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DyDo DRINCO, INC. Company Profile
Integrated Report
Offering delicious productsfor the sound mind and body
2-2-7 Nakanoshima, Kita-ku, Osaka, Japan 530-0005Tel: +81-6-6222-2611
DyDo DRINCO head office obtained ISO 14001 certification.DyDo DRINCO is committed to the environment.
DyDo DRINCO, INC.
Offering delicious productsfor the sound mind and body
DyDo DRINCO, INC. Company Profile
Integrated Report
Offering delicious productsfor the sound mind and body
2-2-7 Nakanoshima, Kita-ku, Osaka, Japan 530-0005Tel: +81-6-6222-2611
DyDo DRINCO head office obtained ISO 14001 certification.DyDo DRINCO is committed to the environment.
DyDo DRINCO, INC.
Offering delicious productsfor the sound mind and body
Together with CustomersThe DyDo Group offers people taste and wellness.
Concept Behind the DyDo Group Slogan
Meaning Behind the DyDo Group Name
The DyDo Group Approach
1 2
Dynamic + Do
DyDo Group Slogan
If the mind is full of energy, our bodies want to be active.
If the body moves positively, the mind gains even more happiness.
The DyDo Group is committed to bringing this joy to the minds and bodies of our customers.
The DyDo Group is unique in its ability to inspire a joyous and healthy life in our customers, through our vast range of drinks and foods up to pharmaceuticals.
The DyDo Group has as its goal to be of service to people and to society through providing valuable products and its corporate activities, based on its consistent vision plus challenge and ideas.
DyDo has its origins as the DAIDO PHARMACEUTICAL CORPORATION. Sharing the same pronunciation, our name incorporates the idea of dynamic action that represents our corporate stance.
Offering delicious productsfor the sound mind and body
DyDo DRINCO, INC.
Tarami Corporation
DAIDO PHARMACEUTICAL CORPORATION
DyDo Group Corporate Vision
Offering high quality products, adding a surprise to deliver "distinctive DyDo" taste and wellness to customers.
Together with customers
Creating "DyDo standards" for the upcoming next generations. To go beyond current framework and values.
Together with future generations
"All DyDo" product development and corporate activities involved in the group is committed to build rich and vibrant society.
Together with society
Endless "DyDo challenging sprit" to bring happiness to all people through our group activities.
Together with people
DyDo Group Corporate Philosophy
The DyDo Group has three segments: DyDo DRINCO for Beverage Sales, DAIDO PHARMACEUTICAL for OEM Beverage Production, and Tarami for Food Production and Sales.
CONTENTSDynamic Spirit ofChallengeThe DyDo Group engages dynamically with the challenges we face to become people's first choice.
DyDo Group Corporation
DyDo Group strives to achieve happiness and prosperity together with people and society as a whole. To realize this, we will continue dynamic efforts to take on new challenges.
The DyDo Group Approach ............... 1
Message from the President .............. 5
The DyDo Group's Path to Growth.............................. 7
Strengths of the DyDo Group............. 9
Mid-term Business Plan................... 11
DyDo DRINCO's Strengths and Key Features ......... 15
DyDo DRINCO Vending Machines.... 17
DyDo DRINCO Brand Introduction ... 19
DAIDO PHARMACEUTICAL CORPORATION's Strengths and Key Features ......... 21
Tarami's Strengths and Key Features ............................... 23
Overseas Expansion........................ 25
CSR Activities ................................. 27
Corporate Governance .................... 39
Financial Report .............................. 43
Corporate Data ............................... 46
The DyDo Group Approach
3 4
RaisingCorporate Value
President & Representative Director
Tomiya Takamatsu
The DyDo Group aims to raise
its corporate value through
sustained growth.
Based on the DyDo Group's corporate philosophy of "striving to achieve happiness and prosperity together
with people and society as a whole," we aim to raise corporate value while working with our stakeholders—
customers, shareholders, local communities, business partners, and employees—to bring benefits to all.
It is essential that we work with all of our stakeholders to achieve sustainable growth and raise our corporate
value in the medium to long term. Society also expects us to be proactive in addressing ESG issues, i.e.
environmental, social, and governance issues.
To build an abundant and vibrant society it is important to lead the way by achieving sustainable growth
ourselves and raising corporate value in the medium to long term.
Following our group corporate philosophy and the direction set by our group vision, we have put forward the
"Challenge the Next Stage" mid-term business plan, which will continue until FY2018. Based on the concept
of achieving mutual prosperity, we will work together as a group, incorporating feedback from our
stakeholders to continue our dynamic efforts to take on new challenges.
As we are partway along in our mid-term business plan, we need to accelerate efforts aimed at innovation,
continue toward sustainable growth, and aim to improve our corporate value in the medium to long term.
We appreciate your continued support and look forward to your guidance ahead.
Message from the President
5 6
Various functions introduced in vending machines to make them more fun to buy products
We are pursuing the development of new types of vending machines that offer new interactive features
Growing Throughthe DyDo DNAThe DyDo Group carries forward its founding DNA, developing and expanding the business, and aiming for further growth.
FounderTomio Takamatsu
DAIDO PHARMACEUTICAL CORPORATION officially established
1956
1940s-1960sFounding
1970s-1980s
1990s-2000sExpansion
Medicine box
DyDo DRINCO RUS, LLC is established in Moscow, Russia2013
Tarami Corporation becomes a consolidated subsidiary
Company enters the healthcare business
2012
2015
2016
2000Talking vending machine
1999Point card vending machine
Vending machine in Russia
DAIDO K.K. officially established
1975
1984 Name changed to DyDo DRINCO, INC.
2001Combination vending machineSells both drinks and snacks
DAIDO PHARMACEUTICAL CORPORATION becomes a consolidated subsidiary
1998
Listed on the Second Section of the Tokyo Stock Exchange
2001
Listed on the First Section of the Tokyo Stock Exchange
2003
1977Hot and cold vending machine
1973Countertop vending machine
Early products
The DyDo Group's Path to Growth
7 8
2010s–the bright future
FurtherGrowth
1992Demitasse Coffee
2000MIU
1975DyDo Blend Coffee
1970Hicron A
1987Arc Super Panel MachineCans, bottles, and plastic bottles in one machine
DAIDO PHARMACEUTICAL CORPORATION was founded with its roots in the Japanese business model of salesmen visiting homes and leaving medicine on a "use first, pay later" basis.Company begins manufacturing and selling pharmaceuticals and energy drinks.
With the release of a hit canned coffee product, DAIDO K.K. was established.Company builds a sales foundation through the development and expansion of vending machines.
Core brands Demitasse and MIU established.Vending machines are treated as their own retail outlets, with unique functions developed.
Company pursues diversification and overseas expansion with the domestic drink business as a foundation.We continue our dynamic efforts to take on new challenges in delivering "distinctive DyDo" taste and wellness.
Controlling shares acquired in the beverage companies of Yildiz Holding A.Ș. of Turkey
Capital participation in the beverages business division of Mamee-Double Decker (M) Sdn. Bhd. of Malaysia
2012Fruit dessert jellies made by Tarami Corporation join the DyDo stable
2012Healthcare & Beauty series sold online and by mail order
2015Cool Tea sales expand in Malaysia
2016DyDo Blend UMAMI Blend
Develop-ment
Energy drinks and canned coffee were sold at gas stations along national routes and other locations
Vending machines are developed that sell both hot and cold drinks, leading to explosive growth in beverage vending machines
Brands built on unique selling points such as Demitasse or the use of deep-sea water
We deliver "distinctive DyDo" taste and wellness in the fields of food and health
9 10
DyDo BEVERAGE SERVICE, INC.
DyDo BUSINESS SERVICE, INC.
DyDo BEVERAGE SHIZUOKA, INC.
DyDo DRINCO SERVICE KANTO, INC.
SHANGHAI DyDo DRINCO, INC.
DyDo DRINCO RUS, LLC
DyDo Mamee Distribution Sdn. Bhd.
Della Gıda Sanayi ve Ticaret A.Ș.
Bahar Su Sanayi ve Ticaret A.Ș.
İlk Mevsim Meyve Suları Pazarlama A.Ș.
DyDo DRINCO TURKEY İçecek Satıș ve
Pazarlama A.Ș.
DyDo DRINCO, INC.
Beverage Sales Division
Our GroupStrengths
Strengths of the DyDo Group (as of January 20, 2016)
Approx. 280,000No. of vending machines in Japan
Going strong for
over 40 years
DyDo BlendBlend Coffee
Available in
Over 100
*4 DyDo survey
(Note) Sales figures by segment are sales to external customers. 60
OEM
DyDo'sstarting
point
Startedas a fruit
storeCompany
plant
Talkingvending
machines
No. 1seller
No.1
Products
Vendingmachines
*1 As of March 20, 2016
Shunnotoki Inc.
Tarami Corporation
OEM Beverage Production Division
DAIDO PHARMACEUTICAL CORPORATION
The DyDo Group promotes a unique business model that takes advantage of the strengths of each division.
Consolidatednet sales
149,856million yen
4,988million yen
82.9%
Sales
Composition ratio
5.7%Compositionratio
11.4%Compositionratio
124,192 million yen
million yen
million yen
million yen
million yen
million yen
Beverage Sales Division
Sales 8,548
17,115
OEM Beverage Production Division
Sales
Food Production and Sales Division
Consolidatedoperating income
(Adjustment 2 million yen)
75.1%
Operating income
Composition ratio
19.6%Composition ratio
5.2%Composition ratio
3,745
Beverage Sales Division
Operating income 979
259
OEM Beverage Production Division
Operating income
Food Production and Sales Division
As the group's core business, we deliver "distinctive DyDo" taste and wellness with a strong lineup in coffee drinks.
This division engages in energy drink research, development, and production, along with OEM (contract) manufacturing. From pharmaceuticals and quasi-drugs to soft drinks, we are a top OEM manufacturer.
Food Production and Sales Division
Creating fruit dessert jelly products that bring smiles to children and adults alike, we have created a trusted brand that maintains the top market share in the industry. No.1 share of
the marketfor fruit dessert jellies 200
customer firms
years of history
million units produced annually
20 dialects/languages*1
*2 Intage SRI: Market for cans and bottle-cans of coffee at 180 ml or lessCumulative sales revenue for Demitasse series March 2014–May 2015
*3 Cans and bottle-cans of coffee at 180 ml or less
No.1salesin small-can coffee
DyDo Blend Demitasse Series
*3*2
*4
Mid-term Business Plan
"Challenge the Next Stage"FY2014 – FY2018 Next Stage
11 12
Achievement ofinnovative product
development
The DyDo Group has put forward the "Challenge the Next Stage"
mid-term business plan, which will continue until FY2018.
Our mid-term operating margin target is 4.0% on consolidated sales
of 200 billion yen in FY2018. Based on the group's corporate
philosophy of striving to achieve happiness and prosperity
together with people and society as a whole, we are
engaging in four challenges to realize sustained
growth.
Challenge to enhanceproduct strength As part of our growth strategy that
focuses on full-fledged business development outside of Japan, in 2015 we made the decision to enter the Turkish and Malaysian markets. We will utilize the expertise we have developed through our domestic business to accelerate overseas development and work toward exceptional top-line growth.
