Slide 1: Results Briefing Materials for FY2017
1/28 Results Briefing Materials for FY2017 Friday, February 2, 2018 Kagome Co., Ltd. (2811) http://www.kagome.co.jp/company/ir Copyright © KAGOME CO., LTD. All rights reserved.
Slide 2: Today’s Topics
2/28 Today’s Topics I. FY2017 Financial Results - Net sales and profits at all levels marked record highs for two consecutive periods. - Business activities that preempted diversified health awareness were successful. - Results of earnings structural reforms and way of working reforms II. Long-Term
Slide 3: FY2017 Consolidated Results
3/28 FY2017 Consolidated Results Compared to revised vs. forecasts at the Consolidated results Year on year forecast beginning of the term Net sales ¥214.2 B +¥11.7 B +6% -¥3.0 B +¥4.2 B Operating income ¥12.0 B +¥1.0 B +9% -¥0.5 B +¥0.5 B Ordinary income ¥12.6 B +¥1.3 B +11% -¥0.4 B +¥0.7 B Net inc
Slide 4: FY2017 Results by Segment
4/28 FY2017 Results by Segment Unit: 100 million yen Unit: 100 million yen Net sales Operating income FY2016 FY2017 FY2016 FY2017 Rate of Rate of Change Change change change Domestic processed 1,469 1,576 +107 +7% 81 107 +26 +31% food business Domestic agriculture 115 114 -1 -1% 9 -2 -11 – business
Slide 5: FY2017 Domestic Processed Food Business
5/28 FY2017 Domestic Processed Food Business Strong performance of two smoothies Yasai Seikatsu 100 Smoothie GREENS Kagome has grown into the top brand in the smoothie market. Copyright © KAGOME CO., LTD. All rights reserved.
Slide 6: FY2017 Domestic Processed Food Business
6/28 FY2017 Domestic Processed Food Business Strong performance of foods with functional claims Tomato juice with functional claims Vegetable juice with functional claims Functionality of Functionality of tomato's nutrient vegetables’ ingredient lycopene GABA The foods with functional claims capture
Slide 7: FY2017 Domestic Processed Food Business
7/28 FY2017 Domestic Processed Food Business We hosted Expansion of Strong sales of the Neapolitan Stadium contest. the prepared food market direct marketing products For readymade dishes sold at The direct marketing business Growth in demand convenience stores and supermarkets Strong sales of insti
Slide 8: FY2017 Domestic Agriculture Business
8/28 FY2017 Domestic Agriculture Business Both sales and income decreased due to a decline in fresh tomato market prices Changes in tomato market prices Launch of ready-washed baby leaves 650 * Tomato market prices at the Tokyo Metropolitan 600 Central Wholesale Market (Yen per kilogram) 550 2016 50
Slide 9: FY2017 International Business
9/28 FY2017 International Business Strong performance in the institutional and industrial business, substantial decline in sales and income due to the impact of heavy rain in Australia, etc. Amount of impact of exchange rates: sales increase of 2 billion, operating income increase of 40 million Stro
Slide 10: Factors Contributing to Operating Income Changes in FY2017
10/28 Factors Contributing to Operating Income Changes in FY2017 Unit: 100 million yen FY2016 109 Increase in income due to higher sales +32 Change in the composition of sales and increase of outsourcing of production -13 Increase in equipment costs and labor costs -8 Cost reduction +17 Review of un
Slide 11: Changes in Consolidated Balance Sheet for FY2017
11/28 Changes in Consolidated Balance Sheet for FY2017 Total assets/liabilities and net assets Unit: 100 million yen ¥195.7 B (down ¥24.0 B from the end of FY2016) Current assets -158 1,097 ・Decrease in cash -168 流動資産 Current assets 1,255 Fixed assets -82 ・Decrease due to the exclusion of PBI from t
Slide 12: Changes in Goodwill for FY2017
12/28 Changes in Goodwill for FY2017 Goodwill ¥0.5 billion (-¥6.0 billion) UG UG-Turkey PBI Dec. 31, 2016 65 AKIRA Seeds Dec. 31, 2017 5 Unit: 100 million yen 0 20 40 60 80 • Decrease of 5.2 billion yen due to the sale of PBI • Increase of ¥100 million due to the acquisition of the shares of AKIRA S
Slide 13: Cash Flows for FY2017
13/28 Cash Flows for FY2017 Unit: 100 million yen FY2016 FY2017 Change Cash flows from operating activities (A) +188 +166 -22 Cash flows from investing activities (B) -186 +173 +358 Disbursement and proceeds pertaining to time deposits and securities (C) -102 +123 +225 Free cash flows (A+B-C) +104 +
Slide 14: Today’s Topics
14/28 Today’s Topics I. FY2017 Financial Results II. Long-Term Vision and Progress of Mid-Term Management Plan III. Challenges for FY2018 IV. FY2018 Results Forecasts Copyright © KAGOME CO., LTD. All rights reserved.
