Mitsui Chemicals, Inc. · TSE:4183
Mitsui Chemicals — FY2019 Earnings Presentation
52 slides from Mitsui Chemicals's earnings presentation, Jun 2, 2020
Slide 1: Creating New Customer Value through Innovations - CEO Presentation
FY20-1 Creating New Customer Value through Innovations CEO PRESENTATION 橋本 修 HASHIMOTO Osamu Mitsui Chemicals Inc. President & CEO Jun 2, 2020
Slide 2: Contents
Jun 2, 2020 Contents ▶Business Performance ▶Post COVID-19 ▶Topics on Targeted Business Domains ▶Topics on Sustainability ▶Financial Overview
Slide 3: Introduction
1 Introduction Jun 2, 2020 As the novel coronavirus continues to spread around the world, I would first of all like to express my heartfelt gratitude to health care workers, as well as to everyone else working around the clock to keep society running. This fiscal year marks a good time to take anoth
Slide 4: MCI's Response to COVID-19
2 MCI’s Response to COVID-19 Jun 2, 2020 Supporting production of face shields in Mexico Remote working for Group staff worldwide 3D-printed masks Supporting healthcare providers • Donation of masks, sanitizers, etc. to local medical institutions across Group locations フェイスシールド製作支援 Nonwovens for med
Slide 5: Business Environment in FY2020
3 Business Environment in FY2020 Jun 2, 2020 Trends continuing Post-COVID-19 from pre-COVID-19 change Growing awareness toward & demand for 1 Rapid progress in digital tech – 5G, AI 3 hygiene and comfort Growing awareness toward Increased geopolitical risks brought by 2 environmental and social sust
Slide 6: FY19 Results & FY20 Outlook
4 FY19 Results & FY20 Outlook Jun 2, 2020 • Income down for second half of FY2019 due to impact of global economic downturn • Valuation loss of 12.1B yen (extraordinary loss for FY2019) on capital invested in Nghi Son refinery • Situation is unclear for FY2020, but plans are based on an assumed seco
Slide 7: Operating Income by Segment
5 Operating Income by Segment Jun 2, 2020 • Mobility segment income down significantly due to a drastic drop in automotive production • Basic Materials segment took a major impact from an inventory valuation loss caused by the steep decline in naphtha prices （JPY bn） Increase FY2017 FY2018 FY2019 FY
Slide 8: Segment 1: Mobility
6 Segment 1: Mobility Jun 2, 2020 –Operating Income- FY19 HIGHLIGHTS Accounting standard （JPY bn） Price J-GAAP→IFRS Sales Operating income COVID-19 +0.6 +3.5 FY18 Volume Fixed costs, FY19 IFRS ▲ 7% ▲ 8% ▲ 1Byen Results ▲2.3 etc. FY19 42.7 ▲15.2 42.7 ▲1.8 Results ✔ Affected by global downturn in auto
Slide 9: Segment 2: Health Care
7 Segment 2: Health Care Jun 2, 2020 -Operating Income- FY19 HIGHLIGHTS Price （JPY bn） Volume Sales Operating income COVID-19 +1.0 +0.1 2% +2% 0.5B Accounting standard J-GAAP→IFRS Fixed costs, ▲1.2 ▲ ▲ Etc. FY19 yen FY18 ▲0.9 Results FY19 Results ▲2.1 13.6 13.8 IFRS ✔ Strong sales in vision care bus
Slide 10: Segment 3: Food & Packaging
8 Segment 3: Food & Packaging Jun 2, 2020 -Operating Income- FY19 HIGHLIGHTS （JPY bn） Sales Operating income COVID-19 Price Volume ±0 +1.8 Accounting standard J-GAAP→IFRS ▲ 3% +2% ▲ 0.5B yen Fixed costs, FY19 ▲1.7 FY18 Etc. Results Results ✔ Strong performance for semiconductor tape ▲1.5 ▲0.4 17.8 1
Slide 11: Segment 4: Basic Materials
9 Segment 4: Basic Materials Jun 2, 2020 -Operating Income- FY19 HIGHLIGHTS Operating Inventory Typhoon, Naphtha Price Naphtha Price Naphtha Price income valuation loss*1 troubles COVID-19 49,400JPY/kl 42,900JPY/kl 23,300JPY/kl (JPY bn） ▲ 69% ▲ 1B yen ▲ 4Byen ▲ 2B yen Volume ✔ Worsening market sprea
Slide 12: Contents
Jun 2, 2020 Contents ▶Business Performance ▶Post COVID-19 ▶Topics on Targeted Business Domains ▶Topics on Sustainability ▶Financial Overview
Slide 13: Emergency Measures - Part 1: Financial Infrastructure
