Kumiai Chemical Industry Co., Ltd. · TSE:4996

Kumiai Chemical Industry — FY2023 Earnings Presentation

50 slides from Kumiai Chemical Industry's earnings presentation, Dec 22, 2023

Slide 1: Financial Results for FY Ended October 31, 2023 and New Medium-Term Business Plan
Financial Results for the Fiscal Year Ended October 31, 2023 and New Medium-Term Business Plan Presentation December 22, 2023
Slide 2: Agenda
Agenda １．Business Environment …… 3 ２．Financial Results for the FY2023 …… 6 ３．Earnings Forecast for the FY2024 …… 15 ４． Review of Previous Medium-Term Business Plan (FY2021-2023) …… 21 ５．Overview of New Medium-Term Business Plan (FY2024–2026) …… 34 copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Ri
Slide 4: Business Environment
Business Environment ■ Grain Market Conditions and Plantings ・Grain prices remained at a high level over the long-term despite a short-term decreased. ・Planting acreage of major crops such as soybean, corn, and wheat was favorable. ■ Semiconductor Market ・Recovery in demand was delayed in many secto
Slide 5: Market Trends for Agricultural Chemicals
Market Trends for Agricultural Chemicals ・Year 2022 showed the highest growth rate in about 20 years due to an increase in grain and agricultural chemical prices ・Domestic market remains flat at around ¥340.0 billion 82.5 74.8 74.9 3.3 (Unit: US$ billion) 2.8 2.6 65.8 61.9 60.8 24.6 58.9 58.2 59.3 2
Slide 7: Financial Results for the FY2023
Financial Results for the FY2023 2023 vs. Revised 2022 2023 YoY Unit: Billions of Yen Rate Revised Forecast Forecast Rate results results (Amount) (As of 6 Jun) (Amount) Net Sales 145.3 161.0 ＋15.7 ＋11% 169.0 △8.0 △5% Gross Profits 34.2 36.7 ＋2.5 ＋7% - - - Operating Income 12.7 14.1 ＋1.4 ＋11% 17.1 △
Slide 8: Factors Contributing to Change in Operating Income
Factors Contributing to Change in Operating Income （¥billion） ¥11 YoY Increase in depreciation of AXEEV sales Implemented price Japanese yen pass-throughs Increase in SG&A , mainly due to increase in personnel expenses and expenses for relocation to new Chemical Research Institute “ShIP” copyright©
Slide 9: Financial Results by Business Segment
Financial Results by Business Segment 2022 2023 YoY Unit: Billions of Yen Rate Results Results (Amount) Net Sales 145.3 161.0 ＋15.7 ＋11% Agricultural Chemicals and Agriculture-Related 112.4 129.5 ＋17.1 ＋15% Fine Chemicals 25.0 22.5 △2.5 △10% Other 7.9 9.1 ＋1.2 ＋15% Operating Income 12.7 14.1 ＋1.4 ＋1
Slide 10: Agricultural Chemicals and Agriculture-Related Businesses
Agricultural Chemicals and Agriculture-Related Businesses Domestic Slight year-on-year increase in sales due to strong sales of Effeeda and DISARTA, despite decrease in sales volume of some products due to customer inventory adjustments Overseas Large increase in sales volume of AXEEV for U.S. marke
Slide 11: Fine Chemicals Business
Fine Chemicals Business Chlorination Decrease in demand for some chloroxylene chemical products due to delayed recovery of demand in semiconductor market Advanced Chemicals Decrease in demand for bismaleimides due to delayed recovery of demand in semiconductor market Expanded Polystyrene & Specialit
Slide 12: FY2023 Results (Overseas Sales and Ratio)
FY2023 Results (Overseas Sales and Ratio) Overall Agricultural Chemicals and Fine Chemical Agriculture-Related Overseas Ratio 60% Overseas Ratio Overseas Ratio 70% Up 4 points YoY 31% Down 3 points YoY Up 4 points YoY ¥90.1billion ¥6.9billion ¥97.0billion copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD
Slide 13: Overseas Net Sales by Region and by Use Category
Overseas Net Sales by Region and by Use Category 50.0 47.2 Unit: billions of yen 10.0 8.0 8.0 6.8 5.8 6.0 30.0 30.0 29.4 4.0 2.0 25.0 25.0 20.9 22.5 0.0 19.9 20.0 20.0 2021 2022 2023 Europe 13.6 14.3 15.0 12.6 15.0 10.0 10.0 7.5 1.9 2.0 2.0 5.0 5.0 1.5 0.8 1.0 0.5 0.0 0.0 0.0 0.0 2021 2022 2023 2021
Slide 14: Summary of the FY2023
Summary of the FY2023 Overall Sales ¥161.0billion (YoY ＋¥15.7B) ・Increase in sales volume of AXEEV ・Implementation of price pass-throughs due to increase in fuel and raw material prices Operating Income ¥14.1billion (YoY +¥1.4B) ・Depreciation of Japanese yen pushed up sales and profit even more than
