Slide 1: Financial Results for the 59th Fiscal Year
Contributing to the development of society as a specialist in water, oil, and macromolecules Financial Results for the 59th Fiscal Year （From Mar 1, 2016 to Feb 28, 2017） MORESCO Corporation http://www.moresco.co.jp/ Tokyo Stock Exchange 1st section 5018 (Petroleum and Coal products) April, 2017 The
Slide 2: Contribution of Real GDP Growth Rate by Quarter
Contribution of Real GDP Growth Rate by Quarter Information: Cabinet Office Total / Household budget (Consumption expenditure + Housing expense) Total / Corporate investment Total / Private inventory investment Total Total/ Public Demand / Private Capital Investment Total Total // External Household
Slide 3: Monthly Car Production in Japan
Monthly Car Production in Japan Thousand units Feb 2015-Feb 2016 Feb 2016-Feb 2017 1,200 800 400 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Information: Japan Automobile Manufacturing Association 3
Slide 4: Overseas Monthly Car Production
Overseas Monthly Car Production Mar 2015-Feb 2016 Thousand Units Mar 2016-Feb 2017 Thousand units China US 3,500 1,600 3,000 1,200 2,500 2,000 800 1,500 1,000 400 500 0 0 Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Thousand units Thousand units Thailand Indonesia 300 150 200 100 100 50 0 0 Mar M
Slide 5: Oil Price & Exchange Rate
Oil Price & Exchange Rate $/b Dubai cruid oil price Exchange rate Yen/$ 120 130 110 120 100 90 110 80 100 70 60 90 50 80 40 30 70 13-4Q 14-4Q 15-4Q 16-4Q Thousand yen/kl Naptha price in Japan 80 60 40 20 13-4Q 14-4Q 15-4Q 16-4Q 5
Slide 6: Consolidated Income Statement
Consolidated Income Statement Millions of yen Year-on- year FY2015 FY2016 change Net Sales ２６,２６６ ２６,６７４ +1.6% Gross Profit ８,５３９ ９,２３５ +8.2% Selling, General and Administrative Expenses ６,４１４ ６,８６１ +7.0% Operating Income ２,１２５ ２,３７４ +11.8% Non-operating profit & loss ２５４ ２８３ +11.7% Ordinary Income
Slide 7: Net Sales of Business Units
Net Sales of Business Units Millions of yen Year-on- year FY2015 FY2016 change Functional Fluids １１,８９７ １２,０９７ +1.7% Synthetic Lub ２,８００ ２,９０４ +3.7% （HD Surface Lub） （１,６１２） （１,６９２） +5.0% Liquid Paraffin & Sulfonates ３,５５４ ３,３７７ △5.0% Hot Melt Adhesive ６,６２８ ６,８０９ +2.7% Other １,３３４ １,４３４ +7.5% Chemi
Slide 8: Division Performance - Functional Fluids
Division Performance - Functional Fluids • Sales increased by 1.7% (12,097 million yen) vs. FY2015 • Sales volume increased by 13.4% FY2015 FY2016 3,992 3,937 Die-casting fluid 4,000 3,399 • Sales volume increased, but 3,195 sales value remained flat due 3,000 to a decline in selling prices. 2,000
Slide 9: Division Performance - Synthetic Lubricants
Division Performance - Synthetic Lubricants • Sales increased by 3.7% (2,904 million yen) vs. FY2015 • Sales volume increased by 6.4% FY2015 FY2016 High temperature lubricants 2,000 Grease for Automobile 1,612 1,692 • Export of grease base oil for 1,500 1,136 1,178 automotive bearing increased in
Slide 10: Division Performance - Liquid Paraffin & Sulfonate
Division Performance - Liquid Paraffin & Sulfonate • Sales decreased by 5.0% (3,377 million yen) vs. FY2015 • Sales volume increased by 6.5% FY2015 FY2016 Liquid paraffin 3,000 • Sales volume increased, but sales 2,625 2,448 value decreased due to a decline in selling prices 2,000 Sulfonate • Sale
Slide 11: Division Performance - Hot Melt Adhesive
Division Performance - Hot Melt Adhesive • Sales increased by 2.7% (6,809 million yen) vs. FY2015 • Sales volume increased by 8.7% FY2015 FY2016 5,000 4,748 4,850 For sanitary material • Sales remained flat due to 4,000 customers’ inventory 3,000 adjustments For tape & label 2,000 1,166 1,106 • Sa
Slide 12: Overseas Sales (Consolidated)
Overseas Sales (Consolidated) Millions of yen 12,000 40.0% 37.2% 37.8% 35.5% 10,000 512 478 448 35.0% 912 783 8,000 742 980 1,138 1,080 30.0% 1,384 1,435 6,000 1,314 25.0% 2,291 2,347 2,447 4,000 20.0% 2,000 3,092 3,234 3,196 0 15.0% FY2014 FY2015 FY2016 Other Malaysia Taiwan Singapore North America
Slide 13: Consolidated Income Statement
Consolidated Income Statement Millions of yen Year-on- year FY2015 FY2016 change Net Sales ２６,２６６ ２６,６７４ +1.6% Gross Profit ８,５３９ ９,２３５ +8.2% Selling, General and Administrative Expenses ６,４１４ ６,８６１ +7.0% Operating Income ２,１２５ ２,３７４ +11.8% Non-operating profit & loss ２５４ ２８３ +11.7% Ordinary Income
