Kagome Co., Ltd. · TSE:2811
Kagome — FY2019 Earnings Presentation
35 slides from Kagome's earnings presentation, February 2020
Slide 1: Results Briefing Materials for FY2019
Results Briefing Materials for FY2019 Kagome Co., Ltd. 1
Slide 2: "Ideal" and "Long-Term Vision" for 2025
“Ideal” and “Long-Term Vision” for 2025 To become a “strong company ” Ideal that can achieve sustainable growth, through food as a means of resolving social issues Long-Term Vision Transform from a “tomato company” to a “vegetable company” Daily intake of vegetables per person Approx. 290 g/day*1 →
Slide 3: Topics
Topics 1. Summary of Business Results for FY2019 (the year ended December 31, 2019) • In spite of decreased revenues resulting from factors such as a drop in demand for mainstay vegetable beverages due to bad weather, etc., and decreased sales for both Domestic Agriculture and International Business
Slide 4: 1. Summary of Business Results for FY2019
1. Summary of Business Results for FY2019 (the year ended December 31, 2019) 4
Slide 5: FY2019 Consolidated Results
FY2019 Consolidated Results Unit: 100 million yen Results Year on year Comparison to forecast Rate of Rate of margin change change Revenue 1,808 - (37) (2)% (82) (4)% Core Operating Income 123 7% (1) (1)% (3) (2)% Operating Income 141 8% +19 +15% +5 +4% *1 Net Income 102 6% +12 +13% +7 +7% *1 Net in
Slide 6: FY2019 Results by Segment
FY2019 Results by Segment Unit: 100 million yen Revenue Core Operating Income FY2018 FY2019 FY2018 FY2019 Year on Rate of Year on Rate of year change year change Beverages 727 720 (7) (1)% 58 58 (0) (0)% Food and others 602 604 +2 +0% 53 54 +0 +1% Domestic processed 1,329 1,325 (4) (0)% 112 112 +0 +
Slide 7: Domestic Processed Food Business
FY2019 Results by Segment Domestic Processed Food Business Net sales/Revenue Operating income/Core Operating Income Unit: 100 million yen 2,000 200 1,576 1,577 1,600 1,405 1,469 160 1,329 1,325 1,364 1,200 107 110 112 112 120 102 81 800 80 52 400 40 0 0 2015 2016 2017 2018 2018 2019 2020 2015年 2016年
Slide 8: FY2019 Domestic Processed Food Business (Beverages)
FY2019 Domestic Processed Food Business (Beverages) Sales were driven by tomato juice and new products, despite bad weather conditions and intensifying competition with other marketable beverages. Unit: 100 million yen Revenue Core Operating Income Domestic Processed Food Business FY2018 FY2019 YoY
Slide 9: FY2019 Domestic Processed Food Business (Food and others)
FY2019 Domestic Processed Food Business(Food and others) Kagome enhanced proposals for home-meal replacement and restaurant markets. Revenues and profit increased due to strong performance of direct marketing and products to give as gifts. Unit: 100 million yen Revenue Core Operating Income Domestic
Slide 10: Domestic Agriculture Business
FY2019 Results by Segment Domestic Agriculture Business Net sales/Revenue Operating income/Core Operating Income Unit: 100 million yen 150 25 120 110 115 114 115 112 108 20 96 90 15 60 9 10 7 30 4 5 0 0 2015 2016 2017 2018 2018 2019 2020 (planned) (IFRS conversion) (30) (2) (2) (2) (2) (1) (1) (2) (
Slide 11: FY2019 Domestic Agriculture Business
FY2019 Domestic Agriculture Business Procurement volume could not be secured due to delays in the development of summer and fall production locations, resulting in a decrease in both revenue and profit as the stagnation of market prices continued. Unit: 100 million yen Revenue Core Operating Income
Slide 12: International Business
FY2019 Results by Segment International Business Net sales/Revenue Operating income/Core Operating Income Unit: 100 million yen 500 479 474 488 464 462 458 20 441 400 16 14 300 12 8 8 200 8 5 100 3 4 2 1 0 0 2015 2016 2017 2018 2018 2019 2020 (planned) (IFRS conversion) * Sales have been in a declin
