Fuji Oil : Presentation (987.09KB)

	FUJI OIL HOLDINGS INC.
FY2023	FY2023 Earning Conference
	Materials

May 10, 2024

Contents

1. FY2023 Results
2. FY2024 Forecast
3. Progress of Mid-Term Management Plan and Initiatives to Improve Corporate Value
4. Reference Materials

2

FY2023 Results

1

3

1. FY2023 Results

FY2023 Results

	FY2022	FY2023	YOY
	Results	Results
Net Sales	557.4	564.1	+6.7
Operating Profit	10.9	18.2	+7.3
Ordinary Profit	9.7	16.8	+7.1
Profit Attributable to	6.1	6.5	+0.4
Owners of Parent

Unit: JPY billion

FY2023	FY2023
Results vs
Rev. Forecast
Rev. Forecast
(Feb. 2024)	(Feb. 2024)

1. +14.1

1. +1.7

1. +1.8

1. +0.0

Net Sales 564.1billion yen YOY +6.7billion yen

Net sales increased due to higher sales prices to reflect higher raw material prices such as cocoa and the effect of yen depreciation on Industrial Chocolate Business despite declined sales prices to reflect stable prices for palm oil, our main raw material, and decreased sales due to the transfer of fixed assets of Fuji Oil New Orleans (hereinafter referred to as "FVN") on Vegetable Oils and Fats Business.

Operating Profit 18.2billion yen YOY +7.3billion yen

Operating profit increased thanks to improved profitability due to stable raw material prices in Japan, the Americas, and Europe on Vegetable Oils and Fats Business despite decreased sales volume against stagnant demand in the confectionery market and increased fixed cost in the U.S. on Industrial Chocolate Business.

Profit Attributable to Owners of Parent

6.5billion yen YOY +0.4billion yen

Profit increased thanks to extraordinary income from the transfer of fixed assets of FVN on Vegetable Oils and Fats Business as well as improved profitability mainly on Vegetable Oils and Fats Business despite extraordinary loss for Blommer on Industrial Chocolate Business.

4

1. FY2023 Results

FY2023 Results by Business

						Unit: JPY billion
						FY2023	FY2023
		FY2022	FY2023			Results vs
				Rev.
		YOY		Rev.
		Results	Results		Forecast
				Forecast
						(Feb. 2024)
						(Feb. 2024)
Net Sales	557.4	564.1	+6.7		550.0	+14.1
	Vegetable Oils and Fats	203.4	185.4	(18.1)		180.2	+5.2
	Industrial Chocolate	228.5	253.4	+24.9		246.4	+7.0
	Emulsified and	91.2	89.9	(1.3)		87.8	+2.1
	Fermented Ingredients
	Soy-based Ingredients	34.3	35.5	+1.2		35.6	(0.1)
Operating Profit	10.9	18.2	+7.3		16.5	+1.7
	Vegetable Oils and Fats	7.0	15.4	+8.4		14.4	+1.0
	Industrial Chocolate	5.0	1.8	(3.1)		1.7	+0.1
	Emulsified and	1.5	3.8	+2.3		3.3	+0.5
	Fermented Ingredients
	Soy-based Ingredients	1.3	1.0	(0.2)		1.1	(0.1)
	Group Administrative	(3.8)	(3.9)	(0.1)		(4.1)	+0.2
	Expenses
Operating Margin	2.0%	3.2%	+1.3pt		3.0%	+0.2pt

Operating Profit by Business

Vegetable Oils and Fats

• Profitability improved thanks to stable raw material prices in Japan, the Americas, and Europe.
• The transfer of fixed assets of FVN, which recorded operating losses in the previous fiscal year.

Industrial Chocolate

• Sales were firm for souvenir, ice cream, and convenience stores in Japan.
• Sales volume increased with contribution of capital investments in Brazil, Southeast Asia, and Europe.
• Sales volume decreased against stagnant demand in the confectionery market in the U.S. In addition, working capital and related costs increased caused by higher raw material prices such as cocoa and higher interest rates.

Emulsified and Fermented Ingredients

• Sales of whipping cream increased for food services and convenience stores in Japan.
• Profitability improved thanks to stable raw material prices in Southeast Asia and China.

Soy-based Ingredients

• Profitability improved thanks to sales prices revision appropriately in Japan.
• Depreciation cost increased for a new plant in Europe.

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1. FY2023 Results

FY2023 Operating Profit Analysis

Operating Profit Analysis YOY

Unit: JPY billion

Price Factor +11.1

Sales Volume Factor	Sales volume decreased in Blommer on Industrial Chocolate Business although sales volume increased in Brazil on Industrial Chocolate
Business and sales volume of whipping cream increased in Japan on Emulsified and Fermented Ingredients Business.
Price Factor	Stable prices for palm oil, our main raw material, contributed to higher profits despite higher price of cocoa and the effect of yen
depreciation in Japan.
Expenses	Labor and other costs increased in each Group company although fixed cost decreased due to the transfer of fixed assets of FVN on
Vegetable Oils and Fats Business.

