T. Hasegawa Co., Ltd. · TSE:4958
T. Hasegawa — FY2024 Earnings Presentation
48 slides from T. Hasegawa's earnings presentation, Nov 21, 2024
Slide 1: Financial Results for the Fiscal Year Ended September 30, 2024
Financial Results for the Fiscal Year Ended September 30, 2024 November 21, 2024 T. HASEGAWA CO., LTD.
Slide 2: Contents
Contents I. Overview of Financial Statements II. Business Environment III. Global Strategy IV. Business Outlook V. Capital Policy VI. Accompanying Materials 1
Slide 3: I. Overview of Financial Statements
I．Overview of Financial Statements 2
Slide 4: Flavor and Fragrance Business Formulas
Flavor and Fragrance Business Ingredients Products (Compounded Flavors and Fragrances) Natural aromatics Flavors 調合 Compounding Synthesized Formulas Fragrances aroma chemicals Integration of research and development capabilities Flavorists : Experts who formulate flavors Perfumers : Experts who form
Slide 5: Market Environment
Market Environment Trends by Category (Domestic Market) ・ Fiscal Year Ended (FYE) September 30, 2024 (October 2023 to September 2024) Impact on Category Trend performance • Secured a slight year-on-year increase in sales volume, while impacted by price increases • Companies focused on green tea beve
Slide 6: Summary of Consolidated Performance
Summary of Consolidated Performance • Achieved record-high sales Currency FY2023 FY2024 Yr/Yr • Notably significant growth in the performance 1US$ ¥138.98 ¥150.44 Yen down 8.2% of our overseas subsidiaries 1RMB ¥19.68 ¥20.84 Yen down 5.9% • Yr/Yr 1MYR ¥30.71 ¥32.37 Yen down 5.4% Net sales increased
Slide 7: Analysis of Changes in Operating Profit
Analysis of Changes in Operating Profit ・Operating profit grew year-on-year due to higher consolidated net sales as a result of increased sales at all bases, and a favorable impact of the depreciation of the yen ・The cost of raw materials increased more moderately compared with the previous year, bu
Slide 8: Net Sales by Segment
Net Sales by Segment ・ Sales growth factors Flavors: Sales increased in T.Hasegawa on a non-consolidated basis, U.S. subsidiary, and Chinese subsidiaries Fragrances: Sales increased in T.Hasegawa on a non-consolidated basis (Million yen) FY2024 Actual Flavors Domestics Fragrances Overseas Total 0 40
Slide 9: Performance Overview by Location
Performance Overview by Location • Sales and profit increased at all bases (Million yen) Domestic U.S. Operating Profit return to Operating Profit Yr/Yr +8.3% Yr/Yr profitability FY2023 FY2024 Change FY2023 FY2024 Change Net Sale 39,711 42,366 +6.7% Net Sale 12,720 15,146 +19.1% Operating Operating
Slide 10: II. Business Environment
Ⅱ．Business Environment 9
Slide 11: Size of Global Flavors and Fragrances Market
Size of Global Flavors and Fragrances Market (Estimated by the Company) • Worldwide flavors and fragrances sales: Approx. 32.5 billion U.S. dollars (approx. 4.5 trillion yen) Europe, Africa, Middle East North America ‐ Market size: Approx. 11.6 billion U.S. dollars (approx. 1,620 billion yen)* ‐ Mar
Slide 12: Global Flavors and Fragrances Market
Global Flavors and Fragrances Market (Estimated by the Company) • Global flavors and fragrances market in 2023: Grew approx. 3% Yr/Yr Global Flavors and Fragrances Market (Estimated by the Company) (Million US$) 40,000 CAGR 30,000 South America 5.1% Asia 3.1% 20,000 North America 2.6% 10,000 Europe,
Slide 13: Japanese Flavors and Fragrances Market Size
Japanese Flavors and Fragrances Market Size • Flavors account for approximately 80% of the Japanese flavors and fragrances market (approx. 50% of the global market) Japanese flavors and fragrances Breakdown of flavors and fragrances market sales (Billion yen) (FY2023) Flavors Fragrances 2019 2020 20
Slide 14: III. Global Strategy
Ⅲ．Global Strategy 13
Slide 15: Domestic Strategies
Domestic Strategies Basic Strategy: Expand market share by anticipating new market demand caused by declining birthrate and aging population, as well as growing health consciousness ・Promote the Fukaya Plant project and further strengthen production systems by newly establishing Production DX Office
Slide 16: Overseas Strategy – U.S.
