Shinagawa Refra Co., Ltd · TSE:5351
Shinagawa Refra — Shinagawa Refractories — FY2021 Earnings Presentation
41 slides from Shinagawa Refra's earnings presentation, June 2022
Slide 1: Sky is the Limit: Shaping the Future of Refractories
Sky is the Limit: Shaping the Future of Refractories Shinagawa Refractories Co., Ltd. TSE Securities Code Number 5351 Shinagawa Refractories: Results for Fiscal Year ended March 2022 0
Slide 2: Table of Contents
Table of Contents Ⅰ. Overview of １．Consolidated Financial Highlights ５．Consolidated Balance Sheet ２．Net Sales by Business Segment ６．Consolidated Cash Flows Financial ３．Operating Income by Business Segment ７．Shinagawa Group Reorganization for Further Results for Competitiveness Enhancement ４．Factors
Slide 3: Overview of Financial Results for 2021
Ⅰ. Overview of Financial Results for 2021 (Fiscal Year ended March 2022) Shinagawa Refractories: Results for Fiscal Year ended March 2022 2
Slide 4: Consolidated Financial Highlights
１． Consolidated Financial Highlights (Unit: Million JPY) FY2020 FY2021 YoY Results Results Net Sales 99,969 110,784 ＋10.8% Operating Income 7,285 10,107 ＋38.7% Ordinary Income 8,220 10,716 ＋30.4% （9.7％） （＋1.5pt） (ROS) （8.2％） Profit attributable to 2,114 5,308 ＋151.1% owners of parent ● Japanese crud
Slide 5: Net Sales by Business Segment
２． Net Sales by Business Segment (Unit: Million JPY) FY2020 FY2021 YoY Results Results Refractories & Related Products 76,648 76.7 84,901 76.6 ＋10.8% Engineering 21,505 21.5 24,898 22.5 ＋15.8% Real Estate 1,814 1.8 984 0.9 ▽45.8% Total 99,969 100.0 110,784 100.0 ＋10.8% Note: Figures in square bracke
Slide 6: Operating Income by Business Segment
３． Operating Income by Business Segment (Unit: Million JPY) FY2020 FY2021 YoY Results Results Refractories & Related Products 6,714 79.5 9,451 80.7 ＋40.8% Engineering 924 10.8 1,825 15.6 ＋97.4% Real Estate 979 9.7 439 3.7 ▽55.1% Total 8,618 100.0 11,717 100.0 ＋36.0% Adjustments ▽1,332 ▽1,609 ― Opera
Slide 7: Factors Behind Changes in Operating Income (YoY)
４． Factors Behind Changes in Operating Income (YoY) (Unit: Billion JPY) Negative Factors Positive Factors ▽2.2 ＋5.1 Change in Total ＋2.9 Cost Group Companies Reduction +0.4 10.1 ＋1.9 Raw Material Engineering Costs & Sales ＋0.9 Exchange Rates Volume 7.2 ▽0.9 Increases [Group Companies Breakdown] +1.9
Slide 8: Consolidated Balance Sheet
５． Consolidated Balance Sheet (Unit: Million JPY) 2021/3 2022/3 Changes ・Cash & Cash Equivalents +3,173 Current Assets 71,654 78,740 ＋7,086 ・Notes and accounts receivable & Contract assets ※1 ＋5,018 ・Tangible & intangible fixed assets ＋1,810 Fixed Assets 38,550 40,969 ＋2,419 ・Investments & other ass
Slide 9: Consolidated Cash Flows
６． Consolidated Cash Flows (Unit: Million JPY) 【 Main contents of cash flows from operating activities 】 FY2020 FY2021 Changes Cash Flows from ・ Income before Income Taxes 9,413 Operating Activities 9,327 9,494 ・ Depreciation 2,684 Cash Flows from ・ Changes in Account Receivable ▽4,024 Investing Act
Slide 10: Shinagawa Group Reorganization
７．Shinagawa Group Reorganization: Isolite Insulating Products is now a wholly owned subsidiary of Shinagawa Achieving Carbon Neutrality is the World’s Most Urgent Mission ⇒New Business Opportunities for Shinagawa/Isolite by Fully Utilizing Synergies ※1 Refractory containing Ceramic Fiber 【Maximizing
Slide 11: FY 2022 Business Plan
Ⅱ. FY 2022 Business Plan Shinagawa Refractories: Results for Fiscal Year ended March 2022 10
Slide 12: Business Environment
１．Business Environment ● Uncertainty looms over the Japanese Crude Steel Production （Unit：Million ton） global economy with Russia’s 1,048.3 1,20 0.0 1,028.8 984.2 956.4 950.0 invasion to Ukraine and the impact of 1,00 0.0 827.8 800 .0 the related economic sanctions. Forecast 600 .0 ●The steel indust
Slide 13: Consolidated Financial Forecasts for FY2022
２．Consolidated Financial Forecasts for FY2022 (Unit: Million JPY) FY2021 FY2022 YoY Results Forecast Net Sales 110,784 100.0 123,000 100.0 ＋11.0% Operating Income 10,107 9.1 ― ― ― Ordinary Income 10,716 9.7 11,500 9.3 ＋7.3% Profit attributable to owners of parent 5,308 4.8 ― ― ― Note: Figures in squ
Slide 14: FY2022 Business Plan: Overview
３．FY2022 Business Plan: Overview ■ The 5th Mid-term Management Plan The Final Year Target will be achieved The Last Year Target One Year Ahead of Schedule FY2023 The Last Year Taget Sales: Left-side Scale (Billion JPY) 140.0 Ordinary Income: Right-side Scale (Billion JPY) 16.0 Sales 115 Billion JPY
Slide 15: Basic Policy & Overview of Primary Action Plans
