Lifedrink Company Inc. · TSE:2585
Lifedrink — FY2023 Earnings Presentation
35 slides from Lifedrink's earnings presentation, May 12, 2023
Slide 1: Financial Results for Year Ending March 31, 2023
Financial Results for Year Ending March 31, 2023 May 12，2023
Slide 2: Disclaimer
Disclaimer This document has been prepared by LIFEDRINK COMPANY, INC. (the “Company”) solely for information purpose only. This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the C
Slide 3: Executive Summary
Executive Summary ◼ Company Overview ⚫ 51 years since establishment, A manufacturer that manufactures and sells water, tea, and carbonated drinks. ⚫ Achieve high sales growth (from FY2020 to FY2023 (CAGR15.8%) and high profitability (OP Margin10.3%) by low price strategy in the growing categories of
Slide 4: 1. Company Overview
1. Company Overview 2. Financial Results for FY2023 3. Mid-term plan（FY2024～FY2026） 4
Slide 5: Our Figures
Our Figures Achieve high sales growth and high profitability by low-price strategy in the growing categories of the soft drink market. Low-price Sales ｇrowth Profitability Shop price of 2L mineral water （Researched by LDC*1） Revenue CAGR Operating Margin (FY2020-FY2023) （FY2023） LDC：JPY６８～７８ Others：
Slide 6: Company Overview
Company Overview Issuer LIFEDRINK COMPANY, INC. (hereafter “LDC”) President and CEO Kuniaki Okano Founded 1950 (Established： 1972) Head office Osaka-shi, Osaka Drink and Leaf Business Business – Manufacture and sale of mineral water, tea, carbonated drinks, and tea leaf products Head Office: Osa
Slide 7: Our History
Our History Formed a capital and business alliance with Sunrise Capital, sub-advised by CLSA 2015 Capital Partners Japan 2016 Established the Fuji Meisui Ashikaga factory (currently the Tochigi factory) Changed the company name to LIFEDRINK COMPANY 2017 Sold Yamachu Unyu (transportation busi
Slide 8: Our Philosophy
Our Philosophy Center of Deliciousness, Foremost Reassurance To “always” be close to our customers from babies to the elderly, We pursue “standard of deliciousness” and “reliable safety” and We provide products with taste and quality that can be chosen in all aspects of daily life, from waking up in
Slide 9: Our features and strengths
Our features and strengths Have the competitive advantage of “low-price products“ and “stable supply" through “mass production of less variety of products", “in-house production", and “nationwide factory expansion" ⚫ Focus on 2L and 500mL of water, tea and carbonated Mass water Production of ⚫ In ge
Slide 10: Our features and strengths (Mass Production of less variety products)
Our features and strengths（Mass Production of less variety products） The liquid type is water, tea, carbonated water, and the capacity is concentrated in 2L / 500ml. Achieves minimization of waste in each process Natural mineral water Carbonated water ZAO SODA 500ml/ 2L 500ml Green tea Oolong tea Na
Slide 11: Our features and strengths (In-house/Nationwide Expansion of factories)
Our features and strengths （In-house/Nationwide Expansion of factories） In-house production mainly reduces manufacturing costs, and nationwide expansion of factories reduces distribution costs. In-house production from procurement to sales Nationwide Expansion of factories ﾚｼﾞﾝ PF （写真） （写真） Resin Pr
Slide 12: Our Sales Channels
Our Sales Channels Build strong relationships with major players in each retail channel. EC is steadily expanding, with one of our main products, “ZAO SODA”, winning the first place in the Rakuten annual ranking 2021 Strong Partnership with Retail Companies Expansion of EC Channels GMS Main Product
