Ezaki Glico Co., Ltd. · TSE:2206
Ezaki Glico — FY2022 Earnings Presentation
44 slides from Ezaki Glico's earnings presentation, Feb 21, 2023
Slide 1: Glico Group Financial Results for the Fiscal Year ended December 31, 2022
Healthier days, Wellbeing for life [Notes of caution] e This documents is an English translation of the Japanese original. In the event of any differences or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. <Full Version> Glico Group Fin
Slide 2: Contents
Contents I. FYE December 2022 Earnings Report P.3 ~ 17 II. Progress Report for the Mid–Term P.18 ~ 27 Business Plan P.28 ~ 31 III. ESG Initiatives IV. FYE December 2023 Earnings Forecast P.32 ~ 39 (Supplemental Materials) ©2023 Ezaki Glico Co., Ltd. All Rights Reserved 2
Slide 3: I. FYE December 2022 Earnings Report
I. FYE December 2022 Earnings Report ©2023 Ezaki Glico Co., Ltd. All Rights Reserved 3
Slide 4: Summary for the FYE December 2022
Summary for the FYE December 2022 = Domestically, net sales decreased -5.3% year-on-year in FY2021 but improved to +0.6% in FY2022. m™ In overseas business, net sales increased +20% year-on-year due to recovery following lockdowns in China in the second half, growth in ASEAN and the U.S.A., and the
Slide 5: Status of Consolidated Performance
Status of Consolidated Performance GBico ™ Net sales: Achieved +3.9% increase despite lockdowns in China due to the effects of foreign exchange rates. ™ Operating income: Decreased -33.5% due to the effects of soaring raw material prices and lockdowns in China. (Unit: 100 million yen) FYE Dec. 2021
Slide 6: Status of Operating Income
Status of Operating Income Glico (Unit: 100 million yen) FYE Dec. 2021 FYE Dec. 2021 FYE Dec. 2022 (previous standards) | (new standards) (new standards) Net sales 3,386 100.0% 2,926 100.0% 3,039 100.0% Cost of sales 1,805 53.3% 1,805 61.7% 1,932 63.6% Gross profit 1,580 46.7% 1,120 38.3% 1,107 36.4
Slide 7: Factors of Increases (Decreases) in Operating Income
Factors of Increases (Decreases) in Operating Income Glico Change from previous period = Domestic operating income decreased primarily due to soaring raw material prices. ™ Overseas operating income decreased, as the effects of higher sales were more than offset by increased expenses primarily attri
Slide 8: Status of Net Sales by Segment
Status of Net Sales by Segment (based on new stand} : Looking at domestic segments, Milk and Dairy Products posted decreased net sales, but Confectioneries and Food Products, Ice Cream, and other segments posted increases for a year-on-year increase of 0.6%. . Overseas segments are an increase of +2
Slide 9: Status of Operating Income by Segment
Status of Operating Income by Segment G%<* = ~=Domestic segments posted a decrease of -3.7 billion-yen YoY that resulted from the effects of soaring raw materials prices and other factors. . Overseas segments posted a year-on-year decrease of -2.7 billion yen that was attributable to lockdowns in Ch
Slide 10: Domestic Business: Situation by Category
Domestic Business: Situation by Category G%*- Category Net sales (% of previous period) FYE December 2022 Results Chocolate Cookies Ice Cream Yogurt Baby Care Health 33.1 billion yen (41.9%) 19.5 billion yen (+5.3%) 80.1 billion yen (+3.7%) 12.3 billion yen (415.1%) 4.4 billion yen (A2.2%) 13.5 bill
Slide 11: Domestic Business: Situation by Category (Chocolate/Cookies)
Domestic Business: Situation by Category (Chocolate/Cookiegfico- Net Sales by Brand Chocolate Market Net Sales Result (Intage SRI+) —Chocolate category— (When FYE Dec. 2020 net sales are set as 100) Unit: 100 Unit: 100 FYE Dec. '20 = FYE Dec. '21 mFYE Dec. '22 million yen A2.4% million yen 4,000 _—_
