NIPPON SHOKUBAI CO., LTD.

Transcription

1 Voluntary translation for readers convenience NIPPON SHOKUBAI CO., LTD. 1 st Half of FY Ending March 2012, Large Meeting 8 November, 2011

2 Progress of our long-term business plan TechnoAmenity 2015 and our forecast for the fiscal year ending March 2012 President Masanori Ikeda

3 Contents 1.Earning Trend 2.Status of Individual Businesses 3.Mid to Long Term Business Plan 4.Individual Business, Mid to Long Term Plan 5.Return Policy Explanation of technical words SAP:Superabsorbent Polymers AA: Acrylic Acid AES: Acrylates EO: Ethylene Oxide EG: Ethylene Glycol NAII: NA Industries, Inc.(USA) NSI: PT.NIPPON SHOKUBAI INDONESIA (Indonesia) 3

4 1. Earnings Trend Results for the first half First half: Increased sales and income (vs to the initial forecast and same period in the previous year) Record profits (Half-year basis, operating and ordinary income) Impact of the earthquake Initially, sales and profits were expected to fall, but the impact was minor 1) Domestic and foreign demand was stronger than expected 2) Users high operating rates from concern for unstable power supply in summer leading to strong demand Spread Initial forecast: Inability to pass on price increases of raw materials costs. Decline in AES market price Result: Raw material price was lower than expected, and AES market remained strong expanded spread Remained steady after upward revision (Jul 25) First half ordinary income (Unit: billion yen) Initial forecast 7/25 revision Result 4 4

5 1. Earnings Trend Forecast for the Second half and Full year Second half:decreased sales and income (vs to the first half) Full year: Forecast for record profits FY 3/2011 FY 3/2012(estimate) t First half Second half Full year First half Second half Full year Sales Ordinary income ROA* 9.7% 9.7% Naphtha price(yen/kl) 46,200 48,800 47,500 57,000 50,000 53,500 Foreign exchange rates ($ and EUR) ) * Ordinary Income / Total Assets $ =89yen $ =82yen $ =86yen $ =80yen $ =75yen $ =77yen EUR=114yen EUR=112yen EUR=113yen EUR=114yen EUR=100yen EUR=107yen (Unit: billion yen) 5

6 1. Earnings Trend Assumptions for 2nd half business environment Global economic downturn Drop of sales volume and facilities utilization Products AES market price decline => Reduced spread FY3/2012 first half results FY3/2012 second half assumption AES price in Asian market (USD/t) 2,758 2,200 Raw materials Naphtha price drop FY3/2012 first half results FY3/2012 second half assumption Domestic naphtha price ( /kl) 57,000 50,000 Exchange rate High yen All-time high yen (particularly big impact for EUR) Second half assumption rate: 75/USD, 100/EUR Exchange rate sensitivity: Against USD Almost neutral Against EUR 1/EUR high yen with operating profits 80 million/annual decrease Demand area High ratio of items in the necessities and daily use products Stable growth of items other than short term inventory adjustment items such as SAP and detergent raw materials 6

7 2. Status of Individual Businesses Short term forecast for main products Basic chemicals AA & AES In the first half, overseas prices were higher than expected ($2,550/t), and facilities operated at full capacity. In the second half, sales volume will be only slightly down compared to the first half thanks to a stable customer base. Overseas AES market assumption is $2,200/t, resulting in reduced spread. EO & EG Full operation in the first half, in response to enquiries stimulated by the earthquake. Steady demand for EO for surfactants in the second half. EG is expected to maintain a high level of operation due to tight supply and demand balance resulting from the strong demand for polyester, the lack of new facilities, and recent trouble at the plants of other companies overseas. Functional chemicals SAP Supply and demand in the first half was tight, and the new Himeji plant was running at full capacity. In the second half, global economic slowdown is expected, but sales volume will be only slightly down compared to the first half thanks to a stable customer base. Volume of sales will decline due to the combination of a high yen and declining raw material prices. Electronics & information materials The flat-panel display (FPD) related market is expected to slump within the year. We will seek expanded sales of Acryviewa in the second half using performance as the advantageous point. Acryviewa film will be launched in the new year. 7

8 2. Status of Individual Businesses Short term forecast for main products Environment & catalysts Automobile catalysts Zirconia sheet In the first half, quantities were down compared to the same period in the previous year due to the earthquake, but sales amount increased with the appreciation of precious metals. In the second half, revenue is expected to increase significantly in response to increased vehicle production. In the first half, quantities shipped declined compared to the second half of the previous fiscal year. Recovery is expected in the second half (Unit: billion yen) FY3/2012 Basic chemicals Functional chemicals Environment & Catalysts First half Second half (estimate) Full year Sales Operating income Sales Operating income Sales Operating income

9 3. Mid to Long Term Business Plan Main points of the mid and long term business plan Steadily increase of capability Undertake steady global expansion of AA/SAP Improve profitability of current products (Profitability Improvement Committee) Get new businesses (materials fore&i E&I, new energy, batteries) on track + Maintain foothold in Operating income (unit:billion yen) Basic Performance Environment & catalyst health and medical field Pursue growth in newly developing Asian markets While maintaining the basic concept, the planned values will be revised in FY3/2013. From FY3/2014, the new second half 3-year business plan starts. 9

10 4. Individual Business, Mid to Long Term Plan AA/SAP global expansion SAP Supply and demand trend Demand Strong growth expected in line with economic growth in developing countries Global demand: approx. 1.7 million tons (2010 estimate) 7 to 8% annual growth Supply Emerging manufacturers, besides current majors, are planning to enter and expand SAP businsess Reinforcement of Shokubai facilities October 2010 June 2012 August 2013 Himeji 60,000 t/year In operation America 60,000 t/year Build & scrap Indonesia 90,000 t/year Scheduled Progressing as planned 10