Slide 16: Earnings Forecast for the FY2024 (YoY)
Earnings Forecast for the FY2024 (YoY) 2023 2024 YoY Unit: Billions of Yen Rate Results Forecast (Amount) Net Sales 161.0 167.0 ＋6.0 ＋4% Agricultural Chemicals and Agriculture-Related 129.5 133.0 ＋3.5 ＋3% Fine Chemicals 22.5 26.0 ＋3.5 ＋16% Other 9.1 8.0 △1.1 △12% Operating Income 14.1 12.0 △2.1 △15%
Slide 17: Earnings Forecast for the FY2024 (Agricultural Chemicals and Agriculture-Related)
Earnings Forecast for the FY2024 (Agricultural Chemicals and Agriculture-Related Businesses) AXEEV (Herbicide) Sales (¥1B) ・Achieved large increase in sales leading up to FY2023, mainly due to spread of herbicide resistant weeds 73.1 76.5 Herbicide-resistant weeds expected to keep spreading also in
Slide 18: Earnings Forecast for the FY2024 (Fine Chemicals)
Earnings Forecast for the FY2024 (Fine Chemicals) Chlorination Increase in sales of chloroxylene chemical products due to recovery of demand in semiconductor markrt and increase in demand from customers Advanced Chemicals Increase in sales bismaleimides due to increase of demand in semiconductor mar
Slide 19: Measures for Shareholder Returns
Measures for Shareholder Returns Target dividend payout ratio of 30% or more FY2024 dividend forecast: Interim dividend ¥10 + Year-end dividend ¥18 = Annual dividend ¥28 per share (payout ratio: 30.6%) (Yen) 60 35% Payout Dividends per Share 一株当たり配当金（円） Ratio 30% 配当性向 Payout Ratio 30% 50 5.41 25% 40
Slide 20: R&D Expenses, Capital Investment, and Depreciation & Amortization
R&D Expenses, Capital Investment, and Depreciation & Amortization R&D Expenses FY2023 Results: ¥ 6.2billion :preliminary amount FY2024 Plan: ¥ 7.2billion Main details: Strengthening initiatives aimed at overseas development, promoting research utilizing cutting-edge technology Capital Investment FY2
Slide 21: Review of Previous Medium-Term Business Plan (FY2021-2023)
04 Rerview of New Medium-Term Business Plan（FY2021 - 2023） “Create the Future－The Challenge for New Possibilities” copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 21
Slide 22: Review of Previous Medium-Term Business Plan (FY2021-2023)
Review of Previous Medium-Term Business Plan (FY2021-2023) Established the Ultimate Goals of the Kumiai Chemical Industry Group to address the market environment forecast for the next 20 to 30 years A corporate group with flexibility and strong presence that enriches the lives of people through its
Slide 23: Review of Previous Medium-Term Business Plan (FY2021-2023)
Review of Previous Medium-Term Business Plan (FY2021-2023) Positioning ・The 3-year period was positioned as a time for sowing the seeds to expand business domains based on the Company’s Ultimate Goals. Numerical targets ・Achieved the main numerical targets for the final year of the MTBP (¥126.0 bill
Slide 24: Review of Previous Medium-Term Business Plan (FY2021-2023)
Review of Previous Medium-Term Business Plan (FY2021-2023) Key Policies Specific Measures Results Challenges under the New MTBP Expand research and Constructed and commenced operation of new Chemical Research business domains Institute “Shimizu Innovation Park” (ShIP), and safety evaluation Construc
Slide 25: Review of Previous MTBP / Further Strengthen R&D Capabilities
Review of Previous MTBP / Further Strengthen R&D Capabilities Implemented growth investment for strengthening R&D capabilities, the Company’s biggest strength ■ Completed new Chemical Research Institute “Shimizu Innovation Park” (ShIP) ・Established research institute with the most advanced facilitie
Slide 26: Review of Previous MTBP / Reduce Production Costs and Boost Production Capacity
Review of Previous MTBP / Reduce Production Costs and Boost Production Capacity Implemented capital investment in each business to ensure production capacity that can secure profit and meet demand ■ Tatsuno Factory ■ Kogota Factory Established new water dispersible granules plant Establishment of li
Slide 27: Review of Previous MTBP / M&A
Review of Previous MTBP / M&A Implemented M&A transactions to expand business domains and research areas, and diversify sales routes ■ Asiatic Agricultural Industries Pte. Ltd. (Singapore) Became consolidated subsidiary ・Acquired 60% stake in AAI in February 2021 ・AAI has a formulation factory in Si
