Chugoku Marine Paints,ltd. · TSE:4617
Chugoku Marine Paints,ltd — FY2023 Earnings Presentation
44 slides from Chugoku Marine Paints,ltd's earnings presentation, May 18, 2023
Slide 1: Financial Results for the Fiscal Year Ending March 31, 2023 (FY03/23)
Financial Results for the Fiscal Year Ending March 31, 2023(FY03/23) May 18, 2023 Chugoku Marine Paints, Ltd. (TSE Code: 4617) Company mascot, “Pentaro”
Slide 2: Outline
Outline Page １. Consolidated Earnings Summary 3–10 ２. Summary by Product and Region 11–19 ３. Medium-Term Management Plan: 20–26 Progress in FY03/23 ４. FY03/24 Forecast and Key Business 27–33 Topics ５. Reference Material 33–44 Note: Figures presented in tables and graphs are expressed in millions of
Slide 3: 1. Consolidated Earnings Summary
1-1 1. Consolidated Earnings Summary Copyright © Chugoku Marine Paints, Ltd. All Rights Reserved. 3
Slide 4: Full-year earnings highlights
Full-year earnings highlights ✔ Consolidated net sales grew, driven by strong sales of marine coatings. Selling price revisions commensurate with higher raw material prices also contributed, along with exchange rate changes. ✔ Operating profit grew sharply as higher selling prices covered the rise i
Slide 5: Consolidated income statement
Consolidated income statement Gross margin rose 1.6pp YoY, as selling price revisions and improved product mix offset the surge in raw material procurement costs. Total SG&A expenses rose due to higher transportation costs and forex impact, but the SG&A ratio fell. Operating profit margin improved 3
Slide 6: Income statement supplemental information
Income statement supplemental information FY03/22 FY03/23 Change % change Depreciation 2,055 1,603 －452 －22.0％ R&D expenses 1,561 1,573 ＋12 ＋0.8％ Domestic naphtha 56,625 76,625 ＋20,000 ＋35.3% price (JPY/kl) ◆Exchange rate(JPY) USD 109.80 131.43 ＋21.63 ＋19.7% EUR 129.89 138.04 ＋8.15 ＋6.3% CNY 17.03 1
Slide 7: Major raw material prices
Major raw material prices Up approx. Domestic naphtha Epoxy resin 35% YoY in April-December 86,100 （＄/t） （JPY/kl） 10,000 81,400 80,000 9,000 Domestic naphtha (LHS) Epoxy resin (RHS) 72,500 70,000 64,600 66,500 8,000 60,700 60,000 66,000 7,000 53,500 （Forecast） 47,700 Down approx. 6,000 50,000 38,800
Slide 8: Factors affecting consolidated operating profit (summary)
Factors affecting consolidated operating 1-5 profit(summary) （ Billions of yen ） ＋136.0 ＋20.6 －69.9 －54.7 6.8 38.8 FY03/22 Selling Material Exchange Others FY03/23 price costs rate impact (gross profit) Copyright © Chugoku Marine Paints, Ltd. All Rights Reserved. 8
Slide 9: Consolidated balance sheet summary
Consolidated 1-6 balance sheet summary End – FY03/22 End FY03/23 Change Main changes Notes and accounts receivable-trade +4,562 Current assets 71,495 81,089 ＋9,593 Merchandise and finished goods +1,788 Raw materials and supplies +1,850 Property, plant and 24,054 24,788 ＋733 Construction in progress
Slide 10: Consolidated cash flows statement summary
1-7 Consolidated cash flows statement summary FY03/22 FY03/23 Change Main changes Profit before income taxes +3,613 Change in provisions +473 Cash flows from operating activities △238 29 ＋268 Change in trade receivables -5,802 Change in inventories +394 Income taxes paid +722 Cash flows from investi
Slide 11: 2. Summary by Product and Region
1-1 2. Summary by Product and Region Copyright © Chugoku Marine Paints, Ltd. All Rights Reserved. 11
Slide 12: Sales by product and region
2-1 Sales by product and region South Southeast Europe and Japan China Total Korea Asia the US FY03/22 24,829 11,087 7,299 6,931 15,975 66,123 Marine FY03/23 31,085 14,118 7,750 9,161 21,834 83,951 coatings % change ＋25.2% ＋27.3% ＋6.2% ＋32.2% ＋36.7% ＋27.0% FY03/22 5,694 1,237 182 4,347 380 11,842 In
Slide 13: Summary by product
2-2 Summary by product Summary by product Marine coatings Marine coatings Industrial coatings Container coatings Sales of coatings for new ships began to grow thanks to 99,481 recovery in domestic demand and selling price revisions Construction implemented in response to soaring raw material prices
Slide 14: Performance by region
2-3 Performance by region Sales of marine coatings were brisk in all regions, with sales growing in all regions except China, where performance was affected by sluggish container coating sales. Sales in Southeast Asia and Europe and the US increased by over 30%, due in part to forex impact. Profit i
Slide 15: Japan
2-4 Japan Sales Up 20.4% YoY Segment profit Up 667 YoY 37,153 Heavy duty coatings 30,853 Construction materials PBs ※1 ＋30.6% Ship repair FY03/23 FY03/22 Overview ✔ Sales of coatings for new ships increased significantly due to recovery in demand that occurred as shipyards received more orders and s
Slide 16: China
2-5 China Sales Down 8.0% YoY Segment profit Up 965 YoY 17,680 16,259 －81.1％ Container Heavy duty coatings Ship repair FY03/22 FY03/23 ＋39.3% Overview ✔ Sales of marine coatings rose thanks to higher selling prices and forex impact stemming from depreciation of the yen. ✔ Coatings for new ships and
Slide 17: South Korea
2-6 South Korea Sales Up 6.6% YoY Segment profit Up 547 YoY 7,976 7,481 Heavy duty ＋61.3% coatings Ship repair FY03/22 FY03/23 Overview －0.1% New ships ✔ Sales of coatings for new ships were largely flat YoY due to a recovery in shipment volume as operational delays at major shipyards were resolved
