1
First Half FY3/2016Consolidated Financial Results Presentation
November 17, 2015The Nisshin OilliO Group, Ltd.
2
Takao ImamuraPresident and Representative Director
・Summary of Financial Results for First Half FY3/2016
・Progress Report on Medium-Term Management Plan
3
Summary of Consolidated Financial Results for First Half FY3/2016 and Consolidated Financial Forecasts for FY3/2016
4
2Q FY3/2016 2Q FY3/2015 Change (%)
Net sales 161,123 158,216 +1.8%Operating income 3,480 3,085 +12.8%Ordinary income 3,691 3,160 +16.8%
Net income attributable to the parent’s shareholders 2,865 1,896 +51.1%
(Million yen)
Consolidated Financial Results for First Half FY3/2016
5
FY3/2016Forecasts
FY3/2015 Results Change (%)
Net sales 340,000 329,267 +3.3%Operating income 7,000 5,574 +25.6%Ordinary income 7,000 5,823 +20.2%
Net income attributable to the parent’s shareholders 4,000 3,447 +16.0%
(Million yen)
FY3/2016 Consolidated Forecasts
6
Progress Report on Medium-Term Management Plan
7
Promote sales at fair selling prices to accommodate the overall cost increase for edible oils
Inject new products in the general-purpose edible oils category to escape homogeneous competition・Launched Nisshin Healthy-Off 900g
Speedy product development and deployment to respond to consumer and user needs・Nisshin Coconut Oil (plain) 130g・Nisshin Medium-Chain Triglycerides 100% Oil 85g・Nisshin Kenko Oil Amani-plus 600g・Expand product lineup for olive oil gift packs
Implement full-fledged strategies for each sales channel to commercial users, price corrections, and sales ratio of value-added products・Expand sales of premium oil products and products in the Super-
Long series Promote a marketing model that implements the joint development of
demand with users through the User Support Center・Product development that stems from target user strategies and
originates from user needs
Moving toward our goal of building a solid earnings base, we are expanding sales of value-added products and fully promoting sales at fair selling prices,
as well as implementing speedy product development
Domestic Oil and Fat Business (1)
[FY3/2016 Cost reduction forecast]・Establish a system that achieves a reasonable balance between supply and
demand: ¥82 million・Maximize benefits from renewal of Yokohama Isogo Plant: ¥475 million・Renew production/logistics functions at West Japan bases: ¥181 million・Organize functions and roles of group subsidiaries: ¥25 million・Measures to reduce transport costs, including joint delivery: ¥346 million・Strengthen comprehensive cost competitive strength in production:
¥1,806 million
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(Million yen)Establish a system that will achieve a cost reduction of ¥3.0 billion,in accordance with plans
(Million yen)
1,163 1,916
2,915
0500
1,0001,5002,0002,5003,0003,500
2013年度実績 2014年度実績 2015年度見通しFY3/2014 Results FY3/2015 Results
Domestic Oil and Fat Business (2) – Reduce Production / Distribution Costs –
FY3/2016 Forecast
9
ISF
Secure stable profits in this business to drive group earnings
Pour energies into sales of value-added products, mainly with clients in Europe Strengthen technological expertise and product diversification through collaborations
with Nisshin Global Research Center Execute expansion of RSPO raw material suppliers Further business expansion in Asia, a region that boasts growth potential
Daito Cacao Co., Ltd. And T.&C. Manufacturing Co., Pte. Ltd.
Select partners for commercialization of products and development of new customers in Southeast Asia (Daito Cacao)
Initiatives for sales to Southeast Asia (T.&C.)
Domestic Processed Oil and Fat
Stabilization of earnings in the specialty fats business and strengthening of sales transaction base
Product development and launch, and the establishment of sales channels for full-fledged entry into the retail market
Expand sales to major companies in bread manufacturing market
Processed Oil and Fat Business
10
Sales volume growth for cosmetic raw materials in Japan and abroad, and establishment of subsidiary in China (Fine Chemical)
Earnings improvement owing to brisk sales of MCT-related products and dressings (Healthy Food)
Fine Chemical
Increase in sales of general and functional cosmetic raw materials to major customers
Sales growth in overseas markets Establishment of Nisshin OilliO (Shanghai) International Trading Co., Ltd. Expand global sales channels extending from IQL
Healthy Food
Increase overall sales, mainly of health linkage products Brisk sales of MCT (Medium Chain Triglycerides) related products Dressing sales driven by launch of Nisshin Healthy-Dressing Sauces Earnings in this business improved substantially year-on-year
Fine Chemical Business and Healthy Food Business
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Boost recognition of MCTs concurrently with product launch and create a strong brand “MCT = Nisshin OilliO”
Strategic launch of MCT-related products
MCT Memorion Nisshin Medium-Chain Triglycerides 100% oil Nisshin Coconut Oil (plain) Oil de Suppli: MCT + coconuts Collaborations with other companies
・Maruha Nichiro Corporation: Nursing care foods・Summit Agro International Ltd.: Nutritional supplement pet food
MCTs secure share in brain function improvement market
Gathering case data on improvement of Alzheimer’s disease symptoms and prevention through the use of our products・Presentations at conferences such as the Japanese Society for Dementia
Care, Parenteral and Enteral Nutrition Society of Asia, and Japan Society for Dementia Prevention
・Gathering evidence from the standpoint of improving symptoms of dementia
Medium-Chain Triglycerides (MCT) Business
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Additional Business Structure Reforms
Aiming toward the realization of our vision in the Medium-Term Management Plan and sustainable group growth in and after FY3/2018, we will seek to implement the following four additional major cost-reduction initiatives.