With a strong financial base built from our existing businesses, and in line with our corporate philosophy, we will explore further possibili-ties for entering new fields of business aimed at reaching new customer demographics. We will also strive to establish new business foundations to roll out new businesses related to food and health.
Mid-term Business Plan
Sales
200 billion yen
4.0%Operating margin
FY2018 Mid-term Management Objectives
Beverage Sales Division
OEM BeverageProduction Division
Food Productionand Sales Division
We are taking new measures to enhance product strength and are also reevaluating the development process. Our challenge is to take these and other new steps so that we can deliver products to consumers that are distinctive to the DyDo Group.
Moving on tothe Next Stage
as a GroupChallenge toestablish new
businessfoundations
Challenge togrow existingbusinesses
Challengeto expandoverseas
businesses
Market expansionthrough overseas
business development
To this point we have worked to optimize results by concentrating management resources on the domestic beverage and food businesses.Moving forward, we aim to generate a stable cash flow to fund further growth by improving productivity and performance in our existing businesses that already provide a solid revenue base.
Optimized businessresults Improved
productivity(Generate stable cash flow)
Development of newfood and healthrelated business
CIS region with Russia as the hub
Chinese region with Shanghai as the hub
Islamic region with Malaysia as the hub
Offering delicious productsfor the sound mind and body
Mid-term Business Plan
❷ Challenge to enhance product strength
Four Challenges in Pursuit of Growth
Capital Policy and Returns to Shareholders
❶ Challenge to grow existing businesses
Our basic stance on capital policy rests on the importance of keeping a balance between three factors: the effective use of capital, maintaining fiscal soundness, and returns to shareholders. Efforts aimed at the effective use of capital include placing priority on allocating internal reserves to strategic business investments—establishing new business foundations—which will improve capital efficiency.Efforts to maintain fiscal soundness are based on improving stable cash creation capacity via existing businesses to maintain a financial foundation that will enable ongoing strategic business investment.In the context of returns to shareholders, our basic policy is to maintain stable dividends, and by making efforts to improve profitability and increase income on an ongoing basis, we aim to increase dividends in the medium term.
Portfolio ManagementThe DyDo Group aims to boost corporate value by practicing portfolio manage-ment. We will raise earning power through switching our existing business to an improved business model, and work to establish a new business portfolio, primarily in food and health, that offers high profitability and growth, thereby improving our capital efficiency.
13 14
OEM Beverage Production Division
Food Production and Sales Division
Beverage Sales Division
DAIDO PHARMACEUTICAL CORPORATION / OEM Beverage Production Division
Tarami Corporation / Food Production and Sales Division
DyDo DRINCO / Beverage Sales Division
To avoid getting entangled in price wars, we look to add value and optimize costs throughout the supply chain, while also generating cash as capital for growth. To maximize the value of our vending machines—a key corporate asset—we aim to reform our vending machine business model to extend beyond existing frameworks. In the convenience store and other markets as well, we are planning effective and efficient promotions to generate strong ongoing sales.
As a top OEM manufacturer, we are working to maintain and enhance our system that provides steady, safe production and expand our capabilities in development and proposing solutions to secure further orders and build a stable revenue base for the DyDo Group.
In building the Tarami brand we have established a strong position in the fruit dessert jelly market. We are continuing to develop a wide range of products that we hope customers will love, as we adapt to changing times and work to achieve further growth.
At DyDo DRINCO, we have been working to improve the brand strength of DyDo Blend by using carefully selected raw ingredients and special blending techniques. We are now putting more effort into product development to gain support among young consumers who form the volume zone for canned coffee consumption, and will aggressively expand our sales routes beyond existing frameworks to become the top brand in the canned coffee category.
❸ Challenge to expand overseas businesses
In 2013, DyDo DRINCO established DyDo DRINCO RUS, LLC as a consolidated subsidiary in Moscow, Russia, aiming to expand the vending machine business model. In 2015 we made the decision to enter the markets of Turkey and Malaysia. We also plan to expand into the CIS region with Russia as the hub, the Islamic region with Malaysia as the hub, and the Chinese region with Shanghai as the hub. In this way we are aiming to accelerate overseas development and work toward exceptional top-line growth.
❹ Challenge to establish new business foundations
Utilizing the foothold provided by stable cash flow from existing businesses, we are looking into possibilities for expanding our range of business.We will use strategic business investments to establish a new business portfolio centered on "food and health" and secure a business foundation with high profitability and growth potential aimed at improving capital efficiency.
Effective use of capital
Maintaining fiscal soundness
Returns to shareholders
Realizing sustainable, profitable growth
Returns to shareholders
Establishing a new businessfoundation via strategic investment
Effective use of capital
Improving cash creationcapacity in existing businesses
Maintaining fiscalsoundness
Basic approach
Sales grow
th rate
Profit ratio
Area of Anticipated Growth
Dealing with a weak yen
Area for RevenueModel Reform
Maximizing vendingmachine value
Area to InvestigateRenewed Growth
Expanding commission area
Area for Investment
New fieldsHigher profit ratio
Increasedorder volume
Mid-term Business Plan"Challenge the Next Stage"
Reformingrevenue model
- Priority is given to appropriating internal reserves for strategic business investment for sustained income/growth and improving capital efficiency
- Improve stable cash creation capacity via existing businesses- Maintain financial foundation enabling ongoing strategic business
investment- Continue to maintain stable dividends despite the severe earnings
environment- Aim to realize ongoing income/growth for mid-term increased
dividends
DyDo DRINCO's Strengths and Key Features
15 16
Scheme of Business Operations
Affiliatedbeverage
production plants
Affiliated packageproduction plants
Affiliatedvending machineproduction plants
CVS, merchandisersand retailers
DyDo Online Shop
Outsourcing
Distributioncenter
Vending machines
Outsourcing
Approximately 85% of our salescome from vending machines
Reducedlogistics costsDevelop products
with high value
Develop remarkablevending machines
Planning anddevelopment Production Logistics Operations Sales
Reducedinvestment
risks
Highly valuedvending machine
operations
Coffee makes up more than 50% of our sales
DyDo DRINCO does not have its own production sites; instead we outsource all production to affiliated plants in a "fabless management" system. We also outsource logistics to cooperating companies all across Japan. This business strategy eliminates investment risks and reduces logistics costs.We have also built the unique business model of selling drinks using vending machines, which offer steady sales and good price stability, with highly profitable canned coffee as our core product. We position the vending machine as its own "retail outlet" and deliver great tastes and satisfaction to customers through our vending machines, which harness the strengths of both people and data.
Securing steady profit with coffee sold through vending machinesVending machine sales, which have comparatively good price stability and steady sales, account for 85% of our sales. By category, sales from canned coffee, our core product, account for more than 50%. Our business strategy is to focus on selling highly profitable coffee via vending machines with high price and sales stability to secure a steady stream of profits.
Characteristics and Strengths of Our Business Model 1Creating attractive retail outlets through people and dataDyDo DRINCO has built efficient and high-quality operations by positioning vending machines as their own "retail outlets" that customers frequent. The operative in charge of each vending machine keeps tabs on the condition of the vending machine and its surroundings and cleans the area to ensure the comfort of customers. Also, to meet needs for diversification, we select products based on the locational characteristics of the vending machine, using analyses of sales data. This cross-fertilization between people and data enables us to deliver great tastes and satisfaction to customers who use our vending machines.
DyDo DRINCO, INC.
Approx.
85%
Vendingmachines
More than
50%
Coffeebeverages
Ensures stable sales and profit
Overall industry figure
Approx. 30%Vending machines
Overall industry figure
Approx. 20%Coffee beverages
(DyDo survey) (DyDo survey)
Characteristics and Strengths of Our Business Model 3
Effective use of management resources via fabless managementDyDo DRINCO does not have its own production sites; instead we have a strong relationship with our partner production sites. Product logistics are also outsourced to cooperating companies all across Japan. This business strategy enables us to reduce investment risks. An approach such as this furthermore makes it possible to utilize management resources efficiently, and allows us to concentrate our investment in product development and high-performance vending machine operations.We strive to develop products with high value that are distinctive from those of our competitors, and operate our vending machines more in line with customer needs.
Characteristics and Strengths of Our Business Model 2
Affiliate production plant
Distribution center
Delivering
to Customers
Great Taste & Satisfaction
Building relationships of trust with location owners to ensure that everyone will enjoy using our vending machines
Comment from Employee
I work in vending machine operations at DyDo. My responsibilities include resupplying products and switching the hot/cold lineup according to the season. I also keep machines and their surroundings clean.I consider my job to be twofold—making vending machine customers happy and building good relationships with vending machine location owners.One thing I recall from last year's product sales campaign was when a location owner with whom I was working placed an order based on my recommendation. Taking encouragement from such interactions, as an operative I want to become even more worthy of the trust of customers and location owners, and to have my superiors and colleagues think of me as entirely dependable.
Toshiharu ChibaOsaka Central Sales Office
We efficiently develop and supply products that customers want using a unique business model.
Area cleanedand maintained
by vending machine operative
Idealselection of
products made based on sales data analysis
18
Energy-Saving Features
D Design
We first introduced efficient "heat-pump vending machines" in 2007 and have expanded numbers of installed units each year. Heat pumps reuse heat generated by refrigeration to keep hot products warm. This enables reduced power consumption during the winter in particular, leading to decreased CO2 emissions.
Heat-Pump Vending Machines
As a measure to further reduce energy consumption, we introduce heat-pump vending machines that use LED lights, which are durable and use minimal energy. Further-more, the adoption of LED lights enables reduced usage of mercury and other harmful substances found in fluorescent lights.
LED Lighting
Annual electricity consumption (per machine)Trends in heat-pump vending machine installation
(Share of newly introduced vending machines in one year)
Year 2007 2009 2015
Rate of introduction of heat-pump vending machines
2% 53% 99%
2000 2005 2015 (Model)
3,000
2,500
2,000
1,500
1,000
500
0
(kWh)
2,963
1,726
589
reduction80%
DyDo DRINCO Vending Machines
17
DyDo DRINCO, INC.
Lower power consumption is eco-friendly
Proposing plans that lead to solving customer problems
I work primarily with corporations that have sales offices or plants around the country, handling sales promotion for vending machine solutions. In the course of my duties, I always keep the building of a solid relationship with the customer as a business partner as my core vision. I work to propose plans from the customer perspective and collaborate with customers in implementing them. Moving forward, I will continue to deliver solutions to customers, and aim to become an indispensable partner for them. I also wish to strive toward vending machines that encourage people to use them as part of their daily routine.
Our approx. 280,000 vending machines across Japan are fun to use and eco-friendly.
Our "D Design" theme based on the letter D from DyDo features yellow-orange coloring and thick lines, letting everyone recognize our vending machines even from far away.
The symbol design of DyDo DRINCO
This feature expresses our appreciation to customers for their patronage. The numbers on the roulette start spinning after a product is purchased, and if they match the customer may select an additional drink free of charge.
