H.U.Group Holdings, Inc. · TSE:4544
H.U.Group — FY2022 Earnings Presentation
40 slides from H.U.Group's earnings presentation, May 12, 2023
Slide 1: FY2022 Annual Financial Results
FY2022 (Ended March 31, 2023) Annual Financial Results May 12, 2023 （TSE: 4544）
Slide 2: Notes & references
Notes & references: * The financial information provided on this material has been prepared in accordance with Japanese GAAP except for EBITDA (Operating profit + Depreciation + Amortization of goodwill) which is a non-GAAP measure. * “Net Profit attributable to shareholders of the parent company” m
Slide 3: Financial Results for FY2022
Financial Results for FY2022 2
Slide 4: Consolidated Net Sales Changes
Consolidated Net Sales Changes (¥ billion) 300 272.9 -16.84 +5.72 -0.92 260.9 1 1 240 66.6 45.1 Decrease in COVID-19 tests: -32% 180 206.3 Growth in base business: +5% 215.8 120 FY21 LTS IVD HS FY22 3 1. Net sales related to COVID-19 testing
Slide 5: FY2022 COVID-19-related Sales (vs. previous year)
FY2022 COVID-19-related Sales (vs. previous year) (¥ billion) -21.5 80 66.6 45.1 40 0 FY21 PCR Airport Lumipulse LP ESPLINE EL Other FY22 (large-scale etc. quarantines events, etc.) Major factors • Demand for antigen testing products (Lumipluse, ESPLINE) increased along with Positive the 7 th and 8
Slide 6: Consolidated Operating Profit Changes
Consolidated Operating Profit Changes (¥ billion) 60 50.5 -23.35 30 -0.20 -0.74 -2.81 23.4 0 FY21 LTS IVD HS H.U. FY22 Group 5
Slide 7: Difference between Results and Previous Forecast
Difference between Results and Previous Forecast COVID-19related sales and profits were lower than expected due to early recovery from the pandemic • Increase in testing demand during the 8th wave was weaker than expected • Quarantine station testing increase has been limited • Base business was lar
Slide 8: Consolidated Ordinary Profit & Net Profit
Consolidated Ordinary Profit & Net Profit Ordinary Profit Net Profit (¥ billion) (¥ billion) 60 60 47.4 29.6 30 30 22.0 15.7 0 0 FY21 FY22 FY21 FY22 Major non-operating factors Major extraordinary factors Foreign exchange gains +¥0.49 B Gains on sales of non-current assets +¥2.64 B Equity in l
Slide 9: Quarterly Performance Trend
Quarterly Performance Trend AkirunoCube-related costs, delay in testing volume recovery due to the pandemic, and an increase in constant fixed costs influenced the performance in FY2022 In addition to the above, sales related to COVID-19 also declined in Q4, resulting in a significant decrease i
Slide 10: LTS
LTS Quarterly Results YoY Comparison Net sales EBITDA, OP (¥ billion) (¥ billion) (¥ billion) 60 18 FY21 FY22 Variance 49.0 Net sales 179.9 163.1 -16.84 -9.4% 1.6 43.4 41.7 Off-site 140.6 125.2 -15.40 -11.0% 10.1 1.3 39.7 38.4 FMS/Branch 33.9 30.9 -2.98 -8.8% 40 1.6 12 10.1 2.0 2.1 Others 5.4 7.0 +1
Slide 11: IVD
IVD Quarterly Results YoY Comparison Net sales EBITDA, OP (¥ billion) (¥ billion) (¥ billion) 24 24 FY21 FY22 Variance 20.2 20.4 19.2 Net sales 64.3 70.1 +5.72 +8.9% Lumipulse 32.0 34.3 +2.30 +7.2% 3.5 4.0 Japan 27.5 30.7 +3.16 +11.5% 4.4 15.0 14.4 Overseas 4.5 3.6 -0.86 -19.0% 6.0 6.2 CDMO etc. 18.
Slide 12: HS
HS Quarterly Results YoY Comparison Net sales EBITDA, OP (¥ billion) (¥ billion) (¥ billion) 10 4 FY21 FY22 Variance Net sales 28.7 27.8 -0.92 -3.2% 6.9 7.0 6.8 6.8 7.1 Sterilization 22.9 21.5 -1.39 -6.1% Home-visiting, 1.6 5.8 6.3 +0.47 +8.1% 1.5 1.5 1.5 1.6 welfare EBITDA 3.36 11.7% 2.76 10.0% -0.
