Slide 1: Kureha Corporation Reports Fiscal 2016 Results
Kureha Corporation Reports Fiscal 2016 Results This report has been prepared in accordance with International Financial Reporting Standards (IFRS), which Kureha adopted from FY2016. Tokyo, Japan – May 2017 – Kureha Corporation (“Kureha”), a leading global supplier of specialty chemicals and plastics
Slide 2: Summary of Consolidated Full-year Results
The underlying market trends are promising. The turn-around in crude oil prices seen since mid-2016 has benefited the US shale oil industry, which after a year of consolidation is now more efficient and technologically adept than ever. With US oil production becoming increasingly dependent on shale
Slide 3: Advanced Materials and Specialty Chemicals Segments
Advanced Materials Segment Major product areas: advanced plastics (PPS, PVDF, PGA), carbon materials Advanced Materials segment sales fell 6.2% year-on-year to 33.4 billion yen while operating income decreased to 0.1 billion yen. Advanced plastics: Continued growth for PVDF, temporary slowdown for P
Slide 4: Specialty Chemicals and Specialty Plastics Segments
Pharmaceuticals / agrochemicals: Earnings fall due to lower sales volumes Earnings in the pharmaceuticals business were mainly impacted by mandatory drug price revisions, stiffening competition from government-promoted generic drugs, and slower sales of Kremezin, a therapeutic agent for chronic kidn
Slide 5: Specialty Plastics, Construction and Other Operations
Outlook: Specialty Plastics segment sales are expected to improve slightly to 43.0 billion yen. Operating income is forecast to fall 18% to 4.1 billion yen. This is mainly due to increased marketing costs in the consumer products business, which is expected to affect operating income despite continu
Slide 6: FY2017 Outlook
FY2017 Outlook (Billions of yen, except where stated) March 2017 March 2018 Change (%) Sales 132.3 142.0 7.3 Operating income 9.3 11.0 18.8 Income before income tax 9.0 11.0 22.5 Net income 7.0 8.4 20.0 Earnings per share (yen) 407.38 488.8 - While uncertainties will persist in the global economy an
Slide 7: R&D Spending and Interest-bearing Debt
R&D spending decreased slightly from 4.9 billion yen to 4.7 billion yen. However, in FY2017, we forecast an increase in R&D spending to 5.5 billion yen. This investment will be aimed at improving existing products and processes, as well as developing new “seeds” for research into next-generation pro
Slide 8: Condensed Consolidated Balance Sheets and Statement of Income
Condensed Consolidated Balance Sheets As of March 31, 2016 and 2017 (Millions of yen) March 2016 March 2017 Assets Current assets 72,894 75,272 Cash and cash equivalents 6,695 6,222 Noncurrent assets 166,913 159,634 Property, plant and equipment 124,987 115,911 Intangible assets 1,666 1,395 Investme
Slide 9: FY2016 Financial Results
FY2016 Financial Results May 12, 2017
Slide 10: Contents
1 Contents 1. FY2016 Full-Year Results 2. FY2017 Outlook • FY2016 Highlights 3-6 • FY2017 Full-Year Outlook 16-19 • Segment Performance • Segment Outlook Advanced Materials 7 Advanced Materials 20 Specialty Chemicals 8 Specialty Chemicals 21 Specialty Plastics 9 Specialty Plastics 22 Construction &
Slide 11: 1. FY2016 Full-Year Results
2 1. FY2016 Full-Year Results (April 1, 2016 – March 31, 2017)
Slide 12: FY2016 Highlights
3 FY2016 Highlights (in billion yen ) FY2015 FY2016 Change FY2016 vs. FY2015 Net sales 140.8 132.3 -6.0% Net sales declined due to lower volumes in Specialty Chemicals, Operating income 7.4 9.3 25.3% Advanced Materials and Construction Income before income tax 6.6 9.0 36.5% Higher operating income
Slide 13: FY2016 Highlights