Slide 28: Review of Previous MTBP / Initiatives on Climate Change
Review of Previous MTBP / Initiatives on Climate Change Addressed ESG issues to realize sustainability management ■ Set numerical target for GHG emissions reductions, examined measures and encouraged the implementation GHG emissions(t-co2), GHG emission rate(emissions /sales in million yen units) 0.
Slide 29: Review of Previous MTBP / Initiatives on Social Issues
Review of Previous MTBP / Initiatives on Social Issues ■ Human Resources Development Developed vision for human resources strategy on human capital management and formulated an action plan to realize the vision ■ Established KPIs for the promotion of diversity and inclusion Promoting active particip
Slide 30: Review of Previous MTBP / Enhancement of Governance
Review of Previous MTBP / Enhancement of Governance ■ Results of dialogue with shareholders and investors Participants Company representatives (Institutional investors, securities companies, etc.) ▶ FY2021 FY2022 FY2023 Performance Briefing, etc. Dec Performance Briefing President, officers in charg
Slide 31: Review of Previous MTBP / Initiatives on Enhancing Corporate Value
Review of Previous MTBP / Initiatives on Enhancing Corporate Value Promoted activities for enhancing the social value of agricultural chemicals, one of the Group’s key challenges ■ Activities to raise awareness about agriculture and agricultural chemicals Agricultural chemicals contribute to securin
Slide 32: Review of Previous MTBP / Financial Highlights
Review of Previous MTBP / Financial Highlights Net Sales(¥1B), Operating Income(¥1B), ROS (Operating Margin,%) Net Sales by Business Segment (¥1B) 200.0 8.7 8.8 10 7.4 7.7 9.1 7.2 161.0 8 Agricultural Chemicals and 150.0 145.3 22.5 118.2 Agriculture-Related 107.3 6 103.4 100.0 Fine Chemicals 4 50.0
Slide 33: Review of Previous MTBP / Financial Highlights
Review of Previous MTBP / Financial Highlights R&D expenses(¥1B), Capital Expenditures(¥1B) Depreciation & Amortization (¥1B) 5.0 4.4 4.2 9.6 3.7 10.0 8.7 4.0 3.1 3.2 6.6 6.2 3.0 5.9 4.8 4.9 5.1 4.9 5.1 5.0 2.0 1.0 0.0 0.0 FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023 R&D exp
Slide 34: Overview of New Medium-Term Business Plan (FY2024-2026)
05 Overview of New Medium-Term Business Plan（FY2024 - 2026） “Create the Future－Expanding our Possibilities” copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 34
Slide 35: New Medium-Term Business Plan (FY2024-2026)
New Medium-Term Business Plan (FY2024-2026) Create the Future — Expanding our Possibilities copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 35
Slide 36: Overview of New Medium-Term Business Plan (FY2024-2026)
Overview of New Medium-Term Business Plan (FY2024-2026) FY2048 Diagram of new MTBP Toward realization of MTBP the Ultimate Goals FY2024-2026 as a 100-year-old MTBP Create the Future ~Expanding our company FY2021-2023 Create the Future Possibilities~ MTBP ~The Challenge FY2018-2020 for New Possibilit
Slide 37: Overview of New Medium-Term Business Plan (FY2024-2026)
Overview of New Medium-Term Business Plan (FY2024-2026) A 3-year period to continue sowing the seeds to expand business domains, germinate the seeds sowed during the previous MTBP, nurture them into a more concrete form, and strengthen and expand the foundations for future growth of new businesses N
Slide 38: Overview of New Medium-Term Business Plan (FY2024-2026)
Overview of New Medium-Term Business Plan (FY2024-2026) Net sales and operating income increased significantly up to FY2023 driven by the high growth rate of AXEEV. We aim to achieve record high sales and operating income in FY2026 even though rising costs are expected during the new MTBP period. Ne
Slide 39: Overview of New MTBP / Allocation of Capital
Overview of New MTBP / Allocation of Capital Capital allocation assumptions to promote efficient capital policy (FY2024–2026) ■ Capital allocation assumptions in new MTBP (FY2024–2026) Dividend Returns Total: Approx. ¥90.0B (Dividend payout ratio: 30% or more) Approx. ¥12.0B Operating Cash Flow (Bef
