Mid-Term Management Plan Chori Innovation Plan 2019 ~Toward New Stage~ FY2017-FY2019 April 25 th, 2017
Index 1 2 3 Review of Former Mid-Term Management Plan Yakushin2016 Mid-Term Management Plan Chori Innovation Plan 2019 1. 2. 3. 4. 5. 6. 7. Vision Policy Strategy Positioning of Mid-Term Management Plan Business Strategy ~ Fibers, Textiles and Garments ~ Business Strategy ~ Chemicals and Machinery ~ Dividend Policy Financial Targets of FY2019 Reference: Global Networks 1
1 Review of Former Mid-Term Management Plan Yakushin2016 (FY2014-FY2016) 2
1 Review of Former Mid-Term Management Plan Yakushin2016 P r o f i t Ordinary income of FY2016: 7.0 billion Highest record(fy2011 6.1 billion) Ordinary income of FY2014-FY2016 in total: (Plan) 20.5 billion (Result) 18.5 billion Achievement rate of 90% Profit attributable to CHORI of FY2014-FY2016 in total: (Plan) 13.2 billion (Result) 13.2 billion Achieved the target plan Financial B a s e End of FY2013 equity capital: 36.3 billion equity ratio:46% End of FY2016 equity capital: 46.3 billion equity ratio: 47% ROA of FY2016 based on ordinary income: 7.1% Investment Dividend M&A and business investment result for FY2014-FY2016 in total: 9.1 billion Large-scale M&A, Making Miyako Kagaku Co., Ltd into subsidiary: invested 6.6 billion (May, 2015) Dividend ratio of 20%. Dividend increased for last 4 FY FY2013: 33 per share FY2016: 40 per share Resumed paying out interim dividend from FY 2016 3
1 Review of Former Mid-Term Management Plan Yakushin2016 P O I N T FY2015 (year to year) Net sales :Increased significantly due to M&A of Miyako Kagaku Co., Ltd Ordinary income:decreased due to loss of accelerated restructuring of textile business Profit attributable :Increased by gain on sales of investment securities to CHORI FY2016 Net sales :Decreased by reduction of trading business amount due to higher yen (year to year) Ordinary income:record-breaking high Profit attributable :Achieved the target plan to CHORI (Unit: billion yen) FY2014 FY2015 FY2016 Annual Result Annual Result Plan Annual Result N e t S a l e s 248.4 291.6 300.0 270.9 Ordinary Income 6.0 5.5 7.5 7.0 Profit attributable t o C H O R I 4.2 4.3 4.8 4.8 To t a l A s s e t s 84.3 98.7 94.0 98.0 Equity Capital 41.4 42.8 47.0 46.3 R O A ( o r d inary income) R O A ( n e t i n c o m e ) 7.1% 5.6% 8.0% 7.1% 4.9% 4.4% 5.0% 4.9% E q u i t y R a t i o 49% 43% 50% 47% 4
2 Mid-Term Management Plan Chori Innovation Plan 2019 ~Toward New Stage~ 5
2 Mid-Term Management Plan Chori Innovation Plan 2019 1.Vision Policy Enlargement of group companies Toward New Stage -Vision of FY2022- Ordinary Income of 13 billion yen Structuring business by investing Strengthening consolidated management Strong Financial Base 6
2 Mid-Term Management Plan Chori Innovation Plan 2019 2.Strategy1 M i d - T e r m Management Plan Chori Innovation Plan 2019 Consolidated Management New Development Business Investment and M&A Corporate Governance Human Resource C o r p o r a t e g r o u p c o n t i n u e s t o e v o l v e a n d c h a n g e o n a g l o b a l s c a l e, b u i l t o n o u t s t a n d i n g c a p a b i l i t i e s a n d e x p e r t i s e 7
2 Mid-Term Management Plan Chori Innovation Plan 2019 2.Strategy2 Consolidated Management New Development Business Investment and M&A Promoting consolidated operations by each business department Accelerating further globalization Strengthening IT infrastructures and improving operational efficiency Enhancing synergy with Toray Group Focusing on investment in growing fields and areas Establish Business Investment Committee Continue to hold M&A Promoting Committee Investment and development of venture enterprises Corporate Governance Human Resource Strengthening internal controlling system Globalized risk management CSR IR Improvement in dividend policy Developing globally specialized personnel Design policy on human resources Mobilization of employees in Chori Group Working-style reforms(reducing overtime work) 8
2 Mid-Term Management Plan Chori Innovation Plan 2019 3.Positioning of Mid-Term Management Plan Net sales (Unit:billion yen) Recorded ever highest ordinary income 271 280 7.0 7.2 Ordinary Income 300 7.8 Breaking our highest record in ordinary income 330 8.5 400 13.0 ROA(Ordinary income based) Increasing ROA 7.5 7.3 7.1 7.2 (Unit:%) 9.0 FY2016 FY2017 FY2018 FY2019 (Result)(Plan) (Plan)(Plan) FY2022 (Vision) FY2016 FY2017 FY2018 FY2019 FY2022 (Plan) (Result) (Plan) (Plan) (Vision) 9
