Kumiai Chemical Industry Co., Ltd. · TSE:4996
Kumiai Chemical Industry — FY2024 Earnings Presentation
44 slides from Kumiai Chemical Industry's earnings presentation, Dec 20, 2024
Slide 1: Financial Results for the Fiscal Year Ending 31 October 2024
Financial Results for the Fiscal Year Ending 31 October 2024 20 December 2024 copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 1
Slide 2: Today's Agenda
Today’s Agenda Ⅰ ． New Management Policy ……… 3 Ⅱ ． Business Environment ……… 6 Ⅲ ． Financial Results for the FY2024 ……… 10 Ⅳ ． Earnings Forecast for the FY2025 ……… 19 Ⅴ ． AXEEV Sales Outlook ……… 26 Ⅵ ． Progress on the Medium-Term Business Plan (FY2024-2026) ……… 33 Ⅶ ． Q&A copyright© KUMIAI CHEMICAL I
Slide 3: Today's Agenda
Today’s Agenda Ⅰ ． New Management Policy ……… 3 Ⅱ ． Business Environment ……… 6 Ⅲ ． Financial Results for the FY2024 ……… 10 Ⅳ ． Earnings Forecast for the FY2025 ……… 19 Ⅴ ． AXEEV Sales Outlook ……… 26 Ⅵ ． Progress on the Medium-Term Business Plan (FY2024-2026) ……… 33 Ⅶ ． Q&A copyright© KUMIAI CHEMICAL I
Slide 4: New Management Policy
New Management Policy Achievements under the previous management ✓ Achieved record sales and profits in FY2023 ✓ Shifted to sustainability management ✓ Launched Initiatives based on the 100-year enterprise concept: expand business and research areas Towards further improvement of corporate value Pol
Slide 5: New Management Policy
New Management Policy 1．Change to a stronger corporate structure ◼ Strengthen profitability through mindset and reorganization ◼ Create new value through product and technology development that anticipates customer needs and wants ◼ Realize the human resources strategy vision and developing human re
Slide 6: Today's Agenda
Today’s Agenda Ⅰ ． New Management Policy ……… 3 Ⅱ ． Business Environment ……… 6 Ⅲ ． Financial Results for the FY2024 ……… 10 Ⅳ ． Earnings Forecast for the FY2025 ……… 19 Ⅴ ． AXEEV Sales Outlook ……… 26 Ⅵ ． Progress on the Medium-Term Business Plan (FY2024-2026) ……… 33 Ⅶ ． Q&A copyright© KUMIAI CHEMICAL I
Slide 7: Business Environment
Business Environment Prolonged Russia-Ukraine War, Tension in the Middle East Continued - There is no significant negative impact on sales due to limited transactions - Meanwhile, tensions in the Middle East will be a factor in higher cost of raw material, manufacturing and logistics through higher
Slide 8: Business Environment: Grain Market
Business Environment Grain market situations - Major grain―soybean, wheat, and corn― prices in downtrend - Grain prices rose from late 2020 due to increased Chinese import demand and extreme weather conditions - Grain prices soared in 2022 due to Russia's invasion of Ukraine - Soaring grain prices f
Slide 9: Business Environment: Market Trends for Agricultural Chemicals
Business EnvironmentーMarket Trends for Agricultural Chemicals - Overseas market: Shift back to a growth trend as inventory levels normalize - Domestic market: Flat at around ¥350.0 billion (unit: US$ billion) Source: Agbioinvestor (global market), Crop Life Japan (domestic market) copyright© KUMIAI
Slide 10: Today's Agenda
Today’s Agenda Ⅰ ． New Management Policy ……… 3 Ⅱ ． Business Environment ……… 6 Ⅲ ． Financial Results for the FY2024 ……… 10 Ⅳ ． Earnings Forecast for the FY2025 ……… 19 Ⅴ ． AXEEV Sales Outlook ……… 26 Ⅵ ． Progress on the Medium-Term Business Plan (FY2024-2026) ……… 33 Ⅶ ． Q&A copyright© KUMIAI CHEMICAL I
Slide 11: FY2024 Overview
Financial Results for the FY2024ーOverview (unit: \ billion) 2023 2024 Change Change results results (Amount) (%) Net Sales 161.0 161.0 ＋0.0 ＋0% Gross Profits 36.7 35.4 -1.3 -3% Operating Income 14.1 11.4 -2.7 -19% Ordinary Income 24.1 18.3 -5.8 -24% Net income attributable to owners of parent 18.0 1
