Nissin Foods Holdings Co., Ltd. · TSE:2897
Nissin Foods — FY3/2024 Earnings Presentation
60 slides from Nissin Foods's earnings presentation, May 13, 2024
Slide 1: Financial Results for FY 3/2024
a Financial Results for FY 3/2024 May 13, 2024 NISSIN FOODS HOLDINGS CoO., LTD. (TSE Stock Code: 2897) Financial Results Presentation: May 14, 2024
Slide 2: CFO introduction and presentation scope
・ I am Takashi Yano, CFO of NISSIN FOODS HOLDINGS. ・ Today, my presentation will focus on FY 3/2024 Financial Results and FY 3/2025 Plan, which is the first item in our presentation of Financial Results for FY 3/2024. ・ Our CEO and COO will discuss details related to the second item, Progress of Mid
Slide 3: Summary of key points
・ Please turn to page 2. This is a summary of the key points I will address today. ・ First, in FY 3/2024, we posted record highs for revenue and every profit measurement, seeing double-digit percentage increases in profit. ・ In particular, our Overseas Business and Domestic Non-Instant Noodles Busin
Slide 4: FY 3/2024 Financial Results
FY 3/2024 Financial Results
Slide 5: FY 3/2024 results
・ Please turn to page 4. ・ The left side of the slide shows our FY 3/2024 results. ・ Revenue was a record-high 732.9 billion yen, up 9.5%, or 63.7 billion yen, year on year, mainly due to the wider impact of price revisions implemented globally over the past few years. ・ Core operating profit of exi
Slide 6: Core operating profit change analysis
・ Please turn to page 5. ・ This page provides an analysis of the factors impacting core operating profit of existing businesses for the fiscal year. Details are shown on a constant currency basis. ・ The pink bar second from the left indicates revenue growth, which exceeded the cost increases shown o
Slide 7: Financial summary by segment
・ Continuing on, page 6 shows a financial summary by segment. All segments reported increases in revenue and profit. I will explain in greater detail beginning with the next page. 6
Slide 8: Revenue breakdown by segment
・ Please turn to page 7. ・ This is a breakdown of revenue by segment. ・ Our Domestic Instant Noodles Business posted a 15.0 billion yen increase, or 5.7% higher year on year. In June last year, we implemented price revisions for the second consecutive year. However, sales volume remained steady, dec
Slide 9: Core operating profit by segment
・ Please turn to page 8. ・ All segments reported higher core operating profit results. ・ Domestic Business raw materials costs increased year on year, partly due to the weak yen. This factor had a dragon on profit, but the impact of higher revenue stemming from price revisions resulted in an increas
Slide 10: FY 3/2025 Plan
FY 3/2025 Plan
Slide 11: Consolidated earnings plan FY 3/2025
・ Next, I will address our consolidated full-year earnings plan for FY 3/2025. ・ Please turn to page 10. Our plan calls for FY 3/2025 revenue of 785 billion yen and core operating profit of existing businesses of 84.6 billion yen, a profit increase of 5.0%. With a core operating profit of existing b
Slide 12: Forecasts by segment
・ Please turn to page 11. Looking at forecasts by segment, we expect revenue to increase across all operating companies compared with FY 3/2024. We also expect core operating profit to increase across all operating companies with the exception of China and EMEA. ・ In our Domestic Business, which inc
Slide 13: Core operating profit change by segment
・ Page 12 is a chart analyzing changes in core operating profit by segment shown on the previous page. ・ We provide our assumptions for overseas revenue and volume at the bottom of the page. As mentioned earlier, we plan for overall overseas volume growth in the 10% range, with mid-single-digit volu
Slide 14: EBITDA and cash flow
Next, letʼs look at EBITDA and cash flow for the past five years. As you can see, we have doubled our cash generation capability since FY 3/2019. EBITDA is now consistently over the 100 billion yen level, driven by business growth in general and the highly profitable business in the Americas in
Slide 15: Progress in Mid- to Long-Term Growth Strategy and Revised KPIs
Progress in Mid- to Long-Term Growth Strategy and Revised KPls 14 14
Slide 16: Growth strategy progress and revised targets