DyDo DRINCO vending machines thank customers for purchases and deliver other spoken messages according to the time of day, season, and so forth. Our machines are programmed to speak in different dialects to help people feel closer to their local vending machine.
Inciting small moments of excitement
RouletteFeature
Personalizing communication
TalkingFeature
SolutionCase Study
ClientCompanyLocation Owner
PointCards
Customers can collect points at DyDo DRINCO vending machines and send away for delightful prizes after accumulating enough points.
A gesture of goodwill for regular customers
"Arigato! Koko de yukkuri shite itte ne!" (Thank you! Have a rest here.)
"Warii ne.Chitto yasunde keshi!"
(Koshu dialect)
"Hya. Yukkuri shite ikaza."
(Shizuoka dialect)
"Okini! Maa,yukkuri shite ikinsai."
(Mino dialect)
Examplesof Phrases
Delivering vending machines that speak in the dialects of 10 regions for expressway service areas and parking areas
Central Nippon Highway Advance had been considering expanding its business at expressway service areas (SAs) and parking areas (PAs) to provide more enjoyment and greater ease to customers who use those areas on breaks from driving. DyDo DRINCO approached the company with the idea of vending machines in different areas that have a talking feature using the local dialect. Initially proposed as a means to give customers a similar feel to when buying souvenirs or food from a staffed shop, offering them a sense of the locality and boosting their enjoyment, the plan was given the go-ahead.
After introducing the vending machines at SAs and PAs on the Chuo Expressway and Nagano Expressway, the machines proved to be very popular, so the concept was further rolled out to SAs and PAs on the Tomei Expressway and Shin Tomei Expressway.
Manages restaurant operations, product sales and vending machines at expressway SAs and PAsCentral Nippon Highway Advance Co., Ltd.
Tomei Expressway
Shin Tomei Expressway
Chuo Expressway
Nagano Expressway
The vending machine is a vital retail outlet and a close part of consumers' lives.
DyDo DRINCO does more than supply drinks—we leverage vending machines to propose solutions that help solve the problems faced by location owners.
A total of 63 SAs and PAs covering 10
regional dialects
Masami SatoCorporate Sales Department
Comment from Employee
DyDo DRINCO, INC.
We work tirelessly to bring out the limitless potential of coffee flavor and to discover wondrous harmonies. That is the secret to DyDo Blend. The rich and complex taste achieved in this exquisitely balanced blend has satisfied coffee drinkers for over four decades to build the brand. We will continue to improve our blending techniques and aim even higher, with the passion of coffee creators, to produce the delicious "distinctive DyDo" taste.
We are revolutionizing canned coffee with a new "UMAMI" taste sensation
With UMAMI Blend, we are bringing out the most from coffee as a raw ingredient and presenting it in a way that has never been done before. Creating this new taste sensation in coffee has been our challenge. This value could not have been generated by anyone but DyDo DRINCO with its 40-plus years of sustained experience in the field of coffee. We will continue aiming to revolutionize canned coffee and break new ground so that our customers know that DyDo Blend is always working to bring them novel and delicious flavors and enjoyment.
DyDo Blend, Blend Coffee
DyDo DRINCO Brand Introduction
A long-time bestseller since 1975. This blend is made with carefully selected coffee beans from five countries—mainly a light roast, but with a wide range of roasts that satisfy the palate and give enjoyment with a gorgeous aroma and light aftertaste.
The Starting Point for DyDo Blend
DyDo Blend UMAMI Blend
In the spring of 2016 we developed a "new standard" for canned coffee based on four decades of experience in bringing out the flavor of coffee beans and blending them with a bold spirit. The new taste sensation brings out the unique "UMAMI" (savory flavor) of coffee.
A New Proposal: UMAMI
DyDo Blend Supervised by the World's Top Barista Series
The Ideal Taste for Every Consumption Context
19 20
DyDo Blend Demitasse Series
In 2015 the amount of premium coffee beans used was increased as a further flavor evolution. Coffee lovers cannot get enough of the deep taste of this product that inspires a high degree of brand loyalty.
Small-Can Coffee's*1 No. 1 Seller*2
We focused on the different times and places that people drink canned coffee and have created the ideal taste for each consumption context.
* Production supervised by Pete Licata, 2013 World Barista Champion.
Bringing Out Coffee's Unique UMAMI
Challenge 2
To bring out the unique flavor of the raw ingredients, we chose to use the coffee fruit in addition to the coffee bean, thereby combining the richness of the coffee beans with the mild sweetness of the coffee cherries. With this new flavor we have brought the unique "UMAMI" of coffee to the fore.
Establishing a "New Standard" for Canned Coffee
Challenge 1
We see a differentiating trend in canned coffee and in particular have identified young (20s to 30s) and heavy consumer (40s to 50s) segments. We therefore took on the challenge of establishing a new canned coffee standard by creating a novel flavor that would appeal to canned coffee consumers in the high-volume youth segment.
Coffee bean
Coffee fruit
We produce delicious "distinctive DyDo" beverages.
*1 Cans and bottle-cans of coffee at 180 ml or less*2 Intage SRI: Market for cans and bottle-cans of coffee at
180 ml or lessCumulative sales revenue for Demitasse series March 2014–May 2015
Supervised by the World's Top Barista*
UMAMI Blend
Natsuko IwasakiBrand Strategy Group,Marketing Department
Comment from Employee
22
Flow of Product Development
Planning & Development Production Quality Control & Quality AssuranceWe constantly collect the latest
information on raw materials and active pharmaceutical ingredients to offer our customers products that are in line with current trends. We carry out repeated prototyping to reach the final product and ensure that products bring a high level of satisfaction to customers.
Introducing the latest equipment, we have created a production system in line with diversifying market needs. DAIDO PHARMACEUTICAL CORPO-RATION operates on the ideal of achieving both high quality and high efficiency.
We undertake quality control to ensure product quality, and quality assurance to ensure product quality before production and during the production phase. This includes strict and detailed inspections of everything related to quality in pursuit of safety.
Productplanning
8,548 million yen(5.7%)
979 million yen(19.6%)
■ Beverage Sales Division■ OEM Beverage Production Division■ Food Production and Sales Division
Consolidatedoperating income
4,988 million yen(FY2015)
Consolidatednet sales
149,856 million yen(FY2015)
DAIDO PHARMACEUTICAL CORPORATION's contract manufacturing is a highly profitable business segment within the DyDo Group. We are building a strong foundation for maintaining consistent business results by striving above all to maintain and improve upon the safety of our production system while actively carrying out solutions-based sales to win more orders.
A high profitability segment that assures stability in group revenue
My job involves establishing the formulations and manufacturing methods that assure uniform product quality. In the OEM business, we consider the most important thing to be the trust we receive from our customers who contract with us to manufacture their product. To maintain this trust I do everything I can to understand the customer's intentions and carry out my work while keeping the customer's perspective in mind at all times. My greatest joy comes from working with other members of our team to solve issues for a customer, which then leads to getting the order. I feel proud of each person for their efforts that bear fruit and meet the conditions laid down by the customer. Market needs are changing constantly and customers are making more advanced requests. We will continue to work hard to adapt, resolve broad-ranging issues, and hopefully create new hit products.
DAIDO PHARMACEUTICAL CORPORATION's Strengths and Key Features
DAIDO PHARMACEUTICAL CORPORATION, the group's OEM Beverage Production Division, pursues energy drink research, development, and manufacturing, specializing in OEM. The company is a top contract manufacturer in Japan for a wide range of products from pharmaceuticals and quasi-drug drinks to beauty tonics for women, and develops around 50 products a year. It has a flexible production system that can meet a wide range of market needs with speed, quality, and high-mix, low-volume production capabilities.
Contract manufacturing (OEM) through initiatives in researching, developing, and manufacturing energy drinks
Maintaining and improving upon the safety of the production system and aiming to push forward as a top OEM manufacturer
DAIDO PHARMACEUTICAL CORPORATION's Strengths and Key Features
Our GMP-certified factories have gained ISO 9001 and FSSC 22000 certification and are fully qualified for the manufacture of pharmaceuticals. They use quality control and assurance systems that offer reliable safety, and have an excellent reputation among our customers who are major manufacturers of pharmaceuticals, cosmetics, and health foods.
The international standard for quality management systems that we use to meet the needs of corporate customers and the market by assuring the quality of our products and services.
ISO 9001
A food safety system certification that is a benchmark standard approved by the Global Food Safety Initiative (GFSI), which combines the ISO 22000 international standard for Food Safety Management Systems with PAS 220, the advanced British standard.
FSSC 22000
An abbreviation for "Good Manufacturing Practice," constituting manufacturing process control criteria for maintaining safety in manufacturing and consistent quality in all processes from the acceptance of raw materials to production and shipment.
GMP
DAIDO PHARMACEUTICAL CORPORATION's Strengths and Key Features
21
DAIDO PHARMACEUTICAL CORPORATION is expanding its OEM (original equipment manufacturer) business in health drinks, focusing on medicinal products. In recent years, as the beauty and health markets continue to grow, we have been taking early steps to establish a production system that can handle new ingredient blends and various container formats that are in line with market needs while making use of our specialized knowledge and expertise in energy drinks. These efforts have helped us secure orders from various companies. We will continue in the future to create products that will contribute to healthier lifestyles, based on partnerships with collaborative development manufac-turers.
Collaborating through first-rate manufacturing to help people lead healthy lives.
DAIDO PHARMACEUTICALCORPORATION
DAIDO PHARMACEUTICAL CORPORATION's Strengths and Key Features 3
Pursuing high-quality product manufacturing from the customer's perspective and responding to market needs
(Note) Sales figures by segment are sales to external customers.
Yukitaka MiyamotoProduct Development Section in Development Department Development Headquarters
Comment from Employee
2
1
Commer-cialization
24
Flow of Product Development
PlanningTarami Corporation's jelly pro-duction begins with the search for delicious tastes that are in demand on the market. We repeatedly conduct consumer interviews and monitor target demographics, selling only products deemed to be of a quality that will satisfy custom-er expectations. In addition, we strictly pursue an appropri-ate balance between fruit qual-ity and costs while carefully selecting optimal ingredients from around the world.
DevelopmentTarami develops unique, delicious tastes and tex-tures to meet market needs identified by mar-keting. We perform re-peated analyses of the functional components of fruits and the ingredients related to flavor, studies of jelly textures, and ana-lytical sensory evaluations of products, all so as to develop new tastes and textures to propose to consumers.
ProductionTarami produces fruit des-sert jelly products under hygienic conditions using cutting-edge manufactur-ing equipment. Our plant boasts the largest produc-tion line in the world for fruit dessert jelly, which employs the latest in mechanization to ensure high-quality Tarami prod-ucts.
Quality ControlNo matter how delicious the final result may be, it cannot be called a good quali-ty product if special care is not seriously taken in terms of safety. Tarami Corpora-tion has established its own unique hygiene and quality control system in line with international standards in order to conduct strict quality checks during every phase of the production process. Tarami Corporation applies the same rigorous standards in taking every step to ensure quality control as it does in ensur-ing the flavor of its products, and will contin-ue to pursue measures to achieve higher product quality.
