Financial Results for the year
Ended September 30, 2014

T．HASEGAWA CO., LTD.
November 17, 2014

T．HASEGAWA CO., LTD.

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IndexⅠ．Summary of the Consolidated Financial Statements

・・・P2-P7－ Market Environment－ Consolidated Results－ Net sales by Segments, by Region－ Operating Income by Region

Ⅱ. Global Strategies

・・・P8-P14－ Domestic Strategies－ Overseas Strategies

Ⅲ．Three-year-Plan
Ⅳ. Shareholder Redemption
Ⅴ. Management Strategies
Ⅵ．Appendix

T．HASEGAWA CO., LTD.

・・・P15-P17
・・・P18-P19
・・・P20-P21
・・・P22-P41

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1

Ⅰ． Summary of the Consolidated
Financial Statements

T．HASEGAWA CO., LTD.

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2

Market Environment

Ⅰ． Summary of the Consolidated
Financial Statements

Domestic Market
Domestic flavors and fragrances market in 2013 slightly expanded vs. year ago
In this summer, there were more cloudy and rainy days throughout the country
And western Japan experienced record-high precipitation and record-low sunshine durations
Beverage market (January-September 2014) was shrunked slightly due to unseasonable weather in this summer
Overseas Market
Overseas flavors and fragrances market expanded by approximately 4% due to the growing demand in emerging
markets especially in Asia and Latin America
Beverage market in China while its growth rate slowed down in 2012, recovered in 2013
Beverage market in U.S. expanded slightly, functional and coffee drink increased steadily
In Southeast Asia, beverage, instant noodle, snack and yogurt market expanded, especially tea beverage growth
is remarkable

T．HASEGAWA CO., LTD.

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3

Ⅰ． Summary of the Consolidated
Financial Statements

Consolidated Results

・Year-on-year: Net sales decreased due to the decrease of net sales of the parent company
Operating income decreased due to increase in manufacturing expenses and Head office relocation expenses
・vs. Plan：Net sales was significantly lower than the plan due to unseasonable weather in this summer,
the parent company was not able to achieve the original plan
Yen million

FY13
Actual

FY14
Plan

FY14
ActualAchievement
yr/yr
Value

vs. Plan
％

Value

％

Net sales

45,104

46,91044,917

-186

-0.4%

-1,992-4.2%

Cost of sales

28,34529,42028,558

212

0.8%

-861

-2.9%

Gross profit

16,75817,49016,359

-399

-2.4%

-1,130-6.5%

SGA expenses

11,32011,92011,977

657

5.8%

57

0.5%

Operating income

5,438

5,570

4,381

-1,057-19.4%-1,188-21.3%

Ordinary income

6,367

5,790

4,939

-1,427-22.4%-850-14.7%

Income before
income taxes

5,708

5,670

4,832

-876

-15.3%-837-14.8%Net income

3,518

3,850

3,239

-279

-8.0%

-610

-15.9%

T．HASEGAWA CO., LTD.

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4

Ⅰ． Summary of the Consolidated
Financial Statements

Net sales by Segments
・While the sales of fragrances of the parent company and the subsidiary in China has grown steadily,
flavour of the parent company shrunk; thus, overall sales decreased

Yen million
FY14
Actual

FY13
Actualyr/yrRemarkValue%

Fragrances

5,567

6,062

494

8.9%

Sales for toiletry products increased
Sales of the subsidiary in China increased

Flavors

39,53638,855

-681

-1.7%

Sales for “Extract product used for tea beverages”
and “Fruit processing product” decreased

45,10444,917

-186

-0.4%

－

Total

yr/yr (%)

FY14 Actual
Domestics
Fragrances

Overseas+8.9%

Flavors
-1.7%
Total
-0.4%
0

10,00020,00030,00040,00050,000

Yen million＊FY2014 overseas sales ratio 27.8%

T．HASEGAWA CO., LTD.

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5

Ⅰ． Summary of the Consolidated
Financial Statements

Net Sales by Region

Consolidated sales decreased by 0.4%,due mainly to the decrease of the parent company sales
The sales of China and USA subsidiaries increased, but it has not covered the sales decrease of the parent

Yen million

Yenmillion
millionYen

47,000

FY13
Actual

FY14
Actualyr/yr%Parentcompany

37,97736,251-1,726

-4.5%

China

5,440

6,700

1,259

23.2%

USA

2,148

2,481

332

15.5%

Adjustment

-462

-515

-52

-

Consolidated

45,10444,917

-186

-0.4%

-1,726+1,259+332-52

44,917

45,10440,0000
FY13 Actual

Parentcompany

China

USA

Adjustment

FY14 Actual・ Parent company : Flavor sales decreased in “Extract product used for tea beverages”
and “Fruit processing product”⇒ Decrease in net sales

