Shinagawa Refra Co., Ltd · TSE:5351

Shinagawa Refra — Shinagawa Refractories — FY2023 Earnings Presentation

37 slides from Shinagawa Refra's earnings presentation, May 30, 2024

  1. Slide 1: SHINAGAWA Update: Results for Fiscal Year Ended March 2024

    SHINAGAWA Update Results for Fiscal Year Ended March 2024 May 30, 2024 TSE Ticker Symbol 5351 Shinagawa Refractories

  2. Slide 2: Shinagawa Refractories: At a Glance

    Shinagawa Refractories: At a Glance A Leading Company for Refractories and Insulation Materials Net Sales Profitability 144.1Billion JPY ROE （FY 2023） （FY 2023） No.2 No. ５ in Japan In the World 20.2％ Global Reach Global Growth Number of Companies Number of Employees Business Growth outside of Japan

  3. Slide 3: Table of Contents

    Table of Contents Ⅰ. Overview of Financial １．Consolidated Financial Highlights: FY 2023 ２．Net Sales by Business Segment Results for FY 2023 and ３．Operating Income by Business Segment FY 2024 Forecast ４．Net Sales by Region ５．Factors Behind Changes in Operating Income (YoY) ６．Consolidated Financial Fo

  4. Slide 4: Overview of Financial Results for FY 2023 and FY 2024 Forecast

    Ⅰ. Overview of Financial Results for FY 2023 and FY 2024 Forecast

  5. Slide 5: 2023 Consolidated Financials Highlights

    １. 2023 Consolidated Financials Highlights (Unit: Billion JPY) FY 2022 FY 2023 YoY Results Results Net Sales 124.9 144.1 ＋15.4% EBITDA 13.7 17.6 ＋28.5% Operating Income 10.8 13.8 ＋28.1% （Operating Margin） （8.7％） （9.6％） （＋0.9pt） Ordinary Income 11.4 14.9 ＋30.1% Profit attributable to owners of parent

  6. Slide 6: Net Sales by Business Segments

    ２. Net Sales by Business Segments (Unit: Billion JPY) FY 2022 FY 2023 YoY Results Results Refractory Sector 80.7 63.9 98.4 67.4 ＋22.0% Insulation Sector 17.9 14.2 18.5 12.7 ＋ 3.6% Ceramics Sector 2.1 1.7 3.5 2.4 ＋64.2% Engineering Sector 24.6 19.5 24.5 16.8 ▽0.2% Other (Real Estate) 0.8 0.7 0.9 0.6

  7. Slide 7: Operating Income by Business Segment

    ３. Operating Income by Business Segment (Unit: Billion JPY) FY 2022 FY 2023 YoY Results Results Refractory Sector 5.3 49.4 8.0 58.0 ＋50.5% Insulation Sector 3.2 29.5 3.4 24.8 ＋7.4% Ceramics Sector 0.13 1.3 0.13 1.0 ▽0.5% Engineering Sector 1.6 15.3 1.7 12.4 ＋3.7% Other (Real Estate) 0.4 4.5 0.5 3.9

  8. Slide 8: Net Sales by Region

    ４. Net Sales by Region (Unit: Billion JPY) FY 2022 FY 2023 YoY Results Resultas Japan 97.2 77.8 101.2 70.2 ＋4.1% Asia・Oceania Overseas 20.6 16.5 Overseas 20.5 14.2 ▽0.4% Total Total North America 4.0 3.2 7.6 5.3 ＋90.1% ２７.７ 42.9 South America B JPY 0.8 0.6 B JPY 12.0 8.4 ＋1,495.9% Others （22.2％） 2.3

  9. Slide 9: Factors Behind Changes in Operating Income

    ５.Factors Behind Changes in Operating Income (Unit: Billion JPY) Negative Factors ▽4.4 Positive Factors＋7.4 ⇒ Total Changes＋3.0 Refractory Sector ＋2.7 New Business Insulation Engineering in Japan Overseas +0.2 Sector ＋0.2 Sector ＋0.0 13.8 Companies +0.5 M&A Margin +0.2 Improvement, +1.7 Ceramics Exc

  10. Slide 10: Consolidated Financial Forecasts for FY2024

    ６.Consolidated Financial Forecasts for FY2023 (Unit: Billion JPY) FY 2023 FY 2024 YoY Results Forecast Net Sales 144.1 143.0 ▽0.8% EBITDA 17.6 18.5 ＋4.5% Operating Income 13.8 14.5 ＋4.4% （Operating Margin） （9.6％） （10.1％） （＋0.5pt） Ordinary Income 14.9 15.0 ＋0.6% Profit attributable to owners of paren

  11. Slide 11: Factors Behind Changes in Operating Income (EBITDA)

    ７.Factors Behind Changes in Operating Income (Unit: Billion JPY) Negative Factors ▽1.2 Positive Factors＋2.1 ⇒ Total Changes＋0.9 Advanced Refractory Sector ＋0.6 Material & Device Cost Sector Reduction ＋0.3 ＋0.8 Insulation Sector Depreciation ＋0.2 18.5 ＋0.2 Engineering Sales Mix SG&A Sector Improvemen

