Resonac Holdings Corporation · TSE:4004
Resonac — FY2021 Earnings Presentation
43 slides from Resonac's earnings presentation, Feb 14, 2022
Slide 1: 2021 Consolidated Financial Results
2021 Consolidated Financial Results (February 14, 2022) Hideki Somemiya, CFO Managing Corporate Officer
Slide 2: Summary
Summary 1. In 2021, due to the full-year consolidation of Showa Denko Materials and the strong performance of semiconductor-related products, sales increased by ¥445.9 billion and operating income increased by ¥ 106.6 billion. 2. In the forecast for 2022, it is expected that net sales will increase
Slide 3: Table of Contents
Table of Contents 1. Consolidated Financial Statements for 2021 2. 2022 Performance Forecast 3. Progress in Implementation of “Long-term Vision for Newly Integrated Company (2021~2030)” 3
Slide 4: Summary (2020 vs. 2021)
Summary (2020 vs. 2021) (Unit: Billions of Yen) （Ref.) Based on ongoing business (Unit: Billions of Yen) Increase/ Increase/ 2020*1 2021 2020*3 2021*4 decrease decrease Net sales 973.7 1,419.6 445.9 Net sales 1,056.6 1,259.3 202.7 Operating income (19.4) 87.2 106.6 Non-operating income and Operating
Slide 5: Summary of Consolidated Sales and Operating Income by Segment (2020 vs. 2021)
Summary of Consolidated Sales and Operating Income by Segment (2020 vs. 2021)*1 (Unit: Billions of Yen) 2020 2021 Increase/decrease Sales 193.4 283.1 89.8 46% Petrochemicals Operating Income 4.9 20.7 15.8 320% Sales 155.8 186.9 31.1 20% Chemicals Operating Income 13.5 21.6 8.1 60% Sales 97.4 120.9 2
Slide 6: Consolidated Sales and Operating Income by Segment (1)
Consolidated Sales and Operating Income by Segment (1) (2020 vs. 2021) Petrochemicals (Unit: Billions of Yen) Chemicals (Unit: Billions of Yen) Increase/ Increase/ 2020 2021 Decrease 2020 2021 Decrease Sales 193.4 283.1 89.8 Sales 155.8 186.9 31.1 Operating Operating Income 4.9 20.7 15.8 Income 13.5
Slide 7: Consolidated Sales and Operating Income by Segment (2)
Consolidated Sales and Operating Income by Segment (2) (2020 vs. 2021) Electronics (Unit: Billions of Yen) Inorganics (Unit: Billions of Yen) Increase/ Increase/ 2020 2021 decrease 2020 2021 decrease Sales 97.4 120.9 23.5 Sales 82.9 102.3 19.4 Operating Operating Income 9.1 16.2 7.0 Income (32.3) 14
Slide 8: Consolidated Sales and Operating Income by Segment (3)
Consolidated Sales and Operating Income by Segment (3) (2020 vs. 2021) Aluminum (Unit: Billions of Yen) Showa Denko Materials (Unit: Billions of Yen) Increase/ Increase/ 2020 2021 2020*1 2021 decrease decrease 302.7 332.3 Sales 80.2 76.2 (4.0) Sales 635.0 581.0*2 54.1 Operating Operating Income 0.4
Slide 9: Operating Income Breakdown by Factor
Operating Income Breakdown by Factor (2020 vs. 2021) (Unit: Billions of Yen) factors related to naphtha devaluation of Subsidiary inventory in Showa Denko accordance with the “lower of Materials Co., cost or market” Ltd. accounting 9 method
