Slide 1: Forecast for FY2023 and Initiatives for Enhancing Corporate Value
Ajinomoto Co., Inc. (2802) Forecast for FY2023 (Ending March 31, 2024) and Initiatives for Enhancing Corporate Value Taro Fujie Member of the Board, Representative Executive Officer President & Chief Executive Officer May 11, 2023
Slide 2: Agenda
I. FY2022 Summary Results and FY2023 Forecast II. Initiatives for Enhancing Corporate Reference Materials Appendixes: Consolidated Results FY2022 (Ended March 31, 2023) FY2023 Forecast by Segment Note: Business profit (consolidated) in this material: Sales - Cost of sales - Selling expenses, Researc
Slide 3: Today's Message
Today's Message • In FY2022 we increased revenue and profit, with business profit exceeding even the performance forecast that we had revised upward from that announced in the half-year results. Sales, business profit, and profit attributable to owners of the parent company reached new highs since t
Slide 4: I. FY2022 Summary Results and FY2023 Forecast
I. FY2022 Summary Results and FY2023 Forecast II. Initiatives for Enhancing Corporate
Slide 5: I-1. FY2022 Digest of Results
I-1. FY2022 Digest of Results Profit attributable to owners Sales Business profit of the parent company Increased (record high) Increased (record high) (record high) ¥1,359.1 billion ¥135.3 billion ¥94.0 billion 118.2% of FY2021 results 111.9% of FY2021 results 124.2% of FY2021 results Excluding cur
Slide 6: I-2. Changes in Business Profit (FY2022 Results by P&L Factor)
I-2. Changes in Business Profit (FY2022 Results by P&L Factor) (¥ bil.) 220 200 180 -33.2 160 77.7 -33.4 Approx. 140 44.0 3.3 120 (approx.) 100 Change in investment in marketing +¥3.0 bil. Increased logistics costs due to -¥3.0 bil. 135.3 80 more product shipments and 120.9 higher shipping fees Othe
Slide 7: I-2. Factors Leading to Changes in Business Profit by Segment
I-2. Factors Leading to Changes in Business Profit (FY2022 Results by Segment) (¥ bil.) 150 9.1 2.5 130 1.7 0.9 110 135.3 90 120.9 70 FY2021 Seasonings and Frozen Healthcare Other FY2022 actual Foods Foods and Others actual (Ref.) FY2022 Forecast (¥ bil.) 150 12.4 -1.0 130 -0.1 0.8 110 133.0 90 120.
Slide 8: I-3. FY2022 Topics (Fermentation Raw Material Prices)
I-3. FY2022 Topics (Main and Sub Fermentation Raw Material Prices) In FY2022, fermentation raw materials, prices increased substantially for sub fermentation raw materials in the first half and in the second half main raw materials also rose. While this had an impact on business performance, we coun
Slide 9: I-4. Breakdown of Sales and Business Profit: Sauce and Seasonings, Quick Nourishment
I-4. Breakdown of Sales, and Factors behind Changes in Business Profit: Sauce and Seasonings, and Quick Nourishment Year-on-year comparison: Breakdown of FY2022 sales in Japan and overseas, and factors behind changes in FY2022 business profit Japan sales: 101% Overseas sales: 111% (local currency ba
Slide 10: I-5. Priority KPIs (Consolidated)
I-5. Priority KPIs (Consolidated) We have mostly achieved the priority KPIs of Phase 1 of the FY2020-2025 Medium-Term Management Plan (MTP). We will further shift from structural reform to growth to achieve our 2030 Roadmap and ASV indicators. FY2020–2022 Phase 1 Structural reform FY19 FY20 FY21 FY2
Slide 11: I-5. Priority KPIs (by Segment)
I-5. Priority KPIs (by Segment) Segments FY2020-2022 actual Unit price growth Organic growth ROIC (International consumer products) (％) (％) (％) FY20 FY21 FY22 FY20 FY21 FY22 FY20 FY21 FY22 MTP Targets Sauce & Seasonings actual actual actual actual actual actual actual actual actual FY22 Seasonings Q
Slide 12: I-6. Progress of Structural Reform
I-6. Progress of Structural Reform ROIC fell below real capability (as planned) due to Significantly above impairment accompanying structural reform FY22 8% target Approx. 10.8% (excluding impairment) Approx. 8.5% Approx. 8% (excluding impairment) (excluding impairment) ROIC Approx. 6％ (excluding im
