Team: Phoenix Partners
Proposed leveraged buyout of Fujifilm. Unlocking value of the Japanese conglomerate through the trimming of declining businesses while focusing on the burgeoning Informations Solutions business. Our strategy will deliver our GPs a return of 32.4% IRR.
We had to present a PPT on why Alphabet was created and whether was it a wise decision to diversify.
The content as well is self written.
The Complete PPT was made by --- Shreyas Sinha [ including the animation, content and the Formula ]
IBM's strategy focuses on shifting to higher value segments of the IT industry through global integration, productivity improvements, and investing in growth markets and technologies. This transformation has driven margin expansion and allowed IBM to invest in the future while providing returns to shareholders. IBM is well ahead of its goal to achieve $10-11 EPS by 2010 through revenue growth, continued margin gains, and share repurchases. The company will focus on growth markets, acquisitions, technology leadership, and new initiatives to sustain long-term performance.
Completed Winter 2002 as part of the Managerial Accounting requirements for the MBA programme at McMaster University, Hamilton, Canada. http://RobinCheung.ca/
Relevant cost analysis revealed that the Challenger deal could be a lucrative
source of incremental revenues, since the 25,000 additional units could be
produced during plant slack time; however, as a discount value line, the
Challenger program does not align strategically with BBC’s best-cost provider
strategy (Porter, 1980). Further, the initial capital outlay of $787,000 for the
project exceed BBC’s available resources.
It is recommended that BBC pursue a short-term agreement with Hi-Valu or a
competing discount retailer to produce the bicycles on more favourable credit
terms, or to seek distribution of BBC’s normal product line through alternative
retail chains.
- Accor is a global hotel group founded in France in 1967 with 27 brands and over 4,900 hotels worldwide.
- New digital entrants like Airbnb have disrupted the hospitality industry with a more agile, customer-centric approach.
- Accor is undergoing a digital transformation, shifting from an asset-heavy model to a more dynamic, mobile-first organization. This includes streamlining the customer experience, implementing an agile IT structure, and creating an ecosystem of partners.
Southwest Airlines operates many flights through Baltimore-Washington International Airport (BWI). Flight F110 from Nashville to Baltimore was delayed, arriving at 8:55 instead of the scheduled 8:15. This caused some passengers to miss connecting flights. The document outlines the process for unloading and reloading bags from F110 and getting passengers to their connecting flights. It also discusses Southwest's culture of employee empowerment and teamwork compared to other airlines. Recommendations include improving the process for deciding whether to hold connecting flights, delegating cargo responsibilities, and enhancing new employee training.
- Rosewood is a luxury hotel management company headquartered in Dallas, Texas with 12 hotels worldwide.
- It utilizes a "sense of place" philosophy where each hotel's design reflects the local culture.
- A survey found low brand recognition among guests, employees, and travel agents. Most knew individual hotels but not the Rosewood brand.
- Implementing a corporate branding strategy was proposed to increase customer loyalty and cross-property usage. This was estimated to significantly increase revenue and profits over the long run compared to just a frequent stay program.
We had to present a PPT on why Alphabet was created and whether was it a wise decision to diversify.
The content as well is self written.
The Complete PPT was made by --- Shreyas Sinha [ including the animation, content and the Formula ]
IBM's strategy focuses on shifting to higher value segments of the IT industry through global integration, productivity improvements, and investing in growth markets and technologies. This transformation has driven margin expansion and allowed IBM to invest in the future while providing returns to shareholders. IBM is well ahead of its goal to achieve $10-11 EPS by 2010 through revenue growth, continued margin gains, and share repurchases. The company will focus on growth markets, acquisitions, technology leadership, and new initiatives to sustain long-term performance.
Completed Winter 2002 as part of the Managerial Accounting requirements for the MBA programme at McMaster University, Hamilton, Canada. http://RobinCheung.ca/
Relevant cost analysis revealed that the Challenger deal could be a lucrative
source of incremental revenues, since the 25,000 additional units could be
produced during plant slack time; however, as a discount value line, the
Challenger program does not align strategically with BBC’s best-cost provider
strategy (Porter, 1980). Further, the initial capital outlay of $787,000 for the
project exceed BBC’s available resources.
It is recommended that BBC pursue a short-term agreement with Hi-Valu or a
competing discount retailer to produce the bicycles on more favourable credit
terms, or to seek distribution of BBC’s normal product line through alternative
retail chains.
- Accor is a global hotel group founded in France in 1967 with 27 brands and over 4,900 hotels worldwide.
- New digital entrants like Airbnb have disrupted the hospitality industry with a more agile, customer-centric approach.
- Accor is undergoing a digital transformation, shifting from an asset-heavy model to a more dynamic, mobile-first organization. This includes streamlining the customer experience, implementing an agile IT structure, and creating an ecosystem of partners.
Southwest Airlines operates many flights through Baltimore-Washington International Airport (BWI). Flight F110 from Nashville to Baltimore was delayed, arriving at 8:55 instead of the scheduled 8:15. This caused some passengers to miss connecting flights. The document outlines the process for unloading and reloading bags from F110 and getting passengers to their connecting flights. It also discusses Southwest's culture of employee empowerment and teamwork compared to other airlines. Recommendations include improving the process for deciding whether to hold connecting flights, delegating cargo responsibilities, and enhancing new employee training.
- Rosewood is a luxury hotel management company headquartered in Dallas, Texas with 12 hotels worldwide.
- It utilizes a "sense of place" philosophy where each hotel's design reflects the local culture.
- A survey found low brand recognition among guests, employees, and travel agents. Most knew individual hotels but not the Rosewood brand.
- Implementing a corporate branding strategy was proposed to increase customer loyalty and cross-property usage. This was estimated to significantly increase revenue and profits over the long run compared to just a frequent stay program.
Tony Hsieh is the CEO of Zappos.com. Zappos started in 1999 and has grown to 1600 employees across its headquarters in Las Vegas and fulfillment center in Kentucky. Zappos prides itself on providing excellent customer service through fast shipping, easy returns, and friendly customer support. It has over 8.5 million customers and repeat customers make up over 75% of sales and order more frequently and at higher values than new customers. Hsieh outlines four things needed to build a strong brand: having a meaningful vision, focusing on repeat customers through great service or low prices, being transparent, and having a committed culture with core values.
The document summarizes findings from an analysis of Pilgrim Bank customer profitability data. It finds that:
1) Profits vary widely across customers, with an average of $111.50 but a range from -$221 to $2071.
2) Online and offline customers do not significantly differ in profitability. Statistical tests show no meaningful differences in averages, ranges, or other metrics between the two groups.
3) No customer demographics like age, income, or tenure strongly predict differences in online vs offline profitability. The relationship is very weak.
4) The recommendation is for Pilgrim Bank to do no pricing changes for online users, as the analysis found no factors like online use
Eric Peterson is the new General Manager of Green Mountain Cellular Telephone Company (GMCT), a subsidiary of Cellular Communication Services. He faces many challenges in getting the new division operational. These include an unclear reporting structure, conflicts with the Chief Engineer, lack of inventory control, delays from subcontractors, and strained employee relationships. Peterson works to address these issues through meetings, new processes, and building trust. He develops plans to restructure roles, introduce incentives, and get buy-in for a new strategy and decision-making process. Presenting these recommendations to the parent company, Peterson believes he can overcome the challenges and get GMCT operational.
Rosewood Hotels and Resorts: Branding to increase Customer Profitability and ...Pallabh Bhura
This presentation is an in-depth marketing analysis of the Harvard Business Case "Rosewood Hotels and Resorts". It has been created by Pallabh Bhura of Jadavpur University during a marketing internship under Prof. Sameer Mathur, IIM Lucknow. It takes into account the various concepts of branding so as to increase Customer Profitability and Lifetime Value of Rosewood Hotels and Resorts.
Case Analysis of Hilton Hotels: Brand Focus: Customer Relationship Management Sandeep Patel
Hilton is a global hospitality company founded in 1919 that operates over 5,500 hotels across 78 countries. It established an early focus on customer relationship management (CRM) through its OnQ technology platform to maximize customer loyalty, drive organic growth, and create competitive differentiation through personalized service and analytics. Implementing CRM consistently across Hilton's large scale of operations, measuring its return on investment, and maintaining brand differentiation remain ongoing challenges.
Social Media Inside The Brand: DuPont Case Study
Learn first-hand about the internal battles, struggles and success you can expect in the Wild West world of Social Media. Hear about the legal aspects of Social Media, how to develop a proper Social Media Marketing policy, and how to sell a "word of mouth" project internally.
* Gary Spangler, eMarketing, DuPont
The consultant conducted a profitability analysis of a 5-star hotel in North Goa that was not meeting the owner's expectations. They analyzed financial statements, evaluated processes, and created revenue verticals. Observations included unjustified costs, low occupancy, and process issues. Suggested changes were to create separate marketing and stores/purchasing functions, implement stores and consumption tracking, increase pricing, improve marketing, and adopt more efficient processes and technologies. The analysis estimated revenue could increase 30% or INR 150 lakh annually and costs could be reduced INR 121 lakh annually through the recommendations.
1) Alan analyzed customer profitability data from Pilgrim Bank and found that half of the bank's 5 million customers were unprofitable. His boss asked him to analyze whether online banking customers are more profitable to help decide whether to charge fees or offer incentives for the online channel.
2) Alan collected data on 30,000 customers including their online usage, demographics, account details, and profitability. He found the average profitability of online customers was slightly higher at $116.67 than non-online customers at $110.79.
3) While this suggests online customers may be more profitable, Alan realized he needs more analysis to determine if the difference is statistically significant and account for other customer characteristics that could
The document summarizes a proposed $90 million sugar mill project in Northern Vietnam that is seeking $45 million in financing from the International Finance Corporation (IFC). The project aims to capitalize on growing domestic sugar demand in Vietnam. Key points analyzed include the project's commercial viability and attractiveness, development impact, and major risks. The project is found to have an internal rate of return of 18% and economic rate of return of 19%, above IFC's threshold of 10%. While there are some transportation and supply risks, the overall risk level is judged to be below moderate. In conclusion, the project is recommended for IFC financing due to its social and financial benefits.
This presentation discusses Microsoft Corporation and the Boston Consulting Group (BCG) matrix approach. It provides background on Microsoft's founding in 1975. It then analyzes different Microsoft operating systems according to the BCG matrix categories: Windows 10 is a cash cow; Windows 7 is also a cash cow; Windows Phone is a question mark with low market share and growth; Windows Vista is a dog with low market share. Finally, it recommends post-analysis strategies for each category, such as increasing investment in Windows Phone to make it a star, and harvesting Windows 10 to maximize profits.
This document provides an overview of The Walt Disney Company. It was established in 1923 by Walt Disney and is currently headquartered in California. Disney has a highly diversified portfolio including media networks, parks and resorts, studio entertainment, consumer products, and interactive. The document discusses Disney's organizational structure, mission and vision statements, divisions, strategies, SWOT analysis, and competitive profile. It also provides financial information showing the impact of the economic downturn in 2009, with recommendations for Disney to improve its performance in the next three years through strategic investments and addressing challenges in the entertainment industry.
An analysis of the Hilton hotels buyout by BlackstoneFrancesco Romeo
This presentation is about the Hilton hotels buyout. We analyze the case with different methods and our conclusion is that it was good deal for both Hilton and Blackstone.
Avia solutions group corporate presentationMZimkute
Avia Solutions Group focuses on aviation business solutions such as consulting, fleet management, training, maintenance, and leasing. It has over 1200 employees across 40 locations worldwide providing services for airlines, MROs, and airports. The group offers a wide range of technical services including base and line maintenance, technical training, spare parts, and engineering support for various commercial aircraft.
The document discusses the acquisition of Pixar by Disney. It provides background on both companies and their history of poor relations. It then describes how the acquisition was implemented successfully by maintaining Pixar's autonomy and culture separately from Disney through agreements on creative control and employee policies. Key to the success was leadership that focused on integration while respecting Pixar's identity and protecting its creative processes.
This chapter discusses global production, outsourcing, and logistics. It addresses key questions about where to locate production, whether to own foreign factories or outsource production, and how to manage an international supply chain. The chapter explains that production location decisions depend on country, technological, and product factors. It also discusses factors that influence make-or-buy decisions and how strategic alliances can help capture benefits of vertical integration. The chapter emphasizes that efficient logistics and information technology are important for international operations.
In April 2013, Procter & Gamble (P&G), the world’s largest consumer packaged goods (CPG) company, announced that it would extend its payment terms to suppliers by 30 days. At the same time, P&G announced a new supply chain financing (SCF) program giving suppliers the ability to receive discounted payments for their P&G receivables. Fibria Celulose, a Brazilian supplier of kraft pulp, joined the program in 2013 but was re-evaluating the costs and benefits of participating in the SCF program in the summer of 2015. The firm’s treasury group and its US country manager must decide whether to keep using the program and, if so, whether to keep their existing SCF banking relationship or start a new relationship with another global SCF bank.
