2016 3Q Business Results

Transcription

1 2016 3Q Business Results CJ CheilJedang IR November 2 nd 2016 This material is based on non-audited financial statements for Q and released for investors convenience only. Please note that readers should be aware this material is subject to revision during the course of audit.

2 Contents Ⅰ. 3Q16 Results Highlights Pg. 3 Ⅱ. Earnings Analysis by Division - Food Division - Bio Division - Feed & Livestock Division - CJ Healthcare - CJ Korea Express Pg. 4 Pg. 5 Pg. 6 Pg. 7 Pg.8 Ⅲ. Other Analysis - SG&A Expense - Non-Operating Income & Expense - Debt Analysis Pg. 9 Pg. 10 Pg. 11 Ⅳ. Appendix 2

3 Ⅰ. 3Q16 Results Highlights Key Highlights Continued top-line growth due to successful launches of new products on the back of strengthened R&D competency and expanding global business Increase in profit due to significant earnings improvement of Bio division Sales Operating Profit Net Profit (+6.0%) +9.1 (+5.1%) (+277.6%) 2, , Q15 3Q16 3Q15 3Q16 3Q15 3Q16 Top-line growth driven by strong growth of Processes food biz and continued steady increase of Foodstuff biz, Feed & Livestock div and CJ Healthcare revenue Increase in operating profit thanks to turnaround in lysine biz in spite of the margin deterioration of foodstuff biz from higher grain prices Sharp increase in net profit due to improvement in FX-related gains & losses Excluding CJ Korea Express 3

4 Ⅱ. Earnings Analysis by Division While Processed food biz continued to deliver solid sales & profit growth thanks to robust sales of new HMR products and Chuseok gift sets, raw sugar price increase and intensified competition in the soybean oil market led to margin contraction with 8.0% top-line growth 11% 1, % Sales 10% OPM 8% 1, , % 1, Q15 4Q15 1Q16 2Q16 3Q16 MS trend of key processed food categories Sales and OPM trend Dumpling Kimchi Hetbahn Increasing revenue of new HMR products Cupbahn Gourmet Soup/Stew Others ~ Sales Earnings analysis Food Division - Processed food sales up 11.6% YoY (W766.0bn) due to solid sales of both new & existing flagship products coupled with strong growth of overseas biz Microwavable Rice/Frozen Food/Kimchi sales: YoY +35%,+23%,+72% (Kimchi MS- 15:14% Aug 16:24%) Successful penetration of new HMR 1) products : Hetbahn Cupbahn s monthly sales reached W5.0bn in 3Q Overseas sales 2) : YoY +39% - Foodstuff sales up 2.7% YoY (W477.9bn) thanks to expanding specialty foodstuff and overseas biz Specialty foodstuff sales: YoY +10% (Portion: 16%) Operating profit: Decline in profitability due to raw sugar price increase and intensified competition in the soybean oil market in spite of the continued solid growth of Top5 cash-cow 3) categories Increase in Processed food biz profit thanks to continued solid 13 9 growth of Top5 cash-cow categories in spite of the increased promotions for newly launched products Decrease in Foodstuff biz profit from raw sugar price increase and competition in the soybean oil market Aug 1Q16 2Q16 3Q16 4Q16E 1)Hetbahn Cupbahn(cooked rice), Gourmet(western-style food), Soup/Stew, etc 2)YoY +11% when excluding Jixiangju which is a newly added subsidiary for consolidation 3)Top5 cash-cow categories: Dasida(Seasoning), Korean Paste, Canned Food, Processed Meat, Frozen Food 4

