The Second Quarter of the Fiscal Year Ending March 31, 2017 (FY2016) Large Meeting. November 9, Voluntary translation for readers convenience

Transcription

1 The Second Quarter of the Fiscal Year Ending March 31, 2017 (FY2016) Large Meeting November 9, 2016 Voluntary translation for readers convenience

2 The progress of Long-term Business Plan Reborn Nippon Shokubai 2020 and the Financial Forecasts for the full year of FY 2016 President Masanori Ikeda

3 Contents 1.The outline of Long-term Business Plan Reborn Nippon Shokubai Financial Results for the second quarter of the fiscal year ending March 31, 2017 (FY2016) 3.Trend by business area 4.Financial Forecasts for the Fiscal Year Ending March 31,2017 (FY 2016) 5.The progress of Long-term Business Plan Reborn Nippon Shokubai Return Policy Explanation of acronyms SAP: Superabsorbent Polymers AA: Acrylic Acid AES: Acrylates EO: Ethylene Oxide 3

4 1. The progress of Long-term Business Plan 1) The outline of Long-term Business Plan Reborn Nippon Shokubai 2020 Targets for 2020 Sales Ordinary Income *ROA Sales of *New Products Target for FY2020 (long-term) : % 47 Target for FY2016 Mid-term : % 29 (Billion Yen) *ROA: return on assets **New Products: products launched within the last five years, excluding SAP Business Policies Safe, reliable production activities Highlighting profitability over sales Assumptions : Domestic naphtha price 65,000 yen/kl, exchange rate : 100 yen/us$, 130 yen/eur Strategies Strengthening existing and core businesses Establishing new businesses as soon as possible, and launching new products to the market quickly 4

5 2. Financial Results for the 2 nd quarter of the FY2016 From April 1, 2016 to September 30, 2016 (Unit:Billion Yen) The forecasts announced on Aug 3 Actual results Net sales Operating income Ordinary income Profit attributable to owners of parent ROA 4.7% 5.4% ROE 5.4% 6.2% Exchange rate : Domestic naphtha price yen / US$, yen / EUR 32,300yen /kl yen /US$, yen / EUR 31,500yen /kl Increase in sales and income (compared to the forecast announced on Aug 3) Factors of increase: Increase in sales volume Decrease of raw materials prices 5

6 3. Trend by business area 1) AA/SAP AA : Supply and demand trend Demand Global demand approx. 5,000 kilo tons per year ( KT/y ) (2015 estimate) Assuming mid-term annual growth rate around 5% Supply Expansion plan 2015 : 800KT/y (global total) Expansion plan for : 100KT/y (global total) Securing profit in spite of lowest sales prices Oversupply of AA&AES will continue for a while The progress and strategies Urgent need: improving profitability Raw material costs Aiming locally-produced and locally-consumed principle globally Procuring propylene at a lower cost Plant operation Keeping cost competitiveness and high operating rate to follow growing SAP demands AA Plant Production technology Developing and introducing new technologies to keep top-level of production technology 6

7 3. Trend by business area 1) AA/SAP SAP: Supply and demand trend Demand Global demand approx. 2,300 KT/y (2015 estimate) Assuming mid-term annual growth rate from 5 to 7 % Supply 2015 expansion : 300KT/Y (global total) 2016 expansion plan: 100KT/Y (global total) 2017 expansion plan: None Lower profitability of SAP due to intensified competition The supply now exceeds the demand, but they will be balanced in time. The progress and strategies Expanding customer base Customizing quality and functions of SAP furthermore to differentiate ourselves from other SAP manufacturers Cost reduction Utilizing strengths of AA/SAP vertical integration Proving enhance production capacity per one facility and our latest technology for improving productivity with new SAP plant at Himeji Launching SAP Survival Project SAP Plant 7

8 3. Trend by business area 1) AA/SAP Business strategy of Long-term Business Plan Maintaining its top share of the global market and world-class technologies in the SAP business Aiming to be a leading global player in the acrylic monomer business Maintaining and strengthening our competitiveness a strength that will make sustainable growth and global business development possible The progress of the investment plan Annual Production Capacity Unit:KT/y Current Planned Total AA Newly established in 2018 (Belgium) 880 SAP 610 Expanded by 50 KT/y in 2016 (Himeji) 100 Newly established in 2018 (Belgium) 710 Global Expansion of AA/SAP Expansion of SAP production capacity by 50 KT/y in Himeji is completed (operation started in Oct. 2016). Further expansion is considered with vigilant watch on the market trends 8

9 3. Trend by business area 2) EO Business strategy of Long-term Business Plan Strengthening the foundation of this core business by changing the product portfolio and entering growth markets, thereby maintaining a steady cash flow. The progress of this term Secondary alcohol ethoxylates( SOFTANOL ) Surfactant 1) outstanding wetting power 2) easy to handle due to low viscosity 3)excellent biodegradability Increasing demand for household liquid detergents To meet an increasing demand 1. Expansion in Kawasaki, Japan in Autumn Further expansion (including outside of Japan) is considered detergents 9

10 3. Trend by business area 3) Performance Chemical Business Business strategy of Long-term Business Plan Positioning ourselves as a top global supplier Exploring new markets and access growth markets through our original products and technologies Expanding our line of unique chemicals, using materials created in house, to form the next mainstay of corporate profits. The progress of this term Acrylic resin for optical materials ( ACRYVIEWA ) Good heat-resistance and transparency Increasing demand Total Capacity is 9,000 MT/y (Expanded production capacity by 3,000 MT/y in 2016) The Dispersion of Zirconia Nanoparticles ( ZIRCOSTAR ) Good dispersibility in various organic materials Matching materials for high refractive index which can realize transparency even in high concentration Effective to realize high image quality, electric power saving for display, and long-time drive of battery. Increasing demand ACRYVIEWA Plant The Dispersion of Zirconia Nanoparticles ZIRCOSTAR 10

