Kureha Corporation · TSE:4023
Kureha — H1 FY2021 Earnings Presentation
37 slides from Kureha's earnings presentation, Nov 9, 2021
Slide 1: FY2021 Interim Report
FY2021 Interim Report November 9, 2021
Slide 2: Contents
1 Contents Highlights 2 I. FY2021 Half-Year Results III. Supplementary Materials • FY2021 1H Financial Summary 4-8 • PVDF Business Updates 31 • Segment Revenue & Operating Profit 9-13 • PGA Business Updates 32 • Cash Flow 14 • Returning to Shareholders 33 • Financial Position 15 • Consolidated Compa
Slide 3: Highlights
2 Highlights ◼ FY2021 half-year operating profit at ¥11.4bn (up 84% YOY, up 52% from initial forecast); Full-year forecast revised upward to ¥19.5bn (up 13% YOY, up 30% from initial forecast) ◼ FY2021 year-end dividend forecast raised to ¥100 per share, up from ¥85 in prior year ◼ FY2021 business co
Slide 4: I. FY2021 Half-Year Results
3 I. FY2021 Half-Year Results (Period April 1 – September 30, 2021)
Slide 5: FY2021 1H Financial Summary (1)
4 FY2021 1H Financial Summary (1) (in billions of yen except otherwise indicated) Vs. FY2020 1H FY2020 FY2021 Changes FY2021 1H Actual vs 1H 1H YOY Forecast Forecast • Revenue growth led by Advanced Materials, Specialty Chemicals and Specialty Plastics, 13.0 4.6 partially offset by slower environmen
Slide 6: FY2021 1H Financial Summary (2)
5 FY2021 1H Financial Summary (2) (in billions of yen) Segment performance (vs. FY2020 1H) FY20 1H FY20 1H Revenue Operating profit FY21 1H FY21 1H 28.8 5.1 22.9 3.7 21.1 18.6 2.6 2.0 1.8 11.1 12.8 0.9 1.2 0.5 0.4 9.5 9.0 5.8 5.5 -0.8 Advanced Specialty Specialty Construction Other Advanced Specialt
Slide 7: FY2021 1H Financial Summary (3)
6 FY2021 1H Financial Summary (3) (in billions of yen) FY2020 1H Results AM SC SP CO OO Total Revenue 18.6 11.1 21.1 5.8 9.5 66.0 Notes: Segment operating profit -0.8 0.9 3.7 0.5 2.0 6.3 Intersegment adjustment -0.0 Other income 0.2 Other expenses 0.3 Operating profit 6.2 Finance income 0.3 Finance
Slide 8: FY2021 1H Financial Summary (4)
7 FY2021 1H Financial Summary (4) (in billions of yen) Segment Performance (vs. FY21 1H Forecast) Revenue FY21 1H Forecast Operating profit FY21 1H Forecast FY21 1H Actual FY21 1H Actual 27.0 28.8 5.1 22.9 21.0 3.7 2.6 11.8 12.8 9.0 9.0 1.8 1.6 5.7 5.5 0.9 1.2 1.2 0.1 0.4 Advanced Specialty Specialt
Slide 9: FY2021 1H Financial Summary (5)
8 FY2021 1H Financial Summary (5) (in billions of yen) FY2021 1H Forecast AM SC SP CO OO Total Revenue 27.0 11.8 21.0 5.7 9.0 74.5 Notes: Segment operating profit 1.6 0.9 3.7 0.1 1.2 7.5 Intersegment adjustment Other income 0.1 Other expenses 0.1 Operating profit 7.5 Finance income 0.1 Finance costs
Slide 10: Segment Revenue & Operating Profit: Advanced Materials
9 Segment Revenue & Operating Profit: Advanced Materials (billions of yen) Vs. FY2020 1H FY2020 FY2021 Change 1H 1H % Revenue Up, Operating Profit Up Advanced Materials Advanced plastics: Revenue and profit grew on higher PVDF and PPS Advanced plastics 11.6 19.4 +68% sales volumes; continued strong
Slide 11: Segment Revenue & Operating Profit: Specialty Chemicals
10 Segment Revenue & Operating Profit: Specialty Chemicals (billions of yen) Vs. FY2020 1H FY2020 FY2021 Change 1H 1H % Revenue Up, Operating Profit Up Specialty Chemicals Agrochemicals / Pharmaceuticals: Sales volume growth for fungicides and Agrochemicals 3.1 3.3 +6% pharmaceuticals largely offset
Slide 12: Segment Revenue & Operating Profit: Specialty Plastics
11 Segment Revenue & Operating Profit: Specialty Plastics (billions of yen) Vs. FY2020 1H FY2020 FY2021 Change 1H 1H % Revenue Up; Operating Profit Up Specialty Plastics Home products / Fishing lines: Operating profit grew on higher sales volumes of Home products 11.2 12.1 +8% home-use wrap film and
Slide 13: Segment Revenue & Operating Profit: Construction
