Ajinomoto Co., Inc. and Calpis Co., Ltd. to Integrate Operations

Transcription

1 Blank slide Ajinomoto Co., Inc. and Calpis Co., Ltd. to Integrate Operations Move aimed at accelerating growth in the health & overseas businesses Norio Yamaguchi President and CEO Ajinomoto Co., Inc. June 11,

2 Agenda 1. Summary of today s announcement 2. Business environment overview 3. Business development of Ajinomoto Co., Inc. ( Ajinomoto ) 4-1. Business development of Calpis Co., Ltd. ( Calpis ) 4-2. Potential functions of lactobacillus strain 4-3. The brand value of CALPIS 5. History of Ajinomoto-Calpis alliance 6-3. Model for generating the synergies: Jino 7. Accelerate the development of overseas business 8. Expected areas of synergy (Summary) 9. Transaction scheme 10. Schedule (Reference) Company profiles (Consolidated) 6-1. Model for generating the synergies 6-2. Model for generating the synergies (by value chain) 1

3 1. Summary of today s announcement Ajinomoto Our philosophy is to contribute significant advances in Food and Health on a global basis and ultimately to create a better life for all. Calpis A deepening contribution to society through products and technology that promote health of body and mind. Develop the business in the global market, with new and valuable products & services based on health Ajinomoto and Calpis agreed to make Calpis a wholly owned subsidiary of Ajinomoto through an exchange of shares. Share exchange ratio 1 : 0.95 (One share of Calpis common stock to be exchanged for each 0.95 shares of Ajinomoto common stock) 2

4 2. Business environment overview Restriction of medical expense From treatment to prevention Increasing healthconscious trend on worldwide basis Larger scale/power of retail industry through M&A Accelerating global reorganization in the food & beverage industry Maturing of domestic food & beverage market Strengthen brand power Provide value-added products and services Development of overseas business 3

5 3. Business development of Ajinomoto Umami / Kokumi 1 seasonings Sweeteners Research on Taste-enhancing functions Research on physiological functions Core materials Amino acids and Vegetative materials Traditional materials Research on manufacturing technology Research on nutritional functions Food ingredients Pharmaceuticals Specialty chemicals Fermentation technologies Enzyme technologies Synthesis technologies Food-processing technologies Lifestyle-related diseases QOL improvement Metabolism facilitation / normalization 1 Rich, full-bodied taste Nutrition, digestion and absorption Anti-metabolic syndrome Anti-stress Anti-allergy Sports physiology (Science) Beauty treatment Medical foods Infusions Enteral nutrition Animal nutrition 4

6 4-1. Business development of Calpis Core materials CALPIS Cultured Milk Microorganism (Lactobacillus and others) Search for useful microorganism L-92 lactobacillus Anti-allergic function Probiotics Calsporin (feed additives) Improvement in animal performance Further exploration on potential functions of lactobacillus Exploration on taste Research on flavor by fermentation R&D on CALPIS Cultured Milk Biogenics LTP, Ameal Peptide Functions on controlling blood pressure Application to new functional food and cosmetic ingredients Development of tasty beverages with unique technologies 5

7 4-2. Potential functions of lactobacillus Anti-metabolic syndrome etc. Prevent lifestylerelated disease Calpis lactobacillus library Anti-stress Anti-allergy Improve physical conditions Improve skin functions Prevent cognitive disorder Anti-aging etc. 6

8 4-3. The brand value of Calpis Unique taste with sweet and sour <taste of first love, refreshing> Tasty <with own preference> Image of peace of mind, friendly + Safety, high quality Familiar, traditional <White, polka dots> Tasty <anywhere, anytime> Sentimental <make, happy, family> CALPIS (Conc) Value of lactobacillus fermented milk drink for health Sentimental <Adolescence, love, friend> CALPIS Water CALPIS Soda Fruit CALPIS 7

9 5. History of Ajinomoto-Calpis alliance Since 1990 Agreement on business alliance Ajinomoto becomes a sole sales agent of Calpis Joint purchase of advertising media and joint distribution Personnel exchanges and R&D alliance CALPICO Mini Overseas Establishment of JV 1 in Indonesia Establishment of JV 2 in Thailand Lactobacillus X Amino acid Since 2003 Launch of Jino Aminoblanc Supplement Birdy Transfer of amino VITAL Hypotonic Charge business to Calpis Since 2006 Health & beauty treatment Launch of medical food Calpis Jelly Launch of Jino Blancfia Remarkable success of CALPIS water Strong mutual trust based on many years of cooperation 1 PT Ajinomoto Calpis Beverage Indonesia established in 1994 (ownership: Ajinomoto 50%, Calpis 50%) 2 Ajinomoto Calpis Beverage (Thailand) Co., Ltd. established in 1997 (ownership: the Ajinomoto Group 60%, Calpis 40%) 8

10 6-1. Model for generating the synergies Bulk Business (B to B) Amino acids X Lactobacillus B to C Expanding QOL- improving business areas Functional health beverages & foods Medical/Nursing care foods Nutritional dietary foods Foods Sports drink Health-related drink for infant/children Foods & beverages for the elderly Nutritional supplements Beauty treatment Beverages Overseas expansion Leverage each other s brands Utilize distribution channel 9