４． FY2022 Business Plan: Basic Policy & Overview of Primary Action Plans Basic ＜The 5th Mid-term Management Plan＞ Policy Shinagawa aims for the record financial performance despite the gradual decline in domestic steel demand by introducing new products that meet various customers’ needs and strengt
Slide 16: Primary Action Plans: Correlation Diagram
４． FY2022 Business Plan: Basic Policy & Overview of Primary Action Plans ＜Primary Action Plans: Correlation Diagram＞ Plan and Execute Primary Actions while Growing Business Portfolio Japanese Market Overseas Market Existing Business New Business ３ Technical New Business Collaboration Entering New Ma
Slide 17: Sales Expansion of Refractory & Insulation
５．Primary Action Plans １ Sales Expansion & Production Optimization in Japan １） Sales Expansion of Refractory & Insulation 【Customer Industries】 【Shinagawa = Solutions Provider】 Blast Furnace Increasing Market Combining Technologies of Refractory Share in Existing & Insulation within Shinagawa Group
Slide 18: Production Optimization in Japan
５．Primary Action Plans １ Sales Expansion & Production Optimization in Japan ２） Production Optimization in Japan 3 Areas of The 5th Mid-term Management Plan Investment Focus FY2021 FY2022 FY2023 Monolithic Major Investment Preparing for Starting ① Competitive in 2021 (p.18-19) Full Operation Enhancem
Slide 19: Monolithic Competitive Enhancement
５．Primary Action Plans １ Sales Expansion & Production Optimization in Japan ２） Production Optimization in Japan ① Monolithic Competitive Enhancement West Works Consolidating Monolithic Production in （5 Plants） West Works to Enhance Competitiveness Ako Ako Okayama Okayama Hyogo Hinase Consolidating P
Slide 20: Monolithic Consolidation Schedule and Status
５．Primary Action Plans １ Sales Expansion & Production Optimization in Japan ２） Production Optimization in Japan ① Monolithic Competitive Enhancement Schedule and Updated Status The 5th Mid-term Management Plan The 6th Year/Timing FY2021 FY2022 FY2023 FY2024 1H 2H 1H 2H 1H 2H 1H 2H New Constructions
Slide 21: Overseas Expansion since late 1990s
５． Primary Action Plans ２ Overseas Business Expansion ▶ History of Overseas Business Expansion Overseas expansion since 1997, started from China ⇒In 2022, secured production bases in all major markets in the Indo-Pacific region Overseas Expansion since late 1990s 1997/ 3 China ●Shenyang Shinagawa Me
Slide 22: New Strategic Acquisitions in Brazil and USA
５． Primary Action Plans ２ Overseas Business Expansion ▶ New Strategic Acquisitions in Brazil and USA (announced on 5/12/22) BUSINESS OVERVIEW BUSINESS OVERVIEW Manufacturing and sales of Manufacturing and sales of Business Business refractories Alumina based wear resistant Description Description al
Slide 23: Overseas Expansion and Collaboration within Shinagawa Group
５． Primary Action Plans ２ Overseas Business Expansion ▶Overseas Expansion and Collaboration within Shinagawa Group Shinagawa Production Location Isolite Production Location Shinagawa New （ Sales Location） （ Sales Location） Production/Sales Location Hefeng Shinagawa IIP-E Jinan Ludong Shenyang Shinag
Slide 24: Increasing Trend of Overseas Sales
５． Primary Action Plans ２ Overseas Business Expansion ▶Increasing Trend of Overseas Sales ＊Overseas Sales ＝ Export from Japan＋ Sales by Overseas Production Locations 34.0 billion JPY With the new addition of sales in 12 billion yen from 27％ Brazil and USA, the Group's overseas sales in 2023 are expe
Slide 25: Further Expansion of Overseas Business
５． Primary Action Plans ２ Overseas Business Expansion ▶Further Expansion of Overseas Business ＜New Overseas Projects currently Under Consideration＞ 【China】 ●Additional Production Base Considering further collaboration with our JV partner, Anshan Hefeng Refractories (a major refractory manufacturer i
Slide 26: New Development at Shinagawa Fine Ceramics
５． Primary Action Plans ３ Entering New Markets ▶New Development at Shinagawa Fine Ceramics ●Mainly used as a substitute for metal parts (Required properties: High temperature resistance, low expansion, wear resistance, chemical corrosion resistance) ●Main customers: Manufactures of semiconductor / L
Slide 27: Expanding Capital Investment for the Future Growth
５． Primary Action Plans ４ Vigorous Capital Investments ▶Expanding Capital Investment for the Future Growth Capital Investment Spent Initial 3 Years （by 3 years Mid-term Plan） (Billion JPY(） Budget by the 2nd Year 16.0 14.0 13.5 12.0 11.0 Continue Vigorous 9.4 2021 Investment in the 3rd Year Results
