Kureha Corporation · TSE:4023
Kureha — Q2 FY2024 Earnings Presentation
35 slides from Kureha's earnings presentation, Nov 11, 2024
Slide 1: FY2024 2Q Results
FY2024 2Q Results November 11, 2024
Slide 2: Table of Contents
Table of Contents I. FY2024 Financial Overview and Outlook I-(1) Performance Highlights and Key Items 3- 9 I-(2) FY2024 2Q Results 10 - 17 I-(3) FY2024 Earnings Forecast 18 - 27 II. Progress on Medium- to Long-Term Goals ・Initiatives for FY2025 29 ・New Product and Business Development 30 - 31 ・Progr
Slide 3: I. FY2024 Financial Overview and Outlook
I. FY2024 Financial Overview and Outlook (2)
Slide 4: I. FY2024 Financial Overview and Outlook
I. FY2024 Financial Overview and Outlook I-(1) Performance Highlights and Key Items I-(2) FY2024 2Q Results I-(3) FY2024 Earnings Forecast (3)
Slide 5: Performance Highlights (1)
Performance Highlights (1) FY2024 2Q Results Revenue and profit (billion yen) FY2024 2Q YoY changes: Main Factors FY24 FY23 25/3 2Q • Revenue and profit for PVDF used in LiB binders have Initial declined because of a continued slowdown and 2Q 2Q Diff. Diff. forecast inventory adjustments in the EV a
Slide 6: Performance Highlights (2)
Performance Highlights (2) Analysis of Factors Affecting Operating Profit: FY2024 2Q Results Despite a significant decline in profit for the PVDF business due to the slowdown in the EV market, other existing businesses maintained roughly the same profit levels as the previous year. YoY Change 9.1 bi
Slide 7: Performance Highlights (3)
Performance Highlights (3) FY2024 Annual Forecast FY2024 Annual YoY Change: Key Differences Revenue and profit (billion yen) • Weak PVDF sales due to slowdown in the EV market, FY24 FY23 FY24 especially in Europe Revised Initial Diff. Actual Diff. • Less gains on PGA inventory revaluation due to low
Slide 8: Performance Highlights (4)
Performance Highlights (4) Analysis of Factors Affecting Operating Profit: FY2024 Forecast We aim to strengthen our profit base by addressing the shortfall in the PVDF and PGA businesses through securing more profit in other existing businesses and further cost reductions across the company. YoY Cha
Slide 9: Key Items: PVDF Business
Key Items: PVDF Business EV and LiB Market Overview and Strategies Initial Forecast: Expected recovery during FY2025 LiB Applications Current Outlook: Continued uncertainty throughout Europe FY2025, with recovery in the European • EV sales volumes are lower than the previous year, with no market del
Slide 10: Key Items: PGA Business
Key Items: PGA Business Market (Gas Prices) Overview and Strategies 10 Medium- to High-Temperature Regions 9 Dollars per Million Btu 8 • Drilling activity in one of our primary markets, gas fields, has stalled 7 due to North American gas prices falling below our anticipated 6 range of 2.5–3 USD/mmbt
Slide 11: I. FY2024 Financial Overview and Outlook
I. FY2024 Financial Overview and Outlook I-(1) Performance Highlights and Key Items I-(2) FY2024 2Q Results I-(3) FY2024 Earnings Forecast (10)
Slide 12: FY2024 2Q Financial Overview
FY2024 2Q Financial Overview 2Q Results by Segment: YoY Change (billion yen) Revenue Core operating profit FY23 2Q FY23 2Q 34.0 FY24 2Q FY24 2Q 28.5 4.3 23.4 22.8 4.0 17.1 2.8 16.2 8.6 8.8 1.2 1.11.2 5.4 5.3 0.8 0.7 0.4 0.2 Advanced Specialty Specialty Construction Other Advanced Specialty Specialty
Slide 13: Segment Performance: Advanced Materials
Segment Performance: Advanced Materials (billion yen) <YoY Change> FY24 FY23 Change Lower revenue and operating profit 2Q 2Q Amount % Advanced plastics Advanced plastics 18.5 25.0 -6.4 -26% Despite an improvement in equity in earnings from PPS, revenue for PVDF Carbon products 3.8 3.9 -0.1 -2% used
