Mitsui Chemicals, Inc. · TSE:4183
Mitsui Chemicals — FY2018 Earnings Presentation
48 slides from Mitsui Chemicals's earnings presentation, May 31, 2019
Slide 1: CEO Explanation
Nov 15, 2018 FY19-1 Creating New Customer Value through Innovations CEO Explanation 淡輪 敏 Tsutomu Tannowa Mitsui Chemicals Inc. President & CEO May 31, 2019
Slide 2: Contents
May 31, 2019 Contents Business Performance Topics on Targeted Business Domains Topics on Sustainability Financial Overview Management Target for Sustainable Growth
Slide 3: FY18 Results and FY19 Outlook
１ FY18 Results and FY19 Outlook May 31, 2019 FY18 - Operating incomes driven down by Osaka Works fire etc. (△5 bn yen) and inventory valuation losses FY19 - Record high profit expected （JPY bn） △Denotes a minus Increase FY2016 FY2017 FY2018 FY2019 Items (Decrease) Results Results Results Outlook FY1
Slide 4: Operating Income Outlook by Segment
２ Operating Income Outlook by Segment May 31, 2019 （JPY bn） △Denotes a minus Increase FY2016 FY2017 FY2018 FY2019 D Segment (Decrease) Results Results Results Outlook FY18→FY19 Mobility 40.7 42.3 42.7 44.5 1.8 Health Care 10.1 10.8 13.6 15.5 1.9 Food&Packaging 20.6 19.9 17.8 20.5 2.7 3 Targeted Doma
Slide 5: Management Targets
３ Management Targets May 31, 2019 FY15 FY18 FY19 FY21 VISION (JPY bn) Results Results Outlook Target 2025 Sales 1,344 1,483 1,540 1,670 2,000 Operating income 70.9 93.4 105 140 200 (ROS) (5.3%) (6.3%) (6.8%) (8.4%) (10%) Net income 23.0 76.1 76.0 100.0 ー ROE 5.8% 14.3% 13.1% → 10% or more ROIC* 4.9%
Slide 6: ROIC by Business Domain
4 ROIC by Business Domain May 31, 2019 Focusing investments in high-ROIC targeted domains FY18 FY21 ROIC(％) Results ROIC(％) Target Mobility Health Care Food & Packaging Basic Materials 10% 10% Avg. Avg. 7.5 Ave. 7.5%% 6.0 Ave. 6.0% % 5% 5% Exceeds WACC in all business domains 0 500 1,000 0 500 1,000
Slide 7: Expand investments for further growth
Operating Net 5 Mid-Term Management Target Income Income May 31, 2019 Expand investments for further growth Reduce downward risk Stable profit Growth trajectory （JPY bn） 140 Mobility 3 Targeted Health Care Business Domains Food & Packaging 120 Basic Materials, Others 103.5 105 102.1 93.4 100 70.9 87
Slide 8: 8 Issues in FY19
6 Issues toward Growth Path May 31, 2019 8 Issues in FY19 ①Expansion in 3 targeted business domains - Increase in investment themes - Including peripheral business area Business - Secure production capacity corresponding to demands Strategy ②Accelerate development of new next generation businesses a
Slide 9: Contents
May 31, 2019 Contents Business Performance Topics on Targeted Business Domains Topics on Sustainability Financial Overview Management Target for Sustainable Growth
Slide 10: Five Business domains
7 Five Business domains May 31, 2019 Mobility Elastomers, Performance polymers, 01 27% Performance compounds, 3 Targeted Sales Engineering plastics Business Domains 10% (FY18 Results) 48% 1,483 billion yen 7 13% Health Care ヘルスケア事業 Ophthalmic lens material, メガネレンズ材料 02 Next Generation 04 Nonwovens,
Slide 11: Mobility
May 31, 2019 Mobility Provide solutions making full use of comprehensive strengths
Slide 12: Mitsui Pellicle for Semiconductor Photomask
Mitsui Pellicle™ 8 Dust Cover for Semiconductor Photomask May 31, 2019 -Strengthen next-gen pellicle business that meets semiconductor refinement needs -Exclusive license for EUV pellicle acquired from ASML* *ASML: Dutch-based, global leading manufacturer of semiconductor exposure machine Demand gro
