Nagase & Co., Ltd. · TSE:8012
Nagase & — FY2024 Earnings Presentation
48 slides from Nagase &'s earnings presentation, May 8, 2025
Slide 1: FY2024 Financial Briefing
FY2024 Financial Briefing NAGASE&CO.,LTD. Stock exchange listing : Tokyo (Prime Market) Code number : 8012 May 8, 202５ Copyright © 202５ NAGASE & CO., LTD.
Slide 2: Management Conscious of Capital Costs and Share Prices
Management Conscious of Capital Costs and Share Prices We continue to implement initiatives in the final year of the current medium-term management plan Policies to Enhance Corporate Value Execute growth, financial, and capital strategies set forth in the Medium-Term Management Plan ACE 2.0 Current
Slide 3: Executive Summary
Executive Summary Prinova Group profit declined due to tougher-than-expected conditions in contract manufacturing within the Nutrition business* during the second half of the fiscal year Food ingredient sales performed well; however, profit at Nagase Viita declined due to continued weak sales of cos
Slide 4: Business Environment Surrounding NAGASE Segments
Business Environment Surrounding NAGASE Segments Industry FY2024 Trends FY2025 Trends Segment Automotive applications to grow slightly; Growth in both automotive and construction construction applications unlikely to recover; Coatings applications was sluggish, remaining generally overall performanc
Slide 5: Contents
Contents ■ FY2024 Results and FY2025 Earnings Projectionｓ P6～P26 ■ Medium-Term Management Plan ACE 2.0 P27～P42 Appendix： ✓Sales, Gross Profit, and Operating Income by Quarter (Before Allocation of Corporate & Others) ✓Evaluations From ESG Rating Agencies ✓Major Cash Inflows and Outflows for FY2021-F
Slide 6: FY2024 Results and FY2025 Earnings Projections
FY2024 Results and FY2025 Earnings Projectionｓ ■ Consolidated Statements Income P7 ■ Gross Profit by Region P8 ■ Gross Profit by Business & Segment P9 ■ Operating Income by Business & Segment P10 ■ Sales, Gross Profit and Operating Income by Quarter P11 ■ Segment Overview P12～P16 ■ Overview of Major
Slide 7: Consolidated Statements Income
Consolidated Statements Income ▶ Gross profit reached record highs while gross profit margin improved across all business segments ▶ Operating income reached a record high, despite higher general and administrative expenses, including selling and personnel expenses stemming from increased logistics
Slide 8: Gross Profit by Region
Gross Profit by Region ▶ Higher profit both domestic and overseas ▶ Increase in domestic business sales, due to higher sales (including exports) of raw materials and formulated epoxy resins for semiconductor industries ▶ Overseas profits increased, mainly due to impacts of the weakening yen, as well
Slide 9: Gross Profit by Business & Segment
Gross Profit by Business & Segment ▶ Trading business profits increased to approx. ¥11 billion due to strong performance in the Electronics & Energy, Functional Materials, and Advanced Materials & Processing segments, stemming from moderate recoveries, mainly in the semiconductor, electrical, and el
Slide 10: Operating Income by Business & Segment
Operating Income by Business & Segment ▶ Trading business profits increased approx. ¥9.5 billion due to an increase in gross profit and impacts of actuarial gains and losses ▶ Despite strong sales of formulated epoxy resins by Nagase ChemteX and narrowed losses in the color formers business, manufac
Slide 11: Sales, Gross Profit and Operating Income by Quarter
Sales, Gross Profit and Operating Income by Quarter ▶ Fourth-quarter gross profit was down overall compared with the third quarter; while manufacturing remained solid with profit growth in Electronics & Energy, trading profit was sluggish across all segments except Life & Healthcare, due to reduced
Slide 12: Segment Overview: Functional Materials
Functional Materials Segment Overview: Functional Materials ▶ Gross profits increased primarily for the following reasons ・ Coating materials sales increased due to higher market prices, despite demand remaining flat for both automotive and architectural applications ・ Sales of raw materials for sem
Slide 13: Segment Overview: Advanced Materials & Processing
