First Half FY3/2019 Financial Results Presentation...Summary of Consolidated Financial Results 3...
Transcript of First Half FY3/2019 Financial Results Presentation...Summary of Consolidated Financial Results 3...
First Half FY3/2019
Financial Results Presentation
November 14, 2018
The Nisshin OilliO Group, Ltd.
1
Summary of Consolidated Financial Results
for First Half FY3/2019
Kenji Matsuura,
General Manager, Financial Department
2
Net sales 172,262 166,761 +5,500 +3.3%
Operating income 6,209 4,706 +1,503 +31.9%
Ordinary income 7,003 4,485 +2,517 +56.1%
Net income attributable to the parent’s shareholders
4,838 3,471 +1,367 +39.4%
(Million yen)
Summary of Consolidated Financial Results
3
First Half FY3/2019
First Half FY3/2018
YoY
Change Change (%)
Consolidated Results by Business Segment
4
Oil, Meal, and Processed Food
119,578 3,837 109,245 1,771 +9.5% +116.7%
Processed Oil and Fat
41,455 1,646 46,709 2,429 -11.2% -32.2%
Fine Chemical 9,440 833 9,012 613 +4.7% +35.8%
Other/Corporate 1,787 -108 1,794 -107 -0.4% ―
Consolidated total 172,262 6,209 166,761 4,706 +3.3% +31.9%
First Half FY3/2019
Net sales Operating income
First Half FY3/2018
Net sales Operating income
Change (%)
Net sales Operating income
Percentage of overseas sales
19.5% 21.4% -2.0
(Million yen)
Factors Impacting Operating Income (Results)
5
Increase in sales volume
SG&A expenses and others
Change in subsidiaries’profit
+0.60
△0.5
Domestic processed oil and fat
Overseas processedoil and fat
Processed Oil and Fat
-0.75
2Q FY3/2018 Operating
income 4.70 billion yen+1.50 billion yen
Fine Chemical
Other/Corporate
+2.05
2Q FY3/2019 Operating
income 6.20 billion yen
Oil, Meal, and Processed Food
Sales at optimal prices in line with raw material costs
Expanded sales in high value-added categories and sales of products for ready-made meals and restaurants, among other factors
Change in unit price (sales, cost)
- 0.75
+0.20
- 0.00
+0.05
-0.70
+2.10
Logistic costs, advertising expenses, etc.
- 0.00
Affected by fluctuations in market conditions
Solid sales of detergents and raw materials for cosmetics
Soymeal sales expanded through maintaining an appropriate selling price due to a rise in the Chicago market price even though demand for formulated feed increased only marginally. Rapeseed meal also strived to match the soymeal price rise and sell at an appropriate price even as its blending ratio for formulated feed was reduced and the impact of competitive prices for raw materials for formulated feed was felt.
Although the yen was relatively strong against the U.S. dollar compared to the previous fiscal year, prices for soy and rapeseed rose year on year, partly due to market prices for main ingredients remaining high until around May.
Key Points
Key Points
Status of Oil, Meal, and Processed Food (1)
6
Source:Bloomberg
Source:Yushitokuho Source:Bloomberg
800
900
1,000
1,100
1,200
1,300
Procurement Environment for Raw Materials
Sales Environment for Meal
Market prices for raw materials (¢/Bu)
Soybean (Chicago)
400
450
500
550
600Rapeseed (Winnipeg) (CAD/t)
95
100
105
110
115
120
125
130(JPY/$)
Foreign Exchange Rate (JPY/US Dollar)
30
40
50
60
70
80
20,000
40,000
60,000
80,000
100,000
Soybean meal Rapeseed meal Rapeseed meal ratio
(JPY/t) Average Market Price Trends:Meal
55
60
65
70
75
80
(%) (%)
Meal Value Trends
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2016年度 2017年度 2018年度
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2016年度 2017年度 2018年度
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2016年度 2017年度 2018年度
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2016年度 2017年度 2018年度
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2016年度 2017年度 2018年度
FY3/2017 FY3/2018 FY3/2019
FY3/2017 FY3/2018 FY3/2019
FY3/2017 FY3/2018 FY3/2019 FY3/2017 FY3/2018 FY3/2019
FY3/2017 FY3/2018 FY3/2019
・Strived to expand sales of high value-added products such as olive oil and flaxseed oil, and expanded sales of highly functional oils and fats such as Nisshin Healthy-Off and Nisshin Canola Oil Natyu-Made. ・Strived to sell at appropriate selling prices in line with raw material
costs as well as cultivated new partners in the ready-made meals and
restaurant sectors.
