Nissin Foods Holdings Co., Ltd. · TSE:2897
Nissin Foods — FY2018 Earnings Presentation
40 slides from Nissin Foods's earnings presentation, May 15, 2018
Slide 1: Financial Results for FY2018
Financial Results for FY2018 for the fiscal year ended March 31, 2018 Announced on May 10, 2018 This material was released on May 15, 2018 for the results briefing.
Slide 2: Consolidated Results for FY2018 and Outline of the FY2019 Business Plan
Consolidated Results for FY2018 and Outline of the FY2019 Business Plan (Shift to the International Financial Reporting Standards (IFRS)) Director, CFO, and Managing Executive Officer Yukio Yokoyama
Slide 3: FY2018 Summary (Review of FY2018)
2 FY2018 Summary (Review of FY2018) Attain steady growth to achieve the Medium-Term Business Plan Consolidated ：Marked record-high sales Operating income and adjusted operating income exceeded the previous year’s level. Ordinary income and net income* marked a new record-high. Domestic: Marked recor
Slide 4: FY2018 Summary of Financial Results
3 FY2018 Summary of FY2018 Financial Results （bil. yen） FY2018 FY2018 FY2017 Results VS. Plan YoY Change Plan Results Net sales 516.4 -3.6 -0.7% +20.7 +4.2% 520.0 495.7 Operating income 34.1 +0.1 +0.3% +5.5 +19.2% 34.0 28.6 Adjusted operating income*1 33.4 +0.0 +0.0% +0.5 +1.6% 33.4 32.9 Ordinary in
Slide 5: FY2018 Results: Sales Results by Segment
4 FY2018 Results: Sales Results by Segment （bil. yen） FY2018 FY2018 FY2017 Results vs.Plan YoY Change Plan Results Instant Noodles 274.4 +1.1 +0.4% +5.2 +1.9% 273.3 269.2 NISSIN FOOD PRODUCTS 232.9 +1.6 +0.7% +4.4 +1.9% 231.3 228.6 MYOJO FOODS 41.5 -0.5 -1.2% +0.9 +2.2% 42.0 40.6 Chilled and frozen
Slide 6: FY2018 Results: Operating Income Results by Segment
5 FY2018 Results: Operating Income Results by Segment （bil. yen） FY2018 FY2018 FY2017 Results vs.Plan YoY Change Plan Results Instant Noodles 30.3 +0.4 +1.5% +0.9 +3.0% 29.9 29.5 NISSIN FOOD PRODUCTS 28.3 +0.3 +1.0% +0.6 +2.2% 28.0 27.7 MYOJO FOODS 2.1 +0.2 +8.2% +0.3 +15.2% 1.9 1.8 Chilled and froz
Slide 7: FY2018 Non-operating Income/Expense and Extraordinary Gain/Loss
6 FY2018 Non-operating Income/Expense and Extraordinary Gain/Loss Major reasons (bil. yen) （bil. yen） Non-operating income 7.9 (6.1) • Interest income 1.2 (0.8) • Dividend income 1.4 (1.4) Operating income 34.1 • Gain on sales of marketable securities 0.9 (1.3) • Equity in earnings of affiliates 2
Slide 8: FY2019 Business Plan: Summary of FY2019 Plan (IFRS)
7 FY2019 Business Plan: Nissin Foods Group: Summary of FY2019 Plan (IFRS) Shift to IFRS in the 1st quarter of FY2019 （bil. yen） FY2019 FY2018 Plan YoY Change Results （ＩＦＲＳ） （ＩＦＲＳ）*1 Major factors for the increase in costs Revenue 455.0 +14.0 +3.2% 441.0 Change Factor Rising prices of wheat, Operat
Slide 9: FY2019 Business Plan: Revenue By Business Segment (IFRS)
8 FY2019 Business Plan: Revenue By Business Segment (IFRS) （bil. yen） FY2019 FY2018 Plan YoY Change Results （IFRS） (Change from the previous year’s result under IFRS) （IFRS）*1 Instant Noodles 227.5 +5.3 +2.4% 222.2 NISSIN FOOD PRODUCTS 195.0 +4.0 +2.1% 191.0 MYOJO FOODS 32.5 +1.3 +4.3% 31.2 Chilled
Slide 10: FY2019 Business Plan: Operating Profit By Business Segment (IFRS)
9 FY2019 Business Plan: Operating Profit By Business Segment (IFRS) （bil. yen） FY2019 FY2018 Plan YoY Change Results (IFRS) (Change from the previous year’s result under IFRS) (IFRS)*1 Instant Noodles 27.3 +1.5 +5.7% 25.8 NISSIN FOOD PRODUCTS 25.3 +1.4 +5.9% 23.9 MYOJO FOODS 2.0 +0.1 +3.7% 1.9 Chill
