Kirin Holdings Company (2503) Q3 2024 earnings summary

Executive summary

• Q3 FY2024 revenue rose 9.8% year-over-year to ¥1,699.7bn, with growth in all segments driven by price revisions, acquisitions, and favorable FX.

• Normalized operating profit increased 14.5% to ¥162.0bn, mainly from strong overseas, Non-alcoholic Beverages, and Pharmaceuticals performance.

• Profit attributable to owners declined 5.5% to ¥79.3bn due to a one-time FANCL step acquisition loss, despite higher operating profits.

• Comprehensive income dropped 40.6% year-over-year, reflecting lower foreign currency translation gains.

• Full-year profit forecast revised downward, citing lower expected profit before tax and profit attributable to owners.

Financial highlights

• Revenue: ¥1,699.7bn (+9.8% YoY); Normalized OP: ¥162.0bn (+14.5% YoY); Profit before tax: ¥156.0bn (+9.5% YoY).

• Gross profit increased 12.4% to ¥778.7bn; normalized OP margin (excl. liquor tax) was 10.9%.

• Q3 segment revenue: Alcoholic Beverages ¥794.2bn (+3.5%), Non-Alcoholic Beverages ¥422.1bn (+9.3%), Pharmaceuticals ¥362.6bn (+18.6%), Health Science ¥105.1bn (+51.9%).

• Q3 segment normalized OP: Alcoholic Beverages ¥83.7bn (-0.4%), Non-Alcoholic Beverages ¥50.7bn (+18.7%), Pharmaceuticals ¥70.9bn (+20.3%), Health Science -¥2.0bn (loss narrowed YoY).

• Normalized EBITDA rose 11.8% to ¥232.6bn; cash and cash equivalents at period-end were ¥154.8bn, up ¥23.4bn from December 2023.

Outlook and guidance

• FY2024 revenue forecast at ¥2,300.0bn (+7.8% YoY); normalized OP target unchanged at ¥202.0bn.

• Profit before tax and profit attributable to owners revised downward due to FANCL step acquisition loss; normalized EPS forecast at ¥162; basic EPS forecast at ¥118.20.

• ROIC expected to decrease to 5.6% (from 8.0% in FY2023); ROE forecast at 8.4%; dividend forecast unchanged at ¥71.00 per share.