David Paulsen, President Transamerica Distributors, talks Aegon’s strategy, the US insurance market, Transamerica’s products and services, and answers audience Q&As.
Linking Strategic Planning with Operational Planning, Thomson ReutersInnovation Enterprise
Thomson Reuters is proposing changes to better link strategic planning with operational planning by aligning operating segments with market segments. This would allow market growth projections to be used as a leading indicator for business growth. It would also provide a more robust analysis by tying market share and revenue to business forecasts. The goal is to execute strategic planning by informing large investments, acquisitions, and capital expenditures based on consistent targets across market and operating segments. This approach provides increased visibility but reduces flexibility around targets.
Tony Hsieh is the CEO of Zappos.com. Zappos started in 1999 and has grown to 1600 employees across its headquarters in Las Vegas and fulfillment center in Kentucky. Zappos prides itself on providing excellent customer service through fast shipping, easy returns, and friendly customer support. It has over 8.5 million customers and repeat customers make up over 75% of sales and order more frequently and at higher values than new customers. Hsieh outlines four things needed to build a strong brand: having a meaningful vision, focusing on repeat customers through great service or low prices, being transparent, and having a committed culture with core values.
The document summarizes findings from an analysis of Pilgrim Bank customer profitability data. It finds that:
1) Profits vary widely across customers, with an average of $111.50 but a range from -$221 to $2071.
2) Online and offline customers do not significantly differ in profitability. Statistical tests show no meaningful differences in averages, ranges, or other metrics between the two groups.
3) No customer demographics like age, income, or tenure strongly predict differences in online vs offline profitability. The relationship is very weak.
4) The recommendation is for Pilgrim Bank to do no pricing changes for online users, as the analysis found no factors like online use
Eric Peterson is the new General Manager of Green Mountain Cellular Telephone Company (GMCT), a subsidiary of Cellular Communication Services. He faces many challenges in getting the new division operational. These include an unclear reporting structure, conflicts with the Chief Engineer, lack of inventory control, delays from subcontractors, and strained employee relationships. Peterson works to address these issues through meetings, new processes, and building trust. He develops plans to restructure roles, introduce incentives, and get buy-in for a new strategy and decision-making process. Presenting these recommendations to the parent company, Peterson believes he can overcome the challenges and get GMCT operational.
Rosewood Hotels and Resorts: Branding to increase Customer Profitability and ...Pallabh Bhura
This presentation is an in-depth marketing analysis of the Harvard Business Case "Rosewood Hotels and Resorts". It has been created by Pallabh Bhura of Jadavpur University during a marketing internship under Prof. Sameer Mathur, IIM Lucknow. It takes into account the various concepts of branding so as to increase Customer Profitability and Lifetime Value of Rosewood Hotels and Resorts.
Case Analysis of Hilton Hotels: Brand Focus: Customer Relationship Management Sandeep Patel
Hilton is a global hospitality company founded in 1919 that operates over 5,500 hotels across 78 countries. It established an early focus on customer relationship management (CRM) through its OnQ technology platform to maximize customer loyalty, drive organic growth, and create competitive differentiation through personalized service and analytics. Implementing CRM consistently across Hilton's large scale of operations, measuring its return on investment, and maintaining brand differentiation remain ongoing challenges.
Social Media Inside The Brand: DuPont Case Study
Learn first-hand about the internal battles, struggles and success you can expect in the Wild West world of Social Media. Hear about the legal aspects of Social Media, how to develop a proper Social Media Marketing policy, and how to sell a "word of mouth" project internally.
* Gary Spangler, eMarketing, DuPont
The consultant conducted a profitability analysis of a 5-star hotel in North Goa that was not meeting the owner's expectations. They analyzed financial statements, evaluated processes, and created revenue verticals. Observations included unjustified costs, low occupancy, and process issues. Suggested changes were to create separate marketing and stores/purchasing functions, implement stores and consumption tracking, increase pricing, improve marketing, and adopt more efficient processes and technologies. The analysis estimated revenue could increase 30% or INR 150 lakh annually and costs could be reduced INR 121 lakh annually through the recommendations.
1) Alan analyzed customer profitability data from Pilgrim Bank and found that half of the bank's 5 million customers were unprofitable. His boss asked him to analyze whether online banking customers are more profitable to help decide whether to charge fees or offer incentives for the online channel.
2) Alan collected data on 30,000 customers including their online usage, demographics, account details, and profitability. He found the average profitability of online customers was slightly higher at $116.67 than non-online customers at $110.79.
3) While this suggests online customers may be more profitable, Alan realized he needs more analysis to determine if the difference is statistically significant and account for other customer characteristics that could
The document summarizes a proposed $90 million sugar mill project in Northern Vietnam that is seeking $45 million in financing from the International Finance Corporation (IFC). The project aims to capitalize on growing domestic sugar demand in Vietnam. Key points analyzed include the project's commercial viability and attractiveness, development impact, and major risks. The project is found to have an internal rate of return of 18% and economic rate of return of 19%, above IFC's threshold of 10%. While there are some transportation and supply risks, the overall risk level is judged to be below moderate. In conclusion, the project is recommended for IFC financing due to its social and financial benefits.
This presentation discusses Microsoft Corporation and the Boston Consulting Group (BCG) matrix approach. It provides background on Microsoft's founding in 1975. It then analyzes different Microsoft operating systems according to the BCG matrix categories: Windows 10 is a cash cow; Windows 7 is also a cash cow; Windows Phone is a question mark with low market share and growth; Windows Vista is a dog with low market share. Finally, it recommends post-analysis strategies for each category, such as increasing investment in Windows Phone to make it a star, and harvesting Windows 10 to maximize profits.
This document provides an overview of The Walt Disney Company. It was established in 1923 by Walt Disney and is currently headquartered in California. Disney has a highly diversified portfolio including media networks, parks and resorts, studio entertainment, consumer products, and interactive. The document discusses Disney's organizational structure, mission and vision statements, divisions, strategies, SWOT analysis, and competitive profile. It also provides financial information showing the impact of the economic downturn in 2009, with recommendations for Disney to improve its performance in the next three years through strategic investments and addressing challenges in the entertainment industry.
An analysis of the Hilton hotels buyout by BlackstoneFrancesco Romeo
This presentation is about the Hilton hotels buyout. We analyze the case with different methods and our conclusion is that it was good deal for both Hilton and Blackstone.
Avia solutions group corporate presentationMZimkute
Avia Solutions Group focuses on aviation business solutions such as consulting, fleet management, training, maintenance, and leasing. It has over 1200 employees across 40 locations worldwide providing services for airlines, MROs, and airports. The group offers a wide range of technical services including base and line maintenance, technical training, spare parts, and engineering support for various commercial aircraft.
The document discusses the acquisition of Pixar by Disney. It provides background on both companies and their history of poor relations. It then describes how the acquisition was implemented successfully by maintaining Pixar's autonomy and culture separately from Disney through agreements on creative control and employee policies. Key to the success was leadership that focused on integration while respecting Pixar's identity and protecting its creative processes.
This chapter discusses global production, outsourcing, and logistics. It addresses key questions about where to locate production, whether to own foreign factories or outsource production, and how to manage an international supply chain. The chapter explains that production location decisions depend on country, technological, and product factors. It also discusses factors that influence make-or-buy decisions and how strategic alliances can help capture benefits of vertical integration. The chapter emphasizes that efficient logistics and information technology are important for international operations.
In April 2013, Procter & Gamble (P&G), the world’s largest consumer packaged goods (CPG) company, announced that it would extend its payment terms to suppliers by 30 days. At the same time, P&G announced a new supply chain financing (SCF) program giving suppliers the ability to receive discounted payments for their P&G receivables. Fibria Celulose, a Brazilian supplier of kraft pulp, joined the program in 2013 but was re-evaluating the costs and benefits of participating in the SCF program in the summer of 2015. The firm’s treasury group and its US country manager must decide whether to keep using the program and, if so, whether to keep their existing SCF banking relationship or start a new relationship with another global SCF bank.
David Paulsen, President Transamerica Distributors, talks Aegon’s strategy, the US insurance market, Transamerica’s products and services, and answers audience Q&As.
Linking Strategic Planning with Operational Planning, Thomson ReutersInnovation Enterprise
Thomson Reuters is proposing changes to better link strategic planning with operational planning by aligning operating segments with market segments. This would allow market growth projections to be used as a leading indicator for business growth. It would also provide a more robust analysis by tying market share and revenue to business forecasts. The goal is to execute strategic planning by informing large investments, acquisitions, and capital expenditures based on consistent targets across market and operating segments. This approach provides increased visibility but reduces flexibility around targets.
Chapter 05(a) financial analysis-ratio and other analysisAl Sabbir
The document discusses various methods for analyzing the financial performance of a company through its financial statements, including ratio analysis, common size analysis, trend analysis, DuPont analysis, and other types of analyses. It provides examples of different types of ratios that can be used, such as liquidity ratios, activity ratios, leverage ratios, and profitability ratios. It also discusses how to interpret ratios and cautions that ratios must be compared to benchmarks and should account for differences in accounting methods.
Agung podomoro group strategic management batch 5 (2015) by mardiana ridwan k...mardianardn
Based on the information provided, Agung Podomoro Land effectively utilizes its internal strengths while minimizing weaknesses. Some key strengths include its existing distribution network, barriers to market entry, high profitability and revenue, skilled workforce, and experienced business units. Weaknesses addressed include complications in tax structure and issues regarding some project licenses. Overall, Agung Podomoro Land leverages its internal capabilities well in its strategic management.
Access Bank reported strong financial results for the 2009 fiscal year. Profit before tax increased 48% to N28.1 billion, driven by growth in core banking operations. Loan portfolio diversified across sectors with trade as the largest contributor. The institutional banking division recorded the highest profit before tax of N11.4 billion and managed the largest portion of total bank assets. Overall, all business segments improved financial performance compared to the previous fiscal year.
Jollibee Food Corporation is a major Philippines-based food company that operates quick-service restaurants under the Jollibee brand. The document analyzes Jollibee's costs, revenues, market capitalization, and strategies from 2015-2019. It finds that Jollibee's variable costs increased over this period as sales grew. While revenue and number of stores increased each year, market capitalization declined in 2019. The document recommends ways for Jollibee to cut expenses to improve profits, such as reducing electricity and travel costs.
IntroductionThe company that has been researched is the Toyota .docxmariuse18nolet
Introduction:
The company that has been researched is the Toyota motor Corporation
Ticker symbol
TM
Exchange
New York Stock Exchange (NYSE)
No of common shares outstanding
1,583,714,334
Industry
Consumer goods
Country
Japan
Toyota Motor Corporation is considered to be a leading automaker headquartered in Japan. The human resources vertical employed 317,734 people and was the largest automobile manufacturer by production. Founded in 1937, the automaker has grown and has its presence in all countries of the world .the Toyota motor corporation group is considered to be one of the largest conglomerates in the world
A. Provide a rationale for the U.S. publicly traded company that you selected, indicating the significant factors driving your decision as a financial manager
Some financial highlights of the company which favorably incline towards investing in this company:
1. The third quarter result of the financial results of the firm showed that on a consolidated basis,
a. net revenues for the period totaled 19.12 trillion yen, an increase of 17.8 percent compared to the same period last fiscal year.
b. Operating income increased from 818.5 billion yen to 1.85 trillion yen,
c. Income before income taxes was 2.02 trillion yen.
d. Net income increased from 648.1 billion yen to 1.52 trillion yen
e. Operating income increased by 1.03 trillion yen.
Some of the major contributors to the increase in income were cost reduction efforts and favorable currency fluctuations. The global sales of automobiles under the group registered a 25% increase globally.
As the financial manger of a company, my instincts towards advising a client to invest in a company are grounded by strong fundamentals. Toyota Motor Corporation has been very strong in its financial fundamentals. Companies whose financial fundamentals are very strong make good investments portfolios.
Such firms are called blue chip companies and trades very selectively on the stock markets are can be studied in depth for any investment purposes. Such firms rarely indulge themselves in any kind of compliance issues are generally favored by investors.
Toyota Motor Corporation is one such stock that as a finance manager I would recommend to buy and hold because the firm has been in the news for all the right reasons and for its future plans of expansion with very strategic mergers and acquisitions. The firm’s product ranges especially the new line of green automotive ranges have caught the fancy of al countries and it is expected that the company will be giving a return of more than 22% to its shareholders (toyotaglobal.com).
B. Determine the profile of the investor for which this company may be a fit, relative to that potential investor's investment strategy. Provide support for your rationale.
The profile of a suitable investor for the company would be a conservative risk taker. The investor would like to buy the stock and hold it for long periods so as to partake of the .
