first half fy3/2017 consolidated financial results …...1.1 1.1 0.9 1.0 0.7 0 10 20 30 40 50 60 70...
TRANSCRIPT
November 17, 2016The Nisshin OilliO Group, Ltd.
First Half FY3/2017Consolidated Financial Results Presentation
1
2
・Summary of Financial Results for First HalfFY3/2017
・Progress Report on Medium-TermManagement Plan
Takao ImamuraPresident and Representative Director
3
Summary of Consolidated Financial Results for FirstHalf FY3/2017 and Consolidated Financial Forecastsfor FY3/2017
2QFY3/2017
2QFY3/2016 Change (%)
Net sales 155,032 161,123 -3.8%Operating income 5,540 3,121 +77.5%Ordinary income 5,122 3,455 +48.3%
Net income attributable to the parent's shareholders 3,964 2,688 +47.5%
4
Consolidated Financial Results forFirst Half FY3/2017
(Million yen)
5
FY3/2017Forecasts
FY3/2016Results Change (%)
Net sales 329,000 327,836 +0.4%Operating income 9,000 7,129 +26.2%Ordinary income 9,000 7,370 +22.1%
Net income attributable to the parent's shareholders 6,000 5,020 +19.5%
FY3/2017 Consolidated Forecasts
(Million yen)
6
Progress Report on Medium-Term Management Plan
Segment Initial Goals Main Achievements being made in Medium-Term Management Plan
Domestic Oil and Fat
Continuing to implement far-reaching initiatives to improve earnings for building a solid earnings base
Deploying high value-added products, improving earnings in standard oils category, developing new sales channels, and reducing costs
Processed Oil and Fat
Secure stable profits in this business to drive group earnings
Created a global platform for growth, mainly at ISF, Daito Cacao Co., Ltd. and T.&C. Manufacturing Co., Pte. Ltd.
Fine Chemical (FC)
Further expansion in business scale and progress in globalization
Established an infrastructure for the cultivation of Asia’s market by setting up a local subsidiary in China for the sale ofraw materials for cosmetics
Healthy Food (HF) & other
Strengthen initiatives with focused targets in areas that the Nisshin OilliO Group has an advantageCreate new businesses and global brand in the Medium-Chain Triglyceride Business
Expanding sales of medium-chain triglyceride (MCT)-related and other health-related products, promoting mail-order business, and developing elderly and nursing care market
7
Progress Report on Medium-Term Management Plan
2.4 2.3
4.0
2.0 3.0
3.2
0.5
1.1
1.1
0.9
1.0
0.7
0
10
20
30
40
50
60
70
80
90
100
FY3/2015Results
FY3/2016Results
FY3/2017Plan
In addition to benefit from structural reforms in the Domestic Oil and Fat Business, we expect ordinary income to increase for another consecutive fiscal year owing to growth in the Processed Oil and Fat Business and Fine Chemical Business.
2.9 3.15.0
2.94.3
4.0
0
10
20
30
40
50
60
70
80
90
100
FY3/2015Results
FY3/2016Results
FY3/2017Plan
(Billion yen)(Billion yen)
5.8 5.8
7.4
9.0 9.0
7.4
Consolidated ordinary income trends
Domestic Oil and Fat Business
Processed Oil and Fat Business
FC Business HF Business& other
ParentSubsidiaries & affiliates
8
Progress Report on Medium-Term Management Plan
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0
Continuing to implement far-reaching initiatives to improve earnings for building a solid earnings base
Deploying high value-added products• Expanded sales underpinned by active sales promotions to commemorate the 20th anniversary of
the launch of “BOSCO Olive Oil”• Secured earnings contribution on launch of new products that satisfied consumer needs
→ “Nisshin Kenko Oil Amani-plus” (foods labeled with health claim functions)• Developed high value-added products and new customers using a sales method that focuses on
cooperation to unearth user needs→ “Kyuhyu-ga-sukunai Frying Oil”, “Nisshin Super-Long series” (commercial-use)
• Created new market by suggesting usages, including table-use oils that can be directly poured on foods→ Fresh-keep bottles (olive oils, roasted sesame seeds oils)
Supplement-like oils (“Nisshin Flaxseed Oil” / “Nisshin Medium-Chain Triglycerides 100% Oil”) Improving earnings in standard oils categories
• Continued to offer fair selling prices commensurate with raw material prices• Developed products to eliminate homogeneous competition in the standard oils categories and
improved sales ratio for these products→ “Nisshin Healthy-Off”, “Nisshin Canola Oil Natyu-Made”
Reducing costs• Achieved cost reduction goal of ¥3.0 billion by optimizing the production and distribution system.• Estimate another cost reduction of ¥1.1 billion by establishing a corporate structure that continues
to cut costs
In the first half of FY3/2017, posted ordinary income of ¥2.6 billion, versus a full-year ordinary income target of ¥4.0 billion (achievement rate of 65%)
9
Domestic Oil and Fat Business
Created a global platform for growth, mainly at ISF, Daito Cacao Co., Ltd. and T.&C. Manufacturing Co., Pte. Ltd.