11 4. Individual Business, Mid to Long Term Plan AA/SAP global expansion SAP Maintain the top-class market share and ensure profitability The basis of Shokubai s SAP strength 1) R&D strength in products and processes 2) Integrated production from raw material, AA 3) Stable supply network based on production facilities in Japan, US, Europe and China 4) Intellectual property strategy to maintain effectiveness of technology 5) Excellent customers with strong growth Risks and countermeasures 1) New entrants products in developing countries gathering strength Differentiation through performance and quality of products General cost reductions through h process innovation including AA, production efficiency, i and streamlined logistics Proper implementation of intellectual property strategy 2) Reduced price competitiveness due to a strong yen Increase production at facilities free from strong yen risk 11

12 4. Individual Business, Mid to Long Term Plan AA/SAP global expansion AA Supply and demand trend Global demand approx. 4 million tons (2010 estimate) Easing of supply and demand 5 to 6% annual growth is expected in the mid-term calender year Demand (A) 3,960 4,150 4,340 4,550 (Unit: Kt) Annual available supply (B) 5,140 5,270 5,850 6,240 Nominal operating rate (A/B) 77% 79% 74% 73% Growth based on increased demand Reinforcement of Shokubai facilities April 2010 Himeji 80,000 t/year In operation August 2013 Himeji 80,000 t/year Scheduled August 2013 Indonesia 80,000 t/year Scheduled Progressing as planned The majority of Shokubai s expanded AA facilities are used for internal use for SAP production and external sales to the other SAP producers. 12

13 4. Individual Business, Mid to Long Term Plan AA/SAP:Global expansion - end 2013 AA facilities ( Kt/y) SAP facilities (Kt/y) Belgium (Antwerp) 60 China (Zhangjiagang) Japan (Himeji) U.S. (Houston) Singapore (Jurong Island) Indonesia (Cilegon) Production capacity (Kt/y) Current End 2013 AA SAP

14 4. Individual Business, Mid to Long Term Plan Improve profitability of current products EO Establish an earnings base that does not depend on the state of the market Non-EG ratio: Keeping over 70% (Domestic average (including Shokubai) 50%) EO centralization Expansion of derivatives 1) Expansion of (meta) acrylic acid special ester BHEA, HEMA, HPA, HPMA Main application: Automotive ti paint, electronic materials Raw materials: EO/PO, AA/MAA October 2013 Kawasaki Plant (new land acquired in 2007) 20,000 ton/y new facilities on stream * Meet the growing demand * Reduction in quantity of EO shipped 2) Expansion of polymer for concrete admixture April 2012 Kawasaki Plant (existing premises) 16,000 ton/y facilities scheduled 3) Launch of drying shrinkage reducing agent for concrete Jointly developed with 3 construction majors, with commercial production from October 2011 Aim for flexible product configuration as a top priority to improve facility utilization 14

15 4. Individual Business Mid to Long Term Plan Get new businesses on track Electronics & information materials: A key source of revenue Acrylic resin for optical materials Acryviewa Resin: High performance, Film: Shipment start from the beginning of 2012 New energy materials: A next generation core business Materials for fuel cells (zirconia sheets and cells) Aim for substantial mid-range expansion Battery materials: A next generation core business Materials t i l for lithium-ion i batteries Explanation on next page New material (LiFSI) for electrolyte scheduled for launch in FY3/2013 Aim for sales of 2 billion in FY3/2016 Solid electrolyte polymer for lithium ion batteries Aim for early launch 15

16 4. Individual Business Mid to Long Term Plan Explanation: Materials for lithium-ion batteries New electrolyte material: Lithium bis(fluorosulfonyl)imide (LiFSI) Features Life extension for lithium-ion batteries (120 to 200% compared to existing products) and greatly improved safety (no expansion) Principle: Form a protective film on the electrode surface to suppress electrolyte degradation and production of gas Strong points Established synthesis technology using original catalysts Allows mass production of high h purity product cheaply (first in the world) O O O O Production facilities Ensure production capacity of several hundred tons per year in 2013 F S N Li S F 16

17 5. Return policy Dividends, basic attitude and forecast for FY3/2012 Taking overall account of business expansion and corporate structural reinforcement and based on forecasts of the trend in consolidated earnings, we are aiming to improve levels in the medium term Expansion of investment in core business Large internal reserves FY3/2011 dividend Net Income billion yen 22 yen/share FY3/2012 dividend (forecast) Net Income 21.5 billion yen 22 yen/share Yen/share Interim End of period Total 2 yen/share increase vs. to the previous announcement Ordinary dividend Commemorative dividend * Total * 50th anniversary of the Himeji Plant (2 yen) and 70th anniversary of NIPPON SHOKUBAI(2 yen) % FY3/2005-3/ year average FY3/2007-3/ year average Yen/share Interim End of period Total Ordinary dividend Commemorative dividend Total Average payout ratio Average total rate of return Treasury shares, 8 million, will be cancelled. 17

18 Notes to Readers This presentation material ( Material ) is aiming to provide readers referential information, not to persuade investment. Material contains forward-looking statements and statements of this nature based on reasonable judgments in accordance with information currently available. We do not commit nor guarantee the contents of Material. Readers should be aware that actual results and events might differ substantially from these projections. IR Contacts : NIPPON SHOKUBAI CO., LTD. Investor & Public Relations Dept. Hibiya-Dai Bldg Uchisaiwai-cho cho, Chiyoda-ku Tokyo Japan TEL: +81-(0) FAX: +81-(0) URL: 18