Slide 11: FY2019 Business Plan: Investment Plan, and Financial and Capital Policies 1
10 FY2019 Business plan: Investment Plan, and Financial and Capital Policies 1 Capital Investment Plan for FY2019 （bil. yen） FY2017 FY2018 Domestic Five Year (Plan) - Investment aimed at saving labor and Capital strengthening safety/security management in the Investment 150.0 36.3 52.0 64.0 instan
Slide 12: Investment Plan, and Financial and Capital Policies 2: Shareholder Returns
11 FY2019 Business plan: Investment Plan, and Financial and Capital Policies 2 Shareholder Returns （Dividends） Dividend increase reflecting favorable financial performance, with an aim for achieving average payout ratio of 40% or above ☝ FY2017 1H: 40 yen, Year-end: 45 yen Total: 85 yen Five-year
Slide 13: Medium-Term Business Plan 2021 Review of the Second Year and Basic Strategies
12 Medium-Term Business Plan 2021 Review of the Second Year and Basic Strategies for the Current Fiscal Year Representative Director, President and CEO Koki Ando
Slide 14: FY2019 Executive Summary
13 FY2019 Executive Summary Aim to make a further leap forward in the milestone year of the 60th anniversary of the birth of instant noodles! Domestic: “Heat up” the Japanese market through the strong enhancement of long- selling brands - Aim to maximize sales by enhancing products that will celebra
Slide 15: Changes to KPIs Associated with the Shift to IFRS
Mid-term Plan Changes to KPIs Associated with the Shift to the International 14 Financial Reporting Standards (IFRS) • The targets of the overall Group will not be changed in response to the shift to IFRS. • The method of calculating adjusted EPS for FY2016, which serves as a benchmark for the mid-t
Slide 16: Mid-term Plan Changes to Segment Targets Associated with IFRS
Mid-term Plan Changes to Segment Targets Associated with the Shift to the 15 International Financial Reporting Standards (IFRS) Medium-Term Business Plan: Change in KPIs (Segment Information) FY2021 (IFRS) Revenue 550.0 bil. yen Earning power (IFRS) Operating Profit 47.5 bil. yen through operations
Slide 17: Policy on Shareholder Returns
16 Policy on Shareholder Returns Increase dividends and cancel treasury shares as shareholder returns while the mid-term plan makes steady progress 1. Increasing dividends Expected dividends for FY2018 Expected dividends for FY2019 +20 yen 90 yen 110 yen (Payout ratio: 32.2% /J-GAAP) (Payout ratio
Slide 18: Mid-term Plan Progress of Major KPIs
17 Mid-term Plan Progress of major KPIs Market capitalization Expanded favorably toward 1 trillion yen in FY2021 （bil. yen） Market capitalization: Market base 1,200.0 Market capitalization: After deduction of treasury shares 1 tri. 1,000.0 Mid-term Plan KPI FY2021: 1 trillion yen 866.9 800.0 724.8
Slide 19: Key Strategy Themes to Achieve Targets
18 Mid-term Plan Key Strategy Themes to Achieve Targets Focusing on five key themes in pursuit of business profitability Domestic Overseas 1 Next Promoting Instant noodles stage Global Branding 3 2 Focusing on priority Business Laying stronger overseas locations foundations for our domestic profit
Slide 20: Promoting Global Branding: Globalize CUP NOODLES
19 Strategic Theme 1 Promoting Global Branding ＞ Globalize CUP NOODLES Overseas total CUP NOODLES sales volume (servings) *Exclude sales in Japan ＋3％ ＋6％ Mid-term Plan KPI vs. FY2016 (3/16) Up 50% 3/11 3/12 3/13 3/14 3/15 3/16 3/17 3/18 3/19 3/20 3/21 Activities in FY2018 • July: Adoption of • Aug
