Lacto Japan Co., Ltd. · TSE:3139
Lacto Japan — H1 FY2022 Earnings Presentation
32 slides from Lacto Japan's earnings presentation, July 2022
Slide 1: FY2022 First Half Financial Results Briefing
FY2022 First Half 株式会社ラクト・ジャパン Financial Results Briefing マスタータイトル July 2022 © Lacto Japan Co., Ltd.
Slide 2: Contents
Contents Consolidated Financial Results for FY11/2022 1H and Full-Year FY11/2022 Earnings Forecasts P. 3 Overview of Business Divisions P. 11 Business Environment in 2H and Future Initiatives P. 18 Corporate Business Plan “NEXT-LJ2024” P. 27 2 © Lacto Japan Co., Ltd.
Slide 3: Consolidated Financial Results for FY11/2022 1H and Full-Year Earnings Forecasts
Consolidated Financial Results for FY11/2022 1H and Full-Year FY11/2022 Earnings Forecasts 3 © Lacto Japan Co., Ltd.
Slide 4: Financial Material
Financial Material Demand recovered in tandem with the easing of restrictions on behavior, both net sales and ordinary income grew YoY and versus initial forecasts, and we revised up full-year earnings forecasts Consolidated Net Sales: +32.6% YoY ／ +13.5% vs. initial forecast ▍ In the Dairy Ingredie
Slide 5: FY11/2022 First Half Financial Results
FY11/2022 First Half Financial Results (Millions of Yen) FY11/ 2022 1st Half FY11/ 2021 Initial vs. Initial 1st Half Forecast YoY Actual Forecast Change Change Net sales 52,648 61,500 69,788 32.6% 13.5% Ordinary income 1,412 1,350 1,665 17.9% 23.3% Ordinary income ratio 2.7% 2.2% 2.4% － － (Foreign e
Slide 6: Factors Contributing to Increase / Decrease in Sales and Ordinary Income
Factors Contributing to Increase / Decrease in Sales and Ordinary Income Amid continuing logistics turmoil, sales volume increased as we firmly seized sales opportunities by taking advantage of our procurement capabilities, and in addition, sales unit prices increased due to higher international mar
Slide 7: Balance Sheets
Balance Sheets (Millions of Yen) FY11/2021-end May 2022-end Difference Major factors of change Current assets 50,018 58,597 8,579 Cash and cash equivalents 5,510 6,595 1,084 Increase in inventories Trade notes and accounts receivable 19,277 20,525 1,248 • Increase in merchandise due to higher sales
Slide 8: Consolidated Cash Flow Statements
Consolidated Cash Flow Statements (Million yen) FY11/2022 Major factors of change 1st Half Cash flows from operating activities -2,158 Decrease in cash flows from operating activities -122 Increase in accounts receivable and Cash flows from investing activities inventories due to higher sales volume
Slide 9: FY11/2022 Consolidated Earnings Forecasts
FY11/2022 Consolidated Earnings Forecasts (Million yen) FY11/2022 FY11/2021 Initial Revised YoY YoY Actual Disclosed on Forecast 5 July Difference Change Net sales 110,883 126,000 140,000 29,116 26.3% Ordinary income 2,681 2,900 3,100 418 15.6% Ordinary income ratio 2.4% 2.3% 2.2% － － Net income att
Slide 10: Revisions to Full-year Forecasts for Sales and Sales Volume by Business Division
Revisions to Full-year Forecasts for Sales and Sales Volume by Business Division （ Million yen ） Net sales Initial Revised YoY Disclosed on Difference Forecast 5 July Change Dairy Ingredients and Cheese 85,000 97,200 12,200 14.4% Business Meat Products Business 15,000 13,700 -1,300 -8.7% Asian Bus
Slide 11: Overview of Business Divisions
Overview of Business Divisions 11 © Lacto Japan Co., Ltd.
Slide 12: Net Sales and Sales Volume by Business Division (YoY)
Net Sales and Sales Volume by Business Division (YoY) （ Million yen ） FY11/2021 FY11/2022 YoY 2Q 2Q Difference Net sales Cumulative Cumulative Change Dairy Ingredients and Cheese 36,952 47,202 10,250 27.7% Business Meat Products Business 6,769 7,221 451 6.7% Asian Business (Dairy Ingredients) 6,80
Slide 13: Overview of Dairy Ingredients and Cheese Business Division
Overview of Dairy Ingredients and Cheese Business Division ⃞ Business environment in the first half □Net Sales (Million yen) ▏ The Omicron strain outbreak caused a slump in 47,202 commercial demand at the beginning of the term, Cumulative but demand has been recovering with the lifting of 36,952 res
Slide 14: Overview of Meat Products Business Division
Overview of Meat Products Business Division □Net Sales ⃞ Business environment in the first half (Million yen) 7,221 ▏ Restaurant demand turned to a recovery trend. Cumulative 6,769 ▏ Continuing labor shortages at a U.S. supplier that is our major supplier led to a decrease in 3,690 ■2Q 3,653 product
Slide 15: Overview of Asian Business Division (Dairy Ingredients)
Overview of Asian Business Division (Dairy Ingredients) ⃞ Business environment in the first half □Net Sales (Million yen) ▏ Due to excess inventories of domestic dairy 12,279 ingredients in Japan, demand for dairy ingredient preparations for the Japanese market was weak. Cumulative 6,809 7,495 ▏ The
Slide 16: Overview of Asian Business Division (Cheese)
Overview of Asian Business Division (Cheese) ⃞ Business environment in the first half □Net Sales (Million yen) 1,827 ▏ Commercial demand was in a recovery trend in Cumulative 1,689 tandem with the easing of behavior restrictions. 892 ▏ The lockdown measures in the Shanghai area of ■2Q 887 China had
Slide 17: International Prices of Dairy Products
International Prices of Dairy Products (last 3 years) [Factors behind rise in international market prices in 2022] Decrease in raw milk production volume in major production Skim milk powder (EUR/ton) areas (feed and energy prices/climate) 8,000 Butter (EUR/ton) Post COVID-19 rapid demand growth
Slide 18: Business Environment in 2H and Future Initiatives
Business Environment in 2H and Future Initiatives 18 © Lacto Japan Co., Ltd.
