Ajinomoto Co., Inc. · TSE:2802
Ajinomoto — Q2 2024 Earnings Presentation
43 slides from Ajinomoto's earnings presentation, Nov 7, 2024
Slide 1: Forecast for FY2024 and Initiatives for Enhancing Corporate Value
Ajinomoto Co., Inc. Forecast for FY2024 (Ending March 31, 2025) and Initiatives for Enhancing Corporate Value Taro Fujie Director, Representative Executive Officer, President & Chief Executive Officer November 7, 2024
Slide 2: Agenda
I. Summary Results for the First Half Ended September 30, 2024 and the FY2024 Forecast II. Initiatives for Enhancing Corporate Value Reference Materials Appendixes: Consolidated Results First Half Ended September 30, 2024 FY2024 Revised Forecast by Segment Note: Business profit (consolidated) in thi
Slide 3: Today's Message
Today's Message • In the interim period of FY2024, both sales and business profits reached new highs. Business profit achieved growth of 13% YoY, and growth was double-digit even when currency translation is excluded. We revised sales and business profit forecasts upward. • Functional Materials reco
Slide 4: I. Summary Results for the First Half and FY2024 Forecast
I. Summary Results for the First Half Ended September 30, 2024 and the FY2024 Forecast II. Initiatives for Enhancing Corporate Value
Slide 5: I-1. FY2024: Digest of First-Half Results
I-1. FY2024: Digest of First-Half Results Sales: Increased Business profit: Increased Profit attributable to owners of the (New record) (New record) parent company ¥744.2 billion ¥86.9 billion ¥50.2 billion 108% of FY2023 113% of FY2023 108% of FY2023 Excluding currency translation: Excluding curren
Slide 6: I-2. Changes in Business Profit by P&L Factor
I-2. Changes in Business Profit (H1-FY2024 Results by P&L Factor) (¥ bil.) 120 Increased GP from increased sales Investment in intangible and an improved profit structure assets to bring growth 100 6.8 -19.1 2.7 20.0 Investment in marketing: 80 Approx. -¥3.0 bil. Investment in R&D: Approx. -¥1.0 bil
Slide 7: I-2. Changes in Business Profit by Disclosed Segment
I-2. Changes in Business Profit (H1-FY2024 Results by Disclosed Segment) (¥ bil.) 100 8.0 1.0 3.4 Includes Forge -4.2 80 -2.1 86.9 除くForge 76.5 Includes ▲194 Forge -4.2 60 FY23 H1-FY23 Seasonings Frozen Foods Healthcare and Other H1-FY24 上期実績 Actual and Foods Others Actual (Ref.) FY2024 Initial Fore
Slide 8: I-3. Sauce and Seasonings, and Quick Nourishment: Sales Breakdown
I-3. Sauce and Seasonings, and Quick Nourishment: Breakdown of Sales, and Factors behind Changes in Business Profit Breakdown of the FY2024 first half sales and factors behind changes in business profit, in Japan and overseas (vs. the previous year) Japan sales: 105% Overseas sales: 106% (local curr
Slide 9: I-4. Revised Forecast for FY2024
I-4. Revised Forecast for FY2024 Upward revision of sales and business profit in the FY2024 full-year forecast We revised the sales and profit forecasts upward on the expectation that Functional Materials will maintain its strong first-half momentum. By contrast, we revised the forecast for business
Slide 10: I-5. Changes in Business Profit (Revised Forecast by Segment)
I-5. Changes in Business Profit (FY2024 Revised Forecast by Disclosed Segment) FY2024 Revised Forecast vs. FY2023 Actual (¥ bil.) 180 160 11.1 1.7 140 2.2 -2.8 160.0 120 147.6 100 FY23 Seasonings Frozen Foods Healthcare Other FY24 Actual and Foods and Others Revised forecast FY2024 Revised Forecast
Slide 11: I-6. Sauce and Seasonings, and Quick Nourishment: Forecast Breakdown
I-6. Sauce and Seasonings, and Quick Nourishment: Breakdown of Sales, and Factors behind Changes in Business Profit Breakdown of factors behind changes in sales and business profit for the FY2024 revised forecast, in Japan and overseas (vs. the previous year) Japan sales: 108% Overseas sales: 109% V
Slide 12: I-7. Seasonings and Foods (Japan coffee business)
I-7. <Seasonings and Foods> (Japan coffee business) Despite multiple price increases, we have been unable to keep up with cost increases due to soaring prices of coffee beans and the weak yen, resulting in worsening business profit margin. ⇒ We will promptly take further actions while closely watchi
Slide 13: I-7. Seasonings and Foods (Japan coffee business)
I-7. <Seasonings and Foods> (Japan coffee business) We are reducing the percentage of the amount of coffee beans used as a part of the sales KPI, and are building a business portfolio resistant to the effects of market prices. We aim for stable business operation by improving the GP margin, includin
Slide 14: I-8. Seasonings and Foods (Overseas)
I-8． <Seasonings and Foods> (Overseas) In the Seasonings and Foods segment, overseas business profit margin exceeds the pre-COVID-19 pandemic level. We will strengthen the business portfolio and further grow sales and profit margin. Seasonings and Foods, overseas business profit margin 20% 15% 10% F
