Nagase & Co., Ltd. · TSE:8012
Nagase & — Q2 FY2023 Earnings Presentation
23 slides from Nagase &'s earnings presentation, Nov 27, 2023
Slide 1: FY2023 Second Quarter Financial Briefing
FY2023 Second Quarter Financial Briefing NAGASE&CO.,LTD. Stock exchange listing : Tokyo (Prime Market) Code number : 8012 November 27, 2023 Copyright © 2023 Nagase & Co., Ltd.
Slide 2: Executive Summary
Executive Summary Profitability of the digital print processing materials business deteriorated due to falling unit prices caused by intensifying competition FY2023 Second Resin sales were sluggish due to a decline in global demand and weak market conditions Quarter Results Profit contribution by th
Slide 3: Business Environment by Segment
Business Environment by Segment Full-Year Projections First Segment Dept. Markets Initial Assumption First Half vs. Projections Second-Half Projections vs. (vs. Initial Half Projections) Supply chain inventory adjustments resolved, Automotive-related recovery, but Coatings Recovery compared to first
Slide 4: Contents
Contents ■ FY2023 Second Quarter Results and FY202３ Earnings Projectionｓ P5～P22 ■ Medium-Term Management Plan ACE 2.0 P23～P40 Copyright © 2023 Nagase & Co., Ltd. 4
Slide 5: FY2023 Second Quarter Results and FY2023 Earnings Projections
FY2023 Second Quarter Results and FY202３ Earnings Projections Copyright © 2023 Nagase & Co., Ltd. 5
Slide 6: Consolidated statements income
Consolidated statements income ▶ Gross profit : Profit decreased mainly due to lower profitability of the resin sales business under Advanced Materials & Processing ▶ Operating income : Profit decreased due to lower gross profit and increases in selling, general and administrative expenses in connec
Slide 7: Gross Profit By Region
Gross Profit By Region ▶ Domestic business profit increased while overseas business profit declined, resulting in an overall decrease in profit ▶ Increase in domestic business sales, mainly due to higher sales of cosmetic materials and formulated epoxy resins ▶ Despite higher profits overseas due to
Slide 8: Gross Profit By Business & Segment
Gross Profit By Business & Segment ▶ Functional Materials posted lower sales of coating raw materials and raw materials for semiconductor-related products and other electronics industry products ▶ Advanced Materials & Processing posted lower sales due to decreased demand for resin sales in the offic
Slide 9: Operating Income by Business & Segment
Operating Income by Business & Segment ▶ Functional Materials and Advanced Materials & Processing posted lower operating income due to a decrease in gross profit ▶ Electronics & Energy posted higher operating income with increased gross profit ▶ Life & Healthcare recorded higher gross profit; howeve
Slide 10: Functional Materials Segment Operating Income Overview
Functional Materials Segment Operating Income Overview ▶ Decrease in sales of coating raw materials due to sluggish sales for architectural applications, despite recovery in sales to the automotive and other industries ▶ Sales decreased for raw materials for semiconductor-related products and other
Slide 11: Advanced Materials & Processing Segment Operating Income Overview
Advanced Materials & Processing Segment Operating Income Overview ▶ Lower profit due to decreased demand for resin sales in the office equipment, appliance, and video game device market, as well as the impact of inventory adjustments by customers ▶ Lower digital print processing materials sales due
Slide 12: Electronics & Energy Segment Operating Income Overview
Eｌectronics & Energy Segment Operating Income Overview ▶ Despite weakening semiconductor market conditions, sales of materials to the semiconductor industry increased due to growth in product sales ▶ Sales of formulated epoxy resins increased mainly for server applications and mobile device applicat
Slide 13: Mobility Segment Operating Income Overview
Mobility Segment Operating Income Overview ▶ Sales increased for resins, mainly due to an increase in automobile production and expanded market share to existing customers ▶ Sales increased in functional materials and functional components for interior and exterior fittings and electrification ▶ Ope
Slide 14: Life & Healthcare Segment Operating Income Overview
Life & Healthcare Segment Operating Income Overview ▶ Overall, the Prinova Group recorded higher sales due to the impact of the weaker yen and operations at the new plant in Utah; however, food ingredient sales profitability declined due to falling market prices ▶ Hayashibara posted increased sales,
Slide 15: State of Major Manufacturing Subsidiaries
State of Major Manufacturing Subsidiaries ▶ Nagase ChemteX : Despite the transfer of the biochemicals business, profit rose due to increased sales of highly profitable formulated epoxy resins ▶ Hayashibara : Higher profit due to the wider advancement of price increases and strong sales of cosmetic m
Slide 16: Consolidated Balance Sheets
Consolidated Balance Sheets ▶ Current assets : Decrease due to reduced inventories ▶ Net assets : Increase, despite dividend payments and share buybacks, as we posted a profit for the period, as well as increases in net unrealized holding gain on securities and translation adjustments due to the wea
Slide 17: Consolidated Cash Flows
Consolidated Cash Flows ▶ Operating CF : Net operating cash flow of ¥38.2 billion, mainly due to a decrease in working capital ▶ Investing CF : Net cash used of ¥6.4 billion, mainly due to purchase of property, plant and equipment and intangible assets, offset in part by proceeds from the sales of i
Slide 18: FY2023 Earnings Projection (Changed)
FY2023 Earnings Projection(Changed) ▶ While certain businesses, such as the automobile-related, semiconductor-related, and Life & Healthcare have been performing solidly, we lowered our full-year earnings forecast in light of the following conditions ▶ Resin sales declined due to lower demand for el
Slide 19: FY2023 Earnings Projection By Segment (Changed)
FY2023 Earnings Projection By segment(Changed) ▶ Sales of Functional Materials should increase due to a transfer of business from the Advanced Materials & Processing segment; however, we revised our forecast for operating income downward due to the negative impact of the digital print processing bus
Slide 20: FY2023 Earnings Projections by Segment (1st half Actual, 2nd half forecast)
FY2023 Earnings Projections by Segment (1st half Actual, 2nd half forecast) ▶ All figures below reflect organizational changes effective October 1, 2023 ▶ We expect operating income overall to increase versus the first half in respect to a certain degree of easing in inventory adjustments by custome
Slide 21: FY2023 Earnings Projection By Major Manufacturing Subsidiaries (Changed)
FY2023 Earnings Projection By Major Manufacturing Subsidiaries (Changed) ▶ Nagase ChemteX : While we expect overall sales to decrease, we made an upward revision to operating income due to strong sales of high-profit products ▶ Hayashibara : We made an upward revision to operating income, mainly due
Slide 22: Shareholder Returns
Shareholder Returns ▶ We plan to pay an interim dividend of ¥40 per share and a year-end dividend of ¥40 per share for an annual dividend of ¥80 per share for fiscal 2023 (expected 14th consecutive fiscal year of dividend increases) ▶ We are proceeding as planned with the repurchase of ¥８ billion in
Slide 23: Inquiries
■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 November 27, 2023 Actual earnings may differ from