Ezaki Glico Co., Ltd. · TSE:2206
Ezaki Glico — FY2018 Earnings Presentation
40 slides from Ezaki Glico's earnings presentation, May 23, 2019
Slide 1: Glico Group Financial Results for the Fiscal Year ended March 31, 2019
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. Glico Group Financial Results For the Fiscal Year ended March 31, 20
Slide 2: Contents
Contents I. FYE March 2019 Earnings Report P. 3 - 28 II. FYE December 2019 Earnings Forecast P.29 - 37 (Supplemental Materials) P.38 - 39 © 2018 Ezaki Glico Co., Ltd. All Rights Reserved 2
Slide 3: I. FYE March 2019 Earnings Report
I. FYE March 2019 Earnings Report © 2018 Ezaki Glico Co., Ltd. All Rights Reserved 3
Slide 4: Summary of FYE March 2019 Performance
Summary of FYE March 2019 Performance 1. Domestic performance was severe, as consolidated net sales fell 0.9% YoY. • During FYE March 2019, consolidated net sales of Pocky, Pretz, BifiX Yoghurt, Cafe Ole, and other mainstay brands showed a decrease of 0.9% compared to the previous year. 2. The healt
Slide 5: Status of Net Sales and Income
Status of Net Sales and Income Net sales: While the overseas segment continued to be strong, it could not cover the difficulties faced in the domestic segment, and thus net sales fell 0.9% on a consolidated basis compared to the previous year. Operating income: Operating income fell 17.8% on a conso
Slide 6: Status of Operating Income
Status of Operating Income (Unit: 100 million yen) FYE FYE FYE Mar 2018 Sales Mar 2019 Sales Mar 2019 Sales Results ratio(%) Forecast ratio (%) Results ratio (%) Net sales 3,534 100.0 3,580 100.0 3,503 100.0 Cost of sales 1,872 53.0 1,877 52.4 1,842 52.6 Gross profit 1,662 47.0 1,703 47.6 1,661 47.4
Slide 7: Factors of Increases (Decreases) in Operating Income
Factors of Increases (Decreases) in Operating Income <Change from previous period> <Change from forecast> • Revenues decreased by 900 million yen due to a • There was a 2.2 billion yen decrease in revenues year-on-year decrease in net sales. because net sales fell below plans. • Sales promotion rati
Slide 8: Impact of Raw Material Price Fluctuations on Costs
Impact of Raw Material Price Fluctuations on Costs FYE March 2019 Results Although prices increased for fruit juices and fruits, overall procurement costs for the Group fell by 700 million yen due to lower prices for oils and fats and sugars. FYE December 2019 Targets A decrease in procurement costs
Slide 9: Status of Net Sales by Segment
Status of Net Sales by Segment The overseas segment continued to perform well following the first half. (Growth of 13% based on local currencies) However, the domestic segment had a year-on-year decrease of 2.3%, as, although the health business achieved two-digit growth, the Confectionaries and Foo
Slide 10: Status of Operating Income by Segment
Status of Operating Income by Segment Operating income decreased compared to the previous year in all segments except Ice Cream and Other. (Unit: 100 million yen) FYE Mar 2018 FYE Mar 2019 FYE Mar 2019 Change from Change from Results Forecast Results Previous Period Forecast (%) (%) Total 204 180 16
Slide 11: Domestic Business: Situation by Category
Domestic Business: Situation by Category Net sales Category (% of previous FYE March 2019 Results period) Health-oriented products, such as LIBERA and GABA, as well as Caplico and Kobe Roasted Chocolate grew. However, mainstay products Pocky and Almond 46.2 billion yen Chocolate Chocolate struggled,
Slide 12: Domestic Business: Situation by Category (Chocolate/Cookies)
Domestic Business: Situation by Category (Chocolate/Cookies) Chocolate category Chocolate Market Net Sales Net Sales by Brand (Intage SRI) - Chocolate category - (When FYE March 2017 net sales are set as 100) Unit:100 million yen 17/3期 FYE Mar '17 18/3期 FYE Mar '18 19/3期 FYE Mar '19 Unit:100 million
Slide 13: Domestic Business: Situation by Category (Ice Cream/Yoghurt)
Domestic Business: Situation by Category (Ice Cream/Yoghurt) Ice Cream category Ice Cream Market Net Sales Net Sales by Brand (Ice Cream Marketing News) - Ice Cream category - (When FYE March 2017 net sales are set as 100) Unit:100 million yen Unit:100 million yen 17/3期 FYE Mar '17 18/3期 FYE Mar '18
Slide 14: Domestic Business: Situation by Category (Drinking Milk/Infant Formula)