Productplanning
ISO 9001 registeredJQA-QM5315
FSSC 22000 registeredJQA-FC0064Konagai Plantcup desserts
(excluding productsin decorative boxes)
Main Products
Kudamonoyasan series
Happiness every series
Torokeru Ajiwai series Creating new fruit dessert jellies that exceed people's expectations
I emphasize taking a broad perspective and seeing things from the customer's point of view in the process of creating products for the marketplace. I always make it a point to try a wide variety of foods of all kinds. Also, to create products from ideas, we get everyone on the development team aligned in the same direction and work to get people to
express even the smallest of differences with precision. I am only in my second year with the company, but I feel that I am gaining the proper knowledge and skills to do my job well, and I hope that my efforts can lead to a popular new fruit dessert jelly from Tarami.
Tarami's Strengths and Key Features
23
Tarami Corporation is a well-known company with brand strength, which is why we have a top share in the fruit dessert jelly market. We are striving to bolster brand strength to achieve further growth. When one eats delicious food, a smile comes to one's face. Seeing the smile of someone dear to you is also a pleasure. We want everyday life to be filled with smiles, and we want those smiles to continue into the future. Our goal is to create delicious products that bring happiness to as many people as possible and brighten their everyday lives. With these ideas close to heart, Tarami Corporation continues to take on new challenges.
Developing products and strengthening the brand to generate smiles and wonder.
Tarami represents the group's Food Production and Sales Division. Its name recognition and brand strength have allowed the company to maintain the top share in the fruit dessert jelly market. After becoming a group company in June 2012, Tarami has become the third main contributor to the DyDo Group's consolidated performance. With an approach to making products based on the desire to supply items that generate surprise and wonder and meet the needs of the times, Tarami aims to maintain its share of over 40% of the growing fruit dessert jelly market.
Tarami's Strengths and Key Features 1
The fruit dessert jelly market is likely to experience stable growth in the future following a consumer trend toward more healthy desserts. As we build an unassailable position in the fruit dessert jelly market, Tarami aims to develop higher value-added products and open new dessert markets and sales channels to achieve further growth.
Creating more delicious products with a focus on consumers and an eye on their lifestyles
Maintaining a top share in the fruit dessert jelly market through our powerful recognition level and brand strength
Tarami's Strengths and Key Features 2
Tarami Corporation
TaramiCorporation
CompetitorA
CompetitorB
Othercompanies
(Source: DyDo survey as of January 2016)
Ryoko TomisawaProduct Development Group, Development Department
Commer-cialization
Comment from Employee
25 26
The company manufactures and sells Tarami-brand fruit jelly desserts in the Indonesian market.
PT. Tarami Aeternit Food established as a joint venture with PT. Aeternit Prima Mandiri in Indonesia
November 2014
December 2015
We have made a capital investment and completed acquisition of shares in the beverage sales business segment of Mamee, a major food manufacturer in Malay-sia. Utilizing Mamee's power-ful sales channels, we will secure growth in the Malay-sian beverage market.
Capital participation in the beverage business division of Mamee Double- Decker (M) Sdn. Bhd. in Malaysia
February 2016
DyDo has acquired shares of beverage companies belonging to Yildiz Holding A.Ș. in Turkey. The companies are aiming for rapid growth that stays one step ahead in the fast-growing Turkish beverage market.
Beverage companies of Yildiz Holding A.Ș. of Turkey made consolidated subsidiaries
December 2013
DyDo DRINCO RUS, LLC has been established as a wholly-owned consolidated subsidiary in Moscow, Russia. The company is engaged in promoting installation of vending machines across the city, and is horizontally rolling out the vending machine business model—one of DyDo's key strengths—to generate new business opportunities.
Expanding the vending machine business to Moscow, Russia
July 2008
Shanghai DyDo DRINCO, INC. has been established as a wholly-owned consolidated subsidiary to expand sales of DyDo-brand beverages.
Selling beverages in Shanghai
December 2014
DAIDO PHARMACEUTICAL CORPORATION has invested in TCI Co., Ltd., a company that carries out contract manufacturing of beauty drinks and health foods. As this cooperative relationship develops, growth opportunities will expand in the Chinese and ASEAN markets.
Partnership with TCI Co., Ltd. in Taiwan
25
In order to achieve sustainable growth, the DyDo Group is accelerating business development in overseas markets where high growth is anticipated. In 2015 we made the decision to enter the markets of Turkey and Malaysia. We also plan to expand into the CIS region with Russia as the hub, the Islamic region with Malaysia as the hub, and the Chinese region with Shanghai as the hub to expand our business outside of Japan.
The DyDo Group will accelerate overseas business development, taking on the challenge to open new markets.
Global Challenge
Turkey
Malaysia
Indonesia
Taiwan
China
Russia
Overseas Development
CSR Activities
Check implemented at the raw material phase Production phase check / Distribution and sales phase check
We check for compliance with standards and other conditions in raw materials starting from the product planning phase.We also implement thorough quality checks in the pre-production phase. Occasionally, we actually go to the production site if necessary to implement onsite evaluation of production and processing plants.
Compliance and quality check before production
Quality control through DyDo's double-tiered evaluation method
At DyDo, we implement a double-tiered evaluation method in line with our fabless business approach, which entails outsourcing of production to affiliate production plants. Each affiliate production plant carries out inspections during production, which are followed by inspections conducted by DyDo DRINCO. We utilize this strict, double-tiered evaluation check method in an effort to ensure product safety.
"Always giving amazement with our high quality!"
CSR Policy
Evaluating on-site observation
*1 Food materials meet the standards outlined by the Food Sanitation Act, established to provide safety with regard to harmful or toxic substances or microorganisms and prevent health risks attributable to food or drink consumption, such as the use of additives.
More detailed information is available on our website http://www.dydo.co.jp/csr/product.html (Japanese only)
To our customers
Products evaluation based on our raw material standards
Products evaluation based on our quality standards
On-site origin inspections and plant evaluations.A
ffiliate productionplant selection
Inspections
passed
Custom
ers
We would like to deliver not only distinctive products but also we want each and every customer to feel secure about our products. We publish a list of the raw materials and nutritional ingredients in our major products on our website. In addition, we post information regarding phosphorous, potassium and caffeine content, as well as allergenic substances, which customers often inquire about.
DyDo DRINCO has a customer service center that is always available to receive a wide range of customer inquiries, opinions, impressions, requests and so on. We consider our customers' opinions to be vital assets. We utilize them to develop our products and vending machines, and improve our services.
Nihon Canpack Co., Ltd. pursues quality activities on a daily basis with the goal of producing the highest quality in Japan. We aim to produce high-quality products to satisfy customers while working diligently to meet expectations. We carry out annual quality assurance audits to reconfirm and share our quality control data, raising mutual awareness toward quality, which leads to making better
products. We are grateful for the long partnership and are confident in the relationship of trust that we have built.
Product planning and development
Only legally compliant,safe raw materials are used
Selected affiliateproduction plants
Affiliateproduction
plant
Affiliateproduction
plant
Affiliateproduction
plant
Production andinspection processes
Inspection processes
❶Raw material inspection❷Product inspection
(visual/physical properties)
❸Product inspection table check❹Temperature consistency check*2
❺Radioactive substance inspection
Inspectionspassed
Freshness monitoring
Sales points
Vending machines Retail shops
Production plant auditing
Prod
uct
Prod
uct
Prod
uct
27 28
Providing information that customers want through our website
Paying careful attention to customer opinions to improve our products and services
Strict quality checks, both in-house and at affiliate plants
To our customers
To our employees
To ourbusiness partners
To society
To our shareholders
Based on our group philosophy of "striving to achieve happiness and prosperity together with people and society as a whole," we are incorporating the voices of our stakeholders into our management and contributing to the realization of an active and enriched society.
Raw material manufacturer, country of origin, blending ratio, presence of allergens, presence of genetic modification, presence of bovine and porcine material, etc.
Quality specifications, production process, handling conditions, safety in terms of Food Sanitation Act*1, residual pesticides.
*2 Products are subjected to a constant temperature and the liquid content is checked for its condition and taste.
Commentfrom
Affiliate Plant
Sumio Komatsu General Manager, Quality Assurance Department, Nihon Canpack Co., Ltd.
"Always giving amazement with our high quality!"Bringing joy and amazement as well as safety and reliability.
"Giving the joy of working dynamically and gaining achievements!"Ensuring communication inside the company and developing human resources able to take challenges.
"Challenging the next growth stage together!"Sharing management vision/strategies and deepening relations of trust with our business partners.
"Emphasizing the importance of the bonds between people and society!"Contributing to the vitality of members of local society through our business operations and community activities.
"For ongoing increases in corporate value!"Realizing stable returns through a sound governance system.
❶Raw material and acceptance inspection ❷Production control❸Product inspection
(visual/physical properties)
❹Temperature consistency check*2
❺Microbes (bacteria, etc.) check
CSR Activities
More detailed information is available on our websitehttp://www.dydo.co.jp/csr/employee.html (Japanese only)
"Giving the joy of working dynamically and gaining achievements!"
To ouremployees
I wanted to work across borders, so after graduating from university I went to study in the United States to acquire English language skills and qualifications relating to international trade. I participated in a local job forum and I felt a welcoming atmosphere from DyDo. It seemed like they had a corporate culture that values its employees, so I decided to join the company. After joining DyDo I started working in new business development aimed at entering new markets, along with sales and exports to international clients. Having lived overseas myself, I feel that I am able to accept the differences in the ways people think—both Japanese and non-Japanese—as well as lifestyle differences, which helps in carrying out sales and strategic planning with flexibility. Looking ahead, I want to see things from the standpoint of people in other countries and improve my skills not only in sales but in marketing as well. I want to become able to create popular products that people outside of Japan come to know and love as DyDo products.
After joining the company I started to build relationships with corporate customers, and I have also been involved in sales aimed at solving customer problems through solution proposals based on vending machines and other tools. While working in sales and talking with customers I came to realize that I wanted to use my experience and become involved in product development and the type of work that would give form to drinks of the future, so I volunteered when the section I wanted to work in was seeking people. Now that I'm working in that section, I am excited about making small discoveries or innovations to enrich people's lives through the daily experience of drinks, and I want to do everything I can to create new value. The company's internal open recruitment system made it possible for me to take a serious look at my life—what I had done in the past and what kind of career I wanted to have, and made me realize how much support I was getting from the people around me. I want to take that encouragement and further brush up my skills going forward.
Communicating with Employees and their Families
29 30
❶ Recruit diverse personnel who are prepared to boldly take on challenges and are capable of taking responsibility for innovation.
❷ Train personnel to increase knowledge and improve skills in order to create and implement a vision and become capable of bringing about innovation.
❸ Build an organizational culture and personnel system that promote an ongoing handling of challenges.
Hiring female employeesNew employees by gender
One way in which DyDo DRINCO achieves diversity is in actively hiring and training women. We are systematically promoting the hiring of women, and for the period between FY2011 and FY2015 the ratio of women to men hired as new employees was 47.5%.
