Financial Results

for the H1 of FYE March 2024 (FY2023)

(From April 1, 2023 to September 30, 2023)

November 9, 2023

0 © Meiji Holdings Co., Ltd. All rights reserved.

(Note)

  • A two-for-one common stock split was issued on April 1, 2023.
    EPS and cash dividends per share are calculated on the assumption that the stock split was conducted at the beginning of FY2022.
  • The H2 and Full-year plan for FY2023 were revised in November.

Contents

  1. Financial Summary for the H1 of FY2023
  2. Outlook for the H2 and Full-year of FY2023

Kazuo Kawamura

CEO, President and Representative Director

3. Achieving Sustainable Growth in the Pharmaceutical Segment

Daikichiro Kobayashi

COO (Pharmaceutical Segment), Member of the Board and Executive Officer

1 © Meiji Holdings Co., Ltd. All rights reserved.

1. Financial Summary for the H1 of FY2023

2 © Meiji Holdings Co., Ltd. All rights reserved.

Summary for H1 FY2023 Consolidated Results

(JPY bn)

FY2022

FY2023

FY2023

H1 Results

H1 Results

YoY Change

vs. H1 Plan

H1 Plan

Net sales

517.5

546.0

+5.5%

+0.4%

544.0

+28.5

+2.0

(Overseas sales)

56.7

63.6

+12.1%

-7.9%

69.0

+6.8

-5.4

Operating profit

43.1

44.4

+2.9%

+38.9%

32.0

+1.2

+12.4

Op. profit margin

8.3%

8.1%

-0.2 pt

+2.3pt

5.9%

Profit attributable to

33.3

27.9

-16.4%

+39.6%

20.0

owners of parent

-5.4

+7.9

EPS (JPY)

118.52

100.13

-18.39

+28.86

71.27

  • Sales and operating profit: Increased both in Food and Pharmaceutical segments
  • Profit attributable to owners of parent: Decreased significantly

Recorded share of loss of entities accounted for using equity method and increased tax expense

  • Maintained strong profits same as Q1, outperformed the initial plan
  • Interim dividend: Increased by JPY 5

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Food: Summary - H1 FY2023

（JPY bn）

FY2022

FY2023

FY2023

H1 Results

H1 Results

YoY Change

vs. H1 Plan

H1 Plan

Net sales

420.6

445.4

+5.9%

+0.9%

441.4

+24.8

+4.0

Operating profit

29.3

29.6

+1.2%

+14.6%

25.9

+0.3

+3.7

Analysis of changes in operating profit

H1 Results - FY2022

Due to increased/decreased sales

Changes in costs of goods sold

Changes in marketing expenses

Changes in other SG&A expenses

Other (incl. change in results of subsidiaries)

H1 Results - FY2023

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29.3

-2.1

+0.5

-0.7

29.6

+19.9

: Increased due to price hike +30.4

Change in sales volume and product mix -10.5

-17.2

: Increased in raw material costs

(incl. domestic raw milk and overseas dairy ingredients)

  • Increased in promotional and logistic costs
  • Decreased in indirect manufacturing costs (incl. energy costs)
  • Overseas, decreased in profit from subsidiaries in China and increased from subsidiary in the U.S.
    Domestic, decreased in profit from feed subsidiary and increased from sales subsidiaries

Pharmaceutical: Summary - H1 FY2023

（JPY bn）

FY2022

FY2023

FY2023

H1 Results

H1 Results

YoY Change

vs. H1 Plan

H1 Plan

Net sales

97.1

100.8

+3.8%

-2.0%

102.9

+3.6

-2.0

Operating profit

14.6

15.9

+8.5%

+117.8%

7.3

+1.2

+8.6

Analysis of changes in operating profit

H1 Results - FY2022

Due to increased/decreased sales

Impact of drug price revision

Changes in costs of goods sold

Changes in marketing expeses

Changes in other SG&A expenses

Other (incl. change in results of subsidiaries)

H1 Results - FY2023

5 © Meiji Holdings Co., Ltd. All rights reserved.

