Ajinomoto Co., Inc. · TSE:2802
Ajinomoto — H1 FY2012 Earnings Presentation
45 slides from Ajinomoto's earnings presentation, Nov 7, 2012
Slide 1: Forecast for the Fiscal Year Ending March 31, 2013 (FY2012) and Outlook
Ajinomoto Co., Inc. Forecast for the Fiscal Year Ending March 31, 2013 (FY2012) and Outlook November 7, 2012 Masatoshi Ito President & CEO
Slide 2: Contents
Contents I. Summary of FY2012 FY2012 Forecast ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・P2 Factors in Changes in FY2012 Operating Income Forecast ・・・・・・・・・・・・・・・・ P3 FY2012 Forecast by Segment ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P4 FY2012 Forecast – Ordinary Income and Net Inco
Slide 3: I. Summary of FY2012
I. Summary of FY2012 Copyright © 2012 Ajinomoto Co., Inc. All rights reserved.
Slide 4: FY2012 Forecast
FY2012 Forecast Net sales and operating income are both expected to increase overall, as in the initial forecast, although there are minor adjustments to the forecast for specific segments. FY2012 FY2012 FY2011 (\ Billion) Revised Initial Difference Results Forecast Forecast Net sales 1,221.0 1,221.
Slide 5: Factors in Changes in FY2012 Operating Income Forecast
Factors in Changes in FY2012 Operating Income Forecast Currency exchange rates have improved since the start of the period, but raw material and fuel prices are rising, so we expect results to be in line with the initial forecast. Operating income is expected to continue to increase with higher sale
Slide 6: FY2012 Forecast by Segment
FY2012 Forecast by Segment (¥ Billion) YoY Change FY2012 FY2012 O.P.% (Initial Forecast) O.P.% Difference FY2011 O.P.% Forecast Amount % Net sales 1,221.0 1,221.0 0.0 1,197.3 23.7 2% Domestic Food Products 411.8 411.0 0.8 438.4 -26.6 -6% Overseas Food Products 250.3 254.0 -3.7 230.5 19.8 9% Bioscien
Slide 7: FY2012 Forecast - Ordinary Income and Net Income
FY2012 Forecast - Ordinary Income and Net Income Extraordinary gains (losses): Gain on sale of Calpis Co., Ltd. shares, and transfer of benefit obligation relating to employees’ pension fund are expected. However, business structure improvement expense of approx. 15.0 billion yen is forecast, result
Slide 8: Roadmap to a "Genuine Global Company"
Roadmap to a "Genuine Global Company" Achieve stable profit growth - Average annual growth rate of 10% - Become a global top 10 food company* Transition to Operating income >¥150B Operating margin >10% a global ROE >10% Build foundation company Market Cap. >¥1.5T Recover for a global Overseas sales
Slide 9: II. Growth Driver Development
II. Growth Driver Development (1)R&D Leadership (2)Global Growth Copyright © 2012 Ajinomoto Co., Inc. All rights reserved.
Slide 10: (1) R&D Leadership
(1) R&D Leadership Targeted direction and areas Contribute to resolving issues for 21st century human society - Global sustainability, food resources, healthy living - R&D Open & Leadership link innovation Cutting-edge World's No.1 in biotechnology seasonings platform Taste components White Biotech
Slide 11: Synthetic rubber using bio-based isoprene
(1) R&D Leadership Cutting-edge biotechnology platform: Synthetic rubber using bio-based isoprene With tighter supply of natural rubber projected, we aim to contribute to environmental resources and build a sustainable resource cycle by producing a biomass-derived intermediate material for synthetic
Slide 12: Amino Acids Supports the Center (Stem) of the Tree of Life
Amino Acids Supports the Center (Stem) of the Tree of Life Energy production Energy Neuroendocrine Control (TCA cycle) Neurotransmitter Antibody Biological Defense Signal Transduction Hormone Blood (insulin, glucagon, etc.) (hemoglobin, albumin, etc.) Structural Formation Collagen Exercise Muscle (m
Slide 13: Open & Link Innovation: Amino Index
(1) R&D Leadership: Open & Link Innovation Fine chemicals and life science: Amino Index® Technology that checks health condition and risk of diseases by measuring the concentration of amino acids in the blood. ☆As of Oct. 2012, 213 establishments had adopted Amino Index® (up 163 from March 2012) FY2
Slide 14: World's No. 1 in seasonings: New products
(1) R&D Leadership World’s No. 1 in seasonings: New products based on original materials and technologies As a leader in seasonings that combine deliciousness and health value, we will achieve the No. 1 position in the dry seasonings category by acquiring technologies in all the areas that make up d
Slide 15: Nabe Cube
(1) R&D Leadership Nabe Cube® (Domestic home-use) Change liquid hot pot soup to solid hot pot soup cube Approx.180g Highly concentrated 7.3g However, changing liquid soup to a dry solid form alone does not yield Nabe Cube® chicken broth & the desired flavor and ease of use. umami-salt flavoring Flav
