Nagase & Co., Ltd. · TSE:8012
Nagase & — Q3 FY2024 Earnings Presentation
32 slides from Nagase &'s earnings presentation, Feb 6, 2025
Slide 1: FY2024 Third Quarter Financial Briefing
FY2024 Third Quarter Financial Briefing NAGASE&CO.,LTD. Stock exchange listing : Tokyo (Prime Market) Code number : 8012 February ６, 202５ Copyright © 202５ Nagase & Co., Ltd.
Slide 2: Contents
Contents ■ Consolidated Statements Income P３ ■ Gross Profit by Region P４ ■ Gross Profit by Business & Segment P５ ■ Operating Income by Business & Segment P６ ■ Sales, Gross Profit and Operating Income by Quarter P7 ■ Segment Overview P8～P1２ ■ Overview of Major Manufacturing Subsidiaries P1３～１５ ■ Cons
Slide 3: Consolidated Statements Income
Consolidated Statements Income ▶ Gross profit was the highest ever for the cumulative consolidated third quarter; gross profit margin improved across all business segments ▶ Operating income reached a record high in the cumulative consolidated third quarter and operating income margin improved, desp
Slide 4: Gross Profit by Region
Gross Profit by Region ▶ Higher profit both domestic and overseas ▶ Increase in domestic business sales, due to higher sales (including exports) of raw materials and formulated epoxy resins for semiconductor industries ▶ Profits increased due to impacts of the weakening yen overseas, higher sales of
Slide 5: Gross Profit by Business & Segment
Gross Profit by Business & Segment ▶ Trading business profits increased to ¥１０．２ billion due to strong performance in the Functional Materials, Advanced Materials & Processing, and Electronics & Energy segments , stemming from moderate recoveries, mainly in the semiconductor, electrical appliances ,
Slide 6: Operating Income by Business & Segment
Operating Income by Business & Segment ▶ Trading business profits increased approx. ¥8.9 billion due to an increase in gross profit and impacts of actuarial gains and losses ▶ Despite strong sales of formulated epoxy resins by Nagase ChemteX and narrowed losses in the color formers business, manufac
Slide 7: Sales, Gross Profit and Operating Income by Quarter
Sales, Gross Profit and Operating Income by Quarter ▶ Gross profit in the third quarter was strong in the trading business, driven by Electronics and Energy, but profit growth in the manufacturing business was sluggish, mainly in the Prinova Group, resulting in an overall decrease in profit compared
Slide 8: Segment Overview: Functional Materials
Functional Materials Segment Overview: Functional Materials ▶ Gross profits increased primarily for the following reasons ・ Coating materials sales increased due to higher market prices, despite demand remaining flat for both automotive and architectural applications ・ Sales of raw materials for sem
Slide 9: Segment Overview: Advanced Materials & Processing
Advanced Materials & Processing Segment Overview: Advanced Materials & Processing ▶ Gross profits increased primarily for the following reasons • Resin sales increased with the recovery in demand for office equipment and other applications in the electrical appliances and electronic industries • Sal
Slide 10: Segment Overview: Electronics & Energy
Electronics & Energy Segment Overview: Electronics & Energy ▶ Gross profits increased primarily for the following reasons ・ Sales of materials for high-end smartphones, tablets, and other electronic devices increased due to a recovery in demand ・ Sales of semiconductor materials increased due to the
Slide 11: Segment Overview: Mobility
Mobility Segment Overview: Mobility ▶ Gross profits increased primarily for the following reasons ・ Resin sales, which account for about half of gross profit, increased due to yen depreciation and rising market prices, despite a decline in automobile production volume ・ Sales of functional materials
Slide 12: Segment Overview: Life & Healthcare
Life & Healthcare Segment Overview: Life & Healthcare ▶ Gross profits increased primarily for the following reasons ・ Increased sales of intermediates and pharmaceutical raw materials ・ Sales of Nagase Viita increased overall due to strong sales of food ingredients, despite lower sales of cosmetic m
Slide 13: Overview of Major Manufacturing Subsidiaries: Nagase ChemteX
Overview of Major Manufacturing Subsidiaries: Nagase ChemteX ▶ Gross profits increased primarily for the following reasons ・ Sales of formulated epoxy resins increased due to strong sales for semiconductors for AI server ・ Sales decreased for photolithography materials for use in displays ▶ Operatin
Slide 14: Overview of Major Manufacturing Subsidiaries: Nagase Viita
Overview of Major Manufacturing Subsidiaries: Nagase Viita ▶ Gross profits increased primarily for the following reasons ・ Sales of food ingredients increased both in Japan and overseas ・ Domestic sales of cosmetic materials increased, but overseas sales remained sluggish due to a decline in demand
Slide 15: Overview of Major Manufacturing Subsidiaries: Prinova Group
Overview of Major Manufacturing Subsidiaries: Prinova Group ▶ Gross profits increased primarily for the following reasons ・ Food ingredient sales saw an increase in volume and an improvement in gross profit margin ▶ Operating income decreased due to allowance of approx. ¥1.3 billion for doubtful acc
Slide 16: Consolidated Balance Sheets
Consolidated Balance Sheets ▶ Increase in fixed liabilities due to acquisition of treasury stock and refinancing of short-term interest-bearing debt to long-term interest- bearing debt in light of rising interest rates in the medium term, etc. 100 millions of yen 2024/03 2024/12 Change Details Total
Slide 17: Consolidated Cash Flows