12 Segment Revenue & Operating Profit: Construction (billions of yen) Vs. FY2020 1H FY2020 FY2021 Change 1H 1H % Revenue Down; Operating Profit Down Construction - Profit in the Construction segment remained consistent on decreased revenue due to delays Construction 9.3 9.0 -3% in public constructio
Slide 14: Segment Revenue & Operating Profit: Other Operations
13 Segment Revenue & Operating Profit: Other Operations (billions of yen) Vs. FY2020 1H FY2020 FY2021 Change 1H 1H % Revenue Down; Operating Profit Down Other Operations - In Environmental Engineering, decreased revenue and profit resulted from the absence of post- Environmental typhoon waste treatm
Slide 15: Cash Flow
14 Cash Flow (billions of yen) FY2020 FY2021 Change 1H 1H Profit before income tax 6.4 11.5 5.1 Depreciation 5.8 5.8 0.1 Other -0.8 -3.8 -2.9 Cash flow from operating activities 11.3 13.5 2.2 Cash flow from investing activities 3.5 -4.8 -8.2 Free cash flow 14.8 8.7 -6.0 Cash flow from financing acti
Slide 16: Financial Position
15 Financial Position (billions of yen) Assets Liabilities and Equity Mar. 31 Sept. 30 Mar. 31 Sept. 30 Change Change 2021 2021 2021 2021 Cash and cash equivalents 17.8 22.1 4.3 Trade and other payables 19.2 21.0 1.8 Trade and other receivables 28.2 31.4 3.2 Interest-bearing debt 29.5 27.5 -2.0 Inve
Slide 17: II. FY2021 Full-Year Outlook
16 II. FY2021 Full-Year Outlook
Slide 18: FY2021 Financial Forecast (1)
17 FY2021 Financial Forecast (1) (in billions of yen except otherwise indicated) Vs. FY2020 (Revised) Changes FY2021 Changes • Revenue expected to increase primarily on FY2020 FY2021 Initial in YOY Forecast Forecast Forecast higher sales volumes in the Advanced 15.4 10.0 Materials segment, including
Slide 19: FY2021 Financial Forecast (2)
18 FY2021 Financial Forecast (2) (in billions of yen) Earnings Forecast by Segment (vs. FY2020 Results) Revenue FY20 Results Operating profit FY20 Results 60.0 FY21 Forecast 8.5 FY21 Forecast 7.7 44.5 42.4 44.0 6.5 4.4 23.5 25.0 3.5 20.3 18.5 2.6 13.9 12.5 2.2 1.7 1.1 0.7 Advanced Specialty Specialt
Slide 20: FY2021 Financial Forecast (3)
19 FY2021 Financial Forecast (3) (in billions of yen) FY2020 Results AM SC SP CO OO Total Revenue 44.5 23.5 42.4 13.9 20.3 144.6 Notes: Segment operating profit 3.5 2.2 7.7 1.1 4.4 18.9 Intersegment adjustment 0.1 Other income 0.9 (FY2020) Other expenses - Other expenses include an 2.5 impairment lo
Slide 21: FY2021 Financial Forecast (4)
20 FY2021 Financial Forecast (4) (in billions of yen) Earnings Forecast by Segment (vs. FY2021 Initial Forecast) Revenue Previous Forecast Operating profit Previous Forecast 60.0 New Forecast 8.5 New Forecast 53.0 7.3 42.5 44.0 6.5 4.0 23.5 25.0 18.5 2.6 12.5 1.7 0.4 0.7 Advanced Specialty Specialty
Slide 22: FY2021 Financial Forecast (5)
21 FY2021 Financial Forecast (5) (in billions of yen) Initial Forecast AM SC SP CO OO Total Revenue 53.0 23.5 42.5 12.5 18.5 150.0 Notes: Segment operating profit 4.0 1.7 7.3 0.4 2.6 16.0 Intersegment adjustment Other income 0.3 (Previous Forecast) Other expenses - Other expenses include an one-time
Slide 23: Segment Earnings Forecast: Advanced Materials
22 Segment Earnings Forecast: Advanced Materials (billions of yen) Vs. FY2020 FY2020 FY2021 Change Revenue Up; Operating Profit Up Forecast % Advanced plastics Advanced Materials Revenue up, Profit up: - Continued strong demand for PVDF in the Advanced plastics 28.8 42.5 +47% automotive LiB market (
Slide 24: Segment Earnings Forecast: Specialty Chemicals
23 Segment Earnings Forecast: Specialty Chemicals (billions of yen) Vs. FY2020 FY2020 FY2021 Change Revenue Up; Operating Profit Down Forecast % Agrochemicals / Pharmaceuticals Specialty Chemicals Revenue down, Profit down: - Impact of drug price revisions Agrochemicals 7.1 7.0 -1% - Increased R&D c
Slide 25: Segment Earnings Forecast: Specialty Plastics
24 Segment Earnings Forecast: Specialty Plastics (billions of yen) Vs. FY2020 FY2020 FY2021 Change Revenue Up; Operating Profit Up Forecast % Home products / Fishing lines Specialty Plastics Revenue up, Profit up: - Higher sales volumes of Home Products, Home products 21.8 22.5 +3% including ‘NEW Kr
