Resonac Holdings Corporation · TSE:4004
Resonac — Showa Denko K.K. — Q2 2020 Earnings Presentation
38 slides from Resonac's earnings presentation, Aug 12, 2020
Slide 1: Second Quarter, 2020 Financial Results - Consolidated
We “Act” to touch the heart and make society better Second Quarter, 2020 Financial Results - Consolidated - SHOWA DENKO K.K. August 12, 2020 Motohiro Takeuchi, CFO Representative Director & Managing Corporate Officer Performance forecast and other statements pertaining to the future as contained in
Slide 2: Consolidated Companies / Selected Data
Consolidated Companies Consolidated subsidiaries: 152 (newly consolidated: 91 companies related to Hitachi Chemical) (Showa Denko Materials segment) -Major companies Hitachi Chemical Co., Ltd. Hitachi Chemical Electronic Hitachi Chemical (Johor) Sdn. Bhd. SD (Shanghai) Co., Ltd. Materials (Guangzh
Slide 3: Summary 2019 vs. 2020 (Jan.-Jun.)
Summary 2019 (Jan.1 – Jun.30) vs. 2020 (Jan.1 – Jun.30) (Unit: Billions of yen except cash dividends per share) Jan.-Jun., 2019 Jan.-Jun., 2020 Increase/decrease Net sales 475.5 326.6 -148.9 Operating income 85.5 -25.8 -111.3 Non-operating income and expenses, net -0.6 -17.4 -16.8 Interest/Dividends
Slide 4: Special factors (impacted on first half results)
Special factors (impacted on first half results) (Unit: Billions of Yen) Major item Breakdown Amount Negative influence of the difference between the Petrochemical receipts and disbursements of raw materials, reflecting 8.5 the sharp decline in naphtha prices, time-lag factor Devaluation of inventor
Slide 5: Extraordinary Profit/Loss
Extraordinary Profit/Loss (Unit: Billions of Yen) Jan.-Jun., 2019 Jan.-Jun., 2020 Increase/decrease Extraordinary profit 1.8 2.1 0.3 Gain on sales of non-current assets 0.5 1.6 1.1 Other 1.3 0.5 -0.8 Extraordinary loss -3.0 -8.5 -5.5 Loss on sales and retirement of non-current -1.0 -1.5 -0.5 a
Slide 6: Consolidated Sales and Operating Income by Segment (1)
Consolidated Sales and Operating Income by Segment (1) (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ decrease Item 2019 2020 Olefins: sales decreased (market prices down, shipment volumes down) Organic chemicals: sales decreased Sales 127.5 95.7 -31.7 (vinyl acetate, ethyl acetate: shipment
Slide 7: Consolidated Sales and Operating Income by Segment (2)
Consolidated Sales and Operating Income by Segment (2) (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ decrease Item 2019 2020 Ceramics: sales decreased (shipment volumes of abrasives for auto and steel industry down) Sales 142.7 43.0 -99.7 Graphite electrodes: sales significantly decreased (s
Slide 8: Operating Income Breakdown by Factor
Operating Income Breakdown by Factor (Unit: Billions of Yen) Showa Denko 2nd Quarter, 2020 Consolidated Financial Results 8
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet (Unit: Billions of Yen) Assets Dec. 31, June. 30, Increase/ Liabilities and net assets Dec. 31, June. 30, Increase/ 2019 2020 decrease 2019 2020 decrease Cash and deposits 122.1 198.6 76.6 Notes and accounts payable 117.5 153.9 36.4 Notes and accounts receivable 170.3 248.