11 6-2. Model for generating the synergies (by value chain) Fully utilize the abundant management resources of both companies Seeds R&D Production Product Corporate brand Sales Research (technology) Development (product) B to C B to B Ajinomoto Calpis Amino acids Vegetative ingredient Traditional ingredient CALPIS Cultured Milk Lactobacillus Research on Nutritional functions Flavoring functions Physiological functions Technologies Research on Peptide Lactobacillus Various food product development Beverage development Food processing technologies etc. Beverage processing technologies Foods Amino acids Functional Lactobacillic Functional peptide based lactobacillus beverages Retail/bulk /mail-order Retail/bulk /mail-order Peptide 10

12 6-3. Model for generating the synergies: Jino Cosmetics, supplements, beverages (March, 2007) Seeds R&D Production Product Brand Sales Research (technology) Development (product) B to C B to B Ajinomoto Calpis Amino acids Peptide CMP 1 Research on skin (in vivo) Cosmetics production Beverage production Basic research on skin foundation (in vitro) Cosmetics technologies Beverage technologies Skin lightening cosmetics Beauty drinks Jino Blancfia Jino Moist Support Jino mail-order 1 CMP: caseinomacropeptide 11

13 7. Accelerate the development of overseas business Develop overseas business of Calpis by utilizing Ajinomoto s global network Germany China Beijing Belgium France Russia Thailand Vietnam China Shanghai China HK Test marketing of Calpis (China) USA ameal bp Calsporin Test marketing of CALPICO India (USA) Nigeria Philippines Taiwan Indonesia Birdy Malaysia Calpis (Taiwan) Peru Brazil (Thailand) Test marketing of canned coffee CALPICO Mini (Vietnam) (Indonesia) Major overseas operation bases of Ajinomoto and Calpis The Ajinomoto Group currently operates in over 23 countries/regions 12

14 8. Expected areas of synergy (Summary) Expansion of health and nutrition business Use of the CALPIS brand Accelerating overseas business Cost reduction through more efficient operation Expand product line-up of functional health beverages and foods by utilizing the materials, technologies and product areas of each company Pursue business opportunities in the medical and nursing care area by utilizing the materials and technologies of each company Develop new health-benefiting materials by cooperating in R&D Expand bulk business of health-benefiting materials Expand functional health beverages and foods businesses by utilizing each brand Strengthen beverage business by utilizing Ajinomoto s resources Utilize and extend the healthy image of the Calpis brand and its wide acceptance by infants, children and young people, into Ajinomoto s food business Strengthen overseas beverages and health and nutrition businesses by utilizing the distribution network of the Ajinomoto Group Establish an optimal cost structure by reviewing any cost inefficiency in the areas such as sales, logistics, procurement, administration etc. Target: To double Calpis operating income by FY 2012 To realize the synergies at the earliest occasion, Ajinomoto and Calpis will establish a Synergy Committee, composed of directors and several executives from each company 13

15 9. Transaction scheme Summary Make Calpis a wholly owned subsidiary of Ajinomoto through an exchange of shares Share exchange ratio: One share of Calpis common stock to be exchanged for 0.95 shares of Ajinomoto common stock Share exchange ratio is 21.2% premium over the ratio of the share prices as of June 6, 2007 Current status Share exchange After share exchange Ajinomoto shareholders Ajinomoto shareholders Ajinomoto shareholders Ex-Calpis shareholders 100% Ajinomoto shares Ajinomoto Other Calpis shareholders Ajinomoto Other Calpis shareholders Ajinomoto 27% 1 73% Calpis shares 100% Calpis Calpis Calpis 1 Voting rights basis 14

16 10. Schedule Board of Directors resolution on share exchange (both companies) June 11, 2007 (Mon) Signing of share exchange agreement Record for the general shareholders meeting (Calpis) Shareholders meeting to approve share exchange (Calpis) Final day for trading (Calpis) Share delisting (Calpis) Effective date of share exchange Share delivery June 11, 2007 (Mon) June 30, 2007 (Sat) Aug. 29, 2007 (Wed) (Expected) Sept. 21, 2007 (Fri) (Expected) Sept. 25, 2007 (Tue) (Expected) Oct. 1, 2007 (Mon) (Expected) Late Nov., 2007 (Expected) Note: Ajinomoto plans to conduct the share exchange without obtaining the approval of the general meeting of shareholders using a simple exchange of shares, based on Article 796, Paragraph 3 of Corporate Law of Japan. 15

17 (Reference) Company profiles (Consolidated) (Unit: JPY bn) Net sales Ajinomoto (FY ) 1,158.5 Calpis (FY ) Operating income OP margin 5.5% 4.5% Total assets 1, Total equity No. of employees 24,733 1,330 1 Fiscal year ended March 31, Fiscal year ended December 31,

18 Disclaimer This document has been translated from the original Japanese as a guide for non-japanese investors. It contains forward-looking statements based on a number of assumptions and beliefs made by management in light of information currently available. Actual financial results may differ materially depending on a number of factors, including changing economic conditions, legislative and regulatory developments, delay in new product launches, and pricing and product initiatives of competitors. Copyright and any other rights related to this document belong to Ajinomoto Co., Inc. and Calpis Co., Ltd. 17