Slide 26: Segment Earnings Forecast: Construction
25 Segment Earnings Forecast: Construction (billions of yen) Vs. FY2020 FY2020 FY2021 Change Revenue Down; Operating Profit Down Forecast % - Intensified competition in the civil engineering Construction business Construction 21.1 20.0 -5% - Decreased number of high-margin construction projects Elim
Slide 27: Segment Earnings Forecast: Other Operations
26 Segment Earnings Forecast: Other Operations (billions of yen) Vs. FY2020 FY2020 FY2021 Change Revenue Down; Operating Profit Down Forecast % - Environment Engineering revenue down, profit Other Operations down due to the absence of post-typhoon waste Environmental treatment 14.9 13.1 -12% enginee
Slide 28: Cash Flow
27 Cash Flow (billions of yen) FY2021 FY2020 Change Forecast Profit before income tax 17.7 19.5 1.8 Depreciation 11.7 11.5 -0.2 Other -2.7 -6.4 -3.7 Cash flow from operating activities 26.7 24.6 -2.1 Cash flow from investing activities -3.9 -14.5 -10.6 Free cash flow 22.8 10.2 -12.7 Cash flow from f
Slide 29: Key Indicators (1)
28 Key Indicators (1) (billions of yen) Capital Investment Depreciation Expenses 18.5 15 12.1 20 14.9 11.7 11.5 13.2 14.3 10.3 10.2 9.9 10.3 11.4 10.3 11.8 10 9.8 8.2 8.2 6.1 5.9 5.7 10 6.0 7.4 5.4 5.1 5.0 5.4 5.5 5.8 5 6.7 5.4 4.8 4.0 5.8 6.7 6.1 5.0 5.1 4.9 5.0 6.0 5.8 5.8 0 0 FY2015 2016 2017 201
Slide 30: Key Indicators (2)
29 Key Indicators (2) ROE ROIC 10% 9.0% 8.4% 8% 7.7% 6.3% 6.5% 6.4% 8% 7.1% 7.4% 6.1% 5.8% 6% 4.9% 6% 4.1% 3.5% 4% 2.9% 4% 2% 2% 0% 0% FY2015 2016 2017 2018 2019 2020 2021 FY2015 2016 2017 2018 2019 2020 2021 Estimate Estimate ROA DE Ratio 8% 7.1% 7.3% 7.4% 7.0% 0.8 0.69 5.3% 0.57 6% 0.6 3.8% 4% 0.4
Slide 31: III. Supplementary Materials
30 Ⅲ. Supplementary Materials
Slide 32: PVDF Business Updates
31 PVDF Business Updates PVDF: Revenue (FY2016 – 2021e) (¥ billion) • A roughly 40% market share held by Kureha PVDF in 300 30 the automotive anode binder segment; primary customers include major Chinese and South Korean 250 25 lithium-ion battery manufacturers 200 20 • Kureha China Changshu plant b
Slide 33: PGA Business Updates
32 PGA Business Updates PGA: Quarterly Revenue Revenue & Operating Profit (FY2016- 2021e) (¥ billions) (¥ billion) 15 1.5 40 4 10 1.0 20 2 0 5 0.5 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 Estimate △ 20 -2 0 △ 40 -4 Revenue Ope. Profit • Shale oil and gas production activities are gradually returnin
Slide 34: Returning to Shareholders
33 Returning to Shareholders ◼ Kureha’s basic policy for the distribution of earnings is to strengthen the company overall to realize longer- term growth, prepare for future business expansion, enhance retained earnings, and provide a stable and continued dividend ◼ The Company may consider flexibly
Slide 35: Consolidated Companies
34 Consolidated Companies (billions of yen) FY2020 1H FY2021 1H Change Revenue Total assets Revenue Total assets Revenue Total assets Kureha Corporation 29.5 192.3 34.6 201.4 5.1 9.1 Kureha Trading Group 8.5 12.2 10.2 14.0 1.7 1.8 Kureha Corporation 12.8 -- 17.6 -- 4.8 -- Kureha Trading Group 5.6 --
Slide 36: Consolidated Companies (cont'd)
35 Consolidated Companies (cont’d) (billions of yen) FY2020 1H FY2021 1H Change Revenue Total assets Revenue Total assets Revenue Total assets Kureha Nishiki Group 7.0 11.2 7.2 10.9 0.2 -0.3 Construc- Kureha Engineering 2.3 2.3 1.8 2.4 -0.5 0.1 tion Consolidation adjustments -3.5 -- -3.5 -- -0.0 --
Slide 37: Disclaimer
36 Disclaimer • These materials are provided for a deeper understanding of our company, and are not intended to be used as a solicitation for investment or other activities. • These materials have been prepared by our company based on the information available at the time of this presentation. Actua