5 Ⅱ. Earnings Analysis by Division Profit increased by 70.8% due to turnaround in lysine biz from gradual pricing recovery and sales volume increase of nucleotide while continued efforts on improving yield enabled cost reduction Sales and OPM trend Earnings analysis Bio Division 5% Sales 7% 4% OPM 9% 7% Sales: down 1.8% YoY(W456.0bn) due to weak pricing of major amino acids, despite the volume increase of lysine and nucleotide - Methionine price: $3.4/kg (-30% YoY) - Tryptophan price: $7.5/kg (-23% YoY) (Unit: $/T) 1,500 1,300 1,100 3Q15 4Q15 1Q16 2Q16 3Q16 Lysine price trend in 2016 CJCJ Global Contract Price (LHS) China Spot Price (WIND) (RHS) Jan Feb Mar Apr May Jun Jul Aug Sep Oct 1) (Unit: RMB/kg) Operating profit: up 70.8% YoY(W39.8bn) thanks to turnaround in lysine biz and increase in sales volume of nucleotide - Lysine: turned a profit from June with increasing contribution from regions 2) with higher lysine price 3Q16 ASP: $1,260 (1Q16:$1,200, 2Q16: $1,215) 3Q16 volume: 158k ton (YoY +14%, QoQ +8%) - Nucleotide: sales volume has continued to expand since 1Q16 when ASP was increased to a steady level at around $7/kg 3Q16 volume: 6,800 ton (YoY +6%, QoQ +5%) 1)China spot price(source: WIND) includes VAT(17%) 2)EU, N. America, and China are the largest sales region (regions listed in the order that accounts the most within total sales ) China portion will be further reduced in 4Q due to the shutdown of Shenyang site 5

6 Ⅱ. Earnings Analysis by Division Feed & Livestock Division Profit increased by 67.6% thanks to improved earnings of overseas livestock biz, despite the slower top-line growth owing to timing difference of Lebaran holidays in Indonesia 2% Sales 3% 3% OPM 4% 4% Q15 4Q15 1Q16 2Q16 3Q16 Adjusted sales growth(2q+3q) remains strong +14.0% (2Q+3Q) 15 (2Q+3Q) 16 Sales and OPM trend 1,000.0 Expanding overseas biz contribution 67% 67% 68% 72% Q16 YTD Sales: up 6.4% YoY(W478.6bn); despite the continued robust growth in Vietnam & Philippines, timing difference of Lebaran translated to a temporary slowdown of feed demand in Indonesia resulting in overall slower growth - Indonesia: 2Q+3Q sales up 22% YoY (2Q +39%, 3Q +6%) - Vietnam/Philippines: sales up 24%/18% YoY thanks to increase in sales volume of feed - Domestic: sales up 1% YoY as sales volume of livestock increased, offsetting the decline in feed price Operating profit: up 67.6% YoY(W18.1bn) on the back of reduced production cost and improved pricing within overseas livestock biz - Enhanced profitability from higher livestock prices which resulted from restrictions on importing DOC 1) and livestock disease in Indonesia 1) Day Old Chick Earnings analysis 6

7 Ⅱ. Earnings Analysis by Division CJ Healthcare Earnings improvement led by increasing contribution of high-margin/strategic ETC products and solid growth of drink category Sales and OPM trend Earnings analysis 10% 13% Sales 16% OPM 14% 11% Sales: up 16.6% YoY(W129.9bn) due to expanded sales of high-margin/strategic ETC products and drink category - ETC products: YoY +16% Beverage category(e.g. Condition, Well-being Hutgaesoo): YoY +12% 3Q15 4Q15 1Q16 2Q16 3Q16 Increasing contribution of high-margin/strategic products within ETC category 22% 25% 30% Operating profit: up 26.4% YoY(W13.9bn) thanks to strengthened sales&marketing of high-margin/strategic ETC products - High-margin/strategic product contribution within ETC category continues to expand High-margin/strategic ETC product sales: YoY +36% - QoQ earnings decline from higher Ad&Promotion spending related to the renewal of Well-being Hutgaesoo product 3Q14 3Q15 3Q16 7

8 Ⅱ. Earnings Analysis by Division Sales and profit up 17.3% and 16.9% respectively due to increase in new orders and CJ Rokin acquisition CJ Korea Express 4% 1, % 1,337.8 Sales 4% 1,445.2 OPM 4% 4% 1, , Q15 4Q15 1Q16 2Q16 3Q16 Parcel delivery MS and volumes continue to expand Sales and OPM trend 택배 MS 41.3% 41.6% CJ KX volume(mil boxes) 43.5% % 44.1% 3Q15 4Q15 1Q16 2Q16 3Q16 Sales: up 17.3% YoY(W1,490.3bn) due to solid growth of Parcel delivery and Global div, despite the sluggish domestic economy Earnings analysis - Contract Logistics(CL): Increase in high-margin contracts (e.g. cold chain) thanks to strengthened consulting service - Parcel delivery: Volume growth sustained(yoy +21%) on the back of strengthened marketing activity, despite lacking business days - Global: Sharp growth due to synergy from CJ Rokin 1) acquisition and normalization of project forwarding business Operating profit: up 16.9% YoY(W60.3bn) thanks to increase in high-margin contracts and enhanced operation efficiency - Contract Logistics(CL): Higher profit thanks to increase in high-margin contracts in spite of the deteriorated margin of stevedoring biz owing to lackluster manufacturing sector - Parcel delivery: Eased fixed cost burden from securing more volumes with balanced distribution system and optimized delivery networks - Global: Margin expansion due to CJ Rokin acquisition and improvement in project forwarding business 1)YoY +10% when excluding CJ Rokin effect 8