This document discusses analyzing business performance using key financial ratios. It introduces profitability ratios like gross profit margin, net profit margin, and return on capital employed (ROCE). These ratios show how effective a business is at generating profits. The document provides the formulas for each ratio and works through an example for a company called Green Planet. It emphasizes that ratios need to be evaluated as good or bad relative to industry standards and discusses how various stakeholders use ratio analysis to assess business performance.
The document provides background information on WidgetsRUs, a retail company experiencing declining performance and increasing competitive pressures. A strategic review identified issues including weak online sales, brand image, rising costs, and lack of cross-organizational coordination. The company appointed a Portfolio Director to implement portfolio management and address these issues through prioritizing initiatives, efficient delivery, and optimized benefits realization. A portfolio prioritization and delivery planning exercise was undertaken for the next 12 months.
1) The fund has recently underperformed its category benchmark due to cyclical downturns in mid-cap stocks it holds and certain stocks dragging performance. However, the fund manager believes current underperformance may be cyclical and recovery could follow as with past periods.
2) The fund's portfolio consists of many category-leading companies with strong long-term growth potential. While some sectors and stocks have faced short-term issues, the fund manager believes their quality and market positions provide long-term alpha potential.
3) The fund manager continues evaluating the portfolio based on their investment framework, exiting positions where warranted but also adding to cyclically downturn stocks with good long-term prospects trading at attractive valuations now
The cognitive bank ibm launch deck 2016Charlie Chan
It's official, the traditions of the financial services business model are in stagnation…
Customer experience and engagement are not keeping pace with greater expectations of the rapidly evolving digital world
Sustainable profitability is a serious challenge for most of the global banking industry
Even more troubling is that operational efficiency is also in decline and attempts at tactical cost reduction are failing to achieve sustainable efficiencies
IBM's latest IBV study – the cognitive bank – categorises winners and losers by revenue growth and operating efficiency over the past three years. Data and managing it effectively is the primary source of sustainable competitive advantage
Winners have several traits in common:
firstly they are reorientating their business models, by establishing, expanding, and evolving their ecosystem of partners everywhere…transforming very deep and wide
Secondly, they are investing in fintechs, as partners in sustainable business models
Thirdly, becoming the cognitive bank, using the latest techniques in design thinking and agile
Outperforming banks are already on their journey towards becoming the cognitive bank. We are already partnering with them to plan the journey and charter the course
- Oracle Financial Services Software Ltd. provides software and IT solutions for banking and financial services. It has highly profitable net margins and a sound financial situation, allowing for investment. Analysts recommend overweighting or purchasing the stock as current prices imply significant appreciation potential.
- The company has strong fundamentals and growth prospects as it shifts more of its traditional software to cloud-based systems. This cloud transition is expected to increase average revenue and income over the next 10 years.
- Investing in Oracle Financial Services is recommended for mid to long term investors as the stock price is moving closer to its lower bound and the company delivers consistent license growth and margins.
How to create value for your organization? Why TSR is the best metric for value creation? Why is it difficult to create sustainable value? How to build sustainable value creation strategy & create value for a longer period of time? Why CSR & brand value change not consider as a part of TSR? Why multiple compressions are so difficult to beat? Why investors & analyst discounts valuation multiple? How to transit majority investors without eroding TSR? How to create value in low growth economy? How to play your strategy with sustainable TSR matrix as per investors eye? Why investors communication is so important for value creation? Which strategy you should use for value creation? How to use value creation scenarios? Why cash strategy is so important in low growth economy?
If all these question bothers you before developing your company’s corporate strategy/value creation strategy then you must see your New Year’s
complimentary gift presentation
“A handy e-book on how to create sustainable shareholders value”
KAMG was established in 2000 by Kip Knelman and grew significantly before being acquired by Lazard Asset Management in 2005. In 2008, Kip reacquired the firm. KAMG utilizes fundamental research and relative valuation in their growth investment strategy, searching for growth opportunities across all market capitalizations and economic sectors. Their process combines analysis, qualitative assessments, credit cycle analysis, and relative valuation for portfolio construction. KAMG aims to provide long-term alpha through stock selection and believes their proven process, founder's experience, boutique size, and client service focus contribute to their success.
The document provides an overview of a course on financial modelling for company valuation. It discusses the following key points:
- The course covers building financial models, developing case studies, modelling different financial concepts, and using models to perform valuation.
- Financial ratio analysis helps analyze relationships between financial variables and compare performance over time, against competitors, and industry norms.
- Key ratios are discussed to measure profitability, operating efficiency, liquidity, solvency, and valuation.
- The DuPont analysis framework breaks down return on equity into operating efficiency, asset utilization, and financial leverage.
- Profitability analysis should consider metrics at different levels like product, market, and customer to optimize overall profits.
This document discusses various issues related to implementing strategies in the areas of marketing, finance/accounting, research and development (R&D), and management information systems (MIS). Some key points include:
1. Market segmentation and product positioning are important strategy implementation tools that involve dividing markets into customer subsets and mapping how products compare to competitors.
2. Projected financial statement analysis is a central strategy implementation technique that allows examining the expected results of various actions. It involves forecasting financials like income statements and balance sheets.
3. Research and development plays a role in implementation and can involve approaches like being first to market, innovative imitation to minimize risks, or low-cost mass production.
4. An
Similar to APEI International LBO Challenge 2018 - Fujifilm LBO (20)
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
How Does CRISIL Evaluate Lenders in India for Credit RatingsShaheen Kumar
CRISIL evaluates lenders in India by analyzing financial performance, loan portfolio quality, risk management practices, capital adequacy, market position, and adherence to regulatory requirements. This comprehensive assessment ensures a thorough evaluation of creditworthiness and financial strength. Each criterion is meticulously examined to provide credible and reliable ratings.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Duba...mayaclinic18
Whatsapp (+971581248768) Buy Abortion Pills In Dubai/ Qatar/Kuwait/Doha/Abu Dhabi/Alain/RAK City/Satwa/Al Ain/Abortion Pills For Sale In Qatar, Doha. Abu az Zuluf. Abu Thaylah. Ad Dawhah al Jadidah. Al Arish, Al Bida ash Sharqiyah, Al Ghanim, Al Ghuwariyah, Qatari, Abu Dhabi, Dubai.. WHATSAPP +971)581248768 Abortion Pills / Cytotec Tablets Available in Dubai, Sharjah, Abudhabi, Ajman, Alain, Fujeira, Ras Al Khaima, Umm Al Quwain., UAE, buy cytotec in Dubai– Where I can buy abortion pills in Dubai,+971582071918where I can buy abortion pills in Abudhabi +971)581248768 , where I can buy abortion pills in Sharjah,+97158207191 8where I can buy abortion pills in Ajman, +971)581248768 where I can buy abortion pills in Umm al Quwain +971)581248768 , where I can buy abortion pills in Fujairah +971)581248768 , where I can buy abortion pills in Ras al Khaimah +971)581248768 , where I can buy abortion pills in Alain+971)581248768 , where I can buy abortion pills in UAE +971)581248768 we are providing cytotec 200mg abortion pill in dubai, uae.Medication abortion offers an alternative to Surgical Abortion for women in the early weeks of pregnancy. Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman Fujairah Ras Al Khaimah%^^%$Zone1:+971)581248768’][* Legit & Safe #Abortion #Pills #For #Sale In #Dubai Abu Dhabi Sharjah Deira Ajman
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
2. Deal Team
i
Deal Team consists of both technical specialists and business consultants well versed in their area of expertise…
Darren Cheng
Structuring and
Execution
• BBM, SMU School of
Business
• Standard Chartered
Plc
• Seatown Holdings
• Sumitomo Mitsui
Banking Corporation
• Lumen Capital
Investor
Ernest Ong
M&A and
Corporate
Development
• BBM, SMU School of
Business
• Auric Pacific
• Seatown Holdings
• PwC
• IncuVest Asia
Josephine Soh
Consulting and
Business
Development
• BBM & BBA, SMU
School of Business
and Accountancy
• Parthenon-EY
• PwC
• DHL
• Telenor
Cao Yu
Mergers and
Acquisitions
• BBA, SMU School of
Accountancy
• Morgan Stanley
• Lazard
• TSR Partners
3. Executive Summary
1
We believe that Fujifilm has the potential to unlock tremendous value through 3 key levers and will exist as a more efficient organization
post restructuring
• Generating 43.6% of our returns, EBITDA growth is the biggest
driver of our IRR. We believe that the renewed focus in the
pharmaceuticals business coupled with our short, medium, and long
term strategies to boost Fujifilm’s growth will transform the firm into an
integrated healthcare solutions provider.
• We see EBITDA growing by 18.7% CAGR up our exit in FY2022 and
continue to grow post-IPO with the implementation of our proposed
strategy
#1 EBITDA Margins Expansion through improved operations
• Generating 18.0% of returns, value is
unlocked by levering the firm from 1.9x to 5.0x
in Total Debt/EBITDA, utilising Fujifilm's
available debt headroom
• While maintaining a healthy Debt Service
Coverage Ratio of ~1.5x, we could potentially
benefit from the lower of cost of capital
• The low cost of borrowing in Japan makes it
an attractive place for LBO transactions
• At the end of the 5 year projection period, we
expect to paydown ~71% of the total debt
and exit at a 0.54x Total Debt/Equity
#2 Lowering cost of capital through
increased leverage
• Generating 38.4% of our returns, we believe
that the firm is currently significantly
undervalued due to the prevalence of a
conglomerate discount
• Disposing low growth assets early in the post-
LBO strategy allows resources to be focused on
Fujifilm’s high growth pharmaceuticals
segment
• Aim at disposing businesses to strategic
investors which have higher willingness to pay
due to achievable synergies
• Exit as a more pure-play pharmaceuticals
company, with an attractive blended EV/EBITDA
of 13.9x
#3 Potential for valuation re-rating due to
perceived conglomerate discount
IRR 32.4%
MoM 3.5x
4. Screening Process
Note: 1. Based on Net Debt/EBITDA, 2. EV/EBITDA, 3. Full details in the appendix
Source: Team Analysis 2
Our screening methodology takes into account the firm’s external and internal environment, as well as signs of undervaluation,
opportunities for EBITDA expansion, and low net debt
Company
Attractiveness
of Industry
Firm’s Cash Flow
Stability
Firm’s Potential
to Grow
Debt Headroom1 Valuation2 Incompetence of
Management3
AMD 4 2 4 2 1 2
Micron 4 3 4 1 4 2
Kraft Heinz 1 4 2 1 3 1
Pepsi Co 1 4 2 3 4 4
GE 3 3 3 1 3 2
Mattel 2 2 2 1 1 3
2 3 3 4 4 4 2
Kodak 2 2 3 4 4 2
Our analysis shows that Fujifilm is the best LBO candidate
5. Company Profile
3
Company Overview 3-Year Share Price History with P/E Bands
0.00
1000000.0
2000000.0
3000000.0
4000000.0
5000000.0
6000000.0
7000000.0
8000000.0
9000000.0
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17
Max: 23.6x
High: 20.8x
Avg: 18.1x
Low: 16.0x
Min: 13.9x
Share Price (¥ )
52W Return: (4)%
52W Return: 8%
Institutions
28.8%
Corporations
1.5%
Individuals/Insiders
0.0%
Public
69.7%
Shares Outstanding
430.2mm
Holder Appointment
Stock
Held
Komori,
Shigetaka
Chairman &
CEO
22,500
Toda, Yuzo
CTO,
Corporate VP
11,600
Tamai, Koichi
CIO,
Corporate VP
7,600
Key Insiders
342 900 1,081
11%
9% 8%
14% 15% 13%
0%
10%
20%
0
500
1,000
Imaging Solutions Information Solutions Document Solutions
Revenue EBIT Margins EBITDA Margins
¥ (mm) Margins (%)
• Established in 1934, Fujifilm Holdings Corporation develops, produces,
distributes and services imaging, pharmaceutical and printing solutions
worldwide, headquartered in Tokyo, Japan
• Market Cap: ¥2,204bn; Enterprise Value: ¥2,151bn
• Derives revenue from 3 operating segments (% of Revenue):
o Imaging (15%): Offers photo imaging (e.g. Instax) and optical device
and electronic imaging (e.g. mirrorless/ DSLR cameras) products
globally, with strong acceptance in NA and EU
o Information (39%): Offers mainly pharmaceuticals (e.g. regenerative
medicine) and medical systems, and highly functional materials (e.g.
