2009 H1 results and key issues going forward ・H1 results exceeded targets •Action and qualitative expansion: Steady progress in developing 2010 medium-term business plan ■ Position in 2009 ⇒ Final year of 2007 medium-term business plan, zero year of next medium-term business plan
Slide 4: Generating synergies: key issues and our approach -1
Generating synergies: 14 key issues and our approach -1 ■ Top priority is to generate synergies: Each initiative is proceeding as planned ■ Cross-company teams (CCT) spanning the group by function and have been formed to strengthen our organization and accelerate the generation of synergies 2009 H1
Slide 5: Generating synergies: key issues and our approach -2
Generating synergies: 14 key issues and our approach -2 2009 H1 progress (2009 target) Issue 2009 approach Sales Cost synergies synergies CCT Pursue policies for reducing Group procurement costs, ¥1.6 bn Enhance Group focusing mainly on KB and KBC (¥0.7 bn) procurement aiming to (Raw materials, pack
Slide 6: 2009 interim results overview and full-year forecasts
2009 interim results overview 2009 full-year forecasts (Consolidated) 6
Slide 7: 2009 H1 consolidated review
2009 H1 consolidated review ● Good progress: outperformed initial forecasts in all income categories Record sales and ordinary income. Targets achieved in all income categories on strong performances by core companies Kirin Brewery, Lion Nathan and National Foods, despite the difficult operating env
Slide 8: 2009 full-year forecasts (consolidated)
2009 full-year forecasts (consolidated) ●Operating income, ordinary income, net income all upwardly revised Based on results and operating environment until H1 revisions are as follows. Kirin Brewery: Sales and operating income upwardly revised due to strong sales Lion Nathan: Sales and operating in
Slide 9: Performance trends: 2009 H1 results
Performance trends: 2009 H1 results Income, EBITDA Sales Consolidated Consolidated 120 1,000 100 Sales, Sales, Ordinary Ordinary 800 income income both both new new 80 records records 600 60 400 Sales 40 Operating income Ordinary income 20 200 Net income EBITDA 0 0 04H1 05H1 06H1 07H1 08H1 09H1 (Bil
Slide 10: Performance trends (revised FY forecasts)
Performance trends (revised FY forecasts) Continue Continue strong strong performance performance of of H1; H1; aim aim to to achieve achieve upwardly upwardly revised revised targets targets Income Sales 280 2,400 240 2,200 200 2,000 Sales Operating income 160 1,800 Ordinary income Net income 120 1
Slide 11: Consolidated interim sales and operating income by segment
Consolidated interim sales and operating income by segment ■ Sales: Grew steadily in all segments except alcohol, which decreased due to currency exchange rates 2008 H1 2009 H1 Alcohol (46.7) 1,047.8bn SD, Foods +7.4 1,060.4bn Other Pharma +31.3 その他 Other Pharma 88.7bn 医薬 Pharma 109.3bn 69.6bn (8%)
Slide 12: Sales and operating income by segment (2007, 2008, 2009 forecasts)
Sales and operating income by segment (2007, 2008, 2009 forecasts) ■ Sales: Alcohol segment decreased in sales composition due to growth in Soft drinks, foods, Pharma, and Other segments Alcohol (7.9) Alcohol (78.5) 2007 SD, Foods ＋242.1 2008 SD, Foods ＋37.4 2009 e 1,801.1 bn Pharma ＋101.6 2,303.5 b
Slide 13: 2009 H1 Review by segment
2009 H1 Review by segment 13
Slide 14: 2009 H1: Alcohol segment
2009 H1: Alcohol segment Billion yen; 2009 H1 results 2008 H1 results Change % Change in Operating income is consolidated yen stated prior to All Alcohol Sales 498.6 545.3 (8.6)% (46.7) company/eliminations Operating income 38.3 42.5 (9.8)% (4.2) Kirin Brewery Key changes in profits (2009 vs. 2008)
Slide 15: 2009 H1: Soft drinks and foods segment
2009 H1: Soft drinks and foods segment Billion yen; 2009 H1 results 2008 H1 results Change % Change in Operating income is consolidated yen stated prior to All Soft drinks and company/eliminations foods Sales 351.4 344.0 +2.1% 7.4 Operating income (6.4) (5.6) --% (0.8) Kirin Beverage Key changes in
