Slide 1: NSG Group 2023/3 Annual Results
NSG Group 2023/3 Annual Results (from 1 April 2022 to 31 March 2023) 12 May 2023
Slide 2: Munehiro Hosonuma and Reiko Kusunose
Munehiro Hosonuma Representative Executive Officer and Chief Executive Officer Reiko Kusunose Senior Executive Officer and Chief Financial Officer 12 May 2023 2023/3 Annual Results Presentation
Slide 3: Agenda
Agenda 1. Financial Year ended 31 March 2023 Annual Results 2. Forecast for Financial Year ending March 2024 3. Update of Transformation Initiatives under Revival Plan 24 (RP24) 4. For the Financial Year ending March 2024, Final Year of RP24 5. Summary 12 May 2023 2023/3 Annual Results Presentation
Slide 4: 1. Financial Year ended 31 March 2023 Annual Results
1．Financial Year ended 31 March 2023 Annual Results 12 May 2023 2023/3 Annual Results Presentation 4
Slide 5: Consolidated Income Statement
Consolidated Income Statement Continued revenue and OP increase, OP above full-year forecast by 24%. Sales price and volume improvements absorbing impact of input costs rise Q4 (3 months) Full-year (12 months) Full year (JPY bn) 2022/3 2023/3 Change 2022/3 2023/3 Change Forecast Revenue increased in
Slide 6: Change Analysis – Operating profit (12 months cumulative)
Change Analysis – Operating profit (12 months cumulative) Sales price and vol/mix increases absorbing the impact of input and other costs 2022/3 Price improvement in all businesses 2023/3 Full-year Full-year including Architectural and Automotive 100 Freight and labour costs hike surpassing cost red
Slide 7: Change Analysis – Operating profit (Quarter 4 only)
Change Analysis – Operating profit (Quarter 4 only) OP improved significantly due to sales price increases while impacted by material and other costs rise 2022/3 2023/3 Q4 Price improvement in all businesses Q4 30 20 Significant Sales volume recovery material prices in Automotive hike 10 Freight and
Slide 8: Energy Price Movement
Energy Price Movement German natural gas price: remaining high level though in declining trend Japanese heavy fuel oil price: moving in high prices above JPY70,000/Kl during Q4 12 May 2023 2023/3 Annual Results Presentation 8
Slide 9: Glass Market Price Movement
Glass Market Price Movement German glass price increasing by 42% from FY2022/3 (136.9) to FY2023/3 (194.4) on annual average, although falling during Q4 with energy surcharge systems. Offsetting impact of higher input costs especially natural gas 12 May 2023 2023/3 Annual Results Presentation 9
Slide 10: Consolidated Balance Sheet
Consolidated Balance Sheet Maintained shareholders’ equity ratio above 10% of RP24 target despite goodwill impairment in Q2 31 March 31 March Decrease of goodwill and (JPY bn) Change intangible assets due to 2022 2023 impairment in Q2 Total Assets 939.3 951.4 12.1 Mainly increase in inventories, Non
Slide 11: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows Achieved free cash inflow above RP24 target of JPY 10 bn for the full-year reflecting OP improvement, consistent with the previous year Q4 (3 months) Full-year (12 months) (JPY bn) 2022/3 2023/3 Change 2022/3 2023/3 Change Net cash flows from operating 23.9 40.2
Slide 12: Segmental Information
Segmental Information 2021/3 Full-year 2022/3 Full-year 2023/3 Full-year Change (JPY bn) Operating Operating Operating Operating Operating Revenue ％ profit after Revenue ％ Revenue ％ Revenue profit profit profit Profit COVID* Architectural 215.5 43% 15.7 9.2 281.8 47% 28.1 365.9 48% 33.6 84.1 5.4 Eur
Slide 13: Architectural
Architectural (Cum. Rev▲, Profit▲: Q4 Rev▲, Profit ▼) Significant revenue and OP increase in full-year due to price increases, partly supported by weaker JPY. OP decrease in Q4 with high input costs, freight and labour costs increase 2022/3 2023/3 Europe (Cum. Rev▲, Profit▼ : Q4 Rev▲, Profit▼) JPY b
Slide 14: Automotive
Automotive (Cum. Rev▲, Profit ▲: Q4 Rev▲, Profit▲) Achieving full-year OP with further price improvement with vehicle manufacturers. Constrained vehicle build due to parts shortage being resolved gradually JPY bn 2022/3 Full-year 2023/3 Full-year Europe (Cum. Rev▲, Profit▲: Q4 Rev▲, Profit▲) 354.7 A
Slide 15: Technical Glass
Technical Glass (Cum. Rev▲, Profit▼ : Q4 Rev▼, Profit▼) Sales volume declined due to lockdown and economic slowdown, and costs rise leading to worse profitability. Continued cumulative revenue increase (like-for-like basis without disposal of battery separator business in September 2021) JPY bn 2022