Slide 28: Corporate Sustainability: Commitment and Action Plan
６．Corporate Sustainability １）Our Commitment and Action Plan 【Our Commitment】 Creating a Sustainable Society Board of Directors Based on our management philosophy of "Creation of a Report Supervise Prosperous Society by Industrial Development," Shinagawa will work together with our stakeholders to cr
Slide 29: Materiality at Shinagawa
６．Corporate Sustainability ２）Materiality at Shinagawa SDGs Theme № Materiality Develop and provide environmentally-friendly products and solutions to contribute to 1 the reduction of CO2 emissions and energy conservation Climate Change & Reduction of 2 Reduce CO2 emission and promote energy conserva
Slide 30: Addressing Climate Change: Towards Carbon Neutrality
６．Corporate Sustainability ３）Addressing Climate Change ① Towards Carbon Neutrality ● Reduce Greenhouse Gas Emissions 50% by 2030 (vs 2013) Goal 2013：52,900 ｔons/Y 2030：26,000 ｔons/Y ● Carbon Neutrality by 2050 Suppliers Shinagawa Customers Scope3 Scope1 Scope2 Scope3 Raw Material Using Non Mining Ca
Slide 31: Support for the TCFD and its Recommendation
６．Corporate Sustainability ３）Addressing Climate Change ② Support for the TCFD and its Recommendation ● Shinagawa declared support for the TCFD and its recommendations on December 2021 and has joined their consortium. ● We will voluntarily and proactively promote information disclosure based on the T
Slide 32: Sustainable Return of Profits to our Shareholders
７．The 5th Mid-term Management Plan & Policy for Profits Return to Shareholders ▶Sustainable Return of Profits to our Shareholders 【Dividend Policy】 Dividend per Share & Payout Ratio Dividend per Share Payout Ratio Considering the important of enhancing （JPY） 48.6 （％） 250 50 the return of profits to
Slide 33: Supplementary Notes
Ⅲ. Supplementary Notes Shinagawa Refractories: Results for Fiscal Year ended March 2022 32
Slide 34: Corporate Management Principles
１．Corporate Management Principles Shinagawa’s Management Principles Shinagawa contributes to the industrial development and the realization of a prosperous and sustainable society through providing high quality refractory products and engineering services such as designing and constructions of vario
Slide 35: Consolidated Net Sales & Ordinary Income for Past 14 Years
２．Consolidated Net Sales & Ordinary Income for Past 14 Years （Million JPY） Shinagawa Shirorenga & Net Sales Ordinary Income （Million JPY） 140,000 14,000 Kawasaki Refractories Merged on October 1, 2009 Consolidated financial results for the fiscal year ended March 2010 combine the consolidated financ
Slide 36: The Roles of Refractories Industry
３． The Roles of Refractories Industry ● Many vital materials that support important social infrastructure, such as steel, non-ferrous metals, cement and glass, are produced in furnaces lined with refractory products. ● The refractories industry supports the foundation of these key industries through
Slide 37: Major Products
４．Major Products • Refractories are industrial materials that can resist ultra-high temperatures in excess of 1,500 ℃. Refractories • Approximately 80% of refractory production is consumed by the steel industry. Shaped Refractories Monolithic Refractories Mold Powder Shaped refractories (“fire brick
Slide 38: Key Features and Advantages
５． Key Features and Advantages Leading Company of Ultra-High 1 Temperature Technologies Next Page Solid Customer Base with Highly-Advanced 2 Technological Capabilities 3 Active Global Business Expansion Shinagawa Refractories: Results for Fiscal Year ended March 2022 37
Slide 39: Solid Technology Development and Commercialization
５． Key Features and Advantages Leading Company of Ultra-High Temperature Technology Solid Technology Development and Commercialization Capabilities supported by Key Two Technologies ●Furnace Design ●Engineering Services ●Refractories ・Furnace construction work for ●Ceramic Fibers Refractory Furnace
Slide 40: Disclaimer
Disclaimer This document is intended to provide information on the results for the fiscal year ended March 2022 (April 2021 – March 2022) and is not intended to solicit investment in securities issued by the Company. The document was prepared based on data available as of June 16, 2022. Opinions, fo
Slide 41: Shinagawa Refractories Co., Ltd.
Sky is the Limit: Shaping the Future of Refractories Shinagawa Refractories Co., Ltd. TSE Securities Code Number 5351 Shinagawa Refractories: Results for Fiscal Year ended March 2022 40
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