Ajinomoto Co., Inc. · TSE:2802
Ajinomoto — H1 FY2016 Earnings Presentation
32 slides from Ajinomoto's earnings presentation, Nov 8, 2016
Slide 1: Forecast for the Fiscal Year Ending March 31, 2017 (FY2016) and Outlook
Ajinomoto Co., Inc. (2802) Forecast for the Fiscal Year Ending March 31, 2017 (FY2016) and Outlook November 8, 2016 Takaaki Nishii President & CEO
Slide 2: Contents
Contents Ⅰ. Overview of FY2016 Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P1 FY2016 Revised Forecast ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P2 FY2016 Revised Forecast: Factors in Changes in Operating Income Compared with Initial Forecast ・・ P3 FY2016 Revised Forecast: Factors in Chan
Slide 3: I. Overview of FY2016 Forecast
I. Overview of FY2016 Forecast 1
Slide 4: FY2016 Revised Forecast
FY2016 Revised Forecast In the final fiscal year of the FY2014-2016 Medium-Term Management Plan, both net sales and operating income are revised downward due to impact of exchange rates and slump in feed-use amino acids market. Net sales(left scale) FY2016 FY2016 Operating income (right scale) Diffe
Slide 5: Factors in Changes in Operating Income Compared with Initial Forecast
FY2016 Revised Forecast: Factors in Changes in Operating Income Compared with Initial Forecast Assumed exchange rate (vs. JPY) Substantial negative impact of exchange rates due to FY2016 FY2016 1H- 2H- FY2015 appreciation of the yen. Increasing positive impact in Revised Initial FY2016 FY2016 result
Slide 6: Factors in Changes in Operating Income Compared with FY2015 Results
FY2016 Revised Forecast: Factors in Changes in Operating Income Compared with FY2015 Results Assumed exchange rate (vs. JPY) FY2016 FY2016 1H- 2H- FY2015 Business is steadily growing despite the Revised Initial FY2016 FY2016 results* substantial negative impact of exchange rates. forecast forecast r
Slide 7: FY2016 1H & 2H Projected Operating Income
FY2016 1H & 2H Projected Operating Income： Factors in Changes in Operating Income Compared with FY2015 Results Assumed exchange rate (vs. JPY) 1H- 2H- In the first half, operating income fell sharply due to the negative FY2015 FY2016 FY2016 effect of currency translation and slump in the animal nutr
Slide 8: FY2016 Revised Forecast by Segment
FY2016 Revised Forecast by Segment (¥ Billion) FY2016 FY2016 YoY Change Y o Y Change* Revised Initial Difference FY2015 O.P.% O.P.% O.P.% Amount % forecast forecast (A)-(B) (C) Amount % (A) - (C) (A) / (C) (A) (B) Net sales 1,095.0 1,186.0 -91.0 1,184.1 -89.1 -7% 8.3 0% Japan Food Products 403.0 411
Slide 9: Revised Forecast - Ordinary Income and Profit for the Period
FY2016 Revised Forecast - Ordinary Income and Profit for the Period Decrease in ordinary income and profit for the period. Downward revision of net extraordinary gains. FY2016 FY2016 FY2015 (¥ Billion) Revised Initial Difference Main Factors forecast forecast Results Net sales 1,095.0 1,186.0 -91.0
Slide 10: Targeted Composition of Operating Income
Targeted Composition of Operating Income Raise earnings quality by controlling the ratio of bulk businesses and pursuing specialty groupwide. 150.0 (¥ Billion) 150 Amortization of goodwill 10.0 (¥6.4 billion) 90 Animal nutrition 90.8 81.5 91.0 5.5 87.9 8.0 74.5 1.6 0.0 72.6 71.2 4.6 Pharmaceuticals
Slide 11: Roadmap to a Genuine Global Specialty Company
Roadmap to a Genuine Global Specialty Company Accelerate growth to take aim at becoming one of the global top 10 companies. Achieve stable profit growth with a shift to specialty EPS growth of around 10%/year Transition to a global food Accelerate company growth momentum Build foundation for Acceler
Slide 12: II. GROW: Accelerate Growth Momentum
II. GROW: Accelerate Growth Momentum (1)Growth Drivers International Food Products/Seasonings & Processed Foods and Frozen Foods (2)Stable Growth Businesses Japan Food Products/Frozen Foods and Coffee Products (3) Business Strengthening Healthcare/Other (4) Topics 10
Slide 13: Create country/area pillars in the Five Stars countries
II. GROW: Accelerate Growth Momentum (International Food Products/Seasonings & Processed Foods) (1)-1. ①Create country/area pillars to follow Japan with rapid growth in the “Five Stars” countries. Aim to Double/Triple Growth in “Five Stars”: Steady growth of existing businesses and aggressive expans
Slide 14: Conditions in Thailand, Our Largest Overseas Base
II. GROW: Accelerate Growth Momentum (International Food Products/Seasonings & Processed Foods) (1)-2. Conditions in Thailand, Our Largest Overseas Base Seasonings firm in domestic market - Moving to new stage with establishment of Myanmar subsidiary Thailand: Steady expansion in domestic sales Apri
Slide 15: Ajinomoto Windsor: Frozen Foods Business in North America
II. GROW: Accelerate Growth Momentum (International Food Products/Frozen Foods ) (1)-3. Ajinomoto Windsor, Inc.: Initiatives in the Frozen Foods Business in North America – Generate Synergy Expand Sales and Strengthen the Profit Structure Generate Synergy from the Comprehensive Strength of the Ajino
Slide 16: Market Environment and Outlook for Japan Frozen Food Products
II. GROW: Accelerate Growth Momentum (Japan Food Products/Frozen Foods ) (2)-1. Market Environment and Outlook for Japan Frozen Food Products Market Environment & 1H Review Outlook Household-Use Market (Data from AJINOMOTO FROZEN FOODS Co., 2016) ■Continued expansion expected. The cooked frozen food
Slide 17: AGF: Initiatives in the Coffee Business
II. GROW: Accelerate Growth Momentum (Japan Food Products/Coffee Products ) (2)-2. Ajinomoto General Foods, Inc. (AGF): Initiatives in the Coffee Business Market Environment & 1H Review New Initiatives ◆Japan’s Coffee Market Is Expanding Steadily ◆ Evolve and Nurture Sen ・Record consumption for four
Slide 18: Business Strengthening: Health Support with Amino Acids
II. GROW: Accelerate Growth Momentum (Healthcare/Other) (3) Business Strengthening: Health Support with Amino Acids ◆ Rolling out evidence-backed amino acid-based products Amino Vital® Support for Athletes ・A high-performance amino-acid sports supplement backed by evidence from sports nutrition rese
Slide 19: Business Alliance with T.HASEGAWA CO., LTD.
