Nissin Foods Holdings Co., Ltd. · TSE:2897
Nissin Foods — FY 3/2023 2Q Earnings Presentation
38 slides from Nissin Foods's earnings presentation, Nov 10, 2022
Slide 1: Financial Results for FY 3/2023 2Q
SI Financial Results for FY 3/2023 2Q Announced on November 10, 2022 NISSIN FOODS HOLDINGS CO., LTD. (TSE Stock Code: 2897) Financial Results Presentation: November 11, 2022
Slide 2: CFO introduction to FY 3/2023 2Q results
• My name is Takashi Yano, CFO of NISSIN FOODS HOLDINGS. • I will begin by reporting on FY 3/2023 2Q financial results. 1
Slide 3: Summary of 2Q results
• As shown here, both revenue and core operating profit of existing businesses increased year on year. • Revenue, in particular, was a record-high for a first half. • And as shown on the following page, core operating profit of existing businesses, operating profit, and profit attributable to owners
Slide 4: Cost environment outlook for second half
• We expect the cost environment to remain difficult throughout the second half of the year, particularly in Japan, given the current surge in raw materials and utility prices, the widespread impact of the weak yen, and the extremely high Japan domestic corporate goods price index of 9.7% recorded f
Slide 5: Detailed results summary
• This page provides a more detailed look of the summary from the previous page. The main components are as I just explained. 3
Slide 6: Results by business segment
• The Domestic Instant Noodles Business posted a 3.3% increase in sales and a 3.6% decrease in profit year on year. While NISSIN FOOD PRODUCTS and MYOJO FOODS reported higher sales due to price revisions, MYOJO FOODS experienced a significant decline in profits, even though NISSIN FOOD PRODUCTS prof
Slide 7: Revenue breakdown by segment
• This is a breakdown of revenue results by segment. • All segments recorded revenue growth, but the Overseas Business demonstrated the most significant growth. All regions achieved double-digit revenue growth in the range of 30% to 50%. Overall, we saw a significant revenue increase of 44.3% compar
Slide 8: Contribution to revenue and profit by segment
• Here are the details of each segment's contribution to revenue and profit. • The largest contributor was the Overseas Business, shown in the middle row on the left. The Overseas Business accounted for nearly 90% of the 41.9 billion yen increase in overall revenue. • In particular, we expect the Am
Slide 9: Core operating profit by segment
• This section shows core operating profit results by segment. • Consolidated core operating profit increased 1.2 billion yen, or 4.4%, year on year to 28.3 billion yen. This result was due to the impact of foreign exchange rates, as well as increased sales, helping offset a wide range of cost press
Slide 10: Contribution to core operating profit of existing businesses
• Here is our analysis of contribution to core operating profit of existing businesses. • While the Domestic Business posted lower profits due to soaring raw materials prices, the Overseas Business, mainly the Americas, absorbed cost increases with price revisions and strong demand, resulting in hig
Slide 11: Factors behind change in core operating profit
• This slide shows a high-altitude view of the factors behind the changes in core operating profit of existing businesses. • The major changes were due to changes in Domestic and Overseas business revenue and cost of sales ratios. • The main factor behind CoGS ratio fluctuations was the impact of ra
Slide 12: CEO introduction
• My name is Koki Ando, President and CEO of NISSIN FOODS HOLDINGS. • I will provide a review of the first half of FY 3/2023 and discuss the future direction of the company, focusing on the situation in the Americas and China. I will also go over the progress of our environmental strategy, EARTH FOO
Slide 13: First half review and future prospects
• Let’s look at the first half of the year and future prospects. • First, we see that our businesses have abundant resilience. The instant noodles business continues to enjoy strong demand even under rapidly rising prices for commodities. The price revisions we made for our products have been widely
Slide 14: The Americas business
• The Americas business saw extremely strong demand, even in the wake of price revisions. Combined with strategies in each country, this region has become a strong driving force for the group. We achieved favorable results in all countries in which we operate, including the U.S., Brazil, and Mexico.
