Strategies of the Takara Group p1 Established Strengths, Strengths Sustained Progress g Established strengths underpinning our business foundations and d Sustained progress toward the next stage of growth March 2, 2011 Takara Holdings Inc. Inc. Representative Director, Executive Vice President Director Tadashi OmiyaContents p2I. Takara Group ~Takara Holdings Inc. and consolidated subsidiaries~ Corporate Data, Business Structure, Basic Business Strategy Data StructureII. Takara Shuzo Group ~Alcoholic Beverages and Seasonings Business~ Business Outline, Business StrategiesIII. Takara Bio Group ~Biomedical Business Biomedical Business~ Business Outline, Business StrategiesIV. Financial Strategies i i S i
Takara Group Corporate Data p3 ■ Trading Name: Takara Holdings Inc. ■ Established: 1925 ■ Stock Listings: Tokyo and Osaka (Code: 2531) ■ Head Office: Kyoto, Japan ■ Company Representative: Hisashi Omiya, President p y p y ■ Issued Capital: 13,226 million yen ■ Market Capitalization: 114 074 million yen 114,074 (As of March 31, 2010) ■ Net Sales: 190,525 million yen Kyoto y Operating Income: 8,572 million yen ★ Net Income: 4,677 million yen (FY2010: Year ended March 31, 2010) Takara Group Overseas Offices p4 ■ FOODEX S.A.S. ■ Takara Sake USA Inc. ■ Takara Bio Europe S.A.S. ■ Takara Biomedical Technology (Beijing) Co., Ltd. ■ Takara Biotechnology ( (Dalian) Co., Ltd. ) ★ ★ ★ ★ ★ ★ ★ ★ ★★ ★ ★ ■ Takara Korea Biomedical Inc. ■ Age International, Inc. ★ ■ Shanghai Takara Shuzo International Trading Co., Ltd ■ Takara Shuzo Foods Co., Ltd. Blanton’s ■ DSS TAKARA BIO Ltd. (Bourbon) BIG T (To be established Apr. 2011) (Scotch whisky) ■ The Tomatin Distillery Co., Ltd. ■ J&W Hardie Ltd. ■ Clontech Laboratories Inc. Laboratories, Inc★Takara Shuzo Group (Alcoholic Beverages and Seasonings Business)★Takara Bio Group (Biomedical Business)
Takara GroupCorporate Philosophy p5 Contributing to the creation of a vital C ib i h i f i l society and a healthy lifestyle through our fermentation technology and gy biotechnology in a way that achieves harmony with nature Takara GroupBusiness Chronicles p61842 Sake brewing business is launched. (P d i and sales of sake started) launched. Production d l f k started) d) d 1864 Shochu and mirin businesses are launched. 1912 Continuous distilled shochu is launched. 1920 “Sho-Chiku-Bai” sake is launched. Sho Chiku Bai1925 Takara Shuzo Co., Ltd. is established. 1949 Takara Shuzo Co., Ltd. is listed on the Tokyo Stock Exchange. PR poster 1967 Central Research Institute is established. Central from 1930s 1972 Import and sale of Chinese alcoholic beverages start. Research Institute 1977 “Takara Shochu Jun” is launched.1979 Sales of first domestically produced restriction enzymes begins. 1983 Takara S k T k Sake USA I i established. Inc. is t bli h d 1984 “Takara Can Chu-Hi” is launched. 1993 Worldwide rights to PCR method, which is widely used in g y gene amplification, are obtained. p , Restriction 1995 The RetroNectin® Method, a highly efficient Enzymes “Takara Can Chu-Hi” gene transduction method, is developed. 2001 “Ikkomon ” (100% sweet-potato-based shochu) is launched.2002 T k Takara H ldi Holdings Inc. (h ldi company) i established. I (holding ) is t bli h d 2004 Takara Bio Inc. is listed on the Tokyo Stock Exchange Mothers market. 2005 Clontech Laboratories, Inc. is acquired from Becton, Dickinson and Company, of the U.S. 2006 Takara Healthcare Inc is established. Inc. established 2010 Shares in FOODEX S.A.S., France’s largest importer and wholesaler of Japanese food RetroNectin® ingredients, are acquired. Reagent (GMP grade)