Slide 40: Overview of New MTBP / Key Policies
Overview of New MTBP / Key Policies Seven issues that must be addressed during new MTBP period were selected from the materiality and set as key policies ■ Contribute to sustainable agriculture industry/ ■ Mitigation of climate change and Provide a stable supply of high-quality environmental impact
Slide 41: Contribute to Sustainable Agricultural Industry (Agricultural Chemicals Business)
Contribute to sustainable agricultural industry / Provide a stable supply of high-quality products and services (Agricultural Chemicals Business) AXEEV expected to remain central driver of growth under new MTBP Expand sales of Effeeda and DISARTA in Japan and overseas to consolidate foundation for s
Slide 42: Contribute to Sustainable Agricultural Industry / Smart Agriculture
Contribute to sustainable agricultural industry / Provide a stable supply of high-quality products and services (Agricultural Chemicals Business) Strengthen initiatives aimed at realizing smart agriculture through collaboration with partner companies ■ Utilize AI Cooperate on earth-friendly agricult
Slide 43: Contribute to Sustainable Agricultural Industry (Fine Chemicals Business)
Contribute to sustainable agricultural industry / Provide a stable supply of high-quality products and services (Fine Chemicals Business) Position Fine Chemical Businesses as the second pillar, by developing business in growth areas such as semiconductors and other electronic materials ■ Expand Exis
Slide 44: Reduce Climate Change and Environmental Impact
Reduce Climate Change and Environmental Impact Contribute to protecting the global environment leveraging the Group’s technologies and knowledge ■ Address Climate Change ・Continue efforts to reduce GHG emissions (30% reduction from FY2019 by FY2030) ・Respond to measures taken in each country, such a
Slide 45: Enhance Research and Development Capabilities
Enhance Research and Development Capabilities Accelerate research into developing new agricultural chemicals to contribute to global food production ■ Initiatives of Developing New Agricultural Chemicals ・To date, the Company’s success rate of developing new active ingredient is 1 in 7,500 compounds
Slide 46: Expand Business domains and Promote New Businesses
Expand Business domains and Promote New Businesses Expand business domains mainly with M&A action, and promote new businesses to realize the Group’s sustainable growth ■ Implement M&A of businesses in the Agricultural Chemicals Business and Fine Chemicals Businesses areas ・Work to further expand bus
Slide 47: Develop Human Resources Strategy Based on the Idea of Human Capital
Develop Human Resources/Human Resources Strategy Based on the Idea of Human Capital Establish a vision for human resources strategy in line with the slogans “Dreams” and “the Happiness Triangle” Figure: Concept of Realize happiness for everyone “Dreams” and “the Happiness Triangle” Improve engagemen
Slide 48: Develop Human Resources Strategy Based on the Idea of Human Capital
Develop Human Resources/Human Resources Strategy Based on the Idea of Human Capital Establish a human resources strategy aimed at maximizing the value of human resources considered as capital and enhancing corporate value over the medium to long term ■Put into practice the following action plan aime
Slide 49: Upgrade Corporate Governance, Promote Digital Transformation (DX)
Upgrade Corporate Governance, Promote Digital Transformation (DX)/Digitalization Strengthen governance and promote DX and digitization to reinforce business foundation supporting business strategies ■ Upgrade Corporate Governance ■ Promote DX/Implement Digitization Issues common to all departments D
Slide 50: Statements in this document regarding earnings forecasts and other forward-looking statements are expectations based
Statements in this document regarding earnings forecasts and other forward-looking statements are expectations based on information available at the time the material was prepared and include potential risks and uncertainties. Actual results may differ from these earnings forecasts due to a variety