Strengthening training systems
DyDo DRINCO holds two categories of training to help employees develop and demonstrate their abilities. Training by level of position aims to help individuals acquire the knowledge and approaches that they need. Training by division aims to help employees acquire specialized skills. For new employees, group training by year is provided every year for the first five years on specific themes to help young employees improve their ability to carry out their duties as well as come to see things in different ways and gain new understandings.
Opportunities for self-study
Management seminar for office heads
Poster announcing the challenge support system
DyDo DRINCO has introduced an e-learning program to help employees pursue self-development. Business seminars are also held to help the next generation of leaders build their skills, planned by young employees themselves and held on an ongoing basis.
Support system for employees taking on new challengesWe consider it important for each and every employee to maintain ideals and work to achieve them if the corporate group is going to grow sustainably. That is why we solicit ideas from all of our employees about things they think should be done in the future. This system encourages dynamic engagement in challenges that go beyond one's working group or division. In FY2015, we received responses from 659 of 1,550 employees, and many of the ideas were put into action, such as offering educational experiences for children to teach them about vending machines. (For more information on the educational experience for children, see p. 34.)
Hiring people with disabilities
DyDo DRINCO's rate of hiring people with disabilities is 2.14% (as of January 20, 2016). We are making efforts to help each person further extend their strengths and abilities so that we achieve mutual growth.
Active hiring of individuals with overseas experience
DyDo DRINCO is promoting global business, and toward that end we are actively hiring Japanese and foreign exchange students as well as individuals with business experience overseas. As part of these efforts, we participate in career forums held overseas and operate an autumn hiring system for graduates of foreign universities.
Our Basic Approach to HR
At DyDo DRINCO we respect the values of all individuals—no matter what gender, age, or nationality—and believe that the corporation will achieve sustainable growth by maximizing their individual strengths.
A Respect for Diversity
The DyDo Group issues the family newsletter "Fanpany" to present messages from management, introduce DyDo Group businesses, or to send messages from employees to their families. The "Fanpany" name is an amalgamation of "family," "fan," and "company." It means that even families will become fans of the company. Production of the newsletter is an effort by the DyDo Group to promote understanding among Japanese employees' families.
At DyDo DRINCO we try to develop in our personnel the confidence to be proactive, set high goals, and take on challenges without being afraid to fail. We want them to develop into capable individuals who can carry out business globally. At the same time we want them to pursue personal growth and help draw out the strengths of their teams, keeping in mind what it takes to live and work harmoniously with others.
Personnel Training
20 60
40
20
0
(people) (%)
15
10
5
0FY2011
New female employeesComparative hiring rate of female employees
New male employees
FY2012 FY2013 FY2014 FY2015
Internal job posting system
DyDo DRINCO employs an internal job posting system that aims to improve employee motivation and invigorate the organization. The system makes it possible for individual employees to develop their own careers and take on new challenges in the section of their choice within the Group.
Commentfrom Affiliate Plant
Yuma SakagaInternational Business Department
Tatsuya UejiProduct Development Group, Marketing Department
Comment from Employee
CSR Activities
"Challenging the next growth stage together!"
More detailed information is available on our websitehttp://www.dydo.co.jp/csr/business_partner.html (Japanese only)
To ourbusinesspartners
Case Example
Normally, when there is a power outage caused by a natural disaster, conven-tional vending machines are switched to emergen-cy power by administra-tors. We are able to deliver up to a maximum of 500 products free of charge within 48 hours without power.
Emergency aid vendors
Supplying beverages from vending machines and distribution centers in times of disaster
Evacuationcenter
Evacuationcenter
Evacuationcenter
Evacuationcenter
Beverages
Beverages
Beverages
(The "Cooperative Agreement to Supply Beverages in Times of Emergency" applies only to responses outlined in agreements set up between DyDo and local governments.)
Fundraising vending machines(through cooperation with the owner)
A portionof profits
Installation/contract
Salescommission
Fundraising
Fundraising
"Emphasizing the importance of the bonds between people and society!"
More detailed information is available on our websitehttp://www.dydo.co.jp/csr/jihanki/ (Japanese only)
To society
The DyDo Compliance Hotline is a service that leads to compliance by providing an outlet for reporting or consulting about illegal acts or behavior of concern. Employees of business partners of the DyDo Group may also use the hotline. We are building a system that enables prompt investigation and appropriate action/countermeasures to be taken.
Communication on a daily basis is essential for building better partnerships of mutual trust with our suppliers and other partners. At DyDo DRINCO we also hold regular seminars to explain policies with the goal of making progress together by sharing DyDo's management vision and business strategy.
DyDo DRINCO works to build healthy partnerships with our suppliers and other partners through fair dealings that comply with laws and regulations.
DyDo DRINCO has about 280,000 vending machines across Japan. We talk with vending machine location owners not only when negotiating vending machine placement, but also after installation, communicating closely to build good relationships.
The DyDo Vending Partner Association is an organization for DyDo DRINCO special operators (vending machine operators that handle our products) with whom we have, since DyDo's founding, built a strong relationship based on a close understanding of the company's objectives.
Our company first started doing business with DyDo DRINCO in the spring of 1992 when we began selling DyDo soft drinks in our vending machines. We had been thinking at the time that our ice cream business alone would not sustain the company, as it was subject to major seasonal fluctuations. So we began selling soft drinks to diversify; now soft drinks have become our main business.Based on the DyDo Group's corporate philosophy of striving to achieve happiness and prosperity together with people and society as a whole, our company aims to contribute to local communities through the soft drink vending machine business, bringing satisfaction to customers and enjoyment to our employees and their families.
Comment from
Business Partner
Yamada SxL Home Co., Ltd.
Regular and reliable visits by DyDo's salespeople created a good impression, and when it came time to change our office layout, we decided to put DyDo's vending machines in the open space. DyDo is good about changing products periodically and meeting our needs, treating us with care.Also, in the summertime, they held a sampling event for the employees working at our head office to try drinks that can help prevent heat exhaustion. We all enjoyed the tasting.Our employees liked the sincere approach of DyDo's salespeople, so we are recommending DyDo to all of our company's branches and sales offices.
Comment from
Business Partner
Community Action through Vending Machines
Disaster relief support agreements set up with local governments
DyDo DRINCO has set up agreements with many local governments promising to provide products (free of charge) we have in stock in our distribution centers and disaster aid vending machines (emergency aid vendors) in the event of a major disaster. With these agreements, we are helping to lighten the load on local governments when it comes to drinking water storage preparation in the event of a major disaster.
Fundraising via vending machines
Working together with the location owners of our vending machines, we set up what we call "community action vending machines" and contribute a portion of profits taken by vending machines to raise funds. Our "Green Fundraising Vending Machines" that help in creating woodlands nationwide are one type among several fundraising vending machines. Funds collected are utilized in various activities through each association and organization.
DyDo DRINCO produces vending machines that support the restoration of coral reefs. Part of the sales proceeds from these vending machines is used for helping coral reefs to regrow, an effort that supports the protection of the ocean environment around Okinawa. In this way and others, we are playing our part in reef restoration efforts.
Beverages
Vending machines support coral reef restoration
31 32
Information Sessions for Business Partners
Healthy Partnerships
A Dialogue with Location Owners
A Dialogue with DyDo Vending Partners
Galaxy Fundraising Vending Machines
Guide Dog Fundraising Vending MachinesGiving to guide dog training initiatives
Support for children fighting intractable diseases
Green Fundraising Vending MachinesAssisting afforestation projects around the country
Motoji KunitsuPresident,Kunitsu Syouji Co., Ltd.
CSR Activities
More detailed information is available on our websitehttp://www.dydo.co.jp/csr/jihanki/ (Japanese only)
"Emphasizing the importance of the bonds between people and society!"To society
Community Support Activities
DyDo DRINCO Japanese Festivals
Community Support Fund
The DyDo Group considers the enrichment of the local community our obligation as we engage positively with people and the environment. We therefore established the Community Support Fund for the purpose of carrying out ongoing activities to support local communities. The fund is not an interim assistance measure, but is designed to assist with medium- to long-term support activities by appropriating monies irrespective of the company's performance in a single fiscal year.
DyDo Group Efforts
DAIDO PHARMACEUTICAL CORPORATION Factory Tour (elementary school)To build ties with the local community, DAIDO PHARMACEUTICAL CORPORATION actively accepts factory tours for local elementary schools and others. We want the local community to understand our business and feel closer to the factory. Toward this end we will continue communicating with the local community, and will work to build and maintain a relationship of trust.
I am a "dance education" instructor and in that capacity I have shared a lot of meaningful time with children and many others in Tohoku. I feel rewarded when, wherever I go, people say to me with a big smile, "Dance is so much fun!" I feel that the more chances people have to spend time dancing together and enjoying themselves, the brighter everyone's outlook will be throughout the Tohoku region. I wish to continue doing my best in these activities to make people smile and help them to be healthy.
Comment fromCollaboratingOrganization
I requested a factory tour for my class as part of social studies to give my students a chance to hear the stories of working people—to hear about their difficulties and the ingenuity it takes to overcome them. I wanted my students to feel the charm and warmth that exists in their own town. The children were shown up close how cleanliness was strictly maintained and quality checks were performed, so they came to realize how the efforts of the people working in the factory ensured the safety of their drinks. They also learned that water from the Katsuragi mountains was used in the drinks, so this was a chance for them to renew their appreciation of their home town.
Comment fromParticipating Teacher
Tarami Corporation activities for support of child care institutionsTo contribute first to the local society in our home prefecture of Nagasaki, Tarami Corporation has been delivering jelly products to children at 11 child care institutions throughout the prefecture. We have been providing products on a monthly basis since we started in December 2008, and children have sent us thank you letters in response. We plan to continue such activities as long as we keep putting smiles on children's faces.
Based on our original goal of helping to create bonds between people and revitalize regions through support for festivals that embody Japan's traditional culture, our support efforts have reached their 14th year (as of 2016). From Hokkaido in the north to Okinawa in the south, we offer assistance at 35 festivals throughout the country. By helping to invigorate these festivals, we are also helping to invigorate Japan. Moving forward, we will work together with local people, governments and others in order to cultivate vitality in regions throughout the country.
The Hatachi Fund(Account set up by The Nippon Foundation)
Ongoing assistance for recovery from the Great East Japan Earthquake
Since 2012 we have been donating 10 million yen annually to the Hatachi Fund to provide ongoing support to children living in disaster-hit areas so as to furnish them with an education and support their journey toward becoming independent adults.
Assistance through "Kizuna" Tohoku Revitalization Fundraising Vending Machines
Approximately 10% (about 10 yen per drink) of monthly sales from the designated vending machines is donated to fishery industry associations in Iwate, Miyagi, and Fukushima Prefectures.
Parent-child support with papercraft vending machine kits
Working with our key asset of vending machines as a basis, we produce DyDo DRINCO Papercraft Vending Machine Kits that parents and children can assemble togeth-er by hand, and distribute them around the country at no charge as another way to contribute to society through stimulating curiosity and encouraging expression of individu-ality amongst children.