10 Emergency Measures - Part1: Financial Infrastructure Jun 2, 2020 ■Shareholders’ equity (ratio) (JPY bn) Operating Income ●Net D/E ■Operating income 71.6 1.39 Net D/E 1.0 527.6 (35.6%) Net D/E ●ROS(％) 5.3% 42.0 Significant 2.7% 349.9 (29.4%) 0.76 improvement FY08 (J-GAAP) FY14 (J-GAAP) FY19 (J-GAA
Slide 14: Emergency Measures - Part 2: Investments & Cost-Cutting
11 Emergency Measures - Part 2: Investments & Cost-Cutting Jun 2, 2020 Investments (excl. M&A) Emergency measures 00 ▲13B yen and ■Investment 00■J-GAAP→IFRS 135 As of May 14 122 00 (JPY bn) further considering plans to Emergency Reduce & 00 measure delay reduce & delay investments ▲13 00 106 Additio
Slide 15: Emergency supply of nonwovens for masks and medical gowns
12 Business Impact of the COVID-19 Pandemic – Part 1 Jun 2, 2020 Emergency supply of nonwovens for masks and medical gowns ✔ In addition to masks – for which demand is surging – we are responding to a government request by beginning emergency production of nonwovens for medical gowns ✔ Running full
Slide 16: Inquiries for various antibacterial and antiviral product lines
13 Business Impact of the COVID-19 Pandemic – Part 2 Jun 2, 2020 Inquiries for various antibacterial and antiviral product lines FASTAID™ YOHTOL™ DP-CD Antibacterial colloids Virus Sweeper Towel New iodine-based material Polymer-based antibacterial material Self-liquefaction of bacteria following in
Slide 17: Strengthening Operations for Post COVID-19
14 Strengthening Operations for Post COVID-19 – Part 1 Jun 2, 2020 To prepare for social changes after COVID-19, bolster our marketing operations and functional relationships in a speedy manner Increasing ownership Bolstering organizational structure ＜Mobility＞ ＜Health Care＞ ARRK New Business CoE Sy
Slide 18: Starting up a CoE system with cross-organizational powers
15 Strengthening Operations for Post COVID-19 – Part 2 Jun 2, 2020 Starting up a CoE* system with cross-organizational powers and responsibilities *CoE = Center of Excellence Looking toward potential major changes that lie ahead and providing speedy, optimal solutions to customers Starting with two
Slide 19: Accelerating medical business development
16 Strengthening Operations for Post COVID-19 – Part 3 Jun 2, 2020 Accelerating medical business development Business for TouchFocus™ E-Glass next-gen. eyewear NEW HEALTH CARE BUSINESS Sleep DEVELOPMENT DIV. Mouthpiece business for OSA* Solutions *OSA: Obstructive sleep apnea Medical Business Develo
Slide 20: Launching the New Business Incubation Center
17 Strengthening Operations for Post COVID-19 – Part 4 Jun 2, 2020 Launching the New Business Incubation Center, which is tasked with exploring and creating new businesses in all fields ICT Creating new businesses to become our next MATERIALS target domain INCUBATION CENTER NEW BUSINESS ROBOT Develo
Slide 21: Strategic Outlook for FY2020
18 Strategic Outlook for FY2020 Jun 2, 2020 • Impact from COVID-19 expected to partially remain in Basic Materials, Mobility (automotive production) segments • While our plans for FY20 were built based on a difficult outlook, we are redoubling our efforts to secure cash flow in preparation for furth
Slide 22: Contents
Jun 2, 2020 Contents ▶Business Performance ▶Post COVID-19 ▶Topics on Targeted Business Domains ▶Topics on Sustainability ▶Financial Overview
Slide 23: Mobility
Jun 2, 2020 計数目標まとめｰグラフ Mobility Providing solutions that make full use of our comprehensive strengths
Slide 24: Mobility: Market Conditions for PP Compounds
19 Mobility: Market Conditions for PP Compounds Jun 2, 2020 Getting ready for a post-COVID world despite facing the effects of globally reduced automotive production Forecast: IHS Markit (April 2020) North America Europe Japan Market ▲25% Market ▲25% ▲20% Outlook Outlook Market • Resuming some U.S.