Slide 15: Long-Term Vision
15/28 Long-Term Vision “We will work on the resolution of social issues through foods and become a strong company that can achieve sustainable growth.” From a tomato company to a produce company Extension of healthy life expectancy Copyright © KAGOME CO., LTD. All rights reserved.
Slide 16: Long-Term Vision: Eliminate the shortage of vegetables in Japan
16/28 Long-Term Vision Aim to eliminate the shortage of vegetables in Japan Operation of the system Joint research with Hirosaki University for calculating the supply of vegetables Currently (Japanese) intake of vegetables per day 277 grams => 350 grams Strengthening of Analysis of big data of medic
Slide 17: Progress of Mid-Term Management Plan
17/28 Progress of Mid-Term Management Plan * Figures for each business after "elimination and adjustments among segments" Net sales plan Operating income plan International business 2,500 Domestic agriculture business Domestic processed food business 155 ¥214.2 B ¥215.0 B ¥202.5 B ¥13.0 B PBI 60
Slide 18: Today’s Topics
18/28 Today’s Topics I. FY2017 Financial Results II. Long-Term Vision and Progress of Mid-Term Management Plan III. Challenges for FY2018 IV. FY2018 Results Forecasts Copyright © KAGOME CO., LTD. All rights reserved.
Slide 19: Challenges for FY2018: Domestic Processed Food Business
19/28 Challenges for FY2018 Domestic Processed Food Business [Plans for FY18] Increase of smoothies Sales plan Operating income plan - Yasai Seikatsu 100 Smoothie - GREENS 102% 1,480 101% 1,475 Increase of 1,450 ¥10.8 B ¥161.3 B foods with functional claims 1,400 ¥10.7 B 1,470 - Tomato juice with fu
Slide 20: Challenges for FY2018: Domestic Agriculture Business
20/28 Challenges for FY2018 Domestic Agriculture Business [Plans for FY18] Establishment of a profit structure Sales plan Operating income plan that is not materially affected by the market price fluctuations 111% +¥0.5 B 1,480 1,475 Promotion of 1,470 ¥0.3 B tomato’s nutrient lycopene 1,465 1,480 ¥
Slide 21: Challenges for FY2018: International Business
21/28 Challenges for FY2018 International Business [Plans for FY18] Strengthening of Sales plan Operating income plan the solution business for the global food service 1,480 111% 163% * Excluding the impact of the sale of PBI 1,475 1,480 PBI社分 Expansion of the sales area 1,470 1,475 ¥1.3 B of tomato
Slide 22: Earnings Structural and Way of Working Reforms
22/28 Earnings Structural and Way of Working Reforms Earnings structural reforms Way of working reforms Until 2020 Marginal profit Total working management hours 1,800 hours Improved Rate of paid production holidays taken efficiency 70%80% Copyright © KAGOME CO., LTD. All rights reserved.
Slide 23: Today’s Topics
23/28 Today’s Topics I. FY2017 Financial Results II. Long-Term Vision and Progress of Mid-Term Management Plan III. Challenges for FY2018 IV. FY2018 Results Forecasts Copyright © KAGOME CO., LTD. All rights reserved.
Slide 24: FY2018 Full-Year Results Forecasts
24/28 FY2018 Full-Year Results Forecasts Results forecasts by segment Unit: 100 million yen Unit: 100 million yen Net sales Operating income FY2017 FY2018 FY2017 FY2018 Rate of Rate of Change Change change change Domestic processed 1,576 1,616 +37 +2% 107 108 +1 +1% food business Domestic agricult
Slide 25: Cash Flows for FY2018
25/28 Cash Flows for FY2018 Unit: 100 million yen FY2017 FY2018 Change Cash flows from operating activities (A) +166 +140 -26 Cash flows from investing activities (B) +173 -50 -223 Disbursement and proceeds pertaining to time deposits and securities (C) +123 +70 -53 Free cash flows (A+B-C) +216 +20
Slide 26: Major Business Investments Scheduled
26/28 Major Business Investments Scheduled Total investment Increase of FY2017: 0.8 billion yen the production capacity of smoothies 1.4 billion FY2018: 0.6 billion yen Increase of Total investment the production capacity FY2018: 2.1 billion yen of vegetable beverage pet bottle lines 4.8 billion FY2
Slide 27: Expected dividend in FY2018
27/28 Expected dividend in FY2018 Unit: yen [Change of dividend per share] 35 yen 35 30 yen 30 Up 2 yen 25 * 2014 Settlement 24.5 yen 22 yen of accounts 22 yen 20 yen for nine months 20 18 yen 16.5 yen 15 yen 15 yen 15 yen 15 10 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Expected div
Slide 28: Note
28/28 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 an
Slide 29: Reference: Year-on-year change by brand of vegetable beverages by temperature
29/28 Reference: Year-on-year change in amount of each brand of vegetable beverages by temperature ◆ Comparison for the period of January to December Unit: 100 million yen Temperature Results Results Year-on-year Rate of Brand/category year-on-year zone for 2016 for 2017 change change Dry 67 52 -15