Vending machine educational class for communities
Local children are invited to a DyDo DRINCO sales office and taught about the history of vending machines and how they function. They are also given the chance to restock a machine themselves. These classes let children have fun learning about vending machines.
Cultural assistance through dance class support in the Tohoku region
Support to alleviate lack of exercise among children in Fukushima Prefecture
To alleviate stress and a lack of exercise among children in Fukushima Prefecture, a Parent-Child Hip-Hop Class project is being carried out. Dancing exercises with beneficial effects against declining locomotive func-tion with age also started to be introduced in 2015.
A year after the 2011 Great East Japan Earthquake, DyDo started the Tohoku Dance Project to brighten the lives of children in disas-ter-stricken areas through dance. As of FY2015, dance classes have been held at 101 schools in Iwate, Miyagi, and Fukushima Prefectures, with a total of 8,471 students participating in the classes.
33 34
Shuko Igarashi Nippon Street Dance Studio Association
Machiko MorinagaTeacher, Oshimi Elementary School, Katsuragi, Nara
"Working for a clean earth through our beverages and food products!"
For theenvironment
CSR Activities
Issue a green power certification
Conventional power supply
Japan NaturalEnergy Company
Limited
Wind powergenerationcompanies
Regionalelectricpower
companies
Regionalelectricpower
companies
Green PowerCertification System
Wind power contracts
1Reconsignment2
Power generation performance report
4
Electric power sales
3
Third-party performance report attestation
5
6
Established: June 7, 2001Revised: April 16, 2014
Tomiya TakamatsuPresidentDyDo DRINCO, INC.
Environmental Policy
Based on the idea of achieving happiness and prosperity together, the DyDo Group recognizes the role of nature in allowing us to produce the beverages and food products that we deliver to people throughout society. We consider it an important responsibility to pass on to the next generation a clean earth and a society full of vitality, so we strive to carry out operations with full consideration for the environment.
Basic Philosophy
• Comply with all environment-related laws and regulations applicable to our business activities.
• Save resources and save energy in our business activities at all times.• Reduce environmental impact in our products and services.• Work at both environment and business activities for better communication
with people and society as a whole.
Action Guidelines
We have introduced an electronic conferencing system in the board room at the head office for company executives to lead the way in paperless efforts.Also, mobile devices are distributed to employees to reduce the volume of printouts and make business talks more timely and efficient.
Forest preservation activities
Rainwater is converted into delicious drinking water through a cleansing mechanism in forest soil. We actively participate in local forest volunteer activities, such as entering into forest fostering agreements with autonomous groups to protect the precious forests that create fresh water crucial to our beverages. We also invite local-area residents to attend classes for making handcrafts from thinned timber as part of our efforts to build community ties.
Eco-friendly steel cans
DyDo DRINCO has adopted the use of TULC (Toyo Ultimate Can), the lightest steel cans available in Japan, produced with cutting-edge technologies, for a number of our canned coffee products, our flagship category. This effort reduces the amount of steel used as a raw material in production.
Going paperless
These activities began in 2003 in Nagano Prefecture with the first adopt-a-forest project, when DyDo DRINCO and Asahi Village entered into an adoptive relationship. A forest-building volunteer group from the Chubu No. 1 Sales Division comes to help thin trees and cut branches near the Asahi Prime Ski Grounds. Parents and children from the region are also invited to attend classes for making handcrafts from thinned timber as a way of building ties with local residents. We are very grateful for these volunteer actions. In 2014, they made a new signboard, "DyDo DRINCO Prime Forest," helping to deepen our mutual ties. While protecting our natural heritage and acting against climate change, we look forward to raising a valuable forest together that will produce tasty, pure drinking water.
An electronic conferencing system in the board room at the head office allows directors to set an example for paperless operations.
Paperless system using tablet PCs
Every single one of our vending machines has a sticker to make more people aware of clean energy which is so vital for the next generation (green power).
Lighter packaging
Container type
185 g steel can
FY1987
37.2 g
FY2015
21.2 g
ReduceLess raw
material used
About43%lighter
35 36
Environmental Activities through Vending Machines
In 2002, DyDo DRINCO became the first company in the beverage industry to participate in the Green Power Certification System. Through this system, natural energy generation is outsourced for a cost, and in return a certificate is issued and the customer is recognized as having used green energy. DyDo DRINCO-commis-sioned windmills (Akita Prefecture) have continued operating since the company's initial participation in the system, and their annual power generation of approximately 1 million kWh of clean energy contributes toward conservation of fossil fuels and reduction of CO2 emissions.
Environmental Activities through Our Products
Environmental Activities by Employees/At the Office
Green Power Certification System
More detailed information is available on our websitehttp://www.dydo.co.jp/csr/eco/ (Japanese only)
Comment fromLocal Government
TakeoNakamura Mayor, Asahi Village, Higashichikuma District, Nagano Prefecture
CSR Activities
With allocation base dates set as January 20 and July 20 of each year, we send gift packages of DyDo products worth 3,000 yen to shareholders owning 100 or more of our shares as a small expression of our appreciation and for them to enjoy the special taste that only DyDo can provide.
DyDo DRINCO considers returning profits to shareholders an important management issue. Our basic stance on profit sharing is to distribute dividends on a stable, ongoing basis with consideration for the balance between shareholder return and the internal reserves needed for sustained growth.Looking ahead, we can anticipate the earnings environment to remain tough, but by improving profitability and achieving sustained profit growth we aim to increase dividend payments in the medium term.
Twicea year
Allocation base date: January 20, July 20
Sample image of set sent to our current shareholders, as of January 20, 2016
Special shareholder benefits
Trends in cash dividends per share
50
60 60 60 6060
(yen)
50
40
30
20
10
0FY2011 FY2012 FY2013 FY2014 FY2015
Stable andcontinuous profit allocation
DyDo Challenge Tsushin is a Japanese-language newsletter for shareholders that helps the company to establish two-way communication, an important pursuit in investor relations.
Newsletter for shareholders
Events held for shareholders and investors in FY2015
Corporate seminars for individual investors in FY2015
Cover page featuring a fun quiz Shareholder questions are answered in this section
Shareholder questionnaire results are provided each issue as feedback
More detailed shareholder questionnaire results are listed on the company website
"For ongoing increases in corporate value!"
To ourshareholders
To give our shareholders sufficient time to study agenda items, we send out the convocation notice early and post information to our website prior to sending of the notice.
For our overseas shareholders we post an English version of the agenda items to be covered on our website.
In addition to allowing voting by postal mail, we have adopted a system of electronic voting via the Internet that enables access through personal computers, smartphones, and other devices. Also, we participate in the Electronic Voting Platform operated by ICJ, Inc. aimed at institutional investors.
As an additional measure for shareholders living far away or unable to attend for other reasons, a video of the business report is made public on the company website.
Rapid Disclosure of Convocation Notice
English Translation of Agenda Items
Expanding Voting Methods
Video Distribution of Business Report
Results briefings 2
4
15
Limited meetings
Corporate seminars for individual investors
Kobe: 1 Osaka: 2
Fukuoka: 1
Hiroshima: 1
Nara: 1Nagoya: 2
Tokyo: 4
Saitama: 1
Sendai: 1
Sapporo: 1
37 38
DyDo DRINCO aims to provide information rapidly, on the basis of transparency, fairness, and continuity, to all our stakeholders, including our shareholders and investors. In addition to information disclosure in accordance with the Companies Act, the Financial Instruments and Exchange Act and other laws, plus the Timely Disclosure Rules of the Tokyo Stock Exchange (TSE), we also strive to disclose information proactively and candidly as far as possible as we believe this will be effective for generating a deeper understanding of DyDo DRINCO.
Our Stance on Shareholder Return
DyDo DRINCO considers the Ordinary General Meeting to be a forum for constructive dialogue with shareholders, and we prepare an environment that enables fair and rapid information disclosure and smooth voting for shareholders.
General Meeting of Shareholders
More detailed information is available on our websitehttp://www.dydo.co.jp/csr/stock_holder.html (Japanese only)
See website for videoshttp://www.dydo.co.jp/corporate/ir/event/results_briefing.html (Japanese only)
Information Disclosure Policy
We work to promote a deeper understanding of the DyDo Group among our investors, shareholders and all other stakeholders, and strive to maximize our corporate value by incorporating the feedback we receive into our management. We actively hold corporate seminars for individual investors and results briefings for institutional investors, and are expanding such opportunities for engaging with our shareholders and investors.
Engaging with Shareholders and Investors
1. Basic Approach to Corporate Governance
"DyDo Group strives to achieve happiness and prosperity together with people and society as a whole. To realize this, we will continue our dynamic efforts to take on new challenges." Our corporate philosophy inspires us in our ongoing quest to ensure proper, upstanding business practices and rigid compliance with relevant laws and regulations. It motivates us to constantly improve management efficiency and transparency, and to promote the group's mutual benefits with all of our stakeholders, including our customers, our employees, our business partners, our communities, and our shareholders. It is the very cornerstone of our corporate governance, which is geared toward generating sustainable growth and improving corporate value over the medium- to long-term.
Basic Policy Regarding Corporate Governance
Our core business is beverage sales and, as approximately 85% of those sales come from vending machines in the local community, it is fair to say that our products are familiar parts of consumers' everyday lives. Moreover, our operations are conducted under a "fabless management" system, which means we have no plants of our own and instead oursource work in close cooperation with producers and distributors nationwide to make and deliver products. We concentrate our resources on more specific roles, such as product planning and development, and vending machine operations. We have about 280,000 vending machines across Japan, which are maintained by DyDo Group employees and the DyDo Vending Partner Association (vending machine operators that handle DyDo products).It is a rather unique business model that depends on the trust of our stakeholders. As such, we believe "happiness and prosperity together with people and society as a whole" is more than just a nice phrase for a corporate philosophy—it is our duty, and the overriding objective of our business activities. To that end, our "dynamic efforts" are founded on a bedrock of corporate governance, a steadfast platform of transparent, fair, swift, and bold decision-making. Moreover, we continually work to improve that foundation in order to contribute to the benefit of our shareholders.
At the DyDo Group, we have implemented a Basic Policy Regarding Corporate Governance in order to ensure the transparent, fair, swift, and bold decision-making needed for us to stay ahead of an ever-changing business climate, achieve sustainable growth long into the future, and improve corporate value over the medium- to long-term. That policy is constantly fine-tuned to ensure the ongoing integrity of our corporate governance.
Corporate Governance
(1) Securing the Rights and Equal Treatment of ShareholdersAt the DyDo Group, our corporate philosophy guides us to work in close partnership with a broad range of stakeholders. For instance, we endeavor to effectively secure the rights of our shareholders, and to prepare an environment in which they can exercise those rights appropriately.
(2) Appropriate Cooperation with Stakeholders Other than ShareholdersWe are keenly aware that our efforts to generate sustainable growth and improve corporate value over the medium- to long-term (as enshrined in our corporate philosophy) are reliant on the valuable resources and contributions of a broad spectrum of stakeholders, including our customers, our employees, our business partners, and our communities. Moreover, we are proud to work in close partnership with our stakeholders, and we proactively incorporate their feedback into the running of the DyDo Group.Executives and the board of directors are charged with leading the creation and maintenance of a corporate culture that demands respect for the rights and positions of stakeholders and firm adherence to corporate ethics.