Slide 12: Domestic Business: Situation by Category (Ice Cream/Yogurt)
Domestic Business: Situation by Category (Ice Cream/Yogut%<e- Ice Cream category Ice Cream Market Net Sales Result Net Sales by Brand (Intage SRI+) —Ice Cream category— (When FYE Dec. 2020 net sales are set as 100) wuilion ven 40.1% Leia FYE Dec. ‘20 FYE Dec. ‘21 FYE Dec. '22 1 3, 86 100 4,000 00 7
Slide 13: Domestic Business: Situation by Category (Infant Formula/Health Business)
Domestic Business: Situation by Category (Infant Formula/Health BusinesS2ico— Infant Formula category Infant Formula Market Net Sales Result Icreo (Infant Formula) Net Sales (Intage SDI/SCI+) —Infant Formula category— (When FYE Dec. 2020 net sales are set as 100) Unit: 100 150 million yen +7.3% Unit
Slide 14: Overseas Business: Region-Specific Net Sales and Operating Income
Overseas Business: Region-Specific Net Sales and Operating Income @China (Unit: 1 million CNY) Net sales 1,410 1,210 1,261 A10.5% +4.3% Operating income 141 23 60 A56.8% +159.3% @ ASEAN * (Unit: 1 million USD) Net sales 98 115 113 +14.9% A1.8% Operating income A7 Ai2 A13 al [I OU.S.A.* (Unit: 1 mill
Slide 15: China
China Glico @ Over the full year of 2022, China’s cookie market (POS) shrank by -3.3%. m@ Net sales (shipments) fell -10.5% compared to the previous year based on the local currency. This was mainly due to the fact that two plants in Shanghai suspended production for about two and a half months begi
Slide 16: ASEAN
ASEAN Glico m The ASEAN Cookies Market +7.8% in Thailand and 20.5% in Indonesia year-on-year, greatly surpassing the previous year. @ Overall, net sales in ASEAN, primarily Thailand and Indonesia, settled at +14.9% year-on-year due to tight supply capacity, particularly in the second half. @ Operati
Slide 17: U.S.A.
U.S.A. Glico m In FYE Dec. 2022, net sales of Ezaki Glico USA, Glico’s local subsidiary in the U.S. Confectionery business, increased by +18.5% year on year to 108 million USD based on the local currency. A “Pocky Day” displa m A major factor for revenue growth was an increase in the number of store
Slide 18: II. Progress Report for the Mid-Term Business Plan
II. Progress Report for the Mid–Term Business Plan ©2023 Ezaki Glico Co., Ltd. All Rights Reserved 18
Slide 19: Purpose and Vision
Purpose and Vision Glico Healthier days, Wellbeing for life The Glico Group celebrated its 100th anniversary on February 11, 2022. On the occasion of this centennial, the Group established a new “Purpose” and “Vision.” The new Purpose is “Healthier days, Wellbeing for life,” and the new Vision is “T
Slide 20: Business Strategy in the Mid-Term Business Plan
Business Strategy in the Mid-Term Business Plan Glico | Three pillars of the new Mid-Term Strategy >. Hl ti Taste and health value with scientific evidence ee a ™ N &o¢ Offering “Great Taste and Good Health” Implementation of a globally evolved value chain Realization of a customer-driven value Tran
Slide 21: From Category Management to Business Unit Management
From “Category Management” to “Business Unit Manageent” Until now From now on “Category” * Category-based “Focus area” * Management based on focus -based management from the b d areas (value provided) from standpoints of ease of retail “base the standpoint of thoroughly response and product consider
Slide 22: Building a Customer-Driven Value Chain
©2023 Ezaki Glico Co., Ltd. All Rights Reserved Building a Customer—Driven Value Chain G%<* @ Accelerating growth by incorporating functions that propel the building of a customer-driven value chain into business units I v Value Value Value selection creation communication ommunication o' Value defi