Slide 15: I-9. Frozen Foods (Japan)
I-9. <Frozen Foods> (Japan) 1. Achievement and issues in H1-FY2024 Achievement Recaptured No. 1 market share in gyoza Issues Sales level with the previous year. Decrease in profit due to increased costs due to high prices of raw materials and weak yen. 2. Gyoza product strategy Provide a lineup of p
Slide 16: I-10. Healthcare and Others: Functional Materials
I-10. <Healthcare and Others> Functional Materials Revenue and profit increased significantly in the first half of FY2024. Momentum is expected to continue in the second half; forecasts for sales and business profit have been revised upward. Sales of Functional Materials %: Vs. prev. year 122% Upwar
Slide 17: I-11. Bio-Pharma Services (CDMO services)
I-11. <Healthcare and Others> Bio-Pharma Services (CDMO services) The use of unique technologies is driving growth, and profit has significantly increased in existing businesses. Forge Biologics is also performing strongly. Situation in the first half Initiatives by Ajinomoto Bio-Pharma Services Eur
Slide 18: I-12. 2030 ASV Indicators
I-12. 2030 ASV Indicators Aim to steadily reach our FY2024 revised forecast to reach our 2030 ASV indicators. FY24 Ref.: Aim for FY25 FY30 FY23 H1-FY24 revised forecast (plan) (plan) approx. 3x EPS Approx. Approx. (vs. FY2022） ROE 11.0% 12% 18% 20% (Excluding the impact of the Forge consolidation) (
Slide 19: I-12. Reference: Growth Paths by Segment
Please see the Appendix I-12. Reference: Growth Paths by Segment (for the initial forecasts) Segment Organic growth Business profit ROIC EBITDA margin Vs. prev. year CAGR Vs. prev. year CAGR FY22 H1- FY24 FY25 FY22 H1- FY24 FY25 FY22 FY23 FY24 FY25 FY22 H1- FY24 FY25 Sauce & actual FY24 revised plan
Slide 20: I-13. Assets and Liabilities
I-13. Assets and Liabilities The forecast for total assets remains unchanged. For FY2024, the net D/E ratio range is raised to 40%-60% (from the previous 30%-50%). (¥ bil.) Total 総資産 * ネットD/Eレシオ Net D/E ratio assets （%） 2,000 20,000 60 1,500 15,000 40 10,000 1,000 20 5,000 500 00 0 FY14 FY15 FY16 FY
Slide 21: I-14. Cash Generation
I-14. Cash Generation The operating cash flow forecast was revised upward by about ¥20 billion. We will steadily generate operating cash and work to expand investment and shareholder returns in accordance with our cash allocation policy. Operating Cash Flow (¥ bil.) Approx. 200 ¥195 billion 150 100
Slide 22: I-15. Strategic Investments
I-15. Strategic Investments The forecast for business performance in investment plans remains unchanged. From a medium- and long-term perspective, we will aggressively promote investments for expanding profit to achieve our vision for 2030. (%) 無形投資比率 Percentage of investment in intangible assets 60
Slide 23: I-16. Important Management Indicators
I-16. Important Management Indicators Upwardly revised EPS and Normalized EPS to reflect share repurchases in the second half of the year. ROE deviates significantly from the FY2025 ASV index (planned value: 18%), but we will raise the value by improving profit attributable to the parent company and
Slide 24: I-17. Investment for Growth and Shareholder Returns
I-17. Investment for Growth and Shareholder Returns (Our Thinking under the Medium-Term ASV Initiative) Further raised the forecast from the beginning of the fiscal year for operating cash flow, which will be a new record. Announced flexible shareholder returns in accordance with our cash allocation
Slide 25: I-18. Return to Shareholders and Investments for Growth
I-18．Return to Shareholders and Investments for Growth Following a repurchase of 50 billion yen in shares in the first half of FY2024, in the second half we announced a repurchase of 40 billion yen in shares. We announced an acceleration of return to shareholders as well as a stock split. ■■配当 （FY13
Slide 26: II. Initiatives for Enhancing Corporate Value
I. Summary Results for the First Half Ended September 30, 2024 and the FY2024 Forecast II. Initiatives for Enhancing Corporate Value
Slide 27: II-1. Medium-Term ASV Initiatives
II-1. Medium-Term ASV Initiatives (for year 3 of the “2030 Roadmap”) We are growing business profit at an annual rate of 10-15% to reach our 2025 ASV indicators. We will maintain and accelerate this momentum. FY2023 FY2024 revised forecast FY2025 business profit growth rate business profit growth ra
Slide 28: II-2. Medium-Term ASV Initiatives
II-2. Medium-Term ASV Initiatives (for year 3 of the “2030 Roadmap”) Our Purpose-Driven Management by Medium-Term ASV Initiatives 2030 Roadmap is now in the second half of its second year. We are at the stage of "achieved a mindset for tackling challenges" aimed at attaining the height of the Roadma
Slide 29: II-3. Overseas Food Products Business
