Kirin Holdings Company (2503) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenue rose 3.7% year-over-year to ¥1,136.3 billion, driven by Health Science and Non-alcoholic Beverages, while normalized operating profit increased 1.3% to ¥94.2 billion.

• Profit before tax and EPS declined due to restructuring costs, higher other operating expenses, and yen appreciation.

• Health Science Business returned to profitability, driven by the early transfer of the Amino Acid Business and strong performance from FANCL.

• Alcoholic Beverages remained a major profit source, with steady performance in Japan and Australia despite market contraction.

• Pharmaceuticals saw a decline in revenue and profit due to increased R&D expenses and APAC restructuring, but key drug pipelines are progressing.

Financial highlights

• Revenue: ¥1,136.3B (+3.7% YoY); Normalized OP: ¥94.2B (+1.3% YoY); Profit before tax: ¥83.8B (-22.8% YoY); EPS: ¥65 (-7.7% YoY).

• Health Science revenue surged 82.9% YoY to ¥127.2B; Alcoholic Beverages revenue fell 3.9% YoY to ¥492.6B.

• Gross profit increased 6.1% YoY to ¥532.4B; normalized EBITDA rose 5.4% to ¥147.0B.

• Free cash flow improved to ¥5.7B from -¥7.3B YoY; total assets at ¥3,301.3B, equity at ¥1,407.3B.

• Operating profit declined 15.0% to ¥68.7B, impacted by higher restructuring expenses.

Outlook and guidance

• No revision to full-year forecast; aiming for EPS of ¥185.20 and revenue of ¥2,440B (+4.3% YoY).

• Normalized operating profit projected at ¥212B (+0.5%), profit attributable to owners at ¥150B (+157.7%).

• Dividend forecast raised to ¥74 per share for FY2025.

• Health Science targets normalized OP of ¥50B within 10 years using existing assets.

• Risks of missing sales targets in some segments, but cost optimization and recovery measures expected to offset negatives.