Moresco Corporation · TSE:5018
Moresco — 2Q FY2022 Earnings Presentation
32 slides from Moresco's earnings presentation, October 2022
Slide 1: MORESCO Corporation 65th 2Q Financial Report
MORESCO Corporation MORESCO Group delivers sustainable one-of-a-kind products The 65th 2Q Financial Report （ From March 1, 2022 to August 31, 2022 ） Tokyo Stock Exchange Prime Market 5018 (Petroleum and Coal Products) October 2022 Copyright © MORESCO Corporation All Rights Reserved.
Slide 2: Business environment for the current period (1)
Business environment for the current period (1) $/b Dubai crude oil price Exchange rate ¥/$ 120 130 110 100 120 90 110 80 70 100 60 90 50 80 40 30 70 19-2Q 20-2Q 21-2Q 22-2Q Thousand yen/kL Naphtha Price in Japan 80 60 40 20 19-2Q 20-2Q 21-2Q 22-2Q Copyright © MORESCO Corporation All Rights Reserved
Slide 3: Business environment for the current period (2)
Business environment for the current period (2) Car Production by Our Operating Region Source: MarkLines Co., Ltd. 10,000 units 3,000 24.9 25.03 million units million units 2,500 359 420 2,000 473 502 215 1,500 348 1,000 1,257 1,211 1,009 500 333 401 371 0 20/2Q 21/2Q 22/2Q Notes: Southeast/South As
Slide 4: Consolidated Income Statement
Consolidated Income Statement ➢ Although sales increased due to product sales price corrections, the profit margin declined due to further increases in raw material prices. Millions of yen Account title 21/2Q 22/2Q Year-on-year change Net Sales 13,366 14,523 +8.7％ Gross Profit 4,544 4,039 △11.1％ +3.
Slide 5: Breakdown of Sales by Division
Breakdown of Sales by Division Millions of yen Account title 21/2Q 22/2Q Year-on-year change Functional Fluids 6,341 7,027 +10.8％ Synthetic Lubricants 1,033 991 △4.1％ (HD Surface Lub) 351 392 +11.4％ Liquid Paraffin & Sulfonates 1,672 1,855 +11.0％ Hot Melt Adhesive 3,325 3,754 +12.9％ Other 987 896 △9
Slide 6: Division Performance - Functional Fluids
Division Performance - Functional Fluids ➢ Sales increased by 10.8% year-on-year (7,027 million yen) Sales volume decreased by 0.7％ Millions of yen 21/2Q 22/2Q 2,090 2,000 2,014 ➢ Unit prices rose due to sales price 1,751 corrections. 1,800 1,600 1,391 1,512 ➢ In terms of volume, the decline in die
Slide 7: Division Performance - Synthetic Lubricants
Division Performance - Synthetic Lubricants ➢ Sales decreased by 4.1% year-on-year (991 million yen) Millions of yen 21/2Q 22/2Q 657 ➢ High temperature lubricating oils 600 575 Sales decreased due to a decrease in automobile production volume. 392 ➢ Hard disc surface lubricants 400 351 Sales increas
Slide 8: Division Performance - Hot Melt Adhesive
Division Performance - Hot Melt Adhesive ➢ Sales increased by 12.9% year-on-year (3,754 million yen) Sales volume increased by 8.9％ Millions of yen 21/2Q 22/2Q 2,688 ➢ Unit prices rose due to sales price 2,500 2,312 corrections. 2,000 ➢ Products for hygiene increased in India, Japan, and Indonesia.