Slide 16: 2009 H1: Pharmaceuticals segment
2009 H1: Pharmaceuticals segment Billion yen; 2009 H1 results 2008 H1 results Change % Change in Operating income is consolidated yen stated prior to all Pharma Sales 100.9 69.6 +44.8% 31.3 company/eliminations Operating income 18.0 10.9 +64.7% 7.1 *Consolidated Kyowa Hakko from April 2008 (became K
Slide 17: 2009 H1: Other business segment review
2009 H1: Other business segment review Billion yen; 2009 H1 results 2008 H1 results Change % Change in Operating income is consolidated yen stated prior to All Other Sales 109.3 88.7 +23.3% 20.6 company/eliminations Operating income (0.4) 7.3 --% (7.7) Key changes in profits (2009 vs. 2008) Kyowa Ha
Slide 18: 2009 H1: Profit breakdown (Ordinary income and net income)
2009 H1: Profit breakdown (Ordinary income and net income) Ordinary income Net Income 18
Slide 19: 2009 full year Key issues by segment
2009 full year Key issues by segment 19
Slide 20: Key issues for 2009 H2 by segment and by major operating company
Key issues for 2009 H2 by segment and by major operating company Kirin Brewery ・Maintain momentum of strong sales achieved up to H1 ・Continue effective sales promotions of core brands (Ichiban Shibori, Nodogoshi Nama, Tanrei ) and maintain strong performance of Kirin Free ・Further strengthen sales f
Slide 21: Alcohol segment: Outlook for the full year
Alcohol segment: Outlook for the full year Billion yen; 2009 current 2009 initial 2008 results Change % Change in Change to consolidated forecast forecast yen forecast in yen Alcohol Sales 1,103.0 1,095.0 1,181.5 (6.6)% ¥(78.5) bn +¥8.0bn Operating income 96.0 90.0 109.9 (12.7)% ¥(13.9) bn +¥6.0bn M
Slide 22: Soft Drinks & Food segment: Outlook for the full year
Soft Drinks & Food segment: Outlook for the full year Billion yen; 2009 current 2009 initial 2008 results Change Change in Change to consolidated forecast forecast % yen forecast in yen Soft Drinks Sales 754.0 740.0 716.6 +5.2% +¥37.4bn +¥14.0bn & Food Operating income 110 120 64 +71.0% +¥4.6bn ¥(1.
Slide 23: Pharmaceuticals segment: Outlook for the full year
Pharmaceuticals segment: Outlook for the full year Billion yen; consolidated 2009 current 2009 initial 2008 Change Change in Change to forecast forecast results % yen forecast in yen Pharma Sales 205.0 200.0 171.5 +19.5% +33.5bn +5.0bn Operating income 35.0 28.0 28.2 +24.1% +6.8bn +7.0bn Main differ
Slide 24: Other segment: Outlook for the full year
Other segment: Outlook for the full year Billion yen; consolidated 2009 central 2009 initial 2008 Change Change in Change to forecast forecast results % yen forecast in yen Other Sales 238.0 265.0 233.8 +1.8% +4.2bn (27.0)bn Operating income 6.0 13.0 18.2 ( 67.2)% (12.2)bn (7.0)bn Main differences ・
Slide 25: Profit breakdown: Outlook for the full year
Profit breakdown (Ordinary income and net income): Outlook for the full year Ordinary income Net Income 25
Slide 26: Supplementary materials
BOULEH RBC KIRIN Supplementary materials
Slide 27: National Foods 2009 interim results
National Foods 2009 interim results Reference: Local Operational Base Results Forecast Unit: A$ million 2008 2009 2009 2009 Change Initial full-year Revised full-year Change First half First half forecast forecast Sales 1,145 1,804 58% 3,487 3,523 +36 EBIT （operating income) 2 25 1150% 104 140 +36 E
Slide 28: National Foods 2009 first half: analysis of operating income (EBIT)
National Foods 2009 first half: analysis of operating income （EBIT） ■ Contribution from price rises implemented from 2008 and stabilization of raw milk input costs from 2008 2H on ■ Negative exchange rate impact from concentrated fruit juice purchased in US$ but integration benefits from Dairy Farme
Slide 29: EBIT analysis: 2009 revised full-year forecast vs 2008 results