(3) Ensuring Appropriate Information Disclosure and TransparencyIn line with our policy of transparency, fairness, and long-term focus, we provide shareholders, investors, and all other stakeholders the information they need to make informed decisions. This includes information on our companies' finances, business performance, management strategies and issues, risks, and other matters relating to governance. Indeed, we consider our legal obligation to disclose pertinent information promptly and appropriately to be a serious matter. In addition, however, we are also eager to publish information that encourages correct understanding of the DyDo Group to the furthest possible extent.
(4) Responsibilities of the BoardThe board of directors seeks to discharge its responsibility and accountability to shareholders by pursuing a three-pronged strategy for consistent improvement of the group's earning power and capital efficiency so as to achieve sustainable growth and improve corporate value over the medium- to long-term. Those three facets are: 1) set the direction for implementation of the group's corporate strategy; 2) establish a platform for executives to take calculated risks; and 3) institute effective, independent, and objective oversight of executives and directors.
(5) Dialogue with ShareholdersConstructive dialogue with shareholders is an integral part of our IR strategy, which is geared toward our goal of sustainable growth and improved corporate value over the medium- to long-term. Such communication not only fosters correct understanding of the DyDo Group, but it also generates valuable feedback that serves as a frank appraisal of our true trustworthiness and corporate value.
Group Vision
Group Philosophy
Together with customers
Together with society
Together with future generations
Together with people
More detailed information is available on our websitehttp://www.dydo.co.jp/corporate/ir_eng/management/governance.html
39 40
General Meeting of Shareholders
Execution ofOperations
Management Council
Risk ManagementCommittee
Internal Control Officer
Personnel / General Affairs(Legal Affairs Group)
Operating Division
President andRepresentative Director
Audit
Internal Audit
Accounting Audit
Coordination
Coordination
Appointment / Stepping Down
Audit
Appointment / Stepping Down
Appointment / Stepping Down
AccountingAuditor
LegalConsultant,
etc.
Ad
vice /G
uidance
Co
ord
ination
Reports
ReportsAppointment /Stepping Down
Board of Corporate Auditors
AuditingDepartment
Board of Directors
Corporate Governance System (Organizational Chart)
2. How We Put Japan’s Corporate Governance Code into Practice
DyDo Group strives to achieve happiness and prosperity together with people and society as a whole. To realize this, we
will continue dynamic efforts to take on new challenges.
Offering high quality products, adding a surprise to deliver "distinctive DyDo" taste and wellness to customers.
"All DyDo" product development and corporate activities involved in the group is committed to build rich and vibrant society.
Creating "DyDo standards" for the upcoming next generations. To go beyond current framework and values.
Endless "DyDo challenging sprit" to bring happiness to all people through our group activities.
1. Domestic economic situation
2. Market competition in the beverage industry
3. Focus on sales in the vending machine channel and reliance on coffee beverages
4. Procurement of ingredients and materials
5. Production system
6. Weather and natural disasters
7.
8.
9.
10.
11.
12.
13.
Legal regulations, etc.
Management of customer information
Food safety and quality control
Changes in the market value of securities
Securing and developing personnel
Overseas business development
Corporate takeovers and business/capital alliances
The following are the types of risks that could have a serious impact on the business performance and financial soundness of the DyDo Group. The items listed below were assessed by the group as of January 20, 2016, and do not constitute all of the possible business risks.
The DyDo Group holds to a group philosophy of striving to achieve happiness and prosperity together with people and society as a whole; we promise to work dynamically to break new ground and help build a rich and vibrant society, balanced by feedback from stakeholders.These are the specific measures based on our group philosophy through which we aim to take social responsibility as a corporation: 1. Regulatory compliance, 2. Financial reporting reliability, 3. Asset protection, and 4. Business effectiveness/efficiency. We have determined that establishing an internal control system shall form our basis for achieving these measures.
Mid-term business plan targets are the milestones that line our way to improved corporate value. As part of our efforts to overcome the challenges that block that path, we will switch to a holding company structure on January 21, 2017, in order to bolster the DyDo Group's management base.
Ongoing Improvements to Corporate Governance
Internal Control
We are working to establish an environment that encourages constructive debate among directors.
● Reducing the size of the board of directors as set forth in the articles of incorporation: 9 members → 7 members
● Shortening the term of members of the board of directors as set forth in the articles of incorporation: 2 years → 1 year
● Increasing the proportion of independent and external directors → To one-third of the entire board (as of April 15, 2016)
● Reassessing the scope of management's responsibilities:Related rules, including the Board of Directors Rules, Management Meeting Rules, and Administrative Authority Rules, were revised as of January 21, 2016.
● Reassessing board of directors operations:- Improving the provision of information to external directors- Distributing materials in advance
Implementing a highly transparent, objectively assessed incentive system closely linked to group performance will heighten directors' and executive officers' awareness of the importance of improved performance and the need to contribute to greater corporate value.
● Incentive system due to start on January 21, 2017● Targeted positions:
Directors and corporate officers of DyDo Group Holdings Inc., DyDo DRINCO, INC., DAIDO PHARMACEUTICAL CORPORATION, Tarami Corporation, and overseas beverage management company(Not including external directors or the chairman of the board of directors)
● Grants of DyDo shares based on extent to which KPIs are achieved:(1) Percentage achievement of each business year's consolidated net sales target(2) Percentage achievement of each business year's consolidated operating income
target(3) Percentage achievement of the consolidated net sales target for the final year of the
mid-term business plan(4) Percentage achievement of the operating margin for the final year of the mid-term
business plan(No incentives will be granted if KPIs are not achieved.)
● Timing of grants of DyDo shares to eligible directors and officers under this system:In general, shares will be granted at the end of the term of the director or officer in question if the requirements for such an award have been met.
Basic Approach on Internal Control
An internal auditing department that reports directly to the president and is independent from the business divisions so as to maintain impartiality has been established to audit each internal division, report the results to the president, assess the results, and provide guidance. Also, we have set up a board of corporate auditors and the position of accounting auditor for the department to work with to conduct effective and efficient audits.In addition to the above auditing system, a director has been put in charge of internal control to oversee all aspects of internal control and compliance (both regulatory and within the realm of social ethics), to ensure full compliance and the smooth running of the internal control system.We have distributed Compliance Action Guidelines indicating specific standards of conduct for all directors and employees and will continue to raise awareness toward compliance. Each business division in the company is to autonomously check its own risk management status in accordance with our Basic Rules on Risk Management that cover many basic matters related to compliance. Each division is to then present the results to the Risk Management Committee, headed by the president, which is to discuss and review measures based on those results.Also, to help strengthen deterrence against legal violations, a DyDo Compliance Hotline is being set up for internal reporting based on our Internal Report System Rules. Another system that has been put in place is the strict handling of personal information based on Privacy Protection Rules.Our company's basic policy regarding the building of an internal control system has been established at our board of directors meeting.
Outline of Our Internal Control System
Corporate Governance
Business Risks
For more details
For more details http://www.dydo.co.jp/csr/internal_control.html (Japanese only)
41 42
DyDo DRINCO, INC.(Domesticbeveragebusiness)
(Overseasbeveragebusiness)
Holding companyDyDo Group Holdings, Inc.
DA
IDO
P
HA
RM
AC
EU
TICA
L C
OR
PO
RATIO
N
Tarami
Corporation
DA
IDO
P
HA
RM
AC
EU
TICA
L C
OR
PO
RATIO
N
Tarami
Corporation
Overseas beverage
managem
ent com
panyO
verseas beverage subsidiaries (O
verseas beverage business)
DyD
o DR
INC
O, IN
C.
(Dom
estic beverage business)
Current structureAfter transition to holding company structure
1. Transition to a Holding Company Structure
2. Revitalizing and Strengthening the Functionality of the Board of Directors
3. Introducing a Performance-Based Incentive System
http://www.dydo.co.jp/csr/internal_control.html (Japanese only)
Liabilities
Current liabilities
Notes payable and accounts payable
Short term loans
Short term lease obligations
Accounts payable
Accrued income taxes, etc.
Accrued expenses
Accrued bonuses
Other
Fixed liabilities
Bonds
Long term loans
Long term lease obligations
Other
Liabilities total
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total other comprehensive income
Minority interests
Net assets total
Liabilities / net assets total
41,240
16,286
6,434
2,438
11,052
1,237
1,901
1,013
877
21,919
―14,076
2,550
5,292
63,160
81,184
1,924
1,464
77,800
(4)
1,647
1,901
84,734
147,894
43,032
17,664
7,997
1,937
9,852
1,031
1,754
1,032
1,762
35,483
15,000
13,661
2,167
4,654
78,516
82,460
1,924
1,464
79,076
(4)
740
1,979
85,181
163,697
Net sales
Cost of sales
Gross profit
Sales expenses and ordinary management costs
Operating income
Non-operating income
Non-operating expenses
Ordinary income
Extraordinary expenses
Income before taxes
Income taxes, etc.
Minority interests
Net income
149,526
67,553
81,972
76,798
5,174
710
1,414
4,470
―4,470
2,027
120
2,322
149,856
68,859
80,996
76,008
4,988
430
1,156
4,262
421
3,841
1,422
71
2,347
FY2015(Jan. 21, 2015 to
Jan. 20, 2016)
FY2014Item
Item
(Jan. 21, 2014 toJan. 20, 2015)
13,959
3,734
(2,561)
11
15,145
26,874
42,020
14,603
(8,090)
12,412
(46)
18,878
42,020
60,898
FY2015(Jan. 21, 2015 to
Jan. 20, 2016)
FY2014(Jan. 21, 2014 to
Jan. 20, 2015)
FY2014(As of January 20, 2015)
FY2015(As of January 20, 2016)
Assets
Current assets
Cash and cash equivalent
Notes receivable and accounts receivable
Securities
Inventories
Other
Fixed assets
Tangible fixed assets
Tools, equipment and machinery (net amount)
Lease assets
Other (net amount)
Intangible fixed assets
Investments and other assets
Investment securities
Other
Assets total
81,907
47,800
13,707
10,316
7,323
2,758
65,986
34,655
20,171
5,044
9,440
11,072
20,257
14,589
5,668
147,894
101,797
60,294
14,580
16,494
6,976
3,450
61,900
33,737
20,570
4,135
9,030
10,838
17,324
12,215
5,109
163,697
FY2014(As of January 20, 2015)
FY2015(As of January 20, 2016)
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalent at beginning of year
Cash and cash equivalent at end of year
Item
Item
Consolidated Balance Sheets
Consolidated Income Statements (Unit: million yen)
(Unit: million yen)
(Unit: million yen)
Consolidated Statements of Cash Flows
Consolidated Financial Statements
44
Current Fiscal Year Forecast
Regarding Dividends
The Group Actively Pursued Measures Aimed at Sustained Growth
The Japanese economy in FY2015 showed some weakness but continued on a gradual recovery. There has been steady improvement in the employment situation and earnings environment and personal consumption in general is holding steady, but anxiety is being caused by the slowdown in China and other emerging economies, combined with the effects of rising geopolitical risk, and the future still remains uncertain.In the beverage industry, a dwindling birthrate in Japan and the continual aging of its population mean that there is no significant growth forecast for the domestic market for beverages. At the same time, competition is increasing in retail and prices, with various companies vying for a greater share of the industry. Retail costs have also risen sharply, along with the cost of imported raw materials as the yen depreciates. Such factors are having a strong impact on the business climate as we strive to secure profits.In these circumstances, the DyDo Group has been actively engaged in efforts to achieve sustainable future growth during the second year of our "Challenge the Next Stage" mid-term business plan. We aim to build our corporate value further, based on a new corporate philosophy and corporate vision, and do what it takes to respond to major changes in the business climate.