Slide 12: Factors Affecting Changes in Operating Income
Financial Results for the FY2024ーFactors Affecting Changes in Operating Income copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 12
Slide 13: FY2024 Financial Results by Business Segment
Financial Results for the FY2024ーFinancial Results by Business Segment (unit: \ billion) 2023 2024 Change Change Results Results (Amount) (%) Net Sales 161.0 161.0 ＋0.0 +0% Agricultural Chemicals and Agriculture-Related 129.5 128.1 -1.3 -1% Fine Chemicals 22.5 25.0 ＋2.5 +11% Other 9.1 7.9 -1.1 -12%
Slide 14: Agricultural Chemicals and Agriculture-Related Businesses
Financial Results for the FY2024ーAgricultural Chemicals and Agriculture-Related Businesses Domestic - Steady sales of paddy rice herbicide, EFFEEDA - Top sales of “One-shot herbicide for paddy rice” containing EFFEEDA for four consecutive years - Steady Sales of paddy rice nursery box application pr
Slide 15: Fine Chemicals Business
Financial Results for the FY2024ーFine Chemicals Business Chlorination - Flat in sales Prior Year-To-Date Advanced Chemicals - Significant Increase in sales of bismaleimides due to recovery of demands for semiconductors Expanded Polystyrene & Speciality Chemicals - Flat in sales Prior Year-To-Date co
Slide 16: Overseas Sales and Ratio for FY2024
Financial Results for the FY2024ーOverseas Sales and Ratio for the FY2024 ＊ PYTD：Prior Year-To-Date copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 16
Slide 17: Overseas Net Sales by Region and by Use Category
Financial Results for the FY2024ーOverseas Net Sales by Region and by Use Category (unit: ¥ billion) Europe Middle East and Africa Asia and Oceania Central and North America (Ex. Japan) South America ■Herbicide ■Insecticide ■Fungicide ■Plant growth regulator ■Other copyright© KUMIAI CHEMICAL INDUSTRY
Slide 18: Summary of the FY2024
Financial Results for the FY2024ーSummary of the FY2024 All Business Segments ＊ PYTD：Prior Year-To-Date Net Sales ¥161.0 billion (PYTD +¥0.0B) - Decrease in AXEEV sales - Increase in Fine Chemicals sales Operating Income ¥11.4 billion (PYTD -¥2.7B) - Increase in SGA expenses Ordinary Income ¥18.3 bil
Slide 19: Today's Agenda
Today’s Agenda Ⅰ ． New Management Policy ……… 3 Ⅱ ． Business Environment ……… 6 Ⅲ ． Financial Results for the FY2024 ……… 10 Ⅳ ． Earnings Forecast for the FY2025 ……… 19 Ⅴ ． AXEEV Sales Outlook ……… 26 Ⅵ ． Progress on the Medium-Term Business Plan (FY2024-2026) ……… 33 Ⅶ ． Q&A copyright© KUMIAI CHEMICAL I
Slide 20: Earnings Forecast for FY2025: Overview
Earnings Forecast for the FY2025ーOverview (unit: \ billion) 2024 2025 Change Change Results Forecast (Amount) (%) Net Sales 161.0 159.3 -1.7 -1% Agricultural Chemicals and Agriculture-Related 128.1 123.5 -4.6 -4% Fine Chemicals 25.0 26.6 ＋1.6 +7% Other 7.9 9.2 ＋1.3 +16% Operating Income 11.4 10.4 -1
Slide 21: FY2025 Forecast: AXEEV (Herbicide)
Earnings Forecast for the FY2025ーAgricultural Chemicals and Agriculture-Related AXEEV（Herbicide） Background of Continuous Sales Growth Up to FY2024 - High effectiveness against herbicide resistant weeds - Grain prices to soar until 2022, then to downtrend - Effect of the depreciation of the yen - In
Slide 22: FY2025 Forecast: EFFEEDA and DISARTA
Earnings Forecast for the FY2025ーAgricultural Chemicals and Agriculture-Related EFFEEDA（Herbicide） Forecast Sales in FY2024 : ¥9.1 billion - Strong sales with recognition of high effectiveness on weeds and safety on rice - Planned launch of two new pre-mixtures in Japan, as in the previous year - In
