FY3/2018 Financial Results Presentation. May 21, 2018 The Nisshin OilliO Group, Ltd.

Transcription

1 1 Financial Results Presentation May 21, 2018 The Nisshin OilliO Group, Ltd.

2 2 Summary of Financial Results for Kenji Matsuura General Manager, Financial Department

3 3 Summary of Consolidated Financial Results (Million yen) FY3/2017 YoY Change Change (%) Net sales 337, ,909 13, % Operating income 9,102 10,234-1, % Ordinary income 9,276 10,334-1, % Net income attributable to the parent's shareholders 6,930 7, %

4 4 Consolidated Results by Business Segments (Million yen) FY3/2017 Change (%) Net sales Operating income Net sales Operating income Net sales Operating income Oil, Meal, and Processed Food 222,742 3, ,752 4, % -33.9% Processed Oil and Fat 93,233 4,589 87,678 4, % +9.3% Fine Chemical 18,076 1,388 16,879 1, % +8.4% Other/Corporate 3, , % Consolidated total 337,998 9, ,909 10, % -11.1% Percentage of overseas sales 21.1% 21.0% +0.1

5 5 Factors Impacting Operating Income (Results) FY3/2017 Operating income billion yen billion yen Operating income 9.10 billion yen Oil, Meal, and Processed Food Increase in sales volume Expanded sales in high value-added categories and sales of products for ready-made meals and restaurants, among other factors SG&A expenses and others Change in subsidiaries profit Change in unit price (sales, cost) Impact of fluctuations in market prices for raw materials and related factors Processed Oil Oil and Fat and Fat Domestic processed oil and fat Overseas processed oil and fat Strong performance in chocolate products and confectionery ingredients (premix products) Maintained solid sales of value-added products for the European market Fine Chemical Strong performance by raw materials for cosmetics for the domestic market and by the Chinese sales subsidiary Other/Corporate +0.00

6 Status of Oil, Meal and Processed Food (1) Procurement Environment for Raw Materials ( /Bu) Market prices for raw materials Soybean (Chicago) (JPY/USD) Foreign Exchange Rate (JPY/USD) Key Points Raw material costs rose year on year. The price of rapeseed increased due to weather in production areas and strong demand, while the foreign exchange market saw the yen in a depreciation trend. (CAD/t) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2016 FY3/2017 年度 2017 年度 Rapeseed (Winnipeg) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/ 年度 2017 年度 Sales Environment for Meal Key Points The Chicago market price for soymeal continued to struggle on the upside, while rapeseed meal also encountered an adverse environment, partly due to the impact of a fall in raw material prices for formulated feed, a competing product. However, the Company maintained an appropriate price and strove to expand sales. (JPY/t) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2016 年度 2017 年度 FY3/2017 Average Market Price Trends : Meal Soybean meal Rapeseed meal Rapeseed meal ratio 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/ 年度 2017 年度 6 Source: Yushitokuhou (%) (%) Source: Bloomberg Meal Value Trends 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2016 年度 2017 年度 FY3/2017 Source: Bloomberg

7 Status of Oil, Meal and Processed Food (2) Oil, Meal, and Processed Food Net sales Edible oil for commercial use and processing use Key points FY3/2017 Amount Change (Billion yen) Ratio % Household-use % Wellness food % Total % (JPY/18 liter drum) Nikkei Market Price Trends: Oils (JPY/kg) Strong sales of high value-added products such as flaxseed oil and sesame oil Expanded sales of highly functional oils and fats such as Nisshin Healthy-Off and Nisshin Canola Oil Natyu-Made Cultivated new partners for ready-made meals and restaurant sectors, among others, expanded business in edible oils for food processing An adverse profit environment as sales prices failed to reach anticipated level Soybean oil (18 liter drum) Rapeseed oil (bulk) Soybean oil (bulk) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/ 年度 2017 年度 Impact on segment income Increase in sales volume billion Increase in sales volume Change in unit prices (sales) Edible oil for commercial use and processing use Household-use Wellness foods Total Soybean Rapeseed Other products and manufacturing costs, etc. Changes in unit prices billion Raw materials procurement C&F Foreign exchange Meal sales Total Total