4 FY2016 Highlights (in billion yen ) Sales Operating income (excluding other income and expenses) FY2015 FY2016 FY2015 FY2016 42 43 5 5 36 33 31 3 26 16 16 16 3 14 1 2 1 1 2 0 Advanced Specialty Specialty Con- Other Advanced Specialty Specialty Con- Other Materials Chemicals Plastics struction Oper
Slide 14: FY2016 Highlights
5 FY2016 Highlights FY2015 Advanced Specialty Specialty Con- Other Segment Adjustment Group Materials Chemicals Plastics struction Operations Total Total Net sales 35.6 30.6 42.3 16.2 16.1 140.8 140.8 Adjustment -0.1 Other income 0.9 Includes ¥4.5B restructuring cost and ¥1.1B loss on retirement of
Slide 15: FY2016 Highlights: Other Income and Expenses
6 FY2016 Highlights Other Income and Expenses FY2015 FY2016 Other income ¥0.9 billion Other income ¥1.4 billion ¥0.2b Subsidy income: ¥0.2b Subsidy income: ¥1.0b *Subsidy for Fukushima Recovery Initiative *Deducing ¥6.9b for reduced value of related Compensation received: ¥0.2b noncurrent assets fro
Slide 16: Segment Performance: Advanced Materials
7 Segment Performance Advanced Materials (in billion yen) FY2015 FY2016 Change Sales • Advanced Plastics declined due Advanced plastics 21.4 19.4 -9% to lower volumes in PGA (for Carbon products 5.2 4.1 -21% oil/gas extraction) and PPS (bag Other 0.4 0.3 -23% filter), despite PVDF volume growth (LiB
Slide 17: Segment Performance: Specialty Chemicals
8 Segment Performance Specialty Chemicals (in billion yen) FY2015 FY2016 Change Sales • Agrochemicals declined on Agrochemicals 9.5 7.2 -24% lower volumes in fungicides Pharmaceuticals 7.4 5.6 -25% • Pharmaceuticals declined with a Industrial chemicals 9.5 8.8 -8% negative impact of mandatory drug p
Slide 18: Segment Performance: Specialty Plastics
9 Segment Performance Specialty Plastics (in billion yen) FY2015 FY2016 Change Sales • Home Products improved on Home products 18.5 19.5 6% volume growth in ‘NEW Packaging materials 8.0 7.0 -13% Krewrap’ (home-use wrap film) Non-consolidated sales total 26.5 26.5 -0% and ‘Seaguar’ (fishing lines), a
Slide 19: Segment Performance: Construction and Other Operations
10 Segment Performance (in billion yen) FY2015 FY2016 Change Construction Sales • Construction declined due to Construction 24.6 21.2 -14% fewer construction projects in Adjustment -8.4 -7.2 -- both public and private sectors Kureha Group sales 16.2 13.9 -14% Kureha Group operating income 1.5 1.0 -3
Slide 20: Difference from FY2016 Projection
Difference from FY2016 Projection 11 (announced at FY2016 2Q) (in billion yen ) Sales Operating income *excluding other income and expenses FY2016 Projection (at Q2) FY2016 Actual FY2016 Projection (at Q2) FY2016 Actual 42 43 5 33 33 4 25 26 14 14 16 16 3 3 1 1 2 1 1 0 Advanced Specialty Specialty C
Slide 21: Difference from FY2016 Projection
Difference from FY2016 Projection 12 (announced at FY2016 2Q) FY2016 Projection Advanced Specialty Specialty Con- Other Segment Group Adjustment (at Q2) Materials Chemicals Plastics struction Operations Total Total Net sales 33.0 25.0 42.0 14.0 16.0 130.0 130.0 Adjustment 0.0 Other income Includes ¥
Slide 22: Key Indicators
13 Key Indicators (in billion yen) FY2015 FY2016 Change 1H 2H Full year 1H 2H Full year YOY Capital expenditure 5.4 6.0 11.4 4.8 5.5 10.3 -10% Depreciation 5.0 5.4 10.3 5.1 5.1 10.2 -1% R&D expenses 2.3 2.6 4.9 2.2 2.5 4.7 -4% Interest-bearing debt 87.7 81.2 81.2 77.8 71.0 71.0 -13% (Currency exchan
Slide 23: Financial Position
14 Financial Position (in billion yen) Assets Liabilities and Mar. 31 Mar. 31 Net Assets Mar. 31 Mar 31 Change Change 2016 2017 2016 2017 Cash and cash equivalents 6.7 6.2 -0.5 Accounts and notes 19.8 20.4 0.6 Accounts and notes payable-trade 30.9 29.4 -1.5 receivable-trade Interest-bearing debt 81.