Slide 10: Influence of Integration with Hitachi Chemical to Balance Sheets
Influence of integration with Hitachi Chemical to Balance Sheets (Unit: Billions of Yen) Jun. 30, 2020 Increase in total assets 1,100.2 Increase in current assets 306.8 Increase in intangible fixed assets*1 489.8 Increase in liabilities 538.2 (Interest-bearing debt*2 366.9) Non-controlling inte
Slide 11: Total Assets, Interest-bearing Debt and D/E ratio
Total Assets Interest-bearing Debt and D/E ratio (Unit: Billions of Yen) Increase/ Dec. 31, 2019 June. 30, 2020 decrease Total assets 1,076.4 2,106.3 1,029.9 Interest-bearing debt 298.5 997.6 699.1 Debt/Equity ratio 0.60 times 2.37 times 1.77p (Adjusted net D/E ratio 1.72 times) Stockholders
Slide 12: Interest-bearing Debt
Interest-bearing Debt （Unit: Billions 1,100.0of Yen) D/E ratio Adjusted net D/E ratio 997.6 1,000.0 2.37 900.0 800.0 1.72 700.0 600.0 1.20 1.16 0.94 500.0 0.62 0.60 400.0 368.8 359.9 346.7 288.0 298.5 300.0 0.36 200.0 2015 2016 2017 2018 2019 2020 Jun.30 Equity ratio 31.5% 31.8% 34.3% 41.5% 46.4% 20
Slide 13: Consolidated Cash Flows
Consolidated Cash Flows (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2019 2020 decrease CF from operating activities 40.5 5.2 -35.3 CF from investing activities -17.9 -792.6 -774.7 Free CF 22.6 -787.4 -810.0 CF from financing activities -18.7 864.7 883.4 Others -3.3 -1.6 1.8 Increase/d
Slide 14: Selected Data (Consolidated)
Selected Data (Consolidated) (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2019 2020 decrease Interest/dividend income less interest expenses 0.2 -0.9 -1.1 Capital expenditures 22.3 24.8 2.5 Depreciation and amortization 18.6 19.4 0.8 R&D expenditures 10.1 9.7 -0.3 Number of employees (
Slide 15: Capital Expenditures/ Depreciation by Segment
Capital Expenditures/ Depreciation by Segment (Unit: Billions of Yen) Jan.-Jun., 2019 Jan.-Jun., 2020 Increase/decrease Capital Capital Capital Depreciation Depreciation Depreciation expenditures expenditures expenditures Petrochemicals 2.3 2.1 2.8 2.1 0.6 0 Chemicals 4.5 4.5 6.9 4.7 2.4 0.2 Electro
Slide 16: Total Number of Employees and Breakdown by Location
Total Number of Employees and Breakdown by Location 35,000 33,805 Japan Overseas Consolidation of Hitachi Chemical Company, Ltd.: 30,000 The number of employees increased by 23,038. 25,000 15,602 20,000 15,000 10,561 10,864 10,476 10,813 10,146 10,000 18,203 6,075 6,087 5,843 5,951 5,873 5,000 4,688
Slide 17: Selected Data, Forecast
Selected Data, Forecast (Unit: Billions of Yen) 2019 2020 Increase/ Actual Revised Forecast* decrease Exchange rate: ¥/US$ 1H 110.1 1H actual 108.3 1H Yen appreciated by 1.8 2H 108.1 2H revised 105.0 2H Yen appreciated by 3.1 ¥/€$ 1H 124.3 1H actual 119.3 1H Yen appreciated by 5.0 2H 119.8 2H revis
Slide 18: 2020 Forecast
2020 Forecast (Unit: Billions of Yen except Cash dividends per Share and Net income per Share) 2020 2020 2019 Increase/ Actual Revised decrease Forecast* First half Second half Net sales 906.5 960.0 53.5 326.6 633.4 Operating income 120.8 -30.0 -150.8 -25.8 -4.2 Non-operating income and expense -1.5
Slide 19: Special factors (impact on full year results)
Special factors (impact on full year results) (Unit: Billions of Yen) Major item Breakdown Amount Note Negative influence of the difference between the receipts and disbursements of raw Petrochemical 8.5 Temporary materials, reflecting the sharp decline in naphtha prices, time-lag factor Chemicals s
Slide 20: Special factors (impact on full year results)
Special factors (impact on full year results) (Unit: Billions of Yen) Temporary expenses incurred in this year Total 101.3 Negative influence of the difference between the receipts and disbursements of raw Petrochemical 8.5 materials, reflecting the sharp decline in naphtha prices, time-lag factor C
Slide 21: Sales and Operating Income by Segment, 2020 Forecast (1)
Consolidated Sales and Operating Income by Segment, 2020 Forecast (1) (Unit: Billions of Yen) 2020 2020 2019 Increase/ Actual Revised decrease Forecast* 1H 2H Sales 250.7 186.0 -64.7 95.7 90.3 Petrochemicals Operating income 17.2 1.0 -16.2 -3.7 4.7 Sales 157.5 155.0 -2.5 72.0 83.0 Chemicals Operatin
Slide 22: Sales and Operating Income by Segment, 2020 Forecast (2)
Consolidated Sales and Operating Income by Segment, 2020 Forecast (2) (Unit: Billions of Yen) 2020 2020 2019 Increase/ Actual Revised decrease Forecast* 1H 2H Sales 97.5 85.0 -12.5 38.8 46.2 Aluminum Operating income 1.7 1.5 -0.2 -0.2 1.7 Showa Denko Sales － 280.0 280.0 － 280.0 Materials** Operating
Slide 23: Consolidated Cash Flows, 2020 Forecast
Consolidated Cash Flows, 2020 Forecast (Unit: Billions of Yen) 1H, 2020 2H, 2020 2020 Actual Forecast Forecast* CF from operating activities 5.2 59.8 65.0 * CF from investing activities -792.6 -157.4 -950.0 Free CF -787.4 -97.6 -885.0 * CF from financing activities 864.7 105.3 970.0 Others -1.6