・China: Flavor and Fragrance sales increased⇒ Increase in net sales

・U.S.: Expansion of existing business contributed to the growth⇒ Increase in net sales

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6

Ⅰ． Summary of the Consolidated
Financial Statements

Operating Income by Region
・Consolidated operating income decreased due to the poor results of the parent company,
while China subsidiary outperformed the previous year

Yen million
FY13
Actual

FY14
Actualyr/yr%

Yenmillion
millionYen

6,000

Parentcompany

4,158

2,790

-1,367-32.9%

China

1,122

1,564

442

39.4%

USA

17

18

1

7.8%

Adjustment

140

7

-132

-

Consolidated

5,438

4,381

-1,057-19.4%-1,367
+442

5,438

+1

-132
4,381

0
3,000
FY13 Actual

Parentcompany

China

USA

Adjustment

FY14 Actual・ Parent company : Decrease in Net sales and increase in manufacturing expenses and Head office relocation expenses⇒ Decrease in operating income
・China : Increase in net sales and lowering the sales cost ratio⇒ Increase in operating income
・U.S. : Increase in net sales and lowering the sales cost ratio
Increase in expense for further reinforce sales and R&D base, and increased in depreciation expense⇒ At the same level as the previous year
T．HASEGAWA CO., LTD.

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7

Ⅱ．Global Strategies

T．HASEGAWA CO., LTD.

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8

Ⅱ．Global Strategies

Domestic Strategies
Policies

Expand market shares by anticipating new markets stemming from aging society and healthy trends

FY2014 Performance

Ongoing Projects and Progress

Net Sales
36,251 million Yen(-4.5% Yr/Yr)
Operating Income
2,790 million Yen(-32.9% Yr/Yr)

Promotion of Solution-Oriented Sales Activities
・Proposition of new materials, such as materials with high durability of aromas and sweet taste,
and functional materials, etc.
・By reducing use of sugar, sweet, rich and complex taste often weaken.
Proposition new flavor and materials, such as material reinforcing these taste
・Business presentation on new materials and industry trends

Enhancing Capability to Provide Flavors and Fragrances for New Applications
・Focus on new areas such as non-alcoholic beers and cocktails, alcoholic beverages, healthy foods, foodfor medical uses, etc.
⇒Three-fold increase in sales for non-alcoholic beers and cocktails compared to FY2010
・Developing flavors which can replace food materials (e.g. milk, vegetables, fruit juice, meat, etc.)
Netsale”Net sales” and ”Operating Income”

Operating
Income（Million Yen）

50,000

Sales and profit target(FY2019)
Net sales
39,400 million Yen
Operating income
4,600 million Yen

15,000NetsalesOpereting
Income

Yr/Yr
-4.5％

40,000

Yr/Yr
-2.4％

Yr/Yr
+4.1％

Yr/Yr
+1.1％

Yr/Yr
+1.1％

12,000

Yr/Yr
-3.1％

Yr/Yr
-0.1％

30,0009,000

20,000

6,000

10,0003,000

00Fy2011Fy2012Fy2013

T．HASEGAWA CO., LTD.

Fy2014Fy2015(Plan)

Fy2016(Plan)

Fy2017(Plan)

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9

Ⅱ．Global Strategies

Overseas Strategies

PolicyPromote step-by-step globalization with effective use of human resources andfunds allocation

1st Phase：Cultivate local markets in China, U.S. and Southeast Asia
FY14
2Q

FY14
4Q

1st
Step

Localization of the management
Enhancement of R&D and Sales
Cultivate local market

◎→◎
○→◎
○→○

2nd
Step

Enhancement of Production Capacity
Acquisition of local production site
Enhancement of R&D facilities

○→◎
○→◎
○→○

3rd Step

Business alliance, M&A
Enhancement of oversea bases for global business→○→○◎：Completion○：On-going※ The second expansion
phase of Suzhou plant will
start operation in June 2015

Recentsituation

2nd Phase： Increase business opportunities with global companies
T．HASEGAWA CO., LTD.

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10

Ⅱ．Global Strategies

Overseas Strategies -China-

Reinforce revenue base for further sales expansion in the Chinese market by active investments

Policies

Transition of sales of subsidiary in China, capital investment in China（RMB Million ）600
Capital investment in China
Sales of subsidiary in China

500
TH Suzhou
Approx. 293 RMB Million

400

300

TH Shanghai
Approx.73 RMB Million

The second expansion
phase of TH Suzhou plant
Approx.
160 RMB Million（Plan）

200

New R&D facility
at T.H.Shanghai
Approx.
100 RMB Million（Plan）

100

0
2000

January 2000
TH Shanghai
established

2001

2002

2003

2004

October 2001
TH Shanghai
startedoperations

T．HASEGAWA CO., LTD.

