Slide 1: Results Briefing Materials for FY2018
Results Briefing Materials for FY2018 Friday, February 1, 2019 Kagome Co., Ltd. (2811) http://www.kagome.co.jp/company/ir Copyright © KAGOME CO., LTD. All rights reserved. 1
Slide 2: Today's Topics
Today’s Topics 1. Summary of Financial Results for FY2018 • Operating income and net income marked record highs for three consecutive periods, despite a decrease in net sales. • Net sales increased, excluding the results of PBI for FY2017. <Net sales> Sales of the mainstay products, Yasai Seikatsu 1
Slide 3: 1. Summary of Financial Results for FY2018
1. Summary of Financial Results for FY2018 Copyright © KAGOME CO., LTD. All rights reserved. 3
Slide 4: FY2018 Consolidated Results
FY2018 Consolidated Results Unit: 100 million yen Year on year excluding the Change from the results Results Year on year results of PBI forecasts Ratio to net Rate of Rate of Rate of (Reference) sales change change change Net sales 2,099 - -43 -2% +16 +1% -51 -2% Operating income 120 5.7% +0.3 +0.3
Slide 5: FY2018 Results by Segment
FY2018 Results by Segment Unit: 100 million yen Net sales Operating income FY2017 FY2018 FY2017 FY2018 Rate of Rate of Year on year Year on year change change Domestic processed food business 1,576 1,577 +1 +0.1% 107 110 +3 +3% Domestic agriculture business 114 115 +1 +0.5% -2 -2 +1 - International
Slide 6: FY2018 Domestic Processed Food Business (Beverages)
FY2018 Domestic Processed Food Business (Beverages) Net sales of 89.1 billion yen (comparison with the previous year +0.4 billion yen), operating income of 5.8 billion yen (-0.2 billion yen) Yasai Seikatsu 100 Smoothie • Recognition of 330 ml recap container, light meal, intake of dietary fiber, etc
Slide 7: FY2018 Domestic Processed Food Business (Food and others)
FY2018 Domestic Processed Food Business (Food and others) Net sales of 68.6 billion yen (comparison with the previous year -0.3 billion yen), operating income of 5.2 billion yen (+0.5 billion yen) Foods "Kihon no Tomato Sauce“ (Basic Tomato Sauce) • Strong sales due to an advertisement linking CM an
Slide 8: FY2018 Domestic Agriculture Business
FY2018 Domestic Agriculture Business Net sales of 11.5 billion yen (comparison with the previous year +0.1 billion yen), operating income of -0.2 billion yen (+0.1 billion yen) Focus on sales of high value-added products • Increase in sales volume of tomatoes • Addition of functional claims of tomat
Slide 9: FY2018 International Business
FY2018 International Business Net sales of 46.4 billion yen (comparison with the previous year -2.5 billion yen), operating income of 0.3 billion yen (-0.5 billion yen) Kagome Australia Pty Ltd. - Net sales increased with a shift to profits. • Change to a structure that is able to generate profits t
Slide 10: Factors Contributing to Operating Income Changes in FY2018
Factors Contributing to Operating Income Changes in FY2018 Unit: 100 million yen FY2017 120 Changes in the domestic processed Cost reduction Cost fluctuation food business Increase in freight/storage fees Increase in efficiency of promotion expenses Decrease in fixed SGA expenses Increase in adverti
Slide 11: Extraordinary Gain (Loss) Breakdown in FY2018
Extraordinary Gain (Loss) Breakdown in FY2018 FY2017 FY2018 Extraordinary income Gain on sales of (1) 17 46 investment securities Others 29 15 Total extraordinary income 46 61 Extraordinary losses Loss on disaster - 13 (2) Business structure (3) - 5 improvement expenses Others 16 4 Total extraordina
Slide 12: Changes in Consolidated Balance Sheet for FY2018
Changes in Consolidated Balance Sheet for FY2018 Main factors contributing to changes in the consolidated balance sheet Unit: 100 million yen Current assets 1,173 Liabilities 888 (up 77 from the end of FY2017) (down 11 from the end of FY2017) Cash and deposits +84 Interest-bearing debts +1, other pa
