Ajinomoto Co., Inc. · TSE:2802
Ajinomoto — FY2016 Earnings Presentation
41 slides from Ajinomoto's earnings presentation, May 15, 2017
Slide 1: Results for FY2016 and Forecast for FY2017 with Outlook
Ajinomoto Co., Inc. (2802) Results for FY2016 (Ended March 31, 2017) and Forecast for FY2017 (Ending March 31, 2018) with Outlook May 15, 2017 Takaaki Nishii President & CEO
Slide 2: Contents
Contents I. FY2016 Results ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P1-2 II. FY2017 Forecast ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P3-4 Factors Influencing FY2017 Business Profit ・・・・・・・・・・・・・・・・・・・・・・・ P5 Forecast by Segment ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P6 Profit for F
Slide 3: I. FY2016 Results
I. FY2016 Results J-GAAP 1
Slide 4: FY2016 Results (Summary)
I. FY2016 Results FY2016 Results (Summary) ★ Refer to handout material: Consolidated Results FY2016 Ended March 31, 2017 Operating profit by business ¥ bil. 100 91.0 90.8 Year-on-Year Units: ¥ billion 1.6 85.3 2.0 90 5.5 0.5 81.5 4.6 0.0 • Revenue decreased (-92.6), profit decreased (-5.5) 8.0 74.5
Slide 5: II. FY2017 Forecast
II. FY2017 Forecast IFRS 3
Slide 6: FY2017 Forecast
II. FY2017 Forecast FY2017 Forecast Assumed exchange rate1) is the same as (¥ bil.) (¥ bil.) FY16 actual: $1 = ¥108.3 1,187.0 120 Aim for growth of net sales (8%) and 1,091.1 102.0 business profit (5%). 1,000 97.0 100 80 FY17 FY2016 YoY (¥ Billion) Forecast Actual 57.0 53.3 60 Sales 1,187.0 1,091.1
Slide 7: Factors Influencing FY2017 Business Profit (YoY)
II. FY2017 Forecast Factors Influencing FY2017 Business Profit (YoY) Assumed exchange rate (vs. JPY) FY17 FY17 FY2016 FY17-19 Forecast Targets Actual* MTP (¥ Billion) USD 108.3 100.0 108.3 100.0 EUR 118.7 110.0 118.7 110.0 THB 3.08 2.80 3.08 2.80 110 BRL 32.8 30.3 32.8 30.3 YoY +5% * Average rate du
Slide 8: Forecast by Segment
II. FY2017 Forecast Forecast by Segment (¥ Billion) Currency translation FY2017 FY2016 YoY Change adjustments <FY17 targets> ① Growth rate target Actual Amount (Inc. B.P.% B.P.% (A)-(B) (A)/(B) (A) (B) (C) adjustments) ((A+C) / B) Sales 1,132.0 1,091.1 40.9 3% 55.0 8% Japan Food Products 403.0 390.4
Slide 9: Profit for FY2017
II. FY2017 Forecast Profit for FY2017 Aim to grow the target of profit attributable to owners of the parent company by +6% FY17 FY16 (¥ Billion) -: losses Difference Main factors Forecast Actual Sales 1,187.0 1,091.1 95.9 Business profit 102.0 97.0 5.0 Other operating income & expenses (-: losses) -
Slide 10: Roadmap to a Genuine Global Specialty Company
II. FY2017 Forecast Roadmap to a "Genuine Global Specialty Company" Sustainable value creation as a Become a global top 10 class company with robust business structure Genuine Global Specialty Company ¥150 bil. Global top 10 class ¥130 bil. food company level1) Sustained growth as a Become a global
Slide 11: III. GROW: Growth Driver Advancement
III. GROW: Growth Driver Advancement (1) Food Business Strengthen Regional Portfolio (2) AminoScience Business Expand Business Portfolio 9
Slide 12: Food Business: Ensure Growth with Stronger Regional Portfolio
III. GROW Growth Driver Advancement (1)-1. Food Business: Ensure Growth with Stronger Regional Portfolio Regions / Five Stars Existing domains countries to be strengthened N. Product Japan America Rising New domains Thai- Brazil Indo- Viet- Phili- /Europe Stars categories land nesia nam ppines Seaso
Slide 13: Food Business: Balanced Portfolio Between Developed and Emerging Countries
III. GROW Growth Driver Advancement (1)-2. Food Business: Maintain well-balanced portfolio covering between Developed and Emerging Countries N. America/ Rising Stars Europe FY16 Actual BP composition (Africa, Turkey, etc.1)) by region 8 2 (¥ based) Japan FY17 Target Five 41 49 N. America/ Stars Euro
Slide 14: AminoScience Business: Expand Business Portfolio
III. GROW Growth Driver Advancement (2)-1. AminoScience Business: Expand Business Portfolio Strengthen structure of portfolio being supported by multiple specialty businesses according to FY2017-2019 MTP FY19 Plan (%) FY17 Target (%) Business profit composition by business area. Specialty ratio: 91%