Slide 16: Cook Do Kyo-no Ohzara
(1) R&D Leadership Cook Do® Kyo-no Ohzara (today’s dish) ＜Domestic home-use＞ Cook Do® Kyo-no Ohzara (today’s dish) for Salted Chicken and Potatoes Prepare a quick, delicious dish simply by adding the product and water to chicken, potatoes and carrots, and boiling for only about 10 minutes. Root vege
Slide 17: Global Growth: Strengthen presence in existing businesses
(2) Global Growth: Expanding in Overseas Consumer Food Products Increasing presence in existing businesses and expanding in new markets Point Specific programs FY2011 FY2012 FY2013 New MSG factory in Thailand (completion in March 2013) Investment approx. ¥14.7 bn Capacity expansion (nucleotides) in
Slide 18: Global Growth: Nurture next-generation mainstay products
(2) Global Growth: Expanding in Overseas Consumer Food Products Increasing presence in existing businesses and expanding in new markets FY2011 FY2012 FY2013 Point Specific programs Nurture in Vietnam (curry, fried meat and fish), Philippines (new seasoning), Peru and Indonesia (fried meat and fish,
Slide 19: Global Growth: Expand in new markets
(2) Global Growth: Expanding in Overseas Consumer Food Products Increasing presence in existing businesses and expanding in new markets Point Specific programs FY2011 FY2012 FY2013 Establish subsidiary in Myanmar: Study restart of business Establish Asia Bangladesh (August 2011) Pakistan: Study entr
Slide 20: III. Business Structure Reinforcement
III. Business Structure Reinforcement (1) Frozen Foods Business (2) Lower Resource Fermentation Technology (3) Feed-use Amino Acids Business (4) Strengthening the Business Portfolio Copyright © 2012 Ajinomoto Co., Inc. All rights reserved. 19
Slide 21: Frozen Foods: Initiatives to expand O.P. margin
(1) Business Structure Reinforcement of Frozen Foods Business Initiatives to expand O.P. margin Holding the line against low price competition, we are focusing on increasing added value, setting prices that reflect product value and holding down expenses. In interim FY2012, we maintained the operati
Slide 22: Raising efficiency by changing the value chain
(1) Business Structure Reinforcement of Frozen Foods Business Initiatives to expand O.P. margin 1) Raising efficiency by changing the value chain Expand ratio of products produced in-house FY2003 80% ⇒ FY2012 90% (planned) Expand overseas production ratio FY2003 17% ⇒ FY2012 27% (planned) Rest
Slide 23: Cultivation of strong products: Gyoza
(1) Business Structure Reinforcement of Frozen Foods Business Initiatives to expand O.P. margin 2) Cultivation of strong products representative of Japan: Increase the profitability of individual products Gyoza: No. 1 in the home-use frozen food market for 9 straight years, with annual sales of more
Slide 24: Value Create activities
(1) Business Structure Reinforcement of Frozen Foods Business Initiatives to expand O.P. margin 3) “Value Create" activities: Highlight prices that reflect product value and cultivate new areas. Raise quality to offer consumers good products. Further promote safety and security of using ingredients
Slide 25: Progress of Lower Resource Fermentation Technology
(2) R&D Leadership: Progress of Lower Resource Fermentation Technology Specific programs FY2011 FY2012 FY2013 FY2014 Start of commercial plant test in Brazil Technology to reduce Expansion to other regions (FY13 ～) main raw materials MSG (September 2012) Full-scale implementation in Brazil (December
Slide 26: Introducing advanced technologies in each region
(2) R&D Leadership: Progress of Lower Resource Fermentation Technology We are steadily introducing advanced technologies in each region. ★：Introduced ○：Plan to introduce Sweet- MSG Nucleotides Lysine Tryptophan eners North South North South Europe ASEAN Thailand Japan Europe Thailand Europe America
Slide 27: Business Structure Reinforcement in Feed-use Amino Acids
(3) Business Structure Reinforcement Initiatives in Feed-use Amino Acids Maintaining and enhancing the value of businesses with a comprehensive strategy that applies the Ajinomoto Group’s strengths from various aspects Point Specific programs FY2011 FY2012 FY2013 Shift from Brazil-based to North Ame
Slide 28: Strengthening the Business Portfolio: Sale of Calpis
(4) Strengthening the Business Portfolio Completed sale of all shares of Calpis Co., Ltd. to Asahi Group Holdings, Ltd. Completed sale of all shares on October 1. We will use the cash from the sale mainly for investments for growth. Proceeds from Sale and Transfer Method Sale proceeds ¥121.7 billion
