Shinagawa Refra Co., Ltd · TSE:5351
Shinagawa Refra — Shinagawa Refractories — FY2022 Earnings Presentation
45 slides from Shinagawa Refra's earnings presentation, June 2023
Slide 1: Sky is the Limit: Shaping the Future of Refractories
Sky is the Limit: Shaping the Future of Refractories Shinagawa Refractories Co., Ltd. TSE Securities Code Number 5351 Shinagawa Refractories: Results for Fiscal Year ended March 2023 0
Slide 2: Table of Contents
Table of Contents Ⅰ. Overview of １．Consolidated Financial Highlights ４．Factors Behind Changes in Financial ２．Net Sales by Business Segment Operating Income (YoY) Results for ３．Operating Income by Business Segment ５．Consolidated Balance Sheet FY 2022 ６．Consolidated Cash Flows Ⅱ. FY 2023 １．Business En
Slide 3: Overview of Financial Results for 2022 (Fiscal Year ended March 2023)
Ⅰ. Overview of Financial Results for 2022 (Fiscal Year ended March 2023) Shinagawa Refractories: Results for Fiscal Year ended March 2023 2
Slide 4: Consolidated Financial Highlights
１． Consolidated Financial Highlights (Unit: Billion JPY) FY2021 FY2022 YoY Results Results Net Sales 110.7 124.9 ＋12.9% Operating Income 10.1 10.8 ＋7.3% (Operating Margin) (9.1%) (8.7%) (▽0.4%) Ordinary Income 10.7 11.4 ＋6.9% Profit attributable to 5.3 8.3 ＋56.5% owners of parent ● Japanese crude st
Slide 5: Net Sales by Business Segment
２． Net Sales by Business Segment (Unit: Billion JPY) FY2021 FY2022 YoY Results Results Refractories & Related Products 84.9 76.6 99.4 79.6 ＋17.2% Engineering & Installation 24.9 22.6 24.4 19.6 ▽ 1.7% Real Estate 0.9 0.9 0.9 0.8 ＋ 1.5% Total 110.7 100.0 124.9 100.0 ＋12.8% Note: Figures in square brac
Slide 6: Operating Income by Business Segment
３． Operating Income by Business Segment (Unit: Billion JPY) FY2021 FY2022 YoY Results Results Refractories & Related Products 9.4 80.7 10.2 80.6 ＋8.9% Engineering & Installation 1.8 15.6 1.9 15.5 ＋8.6% Real Estate 0.4 3.7 0.4 3.9 ＋12.2% Total 11.7 100.0 12.7 100.0 ＋8.9% Adjustments ▽1.6 ▽1.9 ― Opera
Slide 7: Factors Behind Changes in Operating Income (YoY)
４． Factors Behind Changes in Operating Income (YoY) (Unit: Billion JPY) Negative Factors Positive Factors ＋2.6 ▽1.9 Change in Total ＋0.7 Group Companies Cost Reduction Engineering ＋0.1 +0.1 10.8 Refractories ＋0.4 Inventory Sales Volume Valuation 10.1 ▽0.3 SG&A +1.0 ▽1.6 Margin Improvement & Exchange
Slide 8: Consolidated Balance Sheet
５． Consolidated Balance Sheet (Unit: Billion JPY) FY2021 FY2022 Changes ・Cash & Cash Equivalents ＋1.4 ・Merchandise & Finished Goods ＋4.2 Current Assets 78.7 91.4 ＋12.6 ・Raw Materials & Supplies ＋6.3 ・Tangible fixed assets ＋3.7 ・Goodwill ＋6.2 Fixed Assets 40.9 52.4 ＋11.4 ・Investments & other assets ＋
Slide 9: Consolidated Cash Flows
６． Consolidated Cash Flows (Unit: Billion JPY) 【 Main contents of cash flows from operating activities 】 FY2021 FY2022 Changes Cash Flows from ・ Income before Income Taxes 12.4 Operating Activities 9.4 10.2 ・ Depreciation 2.9 Cash Flows from ・ Changes in Account Receivable 3.8 Investing Activities ▽
Slide 10: FY 2023 Business Plan
Ⅱ. FY 2023 Business Plan Shinagawa Refractories: Results for Fiscal Year ended March 2023 9
Slide 11: Business Environment
１．Business Environment 【Business Environment】 Japanese Crude Steel Production （Unit：Million ton） ●The outlook of world economy is 1,60 0 expected to remain uncertain due to 1,40 0 1,048 1,029 984 inflation in various countries, the 956 1,20 0 879 900 828 prolonged situation in Ukraine and 1,00 0 geo
Slide 12: Consolidated Financial Results: 2020-2022
２．Consolidated Financial Results: 2020-2022 ■ The 5th Mid-term Management Plan Achieved Record High Performance in The Last Year Target 2022 and the Net Sales Surpassed the FY 2023 Target for the Final Year One Year Ahead The Last Year Target Net Sales (Left Scale) (Billion JPY) Ordinary Income (Rig
Slide 13: Consolidated Financial Forecasts for FY2023