Slide 13: Strengthen Production Capacity
Strengthen Production Capacity 9 - Local Production for Local Consumption - May 31, 2019 Long glass fiber reinforced PP PP Compounds in Thailand Establish global structure Increase capacity U.S China Japan Capacity 3.5KTA 3.5KTA (Sep.2020) 3.5KTA (Sep.2019) +13KTA (Oct.2019) (Jun. 2020) Background B
Slide 14: Global Deployment of PP Compounds
10 Global Deployment of PP Compounds May 31, 2019 Shift to resin parts leading to continued growth despite automotive production growth slowing down America Europe Asia 440KTA 50KTA (Including outsourced production capacity) 630KTA India Ohio Netherlands +12KTA (Oct.2020) China Tennessee New base In
Slide 15: Expanding Applications
11 Expanding Applications May 31, 2019 APEL™ ADMER™ Reforming application portfolio Expanding applications ✔ Expand business in smartphone camera lens use ✔ Growth due to gasoline tanks trending toward ✔ Continue high growth amid trend toward resins (adhesiveness, durability) double-camera, triple-c
Slide 16: Strengthening Solutions
12 Strengthening Solutions May 31, 2019 - Strengthen capabilities for creation and development - Opened “Design & Solution Center” (Mar. 2019, Niigata) Group-wide Management Materials Design/Analysis Molds Prototyping /Evaluation Customer needs targeted parts Acquire Mobility Design & New materials
Slide 17: Carbon Fiber Composite Materials
13 Carbon Fiber Composite Materials – Part 1 May 31, 2019 Carbon fiber composite material - commercializing UD tapes TAFNEX™ Installation of laser equipment Carbon fiber reinforced UD tape for UD tape production UD tape Proposing applications in rear doors Laser equipment Multilayer sheet Winding tu
Slide 18: Showcasing TAFNEX concept car at JEC World
14 Carbon Fiber Composite Materials – Part 2 May 31, 2019 Showcasing TAFNEX™ - “hour’s Pod™” concept car exhibit at JEC World convention in France (Mar. 2019) TAFNEX™ CF/PP TAFNEX™ CF/PP UD-Winding Tube -UD Tape- POLYMETAC™ NOSTRA™ Urethane CFRP Ultrahydrophilic coating FORTIMO™ & C TAFNEX™ CF/PP -F
Slide 19: Mobility Project Schedule
15 Mobility Project Schedule May 31, 2019 Expand scope of investments in high-ROIC Mobility domain ➡ accelerate growth Schedule for profit contribution Mobility investment projects Capacity Stable growth Accelerate growth Note (partial list) (KTA) FY17 FY18 FY19 FY20 FY21 FY22 Increased capacity＠Ind
Slide 20: Health Care
May 31, 2019 Health Care Provide products & services contributing to Quality of Life through chemical innovations
Slide 21: Vision Care
16 Vision Care May 31, 2019 Bolster global No. 1 position with full range of refractive index and functional lens materials Global 45% Functional lens materials Ophthalmic lens materials market share 45% +4% UV+420cut™ Market growth rate ✔Cuts out harmful UV rays and high-energy visible (HEV) light
Slide 22: Health Care Topics
17 Health Care Topics May 31, 2019 E-focus glasses Bolster development of TouchFocus™ achieves high sales nonwovens for industry use ✔ Launched new organization for industrial applications development (Apr. 2019) ✔ Rolling out industrial applications using sanitary material technologies Automobile B
Slide 23: Accelerate Development of New Products
【Mitsui Fine Chemicals】 18 Accelerate Development of New Products May 31, 2019 Polyolefin surface modifier Low skin irritation Exfola™ Hair coloring material Low skin irritation General TDA 2,5-TDA Good coloration Paramin 2018 Chemical Society of Japan Award for Technical Development ✔Developed hair