  12. Slide 12: The 5th Mid-Term Management Plan: Look Back

    Ⅱ. The 5th Mid-Term Management Plan: Look Back

  13. Slide 13: Business Environment during the 5th Mid-Term Management Plan

    １.Business Environment during the 5th Mid-Term Management Plan (FY 2021 – 2023) 【Business Environment】 ●The outlook of world economy is Japanese Crude Steel Production （Unit：Million ton） expected to remain uncertain due to 1,600 the effects of monetary tightening 1,400 aimed at curbing inflation, as

  14. Slide 14: Consolidated Financial Results in 2023

    ２.Consolidated Financial Results in 2023 ■The 5th Mid-term Management Achieved Record-high Plan The Last Year Target Performance in 2023 for the FY 2023 Second Consecutive Year Net Sales 115.0 Billion JPY Net Sales (Left Scale) Ordinary Income (Right Scale) Ordinary Income 11.5 Billion JPY (Billion

  15. Slide 15: Primary Action Plans and Results

    ３. Primary Action Plans and Results Primary Action Plans Major Initiatives and Results (2021-2023） ●Si gned an exclusi ve sales agreement wi th Alli ed Mi neral １．Sales Expansion & Products for alumi num i ndustry i n Japan (March 2023) Competitive Enhancement ●Constructi on of a state -of-the- art

  16. Slide 16: VISION 2030 & The 6th Mid-Term Management Plan

    Ⅲ. VISION 2030 & The 6th Mid-Term Management Plan

  17. Slide 17: VISION 2030 & The 6th Mid-Term Management Plan

    １.VISION 2030 & The 6th Mid-Term Management Plan ● Defining VISION 2030, our future vision toward 2030, in the VUCA* era of rapid environmental changes ● Formulating The 6th Mid-Term Management Plan (2024-2026) by back-casting from VISION 2030 ● Taking the opportunity of celebrating the 150th Annive

  18. Slide 18: VISION 2030: Fundamental Policy & Future Vision

    ２.VISION 2030: Fundamental Policy & Future Vision 【VISION 2030: Fundamental Policy】 Pursuing Business Growth while Solving Social Issues simultaneously 【Future Vision＝ Shinagawa Group’s To-Be】 Go Global × Enter New Market Segments × Pursue Sustainability ～ From Japan to the World, From Refractory to

  19. Slide 19: VISION 2030: Goals

    ３.VISION 2030: Goals As a Corporate Group promoting Sustainable Growth, Shinagawa has set both “Financial Goals" and “Sustainability Goals" as long-term goals. （Goals in 2030） Financial Goals Sustainability Goals ■KPI addressing Climate Changes 2023 2030 CO2 Emissions（Consolidated, Scope1&2） Results

  20. Slide 20: VISION 2030: Financial & Capital Strategies

    ４.VISION 2030: Financial & Capital Strategies ● Actively execute capital and business investment to promote sustainable growth ● Promote growth investment while ensuring fulfilling shareholder return ● Interest Bearing Debt will increase while fully maintaining financial soundness （Unit: Billion JPY

  21. Slide 21: The 6th Mid-Term Management Plan: Rationale & Priority Measures

    ５.The 6th Mid-Term Management Plan: Rationale & Priority Measures The 6th Mid-Term Management Plan 2024～2026 【Rationale】 The 1st step towards the future as celebrating 150th Anniversary ～A new step forward as the Shinagawa Group promoting Sustainable Growth～ *Shinagawa was founded in 1875 and welcom

  22. Slide 22: The 6th Mid-Term Management Plan: Goals

    ６.The 6th Mid-Term Management Plan: Goals As a milestone towards implementing “VISION 2030,” Shinagawa strengthens the organizational capabilities essential for sustainable growth and take steps toward achieving financial targets and becoming a more sustainable company. 【Goals for 2026】 Financial Go

  23. Slide 23: Sector Driven Business Expansion: Promoting ROIC Management

    Sector Driven Business Expansion: 2 1 (1/4) Promoting ROIC Management Shinagawa group's From The 6th Mid-Term Management Plan, we use ROIC as a response to implement leading KPI and focus on achieving an effect that exceeds the management that is cost of capital (6.5%) in management decisions such a

  24. Slide 24: Sector Driven Business Expansion: Sector Vision

    1 Sector Driven Business Expansion: (2/4) Sector Vision Sector Vision Refractory Sector Insulation Sector ●Be the Customer’s First Choice ●Expanding global supply of environmental friendly insulation ●The Sky’s the Limit: Creating the products future of refractories and sustainable society with carb

  25. Slide 25: Net Sales and Operating Profits by Sector

    Sector Driven Business Expansion: 1 (3/4) Net Sales and Operating Profits by Sector The 6th Mid-Term Management Plan （Unit： Billion JPY） 2023 2024 2026 Results Plan Plan Net Sales by Sector※ Refractory Sector 98.4 96.2 1,03.4 ● In 2024, sales in the “Refractory Sector" and “Engineering Insulation Se