Slide 25: Mobility: Production Increase for APEL
20 Mobility: Production Increase for APEL™ Jun 2, 2020 Constructing new plant for optical resin APEL™ Steady growth for APEL™ sales Background (Sales Volume) FY08-25 ✔ Continue to show high sales growth compared to CAGR: 9% smartphone demand due to trend toward DVD/BD multi-lens cameras Smartphone ✔
Slide 26: Mobility: Supporting Development of Air Mobility
21 Mobility: Supporting Development of Air Mobility Jun 2, 2020 ✔ Using Mitsui Chemicals’ materials technologies and ARRK’s prototyping support capabilities to aid in the production of air mobility concept model ✔ Achieving additional rigidity, lightweighting by way of technologies for bonding of he
Slide 27: Mobility: Project Schedule
22 Mobility: Project Schedule Jun 2, 2020 Expanding our pipeline for monetization projects for FY21 onward; moving into a phase where we can reap the rewards of our investments Schedule for profit contribution Mobility investment projects Capacity Stable growth Accelerate growth Note (partial list)
Slide 28: Health Care
Jun 2, 2020 Health Care Providing products & services that contribute to quality of life through chemical innovations
Slide 29: Health Care: Dental Materials
23 Health Care: Dental Materials Jun 2, 2020 Bolstering our business and capital tie-up with Shofu for expanded presence in Japan and Asia Digital Digital ● 3D printer inks Invested into B9Creations, Business and a U.S.-based manufacturer ● FY18: 2 products FY19: 4 products capital tie-up of DLP/3D
Slide 30: Health Care: Nonwovens
24 Health Care: Nonwovens Jun 2, 2020 Responding to mask demand Sturdy demand in 5G sector Mask demand Completed capacity increase for crossing cultural borders nano-nonwovens (January 2020) to become global and long-term Downsizing for semiconductor circuits TEKNOROTE™ Needs Downsizing for filters
Slide 31: Food & Packaging
Jun 2, 2020 Food & Packaging Providing solutions for world food problems and seizing new business opportunities
Slide 32: F&P: Agrochemicals & Functional Sheets
25 F&P: Agrochemicals & Functional Sheets Jun 2, 2020 New materials that senses temperature Full-scale expansion for while gently nestling up to human skin new active ingredient TENEBENAL™ HUMOFIT™ ●New active ingredient registered under new IRAC* category CONCEPT ●Diversified growth in the agrochem
Slide 33: New Business Incubation Center
Jun 2, 2020 New Business Incubation Center Pursuing creation and early-stage development of future new businesses
Slide 34: Roles of New Business Incubation Center
26 Roles of New Business Incubation Center Jun 2, 2020 Launching the New Business Incubation Center, which is tasked with exploring and creating new businesses in all fields Creating new businesses to become ICT our next target domain MATERIALS INCUBATION CENTER NEW BUSINESS (Initial sales goal: 100
Slide 35: ICT Materials
27 ICT Materials Jun 2, 2020 Our next target domain: ICT materials that contribute to digitalization Health Basic New Business Mobility F&P Care Materials Incubation Center SYNTEX🄬 Semi MITSUI Special gas Semiconductor ICT-related materials ICROS™ Tape nano PELLICLE™ Process tape for testing…
Slide 36: ICT Materials: Topics
28 ICT Materials: Topics Jun 2, 2020 Collaboration with Elephantech Product development with Z-Works Additive Manufacturing Center (AMC) Establishing AMCs to pursue the possibilities of and Investing in and collaborating with Z-Works, facilitate mass production for inkjet-based additive a company en
Slide 37: ICT Materials: Projects
29 ICT Materials: Projects Jun 2, 2020 Steady progress with investments in existing ICT businesses and new projects ICT-related Projects Schedule (Partial list) FY17 FY18 FY19 FY20 FY21 FY22 New Business Incubation Center EUV pellicle - New plant @Japan Semiconductors ICROS™ Tape - New base @Taiwan
Slide 38: Robot Materials
30 Robot Materials Jun 2, 2020 Combining our materials and technologies to develop components for robotics Texture Acoustic Ｘ Materials Ｘ Technology ＝ MELTANT-β avatar robot ＝ BIG CLAPPY entertainment robot Dustproof, drip-proof, Uses new gel materials to super-elastic skin imitate the sound of clap