Overseas Strategy –U.S.– Basic Strategy: Increase sales in the savory, health, and beverage industries ・Acquisition of ABELEI, a flavor company in Illinois, U.S.. Aim to create synergies ・Both net sales and operating profit for FY2024 were strong, with net sales reaching $100 million for the first t
Slide 17: Expansion of U.S. presence through M&A (ABELEI Acquisition)
Expansion of U.S. presence through M&A (ABELEI Aquitision) • Anticipate expansion of sales channels from established West Coast locations to the Midwest and East Coast of the U.S. 社名 ＡＢＥＬＥＩ, ＩＮＣ． 所在地 Illinois, USA Established in 1981, ABELEI engages in the production and sales of flavors, centered B
Slide 18: Overseas Strategy – China
Overseas Strategy –China– Basic Strategy: Grow earnings through various measures based on a stronger organizational foundation ・Plan to establish a manufacturing subsidiary (in December 2024) to build a new plant for increased capacity ・Overhaul the organization and structure of the Research Institu
Slide 19: Overseas Strategy – Southeast Asia
Overseas Strategy –Southeast Asia– Basic Strategy: Increase sales through collaboration between manufacturing and sales bases in Malaysia (THKL) and sales offices in Thailand and Indonesia ・Plan to construct a new plant in Enstek Industrial Park, Malaysia (plant site already acquired) ⇒ Meet growing
Slide 20: Basic Policies Related to Business Portfolio
Basic Policies Related to Business Portfolio • Develop the businesses based on three basic strategies: (1) Expand Compounded Flavors and Fragrances Sales, (2) Secure Profits in Domestic Market, and (3) Growth in Overseas Market • Achieve abundant and healthy living through aromas and contribute to t
Slide 21: IV. Business Outlook
IV. Business Outlook 20
Slide 22: FY2025 Performance Outlook
FY2025 Performance Outlook ・Increases in both net sales and profit are expected on a consolidated basis ・The U.S., following ABELEI acquisition, is expected to drive sales growth, while steady demand in China will lead profit growth (Million yen) Change FY2024 FY2025 Yr/Yr （Actual） （Plan） （Due to fo
Slide 23: FY2025 Factors Affecting Change in Operating Profit
FY2025 Factors Affecting Change in Operating Profit • Profit growth is expected due to increased net sales and improvements in the cost of sales ratio Improvement Increase in Increase Impact of Yen in cost of sales personnel in sales appreciation ratio expenses (Million yen) FY2024 Net Sales Cost of
Slide 24: Medium-Term Three-Year Plan (Consolidated)
Medium-Term Three-Year Plan (Consolidated) Expect to expand sales through the promotion of solution sales by strengthening collaboration among T.HASEGAWA sales, research, and marketing non-consolidated Promote the strengthening of production systems to meet increasing demand Expect to increase sales
Slide 25: Capital Investment, Depreciation, R&D Expenses
Capital Investment, Depreciation, R&D Expenses Approx. 32 billion yen of capital investment is planned over three years for organic business expansion ・Major Capital Investments (Billion yen) FY2025 FY2026 FY2027 Total (plan) (plan) (plan) DX promotion and IT reform 2.1 0.9 0.9 3.9 Fukaya plant - 3.