Slide 13: I-7. Forecast for FY2023
I-7. Forecast for FY2023 Full-year FY2023 forecast: Increased revenue and profit (record highs) We will take the first step toward achieving our ASV indicators with the steady organic growth and price increase effects in the Seasonings and Foods and Frozen Foods segments, while maintaining growth in
Slide 14: I-8. Factors behind Changes in Business Profit (FY2023 Forecast by P&L Factor)
I-8. Factors behind Changes in Business Profit (FY2023 Forecast by P&L Factor) We aim to achieve double-digit growth in business profit while strengthening investment in our brands for the future and investing in R&D that will accelerate innovation, by increasing GP through growing the top-line and
Slide 15: I-9. Factors behind Changes in Business Profit (FY2023 Forecast by Segment)
I-9. Factors behind Changes in Business Profit (FY2023 Forecast by Segment) FY2023 Forecast vs FY2022 Actual (¥ bil.) 160 155 150 5.4 -0.7 145 1.7 140 8.1 135 150.0 130 135.3 125 120 FY2022 Seasonings Frozen Foods Healthcare Other FY2023 actual and Foods and Others forecast Starting in FY2023, the m
Slide 16: I-10. Breakdown of Sales and Business Profit Forecast: Sauce and Seasonings
I-10. Breakdown of Sales, and Factors behind Changes in Business Profit: Sauce and Seasonings, and Quick Nourishment Year-on-year comparison: Breakdown of the FY2023 sales forecast in Japan and overseas, and factors behind changes in the FY2023 business profit forecast Japan sales: 109% Overseas sal
Slide 17: I-11. Seasonings and Foods (Japan): Initiatives for Recovery of Profit
I-11. Seasonings and Foods (Japan): Initiatives for Recovery of Profit In FY2023, we will aim to increase revenue and improve the composition of GP Flavor seasonings • Reinforce our brand by emphasizing Sauce and Seasonings and our quality Quick Nourishment, Japan: GP margin • Improve the quality an
Slide 18: I-12. Seasonings and Foods (Japan): Expansion with High-Level View of East Asia
I-12. Seasonings and Foods (Japan): Expansion with a High-Level View of Japan and East Asia Invigorating our Japan business through exports, with a high-level view of East Asia, primarily China 1 Export sales of HONDASHI® and soups, 2 Cross-border EC sales of leveraging our affiliates in Taiwan and
Slide 19: I-13. Seasonings and Foods (overseas): Focusing on the Frontier
I-13. Seasonings and Foods (overseas): Focusing on the Frontier Steady organic growth in our five major countries (Thailand, Indonesia, Vietnam, Philippines, and Brazil) and also in their neighboring countries and regions Sales of Sauce & Seasonings Overseas Other countries are outpacing our five ma
Slide 20: I-13. A Success Story from an ASEAN Country
I-13. Seasonings and Foods (overseas): Focusing on the Frontier A Success Story from an ASEAN Country A success story from an ASEAN country: Generating profit from an early stage while dramatically expanding the scale of business Sales Business Profit Elimination of accumulated deficit Achievement o
Slide 21: I-14. Frozen Foods: Growth in the Asian Category
I-14. Frozen Foods: Growth in the Asian Category Continued dramatic growth of gyoza overseas 1 FY2022 sales composition of gyoza Japan:Overseas ＝ 50:50 2 Solid expansion of gyoza overseas Gyoza sales and planned sales, (North America) North America Solid expansion, especially for home use FY20 FY21
Slide 22: I-15. Frozen Foods: Improvement of Profit in North American Business
I-15. Frozen Foods: Improvement of Profit in North American Business Improved profit in FY2022: Result of accumulated price increases, the TDC* Project, and growth focused on core areas From FY2023, too, we will grow the business while carrying out structural reform Actual BP, North America (half-ye