electronic/ fine chemicals and graphic inkjet systems)
o Document (46%): Offers office and printing products and leasing
services through 75% subsidiary Fuji Xerox
Segment Breakdown
Shareholder CompositionSummary Financials
FYE 31 Mar (¥ bn) 2014A 2015A 2016A 2017A CAGR
Revenue 2,418.1 2,463.4 2,460.4 2,322.2 -1.34%
% growth 9.94% 1.87% -0.12% -5.62%
Adjusted EBITDA 219.4 229.7 246.5 231.2 1.75%
% margin 9.07% 9.32% 10.02% 9.95%
Adjusted EBIT 128.5 164.4 180.6 172.3 10.28%
% margin 5.31% 6.67% 7.34% 7.42%
Debt to EBITDA (x) 1.6 1.5 1.5 2.4
ROE (%) 3.9 5.5 5.8 6.5 18.56%
Key Products
Imaging Solutions Information Solutions Document Solutions
3Y High: ¥5,009
3Y Low: ¥3,455
Source: Company Filings, Bloomberg
Fujifilm Nikkei 225 (Rebased)
6. 2,151
389
3,001
858
(209)
1,963
Current EV Imaging
Solutions
Document
Solutions
Information
Solutions
Corporate
Center
Eliminations
SOTP
Valuation
Documents Canon
Seiko
Epson
Ricoh Fujifilm
Placing vs
peers
Market Share 29% 11% 27% 17% 3rd
Average EBITDA Margins 16% 17% 12% 13% 3rd
Average EBIT Margins 12% 14% 8% 8% 3rd
Average ROCE3 23% 27% 7% 8% 3rd
Situational Overview
Notes: 1. 4 year historical average segment results for various firms, 2. Information solutions segment, 3. CE represents segment assets, 4. Return on Research Capital = EBIT/R&D
Source: Company Filings, Euromonitor, Bloomberg 4
Imaging Canon1 Nikon1 Sony1 Fujifilm1 Placing
vs peers
Market Share 25% 15% 14% 13% 4th
Average EBITDA Margins 19% 12% 11% 10% 4th
Average EBIT Margins 15% 9% 6% 7% 3rd
Average ROCE3 41% 23% 36% 7% 4th
Industry Comparables Benchmarking Indicative SOTP Value
• Operational performance appears depressed with Fujifilm underperforming
peers in its various segments
• This demonstrates a lack of focus by management leading to inconsistent
results between operating segments
Operational “dis-synergies” could be unlocked in the event of a split
Pharmaceuticals
/Chemicals2
Takeda
Pharma
Johnson
&
Johnson
Novartis Fujifilm
Placing
vs peers
Average EBITDA Margins 20% 33% 22% 15% 4th
Average EBIT Margins 8% 27% 19% 9% 3rd
Average ROCE3 6% 21% 11% 6% 4th
Average R&D/Revenue 19% 12% 17% 7% 4th
Average RORC4 44% 221% 109% 131% 2nd
7.4x 8.1x 8.3x 14.9x 7.4x ~10.4x EV/EBITDA
• By marking the segments to peer multiples, the current valuation significantly
undermines the market value of the standalone business segments
• Using a bottoms-up SOTP approach we estimate that the indicative upside
is ~39.5%, with the business valued at 10.4x EV/EBITDA, significantly
higher than current trading multiples
Lack of focus limits operational efficiency, while valuations are mismatched due to perceived conglomerate discounting
SOTP Pure-play Implied
Valuations
Tremendous value could be unlocked by splitting up businesses
~¥850bn
unlocked
Existing
Enterprise
Value
7. Strategic Alternatives
Source: Broker Reports
5
After considering other strategic alternatives, we feel that an LBO is the preferred method of investing
Investor Activism
65.6%
55.2%
29.6%
68.6%
62.1%
46.7%
US UK Asia
2014 2015
Increasing activist success rates
between 2014 - 2015
• Investor activism would entail taking up a
small stake in the Fujifilm business and
asking management to split the business
• Japan has strong legal rights of
shareholders and is increasing its
emphasis on board governance
• Activist investor Dan Loeb has managed
to table for increasing shareholder’s
returns in Seven & I Corp.
• Fujifilm has a dispersed shareholder’s
structure which is favourable for a proxy
contest
• Launching a proxy contest however
entails high sunk costs with no guarantee
of success
Key Strategy Activist Tools
Financial
• Changing capital structure to reduce overall cost of
capital
• Return cash to shareholder’s through share
buybacks and dividends
• Public
Communication
• Shareholder’s
Proposal
Operational
• Spinning off unprofitable businesses and reinvest
proceeds into the pharmaceutical business
• Improve efficiency of core businesses
• Proxy Contest
• Shareholder’s
Proposal
A successful activist campaign may unlock value, however, activism is
is an expensive venture and subject to investor perception
• Similarly, we could co-participate in this buyout as a mezzanine investor
• This allows us to limit our downside risk but yet participate in the upside
unlocked through value creation
Proposed Structure incorporating a structured note with equity
warrants…
Our value proposition requires control in order to initiate value levers
and investing in Mezzanine fails to give us this leverage
Sources of Value
1. Coupon payable from cashflows derived from Fujifilm’s operating businesses.
2. Warrants allow us to buy into equity at low prices allowing cashflows derived from
asset sale to flow back in the form of dividend recap to mezzanine holders
3. During asset divestitures, issuers may opt to pay back the loan however incurring a
prepayment penalty charge
95% ownership
LP investor
SPV Mezzanine
5% ownership
Fujifilm
A B C
IRR ~10-15%
consisting of:
Prepayment
penalty
Equity
Participation
Coupon/
Payment-In-
Kind
1
2
3
Mezzanine Investing
8. Transaction Structure
Source: Bloomberg
6
Deal Structure Valuation Analysis
Institutions
1.5%28.8% 69.7%
Pre-LBO
Post-LBO
Selected Key
Management
79.9%0.1% 20.0%
Corporations Public Investors
Sources and Uses Capital Structure
Dispersed pre-LBO shareholding structure reduces the probability of
dissident blockholders rejecting the deal
Methodology Per Share Price Valuation Range
5,121 6,892
5,8004,800
MarketValues
Trading
Comparables
1,000 2,000 3,000 4,000 5,000 6,000 7,000
4,265 6,094
Current Price: ¥4,270
EV/EBITDA: 7.4x
Offer Price: ¥5,124
TV/EBITDA: 8.9x
Offer Premium: 20.0%
52W
Range
Since
IPO
Broker
Target
Prices
LTM
P/E
LTM
EV/EBITDA
5,7101,273
3,932 4,838
We propose to buyout Fujifilm at 8.9x EV/EBITDA at a 20% premium to the current price
697,056
2,680,985
697,056
348,528 1,000
749,876
187,469
Tranch A Tranch B Mezzanine Management: Phoenix
Partners
Bain Capital Total
Debt: ¥ 1,742,640m (65%) Equity: ¥ 938,345m (35%)Sources:
Amount
(¥'m)
x
EBITDA
%
Total:
Uses:
Amount
(¥'m)
x
EBITDA
%
Total:
Tranch A: 697,056 2.4x 21.2% Purchase Price: 2,645,120 9.1x 80.6%
Tranch B: 697,056 2.4x 21.2% Refinance Debt: 558,842 1.9x 17.0%
Mezzanine: 348,528 1.2x 10.6% Transaction Fees: 36,451 0.1x 1.1%
Excess Cash: 600,000 2.1x 18.3% Financing Fees: 40,572 0.1x 1.2%
Management: 1,000 0.0x 0.03% Total Uses: 3,280,985 11.3x 100.0%
Sponsor Equity: 937,345 3.2x 28.6%
Total Sources: 3,280,985 11.3x 100.0%
9. Overview of Strategic Plans
Notes: 1. Includes Graphic Systems division currently part of Information Solutions segment
7
Our post-transaction strategy is executed in 3 phases: Pruning, Weeding and Nurturing
Pruning: Uproot distractions from value
creation1
Weeding: Divesting the printing business at
attractive terms2
Nurturing: Unlocking massive value from
Healthcare3
• Slow growth trajectory which can only be
changed through a consolidation with a
similar sized competitor
• Repackaging Fujifilm’s printing solutions
segment to include graphic systems (ink)
business
• Asset sale to Xerox would fetch attractive
valuations due to market leader premium
and operational synergies from the
acquisition
• Brand-sticky customers in the cameras
industry result in high customer
acquisition costs
• Imaging solutions segment is shrinking
and unable to increase market share due
to lack of extensiveness of product range
• Existing appetite for M&A increases
feasibility of divestment in FY18-19
• Expand CDMO pipeline for OEM drug
manufacturing to capture industry growth
• Improving customer acquisition through
analytics of physician preferences
• Establishing an IoT feedback loop
through sale of medical wearables
• IPO exit in FY22 to unlock shareholder
value at expanded multiples
Imaging Solutions
Document Solutions
Information Solutions
2New Document
Solutions1
3
1 Proposed disposal through
trade sale to Nikon
Proposed disposal of newly
packaged Documents
division to Xerox
Pursue organic top line growth and
margin expansion; exit through IPO
Implementation Period
FY18-19
FY18-19
FY18-22
10. 2
Segment Overview
Source: Euromonitor, Various Company Websites
8
34%
25%
18%
22%
35%
27%
12% 14%
19%
Sony
Olympus
Canon
129 132
83
60
50
34
0
20
40
60
80
100
120
140
DSLR + Mirrorless Market Share Evolution Product Range Analysis Key Commentary
• Canon has been gaining market share in
Fujifilm’s key camera segments with their
extensive product range, excellent distribution
capability and strong brand loyalty
• A key consumer purchase criteria would be
the range and quality of camera bodies and
lenses. Canon possesses a strong advantage
in this, allowing them to capture new
customers and convert current users
• With Fujifilm’s current capabilities, it is
unlikely that they are able to compete
effectively and gain market share from
incumbents
55% 56%
63%
39% 37% 32%
5% 7% 5%
2015 2016 2017
Canon
Nikon
Pentax
DSLRMirorrless
TotalNo.ofCameraBodies
+CameraLenses
Globally, the market is expected to decline and Fujifilm does not have the requisite competitive advantage to gain market share
Global DSLR + Mirrorless Camera Market Key Market Developments Key Commentary
• Overall, the market is expected to decline and
there is limited room for growth. Consolidation
is expected to take place as camera
manufactures attempt to scale and lower costs
• Smartphones have become very close
substitutes and recent industry partnerships
and innovations such as Apple’s Portrait Mode
further threaten digital cameras
• Overall, a longer replacement cycle and
stronger substitutes drive the market’s
decline
Smartphones
• Image quality of smartphones have improved
tremendously, becoming a stronger substitute
for digital cameras. Industry partnerships such
as Huawei with Leica are an attempt from
camera lens manufacturers to stay relevant
0
100
200
300
400
500
600
700
2015 2016 2017 F2022
¥ Bn
Longer Camera Replacement Cycles
• Replacement cycles of cameras have increased
significantly, as consumers have stopped
upgrading their camera, and are presumably
happy with their current camera. Moreover, new
product launches only have incremental
benefits, and lack any significant differentiating
factor to entice consumers
Information
Solutions
Document
Solutions
Imaging
Solutions
11. Disposal of Imaging Solutions to Strategic Buyers
Source: Bloomberg, Company Filings, Capital IQ
9
Nikon has been facing pressures to merge from industry pundits Nikon’s current product line are complementary to Fujifilm’s
A tie-up with Nikon will leverage on both company’s respective competencies
557
468
429
370 357
122 137 149 149
221
2013 2014 2015 2016 2017
SLRs Mirrorless
…as the global Industry has moved from
SLRs into mirrorless cameras Mirrorless
SLRs
ProductMix
Merger would allow Nikon to gain access to its mirrorless sensor
technology and increase market share
Nikon’s failure to diversify product mix has since sparked
speculations of a merger with Fujifilm
-18%
-8%
-5%
-3%
Nikon Sony Canon Fujifilm
Japanese
Strategic
Players
703
457
383 352
247
105 87 65.6
Canon Fujifilm +
Nikon
Nikon Sony Panasonic Fujifilm Ricoh Olympus
Camera Subsegment Growth (¥ bn)Last 3 Year Revenue CAGR (%)
Other Strategic Buyers Exit Valuation
Total Digital Camera Market Sales (¥ Bn)
Acquirer Target
Deal
Value
(US$m)
2006 Sony
Konica
Minolta
-
2011 Blackstone Leica 179.0
2011 Ricoh Pentax 124.2
2012 Sony Olympus 640.0
2017 DJI Hasselblad -
Deal space has been active
We see appetite for acquirers
looking to expand capabilities
Prospective Buyer Universe
Chinese
Strategic
Players
200 400 600
Trading
Comparables
EV/ T12M EBITDA
EV/ 5 Year Avg
EBITDA
Precedent
Transactions
EV/T12M EBITDA
• Based on ¥47.9bn 2018E EBITDA, we derive a exit value of between ¥350 –
400Bn, valuing the camera business at 7.3x – 8.3x EV/2018E EBITDA
• We believe this to be conservative, using a lower exit multiple and not valuing
potential synergies between Fujifilm and strategic buyers. We note that the Sony’s
non-controlling stake in Olympus in 2012 was valued at 10.7x EV/T12M EBITDA.