Kumiai Chemical Industry — FY2023 Earnings Presentation on 6ix

Kumiai Chemical Industry — FY2023 Earnings Presentation

Slide 1: Financial Results for FY Ended October 31, 2023 and New Medium-Term Business Plan

Slide 2: Agenda

Slide 3: Business Environment

Slide 4: Business Environment

Slide 5: Market Trends for Agricultural Chemicals

Slide 6: Financial Results for the FY2023

Slide 7: Financial Results for the FY2023

Slide 8: Factors Contributing to Change in Operating Income

Slide 9: Financial Results by Business Segment

Slide 10: Agricultural Chemicals and Agriculture-Related Businesses

Slide 11: Fine Chemicals Business

Slide 12: FY2023 Results (Overseas Sales and Ratio)

Slide 13: Overseas Net Sales by Region and by Use Category

Slide 14: Summary of the FY2023

Slide 15: Earnings Forecast for the FY2024

Slide 16: Earnings Forecast for the FY2024 (YoY)

Slide 17: Earnings Forecast for the FY2024 (Agricultural Chemicals and Agriculture-Related)

Slide 18: Earnings Forecast for the FY2024 (Fine Chemicals)

Slide 19: Measures for Shareholder Returns

Slide 20: R&D Expenses, Capital Investment, and Depreciation & Amortization

Slide 21: Review of Previous Medium-Term Business Plan (FY2021-2023)

Slide 22: Review of Previous Medium-Term Business Plan (FY2021-2023)

Slide 23: Review of Previous Medium-Term Business Plan (FY2021-2023)

Slide 24: Review of Previous Medium-Term Business Plan (FY2021-2023)

Slide 25: Review of Previous MTBP / Further Strengthen R&D Capabilities

Slide 26: Review of Previous MTBP / Reduce Production Costs and Boost Production Capacity

Slide 27: Review of Previous MTBP / M&A

Slide 28: Review of Previous MTBP / Initiatives on Climate Change

Slide 29: Review of Previous MTBP / Initiatives on Social Issues

Slide 30: Review of Previous MTBP / Enhancement of Governance

Slide 31: Review of Previous MTBP / Initiatives on Enhancing Corporate Value

Slide 32: Review of Previous MTBP / Financial Highlights

Slide 33: Review of Previous MTBP / Financial Highlights

Slide 34: Overview of New Medium-Term Business Plan (FY2024-2026)

Slide 35: New Medium-Term Business Plan (FY2024-2026)

Slide 36: Overview of New Medium-Term Business Plan (FY2024-2026)

Slide 37: Overview of New Medium-Term Business Plan (FY2024-2026)

Slide 38: Overview of New Medium-Term Business Plan (FY2024-2026)

Slide 39: Overview of New MTBP / Allocation of Capital

Slide 40: Overview of New MTBP / Key Policies

Slide 41: Contribute to Sustainable Agricultural Industry (Agricultural Chemicals Business)

Slide 42: Contribute to Sustainable Agricultural Industry / Smart Agriculture

Slide 43: Contribute to Sustainable Agricultural Industry (Fine Chemicals Business)

Slide 44: Reduce Climate Change and Environmental Impact

Slide 45: Enhance Research and Development Capabilities

Slide 46: Expand Business domains and Promote New Businesses

Slide 47: Develop Human Resources Strategy Based on the Idea of Human Capital

Slide 48: Develop Human Resources Strategy Based on the Idea of Human Capital

Slide 49: Upgrade Corporate Governance, Promote Digital Transformation (DX)

Slide 50: Statements in this document regarding earnings forecasts and other forward-looking statements are expectations based