Resonac Holdings Corporation · TSE:4004
Resonac — Showa Denko K.K. — Q2 2019 Earnings Presentation
36 slides from Resonac's earnings presentation, Aug 7, 2019
Slide 1: Second Quarter, 2019 Financial Results
We “Act” to touch the heart and make society better Second Quarter, 2019 Financial Results - Consolidated - SHOWA DENKO K.K. August 7, 2019 Motohiro Takeuchi, CFO Director & Corporate Officer Performance forecast and other statements pertaining to the future as contained in this presentation are bas
Slide 2: Consolidated Companies and Selected Data
Consolidated Companies Consolidated subsidiaries: 56 (2 companies excluded) 1 company newly consolidated 3 companies excluded SHOKO Electronics K.K. (Electronics) PT. Showa Esterindo Indonesia (Petrochemicals, liquidation) SHOWA DENKO CARBON Shanghai Co., Ltd. (Inorganics, liquidation) SHOTIC (Sin
Slide 3: Summary 2018 vs. 2019 (Jan.-Jun.)
Summary 2018 (Jan.1 – Jun.30) vs. 2019 (Jan.1 – Jun.30) (Unit: Billions of yen except cash dividends per share) Jan.-Jun., 2018 Jan.-Jun., 2019 Increase/decrease Net sales 455.8 475.5 19.6 Operating income 77.9 85.5 7.6 Non-operating income and expenses, net -0.3 -0.6 -0.3 Interest/Dividends income
Slide 4: Extraordinary Profit/Loss
Extraordinary Profit/Loss (Unit: Billions of Yen) Jan.-Jun., 2018 Jan.-Jun., 2019 Increase/decrease Extraordinary profit 0.5 1.8 1.3 Gain on sales of non-current assets 0.1 0.5 0.4 Gain on sales of investment securities 0.3 1.2 0.9 Other 0.2 0.1 -0 Extraordinary loss -2.0 -3.0 -1.0 Loss on sal
Slide 5: Consolidated Sales by Segment
Consolidated Sales by Segment (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2018 2019 decrease 【Olefins】 sales increased (shipment volumes up due to large-scale shutdown maintenance in 115.4 127.5 12.1 2018. The absence of periodic shutdown maintenance in 2019) Petrochemicals 【Organic chemic
Slide 6: Consolidated Operating Income by Segment
Consolidated Operating Income by Segment (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2018 2019 Decrease 【Olefins】 profit decreased (shipment volumes up due to the 2018 shutdown maintenance, 7.4 8.5 1.1 depreciation of naphtha inventory due to a fall in price, spread squeezed) Petrochemical
Slide 7: Operating Income Breakdown by Factor
Operating Income Breakdown by Factor (Unit: Billions of Yen) Showa Denko 2nd Quarter, 2019 Consolidated Financial Results 7
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet (Unit: Billions of Yen) Assets Dec. 31, Jun. 30, Increase/ Liabilities and net assets Dec. 31, Jun. 30, Increase/ 2018 2019 decrease 2018 2019 decrease Cash and deposits 113.2 113.8 0.6 Notes and accounts payable 139.4 125.7 -13.8 Notes and accounts receivable 203.7 183.4
Slide 9: Total Assets, Interest-bearing Debt and D/E ratio
Total Assets Interest-bearing Debt and D/E ratio (Unit: Billions of Yen) Increase/ Dec. 31, 2018 Jun. 30, 2019 decrease Total assets 1,075.0 1,077.8 2.8 Interest-bearing debt 288.0 286.2 -1.8 Improved by Debt/Equity ratio 0.62 times 0.58 times 0.04p Stockholders’ equity ratio 41.5% 45.6% 4.1
Slide 10: Interest-bearing Debt
Interest-bearing Debt （Unit: Billions of Yen) D/E ratio 500.0 1.20 1.20 1.16 450.0 0.94 400.0 383.1 368.8 359.9 346.7 0.62 350.0 0.58 300.0 288.0 286.2 250.0 200.0 2014 2015 2016 2017 2018 2019 Jun.30 Equity ratio 29.7% 31.5% 31.8% 34.3% 41.5% 45.6% Showa Denko 2nd Quarter, 2019 Consolidated Financi
Slide 11: Consolidated Cash Flows
Consolidated Cash Flows (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. 2019 Increase/ Revised 2018 2019 decrease forecast* CF from operating activities 52.2 40.5 -11.7 95.0 CF from investing activities -25.5 -17.9 7.7 -60.0 Free CF 26.7 22.6 -4.0 35.0 CF from financing activities -12.9 -18.7 -5.8 -
Slide 12: Selected Data (Consolidated)
Selected Data (Consolidated) (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2018 2019 decrease Interest/dividend income less interest expenses -0.5 0.2 0.7 Capital expenditures 20.7 22.3 1.6 Depreciation and amortization 19.8 18.6 -1.2 R&D expenditures 10.3 10.1 -0.2 Number of employees
Slide 13: Capital Expenditures/Depreciation by Segment