Slide 13: Consolidated Results for FY2022
Consolidated Results for FY2022 (¥ billion) FY2021 FY2022 Profit Profit Variance Results Results ratio ratio Net sales 272.9 260.9 -12.04 -4.4% LTS 179.9 163.1 -16.84 -9.4% IVD 64.3 70.1 +5.72 +8.9% HS 28.7 27.8 -0.92 -3.2% OP 1 50.5 18.5% 23.4 9.0% -27.11 -53.7% LTS 23.6 13.1% 0.3 0.2% -23.35 -98.8
Slide 14: R&D, CAPEX and D&A (comparison with initial plan)
R&D, CAPEX and D&A (comparison with initial plan) • CAPEX: Some acceptance inspections at AkirunoCube postponed to FY2023 • R&D, D&A: Generally in line with the initial plan (¥ billion) Research & Development Capital Expenditure Depreciation & Amortization 30 30 28.8 30 22.6 1 20.0 19.5 4.9 15 15 15
Slide 15: Cash and Deposits / Interest-bearing Debts
Cash and Deposits / Interest-bearing Debts (¥ billion) FY2022 FY2021 Cash and deposits Short-term debts 46.5 44.2 43.0 46.5 Interest- bearing Long-term debts Cash and debt deposits Lease debts Corporate Interest- 3.6 3.7 8.4 3.6 bond bearing 18.7 18.7 Net interest-bearing debts -26.5 25.0 -26.5 -33.
Slide 16: Analysis of Consolidated Cash Flows (FY2022)
Analysis of Consolidated Cash Flows (FY2022) Investment cash (¥ billion) Operating cash flows +32.5 Others -9.4 flows -29.6 Free cash flows +2.9 1 1 -26.5 -6.5 (Increase in net interest-bearing debts） -33.0 March 31, 2022 -0.1 March 31, 2023 Decrease in +10.9 purchase debts -21.0 -Decrease in Sales
Slide 17: Analysis of Consolidated Cash Flows (FY2021)
Analysis of Consolidated Cash Flows (FY2021) Investment cash (¥ billion ） Operating cash flows +55.2 flows -30.9 Others -13.3 Free cash flows +24.3 1 1 -37.5 +11.0（Decrease in net interest-bearing debt） -26.5 March 31, 2021 Depreciation 2 March 31, 2022 +14.6 -10.3 +13.4 Income +1.9 before taxes -5.
Slide 18: FY20-22 3-year-cumulative Cash Flow (Capital Allocation)
FY20-22 3-year-cumulative Cash Flow (Capital Allocation) (¥ billion ） Others: 11.9 FY2022 3-year-cumulative Operating cash flow: free cash flow: Dividends: 22.6 32.5 34.5 Other investment: 10.8 H.U. Group: 6.3 3-year-cumulative FY2021 HS: 4.8 Operating cash operating cash flow: flow: 55.2 IVD: 21.7
Slide 19: Shareholder Returns
Shareholder Returns We are committed to providing consistent dividends based on profits and funds generated by Basic our businesses. Our target is a consolidated Dividend on Equity (DOE) ratio in the 6% range. Policy We make dividend decisions after carefully considering factors such as cash flows a
Slide 20: FY2023 (Ending in March 2024) Business Plan
FY2023 (Ending in March 2024) Business Plan 19
Slide 21: FY2023 Financial Targets
FY2023 Financial Targets (¥ billion ） FY2022 results FY2023 targets Net sales 260.9 245.0 -15.9 -6.1% LTS 163.1 156.0 -7.1 -4.3% IVD 70.1 59.0 -11.1 -15.8% HS 27.8 30.0 +2.2 +8.1% OP 23.4 14.0 -9.4 -40.1% Ord. profit 22.0 12.0 -10.0 -45.5% Net profit 15.7 6.0 -9.7 -61.7% EBITDA 43.1 36.0 -7.1 -16.4%
Slide 22: Net Sales Plan for FY2023 (YoY)
Net Sales Plan for FY2023 (YoY) (¥ billion) 300 LTS 260.9 -31.1 • (＋)New client acquisition LTS 245.0 • (＋)Increase in genetic testing +2.2 250 1 -17.1 +10.0 +3.0 • (＋)Testing volume recovery 1 45.1 IVD 14.0 • (－)Decrease in COVID-19-related -14.0 tests Decrease Growth of base business in COVID-19 +
Slide 23: Operating Profit Plan for FY2023 (YoY)
Operating Profit Plan for FY2023 (YoY) (¥ billion) 30 IVD LTS • (＋)Efficiency effect 23.4 • (＋)Profit growth along with sales growth 20 • (－)Profit decrease due to decrease in COVID-19-related tests • (－)Increase in AkirunoCube-related 14.0 costs 10 IVD • (＋)Profit growth along with sales growth (CD
Slide 24: Basic Direction for FY2023
Basic Direction for FY2023 Profitability improvement is our main target, responding to challenges such as a decrease in COVID-19-related tests, limited efficiency effect from AkirunoCube, and higher energy costs • Establish stable operation of AkirunoCube LTS 1 • COGS improvement through operation o
Slide 25: AkirunoCube Costs and Effects
AkirunoCube Costs and Effects Full operation starts in Akiruno in May 2023, accelerating the reaping of benefits in the second half of the year (¥ billion ） FY2021 FY2022 FY2023 full year estimate One-time -5.6 -3.3 -1.0 Mainly in the first half of the year costs D&A -0.3 -4.1 -6.1 Nearing the peak
Slide 26: Profitability Improvement of LTS Business