Advanced Materials & Processing Segment Overview: Advanced Materials & Processing ▶ Gross profits increased primarily for the following reasons • Resin sales increased with the recovery in demand for office equipment and other applications in the electrical appliances and electronic industries • Sal
Slide 14: Segment Overview: Electronics & Energy
Electronics & Energy Segment Overview: Electronics & Energy ▶ Gross profits increased primarily for the following reasons ・ Sales of materials for high-end smartphones, tablets, and other electronic devices increased due to a recovery in demand ・ Sales of semiconductor materials increased due to the
Slide 15: Segment Overview: Mobility
Mobility Segment Overview: Mobility ▶ Gross profits increased primarily for the following reasons ・ Resin sales, which account for about half of gross profit, increased due to yen depreciation and rising market prices, despite a decline in volume ・ Sales of functional materials and functional compon
Slide 16: Segment Overview: Life & Healthcare
Life & Healthcare Segment Overview: Life & Healthcare ▶ Gross profits increased primarily for the following reasons ・ Increased sales of intermediates and pharmaceutical raw materials ・ Sales of Nagase Viita increased overall due to strong sales of food ingredients, despite lower sales of cosmetic m
Slide 17: Overview of Major Manufacturing Subsidiaries: Nagase ChemteX
Overview of Major Manufacturing Subsidiaries: Nagase ChemteX ▶ Gross profits increased primarily for the following reasons ・ Sales of formulated epoxy resins increased due to strong sales for semiconductors for AI server ・ Sales decreased for photolithography materials for use in displays ▶ Operatin
Slide 18: Overview of Major Manufacturing Subsidiaries: Nagase Viita
Overview of Major Manufacturing Subsidiaries: Nagase Viita ▶ Gross profits increased primarily for the following reasons ・ Sales of food ingredients increased, mainly in Japan ・ Sales of cosmetic materials declined due to lower demand in China, the end market Operating income decreased, despite high
Slide 19: Overview of Major Manufacturing Subsidiaries: Prinova Group
Overview of Major Manufacturing Subsidiaries: Prinova Group ▶ Gross profits increased primarily for the following reasons ・ Food ingredient sales saw an increase in volume and an improvement in gross profit margin ▶ Operating income decreased due to allowance of approx. ¥1.3 billion for doubtful acc
Slide 20: TOPICS: Turnaround of Prinova Nutrition
TOPICS：Turnaround of Prinova Nutrition * Cost reduction through efficiency improvements and top-line growth to drive early profitability in the Nutrition business (Utah and Tennessee factories) Recover Operating Profit of Prinova Group to a growth trajectory and reaccelerate profit contribution *Nut
Slide 21: Consolidated Balance Sheets
Consolidated Balance Sheets ▶ Non-current liabilities increased due to the procurement of long-term interest-bearing debt in light of rising interest rates over the medium term 100 millions of yen 2024/03 2025/03 Change Details Total Current Assets 5,424 5,601 176 (Cash&deposits) 594 663 68 (Trade a
Slide 22: Consolidated Cash Flows
Consolidated Cash Flows ▶ Operating cash flow amounted to ¥36.3 billion, primarily due to an increase in net income from strong business performance 100 millions of yen FY2023 FY2024 Operating CF 729 363 (Income before income taxes) 326 381 (Depreciation and amortization) 166 180 (Change in working
Slide 23: FY2025 Earnings Projection
FY2025 Earnings Projection ▶ Record-high profits expected at all profit measures ▶ Semiconductor-related businesses likely to perform well, driven by a moderate recovery in market conditions and higher demand for AI server semiconductors ▶ Resin sales shift to more profitable products as demand rema
Slide 24: FY2025 Earnings Projection By segment
FY2025 Earnings Projection By segment ▶ Gross profit to increase in Functional Materials due to higher sales of raw materials for coating materials and semiconductor materials, while higher general and administrative expenses to reduce operating income ▶ Advanced Materials & Processing expects highe
Slide 25: FY2025 Earnings Projections by Major Manufacturing Subsidiaries