8 Status of Processed Oil and Fat (Billion yen) FY3/2017 Amount Change Ratio Net sales % Operating income % Key points In Japan, strong performance in chocolate products and confectionery ingredients (premix products) Overseas, solid sales of high value-added products, mainly for the European market, despite impact from high palm oil market prices *Foreign exchange impact (net sales billion, operating income billion) Japan Confectionery ingredients (premix products) Margarine, shortening, and others Chocolate products Specialty fats Sales mix Japan *Value (net sales) basis Overseas Overseas Other regions Malaysia Europe Impact on segment income Billion yen (YoY) Raw material market price : Palm oil (MYR/t) Source: Bloomberg Japan Processed oil and fat products * Chocolate products Confectionery ingredients (premix products) Overseas Processed palm products Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2016 年度 2017 年度 FY3/ Total *margarine, shortening, specialty fats and others

9 9 Status of Fine Chemical (Billion yen) FY3/2017 Amount Change Ratio Net sales % Operating income % *Foreign exchange impact (net sales+0.2 billion, operating income billion) Key Points Raw materials for cosmetics sold briskly to a major customer in Japan, while overseas sales declined to South Korea and Europe. Sales of MCT increased for high priced items Strong operating results at The Nisshin OilliO (Shanghai) International Trading Sales mix *Value (net sales) basis America and other Food and chemicals, and others Raw materials for cosmetics 4% Europe 15% Asia 11% Japan Impact on segment income Billion yen (YoY) Raw materials for cosmetics Detergents, etc Detergents, etc. 70% 70% Food and chemicals, and others Consolidation adjustment Total +0.10

10 Status of Profit in High Value-Added Categories Trend in Profit in High Value-Added Categories *Figures in parentheses represent year-on-year changes Results from FY3/2015 to, with results for FY3/2014 indexed as 100 Oil, Meal, and Processed Food High value-added products as a percentage of consolidated profit Processed Oil and Fat Fine Chemical % (9%) 20% (17%) 19% (18%) Standard products and others 51% (56%) High value-added products as a percentage of profit from household-use products FY3/2014 FY3/2015 FY3/2016 FY3/2017 High valueadded products Standard products and others 34% (38%) *Profit represents profit on sales, a profit indicator for internal management purposes, calculated as gross profit less direct operating expenses and certain other items. 10 (62%)

11 11 Status of Balance Sheet Total assets as of March 31, 2017 ( billion yen) Billion Total assets as of March 31, 2018 ( billion yen) Current assets Cash and deposits and shortterm investment securities Notes and accounts receivable Inventions Others Total liabilities Notes and accounts payable -trade Interest-bearing debt Interest bearing Othersdebt Fixed assets Property, plant and equipment and intangible assets Total net assets Capital surplus / Retained earnings Capital surplus / Retained Treasury stock earnings Investment securities Accumulated other comprehensive income Others assets Noncontroling Consolidated Interest-bearing 800 The nisshin OilliO Group Domestic Subsidiaries Overseas Subsidiaries (Billion) FY/2013 FY/2014 FY/2015 FY/2016 FY/2017 FY/2018

12 Status of Cash Flows FY3/2017 Cash flow total billion yen billion yen (effect of exchange rate change billion yen) Cash flow total billion yen Operating cash flow Change notes and accounts receivable -trabe Change in profit Change in inventories Change notes and accounts payable -trabe Others(Income taxes paid, chage in accounts payables/ receivables, etc.) 20 (Billion yen) Trend in operating cash billion planned 5.7 FY3/2015 FY3/2016 FY3/2017 FY3/2019 FY3/2020 FY3/2021 Investing cash flow Change in property, plant and equipment Change in short-term investment Change securities in short-term investment s Financing Redemption of bonds Change in loans payable Others Others Trends in in captal capital investment 20.0 Trend in research and development Trend expenses in reseach and developmnt Trend Trend in in depreciation depreciation (Billion yen) (Billion 3.0 yen) (Billion yen) FY3/2017 FY3/2019(Plan) 0.0 FY3/2017 FY3/2019(Plan) FY3/2017 FY3/2019(Plan)

13 13 Consolidated Earnings Forecasts (Billion yen) FY3/2019 FY/2018 YoY Change Change (%) Net sales % Operating income % Ordinary income % Net income attributable to the parent's shareholders %