Profitability Improvement of LTS Business In FY24, the cost savings will outweigh the increased costs, resulting from efficiency effects of AkirunoCube and peripheral effects generated by AkirunoCube full operation • Efficiency improvement of general AkirunoCube Effects on its own Peak of fixed cost
Slide 27: Reorganization of Nationwide Lab Network
Reorganization of Nationwide Lab Network • The New Kansai Lab project will restart with the aim of establishing a tri-axis lab network • Objectives of New Kansai Lab 1. Renew a group company lab in the Kansai area (Nihon Rinsho, Inc.) CAPEX forecast: ¥10 B; Real estate: ¥8.5 B 2. Enhance testing c
Slide 28: IVD: CDMO
IVD：CDMO Number of development projects gained from partners（accumulated） Points Regional partner: In Development Phase Regional partner Global partner: In Development Phase Complete development and Global partner: In Production Phase start production (sales generation） 45 Global partner 49 Developm
Slide 29: FY2023 R&D, CAPEX and D&A Costs
FY2023 R&D, CAPEX and D&A Costs Research & Development Capital Expenditure Depreciation & Amortization (¥ billion) 30 30 30 22.6 21.0 20.6 19.5 1 4.9 1 5.1 15 15 15 9.6 10.7 17.6 15.5 0 0 0 FY22 FY23 FY22 FY23 FY22 FY23 Actual Plan Actual Plan Actual Plan • IVD: Increase due to CDMO business growth
Slide 30: Net Sales Expectation for FY2024
Net Sales Expectation for FY2024 • Accelerate growth primarily through new client acquisition in FY23 • COVID-19-related testing is expected to become routine, particularly using Point-of-Care Testing (POCT) Sales excluding COVID-19 Sales related to COVID-19 (¥ billion) 300.0 272.9 260.9 400.0 245.0
Slide 31: OP/EBITDA Expectations for FY2024
OP/EBITDA Expectations for FY2024 Following factors will drive profit growth: • Fixed costs reduction and realization of efficiency effects led by AkirunoCube full operation; decrease of one-time costs • Organic growth of base businesses OP EBITDA (¥ billion) (¥ billion) 65.1 50.4 43.1 35.5 31.9 25.
Slide 32: Sustainability
Sustainability FES y.u.croup
Slide 33: Current H.U. Group Sustainability Roadmap
Current H.U. Group Sustainability Roadmap H.U. Group Sustainability Roadmap Three-Year Targets (FY2020–2022) FY2022 FY2022 Quantitative targets Results Qualitative targets Results CO2 emissions: -7% -24.2% 40-year (vs. FY2017) +29.9% Continuous offering and Environment history Waste plast
Slide 34: External Ratings
External Ratings FTSE Blossom Japan CDP Sector Relative Index Climate change: 2022 A- Selected in April 2022 (2 years in row) SER1: 2023 A MSCI ESG Ratings Ratings Acquired AAA (highest) White 5002 in 2022 Selected for 2 years since 2022 Sustainalytics Maintain Low Risk ISS ESG (2022)
Slide 35: New Sustainability Roadmap Time Period
New Sustainability Roadmap Time Period FY2020 FY2023 FY2025 Medium- term Plan Current Plan (5 years) Next Medium-term plan Sustainability Past Roadmap New Roadmap Roadmap (3 years) (2 years) Next Roadmap <Regarding the period of the new Sustainability Roadmap> The new Sustainability Roadmap will con
Slide 36: New H.U. Group Sustainability Roadmap
New “H.U. Group Sustainability Roadmap” H.U. Group Sustainability Roadmap Two-Year Targets (FY2023–FY2024) • CO2 emissions : -12.6％ (vs. FY2021) Environmental • Waste plastic recycling rate : 82％ • Percentage of female managers : 22％ • Percentage of male employees taking parental leave : 90％ • Perce
Slide 37: Appendix
Appendix FES y.u.croup
Slide 38: Testing Trends of COVID-19 PCR Tests
Testing Trends of COVID-19 PCR Tests Number of COVID-19 PCR tests conducted Index: Number of tests conducted by H.U. in April 2020 = 11 x23 x21 x19 x17 x15 x13 x11 x9 x7 x5 x3 x1 Feb Feb Feb Oct Oct Oct Apr Sep Apr Apr Jun Jun Sep Jun Sep Jul Nov Jul Jul Nov May Nov Mar May Mar May Mar Aug Jan Dec A
Slide 39: Testing Trends of High-sensitivity Quantitative Antigen Tests
Testing Trends of High-sensitivity Quantitative Antigen Tests Number of high-sensitivity quantitative antigen tests at hospitals1 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2021 202
Slide 40: Contact information
【Contact information】 IR/SR Department Email : ir@hugp.com Disclaimer regarding forward-looking statement: The performance forecast provided in this document is prepared by the management based on currently available information and various hypotheses and ideas including significant risks or uncerta