Kirin Holdings Company (2503) Q2 2024 earnings summary

Executive summary

• Revenue grew 12.9% year-over-year to ¥1,095.8 billion, with business profit up 23.8% and profit attributable to owners up 78.9%, driven by strong overseas performance, favorable FX, and all four segments contributing to profit growth.

• Pre-tax profit surged 90.2% year-over-year, and comprehensive income rose 68.3% to ¥226.6 billion, reflecting investment gains and foreign currency translation.

• Strategic focus remains on strengthening core alcohol and pharma businesses, expanding health science, and leveraging M&A and global expansion.

• Full-year revenue guidance was raised, with normalized operating profit target maintained despite higher tax expenses and lower other income.

• Major events included a raised TOB for Fancl, the consolidation of Blackmores and Orchard Therapeutics, and ongoing portfolio transformation.

Financial highlights

• Q2 FY2024 revenue: ¥1,095.8bn (+12.9% YoY); normalized operating profit: ¥93.1bn (+23.8% YoY); profit before tax: ¥108.5bn (+90.2% YoY); profit attributable to owners: ¥57.2bn (+78.9% YoY).

• Normalized EPS: ¥81, up 11% YoY; EPS improved by ¥8 to ¥81.

• Segment revenue: Alcoholic Beverages ¥512.5bn (+6.6%), Non-Alcoholic Beverages ¥270.0bn (+12.0%), Pharmaceuticals ¥232.8bn (+17.0%), Health Science ¥69.6bn (+92.2%).

• Segment normalized OP: Alcoholic Beverages ¥50.3bn (+11.9%), Non-Alcoholic Beverages ¥30.1bn (+31.0%), Pharmaceuticals ¥41.1bn (+13.7%), Health Science -¥1.6bn (improved from -¥4.4bn).

• Gross profit increased 15.4% to ¥501.7bn; normalized EBITDA rose 18.1% to ¥139.5bn.

Outlook and guidance

• Full-year revenue forecast revised up to ¥2,300.0bn (+7.8% YoY); normalized operating profit target at ¥202.0bn; profit attributable to owners forecast at ¥114.0bn.

• Normalized EPS forecast at ¥162; basic EPS at ¥140.76; dividend per share maintained at ¥71.

• Guidance revision reflects higher revenue but lower profit expectations due to increased tax and lower other income.

• ROIC forecast at 6.8% (down from 8.0% in FY23).

• Upward revisions for some segments offset by downward adjustments for others due to market and FX conditions.