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FY2024 Forecast

2

7

2. FY2024 Forecast

FY2024 Forecast

				Unit: JPY billion
		FY2023	FY2024	YOY
		Results	Forecast
Net Sales	564.1	600.0	+35.9
	Vegetable Oils and Fats	185.4	187.4	+2.0
	Industrial Chocolate	253.4	280.5	+27.1
	Emulsified and	89.9	95.0	+5.1
	Fermented Ingredients
	Soy-based Ingredients	35.5	37.1	+1.6
Operating Profit	18.2	20.0	+1.8
	Vegetable Oils and Fats	15.4	12.3	(3.1)
	Industrial Chocolate	1.8	7.4	+5.6
	Emulsified and	3.8	3.5	(0.3)
	Fermented Ingredients
	Soy-based Ingredients	1.0	1.4	+0.3
	Group Administrative	(3.9)	(4.6)	(0.7)
	Expenses
Operating Margin	3.2%	3.3%	+0.1pt
Ordinary Profit	16.8	16.0	(0.8)
Profit Attributable to Owners of	6.5	10.0	+3.5
Parent

Net Sales 600.0billion yen YOY +35.9billion yen

Planning on an increase in net sales thanks to sales prices revision appropriately to reflect higher raw material prices such as cocoa and an increase in fixed costs and an expansion on Emulsified and Fermented Ingredients Business despite lower sales volume in Blommer due to the closure of Chicago plant.

Operating Profit 20.0billion yen YOY +1.8billion yen

Planning on an increase in operating profit thanks to the improvement in Blommer on Industrial Chocolate Business despite a decrease in operating profit on Vegetable Oils and Fats Business due to sales prices revision appropriately to reflect stable raw material prices.

Profit Attributable to Owners of Parent

10.0billion yen YOY +3.5billion yen

Planning on an increase in profit thanks to an increase in operating profit as well as the reduction of temporary costs in the previous year.

* Change in accounting period for Blommer

From FY2024, we will change the Blommer accounting period to the end of March. Previously, Blommer's profit and loss statement from February to January of the next year was consolidated

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2. FY2024 Forecast

FY2024 Key Factors

Soaring Cocoa Prices

Cocoa prices increased dramatically from the beginning of 2024 due to a decline in harvest volumes from the 23/24 crop caused by unseasonable weather and cocoa disease in West Africa and supply shortages.

Risks and Opportunities

		Shortage of cocoa beans and
		cocoa processed products
		Decrease in demand for
Risks		chocolate
		Increase in costs
		Increase in working capital
		Increase in demand for
		vegetable fats for chocolate
Opport
unities		Growing momentum for new
		products and product
		improvements at customers

	Cocoa Bean Prices
10,000	(by the end of Apr. 2024)
8,000
6,000	Over 10,000 GBP/ton
in April 2024.
4,000
2,000
			Unit: GBP
0
Apr-23	Jul-23	Oct-23	Jan-24	Apr-24

Source: ICE Futures Europe (London)

Measures

Securing raw materials for stable supply

Expansion of products with a wide range of prices to meet customer needs

Optimization of sales price

Strengthening group-wide cash management

Establishment of a structure enabling us to increase production and sales expansion

Proposal of products utilizing vegetable fats for chocolate

Blommer

In March 2024, we announced a five-year Structural Reforms.

Structural Reforms Point

1. Closure of Chicago Plant
2. Optimization of Cocoa Processing Business
3. Promotion of Differentiation Strategy

Major Initiatives for FY2024

• Chicago plant ended production at the end of March, scheduled to close at the end of May. Explanation to employees and transfer of production to the other plants have progressed as planned.
  Improvement of $30 million is expected YOY due to cost reductions resulting from the closure of Chicago plant.
• Reduction of exposure through reduction of cocoa bean inventories.
• Increase in production volume by improvement of plant productivity at the three existing plants.

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2. FY2024 Forecast

Vegetable Oils and Fats Business

Vegetable Oils and Fats Business

Net Sales, Operating Profit

Unit: JPY billion

250.0

18.0

FY2024 Forecast

Net Sales 187.4 billion yen YOY +2.0 billion yen, Operating Profit 12.3 billion yen YOY -3.1 billion yen

In FY2023, profitability increased thanks to temporary higher demand outside of Japan and stable palm oil prices at a low level while sales prices were revised. In FY2024, planning on a decrease in operating profit due to the rebound from the previous fiscal year. We will maintain high profit levels by strengthening sales of vegetable fats for

15.4

200.0

12.3

150.0 10.1

7.9 7.4

16.0

14.0

12.0

10.0

chocolate in response to soaring cocoa prices as well as advancing measures to address customer needs related to sustainability and quality.

Points of FY2024

Response to rising demand for vegetable fats for chocolate due to soaring cocoa prices

Expecting to rise demand for vegetable fats for chocolate made from raw materials such as palm oil, sunflower oil,

	8.0
100.0	7.0
	6.0
50.0	4.0
	2.0

and shea butter (Cocoa Butter Equivalent), we will respond to customer needs by establishing a structure enabling us to increase production and expand sales.

Differentiation through sustainable procurement, stable supply, and quality control

0.0									0.0
		FY19	FY20	FY21	FY22	FY23	FY24
								Forecast
		Net sales (left scale)		Operating profit

FY2019 results are based on a 15-month accounting period for subsidiaries outside of Japan, so figures are adjusted to reflect three months of profits/losses.

In addition to traceability and sustainable procurement that is conscious of the environment and human rights, Europe is also seeing a particular increase in needs for oils and fats products with controlled low content of contaminants. We aim to continue capturing demand in FY2024 by taking advantage of the Group's strengths in procurement and refinement technology as well as by ensuring stable supply.

			Europe
	Southeast Asia
		Conduct highly
Build a strong supply
chain for the stable	process of
procurement of high-	sustainable
quality palm oil.	palm oil and sell
		to customers.

10	Reference: Vegetable fats for chocolate page 26