FY2023 Second Quarter Financial Results
Supplementary Briefing Materials
Fuji Seal International, Inc.
November 9, 2023
Copyright 2023 Fuji Seal Group
Table of Contents
- Financial Results for the Second Quarter of FY 2023
- Shift to management based on cost of capital
- Initiatives for Sustainable Growth
- Our Strength + Solid business foundation →Sustainable growth strategy
- Steadily strengthen four businesses
- Expansion of product markets and target areas
- Creation of next generation business model
Copyright 2023 Fuji Seal Group
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Key Points of FY2023 2Q Financial Results and
Progress toward Full-Year Earnings Forecasts
- Net sales and profit at each stage increased in 1st half compared to the same period of the previous year. Both sales and profit decreased excluding the effect of foreign exchange rate fluctuations.
- Operating profit compared to the full-year forecast was generally in line with the plan.
Increase/Decrease | FY2023 | Vs. Announcement | ||||
FY2022 | FY2023 | |||||
Annouced full | ||||||
(Millions of yen) | 2nd quarter | 2nd quarter | ||||
(Amount) | (%) | year | Progress rate | |||
Net sales | 90,909 | 94,852 | +3,943 | +4.3% | 191,000 | 49.7% | |
Operating profits | 4,729 | 5,623 | +18.9% | 10,600 | 53.0% | ||
(Operating Profit | +893 | ||||||
Margin) | (5.2%) | (5.9%) | (+0.7pt) | (5.5%) | (+0.4pt) | ||
Ordinary profits | 5,106 | 7,074 | +38.5% | 10,300 | 68.7% | ||
(Ordinary Profit | +1,968 | ||||||
Margin) | (5.6%) | (7.5%) | (+1.8pt) | (5.4%) | (+2.1pt) | ||
Net profits | 3,486 | 5,337 | +1,850 | +53.1% | 6,200 | 86.1% | |
(Net Profit Margin) | |||||||
(3.8%) | (5.6%) | (+1.8pt) | (3.2%) | (+2.4pt) | |||
Foreign Currency | USD | 123.14 | 135.00 | +9.6% | 125.00 | +8.0% | |
Translation | |||||||
134.39 | 145.93 | +8.6% | 135.00 | +8.1% | |||
Rate (average) EUR |
Copyright 2023 Fuji Seal Group
3
FY2023 2Q Financial Results (1) Net Sales by Region
- Consolidated net sales declined slightly excluding the effect of foreign exchange rates. By region, sales in Japan increased YoY, while sales outside of Japan declined.
Copyright 2023 Fuji Seal Group
4
FY2023 2Q Financial Results (2) Net Sales by Segment by Region
FY2022 | FY2023 | Year-on-year change | |||
Excluding forex | |||||
(Millions of yen) | 2nd quarter | 2nd quarter | Change | Rate of change | impact |
Rate of change | |||||
Japan | 49,172 | 49,350 | 177 | +0.4% | - |
Shrink label | 25,387 | 26,107 | 719 | +2.8% | - |
PS label | 4,998 | 4,308 | △690 | △13.8% | - |
Soft pouch | 10,348 | 10,340 | △7 | △0.1% | - |
Machinery | 2,343 | 2,229 | △113 | △4.9% | - |
Others | 6,094 | 6,363 | +269 | +4.4% | - |
Americas | 23,914 | 25,855 | 1,940 | +8.1% | △1.4% |
Shrink label | 19,733 | 21,645 | 1,911 | +9.7% | +0.1% |
PS label | 943 | 897 | △46 | △4.9% | △13.3% |
Soft pouch | 142 | 148 | 6 | +4.4% | △4.8% |
Machinery | 2,265 | 2,779 | 514 | +22.7% | +11.9% |
Others | 829 | 384 | △445 △53.7% △57.7% | ||
Europe | 13,858 | 14,785 | 926 | +6.7% | △1.8% |
Shrink label | 7,544 | 8,480 | 936 | +12.4% | +3.5% |
PS label | 2,672 | 2,976 | 303 | +11.4% | +2.6% |
Soft pouch | 66 | 0 | △66 | △100.0% | - |
Machinery | 3,575 | 3,328 | △247 | △6.9% | △14.3% |
ASEAN | 8,317 | 8,777 | 459 | +5.5% | △3.7% |
Shrink label | 4,001 | 4,238 | 237 | +5.9% | △3.4% |
PS label | 67 | 94 | 27 | +40.5% | +28.1% |
Soft pouch | 4,036 | 4,134 | 98 | +2.4% | △6.6% |
Machinery | 96 | 263 | 167 | +172.4% | +148.5% |
Others | 115 | 45 | △70 △60.6% △64.0% | ||
Eliminations | △4,355 | △3,916 | 438 | △10.1% | |
Consolidated net | 90,909 | 94,852 | 3,943 | +4.3% |
Japan
The Americas
Europe ASEAN
• Shrink Sleeve Label (SSL) sales increased due to a recovery in the beverage sector as a result of the extremely hot summer and the effect of price revisions.