2005

2006

August 2006
TH Suzhou
established

2007

2008

2009

2010

November 2009
TH Suzhou
started operations

2011

2012

2013

2014

2015

June 2015
The second expansion phaseof TH Suzhou plant will start
operations

2016

2017

The first half of 2017
New R&D facility at
T.H.Shanghai
will start operations

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11

Ⅱ．Global Strategies

Overseas Strategies -ChinaPolicies

Reinforce revenue base for further sales expansion in the Chinese market by active investments
FY2014 Performance

Ongoing Projects and Progress
Enhancement of Production Capacity
・2nd phase of the capital investment of T.H.Suzhou plant is progressing as planned, and it will start operationin June 2015
・The total investment of this project is expected to be approximately 2 billion Yen
・This project will increase our productive capacity in China by approximately 30%

Enhancement of R&D Facilities
・A project team has been launched and the new facilities will start operation in the first half of FY 2017
・The total investment is expected to be approximately 1.5 billion Yen, with a total floor area of
applox. 5,000 square meters.

Sales and profit target(FY2019)

Localize and Strengthen Management Structure to Acquire New Customers,
Further Cooperate with Existing Customers, and to Increase Sales.

Net sales
620 million RMB (10,000 million Yen)
Operating income
120 million RMB (2,000 million Yen)

・Classification of customers: International Companies 60%, Local Companies 30%,
Japanese Companies 10%
・Aim to increase business opportunities with both International and Local companies.
Netsale”Net sales” and ”Operating Income”（Million RMB）

600

Operating
Income300

NetsalesOpereting
Income

Yr/Yr
+7.9％

500

400

Net Sales
401 million RMB (6,700 million Yen)(+11.0% Yr/Yr)
Operating Income
93 million RMB (1,564 million Yen)(+25.7% Yr/Yr)

Yr/Yr+10.9％
Yr/Yr
+3.7％

Yr/Yr
+9.1％

Yr/Yr
+9.2％
250

Yr/Yr
+11.0％
200

Yr/Yr
-1.3％

300

150

200

100

100

50

0

0
Fy2011Fy2012Fy2013

T．HASEGAWA CO., LTD.

Fy2014Fy2015(Plan)

Fy2016(Plan)

Fy2017(Plan)※Consolidated Net sales and operating
income of T. Hasegawa’s two
subsidiaries in China

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12

Ⅱ．Global Strategies

Overseas Strategies -U.S.Policies

Aim to expand sales of Savory and Beverage flavors

Ongoing Projects and Progress

FY2014 Performance

Realignment New Management Structure
・Recruited CEO, Director of Laboratories and Sales department who are well acquainted withbeverage market.
・Recruited an sales staff, strengthening the efficiency of sales functions to
expand beverage market
・Aim at sales growth in local beverage market in U.S.

Enhancement of R&D Facilities Completed

Sales and profit target(FY2019)

・Renovated R&D and Administration Building started operation in June 2014
- Total investment approximates 0.5 billion Yen
・Strengthening R&D support and maintain close exchanges of information between Japanand U.S.

Net sales
45 million US$ (4,500 million Yen)
Operating income
5 million US$ (500 million Yen)

Establishment of Mexico Branch・Established a new office in Mexico to penetrate the North American market in October 2013
NetsaleNetsalesOpereting
IncomeYr/Yr+17.1％

30

20（Million USD）

”Net sales” and ”Operating Income”

40

Yr/Yr
+16.8％

Yr/Yr+12.3％

Yr/Yr+15.8％

Yr/Yr+13.0％

Yr/Yr+12.1％Net Sales
24 million US$ (2,481 million Yen)(+4.7% Yr/Yr)
Operating Income
0.17 million US$ (18 million Yen)(-2.2% Yr/Yr)

Operating
Income
4

3

Yr/Yr
+4.7％

2
Decided topenetrate into
beverage market

10

1

0

0
Fy2011Fy2012Fy2013

T．HASEGAWA CO., LTD.

Fy2014Fy2015(Plan)

Fy2016(Plan)

Fy2017(Plan)

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13

Ⅱ．Global Strategies

Overseas Strategies –Southeast AsiaPolicies

Expand sales through cooperation of sales base in Thailand/Indonesia and production base in Malaysia

Ongoing Projects and Progress

FY2014 Performance
Net Sales
1,700million Yen (+26.3% Yr/Yr)
Operating Income
200 million Yen (+108.1% Yr/Yr)

Technical support visits to customers with Sales force
・This effort brought a good result for “Strengthen business relationship with local major
customers located in “High-priority-countries”.