Slide 13: FY2019 International Business
FY2019 International Business Although revenue decreased due to a drop in sales at the U.S. subsidiary and the impact of exchange rate fluctuations, profit increased as a result of structure reforms. Unit: 100 million yen Revenue Core Operating Income International Business Y on Y Y on Y FY2019 Y on
Slide 14: Factors Contributing to Core Operating Income
Factors Contributing to Core Operating Income Changes in FY2019 Unit: 100 million yen FY2018 124 Changes in the domestic processed (1) Cost fluctuation (21) (2) Cost reduction +15 Increase in fixed SGA expenses (4) food business (3) Increase in freight/storage fees (3) Increase in efficiency of prom
Slide 15: Factors Contributing to Operating Income and Profit
Factors Contributing to Operating Income and Profit Changes in FY2019 Unit: 100 million yen FY2018 FY2019 Core operating income 124 123 Other income 19 27 (1) Other expenses 21 10 (2) Operating income 122 141 … … Profit before income tax 122 139 Income tax expense 37 36 Effective tax rate 30% 26% (3
Slide 16: Changes to FY2019 Statement of Financial Position
Changes to FY2019 Statement of Financial Position Assets/liabilities and equity 201.2 billion yen (YoY increase of 1.4 billion yen) Unit: 100 million yen Current assets: down 50 Unit: 100 million yen Cash and deposits (21): payments of dividends and corporate income taxes, etc. 1,126 Operating and o
Slide 17: Cash Flows for FY2019
Cash Flows for FY2019 Unit: 100 million yen FY2018 FY2019 Change Cash flows from operating activities (A) 107 122 15 Cash flows from investing activities (B) (3) (93) (90) Free cash flows (A+B) 104 30 (75) Cash flows from financing activities (17) (51) (34) Factors contributing to changes in cash fl
Slide 18: 2. "Let's Eat Vegetables" Campaign
2. “Let’s Eat Vegetables” Campaign 18
Slide 19: "Ideal" and "Long-Term Vision" for 2025
“Ideal” and “Long-Term Vision” for 2025 To become a “strong company ” Ideal that can achieve sustainable growth, through food as a means of resolving social issues Long-Term Vision Transform from a “tomato company” to a “vegetable company” Daily intake of vegetables per person Approx. 290 g/day*1 →
Slide 20: "Let's Eat Vegetables" Campaign
“Let’s Eat Vegetables” Campaign Sales estimates for when daily vegetable intake of 350 g/day is achieved 2018 2025 Difference results estimate Japanese person’s daily vegetable intake (g) 290*1 350 +60 Vegetable consumption of Japan (10,000 t) 1,397*2 1,686 +289 Volume of vegetables supplied by Kago
Slide 21: "Let's Eat Vegetables" Campaign: Campaign Strategies
“Let’s Eat Vegetables” Campaign Campaign Strategies Nationwide “Veggie Check” experiences Projects in collaboration with Target: 1 million people! other companies and organizations • Kagome is currently engaged in collaborations with around 20 • Kagome will roll out “Veggie Check” companies/organiza
Slide 22: "Let's Eat Vegetables" Campaign
“Let’s Eat Vegetables” Campaign Stimulate demand for vegetables and maximize sales for all domestic businesses Beverages Health Business “Let’s Eat Vegetables” Campaign Consumer & Institutional Use Food Products and Fresh Foods Vegetable Processing Business 22
Slide 23: 3. Strategies for FY2020 and State of Progress in the Second Mid-Term Management Plan
3. Strategies for FY2020 and State of Progress in the Second Mid-Term Management Plan 23
Slide 24: FY2020 Domestic Processed Food Business (Beverages) Strategies