Slide 15: AminoScience: Accelerate Growth of Advanced Biopharmaceuticals Business
III. GROW Growth Driver Advancement (2)-2. AminoScience Business: Accelerate Growth of Advanced Biopharmaceuticals Business Business category Initiative FY17 FY18 FY19 Large molecule Fill & Finish business1) Steady growth (earnings foundation) biologics (antibodies, recombinant Make ADC business2) E
Slide 16: IV. FIT: Further Business Structure Reform
IV. FIT: Further Business Structure Reform 14
Slide 17: Animal Nutrition: Fundamental Shift from Commodities to Specialties
IV. FIT Further Business Structure Reform Animal Nutrition: Fundamental Shift from Commodities and Proceed with Transition to Specialties FY17 Initiatives Business Profit • Promote OEM Contribute to production of sustainable food resources • Promote shift to high-value-added FY16 FY17 FY20- amino ac
Slide 18: V. Reinforcement of Management Foundation
V. Reinforcement of Management Foundation 16
Slide 19: Management Innovation: Accelerating Reform of Working Practices
V. Reinforcement of Management Foundation Management Innovation: Accelerating “Reform of Working Practices” Accelerate “reform of working practices,” achieve “career diversity,” and improve “engagement” for every employee Expand ASV (Innovation) Check Engagement “Career diversity” × improved “engage
Slide 20: VI. FY2017 Financial Strategy
VI. FY2017 Financial Strategy 18
Slide 21: FY2017 Financial Strategy
VI. FY2017 Financial Strategy FY2017 Financial Strategy Based on the policies of the 2017-2019 MTP, Generate cash flow, invest for growth and provide stable shareholder returns Cash Flow Investments for Growth Shareholder Returns Payout ratio: target 30% per FY Operating cash flow: Engage in integra
Slide 22: Reference
Neen Reference ms 20
Slide 23: Five Stars 1: No. 1 in Deliciousness
Reference: International Food Products/Seasonings & Processed Foods Five Stars 1: “No. 1 in Deliciousness” through Our Unique Key Ingredients and Technology Refine quality of existing products and strengthen production x More new product lines Seasonings Domestic share of Dry Savories: 80% (1st plac
Slide 24: Five Stars 2: No. 1 in Deliciousness
Reference: International Food Products/Seasonings & Processed Foods Five Stars 2: “No. 1 in Deliciousness” through Our Unique Key Ingredients and Technology Refine quality of existing products and strengthen production x More new product lines Seasonings Domestic share of Dry Savories: 49% (1st plac
Slide 25: Expanding North American Frozen Food Business, Accelerating Rising Stars
Reference: International Food Products/Frozen Foods, Seasonings & Processed Foods Expanding North American Frozen Food Business, Accelerating Roll Out of Rising Stars Businesses North America Rising Stars Expand frozen foods business working from our Accelerate regional expansion through partnership
Slide 26: Continued Expansion Expected in the Japan Frozen Foods Market
Reference: Japan Food Products/Frozen Foods Continued Expansion Expected in the Japan Frozen Foods Market; Aim for Further Growth Frozen foods market FY16 Review (Data from Ajinomoto Frozen Foods, Co. Inc.) Japan business secured increased sales. Household-use grew well at 109%, restaurant and indus
Slide 27: Pursue Market Creation and Specialty in the Beverage Domain
Reference : Japan Food Products/Coffee Products Pursue Market Creation and Specialty in the Beverage Domain Coffee Market Trend FY17 initiatives ◆ Japan’s coffee market is expanding steadily New company name: Ajinomoto AGF, Inc. (Jul. 1) Record consumption for fifth straight year (2016 +102% YoY) (S
Slide 28: Launch Integrated Food Solutions Business as a New Pillar
Reference: Integrated Food Solutions Launch Integrated Food Solutions Business as a New Pillar Domains of Deepen our deliciousness technologies Integrated Food Solutions & key ingredients expansion Expand into Sweets category Ajinomoto Co.’s fermentation Fermentation- technology (sugar source + deri