Domestic Business: Situation by Category (Drinking Milk/Infant Formula) Drinking milk category Drinking Milk Market Net Sales Cafe Ole Net Sales (Intage SRI) - Drinking milk category - (When FYE March 2017 net sales are set as Unit:100 million yen 100) Unit:100 million yen 7,000 94 -1.3% 309 89 6,00
Slide 15: Overseas Business: Region-Specific Net Sales and Operating Income
Overseas Business: Region-Specific Net Sales and Operating Income • Double-digit year-on-year growth was achieved in China, ASEAN, and U.S.A. China (Unit: 1 million CNY) FYE Dec 2017 FYE Dec 2018 FYE Dec 2018 Change from Change from Results Forecast Results Previous Period Forecast (%) (%) Net sales
Slide 16: China (1)
China (1) In 2018, China’s cookie market (off-line) grew 5% Net sales growth rate compared to the previous year. Total net sales of Pocky, Pretz, and Pejoy Customer-specific managed sales centered on the Key (off-line + EC) Account Sales Division (KA Division) came into full operation in FYE Decembe
Slide 17: China (2)
China (2) In 2018, the EC market in China’s cookie market grew Glico’s EC net sales and EC share 22% compared to the previous year, continuing a 5.0 % strong growth trend. Glico expanded its lineup of products that include “Sakura Pocky,” a product sold only on T-Mall through collaboration with Alib
Slide 18: ASEAN (1)
ASEAN (1) During FYE December 2018, the company made aggressive marketing investment to solidify its business foundation in ASEAN. While FYE December 2017 net sales showed negative year-on-year growth of -1.2%, FYE December 2018 net sales grew considerably by 14.9%. Particularly noteworthy was the f
Slide 19: ASEAN (2) - Confectionery Business in Indonesia
ASEAN (2) - Confectionery Business in Indonesia - The Indonesian cookie market grew 2% year on year in Confectionery business in Indonesia: FYE December 2018. Meanwhile, Glico’s net sales in net sales Indonesia for FYE December 2018 grew significantly at 76% year on year with greater distribution th
Slide 20: U.S.A.
U.S.A. FY2018 net sales for American confectionery subsidiary Ezaki Glico USA reached roughly five times the FY2014 level as a result of expanded shipments to American retailers. The company is promoting digitalization and other aggressive marketing activities and reinforcing its brand power. It is
Slide 21: Status of Balance Sheet
Status of Balance Sheet Net worth ratio: 61.1% (end of March 2018) ⇒ 61.4% (end of March 2019) (Unit:100 million yen) Assets End End End Vs. Major account items Mar '18 Sep '18 Mar '19 End Mar '18 830 817 Cash and deposits 1,043 1,103 1,036 -7 788 Current assets Notes and accounts receivable 414 444
Slide 22: Status of Cash Flows
Status of Cash Flows Revenue from operating activities decreased as a result of a decrease in net income before income taxes and minority interests. However, free cash flows increased by 5.2 billion yen because expenditure fell as a result of decrease in investing activities. (Unit:100 million yen)
Slide 23: Capital Investments, Depreciation, and R&D Expenditures
Capital Investments, Depreciation, and R&D Expenditures FYE March 2019 Results Aggressive capital investments according to plan, primarily in the confectionery segment. FYE December 2019 Targets Forecasting capital investments of 19.7 billion yen for the full business year from increased expenditure
Slide 24: Review of FYE March 2019 and Future Initiatives: Mainstays of the Growth Strategy
Review of FYE March 2019 and Future Initiatives Mainstays of the Growth Strategy 1. Maximize continuous growth of core brands 2. Create new markets based on dramatic growth of added-value health brands © 2018 Ezaki Glico Co., Ltd. All Rights Reserved 24
Slide 25: A Look back at FYE March 2019
A Look back at FYE March 2019 Focus on core brands: Continuous growth, particularly of long-selling brands © 2018 Ezaki Glico Co., Ltd. All Rights Reserved 25
Slide 26: FYE December 2019 Initiatives
FYE December 2019 Initiatives Focus on core brands: Continuous growth, particularly of long-selling brands Base + Added health value Acceleration of innovation Base SKU innovation Maximizing Gogo-no-Zeitaku “Pocky: Share Happiness” Marketing innovation Pretz: Base SKU Renewal + “Super crunchy” innov
Slide 27: Review of FYE March 2019 and Initiatives for FYE December 19
Review of FYE March 2019 and Initiatives for FYE December 2019 Create new markets based on dramatic growth of added-value health brands <Net sales of added-value health brands> ＜健康付加価値ランド売上高＞ +8.3% Ceaseless improvement of added value +12.3% FYE 2017/3期 FYE 2018/3期 FYE 2019/3期 Mar '16 Mar '17 Mar '1
