Kagome Co., Ltd. · TSE:2811
Kagome — FY2023/1H Earnings Presentation
34 slides from Kagome's earnings presentation, August 2023
Slide 1: Briefing Materials for FY2023/2Q
Briefing Materials for FY2023/2Q Kagome Co., Ltd. Securities Code: 2811 Figures in these materials ・ Amounts are rounded down to the nearest 0.1 billion yen. Part of amounts for core operating income are rounded down to the nearest 10 million yen. ・ Percentages are rounded to one decimal place. 1 ©2
Slide 2: Topics
Topics 1. Summary of Financial Results for FY2023/1H 2. FY2023 Earnings Forecast Revisions 3. FY2023/2H Strategies 2 ©2023 Kagome Co., Ltd.
Slide 3: 1. Summary of Financial Results for FY2023/1H
1. Summary of Financial Results for FY2023/1H 3 ©2023 Kagome Co., Ltd.
Slide 4: FY2023/1H Consolidated Results
FY2023/1H Consolidated Results Revenue: Increased year on year driven by the International Business, including the effects of yen depreciation. Core operating income: Despite surging raw materials prices, increased profitability of the International Business to offset the weaker profitability of the
Slide 5: FY2023/1H Results by Segment
FY2023/1H Results by Segment Domestic Processed Food Business: Food-Other offset the downturn in revenue of Beverages and Direct Marketing for overall higher revenue, but core operating income declined due to cost of sales increases, etc. Domestic Agri-Business: Revenue was up thanks to an increase
Slide 6: FY2023/1H Domestic Processed Food Business
FY2023/1H Domestic Processed Food Business Revenue: Increased amid the early recovery of consumer use sales and strong sales of institutional and industrial use. Core operating income: Decreased due to higher cost of sales, etc. Revenue Core operating income Unit: billion yen 70.0 Unit: billion yen
Slide 7: Trend After Price Revisions
FY2023/1H Domestic Processed Food Business —Trend After Price Revisions Vegetable Beverages: Recovering despite diminished sales volume since price revisions. Foods for consumer use / Institutional and industrial use: Consumer use sales quickly recovered amid measures to spur demand and sales of pro
Slide 8: FY2023/1H Domestic Agri-Business
FY2023/1H Domestic Agri-Business Revenue: Increased on higher selling prices of fresh tomatoes up to April driven by strong market conditions along with higher procurement volume. Core operating income: Decreased due to rising energy costs and a rapid weakening in market conditions since May. Revenu
Slide 9: FY2023/1H International Business
FY2023/1H International Business Revenue: Increased on strong sales to US food service companies and performance of the tomato primary processing businesses. Core operating income: Increased driven by rising prices of tomato paste and price revisions of products for food service companies. Revenue C
Slide 10: FY2023/1H Factors Contributing to Core Operating Income Changes
FY2023/1H Factors Contributing to Core Operating Income Changes Domestic Processed Food Business saw operating income decline due to higher cost of sales, but this was offset by an increase in the core operating income of the International Business. Unit: billion yen FY2022 5.3 Increase in income ow
Slide 11: FY2023/1H Factors Contributing to Quarterly Operating Income and Net Income Changes
FY2023/1H Factors Contributing to Quarterly Operating Income and Net Income Changes Operating income and net income both increased on higher core operating income. The breadth of increase in net income slowed amid the increase in profit attributable to non-controlling interests, etc. Unit: billion y
Slide 12: FY2023/1H Changes to Statement of Financial Condition
FY2023/1H Changes to Statement of Financial Condition Inventories and borrowings increased as a result of soaring raw materials prices and accumulation of stable inventories. Assets/Liabilities and Equity Details of Changes from the Previous Fiscal Year End 237.4 billion yen (+12.1 billion yen vs. p
Slide 13: FY2023/1H Changes in Cash Flow
FY2023/1H Changes in Cash Flow Higher free cash flows: increase in profit before income taxes, etc. Higher cash flows from financing activities: increase in long-term debt, etc. Unit: billion yen FY2023/1H FY2022/1H Change Cash flows from operating activities (A) +9.0 +4.7 +4.3 Cash flows from inves
Slide 14: 2. FY2023 Earnings Forecast Revisions
2. FY2023 Earnings Forecast Revisions 14 ©2023 Kagome Co., Ltd.
Slide 15: Revised FY2023 Results Forecasts
Revised FY2023 Results Forecasts Revenue: Revised upward to 216.0 billion yen following the positive 1H performance of the International Business (+3.0 billion yen versus initial forecast). Core operating income: Revised upward to 11.7 billion yen as a result of lower than expected costs in certain
Slide 16: FY2023 Factors Contributing to Core Operating Income Changes
FY2023 Factors Contributing to Core Operating Income Changes Core operating income revised upward from 7.4 billion yen initially to 11.7 billion yen. FY2023 (initial) 7.4 Unit: billion yen Increase in income owing to price +0.1 revisions Decline in income of Domestic 国 Processed Food Business Increa
Slide 17: FY2023 Business Factors Controlling Costs
FY2023 Domestic Processed Food Business —Factors Controlling Costs Change in cost has been reined in by 2.7 billion yen compared to the initial forecast, despite soaring raw materials prices centered on imported products. Change in cost (including cost of sales reductions) YoY ■ Energy Vs. initial f