Slide 14: Segment Performance: Specialty Chemicals
Segment Performance: Specialty Chemicals (billion yen) <YoY Change> FY24 FY23 Change Lower revenue and operating profit 2Q 2Q Amount % Agrochemicals and pharmaceuticals Agrochemicals 4.4 4.9 -0.5 -10% Despite a decline in revenue from agricultural Pharmaceuticals 1.2 1.7 -0.5 -28% and horticultural
Slide 15: Segment Performance: Specialty Plastics
Segment Performance: Specialty Plastics (billion yen) <YoY Change> FY24 FY23 Change Lower revenue and operating profit 2Q 2Q Amount % Home products and fishing lines Home products 11.2 12.2 -1.1 -9% Although revenue from fishing lines Fishing lines 2.7 2.5 0.2 8% increased, a decline in the sales vo
Slide 16: Segment Performance: Construction, and Other Operations
Segment Performance: Construction, and Other Operations (billion yen) <YoY Change> FY24 FY23 Change Construction: 2Q 2Q Amount % Flat revenue, higher profit 【Construction】 Revenue remained flat YoY, while operating profit increased. Revenue 5.3 5.4 -0.0 -1% Other operations: Operating profit 0.4 0.2
Slide 17: Financial Position
Financial Position Assets Liabilities and Equity (billion yen) Sep. 30, Mar. 31, Sep. 30, Mar. 31, Change Change 2024 2024 2024 2024 Cash and cash equivalents 30.3 23.1 7.2 Trade and other payables 17.5 20.5 -3.0 Trade and other receivables 27.6 40.6 -13.0 *1 Interest-bearing debt 69.7 54.9 14.8 *3
Slide 18: Cash Flow
Cash Flow (billion yen) FY24 FY23 Change 2Q 2Q Profit before income taxes 7.4 9.9 -2.4 Depreciation 6.4 5.7 0.7 Other 10.3 -8.3 18.6 Cash flow from operating activities 24.1 7.2 16.9 Cash flow from investing activities -20.8 -7.6 -13.2 Main drivers of change Operating CF:+16.9bn yen Free cash flow 3
Slide 19: I. FY2024 Financial Overview and Outlook
I. FY2024 Financial Overview and Outlook I-(1) Performance Highlights and Key Items I-(2) FY2024 2Q Results I-(3) FY2024 Earnings Forecast (18)
Slide 20: FY2024 Earnings Forecast: Overview
FY2024 Earnings Forecast: Overview Initial vs. Revised Forecast: By Segment (billion yen) Revenue Core operating profit Initial Forecast Initial Forecast Revised Forecast Revised Forecast 70.0 6.0 57.0 5.7 5.2 40.0 40.0 29.0 30.0 2.1 18.0 1.3 14.5 15.0 16.5 1.0 0.9 0.8 1.0 Advanced Specialty Special
Slide 21: Segment Forecast: Advanced Materials
Segment Forecast: Advanced Materials (billion yen) <YoY Change> Lower revenue and operating profit FY24 FY23 YoY Change FY24 vs. Initial Forecast Revised Initial Advanced plastics Actual Amount % Amount % Forecast Forecast The EV market environment is expected to Advanced plastics 36.0 45.0 -9.0 -20
Slide 22: Segment Forecast: Specialty Chemicals
Segment Forecast: Specialty Chemicals (billion yen) <YoY Change> FY24 FY23 YoY Change FY24 vs. Initial Forecast Lower revenue and operating profit Revised Initial Actual Amount % Amount % Forecast Forecast Agrochemicals and Agrochemicals 7.0 9.7 -2.7 -28% 6.5 0.5 8% pharmaceuticals Pharmaceuticals 3
Slide 23: Segment Forecast: Specialty Plastics
Segment Forecast: Specialty Plastics (billion yen) <YoY Change> FY24 FY23 FY24 Lower revenue and operating profit YoY Change vs. Initial Forecast Revised Initial Actual Amount % Amount % Forecast Forecast Home products Home products 22.0 23.2 -1.2 -5% 23.5 -1.5 -6% Revenue and profit are expected to
Slide 24: Segment Forecast: Construction and Other Operations