FY2025 Earnings Projections b y M a j o r M a n u f a c t u r i n g S u b s i d i a r i e s ▶ Nagase ChemteX: Higher gross profit due to continued strong sales of modified epoxy resins for AI server semiconductors, following previous year performance. Operating income to increase due to improved gro
Slide 26: Shareholder Returns
Shareholder Returns ▶ We plan to pay ¥95 per share for the full year, consisting of an interim dividend of ¥45 per share and a year-end dividend of ¥50 per share (forecasting a 16th consecutive year of dividend increases) ▶ No changes to the 100% total return ratio policy in fiscal 2025, continuing
Slide 27: Medium-Term Management Plan ACE 2.0
Medium-Term Management Plan ACE 2.0 ■ ACE 2.0 Basic Policies P28～２９ ■ FY2024 QUICK WIN Status P30 ■ KGI Outlook for Medium-Term Management Plan ACE 2.0 P31 ■ Growth Strategies for the Future P32 ■ Efforts in the Food Area P33 ■ Efforts in the Semiconductor Area P３4 ■ Efforts in the Life Science Area
Slide 28: ACE 2.0 Basic Policies
ACE 2.0 Basic Policies Become a true “Business designer” ACE 2.0 “Pursuit of Quality” With a mindset focused on Accountability (A), Commitment (C) and Efficiency (E), and to enable its sustained growth, NAGASE will work to give concrete shape (business, mechanisms, culture) (Pursuit) to the aspirati
Slide 29: ACE 2.0 Basic Policies
ACE 2.0 Basic Policies Become a true “Business designer” ACE 2.0 “Pursuit of Quality” With a mindset focused on Accountability (A), Commitment (C) and Efficiency (E), and to enable its sustained Significant Changes in the Underlying growth, Assumptions for ACE 2.0 NAGASE will work to give concrete s
Slide 30: FY2024 QUICK WIN Status -Laying the Groundwork for Change-
FY2024 QUICK WIN Status -Laying the Groundwork for Change- Evolve Our Business and Financial Strengthen front-line capabilities and Portfolios improve capital efficiency Strengthening of front-line ROIC management capabilities Growth strategy Digital utilization Liquidation of unprofitable businesse
Slide 31: KGI Outlook for Medium-Term Management Plan ACE 2.0
KGI Outlook for Medium-Term Management Plan ACE 2.0 Projected KGI Achievement Aim to achieve a PBR above 1.0 at an early stage through sustained capital efficiency improvement and growth strategy execution Medium-Term Management Plan ACE 2.0 Key Goal Indicator （KGI：） “Pursuit of Quality” FY2025 FY20
Slide 32: Growth Strategies for the Future
Reform of Profit Structure Growth Strategies for the Future Make proactive investments in Focus Area of manufacturing (across the three areas of food, semiconductors, and life sciences) to expand profit scale and profit margin over the medium to long term Potential investments in Focus Area and Deve
Slide 33: Efforts in the Food Area
Reform of Profit Structure Efforts in the Food Area Driving Food Business Expansion through the Acquisition of Aprinova - Enhancing Regional Reach in the Global South - About Aplinova Purpose of Acquisition L o c a t i o n : São Paulo in Brazil ✓ Strengthening the South American market as B u s i n
Slide 34: Efforts in the Semiconductor Area
Reform of Profit Structure Efforts in the Semiconductor Area Acquisition of High-Purity Semiconductor Chemicals Business in Asia About the Target Business Purpose of Acquisition Location : China, Korea, Taiwan, Japan ✓ Acquire technology to meet the environmental Business : Recovery and regeneration
Slide 35: Efforts in the Life Science Area
Reform of Profit Structure Efforts in the Life Science Area Acquired Asahi Kasei Pharma's diagnostics and other businesses - Synergies in enzyme manufacturing, sales network expansion, and R&D - About the Target Business Purpose of Acquisition L o c a t i o n : Shizuoka, Japan ✓ Expand product lineu
Slide 36: Established CVC Subsidiary -Nagase Future Investments Co., Ltd.-
Reform of Profit Structure Established CVC Subsidiary -Nagase Future Investments Co., Ltd.- Leverage CVC investments to obtain information and access entry opportunities in new fields and technologies Dec. 2023 FY２０２４ 10 Investments April 1, 2025 Launch Established Subsidiary Data platform Renewable
Slide 37: Withdraw From Businesses With No Future Earnings Potential