Slide 13: Cash Flows for FY2018
Cash Flows for FY2018 Unit: 100 million yen FY2017 FY2018 Change Cash flows from operating activities (A) 166 101 -65 Cash flows from investing activities (B) 173 -3 -176 Disbursement and proceeds pertaining to 123 83 -40 time deposits and securities (C) Free cash flows (A+B-C) 216 16 -200 Cash flow
Slide 14: 2. Review of the first Mid-Term Management Plan for FY2016 to FY2018
2. Review of the first Mid-Term Management Plan for FY2016 to FY2018 Copyright © KAGOME CO., LTD. All rights reserved. 14
Slide 15: Change in Management Indexes Between 2016 and 2018
Change in Management Indexes Between 2016 and 2018 Progress toward achievement under the Mid-Term Management Plan (comparison between FY2018 and FY2015) Net sales increased 14.2 billion yen, operating income was up 5.3 billion yen, the operating margin ratio was up 2.3 pts and ROE was up 8.4 pts. Ne
Slide 16: Results of Two Reforms in 2016 to 2018
Results of Two Reforms in 2016 to 2018 Results of earnings structural reforms (FY2015 -> FY2018) • Promotion of cost reductions Ratio of COGS to net sales (consolidated): reduction of 1.5 pts (56.4% -> 54.9%) • Introduction of the management system of revenue based on marginal profit Ratio of promot
Slide 17: 3. Summary of the second Mid-Term Management Plan for FY2019 to FY2021
3. Summary of the second Mid-Term Management Plan for FY2019 to FY2021 Copyright © KAGOME CO., LTD. All rights reserved. 17
Slide 18: Management Vision Under the Mid-Term Management Plan
Management Vision Under the Mid-Term Management Plan Ideal for 2025 “We will work on the resolution of social issues through foods and become a strong company that can achieve sustainable growth.” Three social issues that Kagome Extension of healthy life Promotion of Global food expectancy agricultu
Slide 19: Basic Strategy Under the Second Mid-Term Management Plan
Basic Strategy Under the Second Mid-Term Management Plan Basic strategy under the second Mid-Term Management Plan Growth by continuing to increase the earning power and challenge new business/fields • To complete the earnings structural reforms that were not completed under the first Mid-Term Manage
Slide 20: Change to the International Accounting Standards (IFRS)
Change to the International Accounting Standards (IFRS) Net sales and income upon changing from the Japanese accounting standards to IFRS Japanese accounting standards IFRS 売上高 Sales revenue 売上高 Net sales 209.9 billion yen SG&A Sales expansion costs/fees Substantial discount -25.3 billion yen Main c
Slide 21: Earnings Structural Reforms: To Be Completed in FY2019 (Agriculture)
Earnings Structural Reforms: To Be Completed in FY2019 Domestic agriculture business (1) Reduction of volatility in supply throughout the year • Adjustment of supply in April to June when supply is excessive by changing the cropping pattern, etc. • Development of the production areas where the produ
Slide 22: Earnings Structural Reforms: To Be Completed in FY2019 (International)
Earnings Structural Reforms: To Be Completed in FY2019 International business (1) Promotion of increased management of revenue and quality and cost reductions of overseas subsidiaries • To increase involvement by the Head Office and construct the system for early response to change. • To spread the
Slide 23: Challenges to New Business/Fields: Intake of Vegetables with Dishes
Challenges to New Business/Fields: Intake of Vegetables with Dishes Increase in consumption of food outside the home = expansion of Consumer trends the markets for prepared food/food for restaurants • Women’s participation in society Results of questionnaire on ready-made dishes that consumers want
Slide 24: Challenges to New Business/Fields: Intake of Vegetables with Dishes