Nikon’s revenues have halved since
2014…
Combined Revenue
¥350bn
Information
Solutions
Document
Solutions
Imaging
Solutions
12. Segment Overview
Note: 1. By EBITDA margins
Source: J.P. Morgan, Gartner, McKinsey, Various company annual reports 10
0
400
800
1,200
2016A 2017A 2018E 2019E 2020E
Others Global Services
Production Services Office Printers
Office Products
1,165
¥ Bn
1,081 1,080 1,060 1,040
2017– 2020
CAGR
-1.92%
-4.98%
0.10%
2.30%
-1.27%
-1.28%
Fuji Xerox Sales by Segment
• Document solutions is Fujifilm’s worst
performing business line1
• While there is slight growth in Global Services,
providing its clients value added services such
as print management and security, this
growth from Global Services alone is
insufficient and cannot reverse the overall
downward trend
• Moreover, Fujifilm has no cost advantage,
and lacks the expertise to pursue new
business lines
• With no pricing power and cost advantage,
Fujifilm does not have bright prospects
0%
4%
8%
12%
16%
20%
2013 2014 2015 2016 2017
Fuji Xerox HP Canon Epson
• The printers and copiers market is expected to
decline at a -1.5% CAGR through to 2022
• As the market shrinks, consolidation is
underway and will pick up speed as
companies aim to gain scale and cut costs.
Going forward, scale and costs will be key
success factors
• Some firms have ventured into and expanded
their product line to include 3D printers. As
strong growth is expected in this industry,
many competitors have already entered and
built their presence in the market. Fujifilm is a
laggard and lacks knowledge and expertise
Digitization
• Digitalization of business processes and the
growth of digital business, are accelerating the
decline of printed pages
Consolidation
• HP acquired Samsung Printers in Nov 2017. By
1Q18, HP’s printer sales grew by 7.2%, while
margins improved by 10bps
Foray into 3D Printers
• HP and Ricoh now manufacture their own 3D
printers targeted at existing enterprise and
healthcare customers
• Canon, Ricoh, and Konica Minolta have been
reselling 3D printers to their existing clients
Key Commentary
Key Market Developments Key Commentary
Operating Margins Analysis
Proposed sale of documents segment based on dim prospects for and lack of competitive edge
15% 15% 13% 13% 12%
19% 21% 20% 21% 20%
19% 18% 20% 19% 20%
24% 24% 23% 22% 24%
23% 23% 24% 25% 25%
2013 2014 2015 2016 2017
Fuji Xerox Ricoh Canon HP Others
Information
Solutions
Document
Solutions
Imaging
Solutions
Global Printers Market Share Evolution
13. 694 773 859
202
226
250
222
0
500
1000
1500
Bear Base Bull
Value from EBITDA (Documents) Value from EBITDA (Graphic Systems)
Value from Cost Synergies
650
1250 1250
2250
400
200
1000
COGS SG&A R&D Total Cost
Savings
Revenue
Synergies
Total
Synergies
Consolidate
manufacturing
footprint +
streamline
logistics
Remove
duplicative
G&A
Remove
duplicative
R&D
Cross selling, widened
product portfolio and
greater R&D firepower
to accelerate market
share gains
Disposal of Documents Solutions to Xerox
Notes: *Intercompany transactions have been deducted, 2. Fujifilm management guidance 2018 through proposed capital restructuring of Fuji Xerox, 3. Only 20% of FY22E cost
synergies priced in
Source: Company Filings, Bloomberg, Broker Reports, Team Estimates
11
Xerox the most suitable buyer of Fuji Xerox… …creating a new market leader in the printing solutions space
An upstream acquisition is currently the best way for Xerox to
immediately expand margins in the maturing documents market
Apart from market leadership, consolidation implies greater value
chain control and direct margin capture by Xerox
Evaluation of Synergies2 Exit Valuation
Conservative cost savings of US$1.25Bn and revenue enhancement
of US$1Bn per annum by 2022…
…allows us to dispose the business at a premium valuation even
before factoring revenue enhancement synergies in the sale price
2.1+ 2.1
1.8 1.8
1.2 1.1
0.8 0.7
0.4
New
Xerox
HP Inc Canon Ricoh Xerox Fuji
Xerox
Konica
Minolta
Seiko
Epson
Brother
(¥ Tn)
Combined Revenue
Smooth integration due
to existing partnerships
and brand coherence
~85% achievable by 2020
(US$ MM)
(US$ Bn)
Substantially all office products sold by
Xerox are produced by Fuji Xerox
(¥ Bn)
6.7x 7.5x 8.3x
With substantial cost and revenue synergies to be gained, a Fuji Xerox acquisition is an attractive and strategic proposition for Xerox
Exit Multiple (EV/EBITDA)
1
3
12.3
11.1 10.4 10.0
14.4%
13.7%
13.4%
13.0%
12%
13%
14%
15%
0.0
5.0
10.0
15.0
2014 2015 2016 2017
Xerox's Revenue (LHS) Xerox's EBITDA margins (RHS)
Information
Solutions
Document
Solutions
Imaging
Solutions
14. Segment Overview
Note: 1. Contract Development and Manufacturing Organization
Source: World Health Organization, Zion, McKinsey, Frost & Sullivan Company Presentations 12
Fujifilm can do more to capture the healthcare market in Asia which is expected to grow across Drugs, Devices, and Services
Disease ‘13 ‘14 ‘15 ‘16 ‘17
Heart Disease 2 2 1 1 1
Respiratory
Disease
1 1 2 3 4
Lung Cancer 3 3 3 2 2
Stomach
Cancer
5 4 4 4 3
Liver Cancer - - 5 5 4
Diarrheal
Diseases
4 5 - - -
Change in Top 5 Diseases in Asia
Growing demand for drugs treating heart
disease, lung, stomach, and liver cancer
• Market expected to grow at 7.4% CAGR till 2021
Trends in Medical Device Segment
Medical Devices
• Globally, Asia Pacific recorded the highest
growth rate of 10% CAGR from 2013 to 2017.
This growth is expected to accelerate, reaching
13.2% till 2022.
Drivers of Growth
• Rising disposable incomes drive expenditures
on healthcare in hospitals, and at home.
• An aging population, growth in mobile and
broadband Internet services, and rising costs of
services drive demand for more at-home care
and portable medical devices.
Fujifilm can expand its product range to
manufacture consumer medical devices
Growth in Analytics within Healthcare
While there is opportunity in telehealth,
strong partnerships underpin its success
Telehealth
• Telehealth is expected to growth at 12% CAGR
till 2022, reaching a total market value of
$1.79Bn within Asia Pacific. This is in line with
the push to develop Smart Cities.
Key Factors for Success
• There is a need to establish a sustainable and
clear business model that involves hospitals and
patients, which is well supported by strong
network infrastructure and regulations.
• With a large volume of data exchanges, players
need strong network security measures.
Fujifilm’s Mismatched Drug Portfolio Inability to Market New Products Heavy Reliance on Hospitals as an End-user
Fujifilm should produce more drugs for
cancer and cardiovascular diseases
While Fujifilm has the ability to R&D many
new products, it’s unable to market them
Currently, Fujifilm does not sell any
medical devices targeted at consumers
Female
Medical Care
(28.9%)
Diagnostic Drugs
(38.1%)
Others
(21.1%)
CDMO1
(6.7%)
Cardiovascular
(2.7%)
Cancer
(2.7%)
436
1,109
1,487
2,626
0
500
1,000
1,500
2,000
2,500
3,000
2014 2015 2016 2017
0%
5%
10%
15%
20%
No.ofNewProducts
SalesGrowth
New Products Sales Growth
• All of Fujifilm’s medical devices are for use by
hospitals and medical professionals
o Endoscope
Utilizes HD
Imaging for
diagnosis
o Ultrasound
Utilizes
ultrasound
for imaging
o X-Ray
Utilizes X-
Ray for
imaging
o In-Vitro
Used for
fluid and
blood tests
Information
Solutions
Document
Solutions
Imaging
Solutions
15. Acquiring more cardiovascular and cancer related CDMO contracts Tailoring analytics process to Fujifilm
Insufficient exposure to growing trends
Enhancing our drugs and pharmaceuticals division
Notes: 1. IMS Health Group, 2. Japan Medical Data Center, 3. Japan Health Policy NOW, 4. National Health Insurance Japan
Source: SAS, Postgraduate Medical Journal, Company filings, Broker Reports, FDA 13
1. In the short term, we strengthen Fujifilm’s drug portfolio by
securing more cancer and cardiovascular CDMO clients
2. To effectively bring our enhanced drug portfolio to market, we
want to adopt an analytics-driven approach to marketing
BenefitsAnalytics ModelData Collected
• IMS Sales data1
• Census data
• Physician data
• Call center data
• CRM data on samples
• Data on promotions
• Managed care data
• Predict which
sales tactic (e.g.
samples, vouchers,
access to experts)
appeals most to
each physician
• Reduce ~50% of
physicians detailed
• Higher return per
physician, per
product
• Less sales staff
needed
By implementing analytics in our marketing, we will be able to
achieve higher profitability in our pharmaceuticals segment
AnalyticsModel
Data To Collect:
• JMDC Sales data2
• Census data
• Physician data
• Clinic data
• Call center data
• CRM data on samples
• Data on promotions
• Data from JHPN2
• Data from NHI Japan2
• Data from Science Ministry
• Data from expert speakers
Benefits
• By targeting physicians via a
personalized sales strategy,
Fujifilm can expect higher
returns per physician
• Reduce cost by optimizing
the use of samples
• Able to strengthen
relationship with physician
and clinic by possessing a
deeper understanding of them
2019 2020 2021 2022 2023
ITK-1 T-817M FF-21101 FF-10101 FF-10102
FF-10501
T-4288
These CDMO contracts can help us to quickly align our portfolio
towards market trends, enhancing our offerings and returns
• In addition to cardiovascular drugs, focus on gastrointestinal and lung cancer,
Asia’s leading causes of cancer
• We want to target US and European companies who are seeking to expand
and penetrate Asia, specifically Japan
• Acquiring these CDMO clients can enable Fujifilm to quickly monetize these
drugs, while it develops its own cancer and cardiovascular drugs
• Some firms could be:
: Cancer Respiratory Diseases : Alzheimer's
• While Fujifilm’s pipeline consists mainly of caner drugs, this pipeline is
insufficient to capture market growth . Fujifilm needs to produce more drugs
targeted at cancer and cardiovascular diseases.
• On average, drugs take about 10 years to develop and launch. This is too slow,
hence we suggest Fujifilm target current players acquire them as CDMO
clients.1
Janssen Pharmaceuticals has achieved success through analytics
Fujifilm’s Drug Pipeline for the next 5 Years
Information
Solutions
Document
Solutions
Imaging
Solutions
16. Finding new markets for our ultrasound devices A healthcare ecosystem that creates value for all stakeholders
Venturing into medical wearables and IoT services
Source: Company website, Carleton University , Financial Times
14
3. In the medium term, we will penetrate the consumer market
capitalizing on existing capabilities in ultrasound
4. Building an integrated healthcare ecosystem in Japan by
offering IoT services to our customers
Foray into medical wearables allows us to target end-consumers,
building our presence in the healthcare industry
• Ultrasound sensors have a diverse range of applications in medical wearables
• Begin to research, develop, and manufacture miniature ultrasound probes
and sensors to target medical wearables manufacturers
• Current uses of ultrasound sensors in wearables include:
• Some clients are:
• Therapeutic Ultrasound Device
Used to relieve pain by producing waves to penetrate the skin.
Typically used by cancer patients
• Ultrasonic Cardiac Monitor
The device can detect and diagnose the cause of irregular
heartbeats. Used by at risk and current heart patients.
• Ultrasound Probe
Allows caregivers and patients to examine the body, find veins,
and to check the flow of fluids
Offering IoT services bridges the gap between hospitals,
manufacturers, and patients, solidifying our presence in healthcare
Hospital
Patients
Better products
Feedback
Benefits to stakeholders:
• Hospital:
Higher revenues, driven
by higher service levels
• Manufacturers:
Closer to market,
develop more relevant
products
• Patients:
Better service
quality
• We will develop analytics, to deliver data-backed insights to its
stakeholders
• We will partner with telcos (Softbank, KDDI, and NTT DoMoCo), who will
provide the network infrastructure to support IoT services
• This rides on the government’s push for industries to adopt and grow
Japan’s IoT landscape
• Enhancing Fujifilm’s product offerings, allowing it to better compete with
other healthcare players such as Fujitsu and Philips
• Future-proof Fujifilm’s business as it moves towards the digitization of
services, collects data, and focuses on newer technologies
Taking steps to become an IoT service provider
Information
Solutions
Document
Solutions
Imaging
Solutions
17. Impact of Strategies
15
Our strategies aim to better align Fujifilm's healthcare segment to market needs, and evolve Fujifilm into a future-ready healthcare company
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2018 2019 2020 2021 2022 Post Exit
Enhanced Drug Portfolio Improved Marketing Tactics Miniaturise Ultrasound Sensors Venture into IoT
Our enhanced drug portfolio, improved
marketing tactics, and entry into consumer
medical wearables will foster deeper
relationships with physicians, hospitals,
clinics, and patients – essential in building
a holistic and value-creating ecosystem
that can meet Japan’s pressing healthcare
needs
Incremental Impact on Operating Income Key Commentary
¥ Mn
1 2 43Enhanced Drug
Portfolio
Improved
Marketing Tactics
Miniaturized
Ultrasound Sensors
Venture into IoT
• Expanding our drug
portfolio, thus selling
more types of drugs to
clinics and hospitals
• With the high
prevalence of lung and
stomach cancer, as
well as cardiovascular
diseases, we believe
that adding these
drugs can drive sales.