2 Mid-Term Management Plan Chori Innovation Plan 2019 4.Business Strategy ~ Fibers, Textiles and Garments ~ Net Sales (unit: billion yen) Ordinary Income (unit: billion yen) FY2016 Result 111.0 FY2016 Result 3.9 FY2019 Plan 130.0 FY2019 Plan 4.8 1 2 3 Textiles Collective Strength Enhancement Project Promote integrated business model covering all arrangements from materials to manufacturing Reorganize company structure to most optimized management system (2 operations 3 operations) Accelerate Global Expansion Global One Stop CHORI Establish global framework of six regions (Japan, China, Asia, US, South and Central America, Europe) Improvement in global supply chain management Expand business initiated by overseas bases (China, ASEAN) Enhance overseas production infrastructure (China Indonesia) Strengthen Planning and Solution Services Transfer apparel business operations to CHORI MODA Co., Ltd. Transfer merchandise function to appropriate place and promote direct trading between overseas countries. (China/Dalian, Vietnam, Thailand, Indonesia) Develop and expand sales of original Chori products and environmental products 10
2 Mid-Term Management Plan Chori Innovation Plan 2019 5. Business Strategy ~ Chemicals and Machinery ~ Net Sales FY2016 Result (unit: billion yen) 159.9 Ordinary Income FY2016 Result (unit: billion yen) 3.1 FY2019 Plan 200.0 FY2019 Plan 3.7 1 2 Trading Business Model to Business Investing and Converting Business Model Promoting business investment Secure and strengthen procurement sources (China, Chile, Germany) Strengthen and deepen converting function (fine chemicals, condenser materials,processed food) Pursue new development (environment related materials, lithium-ion battery materials, pharmaceutical and agrochemical intermediates) Promote Further Globalization Expand overseas business(focus on ASEAN region, maintain overseas bases) Expand China business (Promote collaboration with leading Chinese partners) 3 Enlargement of Group Companies Strengthen alliance with subsidiaries after M&A (Miyako Kagaku Co., Ltd., PTI JAPAN LTD) Accelerate business cycle of transportation equipment business enabled by company split-up (Established Chori Machinery Co., Ltd. in April,2017) 11
2 Mid-Term Management Plan Chori Innovation Plan 2019 6.Dividend Policy Dividend Policy Paying performance-linked dividends corresponding to net income attributable to owners of the parent of the year Ensuring the flexible return of profits and stability of management and financial affairs Maintaining sufficient investment funds for business growth Dividend Trends Dividend paid per year (Unit: 1 yen) Dividend Ratio of 25% or more (FY2017-FY2019) Dividend Ratio of 20% 34 36 40 46 FY2014 (Result) FY2015 (Result) FY2016 (Recent Plan) FY2017 (Plan) FY2018 (Plan) FY2019 (Plan) 12
2 Mid-Term Management Plan Chori Innovation Plan 2019 7.Financial Targets of FY2019 (Unit: billion yen) FY2016 Annual Result FY 2019 Plan N e t S a l e s 270.9 330.0 Ordinar y I ncome 7.0 8.5 Profit attributable to C H O R I R O A (Ordinary Income) R O A ( N e t I n c o m e ) 4.8 5.5 7.1% 7.5% 10% 10% Or more 13
3 Reference: Global Networks Subsidiary Chori Europe Office Moscow Russia Europe (2 bases) Middle East Africa (4 bases) Subsidiary Chori Iran Chori Middle East Office Istanbul Jedha China (13 bases) India (1 base) Asia (11 bases) Subsidiary Chori India Subsidiary Chori China Chori Shanghai Chori HongKong Chori Tianjin Chori Dalian Japan Branch Taipei Office Beijing Qingdao Nantong Wuhan Ruian Guiyang Shenzhen Subsidiary Thai Chori Chori Trading Thailand Chori Indonesia Chori Singapore Chori Malaysia Chori Korea Chori Vietnam Office Ho Chi Minh Manila Dhaka Cambodia Subsidiary Chori America North America (2 bases) Subsidiary Chori Mexico Office Santiago Lima Subsidiary Branch Offices Office Charlotte South and Central America (3 bases) 18 bases 18 bases 36 bases in total 14
Forecasts for operational performances, as well as future predictions described in this document, were prepared based on information available as of the day on which this document was released. This document in no way guarantees the contents and operational performances of the company in the future.