３．Consolidated Financial Forecasts for FY2023 Aim to achieve record-high performance in FY 2023, the final year of the 5th mid-term management plan, exceeding FY 2022 The business environment continues to be difficult due to the decrease of demand for refractories and engineering work in Japan, as w
Slide 14: Factors Behind Changes in 2023 Operating Income (YoY)
４．Factors Behind Changes in 2023 Operating Income (YoY) (Billion JPY) Negative Factors △3.8 Positive Factors ＋5.0 Changes in Total ＋1.2 Margin Improvement & Exchange Rate Changes in Customers +1.6 12.0 Production Cost 10.8 ▲0.6 Inventory Valuation Sales Reduction ＋0.8 Forecast ▲2.5 Expansion +0.8 M&
Slide 15: The 5th Mid-Term Management Plan: Basic Policy & Primary Action Plans
５． The 5th Mid-Term Management Plan: Basic Policy & Overview of Primary Action Plans Basic Policy Despite gradual decline of steel demand in Japan, Shinagawa aims to achieve 【Main Initiatives for 2023】 record-high earnings by introducing new Shinagawa positions 2023 as a products that meet the diver
Slide 16: Reforming Group Management Structure
６．Reforming Group Management Structure ① Promoting sustainable growth of the group by organizing business domains into four sectors to Objectives of clearly identify opportunities and challenges for each sector the Reformation ② Furthering cross-sector collaboration and effective use of management r
Slide 17: Figures by Business Segment (Net Sales and Operating Income)
６－１．Figures by Business Segment (Net Sales and Operating Income) FY2022 Engineering Results Refractories & Related Products Real Estate Adjustments Total & Installation Net Sales （B JPY） 99.5 24.6 1.0 ▽ 0.1 124.9 Operating Income （B JPY） 8.6 1.6 0.4 0.0 10.8 By Old ROS （％） 8.7 6.7 46.8 - 8.7 Segment
Slide 18: Figures by Business Segment (Net Sales and Operating Income)
６－１．Figures by Business Segment (Net Sales and Operating Income) ＊Outer Circle： Net Sales （excluding Adjustments） Inner Circle： Operating Income Real Estate Real Estate Net Sales 1.0B JPY Refractories & Related Net Sales 0.8B JPY Refractories & Related Operating Income 0.4B JPY Products Operating In
Slide 19: Sector Overview 1: Refractory Sector
６－２．Sector Overview １ 「Refractory Sector」 Companies in the Sector Sector Vision Shinagawa Refractories Be the Customer’s First Choice Refractory Business Unit Overseas Business Japanese Sales Production Technology & R&D Growth Strategy/ Basic Policy Procurement ● Sales Expansion & Competitiveness En
Slide 20: Sector Overview 2: Insulation Sector
６－２．Sector Overview ２ 「Insulation Sector」 Companies in the Sector Sector Vision Isolite Insulating Group ・Pursue ambidextrous management of “Exploitation and Exploration” for future growth Isolite Insulating ・Expand global supply of environmental friendly insulation products 1 Japanese Companies Gro
Slide 21: Sector Overview 3: Ceramics Sector
６－２．Sector Overview ３ 「Ceramics Sector」 Companies in the Sector Sector Vision Shinagawa Fine Ceramics Ensure a strong presence within Shinagawa Group by Shinagawa Specialty Ceramics Americas growing with “Advanced Ceramics Technology” Net Sales & Operating Income of Ceramics Sector Unit：B JPY ＊（ROS）
Slide 22: Sector Overview 4: Engineering Sector
６－２．Sector Overview ４ 「Engineering Sector」 Companies in the Sector Sector Vision Shinagawa Refractories Fully integrate accumulated advanced technology with Engineering & Installation Business Unit experienced workforce to achieve sustainable growth Steel Business Division Environment & Industrial F
Slide 23: Sales Expansion & Competitive Enhancement in Japan
７．Primary Action Plans １ Sales Expansion & Competitive Enhancement in Japan １） Sales expansion through collaboration among refractory, insulation, and engineering businesses 【Customer Industries】 【Shinagawa = Solutions Provider】 Expand product line-up by collaboration Blast Furnace/BOF Increasing Ma
Slide 24: Business Expansion into the Aluminum Industry