Key Points
Status of Oil, Meal, and Processed Food (2)
7
Edible oil for commercial use
and, processing use 36.4 34.6 +1.80 +5.1%
Household-use 27.3 26.0 +1.30 +4.9%
Wellness food 1.4 1.4 +0.00 +2.2%
Total 65.2 62.1 +3.10 +5.0%
First Half FY3/2019
Change First Half FY3/2018 Amount Ratio
Net sales
Sales of Oil and Fats and
Processed Food
Edible oil for commercial use and processing use +0.10 +1.00
Household-use +0.45 +0.20
Wellness food +0.05 +0.00
Total +0.60 +1.20
Increase in sales volume
Change in unit
prices (sales)
Soybean -1.35 +0.55 +2.40 +1.60
Rapeseed -1.35 +0.60 +1.20 +0.45 Other products and manufacturing costs, etc.
-1.15
Total -2.70 +1.15 +3.60 +0.90
C&F Foreign
exchange
Raw materials procurement Meal sales
Total
Increase in sales volume +0.60 billion Change in unit prices +2.10 billion Impact on segment
income
150
170
190
210
230
250
270
290
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Soybean oil (18 liter drum)
Soybean oil (bulk)
Rapeseed oil (bulk)
Nikkei Market Price Trends: Oils
(JPY/ 18 liter drum)
(JPY/kg)
(Billion yen)
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2016年度 2017年度 2018年度FY3/2017 FY3/2018 FY3/2019
Status of Processed Oil and Fat
8
Source:Bloomberg
Net sales 41.4 46.7 -5.25 -11.2%
Operating income 1.6 2.4 -0.75 -32.2%
First Half FY3/2019
Change First Half FY3/2018 Amount Ratio (Billion yen)
*Foreign exchange impact (Net sales +1.70billion , Operating income +0.10billion )
19%
4%
40%
37%
Specialty fats
Chocolate products
Confectionery ingredients
(premix products)
・Domestic net sales exceeded the previous year, but due to the impact of costs, operating income was down slightly year on year. ・ Overseas, net sales decreased in Europe, which had experienced brisk sales the previous year, and operating income was also down year on year due to the combined effects of the palm oil market and foreign exchange rate fluctuations.
Key Points
Japan
59% 41%
Overseas Japan
44%
40%
16%
Europe
Malaysia
Other regions
1,4001,6001,8002,0002,2002,4002,6002,8003,0003,2003,4003,600
(MYR/t)
Raw material market price: Palm oil
Japan Processed oil and fat products(*) - 0.00
-0.00 Chocolate products +0.00
Confectionery ingredients (premix products) - 0.00
Overseas Processed palm products - 0.75 -0.75
Total -0.75
Impact on segment income
Billion yen(YoY)
(*)margarine, shortening, specialty fats and others
Overseas * Value (net sales) basis Sales mix
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2016年度 2017年度 2018年度
Margarine, shortening, and others
FY3/2017 FY3/2018 FY3/2019
Status of Fine Chemical
9
Net sales 9.4 9.0 +0.45 +4.7%
Operating income 0.8 0.6 +0.20 +35.8%
First Half FY3/2019
Change First Half FY3/2018 Amount Ratio (Billion yen)
*Foreign exchange impact (Net sales +0.15 billion, operating income + 0.0 billion )
71%
11%
15%
3%
Americas and other
Japan
Asia
Europe
・Export sales of raw materials for cosmetics were firm
and domestic sales were brisk on the back of strong
demand.
・MCT sales decreased year on year, but cultivating
new business in chemicals contributed to sales.
・Results at The Nisshin OilliO (Shanghai) International
Trading Co., Ltd. were also robust.
Key Points
39%
33%
28%
Raw materials for
cosmetics
Detergents, etc.
Raw materials for cosmetics +0.05
Detergents, etc. +0.10
Food and chemicals, and others +0.05
Total +0.20
Impact on segment income Billion yen(YoY)
* Value (net sales) basis Sales mix
Food and chemicals, and others
42 43 44 48 49
26
37 37 42 48 53
25
21 21 24
26 28
15
FY3/2014 FY3/2015 FY3/2016 FY3/2017 FY3/2018 FY3/2019
Trend in Profit in High Value-Added Categories
Fine Chemical Processed Oil and Fat
Oil, Meal, and Processed Food
100 110
122
High value-added products as a percentage of profit from household-use products
Status of Profit in High Value-Added Categories
101
130
High value-added products as a percentage of consolidated profit
39%
61%
Standard products and others
High value-added products
First Half FY3/2019
56%
17%
17%
10%
Standard products and others
66
(20%)
* Figures in parentheses represent year-on-year changes
(21%)
(9%)
(67%)
(50%)
(33%)
10
Forecast
138
Prior-year results and results and forecasts for the current fiscal year, 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.