14 14 Factors Impacting Operating Income (Forecasts) Operating income 9.1 billion yen +1.7 billion yen FY3/2019 Plan Operating income 10.8 billion yen Oil, Meal, and Processed Food Increase in sales volume Sales growth in high value-added categories, etc. Changes in unit price (sale, cost) Unit sales prices Cost fluctuations SG&A expenses and others Change in subsidiaries' profit Processed Oil and Fat Domestic processed oil and fat Overseas processed oil and fat ISF foreign exchange impact, increase in business investment expenses, etc. Fine Chemical Other/Corporate +0.05

15 15 Progress Report on Medium-Term Management Plan Takahisa Kuno Representative Director and President

16 16 Targets FY3/2017 FY3/2019 FY3/2021 Operating income Billion yen ROE % CAGR of 8% EPS growth rate Operating cash flow Billion yen Yen per share Four-year total through FY3/2021

17 17 FY3/2019 Consolidated Earnings Forecasts (Billion Yen) FY3/2019 YoY Change Change (%) Net sales % Operation income % (By segment) Oil, Meal, and Processed Food % Processed Oil and Fat % Fine Chemical % Other/Corporate total Ordinary income % Net income attributable to the parent's shareholders %

18 18 Factors Impacting Operating Income (Forecasts) Operating income 9.1 billion yen +1.7 billion yen FY3/2019 Plan Operating income 10.8 billion yen Oil, Meal, and Processed Food Increase in sales volume Sales growth in high value-added categories, etc. Changes in unit price (sale, cost) Unit sales prices Cost fluctuations SG&A expenses and others Change in subsidiaries' profit Processed Oil and Fat Domestic processed oil and fat Overseas processed oil and fat ISF foreign exchange impact, increase in business investment expenses, etc. Fine Chemical Other/Corporate +0.05

19 Status of Development of High Value-Added Categories Trend in Profit in High Value-Added Categories High value-added categories performed as planned for. From FY3/2019 onward the Company is aiming for further growth by developing the categories further Key Points Sales expansion in high valueadded products such as flaxseed oil and sesame oil in the householduse domain Processed oil and fat grew steadily in Japan and overseas In fine chemicals, sales of raw materials for cosmetics increased FY3/2014 Result FY3/2017 Result Result Oil, Meal, and Processed Food *Prior-year results and forecasts for the fiscal year under review, with results for FY3/2014 indexed as 100 *Profit represents profit on sales, a profit indicator for internal management purposes, calculated as gross profit less direct operating expenses and certain other items. 19 Processed Oil and Fat Fine Chemical

20 FY3/2019 Management Policy Carry on business structure reforms while shifting focus to growth trajectory FY3/2019 Management Policy Pursue globalization and a business model that adds diverse value Work on measures for acquiring stable profits from the Domestic Oil and Fat Business and further streamlining Profit Forecast and Target of High Value-Added Categories FY/2018 Result FY/2019 Forecast FY/2021 Target Progress Key Points Fine Chemical Respond to expanding demand in Japan and overseas Processed Oil and Fat Capture benefits of investment and strengthen supply chain Oil, Meal, and Processed Food Expand sales and stimulate market for oil for topping to be poured directly over dishes *Prior-year results and forecasts for the fiscal year under review, with results for FY3/2014 indexed as 100 *Profit represents profit on sales, a profit indicator for internal management purposes, calculated as gross profit less direct operating expenses and certain other items. 20

21 Progress Report on Medium-Term Management Plan Expand sales of oil for topping and stimulate the market for household-use products by strengthening branding and marketing capabilities Develop products to stimulate demand for oil for topping to be poured over dishes and promote sales through menu proposals 40.0 Billion yen Drizzling Oil Market Scale CAGR 11% The oil for topping market has grown with a CAGR of 11% since FY3/2014 to occupy more than 20% of the household use edible oils market Newly launched macadamia nut oil in addition to olive oil, sesame oil, and flaxseed oil Developed and launched dressings using flaxseed oil, which continues to see sales expand atop increasing recognition of the health benefits of alpha-linolenic acid (omega-3) *Estimated by The Nisshin OilliO Group based on research by INTAGE Inc. SCI, Shoku MAP Inc. Application ideas : Combining vegetable juice with olive oil Flaxseed Oil Dressing for the food- and health-conscious 21