• I am Koki Ando, CEO of NISSIN FOODS HOLDINGS. I will talk about the progress of our mid- to long-term growth strategy and changes to KPIs, beginning with page 14. First, we achieved record highs in revenue and profit at all levels in FY 3/2024, despite geopolitical risks, inflation, and other adve
Slide 17: Progress toward financial KPIs
• Page 16 shows our progress toward financial KPIs through 2030. CAGR for core operating profit of existing businesses, a KPI indicating growth potential, was 24.4%, well above the mid-single-digit target. • This result was due in part to inorganic factors, including the consolidation of KOIKE-YA as
Slide 18: Mid- to Long-term Growth Strategy 2030
• Continuing to page 17, we see a discussion of our Mid- to Long-term Growth Strategy 2030. We achieved our FY 3/2031 target for profit margin ahead of schedule, reflecting a stronger cash-generating capacity of existing businesses and inorganic factors. In conjunction, EBITDA grew to the 100 billio
Slide 19: Cash allocation and shareholder returns
• Please turn to page 18. To improve ROE, we plan to allocate cash to strategic growth investments and expanded shareholder returns. We will allocate the 700 billion yen to 800 billion yen in cash generated by 2030 primarily for organic growth investments, mainly capital expenditures, concentrating
Slide 20: Economic value targets through CSV management
• Next is page 19. In this way, we are committed to four mid- term economic value targets through CSV management: profit growth, use of capital, safe use of debt, and stable shareholder returns. Emphasizing growth, efficiency, and safety, we aim to maintain our net debt/EBITDA multiple below 2x whil
Slide 21: There is no limit to growth
• Please turn to page 20. This slide contains a message that was communicated internally within the company. We adopted the words of our founder who said, "There is no limit to growth." These goals represent a milestone that we will endeavor to reach ahead of 2030. 20
Slide 22: Path to 1 trillion yen revenue
• Moving to page 21. Our previous Mid- to Long-term Growth Strategy 2030, announced in 2020, included a goal to double core operating profit from 40 billion yen to 80 billion yen. We achieved this goal in just three years. Over the next two to three years from now, we plan to invest in plants in the
Slide 23: Earnings growth toward 2030
• Please turn to page 22. Heading toward 2030, we expect to see earnings growth, especially from our Overseas Business. Even considering a slowdown in volume after price revisions, we forecast new plants in the U.S. and Brazil to come online and contribute to sales growth. In the U.S., we aim to gro
Slide 24: Path to 100 billion yen core operating profit
• Page 23 explains factor-by-factor our path toward achieving 100 billion yen in core operating profit from existing businesses. Looking ahead to FY 3/2031, we plan to reach 100 billion yen through an improved product mix and increased volume based on demand growth, thereby covering the increased de
Slide 25: Profit growth and portfolio by segment
• Page 24 presents a picture of profit growth and profit portfolio by business segment. Our Overseas Business now represents more than 50% of profit as of FY 3/2024, and will continue to be a driver of profit growth. By FY 3/2031, we expect the Overseas Business to be an even larger share of our pro
Slide 26: Capital investment plans
• Continuing on page 25, we discuss our capital investment plans, which are essential for business growth. In 2024, we plan to make capital investments of 95 billion yen to establish a structure for increased production, including a new overseas plant, as well as to invest in our domestic businesses
Slide 27: Overseas growth potential
• Next is page 26. Stable growth in our Overseas Business is essential for us to achieve revenue of 1 trillion yen and core operating profit of 100 billion yen. The Overseas Business is growing steadily on a global basis, and we believe this business has great growth potential. • In the Americas, wh
Slide 28: Global expansion of CUP NOODLES brand
• Please turn to page 27. In terms of global expansion of the CUP NOODLES brand, we are seeing remarkable growth in the overseas market. The CUP NOODLES brand accounts for nearly 10% of total global demand for cup-type instant noodles. Our goal is to evolve into a global brand on par with McDonald's
Slide 29: Premium strategy in the U.S.