FY2020 Domestic Processed Food Business (Beverages) Strategies “Let’s Eat Vegetables” Campaign Stimulating demand Increasing value of Target-specific beverages Plant-based domain Developing senior and youth Rollout in soymilk area vegetable beverages demographics of sales floors Sales revenue: +2 bi
Slide 25: FY2020 Domestic Processed Food Business (Food Products) Strategies
FY2020 Domestic Processed Food Business (Food Products) Strategies “Let’s Eat Vegetables” Campaign Stimulating demand Unified vegetable proposals combining consumer use, institutional use and fresh food products Home-meal replacement and Sales revenue: Sales revenue: +1.1 billion yen Home-cooked mea
Slide 26: FY2020 Domestic Agriculture Business Strategies
FY2020 Domestic Agriculture Business Strategies “Let’s Eat Vegetables” Campaign Stimulating demand Sales revenue: +1.3 billion yen Core operating income: Achieving profitability by completing revenue structure reforms +0.7 billion yen Expand farm sales channels • Expand sales channels to buyers othe
Slide 27: FY2020 International Business Strategies
FY2020 International Business Strategies Core operating income: Increase profitability by further advancing reforms to revenue structure +0.6 billion yen Core operating income: U.S.: Kagome Inc. +0.2 billion yen • Concentrate resources by narrowing down SKU • Enhance cost competitiveness by reducing
Slide 28: FY2020 Results Forecasts
FY2020 Results Forecasts Unit: 100 million yen Revenue Core Operating Income FY2019 FY2020 FY2019 FY2020 Year on Rate of Year on Rate of year change year change Domestic processed 1,325 1,364 +39 +3% 112 102 (10) (9)% food business Domestic agriculture 96 108 +13 +13% (2) 4 +7 - business Internation
Slide 29: Investment Plan and Purchasing of Treasury Stocks
Investment Plan and Purchasing of Treasury Stocks Investment Plan Key points of investment plan <Plan> <Progress> • Main investments for FY2020 Update of equipment and facilities at Kozakai Plant Fixed FY2021 (ketchup plant) investments, forecast Renewal of ageing facilities at Taiwan Kagome plant e
Slide 30: Dividend
Dividend Dividend payout policy for the second Mid-Term Annual dividend payouts per share Management Plan • FY2019: 35 yen • Payout at least 35 yen in annual dividends per share • FY2020 (expected): 36 yen • Total return ratio of 40% during the plan period Unit: yen 40 35 10 30 25 20 35 36 記念配当 Comm
Slide 31: State of Progress in the Second Mid-Term Management Plan
State of Progress in the Second Mid-Term Management Plan Results Planned / Forecast ■Revenue ■Core operating income Unit: 100 million yen 2,120 200 2,000 1,846 1,808 1,867 162 150 1,500 124 123 124 100 1,000 50 500 0 0 2018 2018年度 2019 2019年度 2020 (planned) 2020年度 (計画) 2021 (forecast) 2021年度 (見通し) •
Slide 32: Note
Note All information contained herein on the current plans, forecasts and strategies of Kagome that does not consist of historical facts is based on judgments made by Kagome’s management from currently available information. We therefore request that you refrain from relying comprehensively and sole
Slide 33: Reference
Reference 33
Slide 34: FY2019 YoY Sales Comparison for Valuable Beverages
FY2019 YoY Sales Comparison for Valuable Beverages Trends in the valuable beverages market in Japan • Demand declined temporarily due to bad weather in July. • The size of the vegetable beverage market remained below that of the previous year, but began to recover moving into the second half of the
Slide 35: Fresh Tomato Market Prices
Fresh Tomato Market Prices Trends in the fresh tomato market in Japan • A downward trend in market prices has continued since 2017. • Market structure tends towards excessive supply, due to factors such as the increase in the number of large- scale glasshouse plantations. Source: Created based on ma