Operating income (EBIT）analysis: 2009 revised full-year forecast cf. 2008 results ■ Raw milk prices for 2010 (July 2009—June 2010) are expected to be lower and more stable than initially forecast ■ Aiming to generate major increase in income despite consumer shift to lower priced products, with ongo
Slide 30: EBIT analysis: 2009 initial forecast vs 2008 results
Operating income （EBIT） analysis: 2009 initial forecast cf. For reference 2008 results ■ Milk costs forecast to rise A$30M despite signs of easing in market—includes raw milk contracts already signed ■ Aiming to cover above milk cost pressure and restore performance through measures such as: strengt
Slide 31: National Foods (+ DF) 2009 interim results review by segment
National Foods (+ DF) 2009 interim results review by segment 2009 1H 2008 1H Change Comment Total Volume in million liters; sales in A$million Sales volume 1,057 764 293 (2008 1H results does not include DF) Net sales 1,625 1,059 566 Milk Sales volume 702 434 268 ・ Continuing price increases to pass
Slide 32: National Foods (+ DF) 2009 full-year forecast by segment
National Foods (+ DF) 2009 full-year forecast by segment 2009 2008 Change Comments Total Sales volume 2,115 1,495 620 Volume in million liters; sales in A$million Net sales 3,284 2,124 1,160 （2008 1H results do not include Dairy Farmers) Milk Sales volume 1,364 864 500 ・ Milk costs becoming more sta
Slide 33: Trends in contribution to earnings by brand segment
Trends in contribution to earnings by brand segment ■ 2009 full year forecast: Milk segment to improve further with more stable raw milk input costs but contribution from juice to decrease 2007 2008 2009 forecast 5% 6% 5% 10% 12% 16% 32% 41% 13% 45% 21% 21% 27% 29% 17% Cheese and International and M
Slide 34: Lion Nathan results overview
Lion Nathan results overview 2009 H1 results (Oct. 2008 – Mar. 2009) Unit: A$ million Achieved fifth consecutive period of increased earnings (EBIT) as Australian Beer Business raised prices and shifted towards premium products, absorbing higher raw material prices and increased depreciation costs s
Slide 35: Inclusion of Lion Nathan in Kirin's consolidated results
Inclusion of Lion Nathan in Kirin’s consolidated results (Unit: billion yen) Operating Ordinary Consolidated Average rates during period 2009 H1 Sales income income Net income net income as used in Lion Nathan P&L LN P/L 74.9 18.9 15.5 11.1 5.1 2009 H1 1A$ = ¥63.20 2008 H1 1A$ = ¥98.11 Brand amortiz
Slide 36: Consolidation of Lion Nathan as a wholly owned subsidiary
Consolidation of Lion Nathan as a wholly owned subsidiary Matches Kirin’s business strategy KV2015, which targets shift to qualitative growth with the aim of becoming leading company in food and health in Asia and Oceania Background Strengthens Kirin’s broad business platform in Australia that i
Slide 37: San Miguel business overview, results
San Miguel business overview, results Reference: SMC net sales, operating income by main Group SMC results (inclusion in Kirin’s consolidated interim results) company (FY2008 Jan-Dec) Each main division recorded increases in net sales, achieving growth of 14% on Since FY2006 the period of SMC result
Slide 38: Inclusion of SMC in Kirin's consolidated results
Inclusion of SMC in Kirin’s consolidated results Kirin’s FY2009 consolidated results will reflect SMC’s results between October (Unit: billion 2008 yen) and March 2009, and SMB’s results between April 2009 and September 2009 Operating Ordinary Consolidated 2009 H1 Sales income income Net income net
Slide 39: Acquisition of San Miguel Brewery (SMB) shares
Acquisition of San Miguel Brewery (SMB) shares As SMC is actively pursuing entry into the infrastructure businesses, Kirin has bought shares in San Miguel Brewery (SMB), which had been established as a separate company through a spin-off Background ► Strengthen alcohol beverages operations in Asia a
Slide 40: Reference materials
Reference materials - R&D pipeline - Goodwill amortization - Impact of foreign exchange 40
