Ajinomoto Co., Inc. · TSE:2802
Ajinomoto — H1 FY2013 Earnings Presentation
37 slides from Ajinomoto's earnings presentation, Nov 8, 2013
Slide 1: Forecast for the Fiscal Year Ending March 31, 2014 (FY2013) and Outlook
Ajinomoto Co., Inc. Forecast for the Fiscal Year Ending March 31, 2014 (FY2013) and Outlook November 8, 2013 Masatoshi Ito President & CEO
Slide 2: Contents
Contents I. Summary of FY2013 FY2013 Forecast ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・P2 FY2013 Operating Income Forecast (Factors in Changes and Breakdown) ・・・・・・・・・・・・・・・・・・・・・・・ P3-4 FY2013 Forecast by Segment ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・P5 FY2013 Forecast - Ordinary Income and Net Inco
Slide 3: I. Summary of FY2013
I. Summary of FY2013 _—_SSSSSSSSSSSSSSSS
Slide 4: FY2013 Forecast
FY2013 Forecast Net sales: Upward revision of sales forecast because of positive effect of currency translation and expansion of high-value added business despite decrease in unit price of feed-use amino acids. Operating income: Downward revision of operating income forecast because of worsening pro
Slide 5: Factors in Changes in FY2013 Operating Income Forecast
Factors in Changes in FY2013 Operating Income Forecast Downward revision of operating income due to effect of decrease in unit price of feed-use amino acids despite expansion of positive effect of currency translation and stabilization in price of fermentation raw materials Factors in Changes in FY2
Slide 6: Breakdown of FY2013 Operating Income Forecast
Breakdown of FY2013 Operating Income Forecast Operating Income by Year and Segment (before allocation of shared companywide expenses) FY2013 FY2010 FY2011 FY2012 Revised Forecast (¥ Billion) 100.0 1,000 FY2009 69.4 72.6 71.2 64.0 68.0 5.1 8.3 5.7 9.8 13.5 3.0 80.0 800 14.1 11.3 Pharmaceuticals 9.9 3
Slide 7: FY2013 Forecast by Segment
FY2013 Forecast by Segment (¥ Billion) FY2013 FY2013 FY2012 YoY Change O.P.% Initial O.P.% Difference O.P.% Forecast Results Amount % Forecast Net sales 1,032.0 1,019.0 13.0 985.0 47.0 5% Domestic Food Products 340.5 338.5 2.0 391.6 -51.1 -13% Overseas Food Products 317.2 303.9 13.3 245.4 71.8 29% B
Slide 8: FY2013 Forecast - Ordinary Income and Net Income
FY2013 Forecast - Ordinary Income and Net Income Non-operating income (expenses): Upward revision of ¥2.0 billion due to improvement in equity in earnings of affiliates, etc. Extraordinary gains (losses): Upward revision of ¥2.0 billion in extraordinary gains due to disposal of idle fixed assets, li
Slide 9: 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% Build foundation a global ROE >10% Recover for a global company Market cap. >¥1.5T Overseas sales
Slide 10: II. Main Policy: Growth Driver Development
II. Main Policy for Genuine Global Company: In FY2013 ~ Growth Driver Development ~ (1)Global Growth (2) R&D Leadership
Slide 11: Global Growth: Expansion of Overseas Consumer Foods Business
(1) Global Growth: Expansion of Overseas Consumer Foods Business Deepen Existing Business and Expand New Markets; Strengthen Production Capacity. Point Specific programs FY2011 FY2012 FY2013 MSG factory in Ayutthaya, Thailand (completion in March 2013) Investment approx. ¥17.0 bn Capacity expansion
Slide 12: Global Growth: Overseas Consumer Foods, New Products
(1) Global Growth: Expansion of Overseas Consumer Foods Business Deepen Existing Business and Expand New Markets; New Products Point Specific programs FY2011 FY2012 FY2013 ® Vietnam Aji-ngon® for vegetarians Philippines Crispy fry (Frying batter) (August 2012) Thailand Ros Dee Menu Aji-Quick for ste
Slide 13: Global Growth: Expand New Markets
(1) Global Growth: Expansion of Overseas Consumer Foods Business Deepen Existing Business and Expand New Markets Point Specific programs FY2011 FY2012 FY2013 Establish subsidiary in Myanmar: Study restart of business Asia Bangladesh (August 2011) Pakistan: Study entry opportunities Establish Expand
Slide 14: Challenges for Acceleration of Global Growth
(1) Challenges for Acceleration of Global Growth Policy Direction 1. Achieve dramatic expansion of business scale (top-line growth). ・ Target: Thailand, Brazil, Indonesia, Vietnam, Philippines (Provisional title: Five Stars) ・ Goal: To double or triple sales in target area by FY2020 (vs. FY2012) ・ S
Slide 15: Achieve Bursts of Growth: Stake in Kükrer A.Ş.