II-3. Medium-Term ASV Initiatives (for year 3 of the “2030 Roadmap”) Overseas Food Products business In the overseas Food Products business, which has made a recovery in profit through rapid price increases, we aim to achieve the 2030 Roadmap by strengthening the business foundation and with Speed U
Slide 30: II-4. Japan Food Products Business
II-4. Medium-Term ASV Initiatives (for year 3 of the “2030 Roadmap”) Japan Food Products Business In Japan, Seasonings and Foods, excluding coffee, is recovering, but has yet to reach pre-pandemic levels. 16% Seasonings and Foods (Japan, excluding coffee) Business Profit Margin 12% 8% FY19 FY20 FY21
Slide 31: II-5. Our Philosophy – Activities Promoting Empathy
Failure to make full use of employees' and organizations' capabilities II-5. Our Philosophy – Activities Promoting Empathy To achieve the 2030 Roadmap, we will create a corporate culture in which employees take the lead and proactively take on challenges to realize our vision, with both purposes as
Slide 32: II-6. TRY & A-CROSS Network-like Style of Working
Vertical organizations with silo management II-6. Promotion of a Network-like Style of Working and TRY & A-CROSS Self-initiated Taking on of Challenges Introduced in April 2024 = cross-organizational work based on a theme, transcending the boundaries of one’s own department TRY & A-CROSS Making self
Slide 33: II-7. Human Asset Initiatives (Engagement Survey)
Still many separate approvals needed in the approval process II-7. Human Asset Initiatives (Engagement Survey, Preliminary Results) Favorable response to the “ASV realization process” is 76 (average of 8 categories), on par with the previous fiscal year. Scores improved in the categories related to
Slide 34: Message from the CEO
Message from the CEO • In FY2024 first half summary results, we continued to grow in the Food Products business (primarily overseas) and recovery in the Bio & Fine Chemicals business from FY2023, in line with the 2030 Roadmap. • There is room for evolution in the Food Products business in Japan. We
Slide 35: Forward-looking statements notice
➢ 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 s
Slide 36: Summary of the Second Quarter (July-September)
Summary of the Second Quarter (July-September) Profit attributable to owners of the Sales: Increased Business profit: Increased parent company ¥378.7 billion ¥43.8 billion ¥26.2 billion 108％ of FY2023 130％ of FY2023 136% of FY2023 Excluding currency translation: 107% Excluding currency translation:
Slide 37: Consolidated Statements of Income
Consolidated Statements of Income Excluding currency FY24 revised (¥ Billion) H1-FY24 H1-FY23 Difference Vs. prev. year translation forecast YTD progress (A) (B) (A) – (B) (A) / (B) Vs. prev. year (A) / (C) (A) / (B) (C) Sales 744.2 688.0 56.2 108% 105% 1532.5 48% Business profit 86.9 76.5 10.3 113%
Slide 38: FY2024 Assumed Exchange Rates and Exchange Rate Sensitivity
FY2024 Assumed Exchange Rates and Exchange Rate Sensitivity Assumed exchange rates (vs. JPY) FY24 revised FY24 result FY24-2H FY24 forecast 1Q 2Q revised forecast initial forecast USD 148.89 155.85 149.71 145.00 140.00 EUR 163.53 167.85 164.28 161.00 154.00 THB 4.25 4.24 4.29 4.24 4.00 BRL 28.14 29.
Slide 39: 1H-FY24 Key Financial Results by Segment (1)
1H-FY24 Key Financial Results by Segment (1) Overall, revenue increased, with increased unit prices and increased volume in In Japan Sauce and Seasonings, although sales volume decreased due to increased prices for coffee in Quick Nourishment. Seasonings and Foods Overall, revenue increased, mainly
Slide 40: 1H-FY24 Key Financial Results by Segment (2)
1H-FY24 Key Financial Results by Segment (2) Seasonings and Profit decreased in all subsegments (Sauce & Seasonings, Quick Nourishment, In Japan and S&I). Foods +¥5.4 billion (excluding shared Overall, profit increased, due to increased profit primarily in Sauce & Seasonings, companywide expenses) O
Slide 41: Reference: Growth Paths by Segment (Initial Forecast)
Reference: Growth Paths by Segment (Initial Forecast) Segment Organic growth Business profit ROIC EBITDA margin Vs. prev. year CAGR Vs. prev. year CAGR FY22 FY23 FY24 FY25 FY22 FY23 FY24 FY25 FY22 FY23 FY24 FY25 FY22 FY23 FY24 FY25 Sauce & actual actual forecast plan actual actual forecast plan actu
Slide 42: Reference: Human Asset Initiatives, Correlation with Business Performance
Reference:Human Asset Initiatives （Analysis of Correlation with Business Performance for FY2023） We continue to analyze the correlation between engagement survey results and business performance (results for FY2023 survey are shown in the chart below). We identified a correlation between “sustainabl
Slide 43: Forward-looking statements notice
➢ 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 s