• By adopting an
analytics backed
personalized
marketing approach to
sales, we can increase
revenue per client and
reduce the cost to
serve per client,
growing the
profitability of our
customer accounts.
• An expanded product
range is able to drive
revenue growth.
• Entrance into
wearables help us to
fill an important gap in
our customer base,
and sets the stage for
us to provide a holistic
IoT service to all
players in healthcare.
• IoT services can be
provided to our current
clients helping us to
increase revenue per
customer.
• By building a strong
ecosystem, we are
better able to retain
customers, and will
also posses a stronger
value proposition.
14,750
31,840
47,794
66,575
100,777
With access to patients, hospitals,
physicians further complemented by strong
data analytics platforms, Fujifilm can
provide new insights
This added service can help us to
differentiate ourselves against competitors
and allow us to better attract and retain
customers in our ecosystem
After building a strong base in Japan, we
will be able to scale the business in other
parts of Asia, allowing us to achieved
sustained growth for Fujifilm in the coming
years.
~35% CAGR
2017A Operating Income:
¥82,959
Information
Solutions
Document
Solutions
Imaging
Solutions
18. Exit Strategy
Note: 1. P/E calculated based on NOPAT, IPO proceeds would be used to repay debt
16
# Unit Adj. 2018E 2019E 2020E 2021E 2022E CAGR
Revenue ¥' m 793,707 854,380 905,073 973,712 1,047,483 7.2%
% Growth % n.m 7.6% 5.9% 7.6% 7.6%
EBITDA ¥' m 123,696 156,904 176,972 202,673 245,246 18.7%
% Growth % n.m 26.8% 12.8% 14.5% 21.0%
% Margin % 15.6% 18.4% 19.6% 20.8% 23.4%
NPATMI ¥' m NA 22,645 42,240 53,814 77,358 -41.3%
% Growth % n.m n.m 86.5% 27.4% 43.7%
% Margin % n.m 2.7% 4.7% 5.5% 7.4%
Pro-forma Key Financials of Information Solutions
We intend to re-IPO the firm as “Fuji Pharma”
0 2000 4000 6000 8000 10000 12000 14000
LTM P/E
LTM EV/EBITDA
LTM P/E
LTM EV/EBITDA
TradingComparablesTradingComparables
Pharmaceuticals
Specialty
Chemicals
Indicative Valuation based on Pharma and Chemical Comps
¥2,848bn
1. We exit our investment at a blended EV/EBITDA of 13.9x based on our
EBIT-weighted comps set
2. This represents an indicative P/E1 on IPO at 15.0x and equity value of
¥2,848bn
IPO Story
We think that “Fuji Pharma”, with its renewed growth story driven by its
new position as an integrated healthcare solutions provider, will benefit
from an IPO exit:
• The full implementation of our IoT services will be realized in FY2023
• The LP consortium will exit 50% of our investment post-IPO lock up period
• Management will continue to retain a significant stake in the firm to
continue of alignment of interests
This is reasonable given the firm’s IPO growth story which should allow
it to command a premium valuation
We intend to retain our remaining 50% stake of Fuji Pharma due to our
conviction in its growth story
Information
Solutions
Document
Solutions
Imaging
Solutions
19. Management Plans and Incentives
Notes: 1. based on constituents of Nikkei 225
Source: Bloomberg, Company Filings 17
Evaluation of Skills and Value-Add by our Shareholders
Plugging the skill gap Management Compensation
Milestone 1
Restricted Stock (0.25%)
Management will receive 0.25% in
restricted stock upon completion of both
trade sales. Vesting period till IPO exit at
Year 5
Milestone 2
Stock Options (0.25%)
Second tranche of compensation comes
in upon the final IPO of the business
structured with tag-along rights upon exit
of the LP
1. Use of equity-based compensation to align risk-appetites of LP and
managers
2. Option to co-invest with LP consortium
3. Management non-compete clauses to prevent them from engaging in
solicitory behaviour
Fujifilm’s current board could welcome external advisers
Non-Exec
Directors
Expertise
Tatsuo Kawada Business, CEO of
Textile Firm
Makoto Kaiami Legal, District
Judge
Kunitaro Kitamura Supervisory,
Banking Executive
Executive
Directors
% Shares
Held
Tenure in
Fujifilm (yrs)
CEO 0.0040% 55
COO 0.0012% 41
CIO 0.0015% 15
CTO 0.0023% 45
CVP 0.0004% 38
CVP 0.0005% 38
Total:
0.0099%
Average:
39
Managers could do with better
shareholder alignment and a fresh set of
eyes
Only one 1 of 3 non-exec directors has
experience in expanding Fujifilm’s
network.
We choose Bain Capital is our co-investment partner due to:
their reputation for value creation, their experiences in the
field of pharmaceuticals and in Japan
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
-20 0 20 40 60
Positive relation between CEO ownership and shareholder’s returns1
% CEO
Ownership
% Avg
Shareholder
Returns
0.01 12.7
0.02 15.4
0.03 14.0
0.04 14.4
0.05 28.2
0.06 -6.0
0.07 31.5
Achieving management buy-in is vital for company performance
List of Pharmaceutical investments:
Year Acquired
Deal Size
(US$bn)
2014 Macromill 0.4
2017
Toshiba
Semicons
18.0
2017 Asatsu-DK Inc 1.4
2018
(pending)
Takata -
List of Japanese Investments:
Total Average 5 Year Shareholder’s Returns
CEOOwnership%
OutstandingShares
Skill Assessment of the current Board of Directors
20. Returns Analysis
18
Returns Attribution Analysis
Investors’ Returns Analysis
Returns to Phoenix Partners and Bain Capital # Units 2017 2018 2019 2020 2021 2022
Common Equity
Initial Investment: ¥' m (937,345)
Dividends: ¥' m 433,394
Equity: ¥' m 2,805,847
Total Cash Flows: ¥' m (937,345) - 433,394 - - 2,805,847
Money-on-Money (MoM) Multiple: 3.5x
Internal Rate of Return (IRR): 32.4%
Returns to Management Team # Units 2017 2018 2019 2020 2021 2022
Common Equity
Initial Investment: ¥' m (1,000)
Dividends: ¥' m 462
Equity: ¥' m 10,104
Total Cash Flows: ¥' m (1,000) - 462 - - 10,104
Money-on-Money (MoM) Multiple: 10.6x
Internal Rate of Return (IRR): 64.9%
Multiple value levers contribute to our solid 32.4% IRR
• EBITDA Growth (43.6%): By channelling
our resources to the growing Information
Solutions division
• Multiple Expansion (38.4%): By
unlocking the conglomerate discounted
and by the realisaiton of market values of
each individual segment
• Debt Paydown (18.0%): By utilizing
Fujifilm’s available debt headroom
IRR: 32.4%
MoM: 3.5x
21. Sensitivity Analysis
19
Sensitivity Analysis - IRR and Purchase Premium vs. Exit Multiple (Healthcare):
EBITDA Exit Multiple:
11.9 x 12.4 x 12.9 x 13.4 x 13.9 x 14.4 x 14.9 x 15.4 x 15.9 x
4,484 5.0% 34.7% 35.8% 36.8% 37.8% 38.8% 39.7% 40.7% 41.5% 42.4%
4,697 10.0% 32.5% 33.6% 34.6% 35.6% 36.6% 37.5% 38.5% 39.4% 40.2%
4,911 15.0% 30.3% 31.4% 32.4% 33.5% 34.5% 35.4% 36.4% 37.3% 38.2%
5,124 20.0% 28.1% 29.3% 30.4% 31.4% 32.4% 33.4% 34.3% 35.3% 36.2%
5,338 25.0% 26.1% 27.2% 28.3% 29.4% 30.4% 31.4% 32.4% 33.3% 34.2%
5,551 30.0% 24.0% 25.2% 26.4% 27.4% 28.5% 29.5% 30.5% 31.4% 32.4%
5,765 35.0% 22.0% 23.3% 24.4% 25.5% 26.6% 27.7% 28.7% 29.6% 30.6%
Sensitivity Analysis - IRR and Purchase Premium vs. Exit Multiple (Xerox)
EBITDA Exit Multiple:
5.5 x 6.0 x 6.5 x 7.0 x 7.5 x 8.0 x 8.5 x 9.0 x 9.5 x
4,484 5.0% 36.5% 37.1% 37.7% 38.2% 38.8% 39.4% 39.9% 40.4% 40.9%
4,697 10.0% 34.2% 34.8% 35.4% 36.0% 36.6% 37.2% 37.7% 38.2% 38.7%
4,911 15.0% 32.1% 32.7% 33.3% 33.9% 34.5% 35.0% 35.6% 36.1% 36.7%
5,124 20.0% 30.0% 30.6% 31.2% 31.8% 32.4% 33.0% 33.6% 34.1% 34.7%
5,338 25.0% 27.9% 28.6% 29.2% 29.8% 30.4% 31.0% 31.6% 32.2% 32.7%
5,551 30.0% 25.9% 26.6% 27.2% 27.9% 28.5% 29.1% 29.7% 30.3% 30.9%
5,765 35.0% 24.0% 24.7% 25.3% 26.0% 26.6% 27.2% 27.8% 28.4% 29.0%
Sensitivity Analysis - IRR and Purchase Premium vs. Exit Multiple (Camera)
EBITDA Exit Multiple:
5.3 x 5.8 x 6.3 x 6.8 x 7.3 x 7.8 x 8.3 x 8.8 x 9.3 x
4,484 5.0% 38.0% 38.2% 38.4% 38.6% 38.8% 39.0% 39.2% 39.4% 39.6%
4,697 10.0% 35.8% 36.0% 36.2% 36.4% 36.6% 36.8% 37.0% 37.2% 37.4%
4,911 15.0% 33.6% 33.8% 34.0% 34.3% 34.5% 34.7% 34.9% 35.1% 35.3%
5,124 20.0% 31.6% 31.8% 32.0% 32.2% 32.4% 32.6% 32.8% 33.0% 33.3%
5,338 25.0% 29.6% 29.8% 30.0% 30.2% 30.4% 30.6% 30.9% 31.1% 31.3%
5,551 30.0% 27.6% 27.8% 28.1% 28.3% 28.5% 28.7% 28.9% 29.1% 29.4%
5,765 35.0% 25.7% 25.9% 26.2% 26.4% 26.6% 26.8% 27.1% 27.3% 27.5%
Purchase
Premium and Per
Share Offer Price:
Purchase
Premium and Per
Share Offer Price:
Purchase
Premium and Per
Share Offer Price:
IRR is insensitive to key variables, and possesses sufficient buffer to weather through market fluctuations
22. Risks and Mitigation
20
Pre-LBO Risks Post-LBO Risks
Evaluation of Pre-emptive Defences
• Board had sought to remove flip-in poison pill defences during the company’s
117th OGM
• Fujifilm does not have hidden cross-holding structures traditional of Japanese
firms that mask true ownership
• 6 out of 9 non-independent
directors makes hostile deal
unlikely to be approved
• These directors are unlikely to
vote against offer for fear of losing
their jobs
• Shareholder apathy has led to
Japanese shareholder’s
disapproval of hostile deals,
believing that they are value
destructive
• Fujifilm has an appointed
independent board to evaluate
potential acquisition offers
• Management buy-in allows them
to tag along as co-investors in
this deal
• Giving out golden parachutes to
executives
• Entering the investment with an
existing toehold stake to try and
nominate board members loyal
to our proposal
• Public white paper of proposed
plans to highlight value creation
by the Phoenix Partners’
consortium
Approval Risks Mitigation
Drugs from US and EU might not
possess the requisite regulatory
approval to be developed and
manufactured locally
Provide on-boarding and
regulatory support services to
these CDMO clients
Data protection laws in Japan
might restrict clinics and
physicians from revealing
personal data of patients
Work with the government in
coming up with specific clauses
for scientific research, with the
understanding that the Japanese
government is actively promoting
the pharmaceutical industry
Target customers might have
pre-existing contracts with other
suppliers
Provide attractive sales terms to
incentivise target customers to
select us as their supplier
1
2
3
We assessed Pre-LBO and Post-LBO risks, both of which can be mitigated by a significant extent
23. 0.23
3.45
13.10
18.60
27%
46%
0%
10%
20%
30%
40%
50%
-
4.00
8.00
12.00
16.00
20.00
Before 1987 1987 - 1996 1997 - 2006 2007 - 2016
Avg Inbound M&A Transaction Value (USD Bn)
% Cross-border Deals of Total M&A Value (Avg)
Bonus Slide
Source: Mergermarket, Activist Insight, Private Equity International, Broker Reports
21
Reasons why LBO has not taken place What has changed? Relevant Information
Shareholder Apathy
• Shareholders in Japanese corporations
have not typically leveraged their rights to
force management to effect change, and
tend to support the status quo
• Results in management entrenchment
and increased M&A difficulty
• Case study: Failure to split up Sony
Corporation in 2013 (Daniel Loeb)
Size Does Matter
• Lack of compelling success cases of
Japanese corporate giants being
acquired
• Largely deters foreign investors looking
to buyout Japanese conglomerates
Regulatory and Ownership Trends
• Launch of Stewardship Code in 2014 forced
institutional investors to be more engaged in
investee companies decisions