• ISF expanded sales of value-added products in Europe• Moved forward in Asia with sales activities backed by proposals for value-added products
that suit customer needs via collaborations between ISF and T&C and the Nisshin Global Research Center, which was set up in Malaysia to carry out research and development
• Entered negotiations on possible joint venture with Salim Group in Indonesia to globally expand the chocolate business at Daito Cacao
• Continued to implement sales expansion of value-added products in the growing Asian market through ISF and T.&C.
• In Japan, expanded sales of value-added margarine products and specialty fats owing to fortification of user support functions
In the first half of the year, recorded ordinary income of ¥2.1 billion, versus a full fiscal year target of ¥3.2 billion (achievement rate of 66%)
10
Secure stable profits in this business to drive group earnings
Processed Oil and Fat Business
FC Business: Further expansion in business scale and progress in globalizationHF Business: Strengthen initiatives with focused targets in areas that the Nisshin
OilliO Group has an edgeMedium-Chain Triglyceride Business: Create new businesses and global brand
< Fine Chemical Business >In the first half of the year, booked ordinary income of ¥600 million, versus a full fiscal year target of ¥1.1 billion Built a platform for business expansion in Asia by establishing a local subsidiary in China to
handle the sales of raw materials for cosmetics• Substantial contribution to earnings expansion owing to brisk sales backed by technical
proposals and support offering by local subsidiary in China, set up in 2015 to handled sales of raw materials for cosmetics
• In Japan, expanded sales by actively offering proposals on use of value-added products, including functional materials
< Healthy Food Business and others> Expanding sales of medium-chain triglyceride (MCT)-related and other health-related
products, promoting mail-order business, and developing elderly and nursing care market• Expand sales related to markets for elderly and nursing care by improving the recognition of
benefits of health functions of MCT by strengthening ties with hospitals, nursing care facilities, companies outside of the Nisshin OilliO Group, and universities.
• Enlightening consumers of the value of MCT and improving recognition of MCT through active communication and through collaborations between industry, academia, and the government of Suzuka City
11
Fine Chemical Business and Healthy Food Business
Summary of Consolidated Financial Results
for First Half FY3/2017
Nobuyuki WatanabeGeneral Manager, Financial Department
12
*Figures for raw materials and foreign exchange rates are based on the Nisshin OilliO Group results. 13
Summary of Consolidated Financial Results for First Half FY3/2017
(Million yen)
14
Consolidated Results by Business Segments (1)
(Billion yen)
Consolidated Results by Business Segments (2)
15
0.6
0.8
1.0
1.2
1.4
1.6
1.8
大豆 原料価格(USD/t) 大豆 原料価格(¥/t) 大豆粕 販売価格(¥/t)
Taking Apr-Sep 2011 as baseline of 1.0
*Figures are based on the Nisshin OilliO Group results. 16
Raw material price (USD/t) Raw material price (JPY/t) Soybean meal selling price (JPY/t)
Raw Material and Oil Meals Price Trends: Soybean
*Figures are based on the Nisshin OilliO Group results. 17
Raw Material and Oil Meals Price Trends: Rapeseed
0.6
0.8
1.0
1.2
1.4
1.6
1.8
菜種 原料価格(USD/t) 菜種 原料価格(¥/t) 菜種粕 販売価格(¥/t)
Taking Apr-Sep 2011 as baseline of 1.0
Raw material price (USD/t) Raw material price (JPY/t) Rapeseed meal selling price (JPY/t)
0.6
0.8
1.0
1.2
1.4
1.6
1.8Taking Apr-Sep 2011 as baseline of 1.0
*Figures are based on the Nisshin OilliO Group results. 18
Unit Selling Price Trends
Unit price of major oil & fat products (JPY/kg)
Up ¥ 2.40 billion
(Billion yen)
Raw Material Costs Soybean +1.60Rapeseed +2.00ForeignExchange +2.70
Subtotal +6.30Unit Price of Meal -3.65Sales of Oils and Fats -0.70
Total +1.95
Total +0.05