Slide 41: Pharmaceuticals Pipeline (Phase II, Phase III)
Pharmaceuticals Pipeline （Phase II, Phase III） As of July 31, 2009 Code Name Stage In-house or Category Generic Name Indication Formulation Remarks Product Name Japan Other countries Licensed Cancer/ Phase I Developed Cancer KW-0761 Phase Ⅱ in USA Injection Humanized monoclonal antibody Hematology (
Slide 42: Pharmaceuticals Pipeline (Phase I)
Pharmaceuticals Pipeline （Phase I） As of July 31, 2009 Code Name Stage In-house or Category Generic Name Indication Formulation Remarks Product Name Japan Other countries Licensed Cancer/ Phase Ⅰ in Developed KW-2450 Cancer Oral Hematology USA In-house anagrelide Essential KRN654 Phase Ⅰ/Ⅱ Oral Lice
Slide 43: Goodwill amortization (2009 full-year actual)
Goodwill amortization (2009 full-year actual) (Billion yen) Total Kirin Holding Investment Goodwill Brand amortization Year of Amorti- Balance Years Amorti- Balance Years Amorti- Balance Years investment zation remaining remaining zation remaining remaining zation remaining remaining LION NATHAN LTD
Slide 44: Impact of foreign exchange (Australian dollar)
Impact of foreign exchange (Australian dollar) Impact Impact of of changes changes in in foreign foreign exchange exchange (AU (AU $) $) on on operating operating results results (compared (compared to to previous previous fiscal fiscal year) year) (Billion yen) Full year Interim Pre-revisions Post-
Slide 45: Supplementary materials
BOULEH RBC KIRIN Supplementary materials
Slide 46: Results of Operations
Results of Operations (¥ billions) 2008 2009 Six months ended Six months ended June 30, Actual Annual Actual June 30, Actual UE TRESS! (year-on-year rate)| Sales 1,047.8 25.3% 2,303.5 27.9%] 1,060.4 1.2% 2,300.0 (0.2%) Operating income 47.5 10.9% 145.9 21.0% 40.1 (15.5%) 125.0 (14.4%) Ordinary incom
Slide 47: Sales Details
Sales Details 2008 2009 eens Annual Actual hme 30 melaal Annual Forecast Sales volume (year-on-year rate) Alcohol beverages Thousand KL Oocenee) Thousand KL (ones) Thousand KL — Thousand KL — Beer, Happo-shu, and Newgenre | _1,552 (3.3%) | 3,325 (1.8%)) 1,557 0.4% 3277 (1.4%) Millon cases: Million c
Slide 48: Major Expenses and Others
Major Expenses and Others (¥ billions) 2008 2009 Six months ended Six months ended June 30, Actual Annual Actual June 30, Actual Annual Forecast Sales promotion expenses 92.2 201.2 918 +} 261.5 Advertising expenses 414 72.0 36.2 (Sales promotion and advertising expenses include in the above) Kirin B
Slide 49: Major Fluctuations of Balance Sheets
Major Fluctuations of Balance Sheets 49
Slide 50: Guide to Kirin Group Consolidated Financial Indices
Guide to Kirin Group Consolidated Financial Indices 50
Slide 51: Information by Segment
Information by Segment KIRIN <FY2009> (¥ billions) Alcohol Soft drinks and . Eliminations or Pharmaceuticals Others Total beverages Foods Corporate Six Six ‘Soc Six ‘Shc Six months months months months months months Jed Annual ended annual ‘ended annual ended annual ‘ended annual ended annual June 3
Slide 52: Results of operations by Major Companies (2009 H1)
Results of operations by Major Companies (2009 H1) 52
Slide 53: Results of operations by Major Companies (FY2009 Forecast)
Results of operations by Major Companies (FY2009 Forecast) 53
Slide 54: Sales Details of Alcohol Beverages (Kirin Brewery)
Sales Details of Alcohol Beverages (Kirin Brewery) 54
Slide 55: Sales Details of Soft Drinks Beverages (Kirin Beverage Group)
Sales Details of Soft Drinks Beverages (Kirin Beverage Group) 55
Slide 56: Sales of Major Pharmaceuticals (Kyowa Hakko Kirin)
Sales of Major Pharmaceuticals (Kyowa Hakko Kirin Co., Ltd.) 56
Slide 57: This material is intended for informational purposes only and is not a solicitation or
This material is intended for informational purposes only and is not a solicitation or offer to buy or sell securities or related financial instruments. 57
Kirin Holdings Company — H1 2009 Earnings Presentation on 6ix