Establishment of Local Sales Subsidiary in Indonesia
・Established in April 2014, operation will start in FY2015
・Aim to build base for gathering market information and for further growth by capturing demandof local market

Net sales
3,700million Yen
Operating income
700 million Yen

Acquisition of Local Production Base in Malaysia
・Acquired “Peresscol Sdn. Bhd.,” , a flavor sales and production company in Malaysia
・Peresscol has its strengths in areas such as Halal seasoning powder production
・This acquisition allows us to respond to local demands with lower costs and less transit time
Netsale”Net sales” and ”Operating Income”（Million Yen）

4,000

Sales and profit target(FY2019)

Operating
Income2,000

NetsalesOpereting
IncomeYr/Yr+17.4％

3,000

Yr/Yr
+7.3％
1,500

Yr/Yr
+43.4％
2,000

Yr/Yr
+1.5％

Yr/Yr
+26.3％

1,000

1,000

500

0

0
Fy2013Fy2014

T．HASEGAWA CO., LTD.

Fy2015(Plan)

Fy2016(Plan)

Fy2017(Plan)

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14

Ⅲ．Three-year-Plan

T．HASEGAWA CO., LTD.

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15

Income statements (Consolidated)

Ⅲ．Three-year-Plan

Non-consolidated: It is expected that the declined sales of “Extract product used for tea beverages“ is bottoming out
and contributions from new products
China segment: Although economic growth is slowing down, steady sales growth is expected due to further expansion of
Beverage businesses
U.S. segment: Steady growth of Savory products and contribution of sales of beverage flavor
South Asian segment: Strong growth is expected in beverage and snack market, which have robust demand for flavor
Aim at further sales growth by recent acquisition of local production base
Yen million
Fy2014(Actual)Fy2015(Plan)

Fy2016(Plan)

Fy2017(Plan)Net sales

44,91747,35049,10050,700

Cost of sales

28,55829,77030,75031,310Operating income

4,381

5,030

5,310

5,970

Ordinary income

4,939

5,250

5,520

6,190

Net income

3,239

3,510

3,670

4,120

¥102.33 per U.S.$¥16.67 per RMB¥100.00 per U.S.$¥16.2 per RMB¥100.00 per U.S.$¥16.2 per RMB¥100.00 per U.S.$¥16.2 per RMB

Exchange rates
Sales growth ratio

-0.4%

5.4%

3.7%

3.3%

Sales cost ratio

63.6%

62.9%

62.6%

61.8%

Operating income ratio

9.8%

10.6%

10.8%

11.8%

Ordinary income ratio

11.0%

11.1%

11.2%

12.2%

Net income ratio

7.2%

7.4%

7.5%

8.1%

Overseas net sales ratio

27.8%

29.6%

31.7%

33.5%

※Three-Year-Plan of T. Hasegawa group is revised every year
※Please refer to page 41 for details

T．HASEGAWA CO., LTD.

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16

Capital Investment, Depreciation & Amortization, R&D Expenses

Ⅲ．Three-year-Plan

・Capital investment increased due to the temporary relocation and rebuilding of Headquarters,
and the completion is scheduled in March 2016 （FY2014 ¥1.3bn, FY2015 ¥0.6bn )・The second expansion phase of Suzhou plant is progressing as planned
Operation of the new plant is scheduled to start from June 2015 （ FY2014 ¥1.0bn, FY2015 ¥0.7bn )・Construction of new R&D facility at T.H.Shanghai is planned to start operation in the first half of FY 2017.
（ FY2016 ¥1.0bn, FY2017 ¥0.5bn )・R&D expenses is planned to be kept at around 9% of consolidated sales
Yen million

CapitalInvestment
Depreciation&
Amortization
R&D
Expenses

Fy2014(Actual)Fy2015(Plan)

Fy2016(Plan)

Fy2017(Plan)

Consolidated

5,330

3,732

3,346

1,834

Non-consolidated

3,502

2,599

1,909

1,100

Consolidated

2,910

3,118

3,202

3,049

Non-consolidated

2,419

2,465

2,368

2,089

Consolidated

4,010

4,257

4,331

4,588

Non-consolidated

3,269

3,424

3,375

3,347

T．HASEGAWA CO., LTD.

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17

Ⅳ. Shareholder Redemption

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

18

Shareholder Redemption

Ⅳ. Shareholder Redemption

Basic Policy・Strengthening operating foundations and retaining undistributed profits in order to reinvest in future development,
while also meeting shareholders’ expectations by paying dividends which correspond to our business performance・Targeting approx. 35% of consolidated dividend payout ratio for interim and year-end dividends.