Slide 23: Transformation of Domestic Business under the Mid-Term Business Plan
Transformation of Domestic Business under the Mid-Term Business Plan Category management Health Chocolate Cookies Ice Cream Milk and Dairy Products Western confections Food Products Baby Care Others ©2023 Ezaki Glico Co., Ltd. All Rights Reserved 23
Slide 24: Sales of Products for Achieving the Purpose (Domestic)
Sales of Products for Achieving the Purpose (Domestic) G%ce- m Renewed sales of “SUNAO (Vanilla Soft)” and the “SUNAO” cup ice cream series (“Strawberry & Raspberry” and “Macadamia & Almond”) @ Launch of two products—“CRATZ with Low Available Carbohydrates” and “CHEEZA with Low Available Carbohydrat
Slide 25: Initiatives for Providing a Wholesome Life in the Best of Taste
Initiatives for “Providing a Wholesome Life in the Best of Taste’Gvico- mg August/2022: Start of the “SUNAO Delivery” service providing lunches with properly adjusted available carbohydrates* to offices ® Delivery through the “Office glico” network woe . Delivery area: At its start, the service will
Slide 26: Sales of Products for Achieving the Purpose (Overseas)
Sales of Products for Achieving the Purpose (Overseas) Gwice- First overseas launch of “Almond Koka” in China First overseas launch of “BISCO” in China —Sales commenced via e-commerce sites in August —Sales first commenced via e-commerce in 2021— October 2021 and then offline in March 2022— Sales co
Slide 27: Mid-Term Business Plan: Progress
Mid-Term Business Plan: Progress Glico ™ Net sales reached the Mid-Term Business Plan’‘s target, but profits fell short. = Domestic sales struggled in the first half of the year, but a recovery in the second half brought sales up to the previous year’s level. However, operating income declined due t
Slide 28: III. ESG Initiatives
III. ESG Initiatives ©2023 Ezaki Glico Co., Ltd. All Rights Reserved 28
Slide 29: CSR Approach
CSR Approach Glico Environment Society Measures that live up to modern society’s expectations Measures that meet modern society’s demands Corporate governance, corporate ethics, and compliance ©2023 Ezaki Glico Co., Ltd. All Rights Reserved To realize our purpose “Healthier days, Wellbeing for life”
Slide 30: Materiality Mapping
Materiality Mapping Product safety, consumer and community issues e Labor and human rights issues e Environmental and social issues @ Environmental issues @ Compliance and governance issues Mitigation and adaptation to climate change © Resource recycling and waste reduction Corporate governance Prov
Slide 31: ESG Initiatives
ESG Initiatives GNice 1. Environmental initiatives -Presentation of the Glico Group Environmental Vision 2050 (March 2021): Sets Environmenta targets and KPIs for 100% reduction of greenhouse gases by 2050, reduced | Vision 2050 water consumption, plastic containers/recycling, and food waste. «Intro
Slide 32: IV. FYE December 2023 Earnings Forecast
IV. FYE December 2023 Earnings Forecast ©2023 Ezaki Glico Co., Ltd. All Rights Reserved 32
Slide 33: Consolidated Earnings Forecast
Consolidated Earnings Forecast Glico @ Net sales : We again forecast a double-digit year-on-year increase by overseas business and forecast a year-on-year increase of 1.6% by domestic business. We forecast a 4.3% year-on-year increase for the entire consolidated Group. ™ Operating income: We forecas
Slide 34: New Segments
New Segments Glico From FY2023 Reporting | Health and Dairy Nutritional Food Other Overseas unit Food Food Confectionery | Ingredients | Domestic Business Business Business Business Business Business unit Main brands = -Almond Koka + Bifix +Pocky Food Ice cream Overseas +SUNAO +Giant Cone +Pretz Ing