Challenges to New Business/Fields: Intake of Vegetables with Dishes Vegetable solutions To propose solutions for problems with vegetables in prepared food/food for restaurants • Elimination of problems processing vegetables when there are not enough workers. • Response to needs for time savings and
Slide 25: Challenges to New Business/Fields: Strategy for Beverage Business
Challenges to New Business/Fields: Strategy for Beverage Business To place greater emphasis on the three pillars in the beverage business. Functional claims Plant-based area Products by target Stimulation of the market with Expansion of dietary area such beverages with functional as soy milk, almond
Slide 26: Numerical Targets under the Second Mid-Term Management Plan
Numerical Targets under the Second Mid-Term Management Plan Numerical targets for consolidated results (according to IFRS) Unit: 100 million yen FY2018 FY2021 Increase FY2025 Results Targets 2021-2018 Targets Sales revenue 1,846 2,120 +274 2,500 Net operating profit 124 162 +38 200 Ratio of net oper
Slide 27: Numerical Targets by Business under the Second Mid-Term Management Plan
Numerical Targets by Business under the Second Mid-Term Management Plan 単位：億円 Numerical targets by business (numerical data after elimination and adjustment of sales among segments according to IFRS) FY2018 FY2021 2021-2018 Unit: 100 million yen Results Profit ratio Targets Profit ratio Increase Dom
Slide 28: Cash Flow under the Mid-Term Management Plan
Cash Flow under the Mid-Term Management Plan • To appropriate cash flow from operating activities to fixed investments and return to shareholders. • Consideration of the new ideal return to shareholders shareholders Return to Dividends, etc. Consideration of the new ideal return to shareholders Oper
Slide 29: Establishment of New Code of Conduct
Establishment of New Code of Conduct Positioning of the code of conduct • Standards for the usual behavior of the employees of the Kagome Group • To complement the corporate philosophy “appreciation, nature, corporate openness.” 1. Cooperation System for cooperation, cooperation with stakeholders, c
Slide 30: Way of Working Reforms and Promotion of Diversity
Way of Working Reforms and Promotion of Diversity Way of working reforms during the period of the second Mid-Term Management Plan Measures to ensure a suitable environment for working that provides work satisfaction • Approval of second jobs • Introduction of the flextime system • Opening of a nurse
Slide 31: Increasing Governance
Increasing Governance Actions for governance during the period of the second Mid-Term Management Plan Increasing the governance of the Group Initiatives for quality improvement • Application of IFRS, change of the • Improvement and expansion of the standards accounting auditor for quality control co
Slide 32: 4. FY2019 Consolidated Results Forecasts
4. FY2019 Consolidated Results Forecasts Copyright © KAGOME CO., LTD. All rights reserved. 32
Slide 33: FY2019 Consolidated Results Forecasts
FY2019 Consolidated Results Forecasts Unit: 100 million yen Sales revenue Net operating profit FY2018 FY2019 FY2018 FY2019 Rate of Rate of YoY YoY change change Domestic processed food business 1,329 1,359 +29 +2% 115 107 -7 -7% Domestic agriculture business 112 120 +8 +7% -1 1 +2 - International bu
Slide 34: Expected dividend
Expected dividend 40 yen Unit: yen 40 35 yen Commemorative 35 dividend 30 yen 10 yen 30 * Settlement 30 yen 24.5 yen 25 of 22 yen accounts 22 yen for nine 20 yen months 20 18 yen 16.5 yen 15 yen 15 yen 15 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 • FY2018 40 yen (Ordinary dividen
Slide 35: 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 36: Reference Material
Reference Material Changes in monthly candlestick chart for the past ten years (yen against dollar) Simple Moving Average Simple Moving Average Simple Moving Average (9 months) (24 months) (60 months) Copyright © KAGOME CO., LTD. All rights reserved. 36