First Half
Net sales 357.0 338.0 +19.0 +5.6%
Operating income 10.8 9.1 +1.7 +18.6%
Ordinary income 11.4 9.3 +2.1 +22.9%
Net income attributable
to the parent’s
shareholders8.0 6.9 +1.1 +15.4%
FY3/2019YoY
Change Change (%)
FY3/2018(Billion yen)
FY3/2019 Consolidated Earnings Forecasts
11
Oil, Meal, and Processed Food 5.45 3.15 +2.30 +71.1%
Processed Oil and Fat 3.75 4.60 -0.85 -18.3%
Fine Chemical 1.65 1.40 +0.25 +18.8%
Other/Corporate -0.05 -0.05 0.00 ―
Consolidated total 10.80 9.10 +1.70 +18.6%
(Billion yen)
Full-year forecasts (operating profit by business segments)
12
FY3/2019 Plan
FY3/2018 Results
YoY
Change Change(%)
Factors Impacting Operating Income (Full-year forecasts)
13
Increase in sales volume
Changes in unit price (sale, cost)
SG&A expenses and others
Change in subsidiaries' profit
+1.10
△0.5
Domestic processed oil and fat
Overseas processedoil and fat
Processed Oil and Fat -0.85
+0.25
FY3/2018 Operating income
9.10 billion yen+1.70 billion yen
Fine Chemical
Other/Corporate
+2.30
+0.00
FY3/2019 Plan
Operating income 10.8 billion
Oil, Meal, and Processed Food
Unit sales prices +0.85 Cost fluctuations +2.30
Market fluctuation impact, increase in business investment expenses, etc.
Sales growth in high value-added categories, etc.
+3.15
- 1.85
- 0.10
Logistic costs, advertising expenses, etc.
-0.05
-0.80
Progress Report on Medium-Term Management Plan
Takahisa Kuno, Representative Director and President
Targets
15
Operating income 10.2 9.1 10.8 13.0 Billion yen
ROE 6.3 5.4 5.9 7.0 %
EPS (growth rate) 222 204 234 300 Yen per share
Operating cash
flow13.7 5.7 14.0 50.0 Billion yen
FY3/2017
Four-year total through FY3/2021
CAGR of 8%
FY3/2021FY3/2018 FY3/2019
Management Policy
16
Carry on business structure reforms while shifting focus to growth trajectory
57
52
29
49
53
28
130 138
72
58
35
165
*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.
Fine Chemical
Processed Oil and Fat
Oil, Meal, and Processed Food
Key Points
・Respond to expanding demand in Japan
and overseas
・Capture benefits of investment and strengthen
supply chain
・Expand sales and stimulate market for “oil for
topping” to be poured directly over dishes
Profit Forecast and Target of High Value-Added Categories
100
42
37
21
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
FY3/2018 Result
FY3/2019 Forecast
FY3/2021 Target
FY3/2014 Result
Progress Report on Medium-Term Management Plan
17
・PT.Indoagri Daitocacao
・Intercontinental Specialty Fats Sdn. Bhd(ISF) ・T&C Manufacturing Co.,
Pte. Ltd(T&C)
・Intercontinental Specialty Fats (Shanghai)Co., Ltd
・Nisshin OilliO Group, Ltd. ・Daito Cacao Co., Ltd.
Malaysia
Italy
Indonesia
Singapore
Japan
China
・ATICI S.R.L.
Global supply chain in the Processed Oil and Fat Business
Company name: ATICI S.R.L. Location: Genoa, Italy Investment ratio: 70%
(Investment from
Intercontinental Specialty Fats (ISF))
• From a base at the Port of Genoa, ATICI will refine, manufacture and store products of ISF for sale to Europe
• Having a base in the consumption area will enable prompt response to customers and enhance services
• A base for sales activities to capture new business centered on southern Europe and for customer service
• Scheduled to start operations from FY3/2020
• Aim for contribution of ¥300 million after 5 years, including benefits for ISF
Procedures for investment in an Italian oil and fat refining and manufacturing company have been completed
Acquisition of a European Base
Capture the benefits of investment and strengthen the global supply chain in the Processed Oil and Fat Business
18
Company name: PT.Indoagri Daitocacao Location: Indonesia Investment ratio: 51% (Investment from Daito Cacao Co., Ltd.)