Slide 13: ESG initiatives
ESG initiatives In addition to weight reduction of PET bottles and label-less products, consider shifting to eco-friendly materials and building a recycling model for tea shells Environmental Initiatives Tea Shells Recycling Weight Reduction of PET Bottles Reduce Promotion of Label-less Products
Slide 14: 2. Financial Results for FY2023
1. Company Overview 2. Financial Results for FY2023 3. Mid-term plan（FY2024～FY2026） 14
Slide 15: Financial Highlight (FY2023)
Financial Highlight（FY202３） Production quantity *1 Revenue Operating Profit 57 Million cases*2 ３０.２ yen Billion 3.1 Billion yen （YoY +15%） （YoY + 1９%） （YoY + ３８%） Operating Profit% ROE *3 10.３ ％ （YoY + 1.4%pt） ２8.8 ％ 15 *1：Incl, Nitto Beverage, but not incl, Ikoma meisui *2：1 box = 12L is calculated
Slide 16: Business Summary (FY2023)
Business Summary（FY 2023） ⚫ Increased production volume (+15% YoY) due to investments to increase Increase production capacity at existing factories Production, ⚫ Revenue increased (+19% YoY) due to securing sales channels in response Revenue & to increased production volume Operating ⚫ Increased op
Slide 17: Financial Results (FY2023)
Financial Results（FY 2023） Increased production of in-house beverages (+15%YoY) contributed to an increase in sales of 4.8 BN(+19%). Operating profit increased (+38%) as higher sales and cost reduction measures covered various cost increases. Unit：MM(JPY) Variance Revised FY2022 FY2023 YoY% （YoY） pl
Slide 18: Operating Profit Bridge (FY2022 vs FY2023)
Operating Profit Bridge（FY2022 ｖｓ FY2023) Increased costs(raw material and utility) due to soaring crude oil prices and the depreciation of the yen were covered by increased sales volume, higher prices and productivity improvements/cost reductions (labor saving, etc.), and operating Profit was 860 m
Slide 19: (Reference) Quarterly Performance Trends ①
（Reference）Quarterly Performance Trends ① ■ FY2021 ■ FY2021 ■ FY2022 ■ FY2022 ■ FY2023 ■ FY2023 Unit：Million cases*1 Unit：BN JPY Production quantity Revenue ＋1.8 ＋２.１ （+15%） （+36%） 14.8 14.6 8.0 14.1 7.9 13.6 12.8 12.9 7.2 7.0 12.1 12.3 12.2 12.3 6.5 6.5 6.8 11.5 6.0 6.0 5.8 9.6 5.1 4.9 1Q 2Q 3Q 4Q
Slide 20: (Reference) Quarterly Performance Trends ②
（Reference）Quarterly Performance Trends ② ■ FY2021 ■ FY2021 ■ FY2022 ■ FY2022 ■ FY2023 ■ FY2023 Unit：BN JPY Unit：BN JPY Operating Profit/Operating Margin EBITDA/EBITDA Margin 10.0 14.0 14.0% 18.0% 11.7% 9.0 15.2% 15.4% 16.0% 11.4% 12.0 12.0% ＋0.３８ 12.8% 13.8% （＋66%） 8.0 ＋0.2９ 13.7% 10.3% 10.2% （+85%
Slide 21: Balance Sheet (FY2023)
Balance Sheet (FY2023) Assets and liabilities increased due to capital investment and consolidation of Nitto Beverage FY2022/3 FY2023/3 Unit： MM JPY Amount % Amount % Change Current Assets 8,923 52% 10,905 49% +1,981 （Cash & deposit） 3,894 23% 4,326 20% +431 Fix Assets 8,210 48% 11,260 51% +3,050 To
Slide 22: Cash Flow (FY2023)
Cash Flow (FY2023) Operating cash flow profit increased by 852 million yen due to increased profits. Investing cash flow increased by 2,869 million yen due to active growth investment such as capital investment and M&A Unit： MM JPY FY2022/3 FY2023/3 Change % Cash Flow from 2,922 3,774 +852 +29% Oper
Slide 23: Major Capital Investment Progress (FY2023)
Major Capital Investment Progress （FY2023） Invested 570 million yen in expansion of production capacity and 920 million yen in productivity improvement including distribution cost efficiency. Also, invested in the new Gotemba factory and acquired Nitto Beverage Investment （MM JPY） Purpose Factory To
Slide 24: Financial Policy/Dividend