• Sales of Pressure sensitive labels (PSL) decreased due to the continued impact of sluggish demand.
• Spouted pouch (SPT) sales were at the same level as the previous year, despite a decrease in refill of daily necessities due to energy saving measures, due to an increase in pouch sales for beverage due to an increase in human flow.
• Other: Sales increased due to the contribution of contract packaging.
• SSL sales were at the same level as the previous year as customers' inventory adjustments continued through the second quarter.
• Machinery sales increased due to strong sales of machine bodies as well as parts services.
• Other labels continued to make progress in reducing unprofitable products.
• SSLand PSL sales increased due to price revisions, despite a decline in demand caused by inflation.
• Sales of machinery decreased due to sluggish demand for medium- and low- speed machines, despite strong sales to the pharmaceutical industry.
• SSL and SPT sales declined due to consumers' reluctance to buy.
Copyright 2023 Fuji Seal Group
- Machinery sales increased due to strong sales of services and parts
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FY2023 2Q Financial Results (3) Operating Profits by Region
- Consolidated operating profit increased due to the recovery of performance in the European region and ASEAN region.
- Shrink Sleeve Label (SSL) sales are on the road to
FY2022 | FY2023 | Year-on-year | Excluding forex impact | Japan | recovery due to improved productivity, while orders for | ||||||
(Millions of yen) | 2nd quarter | 2nd quarter | change | pressure sensitive label (PSL) have continued to decline | |||||||
since the previous fiscal year, resulting in lower profits. | |||||||||||
Consolidated | 4,729 | 5,623 | +893 | +756 | +16.0% | ||||||
operating profits | • | Continued to promote simplification of organization, | |||||||||
Japan | 4,398 | 4,259 | △139 | △139 | △3.2% | portfolio replacement, and price confirmation | |||||
Americas | 1,414 | 1,206 | △208 | △314 | △22.2% | the | • | The decline in profit improved from -60.7% in the first | |||
Americas | quarter to -22.2% in the cumulative second quarter. | ||||||||||
Europe | △749 | 194 | +943 | +928 | - | ||||||
• Since bottoming out in the fourth quarter of last year, it has | |||||||||||
ASEAN | △137 | 163 | +300 | +286 | - | ||||||
continued to improve in the first and second quarters. | |||||||||||
Eliminations | △196 | △200 | △4 | △4 | +2.0% | Europe | • | Increase due to structural reforms and the effect of price | |||
revisions | |||||||||||
ASEAN | • Return to profitability in 2Q | ||||||||||
• | Increase due to price revisions, productivity improvements, | ||||||||||
and fixed cost reductions | |||||||||||
Copyright 2023 Fuji Seal Group |
6
FY2023 2Q Financial Results (4) Non-operating Income (Expenses), Ordinary Profits, and Net Profits
Increase/Decrease | ||||||||
FY2022 | FY2023 | |||||||
(Millions of yen) | 2nd quarter | 2nd quarter | (Amount) | (%) | ||||
Net sales | 90,909 | 94,852 | +3,943 | +4.3% | ||||
Operating profits | 4,729 | 5,623 | +893 | +18.9% | ||||
・Non-operating incom | 469 | 1,666 | +1,197 | +255.1% | ||||
・Non-operating expen | 92 | 215 | +122 | +133.4% | ||||
Ordinary profits | 5,106 | 7,074 | +1,968 | +38.5% | ||||
・Extraordinary income | 19 | 13 | △ 6 | △32.7% | ||||
・Extraordinary losses | 74 | 21 | △ 52 | △71.0% | ||||
Before income taxes | 5,051 | 7,066 | +2,014 | +39.9% | ||||
Net profits | ||||||||
・Income taxes | 1,564 | 1,728 | +163 | +10.5% | ||||
Net profits | 3,486 | 5,337 | +1,850 | +53.1% | ||||
Foreign Currency | USD | 123.14 | 135.00 | +9.6% | ||||
Translation | ||||||||
EUR | 134.39 | 145.93 | +8.6% | |||||
Rate (average) |
【Non-operating income】
- Foreign exchange gains mainly due to the effect of exchange rate changes on cash and cash equivalents of time deposits denominated in foreign currencies and loans to foreign subsidiaries
【Non-operating expenses】
- Increase in interest expenses due to higher interest rates in the European region
Income taxes
- Effective tax rate decreased (-6.5pt YoY) due to the recognition of tax benefits from the foreign exchange effects of the Mexican subsidiary in the Americas region.