Slide 19: Overview of Business Environment in Second Half
Overview of Business Environment in Second Half Business Business environment expected in second half Divisions • We expect commercial demand, primarily restaurant demand, to recover. • On the other hand, excess inventories of domestically produced skim milk powder are expected to Dairy continue for
Slide 20: State of Domestic Dairy Ingredient Inventories
State of Domestic Dairy Ingredient Inventories □State of Domestic Dairy Ingredient Inventories (MT) 120,000 100,000 80,000 Inventory adjustment 60,000 countermeasure project 40,000 will continue. 20,000 0 Nov Mar Nov May Jul Mar Nov May(Estimate) Jan,2019 Sep May Jul Mar Jan,2020 Sep May Jul Mar Jul
Slide 21: Outline of Special Measures Project for Inventory Adjustment of Dairy Products
Outline of Special Measures Project for Inventory Adjustment of Dairy Products J-milk Dairy Country (Dairy industry organization) manufacturers (FY2022 ALIC project) Dairy manufacturers' Project to Promote Stable Supply and Special Measures Project for Inventory share of dairy product Demand for Liv
Slide 22: Results of response to excess domestic inventories (1)
Results of response to excess domestic inventories (1) Increase in transactions with feed manufacturers In sales to feed manufacturers, sales of domestically produced skim milk powder were newly added from FY11/2020, expanding transactions from before the COVID-19 pandemic. □ Sales to feed manufactu
Slide 23: Results of response to excess domestic inventories (2)
Results of response to excess domestic inventories (2) Supplementation of import business and expansion into export business Sales of domestically produced skim milk powder not only supplemented the decline in sales volume of imported products, but also contributed to the creation of new business op
Slide 24: Priority measures in 2H (1)
Priority measures in 2H (1) Respond aggressively to countermeasure project and product sales tailored to demand □ Sales composition of Dairy Ingredients and Cheese Business (volume basis) (MT） 103,966 100,138 98,293 96,454 93,280 91,993 92,364 ▍ Aggressive sales of products less affected by domestic
Slide 25: Priority measures in 2H (2) Expand market share for cheese sales
Priority measures in 2H (2) Expand market share for cheese sales □Cheese (Dairy (DairyIngredients and Cheese) salessales volumevolume □Cheese Ingredients and Cheese) ▍ Sales volume recovering amid 105.0 （FY11/2019 1H=100） 100.0 100.7 rising market prices and continued 100.0 92.3 logistics disruption
Slide 26: Priority measures in 2H (3) Cheese Manufacturing and Sales Division in Asia
Priority measures in 2H (3) Expand sales and secure profit in Cheese Manufacturing and Sales Division in Asia □ Sales Volume (Asian Cheese business) ▍ Expansion in sales of processed cheese 5,000 Singapore Increase in sales of price-appealing products 4,635 Malaysia 4,197 Aim to expand sales by resp
Slide 27: Corporate Business Plan “NEXT-LJ2024”
Corporate Business Plan “NEXT-LJ2024” 27 © Lacto Japan Co., Ltd.
Slide 28: NEXT-LJ2024: Basic Policy and Numerical Targets
Corporate Business Plan “NEXT-LJ2024”: Basic Policy and Numerical Targets Capturing the post COVID-19 market recovery and growth of Asian business Accelerate building next-generation businesses at the same time FY11/2021 FY11/2024 Actual Targets Net sales 110.8 billion yen 150.0 billion yen Ordinary
Slide 29: NEXT-LJ2024: Financial and Dividend Policy
Corporate Business Plan “NEXT-LJ2024”: Financial and Dividend Policy Medium- to long-term capital requirements and financial targets Dividend policy ⃞ Capital requirements for Asian Business, pillar In order to achieve medium- to long-term growth, we will of growth strategy combine investment in the
Slide 30: Lacto Japan's Value Creation
Lacto Japan's Value Creation [Our Purpose] To contribute to the nutrition and health of people and the enjoyment of food through the stable supply of safe and reliable ingredients and to continue growing and developing as a company that makes a difference to society [Value creation through business
Slide 31: Materialities and Individual Measures
Materialities and Individual Measures Related SDGs Selection of suppliers (audit, inspection, sample testing) Supplying safe Thorough quality control (traceability, food defense, temperature control, etc.) and reliable food Reinforcement of processed cheese manufacturing system (review of phys
Slide 32: Forward-looking projections notice
This report contains projections of performance and other projections based on information currently available and certain assumptions judged to be reasonable. Actual performance may differ materially from these projections as a result of changes in the business environment and other risks and uncer