11 3. Trend by business area 4) New Energy Materials Business strategy of Long-term Business Plan Positioning new energy-related materials as one of our next core businesses Accelerating the development and marketing of these materials Aiming to develop a material that will become the de facto standard in the new energy markets The progress of this term Lithium bis (fluorosulfonyl) imide <LiFSI> ( IONEL ) High performance electrolytes for lithium-ion batteries Improving cycle life at a wide range temperatures Increasing sales, evaluated for automobile battery in earnest Zirconia sheets and cells for fuel cells SOFC (solid oxide fuel cell) main component corresponding to customers demand aiming to increase sales of next generation product LiFSI Zirconia sheets and cells for fuel cells 11

12 3. Trend by business area 5) New Business, New Product New Business: the health and medical materials sector Preparing to enter into the health and medical materials sector for a new business area Strategic investment Capital tie-up and business partnership with GlyTech, Inc. Joint development of Glycosylated Somatostatin Analog(G-SRIF) Capital tie-up with TAK-Circulator,Inc Promotion of developing the seeds of nucleic acid drug Nippon Shokubai established the laboratory of API synthesis (operation started at Suita, Osaka in Nov. 2016) Nippon Shokubai is now considering to establish the production facility of API synthesis Enter into peptide drugs & nucleic acid drug business New Products Ion-Conducting Film and Zinc electrode with Anion-Conducting Layer Useful for safety and low cost zinc rechargeable batteries Making battery life 10 times longer than conventional one The laboratory of API synthesis Ion-Conducting Film 12

13 4. Financial Forecasts for the Fiscal Year Ending March 31, 2017 (FY2016) FY2015 FY2016 (Unit:Billion Yen) Full year 1 st half 2 nd half(forecast) Full year(forecast) Net sales Operating income Ordinary income Profit attributable to owners of parent ROA 8.3% 5.4% 6.9% 6.1% ROE 9.6% 6.2% 7.6% 6.8% Exchange rate : Domestic naphtha price : yen /US$ yen/EUR 42,800yen /kl yen /US$ yen/EUR 31,500yen /kl 105yen /US$ 115yen/EUR 35,000yen /kl yen /US$ yen/EUR 33,200yen /kl For the achievement of the plan Safe, reliable production activities Securing sales volume Keeping appropriate margin Launching new products to the market quickly by the entire company Improving profitability Procuring raw materials etc. at lower cost, reducing costs 13

14 5. Long-term Business plan : The progress of 1 st Half Mid-term Business Plan(FY ) Major capital expenditures Company Country Location Product Capacity (MT/ Y) Commercial Operation Nippon Shokubai Japan Himeji Phenylmaleimide 10,000 Feb Kawasaki Specialty acrylate 20,000 Apr Himeji AA 80,000 Jul Himeji ACRYVIEWA 3000 Aug Himeji SAP 50,000 Oct Nippon Shokubai Japan Kawasaki SOFTANOL 10, NSE Belgium Antwerp AA 100, Antwerp SAP 100, New Business Development Health and medical materials sector Through Capital tie-up and business partnership with venture companies, enter into the health and medical materials sector Under Long-term Business Plan Reborn Nippon Shokubai 2020 (FY ), steadily promote the foundation of growth 14

15 5. Long-term Business plan : The progress of 1 st Half Mid-term Business Plan(FY ) Trend of Financial Results Sales 6,000 売上高 (Billion Yen) 5, , , , , Himeji accident Record high profit Long-term Business plan Reborn Nippon Shokubai Ordinary Income Mid-tem target Sales Ordinary 600 Income (Billion Yen) 年度年度年度年度 2015 年度年度 2020 年度 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2020 実績実績実績実績実績推定実績および長期目標 Forecast & Long-term target 長期目標 Mid-term target FY2014, FY2015: we achieved targets FY2015:Record high profit FY2016:Business environments of core business suddenly changed. Other functional Chemicals(such as E&I materials) are growing at a solid rate. Assumptions : Domestic naphtha price 65,000 yen/kl, exchange rate : 100 yen/us$, 130 yen/eu 15

16 5. Long-term Business plan : 2 nd half of Business Plan (FY2017~2020) Planning the second half of Business Plan (FY2017~2020) While firmly maintaining core business, we will shift to growth business / field We adhere to the management policy of long-term management plan Reborn Nippon Shokubai 2020" Vision for 2025 An innovative chemical company that provides new value for people s lives 16

17 6. Return Policy Taking overall account of business expansion and strengthening of corporate structure, and based on forecasts of the trend in consolidated earnings, we are aiming to improve levels of dividends in the medium term FY2015 dividend Profit attributable to owners of parent 26.0 billion yen 130(Original forecast) 150 yen per share Record the highest past dividend Consecutive Dividends increase, 30 yen higher than last period (Yen / share) Interim End of period Dividends per share th anniversary Commemorable dividend - 10 Unit: yen Total 150 FY2016 dividend, Forecast Profit attributable to owners of parent 19.0 billion yen 150 yen per share The same as the highest past dividend Keeping the dividend of 150 yen per share without commemorable dividend of 10 yen of FY 2015 (Yen / share) Interim End of period Unit: yen Total Dividends per share *The Company conducted a reverse stock split at a ratio of one share for every five shares on Oct. 1, Figures for the dividends per share are amounts take into accounts the reverse stock split. Average FY FY 2015 FY 2015 FY 2016 Payout ratio 28.3% 23.4% 32.0% 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, Chiyoda-ku Tokyo Japan TEL: shokubai@n.shokubai.co.jp URL: 18