Slide 24: Food & Packaging
May 31, 2019 Food & Packaging Provide solutions for world food problems, seizing new business opportunities
Slide 25: Agrochemicals
19 Agrochemicals May 31, 2019 Mitsui Chemicals Agro Active ingredient Target market Progress Fungicide Existing active ✔ Domestic sales launched in FY2015 ingredient for wetland rice ✔ Positive feedback for new efficacy, Tolprocarb receiving award from the Pesticide Domestic market Science Society o
Slide 26: Eco-friendly Packaging Materials
20 Eco-friendly Packaging Materials May 31, 2019 Mono-material X Barrier Paper recyclability, laminate replacement Water-based PU coating with gas barrier Water-based heat-seal coating TAKELAC™ WPB CHEMIPEARL™ Difficult to recycle high-performance Enables water-based layer with thinness and heat Iss
Slide 27: Next Generation Business
May 31, 2019 Next Generation Business Create solution & system businesses at the boundary or peripheral areas
Slide 28: Next Generation Business
21 Next Generation Business May 31, 2019 Next Generation Business Power generation and diagnosis business Energy of photovoltaic plant ✓Diagnosis accounts over 3.1GW Solution ✓Enter certification business in India (Oct. 2019) Rapid diagnosis system for bacterial Medical identification ✓Provide re-ag
Slide 29: Joint development of new models for surgical practice
*Japanese Cabinet Office’s ImPACT program 22 Open Innovation JST Nagoya University May 31, 2019 University of Tokyo Joint development* of new models for surgical practice Eyeball model for Nasal cavity/skull base model practicing glaucoma surgery with Piezola™ Layered structure with human collagen f
Slide 30: Basic Materials
May 31, 2019 Basic Materials Provide materials for the basis of society and industry
Slide 31: Build a Stable Profit Base
■Operating income(JPY bn) 23 Build a Stable Profit Base ーROS(％) May 31, 2019 -Reduce volatility through restructuring -Establish stable profit base for around 30 billion yen Countermeasures for low Withdrawal from Keiyo Ethylene Nghi Son Refinery starts up, cracker operation @ Ichihara (approx. ▲170
Slide 32: Reduce Volatility
24 Reduce Volatility May 31, 2019 Bolster presence in Asia market Resistance to market fluctuation and build stable profit base Phenol, Polyurethane, PTA FY18 Our operating rate FY19 Outlook Local production for local consumption 80% ✔Restructure and establish sales strategies tailored to FULL FULL
Slide 33: Further Strengthen Cracker Competitiveness
25 Further Strengthen Cracker Competitiveness May 31, 2019 Energy New gas turbine Removing Expand cracking efficiency facilities bottlenecks furnace (30 MW, Osaka) (Ichihara) ✔ Cut costs by improving olefin yield ✔ Cut costs by improving proportion of private power generation and recycling waste hea
Slide 34: Contents
May 31, 2019 Contents Business Performance Topics on Targeted Business Domains Topics on Sustainability Financial Overview Management Target for Sustainable Growth
Slide 35: Climate Change and Plastic Waste – Conceptual Overview
26 Climate Change and Plastic Waste – Conceptual Overview May 31, 2019 Tackling climate change and plastic waste to achieve circular economy Plastic waste CIRCULAR ECONOMY Climate change Issue Countermeasure Reuse Lighter/thinner Infrastructure/ systems Longer operating life Recovery Reduce ✔ Reduci
Slide 36: Basic Plan of Plastic Strategy