Slide 28: Development of products oriented toward solving social issues
Review of FYE March 2019 and Initiatives for FYE December 2019 Development of products oriented toward solving social issues ⇒ sales of liquid milk for infants to alleviate child-rearing problems We began development in 2016 with an eye to preparing for disasters and alleviating the burden of parent
Slide 29: II. FYE December 2019 Earnings Forecast
II. FYE December 2019 Earnings Forecast © 2018 Ezaki Glico Co., Ltd. All Rights Reserved 29
Slide 30: Change in the Fiscal Year End
Change in the Fiscal Year End (Final Day of Business Year) Beginning in FY2019, we are changing the accounting term so that it will end in December.* This is to promote integrated operation of global business and bring transparency to management through timely and appropriate disclosure of managemen
Slide 31: Full-Year Plan and Forecast
（Note） Full-Year Plan and Forecast Net sales: We forecast a 2.5% increase in revenue year on year throughout the consolidated Group. Operating income: We forecast increased profits for both domestic and overseas businesses. (Unit:100 million yen) FYE Mar 2019 FYE Change from FYE Change from FYE Mar
Slide 32: Operating Income Forecast
Operating Income Forecast (Unit:100 million yen) FYE Mar 2019 Results Sales ratio FYE Dec 2019 Sales ratio (Following (%) Forecast (%) Adjustment) Net sales 2,848 100.0 2,920 100.0 Cost of sales 1,484 52.1 1,504 51.5 Gross profit 1,365 47.9 1,416 48.5 Freight and charges 242 8.5 242 8.3 Sales promot
Slide 33: Factors of Increases (Decreases) in Operating Income
Factors of Increases (Decreases) in Operating Income <Change from previous period> • Profits will increase by 2.2 billion yen due to a year-on-year increase in net sales. • There will be a 600-million-yen increase in profits attributable to lower freight and charges ratio accompanying a lower sales
Slide 34: Net Sales Forecast by Segment
Net Sales Forecast by Segment Increased revenue is forecasted in all segments except the Milk and Dairy Products segment. A year-on-year increase of 2.5% is forecasted for the entire consolidated Group. The overseas segment will continue to aim for double-digit growth. (Unit:100 million yen) FYE FYE
Slide 35: Operating Income Forecast by Segment
Operating Income Forecast by Segment Although expenditures are expected to increase for all companies, increased profits are forecasted in the Ice Cream segment and Confectioneries and Food Products segment, and a year-on-year increase in profits of 1.6% is forecasted for the entire consolidated Gro
Slide 36: Overseas Business: Region-Specific Net Sales and Operating Income Forecast
Overseas Business: Region-Specific Net Sales and Operating Income Forecast China (Unit: 1 million CNY) FYE Dec 2018 FYE Dec 2018 FYE Dec 2019 FYE Dec 2019 1H results Results 1H forecast Change from Forecast Change from (Jan-June ’18) (Jan-Dec ’18) (Jan-June ’19) previous period (Jan-Dec ’19) previou
Slide 37: Return to Shareholders
Return to Shareholders 1. We shall put priority on long-term investment and aim for long-term maximization of our corporate value. 2. For our dividend policy, we shall return profits to shareholders in a stable and continuous manner toward a goal of achieving a consolidated dividend payout ratio of
Slide 38: TTM Currency Rate
Supplemental Materials TTM Currency Rate USD EUR THB CNY 100KRW 100IDR Mar 31 112.68 127.70 3.19 17.39 9.86 0.85 Jun 30 102.91 114.39 2.93 15.46 8.96 0.79 2016 Sep 30 101.12 113.36 2.91 15.14 9.17 0.78 Dec 31 116.49 122.70 3.24 16.76 9.68 0.87 Mar 31 112.19 119.79 3.26 16.29 10.04 0.84 Jun 30 112.00
Slide 39: Net Sales by Category
Supplemental Materials Net Sales by Category (Unit: 100 million yen) FYE Change FYE Change FYE Mar FYE Mar 2019 FYE from December from Segment Category 2019 Mar 2019 Results Dec 2019 Previous 2019 previous 1H results Results (Following 1H Forecast Period Forecast period Adjustment) % %* Chocolate (i
Slide 40: Notes of caution
[Notes of caution] *Current Glico and Glico Group plans, forecasts, and initiatives indicated in these materials reflect determinations made based on information available at the time. As such, this information may include major risks and uncertainties. Please note that actual performance may differ