Slide 15: China and Hong Kong
• Next, I will discuss China and Hong Kong. In terms of the market environment, demand in FY 3/2022 was lower year on year due to a negative rebound from the increase in demand associated with COVID-19 in FY 3/2021. Looking over the past five years, however, we see demand has been trending upward. U
Slide 16: EARTH FOOD CHALLENGE 2030 (EFC2030) Initiatives
EARTH FOOD CHALLENGE 2030 (EFC2030) Initiatives 14 14
Slide 17: Progress of EARTH FOOD CHALLENGE 2030
• Next, I will discuss the progress of our environmental strategy, EARTH FOOD CHALLENGE 2030. • Looking from the top left of the slide, we recorded progress of 36% in 2021 sustainable palm oil procurement target toward our ultimate goal of 100%. This result is up 10% over last year, thanks to the us
Slide 18: Carbon neutrality by 2050
• Amid these circumstances, we aim to achieve carbon neutrality by 2050, when our CO2 emissions will be effectively zero. • In addition, we will step up Nature Positive initiatives. The Nature Positive concept is covered on the next page of the presentation. 16
Slide 19: Nature Positive
• Nature Positive is an initiative to halt the loss of nature and increase the net volume of nature by conserving biodiversity, for example. • Nature Positive and Carbon Neutral are closely ideas. We believe they are most effective when the two gears mesh, and that we must pursue both. 17
Slide 20: Emissions reduction targets
• To achieve carbon neutrality, we are working to reduce Scope 1 and 2 emissions by 30%, and Scope 3 emissions by 15% by the year 2030. • Adopting new technologies, such as the use of green hydrogen and ammonia fuel will be important to achieve carbon neutrality. We must consider the use of these te
Slide 21: Progress in Scope 1 and 2 emissions
• This slide shows our progress in Scope 1 and 2 emissions. • Actual emissions in 2018 was 416,000 tons. In 2020 emissions were 438,000 tons. In 2021, emissions were 427,000 tons. This was a slight decrease compared to 2020, but an increase compared to 2018. • In 2022, we expect emissions related to
Slide 22: Progress in Scope 3 emissions
• Next, let's look at progress in Scope 3 emissions. • We are working to reduce CO2 emissions, focusing on the use of plant-derived biomass ECO cups, eliminating plastic lid stickers, using alternative food technologies, and increasing the use of sustainable palm oil. • We also believe it is importa
Slide 23: Direction toward Nature Positive
• This is the direction of our efforts to achieve Nature Positive. • We describe it as a hop, step, and jump process. We are still in the hop stage. And we will continue to move forward, step by step, toward achieving Nature Positive, aiming for a business model with less environmental impact that i
Slide 24: Progress in Sustainable Palm Oil Initiatives
| Progress in Sustainable Palm Oil Initiatives : We have disclosed information on palm oil mills procured by the Japanese group, based on which satellite monitoring and dialogues with farmers in high-risk areas followed. We strive to be Nature-Positive with sustainable palm oil initiatives as our st
Slide 25: Domestic Instant Noodles Business performance
• My name is Noritaka Ando. I will begin my part of the presentation with a review of Domestic Instant Noodles Business performance. 23
Slide 26: Market trends over the first half
• First, let’s look at the market trends over the first half of the year. • As shown in the graph at the top right, we revised prices ahead of our competitors, and actual retail prices rose in June and July immediately after the price revisions. • This quick uptake in retail prices, combined with th
Slide 27: First-half results and second-half initiatives
• Let’s look at first-half results in greater detail and discuss initiatives for the second half. • In the first half of the year, our core CUP NOODLE brand grew 5% year on year (shipped basis). We are on track to reach record-high sales for the sixth consecutive year. • And despite a temporary shif
Slide 28: Possibility of further price revisions
• We always consider the possibility of more price revisions as an option to ensure profitability. 25
Slide 29: New businesses: KANZEN MEAL
• In terms of new businesses, the five KANZEN MEAL SKUs, shown at the top left, went on sale nationwide in September. • Sales began with placement on the NISSIN online store at the end of May. By September, we surpassed 4 million servings, equivalent to one serving sold every 3 seconds*¹ of this hig
Slide 30: KANZEN MEAL notes and survey
*¹Calculated based on total number of shipments of KANZEN MEAL series products between May 28, 2022 and July 20, 2022 (NISSIN FOOD PRODUCTS research). *² Evaluation Method: Survey of 253 registered dietitians working at medical institutions nationwide. July 2022 survey question: Would you recommend
Slide 31: Complete Nutrition Meal business
• This slide covers the development of the Complete Nutrition Meal business related to medical facilities and support for the elderly. • I gave a presentation at the 29th International Society of Hypertension in October this year. As described in the section about healthcare cooperation at the botto
Slide 32: New plant land acquisition in Ibaraki Prefecture
• As announced recently, we acquired land for a plant in Ibaraki Prefecture called Ken-O Expressway Interpark Tsukubamirai. • This is a very large site of 33 hectares, which is three times the size of our Kansai Plant. We receive many questions about our intentions for the new plant, but since we ar
Slide 33: Appendix
Appendix 29
Slide 34: Disclosed on May 13, 2022: FY 3/2023 forecasts
Disclosed on May 13, 2022 Reprinted materials from "Financial Results for FY 3/2022" issng l Full-Year Consolidated Earnings Forecasts for FY 3/2023 (exciuding Russiaukraine impact) Aiming for 52.0 billion yen in core operating profit of existing businesses. We expect IFRS operating profit to be bet
Slide 35: FY 3/2023 Forecasts by Segment
I FY 3/2023 Forecasts by Segment Aim for increase revenues and operating profits in all business segments from FY 3/2022 results FY 3/2023 Forecasts NISSIN FOOD PRODUCTS 218.0 MYOJO FOODS 39.0 Domestic Instant Noodles Business 257.0 Chilled / frozen foods and beverages 83.0 Confectionery 15 Domestic
Slide 36: FY 3/2023 Price Revisions (Domestic)
] FY 3/2023 Price Revisions (Domestic) Ss Company Name Main Products Price Revision Date Price Revision Rate NISSIN FOOD PRODUCTS Bag-type instant noodles, cup-type instant noodles, cup-type instant rice, cup-type instant soup Beginning with June 1, 2022 shipments 5%-12% increase in suggested retail
Slide 37: FY 3/2023 Price Revisions (Overseas)
I FY 3/2023 Price Revisions (Overseas) The Americas Main Products Price Revision Date U.S. Bag-type instant noodles, cup-type instant noodles August 2022 Brazil Bag-type instant noodles, cup-type instant noodles May 2022 China (Incl. H.K.) Main Products Price Revision Date DEMAE ICCHO, CUP NOODLES,
Slide 38: Forward-looking statements notice
Ss Company plans, business forecasts, strategies, and other information contained in this document are based on management judgments derived from information available at the time of this publication. Be aware that these are only future projections, and actual results may differ due to various risks
Nissin Foods Holdings — FY 3/2023 2Q Earnings Presentation on 6ix