Takara GroupBusiness Structure (As of September 30, 2010) p7 Takara Holdings Inc. Corporate Planning, Finance, Public Relations, Investor Relations Share owned 100% Share owned 100% Share owned 70.9% Takara Shuzo Co., Ltd. , Takara Bio Inc. [Mothers b d 4974] [M th board: Marketing strength Health-oriented foods and sales know-how development capabilities 21 subsidiaries 9 subsidiaries Takara Shuzo Group Takara Bio Group Alcoholic Beveragesand Seasonings Business Takara Healthcare Inc. Biomedical Business [Established: S [E bli h d Sep. 2006]Financial Results for FY2010 Financial Results for FY2010 (Millions of Yen) (Millions of Yen) Net Sales: 166,969 Health Foods Business Net Sales: 19,325 Operating I O ti Income: 7 129 7,129 Operating I O ti Income: 553 3 other subsidiaries Takara GroupBusiness Outline p8▼ Composition of N t S l b B i C iti f Net Sales by Business S Segment t FY2010 (Millions of Yen)■ Takara Shuzo Group (Alcoholic Beverages and Seasonings Business)Net Sales:165,974 87.1% Shochu Sake Light-Alcohol Light Alcohol Seasonings Refreshers■ Takara Bio Group (Biomedical Business)Net Sales:18,900 Genetic Engineering AgriBio Gene Medicine Research 1) Health foods 1) Gene therapies 9.9% 9 9% 1) Research reagents 2) Mushrooms 2) Cell therapies 2) Scientific instruments (Growth strategy business of 3) Contract research services Takara Group)
Takara Group Five- Five-year Financial Summary p9Operating IO ti Income Net Sales N tS l (Millions of Yen) (Millions of Yen) 14,000 210,000 12,000 180,000 Net Sales (consolidated) Operating Income (Takara Bio Group) 10,000 10 000 Operating Income (consolidated) 150,000 150 000 Operating Income (Takara Shuzo Group) 8,000 120,000 6,000 90,000 4,000 60,000 2,000 30,000 0 0 Operating Income (Takara H lth O ti I (T k Healthcare) ) -2,000 FY2007 FY2008 FY2009 FY2010 FY2011(e) Takara Group Basic Business Strategy p10 Established Strengths, Sustained Progress Takara Bio Group (Biomedical Business) Takara Healthcare (Health Foods Business) ( ) Takara Shuzo Group (Alcoholic Beverages and Seasoning Business)
Takara Shuzo Group p11 Takara Shuzo Group Alcoholic Beverages and Seasonings Business Takara Shuzo GroupBusiness Outline p12▼S l b P d tC t Sales by Product Category: T k Takara Sh Shuzo G Group FY2010 (Millions of Yen) Seasonings Shochu Other 10% 21,583 76,214 13% 46% Other Alcoholic Beverages 6% Alcoholic Beverages 21,285 128,457 13% 77% Light-Alcohol 21,223 Sake Refreshers R f h 13%
Takara Shuzo Group Market Condition p13 Declining Alcoholic Beverages Market ▼ Trend in the Amount of Alcoholic Beverages Consumption (Billions of Yen) 7,000 6,000 Total 5,000 4,000 Beer and Low-malt beer (happoushu) 3,000 2,000 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 1,400 1,200 1,000 Shochu 800 600 400 Sake 200 FY1995 5 FY1996 6 FY1997 7 FY1998 8 FY1999 9 FY2000 0 FY2001 1 FY2002 2 FY2003 3 FY2004 4 FY2005 5 FY2006 6 FY2007 7 FY2008 8 FY2009 9 Source: Shuhan News (Jouzou Sangyo Newspaper) Takara Shuzo Group Business Performance p14 Maintaining Stable Performance in the Shrinking Market ▼ Fi -year Fi Five- Five Financial Summary i lSOperating Income Net Sales(Millions of Yen) ( (Millions of Yen) ) ■ Market Share (CY2009) 10,000 200,000 Domestic Categories Position 7,500 150,000 Market Share 5,000 100,000 Shochu 14.3% 1st Ko-type 29.5% 1st 2,500 , 50,000 , Operating Income Net Sales Sake 7.2% 3rd 0 0 For Gift Use (1.8 liter bottle sake) 1st FY20 FY20 FY20 FY20 FY20 007 008 009 010 011(e) Light-Alcohol Refreshers 11.4% 4th FY2011(e): forecast announced Nov 4, 2010 Mirin (Type-1) (Type 1) 52.1% 1st Net Sales: 169,300 million yen (+1.4% y-o-y) Sources: Nikkan Jouzou Sangyo Bulletin, Operating Income: 7,300 million yen (+2.4% y-o-y) Alcohol and Foods Monthly Statistics of Nikkan keizai tsushinsya, Inc., Takara’s sales data
Takara Shuzo GroupBasic Business Strategies p15 Ensuring Profit from Businesses with Stable Profitability▼D Domestic alcoholic beverages business ti l h li b b i Developing and nurturing differentiated products Responding to the diversification of consumer needs (Trends toward high-quality products and toward low-priced products) high- low- Implementing cost-reduction activities cost- Nurturing Growth Businesses▼ Seasonings business for food processing g p g Developing B-to-B businesses B-to-▼ Overseas business Expanding into North America, Europe, and China Takara Shuzo GroupDomestic Alcoholic Beverages Business Product Strategies p16 Trend toward high-quality products Trend toward low-priced products Premium- Premium-range products Mid- Mid-range productsCentering to consumer trends toward high- In response to consumer economizing and trendsquality products, this category nurtures brands toward low-priced products, this category isbased on a meticulous, long-term strategy. designed to ensure sales volumes and to reinforce the company’s earnings base.■ M i products Main d t ■ M i products Main d t“Ikkomon” 100% sweet-potato-based shochu, “Gokujo Takara Shochu” ko-type shochu,“Shirashinken” honkaku barley shochu, “Takara Shochu High Ball” canned chu-hi,“Sho-Chiku-Bai Shirakabe-gura Ki t J“Sh Chik B i Shi k b Kimoto Junmai” sake, i” k “Sho-Chiku-Bai Ten” k “Sh Chik B i T ” sake, etc. etc. Aiming to provide strong branded products that meet each of consumer trends
Takara Shuzo GroupSeasonings Business for Food Processing p17▼E Expanding seasonings business di i b i Processed food market Household market ＋ Ready-prepared meal market Restaurant market ▶ Establishment of the Seasonings Processing Business Division (Apr. 2006) ▶ Construction of technological assistance infrastructure (Oct. 2006) (Oct ▶ Development of seasonings for food processing, that have functional East Japan Seasonings and economic advantages Customer Center ■ Net Sales (Millions of Yen) 7,000 6,500 6,000 5,500 5 500 Low-alcohol Hon Mirin (left) 5,000 Dried bonito-based seasoning (right) FY2009 FY2010 FY2011(e) Takara Shuzo GroupOverseas Business p18 Europe USA ▶ Equity stake in French company q y p y ▶ Takara Sake USA Inc. established FOODEX S.A.S. acquired (Apr. 2010) in 1983 ▶ Entering the import and wholesale business ▶ Manufacture and sale of sake, for Japanese food ingredients mirin, etc. ▶ Top share in USA sake market China ▶ Takara Shuzo Foods Co., Ltd. established in 1995 ▶ Manufacture and sale of sake, mirin, etc.Spreading Japanese food culture by increasing sales of sake, mirin, etc.