Annual dividends per share(Yen)Consolidated payout ratio

Annual dividends
per share(Yen)50

Consolidated
payout ratio

50%
40.1%

40

38.5%
35.5%

35.4%

40%

30

30%

20

20%

10

25

30

30

30
10%

0

0%
Fy2012

T．HASEGAWA CO., LTD.

Fy2013Fy2014Fy2015(Plan)

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19

Ⅴ. Management Strategies

T．HASEGAWA CO., LTD.

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20

Management Strategies

Ⅴ. Management Strategies

Basic Strategies
Concentrate management resources on high-value added and profitablecompound flavors and fragrances
Make steady revenues in the domestic market
Aim for growth in the overseas market
Domestic Market
Food for medical use

Overseas Market
Aging society
with low birthrate

New applications

Replacement by flavors

R&D
CenterHigher healthconsciousness
Solution-oriented sales
activities

Revenue BaseT．HASEGAWA CO., LTD.

China

U.S.

S.E. Asia

Management
Localization

Collaborative
work of R&D and
sales

Offering
flavors
withlocal taste

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21

Ⅵ. Appendix

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

22

Outlines of Flavors & Fragrances
Business

T．HASEGAWA CO., LTD.

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23

Ⅵ. Appendix

Flavors & Fragrances Business
Ingredients

Products(compound flavors & fragrances)① Natural aromatics③ Flavoring（Flavors）

Compounding② Aromatic chemicals

Recipes④ Fragrances

Integration of all the R&D
capabilities
The experts who formulate fragrances are known as “perfumers”
The experts who formulate flavors are known as “flavorists”
Fragrances and Flavors are tailor-made in accordance to our customers’ requests⇒ Recipes formulated by perfumers and flavorists are the integration of all
the R&D capabilities of flavors & fragrances companies

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

24Market Size of
Flavors & Fragrances Industry

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

25

Total World Market of Flavors & Fragrances Industry

Ⅵ. Appendix

・Estimated sales volume of global market： Approx. 2,500bln Yen（Approx. 24bln USD） as of May,2014
North America-Market size: Approx.650bln Yen (*)

Europe, the Middle East and Africa-Market size: Approx. 900bln Yen(*)-Many of the end-users employ a “Preferred supplier
program” and European and American companies
have built the solid business bases-Many of the end-users employ a“Preferred supplier program” andEuropean and American companies havebuilt the solid business bases-T. Hasegawa established a subsidiary in California
in1978,which has a Sales branch in Atlanta, Chicago
and Mexico, and has Laboratory in Princeton.

Asia-Market size: Approx. 750bln Yen (*)(*) = T. Hasegawa estimates● = T. Hasegawa’s offices and plants
T．HASEGAWA CO., LTD.

-Market is growing due to the economic growth ofdeveloping countries including China-Most of the major flavors and fragrances companies
are operating in China-T. Hasegawa established a subsidiary in Shanghai
in 2000, in Suzhou in 2006, in Bangkok in 2003,andin Indonesia in 2014
- T. Hasegawa acquired Peresscol Sdn. Bhd. in
Kuala Lumpur, Malaysia in 2014 as a production
baseSouth America-Market size: Approx. 200bln Yen (*)-The majority of flavors and fragrances
are imported.
-Competition in Brazilian market isbecoming severe due to the economic
growthCopyright© T.HASEGAWA CO., LTD. All rights reserved.

26

Ⅵ. Appendix

Worldwide market scale of flavors and fragrances

・Top11 companies account for approx. 80% of the global market (as of May,2014)
Company nameCountry

USD million
Sales(2013Yr)

Market Share1

Givaudan

Switzerland

4,905

20.5%

2

Firmenich

Switzerland

3,374

14.1%

3

IFF

USA

2,953

12.4%

4

SymriseGermany

2,522

10.5%

5

Takasago

Japan

1,245

5.2%

6

Wild Flavors

Germany

1,233

5.2%

7

Mane SAFrance

996

4.2%

8

Frutarom

Israel

674

2.8%

9

Sensient Flavors

USA

643

2.7%

10

Robertet SA

France

537

2.2%

11

T.Hasegawa

Japan

428

1.8%

Subtotal－

19,51081.6%

Others

－

4,398

18.4%

Total

－

23,908－* US $1≒ 105.3Yen

Source : Leffingwell & Associates
http://www.leffingwell.com/top_10.htm
T．HASEGAWA CO., LTD.

