Slide 1: Kureha Corporation Reports Fiscal 2017 Results (IFRS)
Kureha Corporation Reports Fiscal 2017 Results (IFRS) Tokyo, Japan – June 2018 – Kureha Corporation (“Kureha”), a leading global supplier of specialty chemicals and plastics, has reported its results for the fiscal year ended March 31, 2018 (FY2017). On a consolidated basis, revenue increased by 11.
Slide 2: Summary of Consolidated Results and Performance by Segment
challenging due to factors such as yen appreciation and rising raw material prices, we are on track to reach the targeted operating profit of 14.0 billion yen. Alongside existing businesses, we will focus strongly on new business creation and accelerate commercialization in 11 selected themes. We wi
Slide 3: Advanced Materials Segment
Advanced Materials Segment Major product areas: advanced plastics (PPS, PVDF, PGA), carbon materials Advanced Materials revenue rose 25% year-on-year to 41.6 billion yen while operating profit jumped from 0.1 billion yen to 1.7 billion yen. Advanced plastics: Continued growth for PVDF and PPS for au
Slide 4: Specialty Chemicals Segment
revenue is expected to increase by 9% to 45.5 billion yen, while operating profit will climb to 3.9 billion yen. Specialty Chemicals Segment Major product areas: industrial chemicals, agrochemicals, pharmaceuticals Specialty Chemicals revenue grew slightly to 26.2 billion yen from 25.9 billion yen w
Slide 5: Specialty Plastics Segment
Specialty Plastics segment revenue rose by 6% from 42.8 billion yen to 45.4 billion yen while operating profit increased by 39% to 6.9 billion yen. Home products: Strong sales volumes for NEW Krewrap and Seaguar The home products business recorded growth in both revenue and operating profit due to s
Slide 6: Outlook for FY2018
compensated for lower revenue, leading to an increase in operating profit. In the hospital business, operating profit declined due to flat revenue. As a result, revenue in Other Operations increased to 16.8 billion yen while operating income rose to 1.8 billion yen. Outlook: In FY2018, Kureha expect
Slide 7: Capex, Depreciation, R&D and Debt
Capex, Depreciation, R&D and Debt (Billions of yen) FY2016 FY2017 FY2018 Capital expenditure 10.3 9.8 15.0 Depreciation 10.2 9.9 10.3 R&D 4.7 5.0 5.8 Interest-bearing debt 71.0 48.1 49.0 Capital expenditure in FY2017 decreased slightly year-on-year to 9.8 billion yen, and was mainly focused on upgra
Slide 8: Condensed Consolidated Balance Sheets and Statement of Income
Condensed Consolidated Balance Sheets As of March 31, 2017 and 2018 (Millions of yen) March 2017 March 2018 Assets Current assets 75,272 76,963 Cash and cash equivalents 6,222 6,475 Noncurrent assets 159,634 165,318 Property, plant and equipment 115,911 114,236 Intangible assets 1,395 1,336 Investme
Slide 9: FY2017 Financial Results
FY2017 Financial Results (Period April 1, 2017 – March 31, 2018) May 11, 2018
Slide 10: Contents
1 Contents 1. FY2017 Results 2. FY2018 Outlook • FY2017 Highlights 3-6 • FY2018 Forecast 16-18 • Segment Performance • Segment Outlook Advanced Materials 7 Advanced Materials 19 Specialty Chemicals 8 Specialty Chemicals 20 Specialty Plastics 9 Specialty Plastics 21 Construction & Other Operations 10
Slide 11: 1. FY2017 Results
2 1. FY2017 Results (April 1, 2017 – March 31, 2018)
Slide 12: FY2017 Highlights
3 FY2017 Highlights (in billions of yen, except where stated otherwise) FY2016 FY2017 Change (%) Revenue 132.3 147.3 15.0 (11.4%) FY2017 vs. FY2016 • Revenue grew across all Operating profit 9.3 13.0 3.7 (40.2%) segments, with largest growth led by Advanced Materials Profit before income tax 9.0 12.