Slide 23: Earnings Forecast for FY2025: Fine Chemicals
Earnings Forecast for the FY2025ーFine Chemicals Chlorination - Increase in sales volumes of some chloroxylene-based products Advanced Chemicals - Significant Increase in sales of bismaleimides due to recovery of demands for semiconductors Expanded Polystyrene & Speciality Chemicals - Flat in sales P
Slide 24: Measures for Shareholder Returns
Earnings Forecast for the FY2025ーMeasures for Shareholder Returns Target Dividend Payout Ratio of 30% or more FY2025 Dividend : Interim Dividend ¥10 + Year-end Dividend ¥24 = Annual Dividend ¥34 Per Share (Payout Ratio: 37.5%) copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 24
Slide 25: R&D Expenses, Capital Investment and Depreciation
Earnings Forecast for the FY2025ーR&D Expenses, Capital Investment and Depreciation R&D Expenses FY2024 Results ¥ 7.0billion FY2025 Forecast ¥ 7.1billion (Factors) ・More focus on development of overseas markets ・Promotion of R&D activities utilizing cutting edge technology Capital Investment FY2024 R
Slide 26: Today's Agenda
Today’s Agenda Ⅰ ． New Management Policy ……… 3 Ⅱ ． Business Environment ……… 6 Ⅲ ． Financial Results for the FY2024 ……… 10 Ⅳ ． Earnings Forecast for the FY2025 ……… 19 Ⅴ ． AXEEV Sales Outlook ……… 26 Ⅵ ． Progress on the Medium-Term Business Plan (FY2024-2026) ……… 33 Ⅶ ． Q&A copyright© KUMIAI CHEMICAL I
Slide 27: Changes in the Area of AXEEV Used
AXEEV Sales OutlookーChanges in the Area of AXEEV Used (Own Research by Kumiai) soybean ｗheat ＆ barley corn wheat, sugarcane, etc. soybean corn soybean wheat, etc. corn copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 27
Slide 28: AXEEV Sales Outlook: U.S.
AXEEV Sales OutlookーSales situation by region U.S. End-use demand in terms of the area of AXEEV used - Demand for AXEEV is steady due to the spread of herbicide resistant weeds and the increase in overlapping treatment - Growth is expected to continue slowly FY2024 (Actual Sales: ¥42.0 billion) - Im
Slide 29: AXEEV Sales Outlook: Australia
AXEEV Sales OutlookーSales situation by region Australia End-use demand in terms of the area of AXEEV used - Generics have already entered the market from the 2021/22 season - The area of AXEEV used decreased slightly in the 2023/24 season FY2024 (Actual Sales: ¥3.2 billion) - The full-scale entry of
Slide 30: AXEEV Sales Outlook: Argentina
AXEEV Sales OutlookーSales situation by region Argentina End-use demand in terms of the area of AXEEV used - The area of AXEEV used is steadily increasing for use on soybeans, corn, wheat, and other crops FY2024 (Actual Sales: ¥13.9 billion) - Entry of generics were Confirmed - Price reductions for m
Slide 31: AXEEV Sales Outlook: Brazil
AXEEV Sales OutlookーSales situation by region Brazil End-use demand in terms of the area of AXEEV used - While the area of AXEEV used for corn has not grown, the area of it used for soybeans, wheat and sugarcane is expanding rapidly - Growth is expected FY2024 (Actual Sales: ¥9.2 billion) - Sales in
Slide 32: Legal Action Relating to AXEEV
AXEEV Sales OutlookーLegal Action Relating to AXEEV Against Patent Infringing Products Relating to AXEEV Apr 2024 (Australia) 1. Commenced court proceedings against ADAMA Australia Pty Ltd. Jul 2024 (Australia) 2. Commenced second court proceeding against Kenso Corporation (M) Sdn. Bhd. and its relat
Slide 33: Today's Agenda