Financial Policy/Dividend While prioritizing growth investments etc., pay a dividend of 28.0 yen per share for the FY2023/3, an increase of 2.0 yen from the previous fiscal year (total dividend of 360 million yen) Policy Contents FY2023/3 ⚫ Aggressive growth investment - Increase production capacity
Slide 25: FY2023 Topics①: Acquisition of Nitto Beverage as a Subsidiary
FY2023 Topics①： Acquisition of Nitto Beverage as a Subsidiary On January 4, 2023, the acquisition of Nitto Beverage shares (making it a subsidiary) was completed. Started initiatives to improve performance and create synergies Overview NBK production items and volume ◼ On Jan 4, 2023, Nitto Beverage
Slide 26: FY2023 Topics②: Tochigi factory new warehouse
FY2023 Topics②：Tochigi factory new warehouse A new warehouse (capacity: approx. 12,500 pallets) in the site of the Tochigi Factory started operation in June 2022, reducing logistics-related costs such as storage cost and packing/transportation cost. Consider deploying this model to other factories A
Slide 27: FY2023 Topics③: EC business initiatives and results
FY2023 Topics③：EC business initiatives and results Steady execution of EC (direct sales) business, including the opening of own EC stores, introduction of new products, and introduction of subscription service New Open Store Awards ◼ Own EC ｓtore（https://www.lifedrink.jp/） ZAO SODA ◼ au PAY market ◼
Slide 28: FY2023 Topics④: Transfer of Non-core sauce business
FY2023 Topics④：Transfer of Non-core source business “Business selection and concentration” that has been promoted since 2016 will be completed with the transfer of the sauce business on Feb 28, 2023 FY2017 FY2020 FY2021 FY2023 Sold Sold Sold Soft Soft Soft Soft Ice Ice Ice Ice drink drink drink drin
Slide 29: 3. Mid-term plan (FY2024-FY2026)
1. Company Overview 2. Financial Results for FY2023 3. Mid-term plan（FY2024～FY2026） 29
Slide 30: Med-term plan outline
Med-term plan outline Aim to improve our corporate value by “evolving and deepening max production and max sales”, improving productivity, and taking on the challenge of the EC/D2C model. Evolution and deepening of max production and max sales ＝Increase/acquire production capacity ⚫ Increase product
Slide 31: Med-term plan outline
Med-term plan outline The key points of each period of the med-term plan are improvement and growth of Nitto Beverage's business performance, and preparation, start of production, and full production at the Gotemba factory. We will also continue to explore M&A opportunities. ⚫ Improving Nitto Bevera
Slide 32: Mid-term plan: Production volume/Revenue
Mid-term plan：Production volume/Revenue Aiming for production volume of 76 MM case (+34% ｖｓ FY2023) and Revenue of 42 ＢＮ (+39%) in FY2026 through growth investment Production volume（MM case） Revenue （BN） ＋34％ ＋39％ 73 76 39 42 57 64 35 50 30 25 FY2022 FY2023 FY2024 FY2025 FY2026 FY2022 FY2023 FY2024
Slide 33: Mid-term plan: Operating Profit/EBITDA
Mid-term plan：Operating Profit・EBITDA Aim for operating Profit of 5.0 BN (+60% from FY2023), operating Profit margin of 11.9% （+1.6%pt）, and EBITDA of 6.7 BN (+ 58%) in the FY2026 Operating Profit（BN） EBITDA（BN） 70.0 ＋58％ 11.9% 10.0% 10.3% 10.7% 10.8% 60.0 8.9% ＋60％ 5.0% 50.0 40.0 0.0% 30.0 6.7 5.0
Slide 34: Earnings forecast (FY2024)
Earnings forecast （FY2024） （Revised from Mar 30, 2023 announcement） The earnings forecast FY2024 plan to increase revenue, profits, and dividends due to the creation of synergies with Nitto Beverage and price revisions. We have revised upwards in consideration of recent orders, etc. Ref. Unit：Millio
Slide 35: LIFEDRINK COMPANY
LIFEDRINK COMPANY LIFEBRINK COMPANY