• Increasing foreign ownership in Japan creates
more support to effect change
• Though lagging, increased shareholder
activism success rates indicate greater
openness to more active investing
Inflection Point for Inbound M&A
• Success cases have started appearing,
potentially starting an inbound M&A wave
targeted at assets of underperforming
conglomerates
• Hampered by accelerated deregulation of FDI
laws under PM Shinzo Abe (with the exception
of Japan’s media operators) since 2014
Major PE Firms Potentially Interested
1
2
We believe willingness to invest in this deal is
based on 2 key factors:
• Exposure to and experience in inbound Japan
M&A deals
• Expertise in growing Pharmaceutical supply
chain networks and developing IoT product
ecosystems
Recent Acquisitions of Japanese Conglomerates
Increasing Inbound Deal Value
The following Private Equity firms meet both criterion:
Date Acquirer Target Deal Size
03/16
Hon Hai/
Foxconn
SHARP
Corporation
US$2.5Bn
09/17
Bain Capital
(Consortium)
Toshiba
Memory
US$10.6Bn
Cultural and regulatory barriers would have previously decreased the attractiveness of this deal, but things have changed…
26. Balance Sheet Projections
# Unit Adj. 2018E 2019E 2020E 2021E 2022E
Cash and cash equivalents ¥' m 200,000 200,000 200,000 200,000 200,000
Notes and accounts receivable: ¥' m 678,387 436,112 461,987 497,023 534,679
Inventories ¥' m 361,954 238,784 249,643 264,697 276,076
Other current assets ¥' m 130,187 30,220 31,320 32,844 33,996
Total current assets ¥' m 1,370,528 905,116 942,950 994,565 1,044,751
Total investments and long-term receivables ¥' m 319,613 344,045 364,458 392,098 421,804
Net property, plant and equipment ¥' m 518,154 293,943 310,005 324,784 338,330
Goodwill, net ¥' m 659,052 659,052 659,052 659,052 659,052
Other intangible assets, net ¥' m 655,530 390,397 389,075 387,753 386,432
Other non-current assets ¥' m 127,817 125,113 122,408 119,703 116,998
Total long-term assets ¥' m 2,280,167 1,812,549 1,844,998 1,883,391 1,922,616
TOTAL ASSETS ¥' m 3,650,695 2,717,666 2,787,948 2,877,956 2,967,368
Notes and accounts payable: ¥' m 275,127 144,963 151,555 160,695 167,603
Accrued income taxes ¥' m 32,005 32,005 32,005 32,005 32,005
Accrued liabilities ¥' m 191,043 176,362 184,382 195,501 203,905
Other current liabilities ¥' m 93,098 (30,295) (31,672) (33,582) (35,026)
Total current liabilities ¥' m 591,272 323,036 336,270 354,618 368,487
Accrued pension and severance costs ¥' m 42,085 43,088 45,048 47,764 49,817
Deferred taxes liabitility ¥' m 136,195 329,660 329,660 329,660 329,660
Other long-term liabilities ¥' m 63,942 51,810 54,166 57,432 59,901
Revolver: ¥' m - - - - -
Tranch A ¥' m 522,937 - - - -
Tranch B ¥' m 690,086 303,500 261,529 214,633 142,487
Mezzanine: ¥' m 390,351 437,194 489,657 548,416 614,226
Total long-term liabilities ¥' m 1,845,596 1,165,251 1,180,060 1,197,905 1,196,091
TOTAL LIABILITIES ¥' m 2,436,869 1,488,287 1,516,330 1,552,523 1,564,578
Retained earnings ¥' m 41,666 291,034 333,274 387,088 464,446
Common Equity ¥' m 938,345 938,345 938,345 938,345 938,345
TOTAL EQUITY ¥' m 1,213,826 1,229,379 1,271,619 1,325,433 1,402,790
27. Cashflow Projections
# Unit Adj. 2018E 2019E 2020E 2021E 2022E
Net income ¥' m 87,433 22,645 42,240 53,814 77,358
Adjustments:
Depreciation and amortization ¥' m 131,271 50,620 54,135 58,528 63,106
Accrual of PIK Interest: ¥' m 41,823 46,842 52,463 58,759 65,810
Other Adjustments ¥' m (46,086) (47,188) (35,345) (49,573) (56,151)
Net cash provided by operating activities ¥' m 214,442 72,920 113,493 121,528 150,123
Purchases of property, plant and equipment ¥' m (78,828) (38,738) (41,039) (44,149) (47,493)
Other ¥' m (30,483) (30,483) (30,483) (30,483) (30,483)
Net cash used in investing activities ¥' m (109,311) (69,221) (71,523) (74,632) (77,977)
Cash dividends paid to shareholders ¥' m - (433,857) - - -
Total Cash Flow Used to Repay Debt: ¥' m (181,089) (909,523) (41,970) (46,897) (72,146)
Net cash used in financing activities ¥' m (181,089) (1,343,380) (41,970) (46,897) (72,146)
Net increase (decrease) in cash and cash equivalents ¥' m (75,958) (1,339,681) - - -
Cash and cash equivalents at beginning of year ¥' m 275,958 1,539,681 200,000 200,000 200,000
Cash and cash equivalents at end of year ¥' m 200,000 200,000 200,000 200,000 200,000
28. Debt Schedule
Interest LIBOR Prepay Principal Undrawn Years
Debt Tranche: %: ¥' m x EBITDA Rate: Floor: Allowed: Repayment: Fee: PIK:
Revolver: 15.0% - 0.0 x L + 100 1.00% Yes 0.0% 0.50%
Tranch A 40.0% 697,056 2.4 x L + 50 0.00% Yes 10.0%
Tranch B 40.0% 697,056 2.4 x L + 250 0.00% Yes 1.0%
Senior Notes: 0.0% - 0.0 x L + 150 1.00% No 0.0%
Subordinated Note: 0.0% - 0.0 x 5.0% 0.00% No 0.0%
Mezzanine: 20.0% 348,528 1.2 x 12.0% 0.00% No 0.0% 5
Total: 100.0% 1,742,640 6.0 x
# Unit Adj. 2018E 2019E 2020E 2021E 2022E
Sources of Funds:
Beginning Cash Balance: 275,958 1,539,681 200,000 200,000 200,000
Less: Minimum Cash Balance: (200,000) (200,000) (200,000) (200,000) (200,000)
Plus: Cash Flow Available for Debt Repayment: 105,131 (430,158) 41,970 46,897 72,146
Subtotal Before Revolver: 181,089 909,523 41,970 46,897 72,146
Revolver Borrowing Required: - - - - -
Total Sources of Funds: 181,089 909,523 41,970 46,897 72,146
Uses of Funds:
Mandatory Debt Repayment:
Revolver: - - - - -
Tranch A 69,706 69,706 - - -
Tranch B 6,971 6,971 6,971 6,971 6,971
Mezzanine: - - - - -
Mandatory Repayment Total: 76,676 76,676 6,971 6,971 6,971
Optional Debt Repayment:
Revolver: - - - - -
Tranch A 104,413 453,232 - - -
Tranch B - 379,616 35,000 39,926 65,176
Mezzanine: - - - - -
Optional Repayment Total: 104,413 832,847 35,000 39,926 65,176
Cumulative Debt Paydown: 181,089 1,090,613 1,132,583 1,179,480 1,251,626
Cumulative Paydown % Initial Debt: 10.4% 62.6% 65.0% 67.7% 71.8%
33. Bear Case Scenario
# Unit Adj. 2018E 2019E 2020E 2021E 2022E
Revenue ¥' m 2,477,784 2,558,455 2,638,285 2,736,600 2,840,640
% Growth % n.m 3.3% 3.1% 3.7% 3.8%
EBITDA ¥' m 309,798 356,644 374,001 396,741 436,087
% Growth % n.m 15.1% 4.9% 6.1% 9.9%
% Margin % 12.5% 13.9% 14.2% 14.5% 15.4%
D&A ¥' m (126,257) (125,395) (124,139) (123,470) (122,678)
EBIT ¥' m 183,541 231,249 249,862 273,271 313,409
% Growth % n.m 26.0% 8.0% 9.4% 14.7%
% Margin % 7.4% 9.0% 9.5% 10.0% 11.0%
Finance Costs ¥' m (68,224) (71,655) (77,915) (86,557) (97,193)
Other Expense ¥' m (5,351) (5,501) (5,501) (5,501) (5,501)
PBT ¥' m 109,965 154,093 166,446 181,213 210,715
% Growth % n.m n.m 8.0% 8.9% 16.3%
% Margin % n.m 6.0% 6.3% 6.6% 7.4%
NPATMI ¥' m 85,055 119,187 128,741 140,163 162,982
% Growth % n.m n.m 8.0% 8.9% 16.3%
% Margin % n.m 4.7% 4.9% 5.1% 5.7%
EPS ¥ n.m 232 250 272 317
Returns to Phoenix Partners and Bain Capital # Units 2017 2018 2019 2020 2021 2022
Common Equity
Initial Investment: ¥' m (937,345)
Dividends: ¥' m -
Equity: ¥' m 2,405,386
Total Cash Flows: ¥' m (937,345) - - - - 2,405,386
Money-on-Money (MoM) Multiple: 2.6x
Internal Rate of Return (IRR): 20.7%
34. Indicative Core Management Team
We don’t expect to make numerous changes to the core management team, whilst promoting COO Kenji as the new CEO
• Joined Fujifilm in 1977 working mainly in the accounting and finance fields
• Instrumental in positioning Fujifilm towards the healthcare segment during his tenure in the planning division
• Building a network of strategic partnerships with other key pharmaceutical giants like Takeda Pharmaceuticals and Merck
• Instrumental in Fujifilm’s M&A acquisitions of SonoSite and Toyama Pharmas
CEO – Kenji Sukeno, 63
COO – Kouichi Tamai, 66
• Joined Fujifilm in 2003
• Previously the General Manager of Medical Systems, Research & Development Center of Research & Development Management
Headquarters
• Worked as the Chief Innovation Officer of Fujifilm
CIO – Yuzo Toda, 72
• Joined Fujifilm in 1973
• Currently serves as a General Manager of Pharmaceutical Products Division at Fujifilm Diosynth Biotechnologies UK Limited. He
has been Chief Technical Officer and Corporate Vice President of Fujifilm Holdings Corporation
• Initiated the Cosmetic and Supplement business, Pharmaceutical business and Regenerative business and ushered Fujifilm into
the new market segments
35. Screening Process
Firms Reasons for not choosing…
• Declining industry
• No opportunity for value creation
• Complex business makes would require tremendous
financial engineering
• Leveraged balance sheet
• Limited opportunities for restructuring
• Leveraged balance sheet
• Turnaround story accompanies execution risks
• Limited opportunities for EBITDA expansion in light of
3G Capital management
• Leveraged balance sheet
• Lofty valuations not supported by cashflows
• Limited opportunities for PE value creation
• Limited PE value-add storey
• Commoditized business susceptible to revenue
fluctuations
• Lack of management support for break up would entail
costly hostile takeover
• Pepsi market cap >US$150bn entails complex
structuring
Valuations of screen universe appear overpriced
Valuation Summary
By elimination, Fujifilm appears to be an attractive
LBO candidate
These three firms appear comfortably
valued with sufficient debt capacity to
increase leverage
33.7x
17.2x
13.5x
14.4x
13.2x
7.4x
5.1x
3.8x
(5.0) -- 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 40.0x
AMD US Equity
MAT US Equity
PEP US Equity
KHC US Equity
GE US Equity
4901 JT Equity
MU US Equity
KODK US Equity
Net Debt to EBITDA EV to EBITDA
Valuations appear rich in today’s market, our methodology screens for undervaluation, opportunities for EBITDA expansion and low net
debt
36. Screening Process
Note: 1. Based on Net Debt/EBITDA, 2. EV/EBITDA, 3. Incompetence of management indicates potential for value add from our deal team
Source: Team Analysis
Company
Attractiveness
of Industry
Firm’s Cash Flow
Stability
Firm’s Potential
to Grow
Debt Headroom1 Valuation2 Incompetence of
Management
AMD
4: Demand for
microchips expected to
grow due to increasing
demand for
broadband, servers,
and digital devices
2: Recently
restructured their debt,
first positive net FCF in
2016
4: Firm is in a good
position to capture
growth driven by
blockchain and cloud
2: 0.6x 1: 33.7x
1: Management has
strong ability to
monetize near term
cryptocurrency trend
Micron
4: Demand for
microchips expected to
grow due to increasing
demand for
broadband, servers,
and digital devices
3: Falling DRAM and
NAN D prices have
affected the
company’s cash flow
negatively
4: Has good R&D
capabilities and is well
poised to capture
growth in microchips
with more chatter on
blockchain and cloud
1: 0.2x 4: 5.2x
2: New management
from SanDisk recently
onboarded, efforts
have yet to materialize
Kraft Heinz
1: Food is highly
commoditized only
opportunities are in
cost advantages, or
premiumization
4: Sells recession
proof products, cash
flows are highly stable
2: Margins are already
high ~39%. Most
growth will be
inorganic
1: 3.6x 3: 14.4x
1: Backed up by 3G
capital, many strategic
opportunities due to
Warren Buffet’s
connections
Pepsi Co
1: Food & beverage is
highly commoditized,
distribution and access
to emerging markets is
paramount.