Slide 21: Globalization/Expansion of SEAFOOD as a Global Flavor
20 Strategic Theme 1 Promoting Global Branding ＞ Globalize CUP NOODLES Globalization/Expansion of “SEAFOOD “as a global flavor ・ Test marketing UK MAINLAND HONG KONG CHINA USA INDIA VIETNAM PHILIPPINES THAILAND BRAZIL SINGAPORE INDONESIA JAPAN Regions where we undertook new measures in FY2018
Slide 22: Focusing on Priority Locations: Brazil
21 Strategic Theme 2 Focusing on Priority Locations：BRICs Brazil CUP NOODLES • Strengthen sales promotions mainly in the Southeast, Relatively high GDP per capita South, and Midwest regions, where economic recovery is remarkable (Enhance sampling sales) US$9,895 • Develop flavors that suit the tas
Slide 23: Focusing on Priority Locations: India and China
22 Strategic Theme 2 Focusing on Priority Locations：BRICs India Enhance our presence in the market by improving proposal capabilities with Large population high value-added products that will not be involved in price competition. 1.3 billion people Bag-type noodle products CUP NOODLES High rate of
Slide 24: Laying Stronger Foundations for Our Domestic Profit Base
23 Strategic Theme 3 Laying stronger foundations for our domestic profit base Developing the domestic instant noodles market Birthday: August 25 Manpuku (A TV drama that will begin airing on NHK in October) Aim to make a further leap forward in the milestone year of the 60th anniversary of the bir
Slide 25: Establishing a Second Primary Earning Source
Strategic Theme 4 Establishing a Second Primary Earning Source ＞Confectionery/ 24 Chilled and frozen Food/ Beverage Business • Promote growth with the starting business (Confectionery) and Confectionery Business the growth business (Cereal) as a pair of wheels Collaboration between the three compa
Slide 26: Developing Human Resources for Global Management/ESG-Related Initiatives
Developing and Strengthening Human Resources for Global 25 Strategic Theme 5, Others Management/ESG-Related Initiatives Appointment of a German president in Europe NISSIN FOODS GmbH President: Wolfgang Haak Since April 2018 He had a long career at a German cosmetics company, serving as the VP in t
Slide 27: (Reference) Notes for this Material
（Reference） Notes for this Material This presentation material is available in the Financial Statements section of our IR website in PDF format. URL: https://www.nissin.com/en_jp/ir/library/materials/ The amounts in this material are rounded to the nearest 100 million yen; totals may not agree w
Slide 28: APPENDIX
APPENDIX
Slide 29: FY2018 Net Sales Contribution by Segment
28 FY2018 Net sales Contribution by Segment （bil. yen ） Segment Impact Major Factor Cup-type (+1%): Increase from the challenging target of +4% year on year in the previous FY2017 Net sales 495.7 year, largely due to new products such as “CUP NOODLE NICE” as well as the launch of NISSIN renewed “MEN
Slide 30: FY2018 Operating Income Contribution by Segment
29 FY2018 Operating Income Contribution by Segment （bil. yen ） Segment Impact Major Factor FY2017 Operating income 28.6 NISSIN FOOD +: Increased sales, lower CoGS ratio, and reduction in advertising expenses -: Higher promotional cost to sales ratio (reactionary increase following the Kumamoto +0.6
Slide 31: FY2018 Analysis of Operating Income: Consolidated