Slide 18: 3. FY2023/2H Strategies
3. FY2023/2H Strategies 18 ©2023 Kagome Co., Ltd.
Slide 19: Topics in Domestic Processed Food Business (Beverages)
Second-Half Strategies —Topics in Domestic Processed Food Business (Beverages) The ongoing contraction in the vegetable beverages market has stopped and our market share continues to grow. The installation of VegeCheck machines in retail stores is encouraging consumers to increase their vegetable in
Slide 20: Topics in Domestic Processed Food Business (Beverages)
Second-Half Strategies —Topics in Domestic Processed Food Business (Beverages) 1H strategies appear to be paying off in the acquisition of new customers of vegetable beverages. In 2H, we will step up dissemination of value information to reverse the trend in the vegetable beverages market. 1H Strate
Slide 21: Topics in Domestic Processed Food Business (Food-Other)
Second-Half Strategies —Topics in Domestic Processed Food Business (Food-Other) Foods for consumer use: Step up dissemination of Western menu items in response to elevated consumer desire to economize (save money). Institutional and industrial use: Bolster proposals in response to labor shortages at
Slide 22: Second-Half Strategies—International Business
Second-Half Strategies—International Business Core operating income: Expected to be on par with the previous year amid full-fledged increases in cost of sales, etc. Portugal (HIT): Secured tomato paste for FY2023; enabling agile price setting. US (Kagome Inc.): Initiatives to grow global food servic
Slide 23: Looking Toward 2025
Looking Toward 2025 The importance of the four actions in the third Mid-Term Management Plan will become even more important leading up to 2025. We will announce the quantitative plan for 2025 and specific strategies in February 2024. Priority issues heading toward 2025 Strengthen procurement Agile
Slide 24: Finally… Kagome's goals remain the same
Finally… Kagome’s goals remain the same despite the dramatic changes in business environment What Kagome “Become a strong company capable of sustainable growth, strives for by 2025 using food as a means of resolving social issues” 2025 Transform from a “tomato company” Vision to a “vegetable company
Slide 25: Reference FY2023/1H Topics
Reference FY2023/1H Topics 25 ©2023 Kagome Co., Ltd.
Slide 26: Ref.) FY2023 Factors Contributing to Core Operating Income Changes
Ref.) FY2023 Factors Contributing to Core Operating Income Changes (YoY) Breakdown of 1H/2H Domestic Processed Food Business (2H): Core operating income will decline due to higher promotion expenses for growing sales and change in cost driven by rising cost of sales. International Business (2H): Cor
Slide 27: Topics in Domestic Processed Food Business: Beverages
Topics in Domestic Processed Food Business Beverages Tomato juice sales were strong after converting beauty-minded consumers to customers. Sales recovered in convenience stores, but sales at mass retailers were below the previous year. Year on year comparison of revenue from beverages (excluding lac
Slide 28: Topics in Domestic Processed Food Business: Direct Marketing
Topics in Domestic Processed Food Business Direct Marketing Sales volume of vegetable beverages and supplements declined as the number of regular customers declined. Core operating income declined due to the impacts of soaring raw materials prices and increased costs for operating direct marketing c
Slide 29: Topics in Domestic Processed Food Business: Food and Others
Topics in Domestic Processed Food Business Food and Others Revenue was up on the quick sales recovery of foods for consumer use and strong sales of products for institutional and industrial use. Core operating income was up on revenue growth despite soaring raw materials prices. Foods for consumer u
Slide 30: Topics in Domestic Agri-Business
Topics in Domestic Agri-Business Revenue increased amid higher selling prices on strong market conditions for fresh tomatoes up to April and higher procurement volume. Core operating income declined due to rising energy costs and a rapid weakening in market conditions since May. Revenue by core prod
Slide 31: Topics in International Business
Topics in International Business Revenue: Increased amid strong sales to US food service companies and strong performance in tomato primary processing businesses. Core operating income: Increased thanks to higher tomato paste prices and price revisions of products for food service companies. Unit: b
Slide 32: Example of Fan-based Marketing: Corporate Bonds with Digital Benefit
Example of Fan-based Marketing: Corporate Bonds with Digital Benefit In February, we issued our first corporate bonds with digital benefit. Develop fan bond holders using direct communication with bond buyers People’s response to this initiative / Details of corporate bonds with digital benefit Resu
Slide 33: Kagome's Sustainability
Kagome’s Sustainability ・ Kagome’s approach to sustainability is to pursue business activities that makes it a “strong company capable of sustainable growth, using food as a means of resolving social issues.” ・ Activities are being implemented led by the Sustainability Committee following our Basic
Slide 34: Kagome's Sustainability—2023/1H Topics
Kagome’s Sustainability—2023/1H Topics ・ Received strong praise from external institutions for our sustainability activities. ・ Eliminated straws on plant-based lactic acid Labre products following the Kagome Policy on Plastics. Selected as Supplier Engagement Leader, the Eliminated straws on all fo