22 22 Progress Report on Medium-Term Management Plan Invest to increase production capacity in the Processed Oil and Fat Business and expand the supply chain by acquiring production sites in Europe Complete the capital investment plan for expanding profitability and capture benefits of production capacity and efficiency increases from investment Main capital investment plan and schedule for completion: ISF (Malaysia) Increase refining facility capacity (First half of FY3/2020) Daito Cacao Co., Ltd. Increase chocolate production facilities (Second half of FY3/2019) The Nisshin OilliO Group, Ltd. Yokohama Isogo Plant (First half of FY3/2019) Build a new plant at PT. Indoagri Daitocacao (Indonesia) and start operation in FY3/2020 Complete construction of supply and sales system during FY3/2019 Acquire production site and construct management system to promote ISF s business in Europe Summary of investment ISF negotiating acquisition of management rights for an oil and fat refining and manufacturing company in Italy Business details : Manufacturing and sales of oil and fat and contracted refining and manufacturing operations Purpose of investment : Having a production site close to customers will enable a flexible response to customers and sales expansion of fat to the highly qualitysensitive European market.

23 Progress Report on Medium-Term Management Plan Increase production capacity of high value-added products for Japanese and overseas markets to expand profits in the Fine Chemical Business Strengthen links between production sites in Japan, Industrial Química Lasem, S.A.U. (Spain), and China through investments to increase production capacity and aim to expand sales in growing global markets Investment details: Increase production lines and filling lines for ester for cosmetics and Medium-Chain Triglyceride (MCT) Start-up period: Operations are scheduled to roll out from April Beauty and Personal Care Market Data CAGR 3% Decided to invest for increasing production capacity to increase production of raw materials for cosmetics and MCT, which are core products of the Fine Chemical Business 400 その他 Other 200 欧州 Europe 南米 South America 北米 North America 0 アジア Asia US$ billion 2016 年 年 *Estimated by The Nisshin OilliO Group based on research by Euromonitor International 23 Plan a 50% increase in the current production capacity of the Yokohama Isogo Plant, which supplies high value-added products to the global market Earnings expansion continues at sales subsidiary The Nisshin OilliO (Shanghai) International Trading Co., Ltd.

24 Progress Report on Medium-Term Management Plan Expand the Health Science Business, which contributes to society through "the power of health and energy" Net sales in were largely the same as FY3/2017. Despite not achieving growth, the Company advanced development measures to achieve the target business scale. Feasibility study on crystallized powder fat (Commercial viability expected for users of edible oils for food processing, start of test sales planned) Product launch, advertising, and sales promotion focusing on exercise and beauty benefits of Medium- Chain Triglyceride (MCT) Direction for Initiatives from FY3/2019 Onward Expand Areas for Development of MCT Expand product lineup in B2C area and increase recognition through advertising Joint development and collaboration with users of edible oils for foodprocessing and commercial use MCTs are tasteless, odorless, and have high thermal stability. They are amenable for food processingand commercial-use applications and are well accepted as raw materials. We will use analysis technologies to devise safe, reliable oil and fat, structured oil and fat, materials, and containers to contribute to the health of consumers in diverse life stages with nutritional and energy needs 24 Infancy Healthy growth Growth period Physical development Middle age Energy & enthusiasm Seniors Memory & cognition Elderly Energy for daily living

25 Reference materials 25

26 Trends in Raw Materials and Meal Prices : Soybean Soybean raw material prices(usd/t) Soybean raw material prices(\/t) Soybean meal selling prices(\/t) 2.0 Indexed with April-September 2012 年 月をset 1とした指数 as *Figures for The Nisshin OilliO Group, Ltd. 26

27 Trends in Raw Materials and Meal Prices: Rapeseed Rapeseed raw materials prices(usd/t) Rapeseed raw materials prices(\/t) Rapeseed meal selling prices(\/t) 2.0 Indexed with April-September 2012 set as *Figures for The Nisshin OilliO Group, Ltd. 27

28 Trends in Selling Prices for Main Oil and Fat Products Indexed with April-September 2012 set as 1.0. *Figures for The Nisshin OilliO Group, Ltd. 28