Slide 26: Strengthen Production in China and Malaysia
Strengthen Production in China and in Malaysia • Enhancement of production capacity through construction of new plants ・Advancing the construction plan for the third plant in China China (Pinghu City, Zhejiang Province) ・Establishing a subsidiary at the plant construction site (scheduled for Decembe
Slide 27: V. Capital Policy
VI. Capital Policy 26
Slide 28: Capital Policy
Capital Policy Basic Policy • Maintain a level of shareholders' equity that will enable us to execute growth investments and appropriately respond to risks, in order to achieve sustainable growth in corporate value and maximize it going forward Policy on Use of Funds • Appropriately use funds, takin
Slide 29: Capital Policy: Shareholder Returns
Capital Policy Shareholder Returns ・Reviewed the consolidated payout ratio policy, revising the target to around 40% from the previous target of around 35% ・For FY2025, a dividend increase is expected, with earnings per share projected at 74 yen ・November 8, 2024 : Published “Notice Concerning Acqui
Slide 30: Capital Policy: Investment Securities
Capital Policy Investment Securities ・Reduce the total number of shares held from the perspective of improving capital efficiency, etc. ・Each year, the Board of Directors verifies the appropriateness of holding shares from a medium- to long-term perspective, based on the holding purpose, economic ra
Slide 31: Capital Policy: Capital Allocation
Capital Policy Capital Allocation Using operating cash flow and cash reserves as funding sources, approximately 32 billion yen in capital investments is planned over the three-year period from FY2025 to FY2027. Additionally, funds will be utilized for proactive shareholder returns and M&A activities
Slide 32: VI. Accompanying Materials
Ⅵ．Accompanying Materials 31
Slide 33: Management Policy
Management Policy Become an Organization that takes on challenges Strengthen Proposal Capabilities Focus Areas Promote Reform Concentration and Selection Enhance Human Resources (Develop Human Resources, Hire Experienced Personnel) Accelerate Expansion in Overseas Market （Capital Investment・M＆A） Str
Slide 34: Promote human capital management
Promote human capital management Continue to examine and take improvement measures, considering human resources as capital Maximize the value of human resources to increase the mid- to long-term corporate value Combination of management Promotion of human resource strategies and HR strategies educ
Slide 35: Basic Policy on IR Activities
Basic Policy on IR Activities Established IR department in Corporate Planning Division to strengthen Basic Policy IR activities and secured opportunities for proactive dialogues Our initiatives • Actively respond to requests for • High foreign ownership individual interviews ↓ • Hold meetings with f
Slide 36: Top Companies in the Global Flavors and Fragrances Market
Top 10 Companies by Share of Net Sales in the Global Flavors and Fragrances Market Million US$ Company name Country 2023Yr) Market Share Sales ((2024Yr) 1 IFF U.S. 8,453 22.5% 2 Givaudan Switzerland・Netherlands 7,876 21.0% 3 Dsm-Firmenich Switzerland 7,310 19.4% 4 Symrise Germany 5,125 13.6% 5 ADM G
Slide 37: Top Companies in the Japanese Flavors and Fragrances Market
Top 10 Companies by Share of Net Sales in the Japanese Flavors and Fragrances Market Others 14.1% FY2023：14.1% Company T Company SO 34.4% 5.4% FY2023：33.4% FY2023：5.9% Company SI 6.2% FY2023：5.8% Company G 10.2% FY2023：11.7% T.Hasegawa Company O 18.7% 10.9% FY2023：18.5% FY2023：10.6% (As of Mar. 2024
Slide 38: Sales Breakdown
