Ajinomoto fy11 president_e_0509

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  • 1.Ajinomoto Co., Inc.Forecast for the Fiscal YearEnding March 31, 2013 (FY2012)and OutlookMay 9, 2012 Masatoshi Ito President & CEO

2. ContentsI. Summary of FY2012FY2012 Forecast P2Factors in Changes in FY2012 Operating Income Forecast P3FY2012 Forecast by Segment P4FY2012 Forecast Ordinary Income and Net Income P5Progress of Performance Indicators P6-7II. FY2012 Initiatives toward Becoming a Genuine Global CompanyGlobal Growth: Expanding in Overseas Consumer Food Products P8-11R&D Leadership: Open & Link Innovation P12-14Domestic Food Products Business Strategy P15R&D Leadership: Progress of Lower Resource Fermentation Technology P16-17Business Structure Reinforcement Initiatives in Feed-Use Amino Acids P18Optimize Business Portfolio and Functional Value Chain P19-21FY2012 Financial Strategy P22-23ReferenceAppendixFY2012 Forecast by Segment Copyright 2012 Ajinomoto Co., Inc. All rights reserved. 3. I. Summary of FY2012Copyright 2012 Ajinomoto Co., Inc. All rights reserved. 4. FY2012 Forecast Net sales: Increase, with decrease due to exclusion of Calpis Co., Ltd (Calpis) from consolidation from 2H and decrease in pharmaceuticals covered by increases in other segments. Operating income: Maintain growth, with decrease in pharmaceuticals covered by improvement of bioscience and fine chemicals and growth in overseas food products.FY2012FY2011 YoY( Billion)Net sales (left scale) ( Billion) ( Billion) Forecast ResultsChangeOperating income (right scale)1,500 80 Net sales1,221.0 1,197.3 +2.0%Net income (right scale) Operating income73.572.6 +1.3% 70 Net income44.041.8 +5.4%60 Net income per share 67.61 61.28+10.3% 1,00050 Net sales +: Increase in sales volume and unit prices for overseas consumer foods;expansion of core domestic food products brands; increase in sales40 volume of bioscience products and fine chemicals-: Exclusion of Calpis from consolidation from 2H; NHI drug price revisions500 and decrease in lump-sum royalty income, etc. in pharmaceuticals30 Operating income +: Improvement in profitability of bioscience products and fine chemicals; 20recovery of electronic materials; increase in sales of overseasconsumer foods0 10 -: Pharmaceuticals; higher raw material and fuel prices Net incomeFY2009 FY2010FY2011FY2012 Forecast +: Increase in operating income; improvement in extraordinary gains/losses3 Copyright 2012 Ajinomoto Co., Inc. All rights reserved. Copyright 2012 Ajinomoto Co., Inc. All rights reserved.2 5. Factors in Changes in FY2012 Operating Income Forecast Negative factors will persist even if external environment becomes less severe. Further, decline in income from pharmaceuticals, continued increase in income from sales volume increase and improved profitability of bioscience products and fine chemicals and expansion of overseas consumer foods. Factors in Changes in FY2012 Operating Income Forecast ( Billion)FY2011 Results 72.6Exchange rates-0.5Raw material & fuel prices -4.6Factors of pharmaceutical business-4.2 Business factors: Sales volume increase, FY2012 Forecast10.2 unit price adjustments, cost reductions, etc. 73.5Exchange rate vs. JPY (ave.)Effect of raw material and fuel price changes (YoY)(-: Cost increase; Billion) FY2012 FY2011FY2012 FY2011 Forecast Results Forecast Results Fermentation main USD 80.079.08 raw materials0.5 -5.7 Fermentation sub-1.5 -6.5 EUR 105.0109.02 raw materials THB 2.60 2.59 Energy-2.1 -1.6 Raw materials for BRL 47.046.52 domestic food products -1.5 -3.2 Total-4.6 -17.0 3Copyright 2012 Ajinomoto Co., Inc. All rights reserved.4 6. FY2011 Forecast by Segment( Billion)FY 2012 FY 2011Y oY C hange O .P .