Slide 9: Division Performance - Liquid Paraffin & Sulfonate
Division Performance - Liquid Paraffin & Sulfonate ➢ Sales increased by 11.0% year-on-year (1,855 million yen) Sales volume increased by 0.2％ Millions of yen 21/2Q 22/2Q 1,500 1,389 ➢ Shipments of liquid paraffin used for 1,235 polystyrene plasticizer were strong. While domestic shipments increased,
Slide 10: Overseas Sales (Consolidated)
Overseas Sales (Consolidated) Millions of yen ％ 38.5 39.7 40 6,000 34.9 825 5,000 658 474 506 1,103 4,000 536 976 304 3,000 1,381 20 696 1,150 2,000 1,082 1,858 1,977 1,000 1,345 0 0 20/2Q 21/2Q 22/2Q Copyright © MORESCO Corporation All Rights Reserved. 9
Slide 11: Consolidated Income Statement
Consolidated Income Statement Millions of yen Account title 21/2Q 22/2Q Year-on-year change Net Sales 13,366 14,523 +8.7％ Gross Profit 4,544 4,039 △11.1％ +3.4％ Selling, General and Administrative Expenses 3,621 3,744 Operating Income 923 295 △68.0％ Non-operating profit & loss 240 550 +129.4％ Ordinar
Slide 12: Consolidated Income Statement
Consolidated Income Statement Millions of yen Account title 21/2Q 22/2Q Year-on-year change Net Sales 13,366 14,523 +8.7％ Gross Profit 4,544 4,039 △11.1％ +3.4％ Selling, General and Administrative Expenses 3,621 3,744 Operating Income 923 295 △68.0％ Non-operating profit & loss 240 550 +129.4％ Ordinar
Slide 13: Selling, General and Administrative Expenses
Selling, General and Administrative Expenses Millions of yen Increase/ Year-on-year 21/2Q 22/2Q Decrease change Selling, General and Administrative Expenses 3,621 3,744 +122 +3.4% (include R&D Expenses) R&D Expenses 684 635 △49 △7.1% SGA Ratio 27.1% 25.8% Ratio of R&D Expenses to Sales 5.1% 4.4% Cop
Slide 14: Consolidated Income Statement
Consolidated Income Statement Millions of yen Account title 21/2Q 22/2Q Year-on-year change Net Sales 13,366 14,523 +8.7％ Gross Profit 4,544 4,039 △11.1％ +3.4％ Selling, General and Administrative Expenses 3,621 3,744 Operating Income 923 295 △68.0％ Non-operating profit & loss 240 550 +129.4％ Ordinar
Slide 15: Profit and Loss by Regional Segment (Consolidated)
Profit and Loss by Regional Segment (Consolidated) ■Sales to external customers ■Operating Income Millions of yen Operating Operating Net Sales Japan Income Net Sales China Income 10,000 558 2,000 300 235 550 9,624 1,737 200 9,053 350 1,000 5,000 95 8,029 143 84 1,677 100 150 △8 1,189 0 -50 0 0 20/2
Slide 16: Balance Sheet (Consolidated)
Balance Sheet (Consolidated) Millions of yen Increase/ Increase/ Account title 22/2Q Account title 22/2Q Decrease Decrease Cash & Deposit 4,166 165 Trade Payable 4,926 618 Notes and accounts Interests bearing debt receivable 7,524 680 (Current) 1,927 1,018 Inventories 6,102 776 Other Current Liabili
Slide 17: Capital Investment/Depreciation
Capital Investment/Depreciation Millions of yen Account title 21/2Q 22/2Q Increase/Decrease Total Capital 334 284 △50 Investment MORESCO 176 128 △48 Consolidated 158 156 △2 Subsidiary Depreciation 590 612 +22 Copyright © MORESCO Corporation All Rights Reserved. 16
Slide 18: Interest-bearing Debt
Interest-bearing Debt Millions of yen End of February End of August Account title Increase/Decrease 2022 2022 Short-term Borrowings * 560 1,546 +986 Long-term Borrowings 350 382 +32 Total Borrowings 910 1,927 +1,018 Interest-bearing Debt Ratio 3.1% 6.2% * Includes the current portion of long-term bo
Slide 19: Cash Flow (Consolidated)
Cash Flow (Consolidated) Millions of yen Income before Income Tax 846 Currency Exchange Operation Investment Adjustment △77 535 △718 Finance 487 3,869 4,096 Cash Acquisition of property, Borrowings 1,031 Cash Equivalent plant and equipment Acquisition of treasury stock △194 Equivalent △744 Dividend
Slide 20: Financial Summary Management index
Financial Summary Management index 20/2Q 21/2Q 22/2Q Earning Per Share △9.35yen 144.92yen 53.94yen Capital Ratio 57.9% 63.6% 60.9% Ordinary Profit Ratio 0.5% 8.7% 5.8% Reference: Number of shares (year-end) 9,697,000 9,697,000 9,697,000 Reference: Number of shareholders at the end 16,416 16,003 15,1
