Mitsui Chemicals, Inc. · TSE:4183
Mitsui Chemicals — H1 FY2019 Earnings Presentation
47 slides from Mitsui Chemicals's earnings presentation, Nov 15, 2019
Slide 1: CEO Explanation: Creating New Customer Value through Innovations
Nov 15, 2019 FY19-2 Creating New Customer Value through Innovations CEO Explanation 淡輪 敏 Tsutomu Tannowa Mitsui Chemicals Inc. President & CEO Nov 15, 2019
Slide 2: Contents
Nov 15, 2019 Contents Business Performance Topics on Targeted Business Domains Topics on Sustainability Financial Overview Management Target for Sustainable Growth
Slide 3: For Sustainable Growth
1 For Sustainable Growth Nov 15, 2019 Fiscal 2019 marks the third year since Mitsui Chemicals put its 2025 Long-Term Business Plan, VISION 2025, into action. In this time, the global business environment has gone through major changes, ranging from U.S.–China trade tensions to what is said to be a o
Slide 4: Results of 1H/FY19 and FY19 Outlook
2 Results of 1H/FY19 and FY19 Outlook Nov 15, 2019 Profits down for FY19 due to worsening market conditions and accidents of facilities and typhoon (JPY bn) △Denotes a minus Increase FY2017 FY2018 FY2019 Items (Decrease) Results Results 1H Results Outlook FY17→FY18 FY18→FY19 Sales 1,329 1,483 675 1,
Slide 5: Operating Income by Segment
3 Operating Income by Segment Nov 15, 2019 (JPY bn) △Denotes a minus Increase FY2017 FY2018 FY2019 Segment (Decrease) Results Results 1H Results Outlook FY18→FY19 Mobility 42.3 42.7 19.8 41.0 △1.7 Health Care 10.8 13.6 6.0 14.5 0.9 Food&Packaging 19.9 17.8 7.9 19.5 1.7 3 Targeted Domains Subtotal 73
Slide 6: Management Targets
4 Management Targets Nov 15, 2019 FY15 FY18 FY19 FY21 VISION (JPY bn) Results Results Outlook Target 2025 Sales 1,344 1,483 1,365 1,670 2,000 Operating income 70.9 93.4 84 140 200 (ROS) (5.3%) (6.3%) (6.2%) (8.4%) (10%) Net income 23.0 76.1 42.0 100.0 ー ROE 5.8% 14.3% 7.5% → 10% or more ROIC* 4.9% 6
Slide 7: Secure stable profits from three Targeted Business Domains
Operating Net 5 Mid-Term Management Targets Income Income Nov 15, 2019 Secure stable profits from three Targeted Business Domains in spite of economic slowdown Reduce downside risk Stabilize profit Growth trajectory （JPY bn） Mobility 3 Targeted Health Care Business Domains Food & Packaging Basic Mat
Slide 8: Issues in FY19
6 Issues toward Growth Path Nov 15, 2019 8 Issues in FY19 ①Expand 3 targeted business domains - Increase in investment themes - Including peripheral business area Business - Ensure production capacity to meet demand Strategy ②Accelerate development of new next generation businesses and new products
Slide 9: Contents
Nov 15, 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 Nov 15, 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 materials, メガネレンズ材料 02 Next Generation 04 Nonwovens,
Slide 11: Mobility
Nov 15, 2019 Mobility Provide solutions making full use of comprehensive strengths
Slide 12: Market Conditions for PP Compounds
8 Market Conditions for PP Compounds Nov 15, 2019 Despite automotive production growth slowing down, shift to resin parts has helped maintain sales volume YoY Automotive production for FY19 MCI-G’s sales volume forecast for FY19 *Market estimates from IHS ▲4.8％ ▲0.6％ North America Europe Japan (Mark
Slide 13: Capacity Increase - Global Expansion
9 Capacity Increase ｰGlobal Expansionｰ Nov 15, 2019 New base in EU (ACE) Operations start in Japan, U.S. Construction on track for long glass fiber reinforced PP Capacity U.S. Japan China +30KTA 3.5KTA 3.5KTA 3.5KTA (Jun.2020) (Sep.2020) (Oct.2019) (Sep.2019) Netherlands Background - Growing needs f
Slide 14: Capacity Increase - New Products
10 Capacity Increase –New Products- Nov 15, 2019 Increase capacity for performance compound products (Mitsui Chemicals Sun Alloys, Chiba, 5bn yen*) *Including buildings Increase capacity for Increase capacity for Specialty TAFMER™ & ADMER™ MILASTOMER™ (Nov.2021) (Jan.2022) Vulcanized TPV TPS Interio
Slide 15: Mobility Project Schedule
11 Mobility Project Schedule Nov 15, 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 16: Health Care
