1) Strengthening of earning power by positioning the domestic profit base as the cornerstone of earnings and the overseas business as a growth engine
• Promote innovation and demonstration of leadership in the industry with high added value and differentiation as key areas of focus
• Reform the earning structure and business model evolution through business integration and value chain sophistication
• Acquire foundations for growth, mainly in overseas markets, leveraging strengths originating in Japan
2) Asset and capital efficiency improvement that takes into consideration capital cost
• Capital efficiency improvement with an emphasis on equity spread (ROE - cost of shareholders' equity)
• Business administration and business portfolio restructuring utilizing ROIC (rate of return on invested capital) as a performance indicator
3) Reinforcement of ESG (environmental, social, and governance) initiatives to increase sustainability
• Upgrade intangible assets such as nature, social and relationship capital and personnel and its development toward a CSV (creating shared value) strategy
• Implement “active corporate governance” that contributes to the practice of management to enhance corporate value
|2015 Results||Guidelines for 2016 to 2018|
|Revenue||¥1,857.4 billion||• Stable growth from main businesses – Business restructuring + New M&As|
|Core Operating Profit||¥135.1 billion||• Existing businesses (Average annual growth rate in the high single digits) + Impact of new M&As|
|EPS||¥166.3||• Average annual growth of approx. 10%|
|ROE||8.8%||• Maintain and grow to 10% or higher|
*Core Operating Profit is the reference index for normalized business performance.
Core Operating Profit = Revenue – (COGS + general administrative cost)
*The above indicators take into account the impact of IFRS transition at the end of FY2016.
*The calculation basis excludes special factors such as foreign exchange impact and one-off extraordinary items.
<Financial and Cash Flow Strategy>
FY2016 to FY2018 Cumulative Guidelines
• Generated cash flow: ¥470.0 billion or more (Operating cash flow + Maximization measures + Assets review)
• Capital expenditures: ¥180.0 to ¥220.0 billion
• Active investment in M&As and alliances to acquire foundations for growth
(Maximum D/E ratio of approx. 1.0 time acceptable if major capital demands arise)
• Stable dividend increases with the aim of a dividend payout ratio of 30% (IFRS basis) by FY2018
• Flexible common stock buybacks taking into account an appropriate balance with growth investment
• Maintain high profitability and improve profitability as the Group’s largest cash cow business.
1) Demonstration of leadership in the industry in high value addition and increasing the profit pool of the industry as the No. 1 comprehensive alcohol beverages company
2) Strengthening of new value creation proposals through innovation and development of strong core brands in each category
3) Earnings structure reforms through value chain upgrading and collaboration, and business model evolution including e-commerce
• Realize growth with profit by establishing a differentiated position as the Group’s second mainstay business.
1) Establishment of a distinctive, prominent position centered on reinforcement of the brand power of key products
2) High value addition in response to consumer health consciousness and new value proposals through innovation, including in the chilled beverages business
3) Earnings structure reforms such as maximization of integration synergies, sales channel and container mix improvement, and SKU reduction
• Develop the Group’s next-generation foundations for growth by focusing on strengths and leveraging business integration.
1) Brand value enhancement and strengthening of high-value-added product proposals through focus on existing categories where our strength lies
2) New value and new demand creation through innovation that leverages business integration in areas such as foods with function claims
3) Business selectivity and creation of integration synergies, earnings structure reforms through value chain optimization
• Expand the global foundation for growth leveraging strengths and drive the Group’s sustained growth.
1) Implementation of strategies for growth centered on brand reinforcement and development in existing businesses in Oceania, Southeast Asia, and other regions
2) Earnings structure reforms and business portfolio restructuring by region through means including expansion of integration synergies
3) Acquisition of new foundations for growth by leveraging strengths originating in Japan, such as brand power and cost competitiveness
*Aim for efficiency effects of ¥20.0 billion to ¥30.0 billion (2016 to 2018 cumulative) from profit structure reforms.