Consolidated Cash Flows ▶ Operating cash flow amounted to ¥21.4 billion, primarily due to an increase in profit for the period from strong business performance 100 millions of yen FY2023 FY2024 3Q 3Q Operating CF 579 214 (Income before income taxes) 257 322 (Depreciation and amortization) 121 135 (C
Slide 18: FY2024 Earnings Projection (No Change)
FY2024 Earnings Projection (No Change) ▶ Semiconductor-related businesses performed well, driven by a moderate recovery in market conditions and increased demand for semiconductor for AI servers ▶ Automobile-related businesses is performed well due to rising market conditions and increased sales of
Slide 19: FY2024 Earnings Projection By segment (No Change)
FY2024 Earnings Projection By segment (No Change) ▶ Higher sales and profit in Functional Materials, due to increased sales of coating materials and raw materials for semiconductor materials, as well as improved profitability of the color former business ▶ Higher sales and profit in Advanced Materia
Slide 20: FY2024 Earnings Projections by Major Manufacturing Subsidiaries
F Y 2 0 2 4 E a r n i n g s P r o j e c t i o n s b y M a j o r M a n u fa c t u r in g S u b s i d i a r ie s ( N o C h a n ge ) ▶ Nagase ChemteX : Higher sales and profit, due to strong sales of formulated epoxy resins for AI server semiconductors, despite lower sales of photolithography materials
Slide 21: Shareholder Returns
Shareholder Returns ▶ We plan to pay ¥90 per share for fiscal 2024, consisting of an interim dividend of ¥45 per share and a year-end dividend of ¥45 per share (forecasting a 15th consecutive year of dividend increases) ▶ No changes to our shareholder return policy of a 100% total return ratio in fi
Slide 22: Inquiries and IR website
■Inquiries: https://www.nagase.co.jp/english/contact/ir/ ■NAGASE Group Investor Relations Website: https://www.nagase.co.jp/english/ir/ These presentation materials contain projections based on forward-looking assumptions, forecasts, and plans as of February ６, 202５ Actual earnings may differ from p
Slide 23: Sales, Gross Profit, and Operating Income by Quarter (Before Allocation)
Sales, Gross Profit, and Operating Income by Quarter (Before Allocation of Corporate & Others) In FY2024, the Company began allocating company-wide shared expenses, excluding a portion of Nagase non-consolidated expenses, to business units under Corporate & Others We are allocating company-wide shar
Slide 24: Business Environment by Segment
Review Business Environment by Segment Industry Full-Year FY2024 Initial Forecast First Half Trends Second Half Trends Segment Growth in both automotive and Growth in Asia is likely to remain sluggish, Automotive applications to remain Coatings construction applications was sluggish, despite a produ
Slide 25: Growth Strategies for the Future
Reform of Profit Structure Review Growth Strategies for the Future Make proactive investments in Focus Area of manufacturing (across the three areas of food, semiconductors, and life sciences) to expand profit scale and profit margin over the medium to long term Potential investments in Focus Area a
Slide 26: Efforts in the Semiconductor Area
Reform of Profit Structure Review Efforts in the Semiconductor Area The Focus Area works to establish a de facto standard in molding compounds for advanced semiconductors, while the Base Area expands commercial rights Focus Area ・Establish position as the de facto standard in molding compounds (LMC/
Slide 27: Efforts in the Life Science Area
Reform of Profit Structure Review Efforts in the Life Science Area Decided to add diagnostics business through M&A, Aim to expand business by developing new materials in the Develop Area Acquire Diagnostics and Other Businesses From Focus Area Asahi Kasei Pharma Corporation Acquire enzyme production
Slide 28: Efforts in the Food Area - Prinova Group Status
Reform of Profit Structure Review Efforts in the Food Area -Prinova Group Status- The growth trend in the sports nutrition market remains unchanged We are proactively advancing efforts to establish a profit-contributing structure at the Utah plant Manufacturing Trading ・Work to acquire new customers
Slide 29: Improve Area in the First Half of FY2024
Reform of Profit Structure Review Improve Area in the First Half of FY2024 Initiated prompt efforts to improve ROIC, focusing on areas where management decisions yield swift results Improvement Targets and Initiatives Develop and implement improvement plans as early as possible. 1. Operating loss am
Slide 30: Cash Allocation in FY2024 and FY2025
Reform of Corporate Culture Review Cash Allocation in FY2024 and FY2025 Leverage interest-bearing debt to pursue growth investments and shareholder returns Cash In Cash Out Adjusted operating CF Growth Investments Adjusted Add back depreciation, Growth Consider M&A deals in operating R&D, and other
Slide 31: Major Cash Inflows and Outflows for FY2021-FY2023
Review Major Cash Inflows and Outflows for FY2021-FY2023 3-year 3-year FY2021 FY2022 FY2023 Cumulative FY2021 FY2022 FY2023 Cumulative Total Total Operating CF after Dividends and share 525 363 476 1,364 124 139 178 442 adjustments* buybacks Proceeds from sales of strategic cross- 92 96 71 260 Inves
Slide 32: Review: Management Conscious of Capital Costs and Share Prices
Review Review: Management Conscious of Capital Costs and Share Prices ー From the FY2023 Financial Briefing ー Policies to Enhance Corporate Value Execute growth, financial, and capital strategies set forth in the Medium-Term Management Plan ACE 2.0 Current Issue Recognition ● PBR has been below 1x si