• Continuing on page 28, we see an explanation of the development of our premium strategy in the U.S. market. In the U.S., we have a new plant scheduled to start up in August 2025. We intend to begin marketing initiatives to improve our brand image among Gen Z and Millennials, who account for 40% of
Slide 30: EARTH FOOD CHALLENGE 2030
• Moving on, page 29 describes the progress of the NISSIN FOODS Group environmental strategy, EARTH FOOD CHALLENGE 2030. Within the framework of this environmental strategy, we increased the percentage of RSPO-certified palm oil used to 43.4%. We are also making steady progress in meeting targets fo
Slide 31: Scope 1 and 2 emissions reduction
• Our self-challenge in response to climate change is to advance Scope 1 and 2 greenhouse gas emission reductions, which we provide in detail on page 30. We committed to a 42% reduction in Scope 1 and a 25% reduction in Scope 3 emissions by 2030, making progress as I speak. Our Scope 1 reduction is
Slide 32: Scope 3 emissions progress
• Page 31 shows our progress in Scope 3 emissions, which has been slow to date. Progress has been a challenge, even as we continue efforts not only on our own, but in cooperation with raw materials manufacturers and retailers. Current initiatives include increasing the percentage of RSPO-certified p
Slide 33: Human capital
• Moving to page 32, you see that we view human capital as the most important resource we have. We have established numerous programs to raise the level of our human capital, including forward-looking employee training. As our founder said in 2007, "Our company is defined by the caliber of our peopl
Slide 34: Human resources retention measures
• Last, turn to page 33, where we discuss human resources retention measures. During FY 3/2024, we hired 79 new graduates and 271 mid-career hires, with mid-career hires outnumbering new graduates by far. With such a large number of mid-career hires, we introduced a job system to ensure mid-career h
Slide 35: Initiatives communicating Mission, Vision, and Values
| Example Initiatives Communicating Mission, Vision, and Values (MVV) * We focus on communicating our Mission, Vision, and Values (MVV) and the NISSIN 10 Rules (action guidelines) to serve as the basis of our activities and unite employees around the world. # NISSIN 2] ACADEMY When joining the compa
Slide 36: KANZEN MEAL series
• Noritaka Ando, president of NISSIN FOOD PRODUCTS, will provide an overview of progress in our new businesses. • First, let's look at page 35. This page lists our KANZEN MEAL series of products. As a new business, we began sales in May 2022. In just two years, we surpassed 25 million servings. One
Slide 37: KANZEN MEAL sales targets
• Let's look at page 36. This page shows how the KANZEN MEAL brand surpassed 3 billion yen in FY 3/2023 and 5 billion yen in FY 3/2024 on a market sales price basis. We forecast sales of 7 billion yen in FY 3/2025, aiming to create a 10 billion yen brand in FY 3/2026. Our original plans called for 6
Slide 38: KANZEN MEAL hot water and room temperature lineup
• Moving on to page 37, the top of the page shows our lineup for hot water series products and our room temperature lineup. In addition to U.F.O. and CURRY MESHI, we also offer a cup-type soup product, and we continue to sell smoothies. We hope to raise brand awareness further via a communications c
Slide 39: KANZEN MEAL DELI and subscription model
• Please turn to page 38. This page highlights 21 different packages in the frozen KANZEN MEAL DELI and subscription model series, exclusive to our online shop. This subscription model has become very popular with a user base expanding at a repeat- purchase rate of 55%, which is quite extraordinary.
Slide 40: Collaborations with other companies
• Please turn to page 39. We are collaborating with other companies on a variety of projects, gradually discovering that KANZEN MEAL and Optimized Nutri-Dense Meal technologies can be used across a very wide range of applications. For example, you see rice balls and bread on the left. These are prod
Slide 41: Employee cafeteria and vending models
• On page 40, we highlight other styles of KANZEN MEAL products developed for employee cafeterias. To the left is a cafeteria meal and an employee cafeteria product we are developing for service at Mitsubishi Corporation, Meiji Yasuda Life, Rakuten, Life Card, and other companies. To the right is an
Slide 42: Insurance channel with Meiji Yasuda Life
• As you can see on page 41, in a slightly unusual combination, we are working with Meiji Yasuda Life to offer KANZEN MEAL products through the insurance industry channel. Meiji Yasuda Life is developing a service that contributes to customer and subscriber health and quality of life. This service w
Slide 43: Clinical trial for diabetes and hypertension
• Please turn to page 42. This page highlights new results from clinical trials of our Optimized Nutri-Dense Meals, the basic technology behind KANZEN MEAL. We conducted a clinical trial to determine whether Optimized Nutri-Dense Meals can be used to develop a new diet for diabetes and hypertension
Slide 44: Clinical trial for seniors
• Please turn to page 43. This page also shows results of a clinical trial. This trial related to the development of an Optimized Nutri-Dense Meal for seniors in Japan, where we see a declining birthrate and aging population. In this clinical trial, we fortified the diets of seniors with nutrients t
Slide 45: Disaster relief food
• Next is page 44. This page highlights the role of Optimized Nutri-Dense Meals as a disaster relief food. Generally, the first wave of relief food delivered to disaster-stricken areas is room-temperature or cold foods such as water, bread, and rice balls. The second wave has traditionally been the
Slide 46: Applications of Optimized Nutri-Dense Meals
• Last, let's look at page 45. I mentioned earlier that we can offer our Optimized Nutri- Dense Meal products in a great variety of ways. At the top left is packaged food, such as instant foods, cup soups, and frozen foods, to which we can apply this technology. To the right of that, we see that the
Slide 47: Status of Our Businesses
Status of Our Businesses 46 46
Slide 48: Domestic Instant Noodles Business
| Domestic Instant Noodles Business SS + Revenue and profit increased due to price revisions besides expanding sales of main products despite rising raw materials costs Revenue Gi. ven) MM FY 3/2023 MM FY 3/2024 NISSIN FOOD PRODUCTS (+5%) Cup type : New products such as CUP NOODLE GUZAI MAMIRE serie
Slide 49: Domestic Non-Instant Noodles Business
| Domestic Non-Instant Noodles Business SS + Revenue and profit increased due to contributions from YORK, with keeping strong performance of lactobacillus beverages PILKUL series and TOKACHI DRINK YOGURT, and KOIKE-YA, with strong sales from main products Revenue Gi. ven) MM FY 3/2023 MM FY 3/2024 i
Slide 50: The Americas
| The Americas * Revenue and profit increased year on year due to the strengthening of propositions and promotion of high-value-added products as well as the impact of price revisions Revenue i. Yen) Ww Mmm FY 3/2023 MM FY 3/2024 i. il did im au 2u Fy3/2025 Tull year m Plan Core Operating Profit (ii
Slide 51: China (incl. H.K.)