Takara Bio Group p19 Takara Bio Group Biomedical Business Takara Bio GroupBusiness Outline p20▼ S l by B i Sales b Business Category: T k C t Takara Bi G Bio Group FY2010 (Millions of Yen) Gene Medicine AgriBio 392 2% 2,243 12% Takara Honshimeji RetroNectin® Center for Cell and Fucoidan mushrooms Gene Therapy 2,769 Capsules 14% 11,163 58% 2,756 14% Genetic Contract Scientific Engineering Research reagents research instruments Research services 16,689 16 689 86% Research ClontechHigh-throughput reagents sequencing Real-time Laboratories’ equipment PCR system products
Takara Bio Group Business Performance p21 Generating Stable Profits ▼ Fi -year Fi Five- Five Financial Summary i lS ■ “B Banzuke” f Japanese Bi t h Banzuke” of J k Biotech Companies in 2011Operating Income Net Sales(Millions of Yen) (Millions of Yen) EAST WEST 1,500 25,000 •Chugai •Kyowa Hakko YOKO 1,000 20,000 Pharmaceutical Kirin •Takeda Takeda •Daiichi Sankyo Daiichi OZUNA 500 15,000 Pharmaceutical 0 10,000 •Takara Bio 500 -500 Operating Income O ti I 5,000 5 000 Net Sales •Eisai •Astellas Pharma -1,000 0 •Otsuka Holdings •FIJIFILM Holdings FY20 FY20 FY20 FY20 FY2011(e) •Pfizer Japan •JCR Pharmaceuticals OZEKI O 007 008 009 010 •Mitsubishi Tanabe •Novartis Pharma Pharma / Benesis / BIPHA FY2011(e): forecast announced Jan. 28, 2011 •Roche Diagnostics Net Sales: 18,900 million yen (-2.2% y-o-y) Operating Income: 800 million yen (+44.6% y-o-y) Source: Nikkei Biotechnology and Business (Nikkei Business Publications, Inc.) Takara Bio Group Basic Business Strategies p22 Achieving expansion and profit stability in Genetic Engineering Research Improving profitability in AgriBio Pursuing R&D activities in Gene Medicine Gene Medicine Future growth business Genetic Engineering Research AgriBio Stable income business Secondary income business Commercialize Gene and Cell Therapies
Takara Bio GroupGenetic Engineering Research p23▼ Became a l di company in the Japanese Market B leading i th J M k t ▶ Obtained a strong share of the research reagents ■ Overseas Sales Ratio market▼ Acquired the Clontech unit of BD Biosciences in 2005 FY2005 20.1% FY2010 37.1% ▶ Bolstered product lineup of research reagents ▶ Expanded overseas sales ▶ Reduced manufacturing costs of Clontech ■ North America 9.4% ■ North America 16.5% ■ Europe 2.7% ■ Europe 8.1% Laboratories’ products (due to transferring ■ Asia 7.9% ■ Asia 12.4% p production from USA to Dalian, China) , ) ■ Net Sales in China (Millions of Yen)▼ Strengthening business in China 2,000 ▶ Established Takara Biotechnology 1,500 (Dalian) Co., Ltd. in 1993 1,000 ▶ Reestablishing China as viable g 500 market, rather than simply a site for Takara Biotechnology 0 production FY2009 FY2010 FY2011(e) (Dalian) Co., Ltd. Takara Bio GroupAgriBio p24▼ Ai i for A iBi t realize Aiming f AgriBio to li operating profit in FY2012 ▶ Improving earnings through increased sales of mushrooms and cost reductions Hatakeshimeji Honshimeji ▶ Transferring sales of health foods to Takara Healthcare Inc. mushrooms mushrooms (Sep. (S 2006)▼ Selling health foods through Takara Healthcare Takara Bio’s unique, Takara Shuzo’s marketing and cutting-edge cutting edge technologies ＋ sales know-how utilized by Takara H lth T k HealthcareAcquire application data that has a direct impacton the sales promotion and product developmentof health food ingredients Gagome kombu (kelp) Ashitaba (angelica harb) “Takara Fucoidan “Ashitaba Chalcone” “fucoidan” “chalcone” Supplement 50”