Slide 35: Operating Income Forecast
Operating Income Forecast Glico FYE Dec. 2022 (Unit: 100 million yen) FYE Dec. 2023 Net sales Cost of sales Gross profit Freight and charges Sales promotion Advertising expenses Salaries and benefits Expenses and depreciation SGA total Operating income 3,039 1,931 1,107 271 89 102 306 209 979 128 10
Slide 36: Factors of Increases (Decreases) in Operating Income (New Standard)
Factors of Increases (Decreases) in Operating Income (New Standard yeico- Change from previous period m@ Domestic, despite soaring raw materials prices and other factors, the plan is to increase total profit due to price revisions and other factors. m We forecast higher operating income in overseas
Slide 37: Net Sales Forecast by Segment
Net Sales Forecast by Segment Glico m Inthe domestic segments, despite anticipated struggles by the Dairy Food Business, we forecast, an overall increase in net sales of +1.6% year-on-year, mainly because we forecast a year-on-year increase in net sales by the Health and Food Business. ™ For oversea
Slide 38: Operating Income Forecast by Segment
Operating Income Forecast by Segment Glico m@ We forecast a +100 million yen increase for domestic business and +3.0 billion yen increase for overseas business. We forecast a +3.2 billion yen year-on- year increase for the entire consolidated Group. FYE Dec. 2022 (Unit: 100 million yen) FYE Dec. 202
Slide 39: Overseas Business: Region-Specific Net Sales and Operating Income Forecast
Overseas Business: Region-Specific Net Sales and Operating Income Forecast Glico @China (Unit: 1 million CNY) FYE Dec. 2022 FYE Dec. 2023 period Net sales 1,261 1,516 +20.2% reoee 60 163 +168.1% @ASEAN * (Unit: 1 million USD) FYE Dec. 2022 FYE Dec. 2023 Net sales 113 +16.7% Operating a13 ai2 , incom
Slide 40: Supplemental Materials: Currency Rates
Supplemental Materials TTM Currency Rate Glico USD EUR THB CNY 100KRW 100IDR 3/31 110.99 124.56 3.49 16.47 9.80 0.78 6/30 107.79 122.49 BaD) 15.69 ©3353 0.77 2018 9/30 107.92 118.02 3.53 15.13 8.99 0.76 12/31 109.56 122.54 3.63 15.67 9.46 0.79 3/31 108.83 119.55 3.34 15.31 8.92 0.67 6/30 107.74 121.
Slide 41: Supplemental Materials: Net Sales by Category
Supplemental Materials Net Sales by Category Segment Confectioneries and Food Products Ice Cream Milk and Dairy Products Food Ingredients Overseas Other Category Chocolate Cookies Food Products Other Total Ice cream, wholesale subsidiaries Total Yogurt Drinking Milk Fruit juices, Carbonated drinks W
Slide 42: Supplemental Materials: Status of Balance Sheet
Supplemental Materials Status of Balance Sheet Glico @ Net worth ratio: 67.5% (end of December 2021 = 66.2% (end of December 2022) 722 799 1,782 1,786 434 1,781 Hees) End Dec. ‘21 End Dec. 22 mNet assets Non-current liabilities Current liabilities Current assets Non-current assets ©2023 Ezaki Glico
Slide 43: Supplemental Materials: Status of Cash Flows
Supplemental Materials Status of Cash Flows Glico Cash flows from operating activities Cash flows from investing activities FCF (free cash flows) Cash flows from financing activities Cash and cash equivalents at end of year ©2023 Ezaki Glico Co., Ltd. All Rights Reserved (Unit: 100 million yen) FYE
Slide 44: Notes of caution
[Notes of caution] *Current Glico and Glico Group plans, forecasts, and initiatives indicated in these materials reflect determinations made based on information available at the present time. As such, this information may include major risks and uncertainties. Please note that actual performance ma