Financial Results for FY2018 Second Quarter. October 31, 2018

Transcription

1 Financial Results for Second October 31, 2018

2 (Cautionary Statement) Statements made in this material with respect to Sumitomo Chemical s current plans, estimates, strategies and beliefs that are not historical facts are forward-looking statements about the future performance of Sumitomo Chemical. These statements are based on management s assumptions and beliefs in light of the information currently available to it, and involve risks and uncertainties. The important factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, general economic conditions in Sumitomo Chemical s markets; demand for, and competitive pricing pressure on, Sumitomo Chemical s products in the marketplace; Sumitomo Chemical s ability to continue to win acceptance for its products in these highly competitive markets; and movements of currency exchange rates.

3 Contents 2 Financial Results for Second Financial Summary 4 Sales revenue by Business segment 5 Core Operating Income by Business segment 6 Segment Analysis 7 Breakdown of Non-recurring Items 12 Consolidated Balance Sheets 13 Consolidated Statements of Cash Flows 14 Financial Estimates for Year 15 (Reference: Segment Information) Cost Elements etc. Capital Expenditures by Business segment Depreciation and Amortization by Business segment Research & Development Expenses by Business segment Sales revenue by Business segment (ly) Core Operating Income by Business segment (ly) Major Group Companies 23

4 Financial Results for Second

5 Financial Summary 4 Difference Ratio Sales revenue 1, , % Core operating income % (Equity in earnings) (22.7) (23.9) (1.2) - Non-recurring items Operating income % Finance income/expenses (Gain/loss on foreign currency transactions) (3.0) (10.2) (7.3) - Income tax expenses Net income attributable to non-controlling interests Net income attributable to owners of the parent % ROE 9.1% 6.4% Exchange rate(yen/$) Naphtha price(yen/kl) 37,600 51,100 Overseas sales revenue ratio 63.4% 64.6%

6 Sales revenue by Business segment 5 Difference Ratio Sales Price Variance Shipping Volume Variance Foreign Currency Conversion Variance Petrochemicals & Plastics % Energy & Functional Materials % IT-related Chemicals % Health & Crop Sciences % Pharmaceuticals % Others & Adjustments % Total 1, , % Analysis , ,122.1 Sales Price Volume Foreign Exchange

7 Core Operating Income by Business segment 6 Difference Price Variance Cost Variance Shipping Volume Variance and Other Petrochemicals & Plastics Energy & Functional Materials IT-related Chemicals Health & Crop Sciences Pharmaceuticals Others & Adjustments Total Total Analysis Price Cost Volume etc.

8 Petrochemicals & Plastics - Segment Analysis - 7 Sales revenue Total billion(+60.3 from ) Sales price Rise in market price Volume Increase in shipment of Rabigh products 2017 Price Volume FX 2018 Foreign exchange -0.7 Core Operating Income Total 35.4 billion(-6.5 from ) Price Cost Volume 2018 etc. Price variance -2.0 Cost variance +1.0 Volume variance etc Decrease in profit margin on synthetic resins in overseas market Better profit margin on raw materials for MMA and synthetic fibers Periodic plant maintenance in Chiba works and Singapore Decrease in license revenue

9 Energy & Functional Materials - Segment Analysis - 8 Sales revenue Total billion(+20.6 from ) Sales price +8.0 Higher market price for aluminum Price Volume FX 2018 Volume Foreign exchange +0.5 Increase in shipment of lithium-ion secondary battery separator Increase in shipment of cathode materials Increase in shipment of high purity alumina Core Operating Income Total 12.8 billion(+2.5 from ) Price variance Cost variance Price Cost Volume 2018 etc. Volume variance etc Increase in shipment of lithium-ion secondary battery separator Increase in shipment of high purity alumina

10 IT-related Chemicals - Segment Analysis - 9 Sales revenue Total billion(+6.9 from ) Sales price Volume Decline in selling price of polarizing film Decline in selling price of touchscreen panels Increase in shipment of polarizing film 2017 Price Volume FX 2018 Foreign exchange +1.8 Core Operating Income Total 14.8 billion(+5.8 from ) Price variance -9.5 Decline in selling price of polarizing film Decline in selling price of touchscreen panels Cost variance +4.0 Rationalization of the use of raw materials Improvement of production yield Price Cost Volume 2018 etc. Volume variance etc Increase in shipment of polarizing film