７．Primary Action Plans １ Sales Expansion & Competitive Enhancement in Japan ２） Business Expansion into the Aluminum Industry The world's leading producer of monolithic refractories for the aluminum industry Entry into the Aluminum Industry in Japan Allied Mineral Products （AMP） Shinagawa: Exclusive
Slide 25: Overseas Business Expansion: Increasing Trend of Overseas Sales
７． Primary Action Plans ２ Overseas Business Expansion １） Increasing Trend of Overseas Sales 42.4 Billion JPY Welcoming SRB (Brazil) and SSCA (USA) with net sales 30％ of total 13.3 Billion JPY, the Group's overseas net sales in FY2023 are expected to reach 42.4 Billion JPY, far 【FY2023】 exceeding the
Slide 26: Growth Strategy in the Americas
７． Primary Action Plans ２ Overseas Business Expansion ２） Growth Strategy in the Americas 【Implemented Strategy in 2022】 【Strategy Beyond 2023】 Increasing Production & Sales Further Business Growth in the Americas Capabilities in the Americas by fully Utilizing New Locations In December 2022, Shinaga
Slide 27: Overseas Business Expansion Strategy
７． Primary Action Plans ２ Overseas Business Expansion ３） Overseas Business Expansion Strategy 【Strategy Beyond 2023 ➀】 【Strategy Beyond 2023 ②】 Further expansion of overseas Business Expansion in ASEAN, India business alliances and continuously and other strategic locations implementing M&A 【China】
Slide 28: Vigorous Capital Investments
７． Primary Action Plans ３ Vigorous Capital Investments ▶ Production Optimization in Japan Consolidating Monolithic Production in the West area to Investments in East Area Enhance Competitiveness (4 Locations ⇒ 2 Locations) Under Consideration Consolidating Consolidation: Before and After West Area i
Slide 29: Shareholders Return
８．Shareholders Return Sustainable Return of Profits to our Shareholders Dividend per Share & Payout Ratio 【Dividend Policy】 Dividend per Share Payout Ratio （JPY） 48.6 （％） Considering the important of 250 50 enhancing the return of profits 200 190 to our shareholders, Shinagawa 200 40 Approx. decided
Slide 30: Next Med-Term Management Plan and Long-Term Vision
Ⅲ. Next Med-Term Management Plan and Long-Term Vision Shinagawa Refractories: Results for Fiscal Year ended March 2023 29
Slide 31: Shinagawa's Long-Term Vision
１．Shinagawa’s Long-Term Vision Defining Shinagawa’s Long-Term Vision that pursues both business growth and sustainable solutions for social issues together Further Pursuing Sustainability （FY） 2021 2022 2023 2024 2025 2026 2027 2028 2029 Defining Long- The 5th Mid-Term The 6th Mid-Term The 7th Mid-T
Slide 32: Initiatives Toward the 6th Mid-Term Management Plan
２．Initiatives Toward the 6th Mid-Term Management Plan Focusing on ROIC Management, Shinagawa further promotes Growth Strategy and maximize Corporate Values to further create and strengthen our “Earning Power” Management Strategy that emphasizes ROIC Management Capital Efficiency ● Put Emphasis on Co
Slide 33: Overview of Sustainability Management
３．Overview of Sustainability Management 2021/10 ▶ Initiated discussions to commercially recycle used refractories 【Structure for Sustainability Management Promotion】 2021/12 ▶ Declared support for the TCFD and its recommendations Board of Directors Reporting Supervision 2022/0４ ▶ Formed Sustainabili
Slide 34: Respect for Human Rights and Ensuring Comfortable Working Environment
４．Respect for Human Rights and Ensuring Comfortable Working Environment “Shinagawa’s Charter of Corporate Behavior”: Respect for Human Rights and Ensuring a Comfortable Working Environment Shinagawa respects human rights, individuality, and personality and never discriminate on the basis of gender,
Slide 35: Addressing Climate Change through Refractory Business
５．Addressing Climate Change through Refractory Business Responding to Urgent Issue of “Addressing Climate Change,” In addition to Initiative within Shinagawa （Scope1・Scope2）, 「Shinagawa focuses on Reducing CO2 at Customers through refractory Business」（Scope3） By FY2030 By FY2050 Shinagawa’s Initiati
Slide 36: Shinagawa Refractories Co., Ltd.