Slide 13: FY2017 Highlights: Segment Variance
4 FY2017 Highlights Segment Variance: FY2017 vs. FY2016 (billions of yen) Revenue Operating …FY2016 …FY2016 45.4 Profit 6.9 41.6 42.8 …FY2017 …FY2017 33.4 5.0 25.9 26.2 3.4 17.4 16.3 16.8 2.5 13.9 1.7 1.7 1.8 1.0 1.0 0.1 Advanced Specialty Specialty Other Advanced Specialty Specialty Other Construct
Slide 14: FY2017 Highlights
5 FY2017 Highlights (billions of yen) Advanced Specialty Specialty Con- Other Segment FY2016 Materials Chemicals Plastics struction Operations Total Adjustment Total Revenue 33.4 25.9 42.8 13.9 16.3 132.3 ------ 132.3 Elimination 0.1 ------ Other income *Subsidy income: ¥1bn 1.4 ------ Other expense
Slide 15: FY2017 Highlights: Other Income and Expenses
6 FY2017 Highlights Other Income and Expenses FY2016 FY2017 Other income ¥1.4 billion Other income ¥0.5 billion ¥0.2b Subsidy income: ¥1.0bn Subsidy income: ¥0.3bn =¥7.8bn (Fukushima Recovery Subsidy) - ¥6.9bn *Including subsidies for post-quake restoration (Loss on reduction of noncurrent assets) i
Slide 16: Segment Performance: Advanced Materials
7 Segment Performance: Advanced Materials (billions of yen) FY2016 FY2017 Change FY2017 vs. FY2016 % Advanced Materials Revenue Operating Profit Advanced plastics 19.7 24.4 24% Advanced plastics: Carbon products 4.1 4.9 19% Operating profit increased on revenue Revenue: Kureha Co. 23.9 29.4 23% grow
Slide 17: Segment Performance: Specialty Chemicals
8 Segment Performance: Specialty Chemicals (billions of yen) FY2016 FY2017 Change FY2017 vs. FY2016 % Specialty Chemicals Revenue Operating Profit Agrochemicals 7.2 9.2 27% Agrochemicals Pharmaceuticals 5.6 3.8 -31% Operating profit increased on higher fungicides sales volume Industrial chemicals 8.
Slide 18: Segment Performance: Specialty Plastics
9 Segment Performance: Specialty Plastics (billions of yen) FY2016 FY2017 Change FY2017 vs. FY2016 % Specialty Plastics Revenue Operating Profit Home products 19.5 20.7 6% Packaging materials 7.0 6.3 -9% Home products Operating profit grew on increased Revenue: Kureha Co. 26.5 27.0 2% revenue from N
Slide 19: Segment Performance: Construction & Other Operations
10 Segment Performance: Construction & Other Operations (billions of yen) FY2016 FY2017 Change FY2017 vs. FY2016 % Construction Revenue Operating Profit Construction 21.2 23.9 13% Construction Elimination -7.2 -6.6 -- Construction volume increased in both Kureha-G Revenue 13.9 17.4 25% public and pr
Slide 20: FY2017 vs. Initial Projection
11 FY2017 vs. Initial Projection Segment Variance: FY2017 Results vs. Initial projection (billions of yen) Revenue Operating profit 41.0 41.6 43.0 45.4 …FY2017 Initial 6.9 …FY2017 Initial projection projection …FY2017 results …FY2017 results 4.1 26.5 26.2 3.4 3.0 17.4 17.0 16.8 2.6 14.5 1.8 1.7 1.0
Slide 21: Key Indicators
12 Key Indicators (billions of yen) FY2016 FY2017 Change 1H 2H Full year 1H 2H Full year YOY Capital expenditure 4.8 5.5 10.3 4.0 5.8 9.8 -5% Depreciation 5.1 5.1 10.2 4.9 5.0 9.9 -3% R&D expenses 2.2 2.5 4.7 2.3 2.7 5.0 6% Interest-bearing debt 77.8 71.0 71.0 56.0 48.1 48.1 -32% (Currency exchange
Slide 22: Financial Position
13 Financial Position (billions of yen) Assets Liabilities and Equity Mar. 31 Mar. 31 Mar. 31 Mar. 31 Change Change 2017 2018 2017 2018 Cash and cash equivalents 6.2 6.5 0.3 Trade and other payables 20.4 21.5 1.2 Trade and other receivables 29.4 32.7 3.3 Interest-bearing debt 71.0 48.1 -22.9 * Inven