Slide 18: Southeast Asia
2-7 Southeast Asia Sales Up 32.6% YoY Segment profit Up 560 YoY 15,636 Container 11,788 Heavy duty coatings ＋22.3% Construction materials FY03/22 FY03/23 PBs ※ Overview ✔ Sales of ship repair coatings were strong in Singapore and Indonesia, and favorable forex effects also contributed to an ＋37.6% S
Slide 19: Europe and the US
2-8 Europe and the US Sales Up 36.2% YoY Segment profit Up 389 YoY 22,456 Container Heavy duty coatings PBs ※ 16,491 FY03/22 FY03/23 ＋38.0% Ship repair Overview ✔ Sales of mainstay ship repair coatings grew markedly as the Company proactively undertook sales activities amid growing demand for enviro
Slide 20: 3. Medium-Term Management Plan: Progress in FY03/23
1-1 3. Medium-Term Management Plan CMP New Century Plan 2 (FY03/22–FY03/26) Progress in FY03/23 Copyright © Chugoku Marine Paints, Ltd. All Rights Reserved. 20
Slide 21: Positioning and Outline for Medium-Term Management Plan
Positioning and Outline for Medium-Term Management Plan FY03/22 FY03/26 2030 Long-term vision Leading global niche company distinguished by sustainability and high profitability Subsequent medium-term CMP New Century Plan 2 management plans Medium-term management plan Promote managerial innovation a
Slide 22: Progress by Key Theme (1)
Progress by Key Theme (1) Expand value provided through environmental and １ social contributions Further expand reductions in greenhouse gases (GHGs) and volatile organic compounds (VOCs) Note: Both tables below display approximate reduction achieved by the Group compared to 2008 levels. GHG (CO2) e
Slide 23: Progress by Key Theme (2)
Progress by Key Theme (2) Expand value provided through environmental and １ social contributions Antiviral coatings for construction materials ✔ Antiviral UV-curable coatings for flooring materials were adopted by an increasing number of construction material manufacturers in Japan ✔ Conducted test
Slide 24: Progress by Key Theme (3)
Progress by Key Theme (3) 2 Improve and stabilize profit structure Selling price measures ✔ Pushed to revise selling prices to reflect rising raw material procurement costs, including for coatings for new ships ✔ Average selling price of marine coatings rose by about 27% YoY due to price revisions a
Slide 25: Progress by Key Theme (4)
1-6 Progress by Key Theme (4) 4 Actively raise shareholder returns and capital efficiency Shareholder return policy under the medium-term management plan FY03/22 results FY03/23 results FY03/24 plan Total return on consolidated 5.3% Shareholder shareholders’ equity (D&BOE): return criteria average o
Slide 26: Capital efficiency and market valuation
Capital 1-6 efficiency and market valuation The current medium-term management plan was established with an eye to capital efficiency (cost of equity) and market valuation. Increase PBR with improved valuation in the Steadily implement and capital market generate results from the medium-term plan Ta
Slide 27: 4. FY03/24 Forecast and Key Business Topics
1-1 4. FY03/24 Forecast and Key Business Topics Copyright © Chugoku Marine Paints, Ltd. All Rights Reserved. 27
Slide 28: FY03/24 full-year earnings forecasts
FY03/24 full-year earnings forecasts 3-1 For marine coatings, we anticipate strong demand for both ship repairs and new ships, primarily overseas. We forecast sales growth in all regions except Japan. For industrial coatings, we expect growth in sales of heavy duty coatings mainly in Southeast Asia,
Slide 29: Sales forecast by product and region
Sales forecast by product and region 3-2 We forecast higher sales for all overseas regions, but expect a YoY sales decline in Japan due in part to a sharp increase in marine coating sales in FY03/23 (sales projected to grow by double digits compared with FY03/22). FY03/23 FY03/24 Change Results Fore
Slide 30: Primary initiatives in FY03/24
3-4 Primary initiatives in FY03/24 Key themes specified in our medium-term management plan １ ✔ Strengthen promotion of high-performance antifoulings and boost market share ✔ Expand sales of low-VOC coatings and strengthen proposals for biomass coatings Expand value provided through ✔ Increase sales
Slide 31: Formal decision on fuel economy regulations for existing ocean-going ships
Topic: Formal decision reached on fuel economy 1-5 regulations for existing ocean-going ships Regulations were adopted by International Maritime Organization (IMO) in June 2021 and will take effect in January 2023 Efforts to make ships environmentally compliant through the reduction of greenhouse ga
Slide 32: Making visible the performance of antifoulings
Topic: 1-5 Making visible the performance of antifoulings New development in CMP-MAP, our hull data analysis service We are participating in the IoS Open Platform, a shared platform for vessel IoT, as a solution provider, and CMP-MAP was registered as an app. ✔ Automated sharing of vessel data obtai
Slide 33: www.cmp.co.jp
www.cmp.co.jp www.cmp-chugoku.com Forecasts presented in these materials are based on judgments made in accordance with information available to CMP as of May 18, 2023. Actual results may differ materially from forecasts due to various risks and uncertainties. Copyright © Chugoku Marine Paints, Ltd.