Slide 23: I-16. Functional Materials (electronic materials and others)
I-16. Functional Materials (electronic materials and others) In the short term, we expect to be affected by semiconductor market adjustments, particularly in the first half of FY2023. In the medium to long term, we expect continued growth through growth in servers and networks. Surface area of ABF*
Slide 24: I-17. Bio-Pharma Services & Ingredients
I-17. Bio-Pharma Services & Ingredients Our CDMO services for nucleic acid-based drugs are growing steadily. We have upwardly revised the medium- to long-term sales estimate announced at the business briefing in August 2022. Sales estimate for CDMO services Sales estimate for nucleic acid-based drug
Slide 25: I-18. 2030 ASV Indicators
I-18. 2030 ASV Indicators Aim to steadily reach our FY2023 forecast to reach our 2030 ASV indicators. Ref. Aim for approx. 3x EPS FY23 FY25 FY30 (vs. FY2022） FY22 (forecast) (plan) (plan) Approx. ROE 12.9% 12.4% 18% 20% Approx. Economic ROIC（>Capital Cost） 9.9% 9.5% 13% 17% ASV Indicators value indi
Slide 26: I-18. Reference: Growth Paths by Segment
I-18. Reference: Growth Paths by Segment Segment Organic growth Business profit ROIC EBITDA margin Vs. prev. year CAGR Vs. prev. year CAGR FY22 FY23 FY25 FY22 FY23 FY25 FY22 FY23 FY25 FY22 FY23 FY25 Sauce & actual forecast plan actual forecast plan actual forecast plan actual forecast plan Seasoning
Slide 27: I-19. Assets and Liabilities
I-19. Assets and Liabilities Total assets increased in FY2022 because of increases in inventory due to increases in raw material prices and currency translation effects. In FY2023, inventories will decrease but capital investments aimed at shifting to growth will boost total assets to about the leve
Slide 28: I-20. Cash Generation
I-20. Cash Generation Operating cash flow in FY2022 was ¥117.6 billion. In FY2022, working capital, particularly accounts receivable (price increases and currency translation) and inventories (raw material prices and currency translation), was affected by factors such as raw material price inflation
Slide 29: I-21. Strategic Investments
I-21. Strategic Investments In FY2023, we will make the capital investments necessary to shift from structural reform to growth. Also, by actively investing in intangible assets, we expect an intangible asset percentage of approximately 50%. （%） 60% Percentage of investment in intangible assets (¥ b
Slide 30: I-22. Important Management Indicators
I-22. Important Management Indicators In FY2023, ROE and ROIC will temporarily decrease due the effect of temporary profit from the sale of fixed assets, etc. recorded in FY2022. However, excluding the temporary profit, we will aim to increase both ROE and ROIC. By aggressively buying back shares, w
Slide 31: I-23. Shareholder Returns and Investment for Growth (Medium-Term ASV Initiative)
I-23. Shareholder Returns and Investment for Growth (Our Thinking under the Medium-Term ASV Initiative) While generating record-high operating cash flow and making necessary investments for the future, we will aggressively buy back shares as a second tier of investments above WACC. Operating cash fl
Slide 32: I-23. Shareholder Returns and Investment for Growth (FY2022 Results and FY2023 Forecast)
I-23. Shareholder Returns and Investment for Growth (FY2022 Results and FY2023 Forecast) In FY2022, plan to increase the dividend again (from past forecast of ¥62 to ¥68). A dividend increase based on a progressive dividend policy is scheduled for FY2023. We have decided to buy back shares and work
Slide 33: II. Initiatives for Enhancing Corporate Value
I. FY2022 Summary Results and FY2023 Forecast II. Initiatives for Enhancing Corporate Note: Business profit (consolidated) in this material: Sales - Cost of sales - Selling expenses, Research & development expenses and General & administrative expenses + Share of profit of associates and joint ventu