Sales operation reformsConsider implementing awareness reforms out in the sales field, and reforms to new sales site policies, operations, and to the transaction system
Distribution structure reformsIn addition to reducing costs by ¥3.0 billion in FY3/2016, begin to roll out new cost cutting initiatives
Operational, organizational, and personnel structure reformsReform operations, organization, and personnel by transforming workstyles, downsizing operations, reforming meetings, and office operations
Cost structureReduce costs by reviewing overall costs
Additional Business Structure Reforms
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Nobuyuki Watanabe
General Manager, Financial Department
Summary of Consolidated Financial Resultsfor First Half FY3/2016
14
(Million yen)
* Figures f or raw materials and f oreign exchange rates are based on Nisshin OilliO results.
+394 +12.8%
+2,907Operating income 3,480 3,085
Change
+1.8%Net sales
2Q FY3/2016
161,123
2Q FY3/2015
158,216
+969 +51.1%
+530Ordinary income
Net income attributable tothe parent's shareholders
3,6912,865
3,1601,896
+16.8%
Change Change (%)-177 -28%
Raw Material Prices & ForeignExchange Rates
Soybean Unit Price (USD/t)2Q FY3/2016
4452Q FY3/2015
622-49 -9%+17 +17%
Rapeseed Unit Price (USD/t)
Foreign Exchange Rate (JPY/USD)
479119
528102
Summary of Consolidated Financial Results for First Half FY3/2016
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(Billion yen)
Oils and Meals 108.0 1.2 103.2 1.9 +4.7% -34.6%
Processed Oil and Fat 43.2 1.7 45.8 1.0 -5.6% +73.8%
Fine Chemical 7.9 0.4 7.6 0.2 +4.6% +105.3%
Healthy Food 3.8 0.0 3.5 -0.0 +6.8% -
Other 2.8 0.1 2.7 0.1 +4.9% +2.4%
Elimination/Corporate -4.8 -0.2 -4.7 -0.2Consolidated total 161.1 3.4 158.2 3.0 +1.8% +12.8%
Percentage of Overseas Sales 19.8% 21.7% -1.9%
2Q FY3/2016 2Q FY3/2015 Change (%)
2Q FY3/2016 2Q FY3/2015 Change (%)
Net salesOperatingincome(loss)
Net salesOperatingincome(loss)
Net salesOperatingincome(loss)
Consolidated Results by Business Segments
25,000
35,000
45,000
55,000
65,000
75,000
85,000
JPY/t 大豆(¥/t) 菜種(¥/t)
16*Figures for raw materials are based on Nisshin OilliO results.
Major Raw Material Prices TrendsSoybean (JPY/t) Rapeseed (JPY/t)
0.8
1.0
1.2
1.4
1.6
17
Taking Apr-Sep 2007 as baseline of 1.0
*Figures for unit selling price are based on Nisshin OilliO results.
Unit Selling Price Trends
Unit price of major oils & fats products (JPY/kg)
18
(Billion yen)
Raw Material Costs Soybean +9.0Rapeseed +2.1Foreign Exchange -7.05
Subtotal -1.95 Oil Meals -6.0
Sales of Oils and Fats +0.5
Total -1.45
Total +0.3
Fine Chemical, Healthy Food Businesses (including subsidiaries)
+1.0
-0.1±0
Total +0.9
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 +0.45Manufacturing Costs, Other +0.2
Total +0.65
Factors Impacting Operating Income (Year on Year)First Half FY3/2015
Operating income: ¥3.10 billion
Up ¥ 0.4 billion
First Half FY3/2016Operating income: ¥3.5 billion
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(Billion yen) (Billion yen)
Total assets Total liabilities and net assets
Current assets Total liabilitiesCash and deposits
Interest-bearing debtInventories Income taxes payableOther Other
Fixed assets Total net assetsProperty, plant and equipment Retained earningsIntangible assets Treasury stock
Noncontrolling interests
Deferred assetsCost of issuing bonds
-2.40.9 0.6
-0
-1.7 -0-1.6 -0
-3.0
-2.2
-2.6+3.5 +9.1+2.2 -0.4
+1.5134.8 +3.9 117.3 +3.9
Notes and accounts receivable - trade
Notes and accounts payable - trade
Investments and other assetsAccumulated other comprehensiveincome
243.1 +1.5
-2.7
+0.9
0 -0
243.1
108.2 -2.4 125.8
Consolidated Balance Sheet: Changes from End of Previous Fiscal Year
36 33 28
43 38
30.4 30.4 39.4
6.6 4.5
5.3
4.1
4.4
3.3 3.0
3.0
8.8 13.4 21.5
19.0 20.7
16.6 12.9
13.1
51.5 51.0 54.9
66.1 63.2
50.3 46.4
55.5 51.5
0
100
200
300
400
500
600
700
2009年3月
期
2010年3月
期
2011年3月期 2012年3月
期
2013年3月
期
2014年3月
期
2015年3月
期
2016年3月
期
第2四半期
2016年3月
期
計画日清オイリオグループ 国内子会社 海外子会社 有利子負債20
FY3/2009 FY3/2010 FY3/2011 FY3/2012 FY3/2013 FY3/2014 FY3/2015 2Q FY3/2016
(Billion yen)
Consolidated Interest-Bearing Debt
FY3/2016 plan
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
The Nisshin OilliO Group Domestic Subsidiaries
Overseas Subsidiaries Interest-Bearing
21
(Million yen)
*Figures f or raw materials and f oreign exchange rate are based on Nisshin OilliO results.