Slide 24: Cash Flow
15 Cash Flow (in billion yen) FY2015 FY2016 Change Income before income tax 6.6 9.0 2.4 Cash flow from Depreciation 10.3 10.2 -0.1 operating activities Other -2.4 -6.8 -4.5 14.6 12.4 -2.2 Cash flow from investing activities -6.0 -1.1 5.0 Cash flow from financing activities -9.9 -11.7 -1.8 Effect of
Slide 25: 2. FY2017 Outlook
16 2. FY2017 Outlook (April 1, 2017 – March 31, 2018)
Slide 26: FY2017 Outlook
17 FY2017 Outlook (in billion yen) FY2017 Change FY2017e vs. FY2016 FY2016 1H 2H Full-year YOY Net sales to increase Net sales 132.3 66.0 76.0 142.0 7.3% largely by the growth of Advanced Materials Operating income 9.3 5.0 6.0 11.0 18.9% Operating income to improve with robust Income before income
Slide 27: FY2017 Outlook
18 FY2017 Outlook (in billion yen ) Sales Operating income *excluding other income and expenses FY2016 FY2017e FY2016 FY2017e 41 43 43 5 33 4 26 27 3 3 3 16 17 14 15 2 1 1 0 1 Advanced Specialty Specialty Con- Other Advanced Specialty Specialty Con- Other Materials Chemicals Plastics struction Opera
Slide 28: FY2017 Outlook
19 FY2017 Outlook FY2016 Advanced Specialty Specialty Con- Other Segment Group Adjustment Total Materials Chemicals Plastics struction Operations Total Net sales 33.4 25.9 42.8 13.9 16.3 132.3 132.3 Adjustment 0.1 Other income Includes ¥1B subsidy income 1.4 Includes ¥1.9B business withdrawal/restru
Slide 29: FY2017 Outlook
20 FY2017 Outlook (in billion yen) FY2016 FY2017e Change Capital expenditure 10.3 14.0 36% Depreciation 10.2 10.5 3% R&D expenses 4.7 5.5 17% Interest-bearing debt 71.0 58.6* -17% (Currency exchange rates) * Based on the assumption that Kureha’s ¥15B convertible bonds due Term average ¥108.3 ¥110.0
Slide 30: Segment Outlook: Advanced Materials
21 Segment Outlook Advanced Materials (in billion yen) FY2016 FY2017e Change Sales Advanced plastics 19.4 26.3 36% • Advanced Plastics to improve by Carbon products 4.1 3.9 -6% strong growth of PGA (for use in oil/gas extraction) in addition to Other 0.3 0.3 -4% PVDF (LiB binder) and PPS Non-consoli
Slide 31: Segment Outlook: Specialty Chemicals
22 Segment Performance Specialty Chemicals (in billion yen) FY2016 FY2017e Change Sales • Agrochemicals to improve with Agrochemicals 7.2 9.0 25% demand recovery after farmers’ Pharmaceuticals 5.6 4.3 -23% inventory adjustment Industrial chemicals 8.8 8.7 -1% • Pharmaceuticals to continually Non-con
Slide 32: Segment Outlook: Specialty Plastics
23 Segment Performance Specialty Plastics (in billion yen) FY2016 FY2017e Change Sales Home products 19.5 19.9 2% • Home Products operating profit expected to decline with Packaging materials 7.0 6.1 -12% increased promotional activities Non-consolidated sales total 26.5 26.0 -2% despite volume grow
Slide 33: Segment Outlook: Construction and Other Operations
24 Segment Performance (in billion yen) FY2016 FY2017e Change Construction • Construction to improve sales Sales slightly with increased number Construction 21.2 21.5 2% of public and private projects Adjustment -7.2 -7.0 -- but reduce profit due to higher Kureha Group sales 13.9 14.5 4% labor and r
Slide 34: Cash Flow
25 Cash Flow (in billion yen) FY2016 FY2017e Change Income before income tax 9.0 11.0 2.0 Cash flow from Depreciation 10.2 10.5 0.3 operating activities Other -6.8 -7.1 -0.3 12.4 14.3 2.0 Cash flow from investing activities -1.1 -15.0 -13.9 Cash flow from financing activities -11.7 0.6 12.3 Effect o
Slide 35: 3. Consolidated Companies
26 3. Consolidated Companies
Slide 36: Sales and Assets
27 Sales and Assets ( In billion yen) FY2015 FY2016 Change Net sales Total assets Net sales Total assets Net sales Total assets Kureha Corporation 79.9 190.2 71.9 188.4 -8.0 -1.8 Kureha Trading Group (2) 20.3 12.1 20.3 13.6 0.0 1.5 Kureha Corporation 27.0 23.9 -3.2 Kureha Trading Group (2) 8.1 8.6 0
Slide 37: Sales and Assets by Consolidated Company
28 ( In billion yen) FY2015 FY2016 Change Net sales Total assets Net sales Total assets Net sales Total assets Kureha Nishiki Group (4) 21.2 11.9 18.2 10.8 -3.0 -1.0 Construc- Kureha Engineering Co. 3.5 2.9 3.0 2.1 -0.5 -0.8 tion Consolidation adjustments -8.4 -7.2 Total 16.2 13.9 -2.3 Kureha Ecolog
Slide 38: Disclaimer
29 Disclaimer 1. These materials are supplied to provide a deeper understanding of our company, and are not intended to as a solicitation for investment or other actions 2. These materials were prepared by our company based on the information available at this point in time, however actual performan