Capital Expenditures/ Depreciation by Segment (Unit: Billions of Yen) Jan.-Jun., 2018 Jan.-Jun., 2019 Increase/decrease Capital Capital Capital Depreciation Depreciation Depreciation expenditures expenditures expenditures Petrochemicals 3.7 3.0 2.3 2.1 -1.4 -0.9 Chemicals 4.1 4.4 4.5 4.5 0.4 0.1 Ele
Slide 14: Total Number of Employees and Breakdown by Location
Total Number of Employees and Breakdown by Location 12,000 10,864 10, 577 10,561 10,476 10,603 10,146 10,000 Japan 8,000 5,932 Overseas 5,873 6,087 5,843 6,075 6,012 6,000 4,000 4,645 4,688 4,777 4,071 4,633 4,591 2,000 0 2014 2015 2016 2017 2018 Jun. 2019 Japan 56.1% 55.6% 59.9% 56.0% 55.8% 56.7% O
Slide 15: Selected Data, Forecast
Selected Data, Forecast (Unit: Billions of Yen) 2018 2019 Increase/ Actual Revised Forecast* decrease Exchange rate: ¥/US$ 2019 earlier forecast** 105.0 1H 108.7 1H actual 110.1 1H 1.4 2H 112.2 2H revised 110.0 2H -2.2 2019 earlier forecast** ¥/€$ 126.0 1H 131.6 1H actual 124.3 1H -7.3 2H 129.2 2H
Slide 16: 2019 Forecast
2019 Forecast(Unit: Billions of Yen except Cash dividends per Share and Net income per Share) 2019 2019 Increase/ 2018 Increase/ Earlier decrease Actual Revised decrease Forecast** (against earlier) Forecast* Net sales 992.1 980.0 12.1 1,100.0 -120.0 Operating income 180.0 145.0 -35.0 190.0 -45.0 No
Slide 17: Consolidated Net Sales by Segment, 2019 Forecast
Consolidated Net Sales by Segment, 2019 Forecast (Unit: Billions of Yen) 2019 2019 Increase/ 2018 Increase/ Earlier decrease Actual* Revised decrease Forecast*** (against earlier) Forecast** Petrochemicals 268.9 260.0 -8.9 290.0 -30.0 Chemicals 156.5 160.0 3.5 166.0 -6.0 Electronics 111.9 105.0 -6.9
Slide 18: Consolidated Operating Income by Segment, 2019 Forecast
Consolidated Operating Income by Segment, 2019 Forecast (Unit: Billions of Yen) 2019 2019 Increase/ 2018 Increase/ Earlier decrease Actual* Revised decrease Forecast*** (against earlier) Forecast** Petrochemicals 20.3 15.5 -4.8 18.0 -2.5 Chemicals 17.4 14.5 -2.9 15.0 -0.5 Electronics 13.6 8.0 -5.6 1
Slide 19: Capital Expenditures/Depreciation Forecast by Segment for 2019
Capital expenditures/Depreciation Forecast by Segment for 2019 (Unit: Billions of Yen) 2018 2019 Increase/decrease Actual* Revised Forecast** Capital Capital Capital Depreciation Depreciation Depreciation expenditures expenditures expenditures Petrochemicals 5.1 5.0 4.8 4.2 -0.2 -0.8 Chemicals 8.0 8
Slide 20: Summary (Reference)
Summary (Reference) CQ1 (Jan.1 – Mar.31), 2019 v s. CQ2 (Apr.1 – Jun.30), 2019 (Unit: Billions of Yen) Increase/ CQ1, 2019 CQ2, 2019 decrease Net sales 234.7 240.8 6.0 Operating income 45.4 40.1 -5.3 Non-operating income and expenses, net -1.2 0.6 1.7 Interest/Dividends income and expenses 0 0.1 0.1
Slide 21: (Reference) Consolidated Sales by Segment
(Reference) Consolidated Sales by Segment (Unit: Billions of Yen) CQ1, CQ2, Increase/ 2019 2019 decrease 【Olefins】 sales increased (shipment volumes up) Petrochemicals 62.7 64.8 2.0 【Organic chemicals】 sales increased (shipment volumes up) 【SunAllomer Ltd.】 sales slightly decreased 【Basic chemicals】
Slide 22: (Reference) Consolidated Operating Income by Segment
(Reference) Consolidated Operating Income by Segment (Unit: Billions of Yen) CQ1, CQ2, Increase/ 2019 2019 decrease 【Olefins】 profit increased (shipment volumes up) Petrochemicals 4.0 4.5 0.5 【Organic chemicals】 profit slightly increased 【SunAllomer Ltd.】 profit decreased 【Basic chemicals】 profit in
Slide 23: (Reference) Quarterly Operating Income
(Reference) Quarterly Operating Income 2019 (Unit: Billions of Yen) 2018 70.0 60.0 56.6 50.0 45.4 43.6 45.5 40.1 40.0 34.3 30.0 20.0 10.0 0.0 CQ1 CQ2 CQ3 CQ4 Showa Denko 2nd Quarter, 2019 Consolidated Financial Results 23
Slide 24: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Petrochemicals》 《Chemicals》 (Unit: Billions of Yen) (Unit: Billions of Yen) 9.0 2019 9.0 2019 8.1 2018 2018 6.0 6.0 4.9 4.9 4.5 4.8 4.0 4.1 4.1 3.6 3.3 3.1 3.0 3.0 2.4 0.0 0.0 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 Showa Denko 2nd Quarter, 2019 Consolidate