Slide 16: 2. Forecast for Financial Year ending March 2024
2．Forecast for Financial Year ending March 2024 12 May 2023 2023/3 Annual Results Presentation 16
Slide 17: Assumptions for 2024/3 Full-year Forecast
Assumptions for 2024/3 Full-year Forecast Group Revenue planned to be flat, OP to decrease, but profit before taxation, profit for the period, and net profit to increase returning profitable. Continue to promote ‘Restoration of Financial Stability’ in the final year of RP24 • Slight appreciation of
Slide 18: Forecast for Financial Year ending March 2024
Forecast for Financial Year ending March 2024 Full-year revenue expected to be flat while OP decrease assumed with material and other costs rise caused by worldwide inflation trend 2023/3 2024/3 Change (JPY bn) Actual Forecast H1 Full-year H1 Full-year H1 Full-year Revenue 375.7 763.5 370.0 760.0 (5
Slide 19: 3. Update of Transformation Initiatives under Revival Plan 24 (RP24)
3．Update of Transformation Initiatives under Revival Plan 24 (RP24) 12 May 2023 2023/3 Annual Results Presentation 19
Slide 20: Transformation Initiatives under Revival Plan 24
Transformation Initiatives under Revival Plan 24 Continued RP24 initiatives to create business structure for sustainable growth Three Reforms ⚫ Business structure reform • Construction started to install online coating capacity for solar energy glass to an existing float furnace in Malaysia (Plannin
Slide 21: Transformation Initiatives under Revival Plan 24
Transformation Initiatives under Revival Plan 24 Shareholders’ equity ratio and FCF above RP24 financial targets. Focusing on improving OP margin and net profit Two Key Initiatives ⚫ Restoration of financial stability (JPY) 2024/3 Target 2022/3 Actual 2023/3 Actual Operating Profit Margin ８％ 3.3％ 4.
Slide 22: Transformation Initiatives under Revival Plan 24
Transformation Initiatives under Revival Plan 24 Sustainability • Contracted sustainability linked loan in Europe whose terms and conditions are linked with the Group’s sustainability targets, leading to promotion of sustainability management and aiming for integration of financial and non-financial
Slide 23: 4. For the Financial Year ending March 2024, Final Year of RP24
4．For the Financial Year ending March 2024, Final Year of RP24 12 May 2023 2023/3 Annual Results Presentation 23
Slide 24: For the Financial Year ending March 2024, Final Year of RP24
For the Financial Year ending March 2024, Final Year of RP24 FY2024/3, an important year for the Group’s future. Continuing to improve profits and cash by cost saving efforts, expansion of VA products and sales price increase New organization starting under CEO Hosonuma from April 2023 • Continuing
Slide 25: 5. Summary
5．Summary 12 May 2023 2023/3 Annual Results Presentation 25
Slide 26: Summary
Summary 1. Annual results of Financial Year ended March 2023 • Continued revenue and OP increase above full-year forecast with price and volume improvement, partly supported by weaker JPY • Higher energy, materials and other costs offset by sales price and volume improvements • Continuous strong per
Slide 27: Notice
Notice The projections contained in this document are based on information currently available to us and certain assumptions that we consider to be reasonable. Hence the actual results may differ. The major factors that may affect the results are the economic and competitive environment in major mar
Slide 28: Appendices
Appendices Financial Year ended 31 March 2023 Annual Results • Consolidated Income Statement – Quarterly Trend • Revenue & Operating Profit – Quarterly Trend • Segmental Information by Quarter • Revenue & Operating Profit – by Region • Exceptional Items • Foreign Currency Exchange Rates and Sensitiv
Slide 29: Consolidated Income Statement – Quarterly Trend
Consolidated Income Statement – Quarterly Trend 2021/3 2022/3 2023/3 （JPY bn） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenue 91.9 129.7 135.8 141.9 147.7 143.0 152.3 157.6 177.9 197.7 190.6 197.3 Operating profit/(loss) (0.6) 3.8 4.8 5.0 7.2 5.5 1.8 5.5 8.3 6.2 9.7 10.7 Operating profit margin - 2.9% 3
Slide 30: Revenue & Operating Profit – Quarterly Trend
Revenue & Operating Profit – Quarterly Trend Architectural (JPY bn) 96.5 93.6 85.6 90.3 10.7 74.8 75.0 8.9 Americas 64.5 67.5 29.8 28.7 26.7 59.4 7.5 24.5 54.2 57.0 6.6 7.4 Asia 21.0 6.8 21.6 7.7 44.9 17.4 6.1 19.5 26.1 2.7 13.4 14.1 15.9 22.9 25.8 24.5 Europe 9.7 4.6 4.1 24.5 21.5 18.6 20.5 4.2 18.