Slide 34: II-1. Evolution of Our Vision: Where We Want to Be
II-1. Evolution of Our Vision: Where We Want to Be Unlocking the power of amino acids to resolve the food and health issues Contributing to the well-being of all human beings, our society and our planet with “AminoScience” ＆ Reduce environmental Promote better impacts and health and life regenerate
Slide 35: II-2. Our Philosophy: Resolving Food and Health Issues
II-2. Our Philosophy: Resolving Food and Health Issues for All Human Beings and Beyond We will achieve “Eat Well, Live Well.” by going beyond resolving food and health issues, and contributing to the well-being of all human beings, our society and our planet with “AminoScience.” Corporate Slogan Eat
Slide 36: II-3. Shift from Structural Reform to Growth
II-3. Shift from Structural Reform to Growth We aim to achieve a highly profitable, unique, and robust structure by shifting to growth in the four outcome-driven growth areas through the evolution of core businesses and growth-driving business model transformation (BMX) . Four growth areas Healthcar
Slide 37: II-4. 2030 Roadmap: Getting All Employees to Work Together
II-4. 2030 Roadmap: Getting All Employees to Work Together When Taking on Challenges Copyright © 2023 Ajinomoto Co., Inc. All rights reserved 37
Slide 38: II-4. 2030 Roadmap: Activities to Instill the Roadmap in All Employees
II-4. 2030 Roadmap: Activities to Instill the Roadmap in All Employees Following Its Announcement Internal PR: Global CEO NEWS 1. Mar. 9 Short messages from all members of the Executive Committee 2. Mar. 17 The evolution of our vision: Sasaki, Morishima 3. Mar. 22 The three key strategic pillars: Mi
Slide 39: II-4. 2030 Roadmap: Feedback from Employees
II-4. 2030 Roadmap: Feedback from Employees We were able to define areas and formulate area strategies that I can really identify with the catch "Resolve the don’t exist in the concept of food and health issues of all human beings and With personal pride and single-year plans. beyond." confidence as
Slide 40: II-5. Evolution of Governance
II-5. Evolution of Governance Governance structure from FY2023 onward 1 Establishment of Management Risk Committee Response to risks that call for initiative by management 2 2nd Term Sustainability Advisory Council Respond with a view to strengthening monitoring by the Board of Directors Appointment
Slide 41: II-6. To Achieve ASV Indicators (Japan: Seasonings and Foods)
II-6. To Achieve ASV Indicators (Japan: Seasonings and Foods) April 1, 2023: Establishment of the Marketing Design Center (video) Copyright © 2023 Ajinomoto Co., Inc. All rights reserved 41
Slide 42: II-6. Establishment of the Marketing Design Center
II-6. To Achieve ASV Indicators (Japan: Seasonings and Foods) April 1, 2023: Establishment of the Marketing Design Center Creating mechanisms for more sophisticated marketing Analysis of data on Development of products Sales through channels that consumer behavior and communication enable a direct c
Slide 43: II-7. Initiatives for Cash Generation
II-7. To Achieve ASV Indicators (Initiatives for Cash Generation) Bringing about ASV through supply chain management reform activities The goal of SCM reform To achieve mechanisms for supplying customers with needed products—where needed, when needed, and in the amounts needed, at the lowest cost an
Slide 44: II-8. Initiatives to Lower the Break-Even Point
II-8. To Achieve ASV Indicators (Initiatives to Lower the Break-Even Point) April 1, 2023: Establishment of the Procurement Strategy Department Responsible for global oversight and strategic planning for procurement (collaboration among businesses, R&D, and production; sustainable procurement). Visu
Slide 45: II-9. Investment in Human Assets