Slide 29: Accelerate Conversion of Bulk Businesses to Specialties
Reference: Conversion of Bulk Businesses to Specialties Accelerate Conversion of Bulk Businesses to Specialties Umami seasonings (MSG) for processed food manufacturers Ratio of retail sales (by weight) Expand supply for retail/internal demand, and reduce costs • Utilize existing production capacitie
Slide 30: Assumptions of FY2017 Forecast
Reference: Assumptions of FY2017 Forecast Assumptions of FY2017 Forecast Foreign exchange rates (vs JPY) Feed-use amino acids 1) Estimated market size (Thousand MT) Sensitivity of translation effects FY15 FY16 FY17 Forecast Avg. rate to full year B.P. Lysine around 2,200 around 2,300 around 2,400 US
Slide 31: Impact of Exchange Rates for Trade
Reference: Impact of Exchange Rates for Trade Impact of Exchange Rates for Trade ◆ If the export base currency depreciates against the trading currency, the effect on operating income is positive. Actual impact of FY16 exchange rates is on the loss side due to export/import base currency appreciatio
Slide 32: 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. FY16 actual in this mate
Slide 33: FY2017–2019 Medium-Term Management Plan: Non-financial Targets
Ajinomoto Co., Inc. FY2017–2019 (for FY2020) Medium-Term Management Plan Supplementary Materials: Non-financial Targets May 15, 2017 Takaaki Nishii President & CEO
Slide 34: Ajinomoto Group's FY2020 Integrated Targets
I. What We Aim for Repost of materials for Medium-Term Management Plan P.8 Ajinomoto Group's FY2020 Integrated Targets: Achieve value creation by setting integrated targets for both social and economic values "Genuine Global Specialty Company" To become a global top 10 class company that grows susta
Slide 35: Social: Meats and Vegetables Consumption
(1) Social: Meats and Vegetables Consumption FY20 targets: (Japan, Five Stars) Meat: 8.6 million tons/year (19% of annual consumption) Vegetables: 5.5 million tons/year (8% of annual consumption) E.g. Indonesia, Masako® Outlook for daily vegetable consumption Vegetable consumption FY15: 113 g FY20:
Slide 36: Social: Contribution to Eating Together
(2) Social: Contribution to Eating Together (Japan, Five Stars) FY20 target: 70 occasions/household/year E.g. Gyoza Communication: example approach Gyoza, 1 bag ＝ 1 occasion for eating together Quantity Sold E.g. Indonesia, Masako® No. of Recommended menus using Masako® occasions for (3 dishes) eati
Slide 37: Social: Spare Time Created
(3) Social: Spare Time Created (Japan) FY20 target: 38 million hrs./yr. (6 hr./household/yr.) E.g. The Chahan E.g. Knorr® Cup Soup Communication: example approach As lifestyles become increasingly diverse, increase the use of our products as meals that can be prepared efficiently Using Group 6 min./
Slide 38: Social: Contribution to Comfortable Lifestyles
(4) Social: Contribution to Comfortable Lifestyles (AminoScience) FY20 target: 22 million people E.g. Products using amino acids Communication: example approach TVCM, website, study sessions, etc. and pharma. (incl. supplements) (Estimated number of users of Group products) Amino acids for foods Num
Slide 39: Environmental: Rollout for Overall Product Lifecycles
(5) Environmental: Rollout for Overall Product Lifecycles In addition to previous production (plant) activities, we are adding the two categories of (2) reduce food loss, and (3) secure food resources … ecosystems and biodiversity in our business activities ahead of international targets. Long-term
Slide 40: Governance: Improve Employees' Engagement
(6) Governance: Improve Employees’ Engagement Carry out global Engagement Survey Improve engagement as an organization, leading to improved performance from greater organizational strength. Target: Approx. 33,000 full-time employees at 130 Group companies FY20 target FY17 FY18 FY19 Percentage of emp
Slide 41: 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. FY16 actual in this mate