Slide 25: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Electronics》 《Inorganics》 (Unit: Billions of Yen) (Unit: Billions of Yen) 9.0 2019 50.0 2019 2018 2018 8.0 39.5 39.8 7.0 40.0 34.6 6.0 33.3 32.3 5.0 4.8 30.0 24.8 4.0 3.0 3.0 3.0 2.7 20.0 2.0 1.2 1.0 10.0 0.0 CQ1 CQ2 CQ3 CQ4 -0.3 -1.0 (note) From 20
Slide 26: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Aluminum》 《Others》 (Unit: Billions of Yen) (Unit: Billions of Yen) 3.0 2019 3.0 2019 2018 2018 2.5 2.5 2.0 2.0 1.5 1.3 1.4 1.4 1.5 1.0 0.9 1.0 0.7 0.5 0.5 0.4 0.4 0.3 0.3 0.3 0.3 0.2 0.0 0.0 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 (note) From 2019 SDK chang
Slide 27: Topics: Revised CSR Policy
Topics [General] ● Revised CSR policy In May 2019, the Showa Denko Group revised its CSR policy in order to clearly show our stakeholders that we aim to contribute to creating sustainable society from the medium- to long-term perspective. Our new CSR policy determines that “We at the Showa Denko Gro
Slide 28: Topics: 2030 GHG Reduction Target
Topics [General] ● Set 2030 GHG reduction target conforming to global standard In July 2019, SDK set a medium-term target figure to reduce emissions of greenhouse gases (GHGs) by 2030. In addition, recognizing importance of information disclosure to the global community, SDK has decided to announce
Slide 29: Topics: Acquired ILAG Group
Topics [General] ● Acquired ILAG Group, global non-stick coatings manufacturer In July 2019, SDK acquired all shares in ILAG Industrielack AG, which leads the ILAG Group (ILAG), a specialty non-stick coating chemicals manufacturing company. Non-stick coating chemicals (NSCs) are used on consumer goo
Slide 30: Topics: SAP S/4HANA ERP System
Topics [General] ● Decided to introduce SAP S4/HANA as next-generation ERP system In May 2019, SDK decided to introduce “SAP S/4HANA,” an enterprise resource planning (ERP) system developed by SAP SE, and will start operation of the new system in January 2020. SDK decided to introduce this new syste
Slide 31: Topics: Aluminum Alloy and Polycarbonate Joining Technology
Topics [General] ● Established a technology to joint aluminum alloy and polycarbonate directly In August 2019, SDK developed a technology to joint aluminum alloy and polycarbonate resin directly. Mechanical joining with bolts and nuts and gluing is widely used to joint metal and plastics. Technologi
Slide 32: Topics: Liquefied Carbon Dioxide Production (Chemicals)
Topics [Chemicals segment] ● Started mass production of liquefied carbon dioxide in Oita Petrochemical Complex Showa Denko Gas Products Co., Ltd. (SGP), a consolidated subsidiary of SDK, established a new plant to produce liquefied carbon dioxide in its Oita Plant in the premise of SDK’s Oita Petroc
Slide 33: Topics: MAMR-based HD Media (Electronics)
Topics [Electronics segment] ● To begin shipment of MAMR-technology-based HD media In 2019, SDK will begin shipment of newly developed 3.5-inch HD media which have storage capacity of 2 terabyte per disk based on the Microwave Assisted Magnetic Recording (MAMR)*1 technology for next- generation hard
Slide 34: Topics: Carbon Division European Sites (Inorganics)
Topics [Inorganics segment] ● Decided to improve Carbon Division’s production sites in Europe In May 2019, SDK decided to improve facilities to produce graphite electrodes at its three production sites in Europe, one each in Germany, Spain and Austria, in order to establish a global system for suppl
Slide 35: Topics: Streamlining Aluminum Can Lines (Aluminum)
Topics [Aluminum segment] ● Decided to streamline domestic aluminum can production lines In May 2019, Showa Aluminum Can Corporation (SAC), a consolidated subsidiary of SDK, decided to stop a part of its production lines to manufacture aluminum cans in its Oyama Plant and Hikone Plant, in order to r
Slide 36: Topics: Aluminum Can Expansion in Vietnam
Topics [Aluminum segment] ● Decided to additionally expand capacity for producing high-grade SiC epitaxial wafers for power devices In April 2019, Showa Aluminum Can Corporation (SAC), a consolidated subsidiary of SDK, decided to establish its third base in Vietnam to produce aluminum cans, aiming t