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27

Ⅵ. Appendix

Size of domestic flavors and fragrances market

・Sales composition of domestic market ⇒ 84% flavors vs. 16% fragrances (50% flavors vs. 50% fragrances worldwide)(Yen billion)

250

Natural Aromatics
Aromatic Chemicals
Fragrances
Ｆｌａｖｏｒｓ

Annual Sales
12

12

13

37

34

31

25

26

27

27

129

134

137

135

139

FY2009FY2010FY2011FY2012

200

11
11
34

Composition Rate (2013Yr)

Fragrances
16%

26
150
23

Flavors
84%

100

50

0
FY2013(Yen billion)

Total

189

204

212

208

210

Year-on-year

-7.4%

7.9%

3.9%

-2.2%

1.0%

T．HASEGAWA CO., LTD.

Source：Japan Flavor and Fragrance
Materials Association

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

28

Business Outline of
T. Hasegawa Co., Ltd.

T．HASEGAWA CO., LTD.

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29

Ⅵ. Appendix

Sales of Domestic Flavor & Fragrance Companies

・Top 5 companies account for approx.80% of the market (as of March,2014)

Others22.2%

Company T
33.4%

Company N
5.3%
Company S
6.9%
Company O
12.4%

T.Hasegawa
19.7%*Based on a survey conducted by a private market research firm, this data was calculated by assuming the total of"non-consolidated sales" of the top 10 companies in domestic market*Fiscal year of Company T, O, S, and N: Apr. – Mar.
*Since fiscal year of T. Hasegawa is Oct. - Sep., numbers indicated in the above pie chart have been adjusted tocorrespond to the Apr. –Mar. fiscal year

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

30

Ⅵ. Appendix

Sales Breakdown - Segments - (Consolidated)

・T. Hasegawa integrates business resources into flavors and fragrances
・Wide variety low-volume production ⇒ T. Hasegawa sells approx. 14,000 products per year
Yen million

Yen million

T. Hasegawa
Company T(Consolidated）(Consolidated）
FY ended in Sep. 2014 FY ended in Mar. 2014
Sales
Share
Sales
Share

48.2%

4,316

27.4%

2,493

15.9%

1,353

13.3% Overseas
1.0% Others

1,341

8.5%

131,036

100.0% Subtotal

15,744100.0%

38,85586.5%

78,99060.3%

Fragrances

6,062

13.5%

33,231

25.4%

Aroma Chemicals

0

0.0%

17,460

Others00.0%

44,917100.0%

36.4%

T. Hasegawa（Consolidated）

Compound flavors &Fragrances
Aroma Chemicals

7,594

Flavors

Total
Ratio of gross profits
to salesCompany S(Consolidated）
FY ended in Mar. 2014
Sales
Share

30.2%
Company T（Consolidated）

Ratio of gross profits
to sales36.3%

Company S（Consolidated）

OthersFragrances

OthersAroma
Chemicals
Overseas

Fragrances

Flavors

T．HASEGAWA CO., LTD.

Compoundflavors &Fragrances

Flavors
Aroma
Chemicals

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

31

T. Hasegawa’s Flavors sales by market (Non-Consolidated)

Ⅵ. Appendix

・Seasonal changes in sales exist since sales for beverage market account for thehighest proportion
Seasonings
marketApprox. 10%

OthersApprox. 10%

Instant noodles
marketApprox. 6%

BeveragemarketApprox. 34%

Confectionery
marketApprox. 14%

DairymarketApprox. 26%

Note: This data was calculated by assuming T. Hasegawa’s sales with identifiable business segments as 100

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

32

Financial Information

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

33

Ⅵ. Appendix

Comparative Income statements (Consolidated)

・All the profit accounts decreased due to the decrease of net sales ,the increase of cost of sales,
and increase of SGA expenses
Yen million
FY2013

Net sales

FY2014

45,104 100.0% 44,917 100.0%

yr/yr
Value

％

-186

-0.4%

RemarkCost of sales

28,34562.8% 28,558

63.6%

212

・There was a deterioration in the cost of sales ratio associated withthe decrease in production volume at the parent company
0.8% ・There was an improvement in the cost of sales ratio associated with
the increase in production volume at the major subsidiaries

Gross profit

16,75837.2% 16,359

36.4%

-399

-2.4%

657

・SGA expenses of the parent company increased due tothe head office relocation
5.8% ・SGA expenses of the subsidiaries increased due tothe improvement of corporate performances

SGA expenses

11,32025.1% 11,977

26.7%

Operating income

5,438

12.1%

9.8% -1,057 -19.4%

4,381(FY13) non-operating income increased due to foreign exchange gainof 480m Yen-22.4% (FY14) non-operating income increased due to foreign exchange gainof 198m Yen

Ordinary income

6,367

14.1%

4,939

11.0% -1,427

Income before
income taxes

5,708

12.7%

4,832

10.8%

-876 -15.3%

Net income

3,518

7.8%

3,239

7.2%

-279

T．HASEGAWA CO., LTD.