Opportunities in either
in cost cutting or
premiumization
4: Highly stable,
dividend payouts have
been growing for ~43
years
2: Many of its brands
are market leaders in
their segment, unlikely
to have revolutionary
growth potential.
Margins have room for
slight improvement
3: 1.5x 4: 13.5x
1: Strong visionary
management,
especially CEO
Nooyi’s belief of
“Profits with Purpose”
Our screening methodology takes into account the firm’s external and internal environment, as well as signs of undervaluation,
opportunities for margin expansion, and low net debt
37. Screening Process
Note: 1. Based on Net Debt/EBITDA, 2. EV/EBITDA
Source: Team Analysis
Company
Attractiveness
of Industry
Firm’s Cash Flow
Stability
Firm’s Potential
to Grow
Debt Headroom1 Valuation2 Incompetence of
Management
GE
3: Industries such as
healthcare and
engineering are poised
to experience strong
growth
1: Did not have
enough cash to
maintain dividends,
slashed dividend by
50%
4: With many divisions,
GE has the opportunity
to spinoff subsidiaries
with limited synergies
and focus on
segments with higher
growth potential
1: 4.0x 3: 13.2x
2: Strong management
team, who are focused
on divesting unwanted
segments and
focusing on high
growth segments
Mattel
3: Rising disposable
incomes signal
increasing ability to
spend on children,
many trends changing
the industry and the
way children play
2: Experiencing
declining cash flow
2: Most of the famous
brands are controlled
by Hasbro, difficult to
create a blockbuster
character to monetize
1: 4.6x 1: 17.2x
3: Board of directors
have many old guards,
who are not very
receptive to change
2: Photocopiers and
cameras are not
expected to grow
much
3: Stable cash flows
supported by its
photocopiers segment
4: With many divisions,
it has the opportunity
to focus on segments
with higher growth
4: -0.6x 4: 7.4x
2: Management is able
to identify
opportunities for
growth and make the
right investments
Kodak
1: Printing industry is
not expected to grow
1: Company’s cash
balance has been
declining due to
operating losses
1: Company mainly
focuses on printing
and film which are low
growth industries
4: 0.4x 4: 3.8x
4: Management is
unable to diversify
business to protect
itself from declining
print business
Our screening methodology takes into account the firm’s external and internal environment, as well as signs of undervaluation,
opportunities for margin expansion, and low net debt
38. Transaction Structure
Notes: 1. Based on all public Japanese M&A transactions >US$1bn
Source: Bloomberg
0
5000000
10000000
15000000
20000000
25000000
30000000
800
1800
2800
3800
4800
5800
FUJIFILM Holdings Corporation (TSE:4901) - Volume FUJIFILM Holdings Corporation (TSE:4901) - Share Pricing
+1 SD
-1 SD
Mean
Offer Price
¥5,124
Price
represents
20% upside to
current price.
This values
the company
at 8.9x
TV/EBITDA
Average APAC M&A Deal Metrics
33x
25x
17x
11x 10x
4x
0
10
20
30
40
50
60
0x
10x
20x
30x
40x
EV/EBITDA % Premium Paid
Price Chart of Fujifilm (since IPO in 1992)
Siam Makro PCL Zoll Medical Corp CP Pokphand Co Ltd Toll Holdings Ltd
Hutchison Whampoa
Ltd
Daihatsu Motor Co Ltd Target
CP ALL PCL Asahi Kasei Corp
Charoen Pokphand
Foods PCL
Japan Post Holdings
Co Ltd
CK Hutchison
Holdings Ltd
Toyota Motor Corp Acquirer
4,083 2,063 2,211 6,271 41,705 3,098
Transaction Value
(US$m)
Median
Premium Paid
on Japanese
M&As is ~17%1
Median
TV/EBITDA
on Japanese
M&As is 10x1
Offer premium of 20% is reasonable considering precedents
39. Guide to Cameras
Source: Company filings, Company websites, Bloomberg, Broker Reports
Understanding the different consumer cameras in the market
DSLR Mirrorless Compact Cameras
• Ability to change lenses
• Superior picture quality
• Heaviest
• Ability to change lenses
• Superior picture quality
• Medium Weight
• Fixed Lens
• Inferior Picture Quality
• Lightest
40. Nikon’s Failure to Break into the Mirrorless Market
Source: Company filings, Company websites, Bloomberg, Broker Reports
Produced in 2015, the J5 was a commercial flop…
But of course, the 1-inch sensor still remains far behind just about every mirrorless
competitor, meaning the J5 shouldn’t be the camera of choice for anyone concerned
with shallow depth of field, strong low-light performance, or the ability to mount lenses
from other systems. And despite the lack of interchangeable lenses, Sony’s RX100
line of compact cameras remain great buys, with the same size and resolution
sensor in smaller bodies with tiny collapsible zoom lenses that are faster than
anything Nikon offers for the 1 series.
The Verge Review:
"It has, although it's certainly not up to our total expectations," Nikon senior technical
manager Steve Heiner tells The Verge when asked whether the 1 series has
performed well. "I think we had bigger expectations. The problem is that we introduced
this into a market where there were competitors." Heiner says that Nikon "doubled the
market just by entering it" in 2011, and believes the series has greater potential. "I
think in the long term we're going to continue to build out the Nikon 1 Nikkor lens line,
and the more options that we make available will make these bodies and others
offerings more and more attractive. So it is doing well. It could do better."
Even the executives are not confident of the product:
41. Solutions and
Services
25%
Others
6%
Graphic
Communication
12%
Office Products
and Printers
57%
Synergy Analysis Between Xerox and Fuji Xerox (1/3)
Source: Company filings, Company websites, Bloomberg, Broker Reports
Xerox Currently Operates Mostly in Low Growth Markets Compatible Geographical Mix
Minimal sales territory overlap compared to sizeable competitors
Current Shareholding in Fuji Xerox Fuji Xerox FY17 Revenue Breakdown
Xerox is a major customer of Fuji Xerox for Office Products
Xerox Sales TerritoryFuji Xerox Sales Territory
APAC
Oceania
Canada
US
Developing
Markets
Developing
Markets
Europe
21
1
22
11
13
5
7
3Workflow Auto
SMB MPS
Production Color
A4 MFPs
Managed Document
Services
A3 MFPs
Production Mono
Single Function
Printers
Market Size ($Bn) CAGR
+10%
+6%
+4%
+3%
+1%
-6%
-12%
-10%
Growing Markets
Declining Markets
Largely declining market exposure necessitates inorganic growth
• Fuji Xerox was established as a JV between Fujifilm and Xerox in 1962 in
Tokyo, Japan
• Currently in the midst of discussing a merger where Xerox ceases to exist
while Fujifilm Holdings gains effective control of the combined assets, a
move largely opposed by Xerox block holder and activist investor, Carl Icahn
75% 25%
Xerox shareholders would be open to acquisition of Fuji Xerox
Current Ownership
Structure:
$9.5Bn
(FY17)
Solutions and Services
• Document services
tailored to various
industries or processes
• Provides high value-
added solutions through
system integration and
cloud-based services
Graphic Communications
• Provides solutions for
graphic communications,
in-plant and production
print with high-volume
requirements
Office Products and
Printers
• Helps customers
address various business
challenges related to
documents and
communications
• Supplies office products
such as multifunction
devices and printers to
large/ small and medium-
sized businesses
• Provides cloud-based or
mobile solution services
Initial shareholding of Fuji Xerox and initial partnerships with Xerox increases the ease of post-merger integration
42. Synergy Analysis Between Xerox and Fuji Xerox (2/3)
Fuji Xerox Market Leadership in Key Segments
A3 MFP Segment Japan MPS Segment A3 MFP Segment
Different core competencies between Xerox and Fuji Xerox make the deal complementary for both parties
Market
Share
Market
Position
35% 35% 61% 54% 47% 51%
#1 #1 #1 #1 #1 #1
Combined Company’s Strengths
Broad Global Scale
• Exposure to >180 countries
• #1 in equipment revenue market share
• Overall #1 in printing industry and
comparably sized with HP
• ~$120Bn total addressable opportunity
• > $18Bn in annual revenue
World-Class Innovation
• ~$1Bn combined R&D firepower
• 6 Innovation labs
• > 6,600 engineers
• ~18,880 combined patents
Strong Financial Profile
• > $1.25Bn annual cost synergies by 2022
• High double digit operating margins by
2022
• $1.5Bn FCF by 2020
43. Synergy Analysis Between Xerox and Fuji Xerox (3/3)
Notes: *Potential restructuring cost savings that can be unlocked at Fuji Xerox independent of acquisition, **Management Estimates
Source: Company filings, Company websites, Bloomberg, Broker Reports
Cost Savings Breakdown Cost Synergies Realisation Progression
Revenue Synergies Breakdown Incremental Revenue Opportunities
Revenue synergies are estimated at ~$1Bn
COGS
SG&A
R&D
Fuji Xerox JV
Savings*
• Plant footprint optimization
• Optimization of 3rd party outsourcers
• Improved design efficiency and scale
• Integrate supply chain and procurement
• Consolidation of central support functions i.e. Finance, HR
• Optimize selling related costs
• Purchasing scale
• Eliminate redundancies and optimize footprint of research centers
• Integrate device controllers
• Combine print drivers, apps, solutions, MPS tools to achieve best
in class solutions
• Manufacturing and R&D cost reduction
• Product portfolio optimization
• SG&A productivity initiatives
~85% cost savings realisable by FY20**
Global
Account
Coverage
Streamlined
Portfolio
Manufacturer
Margin
SMB
Transformation
• Improved win rates on global accounts and growth of existing
relationships
• Integrated global service delivery
• Strengthened distribution and global delivery capabilities
• More competitive portfolio and time-to-market
• Unified user experience
• Access to Fujifilm’s inkjet (Graphic Systems) and production IP
• Complete international entry for A3 portfolio
• Eliminate intercompany margin stacking
• Capture manufacturer margin in all markets
• Added flexibility for quoting process to increase win-rate on price-
competitive deals
• SMB (Small and Medium Businesses) channel transformation
• Competitive pricing for select target areas
• Expanded go-to-market through resellers and acquisitions
• Significant growth opportunity via market share gains and penetration of
~$100Bn production and industrial segment
• Additional opportunities to further diversify business leveraging strength of
combined relationships globally
• Enhanced innovation, strategy alignment and investment capacity to support
longer-term growth
FY18 FY19 FY20 FY21
COGS SG&A R&D
100%
100%
100%
76%
100%
80%
58%
81%
81%
56%47%
47%
100% of cost savings are attainable by FY21, revenue
44. Competitors in Healthcare Industry
Daiichi-Sankyo Takeda Pharmaceuticals Astellas Pharmaceuticals
Company
Strategy
In the light of slow growth, Daiichi-
Sankyo aims to target the cancer
market and build a competitive
advantage in oncology.
Takeda’s current strategy is to
strengthen its foothold in its current
target areas – oncology, central
nervous system, and
gastroenterology.
With a current foothold in oncology,
Astellas aims to target new disease
areas (Muscle Diseases and
Ophthamology) via new
technologies (Fusion protein, gene
therapy, cell therapy).
Key Products
• Ulcer treatment
• Osteoperosis
• Antiplatelet agent
• Alzheimer’s disease
• Bone complications due to cancer
• Chron’s disease
• Lymphoma
• Depression
• Prostate cancer
• Urination disorder
• Post transplant treatment
• Pancreatic caner
Revenue
(¥ Bn)
955.1 1,807 1,377
2012 – 2017
Revenue CAGR
0.05% 4.5% 9.18%
Cancer is a key driver of growth. Fujifilm can focus on gastrointestinal and lung cancer.