Reform of Profit Structure Withdraw From Businesses With No Future Earnings Potential Secure withdrawal-related losses as early as possible to facilitate future business growth Sakai Display Thin-Film Processing Products Corporation Color Formers Business for Glass On-Site Factory (U.S. Business) Su
Slide 38: Improvement Areas FY2024 Progress
Reform of Profit Structure Improvement Areas FY2024 Progress Improved profit margin in FY2024, with operations aimed at achieving zero losses in FY2025 and beyond Improvement targets and initiatives 1. Operating loss among subsidiaries and equity in losses of affiliates Develop and implement improve
Slide 39: Cash Allocation in FY2025
Reform of Corporate Culture Cash Allocation in FY2025 Leverage interest-bearing debt to pursue growth investments and shareholder returns Cash In Cash Out Growth Investments Operating Execute announced M&A CF Growth Consider M&A deals in Asset Replacement ¥26.5～ Investments the range of several tens
Slide 40: Pursuit of Profitability and Efficiency - Shareholder Returns
Reform of Corporate Culture Pursuit of Profitability and Efficiency - Shareholder Returns Control capital growth and ensure an ROE of 8.0% or higher in the final year of ACE 2.0; maintain shareholder returns under a 100% total return ratio through fiscal 2025 to support sustained improvement in ROE
Slide 41: Pursuit of Profitability and Efficiency - Indicators
Reform of Corporate Culture Pursuit of Profitability and Efficiency - Indicators ▶ Forecast 8.1% ROE in fiscal 2025 ▶ WACC remained unchanged from fiscal 2023, as lower equity cost from a decline in beta offset higher debt cost from rising interest rates ▶ ROIC rose by 0.4 points compared to fiscal
Slide 42: Pursue Sustainability - Progress in Corporate Projects
Functions Supporting Reforms Pursue Sustainability - Progress in Corporate Projects Improve Employee Engagement ＜Key FY2024 Initiatives＞ Non-Financial Targets FY2025 (KPIs)and Results FY2021 FY2022 FY2023 FY2024 ・Increased the frequency of monitoring between management and each Target organization t
Slide 43: Opened NAGASE Booth at Kumamoto SDGs Mirai Park in Aso Kumamoto Airport
Opened NAGASE Booth at Kumamoto SDGs Mirai Park in Aso Kumamoto Airport Showcasing use cases of group products Facility Overview Organizer: The Higo Bank, Ltd. Purpose: An SDGs-focused learning facility primarily for elementary, junior high, and high school students Location: Sorayoka Visitor Center
Slide 44: Inquiries and Investor Relations Website
■Inquiries: https://www.nagase.co.jp/english/contact/ir/ ■NAGASE Group Investor Relations Website: https://www.nagase.co.jp/english/ir/ These presentation materials contain projections based on forward-looking assumptions, forecasts, and plans as of May 8, 202５ Actual earnings may differ from projec
Slide 45: Sales, Gross Profit, and Operating Income by Quarter (Before Allocation)
Sales, Gross Profit, and Operating Income by Quarter (Before Allocation of Corporate & Others) In fiscal 2024, the Company began allocating company-wide shared expenses, excluding a portion of Nagase non-consolidated expenses, to business units under Corporate & Others We are allocating company-wide
Slide 46: Evaluations From ESG Rating Agencies
Evaluations From ESG Rating Agencies ESG Rating Highest FY２０１９ FY２０20 FY２０21 FY２022 FY２０23 FY２０24 Agencies rated Results Results Results Results Results Results FTSE 5.0 １．２ １．９ 2.7 3.5 4.2 4.2 MSCI AAA BB BB BBB A A A Climate A C B B A- A- A- Change ＣＤＰ Water A C B A‐ A A A- Forest A C- C C B B B S
Slide 47: Major Cash Inflows and Outflows for FY2021-FY2024
Major Cash Inflows and Outflows for FY2021-FY2024 100 millions of yen 4-years 4-years Cash In FY2021 FY2022 FY2023 FY2024 Cumulative Cash Out FY2021 FY2022 FY2023 FY2024 Cumulative Total Total Operating CF after Dividends and share 525 363 476 515 1,879 124 139 178 270 713 adjustments* buybacks Proc
Slide 48: Prinova Group Business Overview
Prinova Group Business Overview Trading Manufacturing・Processing Aromas Ingredients Solutions Nutrition Flavors Reliable supply of Distribution of more Production of One-stop- Reliable flavors aromas and than 2,000 food premixes, combining solutions from developed by essential oils to ingredients to