Slide 10: Non-operating income/expenses, Extraordinary profit/loss
Non-operating income/expenses, Extraordinary profit/loss Non-operating income/expenses (Unit: Billions of Yen) Increase/ 2020 2021 decrease Main factors Interest/Dividends income and expenses (4.6) (7.7) (3.2) Interest expenses increased Equity method newly applied to affiliates of Equity in earning
Slide 11: Consolidated Balance Sheet
Consolidated Balance Sheet Consolidated Balance Sheet (Unit: Billions of Yen) Dec. 31, Dec. 31, Increase/ Dec. 31, Dec. 31, Increase/ Assets Liabilities and net assets 2020 2021 Decrease 2020 2021 Decrease Cash and deposits 199.0 236.2 37.3 Notes and accounts payable 164.4 207.7 43.4 Notes and accou
Slide 12: Table of Contents
Table of Contents 1. Consolidated Financial Statements for 2021 2. 2022 Performance Forecast 3. Progress in Implementation of “Long-term Vision for Newly Integrated Company (2021~2030)” 12
Slide 13: 2022 Forecast (Consolidated)
2022 Forecast (Consolidated) (Unit: Billions of Yen except Cash dividends per Share and Net income per Share) 2022 Increase/ 2022 Forecast 2021 Forecast decrease 1st Half 2nd Half Net sales 1,419.6 1,350.0 (69.6) 640.0 710.0 Operating income 87.2 84.0 (3.2) 29.0 55.0 Non-operating income and expense
Slide 14: Net Sales Breakdown by Factor
Net Sales Breakdown by Factor (2021 vs. 2022 forecast) (Unit: Billions of Yen) Impact of Excluding the business impact of transfer* business transfer in 2021 * Excluding the impact of deconsolidation of Shoko Co., Ltd. 14
Slide 15: Operating Income Breakdown by Factor
Operating Income Breakdown by Factor (2021 vs. 2022 forecast) (Unit: Billions of Yen) Impact of Excluding the business impact of transfer* business transfer in 2021 * Excluding the impact of deconsolidation of Shoko Co., Ltd. 15
Slide 16: Change of disclosure segment
Change of disclosure segment To be changed to a disclosure segment based on the new management structure from Jan. 2022 ＜Relationship between new segments and major products＞ New Semiconductor and Innovation Enabling Mobility Chemicals Others Old Electronic Materials Materials Olefins, Petrochemical
Slide 17: Sales and Operating Income by New Segment, 2022 Forecast
Sales and Operating Income by New Segment, 2022 Forecast (Consolidated) (Unit: Billions of Yen) 2022 Forecast 1st Half 2nd Half Full Year Semiconductor and Sales 210.0 220.0 430.0 Electronic Materials Operating Income 22.0 31.0 53.0 Sales 90.0 100.0 190.0 Mobility Operating Income 1.0 5.0 6.0 Innova
Slide 18: Sales and Operating Income by Old Segment, 2022 Forecast
Sales and Operating Income by Old Segment, 2022 Forecast (Consolidated) (Unit: Billions of Yen) 2022 2021 Increase/decrease Forecast Sales 283.1 270.0 (13.1) (5%) Petrochemicals Operating Income 20.7 2.5 (18.2) (88%) Sales 186.9 195.0 8.1 4% Chemicals Operating Income 21.6 21.0 (0.6) (3%) Sales 120.
