IR Day (Business Strategy Conference)
The 2026 Medium-term Business Plan
June 11, 2024
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AGENDA
1. Growth Strategy of Food Segment
Katsunari Matsuda
COO (Food Segment), Member of the Board and Executive Officer
2. The Fusion of Sustainability and Business
Jun Furuta
CSO, Member of the Board and Senior Executive Officer
3. Growth Strategy of Pharmaceutical Segment
Daikichiro Kobayashi
COO (Pharmaceutical Segment), Member of the Board and Executive Officer
1 © Meiji Holdings Co., Ltd. All rights reserved.
1. Growth Strategy of Food Segment
2 © Meiji Holdings Co., Ltd. All rights reserved.
Efforts to Improve ROIC
Operating Profit Margin Improvement
ROIC by business*1 | FY2023 | FY2026 | |||
Company-wide | Hurdle rate | (E) | Target | ||
WACC | for food segment | 15% | |||
5% | 6% | 10% | |||
FY2023 operating profit | 64.3 | ||||
Domestic profitability | Approx. | ||||
+9.0 | |||||
improvement | |||||
Domestic fixed cost | +9.5 | ||||
reduction | |||||
FY2026 Target | |||||
Investment in areas to be | - | 5.5 | |||
9% or more | strengthened | ||||
Overseas growth | +6.0 | ||||
ROIC = | |||||
FY2026 operating profit | 83.0 | ||||
6.3% | Invested Capital Control | ||||
Reduction of assets, focusing on | |||||
FY2023 Result | optimization of production system | ||||
and reduction of fixed costs
Aggressive investment in growth areas with reduced resources
→Invested capital will increase compared to
FY2023, but the amount of increase will be controlled.
Dairy
Chocolate
Nutrition
Food solutions
- Enhance proposals for value-added products
- Establish optimal production system
- Discontinue or restage low-profit products
- Rebuild China business
- Promote sustainable cocoa sourcing as new value on products
- Develop global brands
- Establish global production system
- Optimize production sites
- Cultivate new domestic markets (infant formula, femcare, etc.)
- Evolute marketing methods
- Expand areas to overseas
- Grow B2B business through new cacao ingredients and value- added dairy products
- Strengthen global expansion
- Reform low-profit businesses
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*1: ROIC by business is a simplified calculation (NOPLAT + Share of profit and loss of entities accounted for using equity method / Invested capital in a single year)
Accelerate to Grow Overseas Business
2026 Medium-term Business Plan | |||||
(JPY bn) | |||||
FY2023 | FY2024 | FY2026 | |||
Result | Plan | Target | vs. FY2023 | ||
+147.2% |
- Overseas Business Promotion Structure from April 2023
Net sales | 24.3 | 31.0 | 60.3 | +35.9 | |||
China | |||||||
-3.7 | -5.6 | 0.3 | ― | ||||
Op. Profit | |||||||
+4.0 | |||||||
Net sales | 18.1 | 27.0 | 65.2 | +259.5% | |||
+47.0 | |||||||
Asia | +134.8% | ||||||
Op. Profit | 1.5 | 1.4 | 3.6 | ||||
+2.0 | |||||||
Net sales | 32.7 | 34.4 | 44.8 | +36.6% | |||
+12.0 | |||||||
Europe and | |||||||
Americas | 2.3 | 1.6 | 2.2 | -7.4% | |||
Op. Profit | |||||||
-0.1 | |||||||
Net sales | 77.7 | 88.3 | 170.0 | +118.7% | |||
Overseas | +92.2 | ||||||
total | Op. Profit | -2.4 | -5.3 | 3.2 | ― | ||
+5.6 | |||||||
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Global Dairy Business Division
Global Cocoa Business Division
Global Nutrition Business Division
Global Food
Solution Business
Division
Global planning, developing, and marketing
Reorganize functions into each business division
Accelerate to Grow Overseas Business
Dairy and Food Solutions Businesses
Focus area | China, Asia | |
- Review of sales areas to consider profitability
- Cost reduction and optimization of production structure
- Increase the composition ratio of value-added products and strengthen the B2B business
Launched in June 2024
Start operation in Jan. 2023Hokkaido Flavor Yogurt
Tianjin (Drinking milk and Yogurt)
Steady Execution of Revival Plan in China Business
Review of business and product portfolio |
Launch products with unique value and |
strengthen marketing |
Utilize the Guangzhou plant production line |
to launch new products and export outside |
of China |
Improve mainstay products, and plan to |
develop and produce new products at the |
Shanghai ice cream plant |
Sustainable growth for B to B business |
Start operation in Mar. 2024 Shanghai (Ice cream)
Also able to product
room temperature
drinks
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In stores in June 2024
SAVAS milk
*Recorded as a result of
Nutrition Business
Start operation in Jan. 2024 Guangzhou
(Drinking milk, Yogurt
and Confectionery)
Structural reforms |
Review areas and stores with lower |
profitability |
Cost reductions across entire supply chain |
Organize production structure, including |
optimization of production lines |
Accelerate to Grow Overseas Business
Chocolate Business
Focus area | The U.S., China, Asia | |
- Strengthen initiatives related to major retailers and agents
- Expand production capacity and establish a global production system
- Develop global brands
The U.S.
- Expand production capacity for further growth of Hello Panda, a core Meiji brand product
- Strengthen marketing to expand sales of the U.S. versions of Kinoko no Yama: Chocorooms
- Establish market presence for new Meltyblend products
- Improve added value for Stauffer brand products
China
- Expand sales with a focus on highly profitable mainstay chocolate bar products and reassess unprofitable products
-
Guangzhou plant production line launched operations in January 2024
→Plan to produce Hello Panda and other new products
→Increase in depreciation in FY2024, but to achieve significant growth from FY2025 and beyond, including the benefits of new products and area expansion
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Accelerate to Grow Overseas Business
Nutrition Business
Focus area | Asia, Europe | |
- Accelerate the development of products aligned with local needs
- Expand to more countries
Infant Formula
Expand to more countries/regions as products that are competitive in terms of technology and intellectual property
Strengthen sales of Meiji products in countries/regions
where we already have a presence and strengthen alliances with partner companies
Increase product added value | 6 |
Countries where Danone branded | |
tablet infant formula are sold: |
(the UK, France, Italy, Estonia, Lithuania, and Latvia)
Liquid Diet for Consumer
-
Launch in Asia as products that utilize the nutrition engineering technology cultivated through infant formula
→Currently sold in Taiwan and Vietnam - Develop original flavors suited to the needs of each market
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2. The Fusion of Sustainability and Business
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Evolve the Meiji ROESG® Management
Return to a growth trajectory by transforming focus markets, business structure, and our behavior
Key strategies
1. Invest management resources into growth businesses
- Strengthen and expand overseas and B2B businesses of food segment, and pharmaceutical business as growth drivers
2. Keep and improve stable cash flow
- Enhance competitive advantage by pursuing added value
- Review business portfolio and improve capital efficiency
Fusion of sustainability and business strategies ("Trade-on")
3. Promote human capital strategy linked to management strategy
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*ROESG is a registered trademark for a management indicator developed by Kunio Ito, a professor at Hitotsubashi University.
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Meiji Holdings Co. Ltd. published this content on 11 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 June 2024 02:04:03 UTC.