11 Health & Crop Sciences - Segment Analysis - 10 Sales revenue Total billion(+0.4 from ) Sales price Volume +4.4 Increase in shipment of crop protection chemical in overseas market 2017 Price Volume FX 2018 Foreign exchange -3.4 Core Operating Income Total 2.5 billion(-5.9 from ) Price variance -2.0 Higher feedstock prices Cost variance Price Cost Volume 2018 etc. Volume variance etc Equity method investment loss on Nufarm

12 Pharmaceuticals - Segment Analysis - 11 Sales revenue Total billion(-5.4 from ) Sales price -4.5 NHI price revision in Japan Price Volume FX 2018 Volume -0.2 Foreign exchange -0.7 Increase in shipment of Latuda in North America Decrease in shipment of long-listed brands in Japan Core Operating Income Total 39.3 billion(-18.9 from ) Price variance -4.5 NHI price revision in Japan Price Cost Volume 2018 etc. Cost variance -7.0 Volume variance etc Increase in sales expense in North America Increase in R&D expense One time gain from divestiture of ciclesonide products in previous fiscal year

13 Breakdown of Non-recurring Items 12 Difference Changes in fair value of contingent consideration Restructuring charges Gain on sale of property, plant and equipment Others Non-recurring items

14 Consolidated Balance Sheets Mar Sep-18 Difference 31-Mar Sep-18 Difference Current assets 1, , Liabilities 1, , Cash and cash equivalents Trade and other receivables Trade and other payables Interest-bearing Liabilities Inventories Others Others Equity 1, , Non-current assets 1, , Shareholders' equity Property, plant and equipment Goodwill and Intangible assets Other components of equity Non-controlling interests Others Total 3, , Total 3, , Equity attributable to owners of parent to total assets D/E ratio (times) 30.2% 30.4% 0.2%

15 Consolidated Statements of Cash Flows 14 Difference Cash flows from operating activities Cash flows from investing activities Free cash flows Cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net change in cash and cash equivalents Cash and cash equivalents at end of period

16 Financial Estimates for Year 15 (Estimates) Difference Ratio Sales revenue 2, , % Core operating income % (Equity in earnings) (55.3) (50.0) (-5.3) - Operating income % Net income attributable to owners of the parent % ROE 15.4% 13.4% Exchange rate(yen/$) Naphtha price(yen/kl) 41,900 47,000

17 (Reference: Segment Information)

18 Cost Elements etc. 17 Difference Capital Expenditures Depreciation and Amortization Research & Development Expenses Number of Employees (as of September 30) 31,858 32,

19 Capital Expenditures by Business segment 18 Difference Petrochemicals & Plastics Energy & Functional Materials IT-related Chemicals Health & Crop Sciences Pharmaceuticals Others & Adjustments Total

20 Depreciation and Amortization by Business segment 19 Difference Petrochemicals & Plastics Energy & Functional Materials IT-related Chemicals Health & Crop Sciences Pharmaceuticals Others & Adjustments Total

21 Research & Development Expenses by Business segment 20 Difference Petrochemicals & Plastics Energy & Functional Materials IT-related Chemicals Health & Crop Sciences Pharmaceuticals Others & Adjustments Total

22 Sales revenue by Business segment (ly) 21 (estimated) 1Q 2Q 3Q 4Q 1Q 2Q 1st Half Half Petrochemicals & Plastics Energy & Functional Materials IT-related Chemicals Health & Crop Sciences Pharmaceuticals Others & Adjustments Total , ,367.9 ly figures for FY 2017 are not subject to financial review procedures at this moment.

23 Core Operating Income by Business segment (ly) 22 (estimated) 1Q 2Q 3Q 4Q 1Q 2Q 1st Half Half Petrochemicals & Plastics Energy & Functional Materials IT-related Chemicals Health & Crop Sciences Pharmaceuticals Others & Adjustments Total ly figures for FY 2017 are not subject to financial review procedures at this moment.

24 Major Group Companies 23 Company The Polyolefin Company (Singapore) (millions of USD) Petrochemical Corporation of Singapore (millions of USD) Rabigh Refining and Petrochemical Company Dongwoo Fine-Chem (millions of SAR) (billions of KRW) Valent U.S.A. and Subsidiaries (millions of USD) Sales Revenue ,248 1,399 Profit Trends Decreased margins and decreased sales volume due to periodic plant maintenance in the current term. Decreased sales volume due to periodic plant maintenance in the current term. 15,546 20,599 Due to stable operations 1, , Increased due to higher sales volume and other factors despite lower selling price Due to shipment timing difference and other factors