-8.0%

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

34

Ⅵ. Appendix

Comparative Balance Sheets (Consolidated)
Yen million

September 30 September 30
2013
2014

Increase or
Decrease

RemarkCurrent assets

48,82547,909-916

・Increase in Cash and Deposits: 2,303m Yen
・Decrease in Marketable securities: -3,999m Yen
・Increase in Inventories: 835m Yen

Fixed assets

38,622

44,036

5,413

・Increase in Property, Plant and Equipment: 3,164m Yen
・Increase in Investment securities: 2,287m Yen

Total assets

87,44891,946

4,497

Current liabilities

11,722

10,370-1,352

・Decrease in Income taxes payable: -911m Yen

Long-term liabilities

7,226

8,778

1,552

・Increase in Net defined benefit liability: 549m Yen
・Increase in Deferred tax liabilities: 969m Yen
・Increase in Retained earnings: 1,785m Yen
・Decrease in Treasury stock: 140m Yen
・Increase in Foreign currency translation adjustments: 1,220m Yen
・Increase in Unrealized gains on available-for-sale securities: 1,473m Yen
・Remeasurements of defined benefit plans: -322m Yen

Total net assets

68,49972,796

4,297

Total liabilities andnet assets

87,44891,946

4,497

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

35

Ⅵ. Appendix

Comparative Statement of Cash Flows (Consolidated)
Yen million
FY2012FY2013

Increase or
Decrease

Remark・Income before taxes: 4,832m Yen
・Depreciation & Amortization: 2,910m Yen
・Decrease in trade receivables: 433m Yen
・Increase in Inventories: -665m Yen
・Income taxes paid: -2,169m Yen

Cash flows from operating
activities

8,493

5,019

-3,473

Cash flows from investing
activities-4,709-1,5183,190 ・Redemption of marketable securities: 7,000m Yen

Cash flows from financing
activities-1,051-1,460-408 ・Cash Dividends paid: -1,453m Yen

Effect of currency change
on cash and cash
equivalents

702

262

-440

―

Net Change in cash andcash equivalents

3,435

2,303

-1,131―

Cash and Cashequivalents at beginningof period

15,15918,595

3,435―

Cash and cash
equivalents at end of
period18,59520,8982,303―

・Purchase of marketable securities:-2,999m Yen

T．HASEGAWA CO., LTD.

・Acquisition of tangible fixed assets: -5,334m Yen

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

36

Capital Investment, Depreciation & Amortization, R&D Expenses

Ⅵ. Appendix

Yen million

FY14
Plan
CapitalInvestment
Depreciation&
Amortization
R&D
Expenses

FY14
ActualProgress(%)

Consolidated

6,798

5,330

78.4%

Non-consolidated

4,890

3,502

71.6%

Consolidated

3,056

2,910

95.2%

Non-consolidated

2,525

2,419

95.8%

Consolidated

4,033

4,010

99.4%

Non-consolidated

3,301

3,269

99.0%

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

37

Ⅵ. Appendix

T. HASEGAWA CO., LTD (Non-consolidated) Income statements

Yen million

FY13
ActualValue

FY14 Plan(Nov 8th, 2013)

Share

Value

Share

FY14
ActualValue

Achievement

Share

yr/yr

vs Plan

Value

％

Value

％

Net sales

37,977 100.0% 38,420 100.0% 36,251 100.0%-1,726-4.5%-2,168-5.6%

Cost of sales

24,576 64.7% 24,840 64.7% 24,001 66.2%

-574

-2.3%

-838

-3.4%

Gross profit

13,401 35.3% 13,580 35.3% 12,249 33.8%-1,151-8.6%-1,330-9.8%

SGA expenses

9,242 24.3%

9,580 24.9%

9,458 26.1%

216

2.3%

-121

-1.3%

Operating income

4,158 10.9%

4,000 10.4%

2,790

7.7%

-1,367 -32.9%-1,209 -30.2%

Ordinary income

5,689 15.0%

4,340 11.3%

3,356

9.3%

-2,333 -41.0%-983 -22.7%

Income before
income taxes

5,031 13.2%

4,220 11.0%

3,261

9.0%

-1,769 -35.2%-958 -22.7%

Net income

3,364

2,880

2,177

6.0%

-1,186 -35.3%-702 -24.4%

T．HASEGAWA CO., LTD.