9 Ⅲ. Other Analysis SG&A Expense Increase in SG&A(YoY +13%) due to higher variable cost driven by top-line growth and efforts to promote and foster newly launched products Rise in SG&A/sales ratio(yoy +1.3%pt) owing to increased contribution of Processed food biz and CJ Healthcare which have relatively higher SG&A/sales ratio SG&A to Sales ratio trend 3Q15 3Q16 Chg. 23.9% Labor cost % 22.2% 21.8% 22.3% Commission expense Transportation cost Promotion cost Advertising cost Others Q15 4Q15 1Q16 2Q16 3Q16 Total

10 Ⅲ. Other Analysis Non-Operating Income & Expense Improved non-operating line(yoy +90.5bn) from increase in FX-related and commodity derivatives-related gains Net interest expense at W26.2bn (-W2.9bn YoY) Details - Outstanding debt balance(avg.):w4,352.1bn (Avg. int. rate: 2.8%) FX-related Gains at W18.1bn (+W77.7bn YoY) - Recurring +W4.4bn (raw material purchase, exports, etc.) - Non-recurring +W13.3bn (translation losses from debt evaluations, etc.) Commodity derivatives-related gains at W6.1bn (+W11.8bn YoY) 3Q15 3Q16 Chg. Net Interest Expense FX-Related Gains & Losses Equity Method Gains & Losses Donations Commodity Derivatives- Related Gains & Losses Others Total Tax Q16 USDKRW[Ending] :1,096.30, 3Q16 USDKRW[Avg] : 1, USDKRW[Ending] :1,172.00, 3Q15 USDKRW[Avg] : 1,

11 Ⅲ. Other Analysis Net gearing ratio improving with efficient allocation of financial resources and liquidation of non-core assets Debt Analysis Net gearing ratio trend 117% 115% 111% Excluding CJ Korea Express ( 단위 : 억원 ) Including CJ Korea Express Q Q16 100% 99% Net Debt to Equity Ratio 100% 99% 92% 93% Liability to Equity Ratio 166% 161% 155% 155% Total Debt 4, , , , Q16 Net Debt 3, , , ,386.9 Excluding CJ Korea Express 11

12 Ⅳ. Appendix Financial Statement 1-(1). Summary of Income Statement (excluding CJ Korea Express) 3Q15 2Q16 3Q16 Change(YoY) Change(QoQ) Sales 2, , , % % COGS 1, , , % % (%) 70.9% 71.3% 69.6% -1.3%pt. -1.7%pt. Gross Profit % % (%) 29.1% 28.7% 30.4% 1.3%pt. 1.7%pt. SG&A % % (%) 21.0% 21.8% 22.3% 1.3%pt. 0.5%pt. Operating Profit % % (%) 8.1% 6.9% 8.1% -0.0%pt. 1.2%pt. Non-Operating P/L NA 33.8 NA (%) -5.1% -2.5% -0.9% 4.2%pt. 1.6%pt. Recurring Profit % % (%) 3.0% 4.4% 7.1% 4.1%pt. 2.7%pt. Net Profit % % (%) 1.5% 2.1% 5.3% 3.8%pt. 3.2%pt. 3Q16 USDKRW[Ending] :1,096.30, 3Q16 USDKRW[Avg] : 1, USDKRW[Ending] :1,172.00, 3Q15 USDKRW[Avg] : 1,

13 Ⅳ. Appendix 1-(2). Summary of Balance Sheet (excluding CJ Korea Express) Financial Statement Q16 Current Assets 2, , , , , ,189.2 Quick Assets 1, , , , , ,036.4 Inventory 1, , , , ,152.8 Non-Current Assets 5, , , , , ,911.6 Investments 1, , , , , ,465.7 Tangible Assets 3, , , , , ,883.2 Intangible Assets Other Fixed Assets Total Assets 7, , , , , ,100.8 Current Liabilities 3, , , , , ,693.4 Non-Current Liabilities 1, , , , , ,538.1 Total Liabilities 5, , , , , ,231.5 Current Capital Capital Surplus Other Accumulated Earnings Retained Earnings 1, , , , , ,569.5 Minority Interest Total Shareholders Equity 2, , , , , ,