Slide 31: Segmental Information by Quarter
Segmental Information by Quarter 2021/3 2022/3 2023/3 (JPY bn) Q1 Q2 Q3 Q4 Cum. Q1 Q2 Q3 Q4 Cum. Q1 Q2 Q3 Q4 Cum. Revenue: Architectural 44.9 54.2 57.0 59.4 215.5 64.5 67.5 74.8 75.0 281.8 85.6 96.5 93.6 90.3 365.9 Europe 16.0 22.2 22.4 24.5 85.2 27.8 27.1 29.3 31.8 116.0 38.2 40.6 39.1 39.1 157.1 A
Slide 32: Revenue & Operating Profit – by Region
Revenue & Operating Profit – by Region 2022/3 Full-year 2023/3 Full-year Change (JPY bn) Operating Operating Operating Revenue ％ Revenue ％ Revenue profit/(loss) profit profit/(loss) Europe 240.6 40% (0.8) 316.8 41% 10.2 76.2 10.9 Asia 177.2 30% 20.4 196.7 26% 22.9 19.5 2.5 Americas 180.0 30% 10.5 24
Slide 33: Exceptional Items
Exceptional Items 2022/3 2023/3 (JPY bn) Full-year Full-year Restructuring costs (0.7) (0.4) Reversal of surplus provisions 0.4 1.9 Impairment of goodwill & intangible assets - net 0.1 (48.7) Settlement of litigation matters - net (0.6) 2.8 Gain on disposal of subsidiaries and businesses 4.4 1.5 Gai
Slide 34: Foreign Currency Exchange Rates and Sensitivity
Foreign Currency Exchange Rates and Sensitivity Average rates used 2021/3 2022/3 2023/3 2024/3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Forecast GBP 133 135 136 139 153 152 153 153 163 163 164 163 160 EUR 118 121 123 124 132 131 131 130 138 139 140 141 134 USD 107 106 106 106 109 109 112 112 129 134 137
Slide 35: Depreciation & Amortization, Capital Expenditures, R&D Expenditures
Depreciation & Amortization, Capital Expenditures, R&D Expenditures 2022/3 2023/3 2024/3 (JPY bn) Full-year Full-year Full-year Forecast Depreciation & 36.7 40.2 44.0 Amortization Capital expenditures 28.6 40.9 47.7 Ordinary 24.6 36.5 Strategic projects and other 4.0 4.4 R&D expenditures 7.7 9.1 10.
Slide 36: Energy Cost Breakdown (FY2022/3→FY2023/3)
Energy Cost Breakdown (FY2022/3→FY2023/3) Energy costs +59%＊ YoY for the Group, +76% for natural gas. Natural gas prices still in high levels, although declined during H2. Huge cost pressures in Europe and Americas by region, and in Architectural by business FY2022/3 (Cumulative) Group Group natural
Slide 37: Energy Cost Breakdown (by region)
Energy Cost Breakdown (by region) Significant impact to worldwide energy costs by natural gas price hike, especially in Europe and Americas Europe +74% Americas +51％ Natural gas Electricity +27％ Heavy fuel oil Asia Left：2022/3 (Cumulative) Others Right：2023/3 (Cumulative) 12 May 2023 2023/3 Annual R
Slide 38: News Releases ― November 2022 to April 2023
News Releases ― November 2022 to April 2023 (https://www.nsg.com/en/media) -Aiming for a Zero-Incident Workplace Environment- 8-Nov-22 NSG Group’s Safety Day Activities at All Locations Worldwide Completion Ceremony Held for Second Research Building of Technical Research 16-Dec-22 Laboratory Japan 2