・ Joint venture with the Salim Group ・ Preparations are moving ahead for factory construction and sales toward starting sales from April 2019 ・ Expand business by leveraging the strong sales capabilities of the Salim Group in Southeast Asia, including the expanding market in Indonesia, aiming for a contribution of ¥300 million after 5 years
Work is moving forward on a chocolate factory in Indonesia
4.1 4.6
FY3/2017 Result
FY3/2018 Result
3.75
FY3/2019 Forecast
4.9
Processed Oil and Fat Business Segment Operating Income
(Billion yen)
• Moving ahead with strengthen the supply chain for Europe and China, originating from ISF and accelerating sales of products in high value-added categories
• Domestically, capital investment in Daito Cacao and Nisshin OilliO Group’s Yokohama Isogo Plant will start contributing to earnings
• A one-off decrease in earnings is expected in FY3/2019, but the forecast is to capture earnings as originally planned in FY3/2021
Current situation
Entry into a Growth Market Rendering image
Capital investment Completed
During FY3/2019 and FY3/2020, complete capital investment domestically and overseas, start contributing to earnings
(Main capital investment plan and schedule for completion) ISF Strengthen refining and manufacturing capabilities (Scheduled completion FY3/2020 1H) Daito Cacao Increase chocolate production (Scheduled completion FY3/2019 2H) Nisshin OilliO Group Production of processed oil and fat products (Yokohama Isogo Plant) (Completed FY3/2019 1H)
FY3/2021 Plan
Progress Report on Medium-Term Management Plan
19
Olive Oil Market Scale
* Source: SCI at INTAGE Inc.
Use oil for topping as a driver for continuing to expand the olive oil market
Continue communicating that oil for topping is a new method for cooking, create new markets and stimulate the household use market
42 49
FY3/2014 Result
FY3/2018 Result
57
FY3/2019 Forecast
FY3/2020 Plan
Oil, Meal, and Processed Food Segment Profit in High Value-Added Categories
• Using communication about oil for topping as a driver for the overall edible oils for household use market, expand product sales in the high value-added categories including olive oil and sesame oil
• In the standard oil category, raise the composition of strategic products such as Nisshin Healthy-Off and Nisshin Canola Oil Natyu-Made
• Continue to grow earnings by expanding the high value-added category and reforming the product composition in the standard oil category
72 Market Creation
Oil for Topping Market Scale
20.0
2013 2017
CAGR 2007-13 16% 2013-17 4%
* Estimated by the Nisshin OilliO Group based on research by SCI (household consumer panel research) at INTAGE Inc. and Shoku MAP Inc.
2020 Forecast
CAGR 11%
20.0
40.0 Billion
yen
2007 2010 2013 2017 2018 Forecast
2018
Forecast
* Indexed using full Group’s profit in high value- added categories in FY3/2014 as 100
Expanding sales of oil for topping and stimulate the market for household-use products.
Progress Report on Medium-Term Management Plan
40.0 Billion
yen
20
ヘルスサイエンス事業でのMCTの販売チャネルの拡大
Expand MCT oil sales for volume-sales retailers and drugstores through a review of the sales system
MCT oil sales launched in summer 2017 and it is now sold in more stores such as volume-sales retailers and drugstores following a review of the sales system, proactive TV advertising and other efforts
FY3/2019 1H net sales increased 55% compared to FY3/2018 2H
FY3/2019 2H net sales forecast to increase 40% compared to
FY3/2019 1H
Launch product sales utilizing crystallized powder fat technologies
Utilizing crystallized powder fat as a fine powder material, application development moved ahead to reduce water separation and prevent hardening and sales were launched for processed foods Going forward, move ahead on commercialization of crystallized powder fat using MCT for sales in hospital foods, meals for nursing care, etc.
Raise MCT recognition through a communication strategy
Raised awareness of MCT oil among women through commercials featuring Jun Hasegawa, an active modern woman combining beauty and health
FY3/2018 2H
FY3/2019 1H
+55%
FY3/2019 2H forecast
+40%
Expand MCT sales channels in the Health Sciences Business
Expand business by leveraging Nisshin OilliO Group’s proprietary technological capabilities
Progress Report on Medium-Term Management Plan
【Reference materials】
21
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Soybean raw material(USD/t) Soybean raw material prices(¥/t) soybean meal selling prices(¥/t)
Indexed with April-September 2012 set as 1.0.
Trends in Raw Materials and Meal Prices : Soybean
22 * Figures for The Nisshin OilliO Group, Ltd.
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Rapeseed raw material prices (USD/t) Rapeseed raw material prices(¥/t) Rapeseed meal selling prices(¥/t)
Indexed with April-September 2012 set as 1.0.
Trends in Raw Materials and Meal Prices : Rapeseed
23 * Figures for The Nisshin OilliO Group, Ltd.
0.8
0.9
1.0
1.1
1.2
1.3
Indexed with April-September 2012 set as 1.0.
Trends in Selling Prices for Main Oil and Fat Products
24 * Figures for The Nisshin OilliO Group, Ltd.