Today’s Agenda Ⅰ ． New Management Policy ……… 3 Ⅱ ． Business Environment ……… 6 Ⅲ ． Financial Results for the FY2024 ……… 10 Ⅳ ． Earnings Forecast for the FY2025 ……… 19 Ⅴ ． AXEEV Sales Outlook ……… 26 Ⅵ ． Progress on the Medium-Term Business Plan (FY2024-2026) ……… 33 Ⅶ ． Q&A copyright© KUMIAI CHEMICAL I
Slide 34: MTBP First Year: Expand Business Domains and New Businesses
Progress on the Medium-Term Business Plan (FY2024-2026) ーInitiatives in the First Year of the MTBP Expand Business Domains and Promote New Businesses - Expand sales channels to Asia and Africa through AAI, a group company - Promote initiatives to realize synergies with GRA, an AgriTech group company
Slide 35: MTBP First Year: Strengthen R&D Capabilities
Progress on the Medium-Term Business Plan (FY2024-2026) ーInitiatives in the First Year of the MTBP Strengthen R&D Capabilities - The Institute of Chemistry(ShIP) started operations in October 2023 as part of the infrastructure development for research activities - Plans are currently underway to dev
Slide 36: MTBP First Year: Climate Change and Environmental Impact
Progress on the Medium-Term Business Plan (FY2024-2026) ーInitiatives in the First Year of the MTBP Mitigation of Climate Change and Environmental Impact Achieve carbon neutrality by FY2048, the 100th year of the company's founding - Anticipated 30% Reduction in GHG emission, primarily through the in
Slide 37: MTBP First Year: Human Resources, Governance and DX
Progress on the Medium-Term Business Plan (FY2024-2026) ーInitiatives in the First Year of the MTBP Human resource development/human resource strategy based on the concept of human capital - Initiated reform of personnel evaluation and wages system Improvement of Corporate Governance - Promote effort
Slide 38: Mode of Action of New Acaricide Flupentiofenox (VANENTA)
Progress on the Medium-Term Business Plan (FY2024-2026) ーDevelopment of New Active Ingredients and Technologies Clarification of the Mode of Action of a New Acaricide, Flupentiofenox (VANENTA) Effective against spider mites that have developed resistance to existing acaricides due to unique mode of
Slide 39: Development of New Active Ingredients and Technologies
Progress on the Medium-Term Business Plan (FY2024-2026) ーDevelopment of New Active Ingredients and Technologies Development of New Active Ingredients ■ Flupentiofenox (Insecticide) - Under development as an acaricide with a novel mode of action that is effective even against mites that have develope
Slide 40: Development Pipeline of New Active Ingredients
Progress on the Medium-Term Business Plan (FY2024-2026) ーDevelopment of New Active Ingredients and Technologies Launched/ Expansion of Name Type Evaluation stage Development stage registered countries or applied crops Insecticide Flupentiofenox (VANENTA) Acaricide ● Insecticide A Insecticide for pad
Slide 41: Changes in Sales and Operating Income
Progress on the Medium-Term Business Plan (FY2024-2026) ーChanges in Sales and Operating Income copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 41
Slide 42: MTBP Headwinds and Goals
Progress on the Medium-Term Business Plan (FY2024-2026) Facing revenue headwinds due to changes in AXEEV business environment that exceed expectations : - Prolonged global inventory destocking of agricultural chemicals due to Covid-19 -> Increase in own inventory -> Overseas competitors and distribu
Slide 43: Thank you for your attention.
Thank you for your attention. copyright© KUMIAI CHEMICAL INDUSTRY CO., LTD. All Rights Reserved. 43
Slide 44: Forward-looking statements and inquiries
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
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