Slide 21: Consolidated Earnings Forecast
Consolidated Earnings Forecast Millions of yen 2022/2Q FY2022 full year Account title Year-on-year Year-on-year Actual Forecast Progress rate change change Net Sales 14,523 +8.7% 31,500 +3.3% +15.4% Operating 295 △68% 1,110 △40% △23% Income Ordinary 846 △27% 1,700 △23% △16% Income Net Income 504 △63
Slide 22: Realization of a Sustainable Society
Realization of a Sustainable Society Copyright © MORESCO Corporation All Rights Reserved. 21
Slide 23: Development and sales of eco-friendly products
Development and sales of eco-friendly products Conventional product Minimum quantity spray type Water-soluble minimum quantity spray type lubricant Hot Melt Adhesives that contain plant-based resin Development Biomass of eco-friendly hotmelt products Water-glycol hydraulic fluid Powder releasing age
Slide 24: New product development for new energy vehicles
New product development for new energy vehicles* ➢ Develop new products for lightweight materials in China, which is driving the new energy vehicle market, for global expansion. Sales volume forecast by area in 2022 Sales Volume Forecast from 2022 to 2035 (Thousand units) 35,959 Others Japan Japan N
Slide 25: OPV - Contributing to Solar Power Generation in Urban Areas
OPV - Contributing to Solar Power Generation in Urban Areas CO2 payback time (in months) ➢ OPVs reduce payback time* to 1/3 that of Si solar cells, contributing to a reduction in Monocrystalline Si solar cell 42 environmental impact. OPV (5% power generation efficiency) 13 *Payback period for CO2 ge
Slide 26: Radiation Resistant Lubricating support safety in extreme environments
Radiation Resistant Lubricating support safety in extreme environments It is used in the It is used in the high radiation decommissioning process at It supports the safe operation area of one of the world's the Fukushima Daiichi of advanced medical care. leading accelerators. Nuclear Power Station.
Slide 27: R&D system for solving social issues
R&D system for solving social issues Conventional: A development system for each business division that can quickly respond to the needs of each market ＋ Newly established: A development meeting that crosses business divisions and collaborates within the company and with industry, government, and ac
Slide 28: Contribution to the realization of a hydrogen society
Contribution to the realization of a hydrogen society Current status: Future: Dissemination of gas & water vapor Aiming to become a platformer for the transmittance measurement device development of substances for “MORESCO-SuperDetect” hydrogen (Existing) (New) Performance Single chamber type Multi
Slide 29: Generation of petroleum materials from biomass resources
Generation of petroleum materials from biomass resources Hydrogen (H2) ✅ Lubricant ✅ Polymer raw Animal waste Liquid fertilizer materials Dehydration reaction Methane & high Oxidation temperature/pressure Raw garbage reaction reaction Hydrocarbon Sewage sludge, waste foodstuffs, etc. Methanol, etc.
Slide 30: Initiatives for decarbonization
Initiatives for decarbonization ➢ By 2030, we aim to reduce GHG emissions by 46% from our own energy consumption (compared to 2013) . ➢ We aim to be carbon neutral by 2050, including our supply chain. ➢ We are working on setting our GHG emissions Scope 3 targets to be *July 2022 Publication released
Slide 31: Initiatives for health management
Initiatives for health management Health Management Excellent Corporation 2022 (Large-scale Corporate Division) Certified for two consecutive years *This is a system that recognizes corporations that are practicing particularly good health management. （Ministry of Economy, Trade and Industry） MORESC
Slide 32: MORESCO Corporation
Head Office/R&D Center Kobe City Kobe Airport Forecasts, strategic goals and other forward-looking information in this presentation are based on the judgements of MORESCO at the time this presentation was prepared. This information may be revised without prior notice. Investors are cautioned not to