Slide 29: IV. FY2012 Financial Strategy
IV. FY2012 Financial Strategy Copyright © 2012 Ajinomoto Co., Inc. All rights reserved.
Slide 30: FY2012 Financial Strategy
FY2012 Financial Strategy Strengthen capacity to generate cash flow by promoting growth driver development and business structure reinforcement to deliver stable and continuous shareholder returns. Cash generation based on profit growth Cash flow from operating activities: ¥300.0 billion planned o
Slide 31: V. Animal Nutrition Business Middle/Long Term Strategy
Ⅴ. Animal Nutrition Business Middle/Long Term Strategy 30
Slide 32: Market & Competitive Environment
Market & Competitive Environment • Demand for Lysine, Threonine and Tryptophan continues to be high supported by high spreads. FY2011 avg.: USD95/st FY2012 Est. approx. USD200/st • Lysine and Threonine Markets – Firmly growing. Current demand and supply is balanced. • Tryptophan Market – Demand is b
Slide 33: Animal Nutrition Business Middle/Long Term Strategy
Animal Nutrition Business Middle/Long Term Strategy: Multifaceted Deployment of Ajinomoto Group’s Strengths Maintain/Improve Business Value with Comprehensive Strategy ・ Raise global awareness of ・ Timely introduction of new technology the value of using amino Lower resource fermentation ・ Broader i
Slide 34: Accelerate Introduction of Next Generation Technology
Accelerate Introduction of Next Generation Technology and Efficient Expansion (FY10/4Q) 28
Slide 35: AjiPro-L: Entering a new phase
AjiPro™‐L: Entering a new phase • The sales are growing supported by the evidence‐based technical promotion. • While materializing the business opportunities out from a huge potential market, we shall continue expanding the supply promptly to meet the growing demand. As the first step, we decided to
Slide 36: Our contribution to Global Food Resource Sustainability
Our contribution to Global Food Recourse Sustainability Resolve issues for 21st century human society through our businesses Global Sustainability Food Resources Healthy Living Optimize environment and Utilize non‐edible Address under and over nutrition natural resources materials Adopt to aging soc
Slide 37: VI. Pharmaceuticals Business Management Challenges and Progress of Solutions
Ⅵ. Pharmaceuticals Business Management Challenges and Progress of Solutions 36
Slide 38: Pharmaceuticals Business Management Challenges and Progress of Solutions
Pharmaceuticals Business Management Challenges and Progress of Solutions Management challenges and solutions １） Strengthen the infusion and dialysis business structure Move to a new business scheme including utilization of outside resources is under discussion aimed at launch within FY2013. The fina
Slide 39: Reference
Reference Trends in Overseas Consumer Food Products Assumptions of FY2012 Forecast Feed-Use Lysine Market Price and CBOT Spread Trend Copyright © 2012 Ajinomoto Co., Inc. All rights reserved.
Slide 40: 1H-FY2012 Trends in Overseas Consumer Food Products
(Reference) 1H-FY2012 Trends in Overseas Consumer Food Products Sales by Geographical Region Sales by Product < Europe & Africa> Continued North Other investment in high- America <Instant noodles and 2% potential African 1% powdered beverages> market Growth continues Europe 6% Other <South America>
Slide 41: Assumptions of FY2012 Forecast
(Reference) Assumptions of FY2012 Forecast Foreign exchange rate (vs JPY) Feed-use amino acids 1) Estimated market size (Thousand MT) Sensitivity of translation effects Avg. rate FY2010 FY2011 FY2012 est. to full year O.P. Lysine 1,580 1,700 ±1,900 USD 78.5 ±¥1→ less than ¥100 million Threonine 245
Slide 42: Feed-Use Lysine Market Price and CBOT Spread Trend
(Reference) Feed-Use Lysine Market Price and CBOT Spread* Trend *The spread is the price difference between soybean meal and corn on the Chicago Board of Trade (CBOT). (USD/kg, CIF) (USD/ST) 4.5 300 Feed-Use Lysine Market Price (USD/kg) & CBOT Spread (USD/ST) 4.0 250 3.5 Spread 3.0 200 2.5 150 2.0 1
Slide 43: Forward-looking statements
Forward-looking statements, such as business performance forecasts, made in these materials are based on management’s estimates, assumptions and projections at the time of publication and do not represent a commitment from Ajinomoto Co., Inc. that they will be achieved. A number of factors could c
Slide 44: FY2012 Forecast by Segments
(Appendix) Nov.7, 2012 FY2012 Forecast by Segments (¥ Billion) A B A-B C A-C D E D-E A-D C-E （A-D)-（C-E) FY2012 FY2012 2H-FY12 FY2011 YoY Interim Interim YoY 2H-FY11 YoY Domestic Food Products Revised Initial Difference Revised Reasons for Forecast Revision or YoY Change of 2H Results Change FY2012
Slide 45: FY2012 Forecast by Segments (continued)
(¥ Billion) A B A-B C A-C D E D-E A-D C-E （A-D)-（C-E) FY2012 FY2012 2H-FY12 FY2011 YoY Interim Interim YoY 2H-FY11 YoY Pharmaceuticals Revised Initial Difference Revised Reasons for Forecast Revision or YoY Change of 2H Results Change FY2012 FY2011 Change Results Change Forecast Forecast Forecast Ne