Slide 19: Operating Income Breakdown by Factor
Operating Income Breakdown by Factor (2021 vs. 2022 Forecast) (Unit: Billions of Yen) Impact of Excluding the business impact of transfer business transfer factors related factors related in 2021 to naphtha to shutdown 19 maintenance
Slide 20: Capital expenditures by Segment
Capital expenditures by Segment (Unit: Billions of Yen) 2022 Increase/decrease 2022 Old segmentation 2020(A) 2021(B) New segmentation Forecast(C) Forecast (B-A) (C-B) Semiconductor Petro- 5.1 2.7 8.7 (2.4) 6.0 and Electronic 61.5 chemicals Materials Chemicals 11.4 10.0 10.1 (1.4) 0.1 Mobility 12.6 E
Slide 21: Measures Taken in Semiconductor and Electronic Materials Segment (semiconductor materials)
Measures Taken in Semiconductor and Electronic Materials Segment (semiconductor materials) We will continue to grow as a global top-level semiconductor materials manufacturer 2021 2022 • Sales and profit continued to increase since 2020 • We aim to achieve growth of our mobility • Strong demand cont
Slide 22: Measures Taken in Semiconductor and Electronic Materials Segment (HDs・SiC epitaxial wafers)
Measures Taken in Semiconductor and Electronic Materials Segment (HDs・SiC epitaxial wafers) We will increase sales through development of HD media with largest capacity in the industry for use in HDDs for data centers, which are “the Best in Class” As the technology leader of SiC epitaxial wafers, w
Slide 23: Measures Taken in Mobility Segment
Measures Taken in Mobility Segment We will continue to start production of parts/materials for new models surely, and positively invest in production of parts/materials for next-generation cars 2021 2022 • Although there was a recovery in production of • Although the impact of short supply of cars i
Slide 24: Measures Taken in Chemicals Segment
Measures Taken in Chemicals Segment (Graphite electrodes, Petrochemicals) We will strengthen measures for stabilization of profitability of graphite electrodes by introducing price formula and multi-year contract. We will also surely execute periodic maintenance of our petrochemical plant 2021 2022
Slide 25: Table of Contents
Table of Contents 1. Consolidated Financial Statements for 2021 2. 2022 Performance Forecast 3. Progress in Implementation of “Long-term Vision for Newly Integrated Company (2021~2030)” 25
Slide 26: Measures of improving ROIC
Measures of improving ROIC We will achieve ROIC of more than 10% in medium- to long-term through propagation of ROIC conscious management and monitoring Asset efficiency and profitability of global chemical manufacturers ROIC （%） 25.0 : Japanese 1. Propagation of ROIC-oriented management : Non-Japan
Slide 27: Initiatives to improve profit structure
Initiatives to improve profit structure Expected to improve profitability by more than 30 billion yen in 2022, one year ahead of schedule We will also promote measures to reduce costs by additional ¥10 billion in and after 2023, starting from this year Initiative description Amount of profit improve
Slide 28: Initiatives to improve profit structure
Initiatives to improve profit structure We will enhance synergy in development of semiconductor materials and mobility products, and also promote integration of procurement, production process, and business bases Efforts to create synergies • CMP Slurry: Expand production capacity by utilizing SDK’s
Slide 29: Progress in pursuing synergies (short term): CMP slurry
Progress in pursuing synergies (short term): CMP slurry Creation of synergy through integration of operation in value chain of CMP slurry is in progress New product development Production Sales (by 2025) (from Aug. 2021) (from 2025) Development of Development of next-generation next-generation
Slide 30: Progress in reducing interest-bearing debt
Progress in reducing interest-bearing debt We have promoted interest-bearing debt reduction by selling businesses and streamlining assets. As a result, we steadily reduced interest-bearing debt by 209.5 billion yen from that at the end of 2020. We will continue to reduce interest-bearing debt, stren
Slide 31: Capital allocation for the next 5 years