Change2Q 2Q
FY3/2016 FY3/2015
+3.3%
Operating income 7,000 3,480 5,574 3,085 +1,426 +25.6%
Net sales 340,000 161,123 329,267 158,216 +10,733
+20.2%
Net income attributable tothe parent's shareholders 4,000 2,865 3,447 1,896 +553 +16.0%
Ordinary income 7,000 3,691 5,823 3,160 +1,177
429 571 -142 -25%
Change Change (%)Raw Materials Prices &Foreign Exchange Rates
FY3/2016 FY3/2015
Soybean Unit Price (USD/t)
+17 +17%Rapeseed Unit Price (USD/t) 477 522 -45 -9%
Foreign Exchange Rate (JPY/USD) 120 103
FY3/2016 Consolidated Forecasts
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(Billion yen)
Raw Material Costs Soybean +15.15Rapeseed +3.9Foreign Exchange -13.8
Subtotal -4.2 Oil Meals -9.45
Sales of Oils and Fats +3.55
Total -0.65
Total +0.4
Fine Chemical, Healthy Food Businesses (including subsidiaries)
+1.0
-0.2±0
Total +0.8
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 +0.5
Manufacturing Costs, Other +0.4
Total +0.9
Forecasts for Factors Impacting Operating Income (FY3/2016 Year on year)
FY3/2015Operating income: ¥5.55 billion
Up ¥1.45 billion
FY3/2016 (forecast)Operating income: ¥7.0 billion
23
[Reference materials]
500
700
900
1,100
1,300
1,500
1,700
1,900
¢/Bu
24Source: Bloomberg
6/30 1,056.25
4/30 1,530.75
9/26 910.25
9/22 861.75
Soybean Market Price Trends (Chicago Board of Trade)
300
400
500
600
700
800
CAD/t
4/16 441.10
25
5/13 511.20
9/22 394.60
7/10 542.90
Rapeseed Market Price Trends (Winnipeg Commodity Exchange)
Source: Bloomberg
1,200
1,600
2,000
2,400
2,800
3,200
3,600
4,000
4,400MYR/t
26
4/16 2,736
8/29 1,937
8/26 1,800
9/29 2,395
Source: Bloomberg
Palm Oil Market Price Trends (Malaysia)
70
75
80
85
90
95
100
105
110
115
120
125
JPY/USD
27
6/5 125.63
8/24 118.41
9/30 109.65
7/17 101.18
Source: Bloomberg
Foreign Exchange Rate Trends
50
55
60
65
70
%
28Source: CBT market (soybean meal, soybean oil)
Meal Value Trends
3,400
4,100
4,800
3,850
2,800
3,400
3,800 3,850
4,150
3,750
151.0
215.5
153.0
187.5
217.5 218.0
233.0
155.0
179.0
229.0
249.0
140.0148.0
200.5
215.5 216.0210.5
130
150
170
190
210
230
250
270
290
1,000
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
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Nikkei Market Price Trends: Oils
Soybean oil (18 liter drum) Soybean oil (bulk) Rapeseed oil (bulk)
Source: Nikkei inc.
46,500
62,000
70,000
45,000
60,000
64,000
48,000
38,000
61,000
57,000
69,500
32,000
43,000 41,500
31,000
37,000
37,50032,800
25,300
40,500
51,000 68.8
77.9
72.8
57.1
64.5
70.0
65.8
74.6
50
55
60
65
70
75
20,000
30,000
40,000
50,000
60,000
70,000
%JPY/t
大豆粕 菜種粕 菜種粕レシオ
30
Market Price Trends: Meals
Soybean meal Rapeseed meal Rapeseed meal ratio
Source: The Daily “Yushitokuhou”
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