Presentation May 14, 2009 Weathering the Turbulent Business Climate Weathering the Turbulent Business Climate Further Strengthening Our Earnings Base Base Further Strengthening Our Earnings —Business Strategies for the Fiscal Year Ending March 31, 2010 Business Strategies for the Fiscal Year Ending March 31, 2010— — — (Stock code: 2871) Nichirei Corporation Tel: (+81-3) 3248-2235 E-mail: abemsh@nichirei.co.jp URL: http://www.nichirei.co.jp/ir/en/index.html
Table of Contents [Overview] [Business Strategy: Marine Products & Meat and Poultry] Increased Revenue and Earnings as Recovery in Processed Stable Operating Income from Expansion in Growth Driver Foods, Marine Products, and Meat and Poultry Offsets 1 8 Areas and Sales per Person Logistics ROE Up 1.5 Points in FY10/3 on Increased Earnings and Supply-Demand Balance for Brazilian Chicken to Improve 2 9 Improvement in Extraordinary Items from 2Q and Profitability to Normalize [Business Strategy: Processed Foods] [Business Strategy: Logistics] Earnings to Rise on Lower Raw Material Costs and Improved Profitability to Decline on Exchange Rate Weakness in Europe Profitability for Household-Use Products; Recovery in 3 and Fall in Regional Storage Sales owing to Economic 10 Commercial-Use Products Expected from 2Q Slowdown “Home Meal Replacement” Market to Steadily Expand, though Impact from the Economic Slowdown on European Business 4 11 Growth in Processed Chicken Products Will Be Delayed until Limited Due to Location and Nature of Cargo 2Q Nichirei Will Further Differentiate Services for Regional Nichirei in Relatively Strong Position in Household Use Market 5 Storage to Counter Anticipated Slowdowns in Cargo Shipment 12 since Tainted Gyoza Incident in the Difficult Economy Revenue and Earnings to Rise on Increase in Transfer Center Cost Efficiency Up as Concentration of Product Items Cuts 6 Contracts and Transport Operations, Along with Reduction in 13 Number of Ingredient Categories Fuel Costs Production Structure in China to Be Renovated for the Growing 7 [Reference Materials] Local Restaurant Market Segment Data 14 Notes: 1. Figures shown in the graphs and charts in this presentation, unless otherwise specified, have been rounded off to the unit indicated. Certain figures have also been rounded up or down. 2. “E” indicates estimates, the forecasts announced May 12, 2009.
Increased Revenue and Earnings as Recovery in Processed Foods, Marine Products, and Meat and Poultry Offsets Logistics (Amounts less than 100 million yen are 09/3 Actual 10/3 E 09/3 (Comparison) omitted) Net Sales 4,745 4,814 101% Operating Income 151 166 110% Recurring Income 141 145 102% Net Income 60 77 128% ROE 5% 7% EPS 19 yen 25 yen 1. Targets for FY10/3 (i) For net sales, we forecast Processed Foods up 2% year on year, Meat and Poultry 3%, and Logistics 2%. We anticipate 1% sales growth overall for a total of ¥6.9 billion. (ii) For operating income, we forecast an increase of ¥1.5 billion overall, with increases of ¥2.4 billion in Processed Foods and ¥0.7 billion in Meat and Poultry to offset declines of ¥0.6 billion in Logistics and ¥0.4 billion in Real Estate. (iii) For non-operating income, we forecast a deterioration of ¥1.2 billion compared to FY09/3, with the net interest expense rising ¥0.6 billion. (iv) For net income, we forecast an increase of ¥1.7 billion compared to FY09/3. The balance of extraordinary items will improve ¥1.5 billion, including the elimination of a ¥1.7 billion impact from the application of lease accounting standards. 100 million yen Net Sales by Segment 100 million yen Operating Income by Segment 6,000 225 4,814 4,745 4,636 Intercompany 4,694 4,577 200 69 66 elimination 87 181 63 5,000 1 70 70 160 174 74 100 75 2 79 Other 1 166 1 175 2 0 151 1,447 45 1,271 1,423 4,000 1,341 1,387 Real estate 43 4 150 36 61 2 Logistics 125 40 846 950 3,000 925 809 839 100 72 Meat and poultry 811 76 747 761 85 747 761 58 2,000 75 Marine products 6 82 3 7 50 1,000 1,848 Processed foods 6 4 1,773 1,750 1,740 1,774 60 55 25 0 44 41 3 0 20 -269 -242 -225 -244 -257 0 -1 -5 -4 -17 06/3 07/3 08/3 09/3 10/3E FY FY 06/3 07/3 08/3 09/3 10/3E -1 １ -1,000 -25
ROE Up 1.5 Points in FY10/3 on Increased Earnings and Improvement in Extraordinary Items ROIC and ROE Turnover Rate Operating Margin 3.0 14.0% 2.9 3.0 2.7 12.0% 2.5 2.5 10.4% 2.4 Notes: 10.1% 2.5 10.0% 10.0% 2.3 2.2 2.3 2.2 2.2 2.2 10.1% 2.1 9.1% 2.1 2.1 (i) Return on equity (ROE) is calculated from net 8.4% 8.0% 8.5% 7.7% income (loss). Capital employed = Shareholders’ 7.3% 2.0 6.8% 6.6% 6.5% 6.4% 6.4% equity + Interest-bearing debt (excluding lease 6.0% 5.8% 5.6% 5.3% 5.4% 5.3% obligations) - cash and cash equivalents. 4.7% 4.5% 4.0% 3.9% 1.5 (ii) In FY07/3, extraordinary income of ¥3.0 billion was 3.1% 2.9% 4.0% 3.8% 3.4% 3.3% 3.4% 2.2% 3.2% 3.2% recorded on the sale of an affiliate company. 2.0% 2.0% 3.0% 2.9% 2.8% 2.5% Calculated excluding the effects of this income, 1.8% 1.0 1.4% 1.4% 0.2% 0.0% 1.0% 0.2% ROE would be 8.5%. 96/3 97/3 98/3 99/3 00/3 01/3 02/3 03/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3E (iii) In FY09/3, an extraordinary loss of ¥1.7 billion -2.0% -2.0% 0.5 was recorded for the difference from previous fiscal -4.0% Employed capital turnover rate Operating margin years related to the adoption of lease accounting. Employed capital operating margin Return on shareholders' equity Calculated excluding the effects of this loss, ROE -5.6% -6.0% 0.0 would be 6.3%. 1. The Medium-Term Business Plan currently underway sets targets for return on equity (ROE) of 10% within approximately five years, and for shareholder returns a dividend on equity (DOE) of 2.5% with a payout ratio of 25%. 2. Profitability declined considerably during FY09/3, as rises in raw material costs could not be absorbed by product price increases, and market conditions softened for imported chicken. This led to a falloff in the operating margin, and a decline in return on capital employed (ROCE). However, the capital turnover rate (CTR) continued rising 0.2 points, on higher revenues for Marine Products, Meat and Poultry, and Logistics as employed capital remained on a par with the previous fiscal year. For FY10/3, we forecast that as a result lower raw material costs in Processed Foods and other factors, the operating margin will recover, and the CTR will rise 0.1 points. 3. ROE declined considerably to 5.3% in FY09/3. This was due mainly to the decline in earnings, along with a one-time loss of ¥1.7 billion related to the introduction of lease accounting recorded as an extraordinary loss. For FY10/3, we forecast that ROE will rise 1.5 points as a result of the increase in earnings, and a ¥1.5 billion improvement in extraordinary items. ２
Business Strategy: Processed Foods
Recommend
More recommend