14.6

-0.2

: Increased in sales of domestic ethical pharmaceuticals business

on higher demand for antibacterial drug

Decreased in contract revenues from COVID-19 vaccines

-1.6

: Increased in raw material costs

-

0.8

+0.6

: Decreased in costs due to sales efficiency improvement

: Increased in R&D expenses, while decreased in indirect

+1.5

manufacturing costs due to the spin-off of a production site (from

indirect manufacturing costs to costs of purchased goods)

+1.7

: Domestic, increased in profit from manufacturing subsidiaries and

decreased in profit from generic drug sales subsidiary

15.9

Overseas, increased in profit from subsidiaries in Thailand, Spain and

India.

Position of FY2023: Period toward Next Medium-Term Business Plan

Our focal points

  • Strategies to offset cost increase
    • Penetrate price hikes
    • Continue marketing investment
  • Change strategies in core business
    • Recover sales growth and secure stable revenue by pursuing added value
    • Start business restructuring to build a robust foundation for revenue
  • Invest management resources in future growth drivers
    • Expand overseas business and develop new vaccine
    • Accelerate development pipelines in the Pharmaceutical segment
    • Venture into new domains and collaborate with startups and venture companies
  • Integrate sustainability and business performance

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2. Outlook for the H2 and Full-year of FY2023

7 © Meiji Holdings Co., Ltd. All rights reserved.

Revised Outlook for H2 and Full-year of FY2023

（JPY bn）

FY2023

FY2023

FY2023

FY2023

FY2023

Full-year

Full-year

YoY

H2 Plan

H2 Plan

H1 Results

YoY Change

Plan

YoY Change

Plan

Change

(Revised)

(Int. May)

(Revised)

(Int. May)

Consolidated

Net sales

546.0

+5.5%

552.4

+1.4%

558.0

1,098.5

+3.4%

1,102.0

+28.5

+7.8

+36.3

owners of parent

27.9

-5.4

23.0

-12.9

31.0

51.0

-18.4

51.0

Operating profit

44.4

+2.9%

35.5

+10.4%

46.0

80.0

+6.1%

78.0

+1.2

+3.3

+4.6

Profit attributable to

-16.4%

-36.0%

-26.5%

Food

Net sales

445.4

+5.9%

445.6

+0.1%

445.6

891.1

+2.9%

887.0

+24.8

+0.6

+25.4

Operating profit

29.6

+1.2%

31.3

+18.1%

30.1

61.0

+9.3%

56.0

+0.3

+4.8

+5.1

Pharma

Net sales

100.8

+3.8%

107.2

+7.1%

112.6

208.1

+5.5%

215.5

+3.6

+7.1

+10.8

Operating profit

15.9

+1.2

6.0

-0.9

17.7

22.0

+0.2

25.0

+8.5%

-13.8%

+1.3%

Full-year net sales: Downward revision, Full-year operating profit: Upward revision

• Food: No change in H2 sales, upward revision for H2 operating profit

• Pharma: Downward revision both in sales and operating profit for H2 due to impact excluding projected contribution amount from ARCT-154

Full-year profit attributable to owners of parent: Unchanged

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Food: Strategies to Overcome Cost Increase

Effects on operating profit

(JPY bn)

30.0

Price hike

20.0+30.4

  • Covered cost increase by increasing the price
  • Price hikes have permeated due to the appeal of added value and sales volume is a recovery trend.

Price Hikes in FY2023

10.0

+30.0

+13.8 +14.4 +15.9

Mar. 2023 Ice cream

+4 to +9%

Chocolate and gummy

+5 to +10%

0.0

+4.5

Yogurt

+4 to +6%

-10.0-10.5 -17.9 -9.6 -8.3 -12.7

-17.9

-20.0

Cost increase

(Raw materials + energy cost)

-30.0

FY2022

FY2022

FY2023

FY2023

FY2023

H1

H2

Q1

Q2

H2

（E）

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Apr. 2023

Functional Yogurt

+4%

Cheese

+6 to +13%

SAVAS (powder)

+4 to +5%

SAVAS Milk

+2 to +7%

May 2023

Infant formula

Approx. +8%

Commercial liquid diet

+4 to +9%

Jun. 2023

Some of chocolate and gummy

+8%

Aug. 2023

Yogurt

+1 to +3%

Milk

+4 to +11%

Oct. 2023

Chocolate and gummy

+4 to +24%

Dec. 2023

Cream

Approx. +4％

Butter

Approx. +7％

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Disclaimer

Meiji Holdings Co. Ltd. published this content on 09 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 November 2023 11:20:00 UTC.