14 Ⅳ. Appendix Financial Statement 2-(1). Summary of Income Statement (including CJ Korea Express) 3Q15 2Q16 3Q16 Change(YoY) Change(QoQ) Sales 3, , , % % COGS 2, , , % % (%) 77.1% 77.7% 76.3% -0.8%pt. -1.4%pt. Gross Profit % % (%) 22.9% 22.3% 23.7% 0.8%pt. 1.4%pt. SG&A % % (%) 16.3% 16.4% 17.1% 0.8%pt. 0.7%pt. Operating Profit % % (%) 6.6% 5.8% 6.6% 0.0%pt. 0.8%pt. Non-Operating P/L NA 0.2 NA (%) -4.0% -2.2% -2.1% 1.9%pt. 0.1%pt. Recurring Profit % % (%) 2.6% 3.7% 4.5% 1.9%pt. 0.8%pt. Net Profit % % (%) 1.5% 2.0% 3.2% 1.7%pt. 1.2%pt. 3Q16 USDKRW[Ending] :1,096.30, 3Q16 USDKRW[Avg] : 1, USDKRW[Ending] :1,172.00, 3Q15 USDKRW[Avg] : 1,

15 Ⅳ. Appendix 2-(2). Summary of Balance Sheet (including CJ Korea Express) Financial Statement Q16 Current Assets 3, , , , , ,587.4 Quick Assets 2, , , , , ,423.1 Inventory 1, , , , , ,164.3 Non-Current Assets 8, , , , , ,178.9 Investments 1, , , , , ,037.0 Tangible Assets 5, , , , , ,808.5 Intangible Assets 1, , , , , ,164.7 Other Fixed Assets Total Assets 11, , , , , ,766.3 Current Liabilities 3, , , , , ,733.0 Non-Current Liabilities 2, , , , , ,242.0 Total Liabilities 6, , , , , ,975.0 Current Capital Capital Surplus Other Accumulated Earnings Retained Earnings 1, , , , , ,574.9 Minority Interest 1, , , , , ,486.4 Total Shareholders Equity 4, , , , , ,

16 Ⅳ. Appendix 3. Earnings results by division Earnings by Division (excluding CJ Korea Express) Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q CJCJ Sales 1, , , , , , , , , , , , ,308.4 Gross Profit , , Operating Profit EBITDA OP margin(%) 5.5% 4.9% 7.2% 5.7% 5.9% 9.1% 7.8% 8.1% 3.7% 7.2% 8.3% 6.9% 8.1% Food Division Sales , , , , , , , ,243.9 Gross Profit , , Operating Profit EBITDA OP margin(%) 9.8% 8.5% 10.3% 4.6% 8.4% 10.6% 8.0% 11.5% 2.8% 8.4% 10.2% 7.6% 9.2% Bio Division Sales , , Gross Profit Operating Profit EBITDA OP margin(%) -4.5% -4.7% 2.9% 10.5% 1.6% 12.5% 11.0% 5.0% 4.0% 8.0% 7.3% 6.5% 8.7% Feed & Livestock Division Sales , , Gross Profit Operating Profit EBITDA OP margin(%) 2.1% 3.2% 2.3% 1.2% 2.1% 2.1% 3.1% 2.4% 2.8% 2.6% 3.1% 4.0% 3.8% CJ Healthcare Sales Gross Profit Operating Profit EBITDA OP margin(%) 11.1% 11.0% 10.0% 15.3% 11.9% 11.4% 11.1% 9.9% 13.2% 11.5% 15.6% 13.6% 10.7% 16

17 Ⅳ. Appendix 4. Processed Food Domestic M/S trend Category M/S trend (Unit: %) 2016 Jan Feb Mar Apr May Jun Jul Aug Seasoning Dashida Original Natural Beksol Marinade Pepper Paste Haechandle (Paste) Pepper Paste w. Vinegar Bean Paste Seasoned Bean Paste Rice Hetbahn White Rice Multi-grain Rice Cooked Rice Fishery Fish Cake Frozen Processed Meat Dumpling Cooked Frozen Canned Ham Salmon Can Kimchi Kimchi Note: Revenue-basis market share, Source: Link-Aztec 17

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