Fine Chemical, Healthy Food Businesses (including subsidiaries)
+0.60
+0.20Domestic Subsidiaries (Other) ±0.0
Total +0.80
Overseas Subsidiaries(Oil and Meal, Processed Oil and Fat Businesses)Domestic Subsidiaries(Oil and Meal, Processed Oil and Fat Businesses)
Other SG&A -0.70Manufacturing Costs, Other +0.30
Total -0.40
19
First Half FY3/2016Operating income: ¥3.10 billion
First Half FY3/2017Operating income: ¥ 5.50 billion
Factors Impacting Operating Income (Year on Year)
Total assets Current assets Total liabilities
Cash and deposits Interest-bearing debt
Inventories Income taxes payableOther Other
Fixed assets Total net assetsProperty, plant and equipment Retained earningsIntangible assets Treasury stockInvestments and other assets
Non-controlling interestsDeferred assets
Cost of issuing bonds -0.0
-0.2 -0.0-0.6 -2.5
+0.00.0 -0.0
105.8 -1.7 125.3 +0.6-0.7 +3.1
Accumulated other comprehensive income
+0.6 +1.3
-4.4+1.5 +4.6+2.0 +0.6
+2.7128.4 +4.4 109.0 +2.1
Notes and accounts receivable - trade
Total liabilitiesand net assets234.3 +2.7 234.3
+0.2 Notes and accounts payable – trade
(Billion yen)(Billion yen)
20
Consolidated Balance Sheet:Changes from End of Previous Fiscal Year
(Billion yen)
21
Consolidated Interest-Bearing Debt
43.0 38.0
30.4 30.4 33.4 38.1
4.1 4.4
3.3 3.0 2.8
3.3
19.0 20.7
16.6 12.9 11.2
10.7
66.1 63.2
50.3 46.4 47.5
52.1 47.5
0
100
200
300
400
500
600
700
2012年3月末 2013年3月末 2014年3月末 2015年3月末 2016年3月末 2016年9月末 2017年3月末
見込み
日清オイリオグループ 国内子会社 海外子会社The Nisshin OilliO Group Domestic subsidiaries Overseas subsidiaries
End-FY3/2012 End-FY3/2013 End-FY3/2014 End-FY3/2015 End-FY3/2016 End-1H FY3/2016 End-FY3/2017 (Forecast)
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0
*Figures for raw materials and foreign exchange rate are based on the Nisshin OilliO Group results. 22
FY3/2017 Consolidated Forecasts
(Million yen)
Raw Material Costs Soybean -0.50Rapeseed +4.10Foreign Exchange +9.30
Subtotal +12.90Unit Price of Meal -7.30Sales of Oils and Fats -2.20
Total +3.40
Total -0.15
Fine Chemical, Healthy Food Businesses (including subsidiaries)
+0.20
+0.20±0.0
Total +0.40
Overseas Subsidiaries(Oil and Meal, Processed Oil and Fat Businesses)Domestic Subsidiaries(Oil and Meal, Processed Oil and Fat Businesses)
Domestic Subsidiaries (Other)
Other SG&A -1.90Manufacturing Costs, Other +0.10
Total -1.80
23
Up ¥1.85 billion
(Billion yen)
FY3/2016Operating income: ¥7.15 billion
FY3/2017 (forecast)Operating income: ¥9.00 billion
Forecasts for Factors Impacting Operating Income (Year on Year)
[Reference materials]
24
600
800
1,000
1,200
1,400
1,600
1,800
¢/Bu
6/30 1,056.256/10 1,178.25
9/22 861.75 4/7 904.50
25
Soybean Market Price Trends
Source: Bloomberg (Chicago Board of Trade, closing price)
300
400
500
600
700
CAD/t
5/10 526.907/10 542.9
4/16 441.10 7/25 443.90
26
Rapeseed Market Price Trends
Source: Bloomberg (Winnipeg Commodity Exchange, closing price)
1,700
2,100
2,500
2,900
3,300
3,700
MYR/t
9/29 2,395
8/26 1,8007/12 2,270
9/22 2,909
27
Palm Oil Market Price Trends
Source: Bloomberg (Malaysia, closing price)
70
80
90
100
110
120
JPY/USD
8/18 99.89
4/22 111.79
6/5 125.63
8/24 118.41
Source: Bloomberg (Tokyo foreign exchange market, closing price)28
Foreign Exchange Rate Trends
50
55
60
65
70
75
%
29
Meal Value Trends
Source: CBT market (soybean meal, soybean oil)
3,600
4,150
3,850
195.5
233.0
3,750
192.5
206.0
220.5
150
170
190
210
230
250
270
290
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000JPY/kgJPY/18 liter drum
大豆白絞斗缶 大豆白絞バルク 菜種白絞バルク Source: Nikkei inc.30
Nikkei Market Price Trends: Oils
Soybean oil (18 liter drum)
Soybean oil (bulk) Rapeseed oil (bulk)
48,000
37,500
69,500
51,000
32,800
33,500
53,500
51,500
68.3
78.1
70.1
65.0
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
80.0
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
%JPY/t
大豆粕 菜種粕 菜種粕レシオ Source: The Daily “Yushitokuhou”
31
Market Price Trends: Meals
Soybean meal Rapeseed meal Rapeseed meal ratio