8.9%

7.5%

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

38

T. HASEGAWA Shanghai and Suzhou Comparative Income statements

Ⅵ. Appendix

Note: Consolidated profit and loss statements of T.H. Shanghai and T.H. Suzhou.
Yen million

Yen Basis
Net Sales
Cost of sales
Gross profit
SGA expenses
Operating income
Ordinary income

FY13
Value
5,440
3,016
2,424
1,301
1,122
1,392

FY14
Share
100.0%
55.4%
44.6%
23.9%
20.6%
25.6%

Yen15.03/RMB

Value
6,700
3,512
3,187
1,622
1,564
1,644

yr/yr
Share
100.0%
52.4%
47.6%
24.2%
23.4%
24.5%

Value
1,259
496
763
321
442
252

％
23.2%
16.5%
31.5%
24.7%
39.4%
18.1%

Yen16.67/RMB
RMB thousand

Local Currency
Basis
Net Sales
Cost of sales
Gross profit
SGA expenses
Operating income
Ordinary income

FY13
Value
361,983
200,670
161,31386,60874,705
92,633

FY14
Share100.0%
55.4%
44.6%
23.9%
20.6%
25.6%

Value
401,928
210,703191,225
97,34593,87998,668yr/yr
Share
100.0%
52.4%
47.6%
24.2%
23.4%
24.5%

Value
39,944
10,032
29,911
10,737
19,174
6,035

％
11.0%
5.0%
18.5%
12.4%
25.7%
6.5%

・Double-digit growth on both Yen and local currency basis due to the increase offlavor and fragrances sales.

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

39

T. HASEGAWA U.S.A., INC. Comparative Income statements

Ⅵ. Appendix

Yen million

Yen Basis
Net Sales
Cost of sales
Gross profit
SGA expenses
Operating income
Ordinary income

FY13
Value
2,148
1,301
847
830
17
23

FY14
Share
100.0%
60.6%
39.4%
38.6%
0.8%
1.1%

Yen92.83/USD

Value
2,481
1,498
982
963
18
23

yr/yr
Share
100.0%
60.4%
39.6%
38.8%
0.7%
0.9%

Value
332
197
134
133
1
-0

％
15.5%
15.2%
15.9%
16.1%
7.8%
-2.8%

Yen102.33/USD
USD thousand

Local Currency
Basis
Net Sales
Cost of sales
Gross profit
SGA expenses
Operating income
Ordinary income

FY13
Value
23,14914,019
9,129
8,945
183
256

FY14
Share
100.0%
60.6%
39.4%
38.6%
0.8%
1.1%

Value
24,246
14,647
9,599
9,419
179
226

yr/yr
Share
100.0%
60.4%
39.6%
38.8%
0.7%
0.9%

Value
1,097
627
469
473
-4
-30

％
4.7%
4.5%
5.1%
5.3%
-2.2%
-11.8%・ New items contributed to the sales increase・ Operating Income was on a par with the previous fiscal year with increasing
SGA expenses

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

40

Ⅵ. Appendix

Three-year Plan (Consolidated Income statements )Yen million

Fy2014(Actual)
Value

Share

Fy2015(Plan)
yr/yr

Value

Share

Fy2016(Plan)
yr/yr

Value

Share

Fy2017(Plan)
yr/yr

Value

Share

yr/yr

Net sales

44,917 100.0%-0.4% 47,350 100.0%

5.4% 49,100 100.0%

3.7% 50,700 100.0%

3.3%

Cost of sales

28,55863.6%

0.8% 29,770

62.9%

4.2% 30,750

62.6%

3.3% 31,310

61.8%

1.8%

Gross profit

16,35936.4%-2.4% 17,580

37.1%

7.5% 18,350

37.4%

4.4% 19,390

38.2%

5.7%

SGA expenses

11,97726.7%

5.8% 12,550

26.5%

4.8% 13,040

26.6%

3.9% 13,420

26.5%

2.9%

Operating income

4,381

9.8% -19.4%

5,030

10.6%

14.8%

5,310

10.8%

5.6%

5,970

11.8%

12.4%

Ordinary income

4,939

11.0% -22.4%

5,250

11.1%

6.3%

5,520

11.2%

5.1%

6,190

12.2%

12.1%

Income before
income taxes

4,832

10.8% -15.3%

5,100

10.8%

5.5%

5,370

10.9%

5.3%

6,040

11.9%

12.5%

Net income

3,239

7.2%

3,510

7.4%

8.4%

3,670

7.5%

4.6%

4,120

8.1%

12.3%

T．HASEGAWA CO., LTD.

-8.0%

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41

Caution with Respect to Forward-Looking Statements:
This material contains forward-looking statements about the future performance ofT. Hasegawa, which are based on management’s assumptions and beliefs in thelight of information currently available to it.
Therefore, please understand that a number of important risks and uncertainties
could cause actual results to differ materially from those discussed in the forwardlooking statements, and that you should not place undue reliance on them.
Please also note that we will assume no responsibility for any omission or error in
the statements and data in this material.

T．HASEGAWA CO., LTD.

Copyright© T.HASEGAWA CO., LTD. All rights reserved.

42