Nov 15, 2019 Health Care Provide products & services contributing to Quality of Life through chemical innovations
Slide 17: Expanding Vision Care Business
12 Expanding Vision Care Business Nov 15, 2019 Bolster global No. 1 position with full range of refractive index and functional lens materials Expecting to achieve record high sales for FY19 Further expansion in three target areas for FY20 and beyond China Needs Need for thinner and U.S. lighter len
Slide 18: Bolstering Nonwovens for Industry Use
13 Bolstering Nonwovens for Industry Use Nov 15, 2019 Increase capacity for nano-size nonwovens （+75%, Yokkaichi, Jan.2020） Target markets for industrial nonwovens SYNTEX™ nano Automobile Refinement of semiconductor circuits Needs Medical Filters Active Senior Refinement of filters Diapers Sanitary
Slide 19: Accelerating New Product Development
14 Accelerating New Product Development Nov 15, 2019 New capabilities to Yamamoto Chemicals iodine-based anti-mold agents Expand applications for YOHTOL™ DP-CD functional dyes Improved functions by cyclo-encapsulating Dye lineup that selectively absorbs Water solubility Light resistance Heat resista
Slide 20: Food & Packaging
Nov 15, 2019 Food & Packaging Provide solutions for world food problems, seizing new business opportunities
Slide 21: ICROS Tape: New base in Taiwan
15 ICROS™ Tape Nov 15, 2019 New base in Taiwan (Completed in Sep.2019) Record high sales expected in FY19 despite semiconductor recession World’s No1 share protective tape used in - Established in Taiwan, the greatest semiconductor wafer back grinding area of demand - Increases capacity by 50% Tapin
Slide 22: Agrochemicals
16 Agrochemicals Nov 15, 2019 New active ingredient Mitsui Chemicals Agro Dinotefuran TENEBENAL™ First shipment to Brazil Start operation 【Dinotefuran】 - Long-term commercialization contract - Original structure ingredient that does not contain halogen in the molecule with BASF - Can be used for var
Slide 23: New business in F&P domain
17 New business in F&P domain Nov 15, 2019 Bolster cross-organizational cooperation and create new businesses to maximize value chain Recyclability Mono-material packaging, paper packaging F&P Solutions ✓ Water-based polyurethane coating material with Ecological gas barrier properties: Takelac™ WPB
Slide 24: Plastic Waste Reduction Project
18 Plastic Waste Reduction Project Nov 15, 2019 Start demonstration test for material recycling to cut down on waste plastic in packaging chain Recycling plastic waste generated from film production and printing processes for use in new packaging film Scope of demonstration test Future scope (Joint
Slide 25: Next Generation Business
Nov 15, 2019 Next Generation Business Create solution & system businesses at the boundary or peripheral areas
Slide 26: Next Generation Business
19 Next Generation Business Nov 15, 2019 Next Generation Business Solar power generation and diagnostics Energy business ✔Diagnosis accounts over 4GW Solutions ✔Orders doubled due to end of FIT ✔Enter certification business in India (Dec. 2019) Rapid bacteriological identification system Medical ✓Pr
Slide 27: IoT Solutions: Piezoelectric sensor materials
20 IoT Solutions Nov 15, 2019 Accelerate collaboration with customers on piezoelectric sensor materials (Organic sensor materials for detecting pressure, vibration, impact, and distortion) Piezoelectric film Piezoelectric line μFLEX™ PIEZOLA™ μFLEX™ Murata Applications Manufacturing Z-Works Sensing
Slide 28: Basic Materials
Nov 15, 2019 Basic Materials Provide materials for the basis of society and industry
Slide 29: Building Stable Profit Base
21 Building Stable Profit Base Nov 15, 2019 Reduce volatility through restructuring (Profits falling for FY19 due to worst market conditions and special factors) Operating income (Basic Materials) ■ Operating income (PH, PTA･PET, PU) ■ Operating income (Petrochemicals/Industrial Chemicals/ Licensing
Slide 30: ICT material business development project