%O .P .%Fore cast Amount% N e t sale s 1 ,2 2 1 .01 ,1 9 7 .32 3 .7 2% D ome stic Food P roducts 4 1 1 .0 4 3 8 .4 -2 7 .4-6 % O v e rse as Food P roducts 2 5 4 .0 2 3 0 .52 3 .510% B ioscie nce P roducts & Fine 2 1 5 .0 1 9 8 .01 7 .0 9% C he micals P harmace uticals 7 6 .0 7 7 .9 -1 .9-2 % B usine ss T ie -U ps 1 8 9 .0 1 8 2 .86 .2 3% O the r B usine ss7 6 .0 6 9 .66 .4 9% O pe rating income7 3 .5 6 .0 %7 2 .6 6 .1 % 0 .9 1% D ome stic Food P roducts 3 2 .6 7 .9 %3 1 .7 7 .2 % 0 .9 3% O v e rse as Food P roducts 2 3 .0 9 .1 %2 1 .5 9 .3 % 1 .5 7% B ioscie nce P roducts & Fine1 4 .96 .9 %1 2 .2 6 .1 % 2 .723% C he micals P harmace uticals 2 .3 3 .0 %6 .5 8 .3 %-4 .2-6 5 % B usine ss T ie -U ps 1 .6 0 .8 %1 .6 0 .9 %- 0 .0 -1 % O the r B usine ss -0 .9- -0 .9- 0 .0-3 % O rdinary income7 6 .5 7 5 .90 .6 1% N e t income4 4 .0 4 1 .82 .2 5% E xchange rate JP Y /U S D8 0 .0 7 9 .0 8 JP Y /E U R 1 0 5 .0 1 0 9 .0 2( Billion) F Y 2012 F Y 2011 YoY C hange O .P .%O .P .%F orec as t Am ount % Net s alesF eed-us e am ino ac ids93.9 0.0%86.5 0.0% 7.4 9%O thers1,127.11,110.8 0.0%16.3 1% O perating inc om eF eed-us e am ino ac ids10.511.2%11.3 13.1%-0.8-7%O thers 63.0 5.6%61.35.5% 1.7 3%4Copyright 2012 Ajinomoto Co., Inc. All rights reserved. 5 7. FY2012 Forecast - Ordinary Income and Net Income Extraordinary gains (losses): Gain on sale of Calpis Co., Ltd. shares, but amount undetermined.Forecast improvement of 3.8 billion from other factors. Net income: Continued increase. Taxes roughly equivalent to gain on sale of Calpis shares.FY2012FY2011( Billion)DifferenceMain Factors Forecast ResultsNet Sales1,221.0 1,197.3 23.7Operating income 73.5 72.6 0.9Non-operating income (expenses)3.03.3 -0.3Interest expense-1.9 -2.20.3 Decrease in interest expenseExchange gains0.0 0.9 -0.9Exchange losses -0.40.0 -0.4Equity in earnings of affiliates2.3 2.4 -0.1Other (net) 3.0 2.20.8Ordinary income76.5 75.9 0.6Net income 44.0 41.8 2.2 Effective tax rateFY2012:suspence, FY2011: 34.0%Extraordinary gains (losses)Gain on sale of Calpis Co., Ltd. shares will be recorded in FY2012, but amount is undetermined.Forecast improvement of 3.8 billion YoY from other factors, but consolidated gain on sale of Calpis shares is expected to be roughly equivalent to taxes incurred.Taxes and effective tax rate are undetermined, but impact of the sale on net income will be immaterial.Return of substitutable portion of employees welfare pension fund plans (related to past employee service)Not incorporated in performance forecast because approval has not been received at present.Extraordinary gain of 27.1 billion based on estimate of substitutable portion as of March 31.Copyright 2012 Ajinomoto Co., Inc. All rights reserved. 