Achieve Bursts of Growth Acquisition of 50% Stake in Kükrer A.Ş., a Food Company in Turkey Business tie-up with local partner having strong marketing power and high- quality brand recognized in Turkey. We will work to expand new business fields and accelerate business in the Turkey market. 1. Detail
Slide 16: R&D Leadership: 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 Expansion to other regions Technology to reduce (FY14 ~) main raw materials MSG (April 2013) Full-scale implementation in Brazil (July 2013) I
Slide 17: III. Business Structure Reinforcement
III. Main Policy for Genuine Global Company in FY2013 ~ Business Structure Reinforcement ~ (1) Domestic Food Products Business (2) Animal Nutrition Business
Slide 18: Business Structure Reinforcement in Domestic Food Products
(1) Business Structure Reinforcement Initiatives for Main Products in Domestic Food Products Business Implementation of Price Revisions Implementation of product size and price revisions because increased cost due to higher raw material prices and weakening yen exceeded cost reduction efforts. Targe
Slide 19: Policy for Consumption Tax Rise to 8% in April 2014
(1) Policy for Dealing with the Rise in the Consumption Tax to 8% in April 2014 Assumed Effect Effect on demand after the rise in the consumption tax is expected to be limited although a mild surge in last-minute demand is expected in advance of the tax increase. Consumer behavior is expected to cha
Slide 20: Business Structure Reinforcement in Animal Nutrition Business
(2) Business Structure Reinforcement Initiatives in Animal Nutrition Business 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 Enha
Slide 21: IV. FY2013 Financial Strategy
IV. FY2013 Financial Strategy
Slide 22: FY2013 Financial Strategy
FY2013 Financial Strategy Develop growth drivers and fortify the business structure to strengthen cash flow generation. Use free cash flow for continuous and stable shareholder returns while prioritizing investments for growth. Generation of cash based on profit growth Operating cash flow: Conti
Slide 23: V. Strategy of Animal Nutrition Business in FY2013
V. Strategy of Animal Nutrition Business in FY2013 November 8, 2013 Hiroshi Fukushi Member of the Board & Corporate Vice President
Slide 24: Market Environment
Market Environment • Cereal crop environment and spread Firm demand for Lysine, Threonine and Tryptophan FY2012 FY2013 (est.) based on higher spread. Spread (USD/st) 190 240 Market expansion ratio Lysine 115% 110% • Review of Interim FY2013 (YoY) Threonine Tryptophan 122% 150% 115% 144% - Lysine and
Slide 25: Reinforcement of Stable Revenue Base
Business Structure Reinforcement Initiatives Continuous improvement of revenue structure Reinforce leading position of Reinforcement of stable revenue base AjiPro® Launch high-value-added products Reinforce production system Increase emphasis on specialty products to Quickly reinforce the supply of
Slide 26: AjiPro-L: Protect Lys in Rumen
AjiPro®-L Lysine for dairy cows, and its manufacturing process It is difficult to apply Lysine for poultry and swine to dairy cows. We developed original technology that protects Lysine in rumen and Protect Lys Release Lys releases it in the intestine, thus in rumen* in the intestine making Lysi
Slide 27: VI. Strategy of Pharmaceutical Business in FY2013
VI. Strategy of Pharmaceutical Business in FY2013 November 8, 2013 Takashi Nagamachi President & CEO AJINOMOTO PHARMACEUTICALS CO., LTD.
Slide 28: Management Challenges in the Pharmaceuticals Business and Current Situation
Management challenges in the pharmaceuticals business and current situation 1. Management challenges and projects for solution 1) Strengthen the business scheme of infusion and dialysis business: The joint venture project with Yoshindo Inc. started smoothly with inauguration of AY Pharmaceuticals Co
Slide 29: Enrich the Pipeline: AJM300
Management challenges in the pharmaceuticals business and current situation ３．Enrich the pipeline AJM300 action mechanism 1) POC of AJM300(ulcerative colitis treatment Lymphocyte Inhibit Inhibit agent)was obtained. adhesion invasion vessel In the PIIa clinical study, AJM300 was Suppress demonstrat
Slide 30: MOVIPREP for Oral Administration
Management challenges in the pharmaceuticals business and current situation MOVIPREP® for oral administration 2) “MOVIPREP® for oral administration”（launched in June 2013） MOVIPREP® can cleanse the bowel effectively by only a half dose volume of existing bowel cleansing agents in a shorter cleansing
Slide 31: Reference
Reference Trends in Overseas Consumer Food Products Assumptions of FY2013 Forecast Feed-Use Lysine Market Price and CBOT Spread Trend
Slide 32: Interim FY2013 Trends in Overseas Consumer Food Products
(Reference) Interim FY2013 Trends in Overseas Consumer Food Products Sales by Geographical Region Sales by Product < Europe & Africa> <Instant noodles and High-potential North Other America powdered beverages> African market 2% 1% Continued Double- digit growth Europe Other 7% <Asia> processed South
Slide 33: Assumptions of FY2013 Forecast
(Reference) Assumptions of FY2013 Forecast Foreign exchange rate (vs JPY) Feed-use amino acids 1) Estimated market size (Thousand MT) Sensitivity of translation effects to FY2011 FY2012 FY2013 est. Avg. rate full year O.P. Lysine 1,700 1,950 ±2,150 USD 98.0 ±¥1→ approx. ¥50 million Threonine 270 330
Slide 34: 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) 3.5 250 Spread 200 2.5 150 1.5 100 0.5 Ly
Slide 35: 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 36: Appendix: FY2013 Forecast by Segments
(Appendix) Nov.6, 2013 FY2013 Forecast by Segments (¥ Billion) A B A-B C A-C D E D-E A-D C-E （A-D)-（C-E) FY2013 FY2013 2H-FY13 FY2012 YoY Interim Interim YoY 2H-FY12 YoY Domestic Food Products Revised Initial Difference Revised Reasons for Forecast Revision or YoY Change of 2H Results Change FY2013
Slide 37: Appendix: Pharmaceuticals Forecast by Segments
(¥ Billion) A B A-B C A-C D E D-E A-D C-E （A-D)-（C-E) FY2013 FY2013 2H-FY13 FY2012 YoY Interim Interim YoY 2H-FY12 YoY Pharmaceuticals Revised Initial Difference Revised Reasons for Forecast Revision or YoY Change of 2H Results Change FY2013 FY2012 Change Results Change Forecast Forecast Forecast Ne