Slide 23: Cash Flow
14 Cash Flow (billions of yen) FY2016 FY2017 Change Profit before income tax 9.0 12.7 3.7 Depreciation 10.2 9.9 -0.3 Other -6.8 -2.4 4.4 Cash flow from operating activities 12.4 20.2 7.8 Cash flow from investing activities -1.1 -9.7 -8.6 Cash flow from financing activities -11.7 -10.4 1.3 Effect of
Slide 24: 2. FY2018 Outlook
15 2. FY2018 Outlook (April 1, 2018 – March 31, 2019)
Slide 25: FY2018 Forecast
16 FY2018 Forecast (billions of yen, except where stated otherwise) FY2018e Change FY2017 1H | 2H YOY (%) FY2018e vs. FY2017 Revenue 147.3 150.0 2.7 (1.8%) 72.0 | 78.0 • Revenue growth driven by Advanced Materials Operating profit 13.0 14.0 1.0 (7.9%) • Operating profit to increase on 5.0 | 9.0 stro
Slide 26: FY2018 Forecast: Segment Variance
17 FY2018 Forecast Segment Variance: FY2018e vs. FY2017 (billions of yen) Revenue Operating …FY2017 Profit …FY2017 45.5 45.4 46.0 6.9 41.6 …FY2018e 5.9 …FY2018e 26.2 27.5 3.9 3.4 17.4 16.8 16.5 2.7 14.5 1.7 1.8 1.0 1.4 0.6 Advanced Specialty Specialty Other Advanced Specialty Specialty Other Constru
Slide 27: FY2018 Forecast
18 FY2018 Forecast (billions of yen) FY2017 Advanced Specialty Specialty Con- Other Segment Adjustment Total Materials Chemicals Plastics struction Operations Total Revenue 41.6 26.2 45.4 17.4 16.8 147.3 ------ 147.3 Elimination 0.2 ------ Other income *Subsidy income: ¥0.3bn 0.5 ------ Other expens
Slide 28: Segment Outlook: Advanced Materials
19 Segment Outlook: Advanced Materials (billions of yen) FY2017 FY2018e Change FY2018 vs. FY2017 % Advanced Materials Revenue Operating Profit Advanced plastics 24.4 28.0 15% Advanced plastics Carbon products 4.9 4.5 -9% Higher revenue & operating profit driven by strong growth of PGA for Revenue: K
Slide 29: Segment Outlook: Specialty Chemicals
20 Segment Outlook: Specialty Chemicals (billions of yen) FY2017 FY2018e Change FY2018 vs. FY2017 % Specialty Chemicals Revenue Operating Profit Agrochemicals 9.2 8.0 -13% Agrochemicals Pharmaceuticals 3.8 5.0 30% Lower revenue & operating profit due Industrial chemicals 9.4 9.5 1% to a decline in f
Slide 30: Segment Outlook: Specialty Plastics
21 Segment Outlook: Specialty Plastics (billions of yen) FY2017 FY2018e Change FY2018e vs. FY2017 % Specialty Plastics Revenue Operating Profit Home products 20.7 21.0 1% Home products Packaging materials 6.3 6.0 -5% Revenue expected to increase on Revenue: Kureha Co. 27.0 27.0 0% volume growth of N
Slide 31: Segment Outlook: Construction & Other Operations
22 Segment Outlook: Construction & Other Operations (billions of yen) FY2018e vs. FY2017 FY2017 FY2017e Change % Revenue Operating Profit Construction Construction 23.9 20.5 -14% Construction Elimination -6.6 -6.0 -- Revenue & operating profit to decrease due to a decline in post-quake demand, Kureh
Slide 32: Key Indicators
23 Key Indicators (billions of yen) Change FY2017 FY2018e YOY(%) Capital expenditure 9.8 15.0 5.2 (54%) Depreciation 9.9 10.3 0.4 (4%) R&D expenses 5.0 5.8 0.8 (16%) Interest-bearing debt 48.1 49.0 0.9 (2%) (Currency exchange rates) 1USD: Term average ¥110.9 ¥105.0 Term end ¥106.2 ¥105.0 1EUR: Term
Slide 33: Cash Flow
24 Cash Flow (billions of yen) Change FY2017 FY2018e YOY Profit before income tax 12.7 14.0 1.3 Depreciation 9.9 10.3 0.4 Other -2.4 -4.2 -1.8 Cash flow from operating activities 20.2 20.1 0.0 Cash flow from investing activities -9.7 -18.0 -8.3 Cash flow from financing activities -10.4 -2.1 8.3 Effe