22 ICT material business development project Nov 15, 2019 Strengthen cross-organizational ICT marketing Expand existing businesses and create new businesses Health Next- Basic Mobility Care F&P Materials gen MITSUI Semi ICT material business PELLICLE™ SYNTEX™ nano ICROS™ Tape Special gas development
Slide 31: New Business in ICT Field
23 New Business in ICT Field Nov 15, 2019 Strategic partnership with Strategic partnership with Elephantec (Oct.2019) ConnecTec Japan (Nov.2019) Startup in functional printing Semiconductor packaging OEM startup Bringing into Nagoya Works with technology for low-temp., (Sep.2020) low-pressure packag
Slide 32: Digitalization of R&D – Materials Informatics
24 Digitalization of R&D – Materials Informatics (MI) Nov 15, 2019 Promote digitalization of R&D process using AI - Launched MI Development & Promotion Dept. in Nov.2018 - Training 40 data analysts for FY19 Data platform MI utilization platform -Experiment data Machine learning Proposing -Electronic
Slide 33: Digitalization of Manufacturing - Next-Gen Factory
25 Digitalization of Manufacturing - Next-Gen Factory Nov 15, 2019 Advance foundational technology evaluation to help digitalize factories Build next-gen factories where people and machines work in harmony Evaluation/demonstration of foundational technologies Efficiency Online simulator -Real-time s
Slide 34: Development of Robotics Materials
26 Development of Robotics Materials Nov 15, 2019 Making powered exoskeleton lighter Power Assist International (Wakayama University venture) Using plastic for structural materials and reducing number of parts to make for drastic reduction in weight Started trials 14kg Plastic 4.7kg at Ichihara, Mob
Slide 35: Contents
Nov 15, 2019 Contents Business Performance Topics on Targeted Business Domains Topics on Sustainability Financial Overview Management Target for Sustainable Growth
Slide 36: ESG Topics
27 ESG Topics Nov 15, 2019 World’s first bio-PP project Collaboration with UNEP World’s first *United Nations Environment Programme IPA method Biomass raw materials Plan to participate in New tech Fermentation “Low carbon, low waste” Bio-IPA program to support New tech Dehydration Asian innovative s
Slide 37: Blue Value / Rose Value
28 Blue Value™ / Rose Value™ Nov 15, 2019 Blue Value™ Rose Value™ Conserving Coexisting with Declining Birth Rate Extending Healthy Reducing CO2 Nature Food Problem Resources & Aging Population Life Expectancy 8,000.00 7,000.00 Blue Value™ certified products sales ratio 30 % 35.0% 30.0% 8000 7000 Ro
Slide 38: Contents
Nov 15, 2019 Contents Business Performance Topics on Targeted Business Domains Topics on Sustainability Financial Overview Management Target for Sustainable Growth
Slide 39: Cash Flow
29 Cash Flow Nov 15, 2019 - Cash flow from operating income remains high - Maintain active investment phase 150 (JPY bn) 145.9 130 109.5 100.4 100 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 20 14.2 27.3 0.8 18.5 7.6 0 -21.4 -35 -36.4 -42.9 -43.2 -42.5 -47.4 -33.1 -39.6 -6
Slide 40: Net D/E Ratio
30 Net D/E Ratio Nov 15, 2019 - Improve Net D/E 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 0.75 400 4,000 0.68 0.7 0.80 Interest-bearing debt (net) Shareholders’ equ
Slide 41: Shareholder Returns
31 Shareholder Returns Nov 15, 2019 Sustain returns to shareholders for FY19 ✔ 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 Acquisition of 10 billion yen 800 80 特別配当 期末配当 70* tr
Slide 42: Targeted Position
32 Targeted Position Nov 15, 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 43: Creating new customer value and solving social challenges
Creating new customer value and solving social challenges through business activities
Slide 44: Ref. Build a Stable Profit Base
■Operating income(JPY bn) Ref. Build a Stable Profit Base ーROS(％) Nov 15, 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. ▲1
Slide 45: Ref. Reduce Volatility
Ref. Reduce Volatility Nov 15, 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 FUL
Slide 46: Ref. Further Strengthen Cracker Competitiveness
Ref. Further Strengthen Cracker Competitiveness Nov 15, 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 h
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