Since the April 2014 rise in the consumption tax to 8%, there have been major changes in beverage industry market trends, and the business climate has become very severe for earning profits.Amidst this upheaval in the business environment, we need to continue holding our industry-leading position in vending machines, our core business. We also need to think outside the box and dynamically take on new challenges, looking to a new generation of consumers, in order to boost the group's overall competitiveness. As we work to achieve the goals set out in the "Challenge the Next Stage" mid-term business plan with FY2018 as the final year, we need to recognize the vital importance of FY2016 as the midway point and accelerate our innovative efforts. By so doing we can maintain steady growth and boost our corporate value in the medium and long term.
In line with the same basic approach we have always taken, which is to continually maintain stable dividends, we set the FY2015 year-end dividend at 30 yen per share. Added to the interim dividend of 30 yen per share, the total annual dividend for FY2015 is 60 yen.In FY2016, although we foresee a consumer trend toward low-priced purchases and other conditions making the earnings environment in the beverage industry even tougher, we will continue to maintain stable dividends and therefore anticipate the same 30-yen-per-share-interim and year-end dividends for another annual dividend of 60 yen per share.We will strive to further boost profitability and achieve sustained growth to try to increase dividends in the medium term.
303030
152,800
2.0%
5,000
0.2%
4,800
12.6%
2,900
23.6%
FY2014FY2015FY2016 (forecast)
303030
606060
994994
−
42.8%42.3%34.3%
1.2%1.2%
−
Annual dividend
2nd quarter Year end Total
Total amount ofdividends (consolidated)
(million yen)
Dividendpayout ratio
(consolidated)
Dividend rateon net assets (consolidated)
Net sales Operatingincome
Ordinaryincome
Net income attributableto parent
Earnings pershare (yen)
124,1923,7459,788
10,657
Net salesSegment profitCapital expenditureDepreciation expenses
BeverageSales Division
OEM BeverageProduction Division
Food Productionand Sales Division Total Adjustment
Consolidatedstatement
9,126979298459
17,155259595587
150,4744,985
10,68111,704
(618)2−−
149,8564,988
10,68111,704
Financial Report
(Unit: million yen)
(Unit: million yen)
(Unit: yen)
Business PerformanceFY2015
Consolidated results for FY2015 are as follows:
Net sales 149,856 million yen (up 0.2% from FY2014)
Operating income 4,988 million yen (down 3.6% from FY2014)
Ordinary income 4,262 million yen (down 4.7% from FY2014)
Net income 2,347 million yen (up 1.1% from FY2014)
43
175.05
−
Note: The various costs involved in the business planning and post-merger integration for our five overseas beverage subsidiaries (one in Malaysia and four in Turkey) that will enter the scope of consolidated accounting in FY2016 are not included here.
FY2016 forecastYear on year difference (%) change from previous year
Corporate Data
2178, Nakazato-machi, Nagasaki 851-0198Tel: +81-95-839-1111
Tarami Corporation
Consolidated Subsidiaries
DyDo BEVERAGE SERVICE, INC.
DyDo BUSINESS SERVICE, INC.
DAIDO PHARMACEUTICAL CORPORATION
Tarami Corporation
DyDo BEVERAGE SHIZUOKA, INC.
DyDo DRINCO SERVICE KANTO, INC.
Shunnotoki Inc.
SHANGHAI DyDo DRINCO, INC.
DyDo DRINCO RUS, LLC
DyDo Mamee Distribution Sdn. Bhd.
Della Gıda Sanayi ve Ticaret A.Ș.
Bahar Su Sanayi ve Ticaret A.Ș.
İlk Mevsim Meyve Suları Pazarlama A.Ș.
DyDo DRINCO TURKEY İçecek Satıș ve Pazarlama A.Ș.
DyDo DRINCO, INC.
January 27, 1975
2-2-7 Nakanoshima, Kita-ku, Osaka 530-0005, Japan
Tomiya Takamatsu, President
1,924,325,000 yen
16,568,500
24,980 (as of January 20, 2016)
The First Section of Tokyo Stock Exchange Market
Consolidated: 2,887; Non-consolidated: 684 (as of January 20, 2016)
From every January 21st to next year January 20th
Resona Bank, Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank
KPMG AZUSA LLC
Sumitomo Mitsui Trust Bank, Limited
Company Name
Established
Head Office
Representative Director
Paid-in Capital
Number of Shares Outstanding
Number of Shareholders
Stock Exchange Listing
Number of Employees
Fiscal Year
Major Corresponding Banks
Auditors
Transfer Agent & Register
DyDo BEVERAGE SERVICE, INC.
2-2-7, Nakanoshima, Kita-ku, Osaka 530-0005
DyDo BUSINESS SERVICE, INC.
2-2-7, Nakanoshima, Kita-ku, Osaka 530-0005
DAIDO PHARMACEUTICAL CORPORATION
214-1, Shimura, Katsuragi, Nara 639-2121Tel: +81-745-62-5031
DyDo DRINCO, INC.
Sales Bases
Head Office Tokyo Office Sumitomo Fudosan Mita Twin Bldg. East 4F, 4-2-8, Shibaura, Minato-ku, Tokyo 108-0023
Nakanoshima Central Tower Bldg. 18F, 2-2-7,Nakanoshima, Kita-ku, Osaka 530-0005, JapanTel: +81-6-6222-2611
Tohoku Daiichi Sales Department
Tohoku Daini Sales Department
Shutoken Daiichi Sales Department
Shutoken Daini Sales Department
Tokyo Sales Department
Chubu Daiichi Sales Department
802, Sankyo Sendai-higashi Bldg., 5-1-35, Tsutsuji ga Oka, Miyagino-ku, Sendai, Miyagi 983-0852 Tel: +81-22-292-3271
2-7-19, Dainitonya-machi, Aomori 030-0113Tel: +81-17-729-2307
3-40-1, Maruyamadai, Kounan-ku, Yokohama,Kanagawa 233-0013 Tel: +81-45-846-2100
1-311-2, Miyahara-cho, Kita-ku, Saitama 331-0812Tel: +81-48-665-7100
10, Ichigaya Building, 1-1, Honmura-cho, Ichigaya, Shinjuku-ku, Tokyo 162-0845 Tel: +81-3-6361-9171
198-1, Hirose, Isawa-cho, Fuefuki, Yamanashi 406-0035Tel: +81-55-261-5220
Chubu Daini Sales Department
Chukyo Daiichi Sales Department
Chukyo Daini Sales Department
Nishi Nihon Daiichi Sales Department
Nishi Nihon Daini Sales Department
Chokkatsu Sales Department
1283, Kando, Yoshida-cho, Haibara-gun, Shizuoka 421-0304Tel: +81-548-32-8845
2-6, Higashi-Ozone-cho, Higashi-ku, Nagoya, Aichi 461-0022Tel: +81-52-935-0871
705, Ueno, Kawage-cho, Tsu, Mie 510-0304Tel: +81-59-245-5031
3-1-55, Nagayoshinagahara-higashi, Hirano-ku,Osaka 547-0013 Tel: +81-6-6709-6101
1-14-30, Doi, Higashi-ku, Fukuoka 813-0032Tel: +81-92-663-2171
2-2-7, Nakanoshima, Kita-ku, Osaka 530-0005Tel: +81-6-6222-2633
Tel: +81-120-559-552
Tel: +81-120-606-909
Customer Service Center
DyDo DRINCO Online and Mail Order Sales Shopping Customer Service Center
Contact Us
Major Domestic Consolidated Subsidiaries
45 46
Net sales
Cost of sales
Cost of sales ratio (%)
Gross profit margin (%)
SG&A expenses to net sales (%)
Operating income
Operating margin (%)
Ordinary income
Ordinary margin (%)
Net income
Profit margin on net sales (%)
Earnings per share (yen)
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash and cash equivalent at end of year
Total assets
Net assets
Capital adequacy ratio (%)
Net assets per share (yen)
Numbers of shares outstanding (thousands)
Number of employees
Net sales per employee
Depreciation expenses
Capital expenditure
147,404
67,284
45.6
54.4
49.5
7,295
4.9
6,687
4.5
2,351
1.6
141.91
17,540
(8,274)
(11,016)
19,424
128,550
74,788
56.9
4,416.66
16,568
2,936
50.20
12,350
6,839
148,902
67,976
45.7
54.3
49.0
7,934
5.3
7,725
5.2
4,410
3.0
266.22
16,491
(6,704)
(219)
29,051
140,487
79,097
55.1
4,670.18
16,568
2,916
51.06
11,202
16,833
154,828
70,553
45.6
54.4
50.6
6,004
3.9
5,962
3.9
3,712
2.4
224.08
14,764
(16,580)
(469)
26,874
146,479
82,554
55.1
4,872.53
16,568
2,770
55.89
12,080
14,376
149,526
67,553
45.2
54.8
51.4
5,174
3.5
4,470
3.0
2,322
1.6
140.16
13,959
3,734
(2,561)
42,020
147,894
84,734
56.0
4,999.88
16,568
2,767
54.04
12,343
12,261
FY2014
149,856
68,859
46.0
54.0
50.7
4,988
3.3
4,262
2.8
2,347
1.6
141.68
14,603
(8,090)
12,412
60,898
163,697
85,181
50.8
5,022.16
16,568
2,887
51.91
11,704
10,681
FY2015FY2013FY2012FY2011Fiscal year
2015
Financial Report
Consolidated Highlights
(Unit: million yen)
Net sales
200,000(million yen)
(FY)
(FY)
(FY) (FY)
150,000
100,000
50,000
02011 2012 2013 2014 2015
Net assets / Capital adequacy ratio
Net assetsCapital adequacy ratio
100,000(million yen)
75,000
50,000
25,000
0
60(%)
45
30
15
02011 2012 2013 2014 2015
Operating income
10,000(million yen)
7,500
5,000
2,500
02011 2012 2013 2014
Net income
5,000(million yen)
4,000
3,000
2,000
1,000
02011 2012 2013 2014 2015
■ Beverage Sales Division
■ OEM Beverage Production Division
■ Food Production and Sales Division
Consolidatednet sales149,856
million yen
Food Production and Sales Division17,115 million yen (11.4%)
OEM Beverage Production Division8,548 million yen (5.7%)
Beverage Sales Division124,192 million yen (82.9%)
Note: Sales by segment indicate sales to outside clients