Sales Breakdown • The Company specializes in high value-added compounded flavors and fragrances • High-mix production: Sales of approximately 12,000 flavors and fragrances per year (Million yen) T. Hasegawa Company T (Consolidated） (Consolidated） FYE in Sep. 2024 FYE in Mar. 2024 Sales Share Sales S
Slide 39: Breakdown of Flavor Segment Customers by Industry
Breakdown of Flavor Segment Customers by Industry • Many sales are to the beverage industry, and sales are seasonal To other industries Approx. 11% To instant noodle To beverage industry industry Approx. 9% Approx. 33% To seasoning industry Approx. 11% To sweet and savory snacks To dairy industry in
Slide 40: Analysis of Changes in Consolidated Statement of Profit
Analysis of Changes in Consolidated Statement of Profit (Million yen) FY2023 前期 FY2024 当期 Change 増減 (Cumulative (Cumulative Factor 要因 （累計実績） results) （累計実績） results) 金額 Amount ％ Sales increased in all segments of Japan, North America and Asia 日本・北米・アジアの全セグメントにおいて売上増加 Net 売上高 sales 64,874 100.0% 71,6
Slide 41: Analysis of Changes in Consolidated Balance Sheet
Analysis of Changes in Consolidated Balance Sheet (Million yen) Sep. 前期末 30, Sep. 当期末 30, 増減 Change 要因 Factor 2023 2024 ・現預金及び同等物の増加 1,696百万円 • Increase in cash and cash equivalents:1,696 million yen Current 流動資産 assets 70,665 72,241 1,576 • Increase in accounts receivable:609 million yen ・売掛債権の増加 6
Slide 42: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows (Million yen) FY2023 前期 FY2024 当期 (Cumulative (Cumulative Change 増減 Major items in FY2024 当期の主要科目 （累計実績） results) （累計実績） results) ・税金等調整前四半期純利益 10,170百万円 • Profit before income taxes:10,170 million ・減価償却費 yen 4,038百万円 • Depreciation:4,038 million yen 営業活動による Cash
Slide 43: T. Hasegawa non-consolidated (Actual)
T. Hasegawa non-consolidated (Actual) (Million yen) FY2023 FY2024 FY2024 (targets revised on Change (actual) August 5,2024) (actual) Yr/Yr Vs. target Amount Share Amount Share Amount Share Amount ％ Amount ％ Net sales 39,711 100.0% 42,100 100.0% 42,366 100.0% 2,654 6.7% 266 0.6% Cost of sales 24,473
Slide 44: Consolidated U.S. subsidiary (Actual)
Consolidated U.S. subsidiary (Actual) * Statement of profit of T. HASEGAWA U.S.A., INC . (Million yen) FY2023 FY2024 Yr/Yr Yen Basis Amount Share Amount Share Amount ％ Net Sales 12,720 100.0% 15,146 100.0% 2,425 19.1% Cost of sales 8,395 66.0% 9,387 62.0% 992 11.8% Gross profit 4,325 34.0% 5,759 38.
Slide 45: Consolidated Chinese Subsidiaries (Actual)
Consolidated Chinese Subsidiaries (Actual) * Consolidated statements of profit of the Company's two consolidated subsidiaries in China (T. HASEGAWA FLAVOURS AND FRAGRANCES (SHANGHAI) CO., LTD. and T. HASEGAWA FLAVOURS (SUZHOU) CO., LTD.) (Million yen) FY2023 FY2024 Yr/Yr Yen Basis Amount Share Amoun
Slide 46: Malaysian Subsidiary (Actual)
Malaysian Subsidiary (Actual) * Statement of profit of T HASEGAWA FLAVOURS (KUALA LUMPUR) SDN. BHD. (Million yen) FY2023 FY2024 Yr/Yr Yen Basis Amount Share Amount Share Amount ％ Net Sales 1,686 100.0% 2,130 100.0% 443 26.3% Cost of sales 948 56.2% 1,151 54.1% 203 21.5% Gross profit 738 43.8% 978 45
Slide 47: Medium-Term Three-Year Plan (Consolidated)
Medium-Term Three-Year Plan (Consolidated) （Million yen） FY24（Actual） FY25（Plan） FY26（Plan） FY27（Plan） Amount Share % Amount Share % Amount Share % Amount Share % Net Sales 71,645 100.0% 10.4% 74,300 100.0% 3.7% 77,200 100.0% 3.9% 80,200 100.0% 3.9% Cost of Sales 42,001 58.6% 7.2% 42,830 57.6% 2.0%
Slide 48: Disclaimer
This presentation is based on data as of November 21, 2024, and was created with the intention of providing information on future management plans and results for the fiscal year ended September 30, 2024. The views expressed in this material are those of the Company at the time of preparation. No gu