II-9. To Achieve ASV Indicators (Investment in Human Assets) Payment of a special incentive to members of the Ajinomoto Group Employee Stock Ownership Association Achieve Phase 1 targets in the FY2020–25 Medium-Term Management Plan, a precondition for payment. Payment of an amount equivalent to one
Slide 46: Message from the CEO
Message from the CEO • Amid an environment that is changing drastically, dramatic growth in the Healthcare and Others business drove the Group as a whole in FY2022. The Food Products Business, through unyielding efforts to counter difficulties, returned to growth in profit. We are certain that the A
Slide 47: 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. A number of factors could cause actual results to differ materially from expectations. This material includes summa
Slide 48: Summary of the Fourth Quarter (January-March)
Summary of the Fourth Quarter (January-March) Profit attributable to owners Sales: Increased Business profit: Increased of the parent company ¥332.3 billion ¥16.1 billion ¥17.6 billion 112.6% of FY2021 results 129.1% of FY2021 results Vs. FY2021 results - Excluding currency translation: 105.7% Exclu
Slide 49: Addressing Inflation
Addressing Inflation In Seasonings and Foods and Frozen Foods, successive measures are being taken to counteract the ongoing impact of increased costs, such as for raw materials. 第3四半期以降 (Price actions in major countries of business: only executed and announced actions) FY2022 FY2023 Q4 Q1 Umami sea
Slide 50: Ajinomoto Group: Effective Tax Rate
Confidential Ajinomoto Group: Effective Tax Rate Statutory effective tax Effective tax rate of Ajinomoto Group 味の素グループ連結実効税率 rate, Japan 41.8% 30.6% since FY2016 38.0% 35.6% 32.6% 34.5% 33.1% 32.7% 31.5% 29.9% 30.6% 28.5% 27.0% 27.0% Standard tax rate, 25.1% Ajinomoto Group 27.0% 19.5% Effective tax
Slide 51: FY2023 Assumed Exchange Rate and Exchange Rate Sensitivity
FY2023 Assumed Exchange Rate and Exchange Rate Sensitivity Assumed exchange rate (vs. JPY) FY22 actual Medium-Term FY23 ASV Initiatives forecast Q4 Q3 Q2 Q1 2030 Roadmap USD 135.00 132.42 141.38 138.27 129.73 135.00 EUR 135.00 142.16 144.26 139.26 138.26 135.00 THB 3.75 3.90 3.89 3.80 3.77 3.75 BRL
Slide 52: Evolution of Governance
Evolution of Governance Governance structure from FY2023 General Meeting of Shareholders Appointment/ Appointment/ Dismissal of Directors Dismissal of Management / Supervision / Auditing Accounting Auditors Board of Directors Nomination Committee 6 Election/Dismissal (of whom 4 are Outside Directors
Slide 53: Profiles of New Appointees
Profiles of New Appointees Newly appointed as Executive Officer & Vice President Newly appointed to the Outside Director Newly appointed as Internal Director Value Creation Advisory (Assumption of office in June) (Assumption of office in June) Board Scott Trevor Davis Takeshi Saito Wataru Baba Apr.
Slide 54: Materiality Issues as a Strategic Framework
Materiality Issues as a Strategic Framework With a view to realizing our vision and further improving our corporate value over the long term, we have engaged in a series of dialogues at the Sustainability Advisory Council and have arranged important connections for the Ajinomoto Group in the form of
Slide 55: Reference Links
Reference Links Ajinomoto Group IR Information https://www.ajinomoto.co.jp/company/en/ir/ Ajinomoto Group ASV Report (Integrated Report) 2022 https://www.ajinomoto.co.jp/company/en/ir/library/annual.html Ajinomoto Group Medium-Term ASV Initiatives https://www.ajinomoto.co.jp/company/en/ir/event/medi
Slide 56: Reference Links (Japanese Only)
Reference Links (Japanese Only) Management Policy Briefing for the Ajinomoto Group (15-minute version) https://www.youtube.com/watch?v=_h0ocFfR7pM Ajinomoto Group Event for Customers, Announcement of Employee ASV Initiatives (Home use) https://youtu.be/G8k51QriSiQ (Restaurant and industrial use) htt