30 FY2018 Analysis of Operating Income： Consolidated YoY change Domestic Decrease factors Increase factors • CoGS ratio （bil. yen） + Reduction of material costs (+1.5), impacts of change in the breakdown of products by category, improved production （Domestic） +2.1 A：Sales increase efficiency in th
Slide 32: Shift to IFRS: P/L Statement
Shift to the International Financial Reporting Standards (IFRS) 31 IFRS (from the 1st quarter of FY2019 onward): P/L Statement FY2018 results (changes to the P/L statement reflecting the change of the standards) (bil. yen) *1 J-GAAP IFRS Difference Major adjustments between J-GAAP and IFRS (Consolid
Slide 33: Shift to IFRS by Segment
32 IFRS Shift to the International Financial Reporting Standards (IFRS) by Segment FY2018 results by segment under IFRS and comparison with results under J-GAAP ☝ Revenue: Deduction of variable consideration from sales ☝ Operating profit: Non-amortization of goodwill (including equity method compani
Slide 34: Shift to IFRS: B/S
Shift to the International Financial Reporting Standards (IFRS) 33 IFRS (from the 1st quarter of FY2019 onward): B/S FY2018 results (Changes to the balance sheet statement reflecting the change of the standards) （bil. yen） *1 J-GAAP IFRS Difference Major adjustments between J-GAAP and IFRS Assets As
Slide 35: FY2019 Domestic Businesses: Management Policy
34 FY2019 Domestic Businesses: Management Policy NISSIN FOOD PRODUCTS Generate cash and enhance profitability Challenge to be a 100-year brand company • Aggressive approach to the three strategic targets of young people, women and senior citizens • Aim for record net sales upon the 60th anniversar
Slide 36: FY2018 Overseas Businesses: Management Policy
35 FY2018 Overseas Businesses: Management Policy The Americas Handle changes of the market and enhance CUP NOODLES strategy in Brazil U.S. Mexico • Expand sales of existing brands and enhance profit base • Activate market by launching new products • Activate the market by proposing high-priced,
Slide 37: Mid-term Plan Progress of Major Segments (1)
36 Mid-term Plan Progress of Major Segments (1) Operating Instant Noodles Revenue Profit （bil. yen） （bil. yen） Operating income 350.0 Net Sales Operating profit(IFRS) 35.0 20% Revenue(IFRS) OPM 297.6 30.3 OPM(IFRS) 29.5 29.1 18% 300.0 30.0 29.5 265.2 269.2 274.4 27.3 243.0 25.8 16% 25.3 250.0 222.2
Slide 38: Mid-term Plan Progress of Major Segments (2): The Americas, China
37 Mid-term Plan Progress of Major Segments (2) Operating Ｔhe Americas Revenue Profit （bil. yen） （bil. yen） Net Sales Operating income 7.9% 7.9% 90.0 7.0 Operating profit(IFRS) 8% Revenue(IFRS) 80.8 80.8 OPM 80.0 6.4 6.4 6.0 OPM(IFRS) 7% 70.0 64.5 65.0 60.4 62.5 6% 60.0 5.0 48.3 4.2% 5% 50.0 4.0 3.8
Slide 39: Mid-term Plan Progress of Major Segments: Asia, EMEA
38 Mid-term Plan Progress of Major Segments (2) Operating Asia Revenue Profit （bil. yen） （bil. yen） Operating income 30.0 Net Sales 2.5 Operating profit(IFRS) 20% OPM 14.0% 2.0 Revenue(IFRS) 2.0 15% 25.0 24.124.1 OPM(IFRS) 8.3% 1.5 1.4 10% 20.0 1.0 2.2% 5% 0.5 0.5 0% -4.3% 15.0 0.0 -5% 10.0 ’16 ’17
Slide 40: shares. The comments and estimates in this document are based on the company’s judgment
Information in this material is not intended to solicit sales or purchase of NISSIN FOODS HOLDINGS stock shares. The comments and estimates in this document are based on the company’s judgment at the time of publication and their accuracy is not guaranteed. They are subject to change without notice