Capital allocation for the next 5 years Over the next five years, we will create an operating cash flow of approximately 1 trillion yen, allocate 2/3 of it to capital investment and 1/3 of it to maintenance of stable dividend and reduction of interest-bearing debt. We will raise cash for strategic i
Slide 32: Progress in business portfolio reform
Progress in business portfolio reform The sale of businesses with enterprise value of 200 billion yen, which was set forth in the long-term vision, has been implemented for about 80% of the initial target as a result of quick decision-making. We will continue portfolio management, aiming for sustain
Slide 33: Asset streamlining
Asset streamlining We have decided to sell cross-held shares in principle. We will reduce assets by more than 130 billion yen by 2025 through sale of idle properties. Initiatives Effect (Unit: Billions of Yen) as announced in the Updated this time Long term Vision 2021 forecast 2021 actual results F
Slide 34: Long-term numerical targets
Long-term numerical targets To consider discipline more seriously, we have newly introduced ROIC as a new numerical target. By achieving below targets, we aim to be in the top 25% of TSR in chemical industry in medium- to long-term. 2021 2025 2030 (Results) Sales* (Tri. yen) 1.4 1.6 1.8～1.9 EBITDA m
Slide 35: Summary (CQ3 vs. CQ4, 2021)
(Reference) Summary (CQ3 (Jul.-Sep.), 2021 vs. CQ4 (Oct.-Dec.), 2021) (Unit: Billions of Yen) Increase/ CQ3, 2021 CQ4, 2021 decrease Net sales 358.3 367.9 9.6 Operating income 24.4 15.3 (9.1) Non-operating income and expenses, net (1.3) (1.7) (0.4) Ordinary income 23.1 13.6 (9.5) Extraordinary profi
Slide 36: Consolidated Companies, Selected Data
(Reference) Consolidated Companies, Selected Data Consolidated Companies Consolidated subsidiaries: 124 (-27 from Dec. 31, 2020) -29: Related to business transfer (-25) + 2: Minaris Regenerative Medicine (newly establishment), Shinshu Showa K.K. (newly consolidated) Equity method applied: 13 (±０ fro
Slide 37: Consolidated Cash Flows
(Reference) Consolidated Cash Flows (Unit: Billions of Yen) 2020 2021 2022 Increase/decrease (A) (B) Forecast(C) (B-A) (C-B) CF from operating activities 109.3 115.3 140.0 6.0 24.7 CF from investing activities (930.0) 28.6 (135.0) 958.7 (163.6) Free CF (820.8) 143.9 5.0 964.7 (138.9) CF from financi
Slide 38: Selected Data (Consolidated)
(Reference) Selected Data (Consolidated) (Unit: Billions of Yen) 2020 2021 2022 Increase/decrease (A) (B) Forecast(C) (B-A) (C-B) Capital expenditures 69.1 78.6 133.5 9.6 54.8 Depreciation and amortization*1 60.6 81.9 77.5 21.3 (4.3) R&D expenditures 34.4 46.8 48.1 12.4 1.4 Interest/dividend income
Slide 39: Depreciation by Segment
(Reference) Depreciation by Segment (Unit: Billions of Yen) 2022 Increase/decrease Old 2022 2020(A) 2021(B) Forecast New segmentation segmentation (B-A) (C-B) Forecast (C) Petro- Semiconductor 4.2 4.1 4.3 (0.1) 0.2 chemicals and Electronic 26.4 Materials Chemicals 9.5 9.9 9.2 0.4 (0.7) Mobility 14.4
Slide 40: Costs of the integration with Showa Denko Materials Co., Ltd.
(Reference) Costs of the integration with Showa Denko Materials Co., Ltd. (Unit: Billions of Yen) 2022 2021 Forecast Item Oct.-Dec. Full Year Full Year Post-merger integration (PMI) expenses*2 (Operating expenses) (2.2) (7.2) (7.7) Interest on borrowing related to share acquisition, etc. (Non-operat
Slide 41: Amortization of Goodwill and Intangible Fixed Assets Resulting from PPA
(Reference) Amortization of Goodwill and Intangible Fixed Assets Resulting from PPA* at Showa Denko Materials Co., Ltd. (Unit: Billions of Yen) 2021 2022 Amortization amount Forecast 1H 2H Full Year Full Year Intangible Fixed Assets 8.1 7.8 15.8 15.4 Goodwill 9.1 8.5 17.6 16.7 Subtotal (Operating ex
Slide 42: Topics
Topics Segment Topics SDK Decides to Choose and Apply to be Listed into TSE Prime Market General Showa Denko Group Challenges to Realize Carbon Neutrality by 2050 Issuance of new shares and secondary offering of shares Chemicals Showa Denko Decides to Invest in Strengthening Supply Chain of Liquefie
Slide 43: Note
Note Performance forecast and other statements pertaining to the future as contained in this presentation are based on the information available as of today and assumptions as of today regarding risk factors that could affect our future performance. Actual results may differ materially from the fore