Takara Bio GroupGene Medicine p25▼ Li Licensing the R t N ti ® M th d i th RetroNectin Method ▶ Possess exclusive rights for worldwide use of the RetroNectin® Method ▶ The RetroNectin® Method currently used by public medical institutions for over 50 clinical gene therapy studies licensed out to 4 overseas private corporations <Gene Therapy Protocol Using the RetroNectin® Method> Processed cells are Cells are removed re infused re-infused into the patient from the patient Blood cells Blood cells transfused with therapeutic genes Transduction of genes in a culture container coated with RetroNectin® Genes to transduce φ Recombinant retroviruses Takara Bio GroupGene Medicine p26▼ C i i development projects the Takara Bio Group is working on Clinical j i G i i Gene Therapy Target Disease Partner InstitutionHSV TKHSV-TK gene therapy Relapsed leukemia R l dl k i The National Cancer Center Hospital(donor lymphocyte gene transfer therapy)HSV-TK gene therapy Hematological malignancies The National Cancer Center Hospital(haplo add-back)TCR gene therapy: wtMA24 Esophageal cancer Mie University School of MedicineTCR gene therapy: siMA24 (RN-T) Esophageal cancer Mie University School of Medicine and othersTCR gene therapy: siWT24 (RN-T) Cerebralcolorectal cancer tumors, tumors, hematological Mie University School of Medicine and othersMazF gene therapy HIV University of Pennsylvania and othersHF10 Head and neck cancer University of Pittsburgh and others Cell Therapy Target Disease Partner Institution Esophageal cancer, ovarian cancer, Mie University School of Medicine and others etc.RetroNectin® induced T cell therapy Hepatocellular carcinoma Kyoto Prefectural University of Medicine Refractory cancer, Tianjin Medical University, Hepatocellular carcinoma Sun Yat-Sen University
Takara Group p27 Financial Strategies Takara GroupFinancial Strategies p28 (FY2009▼ Financial Strategies of 7th Medium-Term Management Plan Medium- ~FY2011)We will maintain investment at the recurrent levels in e st g w a ta vest e t t e ecu e t eve s existingbusinesses, extend capital for investments geared toward growth andactively work to generate returns for investors.Growth investments: Cumulative outlays exceeding 10 billion yen over the three years. yearsGenerate aggregate returns of more than 10 billion yen over the three years.Total shareholder return: (doubling the previous plan’s levels)Shareholder return payout: Minimum of 50 % *1 *1 Calculated as follows: 1 (Total dividends + Amount of share buybacks) Shareholder return payout = ≧ 50% Deemed consolidated net income*2 *2 Deemed consolidated net income = (Consolidated ordinary income – Interest income and dividends + Interest payments) x (1 – Effective tax rate)
Forward-Forward-Looking Statements p29Statements i this presentation, other than those based on historical fact, concerning theS in hi i h h h b d hi i lf i hcurrent plans, prospects, strategies and expectations of the Company and its Grouprepresent forecasts of future results. While such statements are based on the conclusionsof management according to information available at the time of writing, they reflectmany assumptions and opinions derived from information that includes major risks anduncertainties. Actual results may vary significantly from these forecasts due to various y y g yfactors.Factors that could influence actual results include, but are not limited to, economicconditions,conditions especially trends in consumer spending, as well as exchange rate spendingfluctuations, changes in laws and government systems, pressure from competitors’ pricesand product strategies, declines in selling power of the Company’s existing and newproducts, disruptions to production, violations of the Company’s intellectual property d di i d i i l i f h C ’ i ll lrights, rapid advances in technology and unfavorable verdicts in major litigation.