| China (incl. H.K.) Revenue Gi. ven) SS Core operating profit increased mainly due to lower raw material costs year on year, besides, flagship products are showing signs of recovery. MM FY 3/2023 MM FY 3/2024 Hong Kong and : Recovering sales volume of bag type noodles, increased sales others due to
Slide 52: Asia
] Asia ¢ Profit increased in all regions, mainly in Thailand, due to price revisions in each country and lower material costs Revenue Gi. ven) MM FY 3/2023 MM FY 3/2024 By descending order of revenue Thailand : Increased (Forex impact +0.5 Bil. yen) il al India : Increased (Forex impact +0.2 Bil. ye
Slide 53: EMEA
| EMEA + Continued revenue growth trend in the fast-growing instant noodles market Revenue il ven) Ml FY 3/2023 MM FY 3/2024 all ll ies 4H 2H Full year FY3/2025 Plan Core Operating Profit @ii yen) + CUP NOODLES, Soba and Demae Ramen brands continued to perform well + Increased mainly in the U.K., Ge
Slide 54: Appendix
Appendix 53
Slide 55: Major Regional Review and Efforts Toward 2030 (Domestic)
SS | Major Regional Review and Efforts Toward 2030 (Domestic) Domestic Instant Noodles Business Domestic Non-Instant Noodles Business + Strategically captured the demand for instant noodles, which are relatively more -- Chilled and Frozen Foods/Beverage Confectionery affordable during inflation desp
Slide 56: Major Regional Review and Efforts Toward 2030 (Overseas)
Progress Progress SS Major Regional Review and Efforts Toward 2030 (Overseas) The Americas China (Incl. H.K.) ig price revisions imp! in August 2022: business structure to a proftabe structure. Expanding premium products and developing the market. Brazil: Created strong demand in a market where we h
Slide 57: Revenue and Volume in the Americas and Overseas
SS | Revenue and Volume in the Americas and Overseas (YoY) Jan. Mar. Base products: + mid-single digit % Premium products: * high-single digit % FY 3/2024 —— Apr.-Jun. —— —— Jul.-Sep. ——- -—— Oct.-Dec. ——- -— Jan.-Mar. —— (Apr. - Mar.) ~~ FY 3/2024 | 3CNCuTT Volume Revenue Volume Revenue Volume Reve
Slide 58: Major Price Revisions (Domestic)
SS | Major Price Revisions (Domestic) Instant Noodles Business o 3 8 S 5 N £ 3 and beverages Confectionery / Snack FY 3/2020 ~ FY 3/2021 NISSIN FOOD PRODUCTS. MYOJO FOODS = Jun. 19 (NISSIN FOOD 4-8%, MYOJO 3-7%) CHILLED FOODS Apr. 19 (3-9%) FROZEN FOODS YORK CISCO BonChi KOIKE-YA Jun -Jul. 19 (7-9%)
Slide 59: Major Price Revisions (Overseas)
The Americas Major Price Revisions (Overseas) FY 3/2020 ~ FY 3/2021 U.S. Apr. 19 (Bag, Cup) Brazil May 20 Nov.20 Feb. 21 (Bag, Cup) (Bag, Cup) (Bag, Cup) Mexico” “Implemented Implemented gradually for each channel China (Incl. H.K.) —4.K. Jul. 19 (Cup) Asia Implemented in some regions EMEA Implement
Slide 60: Cautionary notes on forward-looking statements
SS Company plans, business forecasts, strategies, and other information contained in this document are based on management judgments derived from information available at the time of this publication. Be aware that these are only future projections, and actual results may differ due to various risks
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