Slide 39: Basic Materials
Jun 2, 2020 Basic Materials Providing materials to serve as the basis of society and industry
Slide 40: Basic Materials
31 Basic Materials Jun 2, 2020 Expecting results to move into the red due to a major impact from an inventory valuation loss caused by plummeting naphtha prices; pursue further restructuring (JPY bn) * Includes effects of pricing formula cutoff Operating income (Basic Materials) ■Operating income (R
Slide 41: Contents
Jun 2, 2020 Contents ▶Business Performance ▶Post COVID-19 ▶Topics on Targeted Business Domains ▶Topics on Sustainability ▶Financial Overview
Slide 42: Blue Value / Rose Value
32 Blue Value™/Rose Value™ Jun 2, 2020 Environmental contribution value QOL improvement contribution value Blue Value™ Rose Value™ Conserving Coexisting Enriching living and Extending healthy Protecting Reducing CO2 resources with nature social environment life expentancy food ■BV sales (JPY bn) 30
Slide 43: Rose Value-Certified Products for Making Towns Sustainable
33 Rose Value™-Certified Products for “Making Towns Sustainable” Jun 2, 2020 Protect from natural disasters and More durable, long-life their impact infrastructure Toughness coat™ GeoPool Concrete surface Rainwater retention system strengthening material Controlling rainwater discharge Longer-life c
Slide 44: Pursuing an ESG Strategy
34 Pursuing an ESG Strategy Jun 2, 2020 Establishment of Climate Change/Plastic Strategy Dept. Efforts with UNEP* *United Nations Environment Programme Tackling issues of climate change Supporting Asian startup companies and plastics on a group-wide strategic level; that are helping to cut down on p
Slide 45: Contents
Jun 2, 2020 Contents ▶Business Performance ▶Post COVID-19 ▶Topics on Targeted Business Domains ▶Topics on Sustainability ▶Financial Overview
Slide 46: Cash Flow
35 Cash Flow Jun 2, 2020 (JPY bn) 145.9 130 115 109.5 ←100B yen→ Operating cash flow remains 45.2 29.8 10.0 ▲64.3 at high level ▲85.2 ▲120* *As we move over to IFRS, repair expenses for FY20 will be FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Outlook factored into assets as capital expenditure
Slide 47: Net D/E Ratio
36 Net D/E Ratio Jun 2, 2020 800 (JPY bn) ■Shareholders’ equity 700 ■Interest-bearing debt(net) ー Net D/E FY19 FY20 600 (J-GAAP) (IFRS) Results Outlook 500 Net D/E Net D/E 400 300 0.76 0.80 Maintaining 200 financial soundness 100 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20(Outlook) IFRS
Slide 48: Shareholder Returns
37 Shareholder Returns Jun 2, 2020 ■ Dividends(interim) 100JPY 100JPY + + ■ Dividends(year-end) FY20 dividend forecast pending; Acquisition of Acquisition of ■ Memorial 90 JPY* treasury stock treasury stock + ー Net income 10B yen 10B yen yet our shareholder return policy Acquisition of treasury stoc
Slide 49: Summary of Financial Targets
38 Summary of Financial Targets Jun 2, 2020 J-GAAP J-GAAP J-GAAP IFRS Reviewing (JPY bn) FY15 FY18 FY19 FY20 VISION IFRS Results Results Results Outlook 2025 Sales 1,344 1,483 1,339 1,145 2,000 revenue*1 Operating income before special items*1 70.9 93.4 71.6 35.0 200 (ROS) (5.3%) (6.3%) (5.3%) (3.1%
Slide 50: Concluding Message
39 Concluding Message Jun 2, 2020 To seize opportunities brought by new values, needs, risks and other rapid social changes in the post-COVID world, we will review our long-term business plan with an eye toward a new vision for our Group, which links strategic, organizational and technological appro
Slide 51: Creating new customer value and solving social challenges
Creating new customer value and solving social challenges through business activities
Slide 52: Challenge Diversity One Team
Challenge Diversity One Team Statements made in this document with respect to Mitsui Chemicals' current plans, estimates, strategies, and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Mitsui Chemicals. Information provided h