  26. Slide 26: Sector Driven Business Expansion: Refractory Sector

    Sector Driven Business Expansion (4/4) 1 ① Refractory Sector 【Net Sales】 （Billion JPY） 【Operating Income・EBITDA】 （Billion JPY) 【ROIC】 Operating EBITDA 120.0 98.4 96.2 103.4 16.0 Income 14.3 10.6 11.4 11.3 12.0 80.0 9.0 8.0 FY 2023 FY 2026 8.0 Results Goal 40.0 8.1％ 9.5％ 4.0 0.0 0.0 2023 2024 2025 20

  27. Slide 27: Sector Driven Business Expansion: Insulation Sector

    Sector Driven Business Expansion (4/4) 1 ② Insulation Sector 【Net Sales】 （Billion JPY） 【Operating Income・EBITDA】 （Billion JPY) 【ROIC】 Operating EBITDA Income 30.0 6.0 5.1 22.0 4.3 4.2 18.5 19.8 4.1 20.0 4.0 3.4 3.5 FY 2023 FY 2026 Result Goal 10.0 2.0 10.9％ 11.0％ 0.0 0.0 2023 2024 2026 2023 2024 202

  28. Slide 28: Sector Driven Business Expansion: Advanced Material & Device Sector

    Sector Driven Business Expansion (4/4) 1 ③ Advanced Material ＆Device Sector 【Net Sales】 （Billion JPY） 【Operating Income・EBITDA】 （Billion JPY) 【ROIC】 Operating EBITDA 6.0 5.4 1.0 Income 4.6 0.8 0.8 4.0 3.5 0.6 0.5 FY 2023 FY 2026 0.4 0.4 Result Goal 2.0 0.2 0.2 0.2 0.1 4.0％ 9.9％ 0.0 0.0 2023 2024 202

  29. Slide 29: Sector Driven Business Expansion: Engineering Sector

    Sector Driven Business Expansion (4/4) 1 ④ Engineering Sector 【Net Sales】 （Billion JPY） 【Operating Income・EBITDA】 （Billion JPY) 【ROIC】 Operating EBITDA Income 30.0 24.5 22.9 24.9 2.5 2.0 1.9 2.0 1.7 1.7 20.0 1.5 1.5 1.3 FY 2023 FY 2026 1.0 Result Goal 10.0 0.5 14.7％ 15.1％ 0.0 0.0 2023 2024 2026 2023

  30. Slide 30: Production Optimization in Japan

    2 Production Optimization in Japan Reorganize and integrate production bases in the West and East to build an optimal production system for further expanding sales in Japan and growing businesses in the global market Consolidating Monolithic Consolidating Monolithic from Yumoto to Others West Area f

  31. Slide 31: Accelerating Global Expansion 1/2

    3 Accelerating Global Expansion 1/2 In addition to organic growth, Refractory Sector will lead the acceleration of global expansion through new M&A and JV ▶Shinagawa established SRI (PT Shinagawa ▶Shinagawa started producing high quality mold Refractories Indonesia) in 2014, started supplying powder

  32. Slide 32: Accelerating Global Expansion 2/2

    3 Accelerating Global Expansion 2/2 Overseas sales rapidly expanded under the 5th medium-term plan: By further promoting PROXIMITY strategy during the 6th Mid-Term Management Plan, Shinagawa plans to achieve overseas sales of 82.2 billion yen, with an overseas sales ratio of 45%. 82.2B JPY 45％ 42.9B

  33. Slide 33: Promoting Sustainability Management: Addressing Climate Changes

    Promoting Sustainability Management 4 ① Addressing Climate Changes Establishing initiatives to address climate changes through business activities as Shinagawa’s key growth strategy element 【Specific Examples】 Promoting decarbonization initiatives within Shinagawa group Promoting Energy Conservation

  34. Slide 34: Promoting Sustainability Management: Human Capital Strategies

    Promoting Sustainability Management 4 ② Human Capital Strategies Implementing human capital strategies as an initiative to secure, develop and retain talents, which is the basis for sustainable growth Human Capital Strategies Building a management foundation with focus on “Talent Acquisition," “Tale

  35. Slide 35: Financial/Capitalization Strategy: Investment for Growth

    ７.Financial/Capitalization Strategy ① Investment for Growth Accelerating growth investment including M&A as a key measure to strengthen management structure for the future ■Capital Investment 20.6B JPY 【Investment Policy】 by Year 1.7 Corporate HQ ● Actively invest in growth markets (fields & areas)

  36. Slide 36: Financial/Capitalization Strategy: Shareholders Return

    ７.Financial/Capitalization Strategy ② Shareholders Return Sustainable Return of Profits to our Shareholders ■Dividend per Share & Total Dividend Payout 【Dividend Policy】 （JPY） （B JPY） Considering the importance of enhancing 200 the return of profits to shareholders, Total Dividend Payout Dividend pe

  37. Slide 37: Disclaimer

    Disclaimer This document is intended to provide information on the results for the fiscal year ended March 2024 (April 2023 – March 2024) and is not intended to solicit investment in securities issued by the Company. The document was prepared based on data available as of May 30, 2024. Opinions, for

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