II. GROW: Accelerate Growth Momentum (R&D) (4)-1．Topics: Progress in Business Alliance with T.HASEGAWA CO., LTD. Following successful lab-scale production of fermentation-derived natural flavor (vanillin), moving to commercial production stage. Aiming to provide samples in FY2017. Manufacturing Proc
Slide 20: Strengthening Business Foundation in Africa: Promasidor Stake
II. GROW: Accelerate Growth Momentum (M&A) (4)-2．Topics: Strengthening Business Foundation in Africa - Acquisition of 33.33% Stake in Promasidor Holdings Limited By combining Promasidor Holdings Limited’s (“Promasidor”), strong sales foundation in Africa with our extensive product development capabi
Slide 21: III. FIT: Further Reinforcement of Business Structure
III. FIT: Further Reinforcement of Business Structure Animal Nutrition Business Shift to Specialty Products in Bulk Commodities Business 19
Slide 22: Shift to Specialty Products in Animal Nutrition: AjiPro-L
III. FIT: Further Business Structure Reinforcement (Life Support/Animal Nutrition) Shift to Specialty Products in Animal Nutrition Business 1. AjiPro®-L Initiatives Market Environment Long-term slump in milk prices in North America, a key market, and stable low prices of blood meal ・Sharp decrease
Slide 23: IV. FY2016 Financial Strategy
IV. FY2016 Financial Strategy 21
Slide 24: Investments for Growth and Shareholder Returns
FY2016 Financial Strategy Investments for Growth and Shareholder Returns No change from the policy in the FY2014-2016 Medium-Term Management Plan. Prioritize use of operating cash flow for investments for growth and schedule increases in dividends in FY2016. Generate Free Cash Flow Weighted Allocati
Slide 25: V. Next Medium-Term Management Plan
V. Next Medium-Term Management Plan 23
Slide 26: Formulate Integrated ASV Targets Combining Financial and Non-Financial Targets
Toward the Formulation of the FY2017-2019 Medium-Term Management Plan Formulate “Integrated ASV Targets” That Combine Financial and Non-Financial Targets ■Announcement date: February 17, 2017 ■Financial targets: Formulated on IFRS basis To become a global top 10 class food company • Contribute to th
Slide 27: Reference
Reference |
Slide 28: Shift to Specialty Products in Bulk Commodities Business
Shift to Specialty Products in Bulk Commodities Business: Reducing Dependence on Bulk Products Animal Nutrition Animal Nutrition (% of operating income) Specialty products contributed despite slump in commodities Commodities AjiPro®-L: Aiming to achieve sales expansion by 40 （Lysine, Threonine, 65 T
Slide 29: Resource-Saving Fermentation Technologies
Resource-Saving Fermentation Technologies (R&D Leadership): Cost reductions of ¥1.0 billion planned in FY2016 Specific Measures FY2011-2013 FY2014 FY2015 FY2016 Introduced in Brazil High performance （FY13/Q1） (Higher reduction rate) MSG Rollout to other regions High Technologies to （FY15/Q4～） perfor
Slide 30: Assumptions of FY2016 Revised Forecast
[Reference] Assumptions of FY2016 Revised Forecast Revised foreign exchange rates (vs JPY) Feed-use amino acids Blue：Revised 1) Estimated market size (Thousand MT) Sensitivity of translation effects to full Avg. rate year O.P. FY2014 FY2015 FY2016 (Forecast) USD 103.5 ±\1 → approx. \50 million Lysin
Slide 31: 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. The impact of exchange rates for trade in the first half was almost nil, as the 1Q and 2Q effects offset each other. The 1Q effect was on the profit s
Slide 32: Eat Well, Live Well.
Eat Well, Live Well. AJINOMOTO. > 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 expectat