Sky is the Limit: Shaping the Future of Refractories Shinagawa Refractories Co., Ltd. TSE Securities Code Number 5351 Shinagawa Refractories: Results for Fiscal Year ended March 2023 35
Slide 37: Supplementary Notes
Ⅳ. Supplementary Notes Shinagawa Refractories: Results for Fiscal Year ended March 2023 36
Slide 38: Corporate Management Principles
１．Corporate Management Principles Shinagawa’s Management Principles Shinagawa contributes to the industrial development and the realization of a prosperous and sustainable society through providing high quality refractory products and engineering services such as designing and constructions of vario
Slide 39: Consolidated Net Sales & Ordinary Income for Past 11 Years
２． Consolidated Net Sales & Ordinary Income for Past 11 Years Billion JPY Net Sales Operating Income Billion JPY 140.0 14.0 124.9 119.0 118.9 120.0 11.4 12.0 110.7 10.6 103.7 102.7 99.2 100.1 99.9 96.8 97.8 9.8 10.7 100.0 10.0 8.2 80.0 8.0 6.3 60.0 6.3 6.0 5.1 4.9 5.2 40.0 4.1 4.0 20.0 2.0 0.0 0.0 2
Slide 40: The Roles of Refractories Industry
３． The Roles of Refractories Industry ● Many vital materials that support important social infrastructure, such as steel, non-ferrous metals, cement and glass, are produced in furnaces lined with refractory products. ● The refractories industry supports the foundation of these key industries through
Slide 41: Major Products
４．Major Products • Refractories are industrial materials that can resist ultra-high temperatures in excess of 1,500 ℃. Refractories • Approximately 80% of refractory production is consumed by the steel industry. Shaped Refractories Monolithic Refractories Mold Powder Shaped refractories (“fire brick
Slide 42: Key Features and Advantages
５． Key Features and Advantages Leading Company of Ultra-High 1 Temperature Technologies Next Page Solid Customer Base with Highly-Advanced 2 Technological Capabilities 3 Active Global Business Expansion Shinagawa Refractories: Results for Fiscal Year ended March 2023 41
Slide 43: Key Features and Advantages: Ultra-High Temperature Technology
５． Key Features and Advantages Leading Company of Ultra-High Temperature Technology Solid Technology Development and Commercialization Capabilities supported by Key Two Technologies ●Furnace Design ●Engineering Services ●Refractories ・Furnace construction work for ●Ceramic Fibers Refractory Furnace
Slide 44: Disclaimer
Disclaimer This document is intended to provide information on the results for the fiscal year ended March 2023 (April 2022 – March 2023) and is not intended to solicit investment in securities issued by the Company. The document was prepared based on data available as of June 15, 2023. Opinions, fo
Slide 45: Shinagawa Refractories Co., Ltd.
Sky is the Limit: Shaping the Future of Refractories Shinagawa Refractories Co., Ltd. TSE Securities Code Number 5351 Shinagawa Refractories: Results for Fiscal Year ended March 2023 44
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