27 Basic Plan of Plastic Strategy May 31, 2019 Pursuing circular economy model throughout value chain Expand biomass plastics Biomass plastics help cut Climate-friendly Biomass Resource circulation CO2 emissions ✔Bio-polypropylene strategy ✔Bio-Polyol (Econykol™) ✔Bio-Polyurethane (STABiO™) ✔Bio-bas
Slide 37: Climate Change Response Plan
28 Climate Change Response Plan May 31, 2019 -Dealing with climate change is our top priority -Pursue cooperation and co-creation throughout global value chain Mitigation Adaptation Realizing low-carbon society Realizing healthy and happy society by reducing GHG emissions resilient to climate change
Slide 38: Development of Bio-Based Polypropylene (Bio-PP)
29 Development of Bio-Based Polypropylene (Bio-PP) May 31, 2019 Targeting commercialization of Bio-PP as Japan’s leading supplier ✔ PP: 23% of all plastic production in Japan World’s first IPA method ✔ Wide-ranging applications: auto parts, consumer electronics, medical, housing Biomass raw material
Slide 39: Blue Value, Rose Value
30 Blue Value™, Rose Value™ May 31, 2019 Blue Value® Rose Value™ Harmony with Declining Birth Rate Longer Healthy Reduce CO2 Protect Resources Nature & Aging Population Life Expectancy Food Problem Blue Value™ Rose Value™ 30 8,000.00 35.0% 30 8000 0.35 % % certified products sales ratio certified pr
Slide 40: Contents
May 31, 2019 Contents Business Performance Topics on Targeted Business Domains Topics on Sustainability Financial Overview Management Target for Sustainable Growth
Slide 41: Cash Flow
31 Cash Flow May 31, 2019 -Cash flow from operating income remains high -Maintain active investment phase 150 (JPY bn) 145.9 125 109.5 100.4 100 1,095 100.5 82.7 92.4 70.2 73.2 50 58.3 53 45.2 54.9 30 43.3 43.5 23.3 14.2 27.3 0.8 18.5 7.6 5 0 -21.4 -35 -36.4 -42.9 -43.2 -42.5 -47.4 -33.1 -39.6 -643
Slide 42: Net D/E Ratio
32 Net D/E Ratio May 31, 2019 -Improve Net D/E of 0.65 and continue active investments -Further enhance corporate value 8,000 800 1.60 (JPY bn) Equity ratio 1.44 700 7,000 1.40 1.22 1.22 600 6,000 1.20 1.12 1.03 500 5,000 1.00 0.79 400 0.75 0.68 4,000 0.80 Interest-bearing debt (net) 0.65 Shareholde
Slide 43: Shareholder Returns
33 Shareholder Returns May 31, 2019 -Increasing returns to shareholders -Acquired treasury stock of 10 billion yen in FY18 ✔ Target total return ratio: 30% or more ✔ Stable and continuous dividend increase 100 100 ✔ Flexibly 100 acquire treasury stock 90* Acquisition of 900 treasury stock 90 Acquisi
Slide 44: Targeted Position
34 Targeted Position May 31, 2019 Mobility Health Care F&P New & Next Generation Basic Materials Operating income （JPY bn） ▲ Denotes a minus 14% Targeted business Vision2025 Basic Strategies domains ratio ①Pursue innovations ②Accelerate global expansion 12% ③Strengthen competitiveness of existing bu
Slide 45: Sustainable Growth
35 Sustainable Growth May 31, 2019 Constantly pursuing innovation and growth to become a chemical group with an undisputed global presence Restructuring Restore Growth Leap Extensive Transform Shift to Actualize 200 business business customer-driven 86% corporate restructuring portfolio business mod
Slide 46: Creating new customer value and solving social challenges through business activities
Creating new customer value and solving social challenges through business activities
Slide 47: 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
Slide 48: Automotive Engineering Exposition 2019
Automotive Engineering Exposition 2019 May 31, 2019 Propose interior design for next mobility in collaboration with ARRK Translucent surface materials for display use made from Milastomer™