Copyright 2023 Fuji Seal Group
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FY2023 2Q Financial Results (5) B/S | (million-yen) | |
- Working capital increased due to foreign exchange effects and the end of the second quarter being a holiday for financial institutions. Tangible fixed assets increased with the start of operations of the new North Carolina plant in the Americas.
Current assets
118,112
(+8,089 compared to the end of
the previous period)
Major Points of Increase/Decrease Cash and bank deposits
+2,223
Notes and accounts
receivable +4,317
Inventories +1,867
Fixed assets
74,970
(+4,989 compared to the end of
the previous period)
Major Points of Increase/Decrease Tangible fixed assets
+3,473
Goodwill +1,008
total assets
193,083
(+13,079 compared to the end of the previous period)
End of | FY2023 End of | Rate of | |||
FY2022 | 2nd quarter | change | |||
Equity ratio | 67.0% | 67.5% | +0.5pt | ||
Interest-bearing debt | 12,578 | 11,958 | △4.9% | ||
D/E ratio | 10.4% | 9.2% | △1.3pt | ||
Foreign | USD | 132.70 | 144.99 | +9.3% | |
Currency | |||||
EUR | 141.47 | 157.60 | +11.4% | ||
Translation |
Liabilities
62,760
(+3,328 compared to the end of
the previous period)
Major Points of Increase/Decrease
Trade payables | +1,736 |
Debts | △614 |
Other Current liabilities | +2,054 |
Net assets
130,322
(+9,751 compared to the end of
the previous period)
Major Points of Increase/Decrease
Retained earnings | +4,351 |
Foreign currency translation | |
adjustment | + 5,670 |
Copyright 2023 Fuji Seal Group
8
FY2023 2Q Financial Results (6) Cash flows and depreciation | (million-yen) | |
- Free cash flow turned positive from negative in the same period of the previous year as business performance recovered, Cash flows from operating activities exceeded those of the second quarter of FY2021.
Cash flows from operating activities | Cash flows from investing activities | FCF | Cash flows from operating activities | ||||
9,939 | • | Net income before tax | 7,066 | ||||
• | Depreciation breakdown | 4,001 | |||||
8,700 | 7,548 | 8,200 | • | Change in working capital △1,449 | |||
• | Income taxes | △1,360 | |||||
6,514 | |||||||
6,652 | |||||||
Cash flows from investing activities | |||||||
5,700 | |||||||
• | Acquisition of Noncurrent assets | ||||||
3,452 | 2,966 | △3,652 | |||||
3,252 | • | Changes in the Scope of Consolidation | |||||
2,700 | |||||||
payments for acquisition of subsidiaries | |||||||
1,752 | |||||||
△1,204 | |||||||
△300 | |||||||
△3,300 | △3,062 | ||||||
△3,287 | △3,281 | ||||||
△6,300 | △5,796 | △6,247 | △4,948 | ||||
2019Q2 | 2020Q2 | 2021Q2 | 2022Q2 | 2023Q2 | |||
End of FY2022 | FY2023 End of | Reason for Increase/Decrease | |||||
2nd quarter | |||||||
Capital expenditures | 5,851 | 3,596 | |||||
Depreciation and amortization | 3,745 | 4,001 | Copyright 2023 Fuji Seal Group | ||||
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Dividends from surplus
The interim dividend will be paid at the end of the second quarter as originally planned.
- Interim dividend 17 yen per share
- Total amount of dividends paid 931 million yen
- Payment start date December 1, 2023
Basic Policy on Profit Distribution
• Investments for continuous growth (technology development, human capital development, capital expenditures, M&A)
• Target Consolidated dividend payout ratio of 20-25%
• Stable and continuous increase in dividend per share
• Establishment of a stable financial base for contingency planning and flexible acquisition and disposal of Treasury stock
Copyright 2023 Fuji Seal Group
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Fuji Seal International Inc. published this content on 09 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 14:50:55 UTC.