Slide 34: 4. Reference
1-1 4. Reference Copyright © Chugoku Marine Paints, Ltd. All Rights Reserved. 34
Slide 35: Company outline
参考 Company outline Name Chugoku Marine Paints, Ltd. Establishment May 1917 (in business for 106 years) Main business Production and sales of functional coatings centered on marine coatings Capital 11,626 million yen Tokyo: 2-6, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo Headquarter Hiroshima: 1-7, Meij
Slide 36: Bases and Group companies
参考 Bases and Group companies Our business encompasses approximately 60 locations belonging to 24 companies located in 20 countries around the world. Norway UK Holland Germany Japan Italy Turkey South Korea Tokyo (headquarters) Greece Cyprus Shanghai Shiga UAE Guangdong Hyogo USA Myanmar India Taiwan
Slide 37: Products (Marine coatings)
参考 Products (Marine coatings) Marine coatings CMP provides antifoulings that protects ship bottoms from contamination and products for every part of the hull, including heavy duty coatings protecting a variety of tanks from corrosion. In addition to Japan, the company has manufacturing bases in Chin
Slide 38: Antifoulings (hydrolysis-type) mechanisms
参考 Antifoulings (hydrolysis-type) mechanisms Hydrolysis type Hydrolysis-type coatings have a surface that dissolves like soap and is later renewed, maintaining a smooth surface and stable antifouling functionality. By controlling the thickness of its coating film, it is possible to produce high and
Slide 39: Products (Industrial and Container coatings)
参考 Products (Industrial and Container coatings) 船舶用塗料 Industrial coatings Container coatings coatings Utilizing technologies cultivated in marine coatings, CMP CMP supplies container coatings mainly to China, the provides a variety of products including construction leading producer of containers. m
Slide 40: ESG information (E)
参考 ESG information (E) E:環境 E: Environment Products contributing to the realization of a sustainable society Reducing CO2 and saving energy Renewable energy Antifoulings, the core product of marine coatings, improve CMP promotes joint research with ship mileage by reducing surface resistance due to
Slide 41: ESG Information (S&G)
ESG Information (S&G) 参考 S:Society G:Governance Regional contributions Structure CMP conducts various activities at its offices worldwide. Organization: Company with auditors Director’s term: One year Officer composition: Two of six directors are outside directors. (1/3) Two of four auditors a
Slide 42: Shareholder returns
1-6 Shareholder returns Return The Company aims to achieve an average total return on consolidated shareholders’ equity standards (D&BOE) of at least 5% over the course of its medium-term management plan (FY03/22–FY03/26). Dividends Share buybacks Consolidated payout ratio: at least 40% We will flex
Slide 43: Fact Sheet (FY03/2019-FY03/2023)
Fact Sheet（FY03/2019-FY03/2023） Note: Underlined figures were revised on December 27, 2021. 【Consolidated Basis】 FY03/2019 FY03/2020 FY03/2021 FY03/2022 FY03/2023 Net sales (millions of yen) 88,452 87,729 82,442 84,295 99,481 Operating profit (millions of yen) △643 3,441 6,506 687 3,887 Ordinary pro
Slide 44: Fact Sheet (FY03/2014-FY03/2018)
Fact Sheet（FY03/2014-FY03/2018） Note: Underlined figures were revised on December 27, 2021. 【Consolidated Basis】 FY03/2014 FY03/2015 FY03/2016 FY03/2017 FY03/2018 Net sales (millions of yen) 90,901 106,737 115,066 82,368 82,980 Operating profit (millions of yen) 4,058 7,442 9,969 5,429 3,704 Ordinar