Segment Forecast: Construction and Other Operations (billion yen) <YoY Change> FY24 FY23 YoY Change FY24 vs. Initial Forecast Construction: Higher revenue, lower Revised Initial operating profit Actual Amount % Amount % Forecast Forecast Although revenue is expected to increase, [Construction-relate
Slide 25: Cash Flow
Cash Flow (billion yen) FY24 FY23 Change △ Forecast Actual Profit before income taxes 10.5 13.9 3.4 Depreciation 12.4 11.7 0.8 Other 7.4 -14.0 21.4 Cash flow from operating activities 30.3 11.6 △ 18.7 Cash flow from investing activities -47.7* -34.3 13.4 Free cash flow Note*: Includes 36.4 billion y
Slide 26: Key Metrics (1)
Key Metrics (1) (billion yen) Capital investment 52.4 Depreciation expense 50.0 15.0 12.1 11.7 11.6 11.6 11.7 12.4 40.0 35.3 10.3 10.2 9.9 10.3 34.0 10.0 30.0 6.1 5.9 5.9 5.9 6.0 6.0 14.9 14.3 14.3 16.5 24.4 5.4 5.1 5.0 5.4 20.0 11.4 10.3 9.8 13.2 5.0 6.7 10.0 6.0 5.5 5.8 7.4 8.2 8.2 7.6 18.4 5.0 5.
Slide 27: Key Metrics (2)
Key Metrics (2) ROE ROIC 10% 9.0% 8.4% 8% 7.0% 7.7% 7.4% 8.1% 6.3% 6.5% 6.1% 6.6% 8% 7.1% 5.8% 6% 4.9% 6% 4.5% 3.9% 4.1% 3.5% 3.3% 4% 2.9% 4% 2.7% 2% 2% 0% 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Est. Est. ROA PBR 1.5 10% 7.9% 8% 7.1% 7.
Slide 28: Key Metrics (3)
Key Metrics (3) Net DE ratio Equity ratio 1 100% 0.63 0.52 0.5 0.33 72% 70% 73% 0.28 75% 67% 67% 0.21 0.18 62% 65% 0.14 59% 0.06 53% -0.01 -0.03 49% 0 50% -0.5 25% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Est. Est. EPS ( yen) Interest-bearin
Slide 29: II. Progress on Medium- to Long-Term Goals
II. Progress on Medium- to Long-Term Goals (28)
Slide 30: Initiatives for FY2025
Initiatives for FY2025 We aim to achieve the target for FY2025 by improving the performance of all existing businesses and through further cost reduction measures to offset the decline in profits of the PVDF and PGA businesses. <Measures> Expand markets and applications to offset the decline in Eu
Slide 31: New Product and Business Development
New Product and Business Development Promoting the development of new products and businesses in three focus areas: Environment and Energy, Life, and Digital Communications Target Launch Timelines/Peak Sales Goals for Major New Businesses & Products (Agricultural Fungicides) Development Sales Target
Slide 32: New Product and Business Development
New Product and Business Development Biostimulants Anti-Adhesion Film • Technology that enhances crop yield • Film designed to prevent post-surgical adhesions • Currently conducting field tests in Japan, Europe, and US • Offers excellent adhesion prevention and ease of UNUSED USED handling Initiativ
Slide 33: Progress on Reducing Environmental Impact
Progress on Reducing Environmental Impact CO₂ emissions reduction Zero waste emission ratio Over 30％ Below 1.5％ (FY2030 Goal, Compared to FY2013 Levels) (FY2025 Goal) • At the Iwaki Factory's coal-fired power plant, • On track to meet our target of reducing final (landfill) technical studies on fuel
Slide 34: Fostering Synergy between Company and Employees
Fostering Synergy between Company and Employees Employees' Psychological Connection to the Company (Engagement) Feeling proud of the company, Sympathizing with the Having opportunities to grow liking workplace colleagues, company's vision and policies through work enjoying daily work Employees feel
Slide 35: Disclaimer
Disclaimer • This document is intended solely for the purpose of providing a better understanding of our Company and is not intended as a solicitation to invest or take any other action. • This document has been prepared based on currently available information. Please note that actual results may d