Slide 24: Capital expenditures/Depreciation Forecast by Segment
Capital expenditures/Depreciation Forecast by Segment for 2020 (Unit: Billions of Yen) 2019 2020 Increase/decrease Actual Revised Forecast* Capital Capital Capital Depreciation Depreciation Depreciation expenditures expenditures expenditures Petrochemicals 4.4 4.1 5.9 4.3 1.5 0.2 Chemicals 11.4 9.3
Slide 25: (Reference) Quarterly Operating Income
(Reference) Quarterly Operating Income 2020 (Unit: Billions of Yen) 2019 60.0 50.0 45.4 40.1 40.0 30.0 23.8 20.0 11.5 10.0 2.5 0.0 CQ1 CQ2 CQ3 CQ4 -10.0 -20.0 -30.0 -28.3 Showa Denko 2nd Quarter, 2020 Consolidated Financial Results 25
Slide 26: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Petrochemicals》 《Chemicals》 (Unit: Billions of Yen) (Unit: Billions of Yen) 9.0 2020 9.0 2020 2019 2019 6.0 4.5 4.8 4.0 3.9 6.0 3.0 4.0 4.1 3.1 0.0 3.0 2.4 2.7 CQ1-0.2 CQ2 CQ3 CQ4 2.3 -3.0 -3.5 0.0 CQ1 CQ2 CQ3 CQ4 -6.0 Showa Denko 2nd Quarter, 2020
Slide 27: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Electronics》 《Inorganics》 (Unit: Billions of Yen) (Unit: Billions of Yen) 9.0 2020 50.0 2020 2019 39.5 2019 8.0 40.0 32.3 7.0 30.0 6.0 20.0 5.0 13.1 10.0 4.4 4.0 0.8 0.0 3.0 CQ1 CQ2 CQ3 CQ4 2.0 1.9 -10.0 2.0 1.0 1.2 0.8 -20.0 1.0 -23.8 0.0 -30.0 CQ1
Slide 28: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Aluminum》 《Others》 (Unit: Billions of Yen) (Unit: Billions of Yen) 3.0 2020 3.0 2020 2019 2019 2.5 2.5 2.0 2.0 1.5 1.5 1.0 0.9 1.0 0.9 0.5 0.3 0.3 0.2 0.0 0.0 0.5 0.3 0.3 0.3 0.3 CQ1 CQ2 CQ3 CQ4 0.2 -0.5 -0.3 0.0 CQ1 CQ2 CQ3 CQ4 Showa Denko 2nd Quar
Slide 29: Topics [General]
Topics [General] ● Announcement regarding results of tender offer for shares in Hitachi Chemical Company, Ltd. and change in subsidiary ● Announcement regarding fundraising, capital reduction of the consolidated subsidiary and change in the specified subsidiary company For details, please refer to o
Slide 30: Topics [General]
Topics [General] ● Received award for used-plastic chemical recycling business SDK received an award from Chairman of the Japan Business Federation for its used-plastic chemical recycling business. This award is part of Fujisankei Communications Group’s 29th Grand Prize for the Global environment Aw
Slide 31: Topics [General]
Topics [General] ● Introduced AI system to examine capital investment SDK introduced an artificial-intelligence-based search system to look efficiently for information useful for capital investment evaluation from the company’s knowledge databases. This new search engine uses an AI system named “KIB
Slide 32: Topics [General]
Topics [General] ● Developed AI-based image analysis system to improve spherical alumina production SDK developed an artificial-intelligence-based image analysis system for spherical alumina production in cooperation with BLUE TAG. SDK started using the system at its production line in the first hal
Slide 33: Topics [General]
Topics [General] ● Oita Complex received Best Safety Award from Japan Chemical Industry Association In May 2020, SDK’s Oita Complex received the Best Safety Award from Japan Chemical Industry Association (JCIA) in a program to commend chemical companies’ safety activities. This is an award to commen
Slide 34: Topics [Chemicals segment]
Topics [Chemicals segment] ● Decided to establish second factory in Shanghai to produce electronic high-purity gases In January 2020, SDK decided to establish its subsidiary’s second factory in Shanghai to produce high- purity gases for electronics. Shanghai Showa Electronics Materials Co., Ltd. (SS
Slide 35: Topics [Chemicals segment]
Topics [Chemicals segment] ● Completed expansion of lines to produce vinyl ester resin and synthetic resin emulsion in Shanghai In June 2020, SDK expanded production lines to produce vinyl ester resin (VE) and synthetic resin emulsion (EM) in the premises of Shanghai Showa Highpolymer Co., Ltd. (SSH
Slide 36: Topics [Electronics segment]
Topics [Electronics segment] ● Developed HAMR-technology-based HD media SDK developed the technology of manufacturing media for next-generation hard disk drives (HDDs) based on the Heat Assisted Magnetic Recording (HAMR*) technology. Due to the rapid expansion of cloud service, video content, and im
Slide 37: Topics [Electronics segment]
Topics [Electronics segment] ● Decided to install equipment to mass-produce SPALFTM packaging material for large onboard LIBs Showa Denko Packaging Co., Ltd. (SPA), a consolidated subsidiary of SDK, has developed a new product to be added to the lineup of SPALFTM aluminum laminate film which is used
Slide 38: Topics [Inorganics segment]
Topics [Inorganics segment] ● About closing of a graphite electrode production site in Germany In June 2020, the Showa Denko Group completed labor-management consultations concerning planned closure of a production site in Meitingen, Germany, under the jurisdiction of consolidated subsidiaries SHOWA