56 8. Progress of Performance IndicatorsMore effective profit generationNet sales and operating income fell short of initial planNet income grew at a rate exceeding the operating income margin Constant growth in operating income Reduction of extraordinary losses (business restructuring expenses almost finished byFY2010; reduction of loss on devaluation of securities)Decrease in shareholders equity Decrease due to repurchase and retirement of treasury stock Constant improvement toward achieving 8% ROE in FY2013Progress of Performance Indicators( Billion) YoY FY2012 YoY FY2013FY2010 FY2011vs FY2010Change ForecastChange TargetNet sales1,207.71,197.3-0.9% 1,221.0 2.0%1.1% 1,366.0Operating income69.4 72.6 4.6%73.5 1.3%5.9%87.0O.P. margin (%)5.7% 6.1%0.3% 6.0% -0.0%0.3% 6.4%Ordinary income 70.5 75.9 7.6%76.5 0.8%8.5% -Net income30.4 41.837.3%44.0 5.4%44.7%-EPS (Yen)43.5661.28 17.7267.616.3324.05 -Shareholders equity 608.2605.3-0.5% 583.1-3.7%- 4.1% -ROE (%)5.0% 6.9%1.9% 7.4%0.5%2.4% 8.0% Copyright 2012 Ajinomoto Co., Inc. All rights reserved.67 9. Roadmap to a "Genuine Global Company"Achieve stable profit growth - Average annual growth rate of 10% - Becomea global top 10food company*Transition toOperating income >150B Operating margin >10% a globalBuild foundationcompany ROE >10% Market Cap.>1.5T Recoverfor a global Overseas sales ratio>50 earnings companymomentumFY2010FY2011FY2012FY2013FY2016*Excluding beverage companiesresults resultsforecastplanROE5.0%6.9% 7.4%8% 10% OP margin 5.7%6.1% 6.0% 7%8% Operating income 69.4 bn 72.6 bn73.5 bn 87.0 bn100.0 bn+Overseas profit ratio53% 51% 51%56% Copyright 2012 Ajinomoto Co., Inc. All rights reserved.78 10. II. FY2012 Initiatives towardBecoming a Genuine Global Company Growth Driver Development Copyright 2012 Ajinomoto Co., Inc. All rights reserved. 11. Global Growth: Expanding in Overseas Consumer Food ProductsIncreasing presence in existing businesses and expanding in new marketsPoint Specific programsFY2011 FY2012FY2013New MSG factory in Thailand (completion in March 2013)Investment approx. 14.7 bn Umami seasonings Capacity expansion (nucleotides) in Thailand(1st stage completion in Nov. 2011, 2nd stage completion in Sept. 2013)Investment approx 9.3 bn Capacity expansion (Ros Dee) in Thailand (completion in July 2011) Investment approx. 1.0 bn IncreaseCapacity expansion (Sazon) in Brazil (completion in May 2013) Investment approx. 2.0 bn production of Flavor mainstayseasoningsNew factory (Masako) in Indonesia (completion in September 2012) Investment approx. 3.7 bn products Strengthen Canned coffee capacity expansion presence inBirdy) in Thailand Canned coffee(completion in June 2013) Investment approx. 3.8 bn existing businesses Nurture in Vietnam (curry, fried meat and fish), Philippines (new seasoning), Peru and Indonesia (fried meat and fish, seasonings for rice), PowderedThailand (fried meat and fish, tom yum soup, etc.)Nurture next-Launch of Ros Dee Menu in Thailand (November 2011) menu-specific generationseasoningsmainstayLaunch in India (Hapimaproductsspice blend seasoning forProcessed foods curry) (April 2011)Study new instant noodle areasItems implemented or decided since November 2011 in redCopyright 2012 Ajinomoto Co., Inc. All rights reserved. 8 10 12. Global Growth: Expanding in Overseas Consumer Food ProductsIncreasing presence in existing businesses and expanding in new marketsPoint Specific programsFY2011FY2012 FY2013Establish BangladeshMyanmar: Study restart of businessEstablishAsiasubsidiary (August 2011)Pakistan: Study entry opportunitiesExpand in new Came