Slide 34: 3. Updates on 'Kureha's Challenge 2018'
25 3. Updates on ‘Kureha’s Challenge 2018’ Mid-Term Management Plan
Slide 35: Kureha's Challenge 2018: Strategic Positioning
26 Kureha’s Challenge 2018: Strategic Positioning ‘Kureha’s Challenge 2018’ The FY2016-2018 mid-term management plan Strategic direction As a company built on Business goals technology, Kureha will develop differentiated ･ Enhance competitiveness and earnings products in the field of capacity of exi
Slide 36: Quantitative targets: Mid-term plan vs. Outlook
27 Quantitative targets Mid-term plan vs. Outlook (billions of yen) FY2018e vs. Mid-term plan targets Mid-term plan FY2018e FY2018 Difference • Revenue lower than targeted in targets Advanced Materials (a delay in PGA business expansion) and Revenue 150.0 160.0 -10.0 Other Operations (revising busin
Slide 37: Segment Performance: Mid-term plan vs. Outlook
28 Segment Performance Mid-term plan vs. Outlook Mid-term plan Factors for differences FY2018e Difference ⃝ Performing above target FY2018 targets -- Performing as planned △ Performing below target Ope. Ope. Ope. Revenue Revenue Revenue Profit profit profit Advanced Materials Advanced 45.5 3.9 50.0
Slide 38: Key Indicators: Mid-term plan vs. Outlook
29 Key Indicators: Mid-term plan vs. Outlook FY2016- Mid-term plan FY2016 FY2017 FY2018e 2018e Difference FY2016-2018 Total Capital expenditure 50.0 10.3 9.8 15.0 35.1 -14.9 Depreciation 35.0 10.2 9.9 10.3 30.4 -4.6 R&D expenses 20.0 4.7 5.0 5.8 15.5 -4.5 Mid-term plan FY2018e Difference FY2016-2018
Slide 39: Progress on Kureha's Challenge 2018
30 Progress on Kureha’s Challenge 2018 Initiatives Enhance competitiveness & Progress in FY2016-2017 Challenges in FY2018 Enhance earnings capacity Resolved to enhance annual production Study for additional production ＰＰＳ by 5000 tons (operational in 2021) enhancement ＰＶＤＦ 2000t enhancement project
Slide 40: Progress on Kureha's Challenge 2018
31 Progress on Kureha’s Challenge 2018 Initiatives Progress in FY2016-2017 Challenges in FY2018 Explore new business Explored potential themes responding to Work on selected 11 themes with proper themes market needs in collaboration with gate controls and accelerate their external parties commercial
Slide 41: 3. Consolidated Companies
32 3. Consolidated Companies
Slide 42: Revenues & Assets
33 Revenues & Assets (billions of yen) FY2016 FY2017 Change Revenue Total assets Revenue Total assets Revenue Total assets Kureha Corporation 71.9 188.4 78.9 192.7 7.0 4.3 Kureha Trading Group (2) 20.3 13.6 22.5 14.1 2.2 0.5 Kureha Corporation 23.9 -- 29.4 -- 5.5 -- Kureha Trading Group (2) 8.6 -- 1
Slide 43: Revenues & Assets
34 Revenues & Assets (billions of yen) FY2016 FY2017 Change Revenue Total assets Revenue Total assets Revenue Total assets Kureha Nishiki Group (4) 18.2 10.8 21.9 11.3 3.8 0.4 Construc- Kureha Engineering Co. 3.0 2.1 2.0 2.1 -1.0 0.0 tion Consolidation adjustments -7.2 -- -6.6 -- -- -- Total 13.9 --
Slide 44: Disclaimer
35 Disclaimer • These materials are supplied to provide a deeper understanding of our company, and are not intended to as a solicitation for investment or other actions. • These materials have been prepared by our company based on the information available at this point in time. However, actual perf