Slide 14: Net Sales and Gross Profit Ratio
Net Sales and Gross Profit Ratio Millions of yen Net sales Gross profit ratio 30,000 40% 26,820 26,266 26,674 25,000 23,724 19,987 20,000 18,656 34.6% 15,000 32.5% 30% 30.1% 30.3% 10,000 29.5% 28.2% 5,000 0 20% FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 14
Slide 15: Selling, General and Administrative Expenses
Selling, General and Administrative Expenses Millions of yen Increase/ Year-on- FY2015 FY2016 year change Decrease Selling, General and Administrative Expenses ６,４１4 ６,８６１ ＋４４６ ＋７.０％ (R&D expense) １,０３１ １,１５７ ＋１２６ ＋１２.２％ Selling, General and Administrative Expenses Ratio in Net Sales ２４.４% ２５.７% R&D
Slide 16: Operating Income Fluctuation Factors
Operating Income Fluctuation Factors Millions of yen 1,690 △626 △149 Increase in Cost of Foreign Exchange Sales Loss △665 Increase in SG&A Increase in Income 2,374 2,125 FY2015 FY2016 Operating income reached a record high. Exchange Rate: 121 yen → 109.5 yen 16
Slide 17: Profit and loss by country (Consolidated)
Profit and loss by country (Consolidated) Millions of yen Net sales Operating Net sales Operating 25,000 Japan income 1,800 2,950 313 China income 350 1,396 1,532 1,600 2,900 287 272 1,351 2,850 300 20,000 1,400 2,800 250 1,200 15,000 2,750 200 1,000 2,700 800 2,650 2,881 150 10,000 600 2,600 2,866
Slide 18: Balance Sheet (Consolidated)
Balance Sheet (Consolidated) Millions of yen Increase/ Increase/ Account title FY2016 Decrease Account title FY2016 Decrease Cash & Deposit 2,604 192 Trade Payable 4,233 △ 340 Notes and Accounts Interests bearing debt Receivable-trade 6,776 454 (Current) 2,916 △ 843 Inventories 3,888 △ 102 Other Cur
Slide 19: Interest Bearing Debt
Interest Bearing Debt Millions of yen Year-on- At the end of At the end of year FY2015 FY2016 change Short Term Borrowing※ (within 1 year) ２,２１１ １,７２６ △４８５ Long Term Borrowing １,５４８ １,１９０ △３５８ Total ３,７５９ ２,９１６ △８４３ Ratio of interest-bearing debt １５.１％ １１.５％ ※ including long term borrowing with matu
Slide 20: Cash Flow
Cash Flow Millions of yen Repayment of borrowing △834 5,000 Dividend Payout △427 4,500 △1,104 Investment 4,000 Currency +2,842 Exchange 3,500 Sales △1,296 Adjustment 3,000 Finance △3 2,500 2,000 Acquisition of Tangible Fixed Assets △1,135 1,500 2,482 1,000 2,043 Depreciation 1,074 Cash Cash Equivale
Slide 21: FY2017 Consolidated Earnings Forecast
FY2017 Consolidated Earnings Forecast Millions of yen FY2016 FY2017 FY2017 FY2017 Result 1H 2H Net Sales ２６,６７４ １３,８００ １４,９００ ２８,７００ Operating ２,３７４ １,１００ １,５００ ２,６００ Income Ordinary ２,６５８ １,３００ １,６００ ２,９００ Income Net Income １,６００ ８００ １,０５０ １,８５０ ＜Dividend per Share＞ FY2015 Result (Dividend Payout R
Slide 22: Medium Term Management Plan
Medium Term Management Plan 22
Slide 23: Recent Performance and the 7th Medium Term Management Plan (revised)
Recent Performance and the 7th Medium Term Management Plan (revised) （FY2015 –FY2017） Released Feb. 21, 2017 Net sales Ordinary income 5,000 ■ Expand Hot Melt Adhesive business in China and Southeast Asia 30,000 ■ Strengthen sales of cutting fluids and hot 28,700 forging fluids in overseas market ■
Slide 24: Mid-Term Plan - Consolidated Sales by Division
Mid-Term Plan - Consolidated Sales by Division Mid-term Plan FY2017 13,050 3,000 3,600 7,300 1,750 Device Materials 300 included FY2016 12,097 2,904 3,377 6,809 1,487 FY2015 11,897 2,800 3,554 6,628 1,388 FY2014 12,330 2,787 4,024 6,311 1,369 FY2013 10,681 2,380 3,818 5,526 1,318 0 5,000 10,000 15,0
Slide 25: Device Materials & New Equipment
Device Materials & New Equipment Joint R&D with Ideal Star Inc. on Organic Photovoltaics (OPV) Features ・Power generation layer (organic): variety of color options, see-through property, low-light sensitivity ・Ultra thin, lightweight ・Printing: high-speed/large area processing capabilities, cost eff
Slide 26: Expanding global sales of hot forging fluids
Expanding global sales of hot forging fluids Installed production facilities in Thailand to expand sales of hot forging fluids in Southeast Asia 2016- In-house development of graphite-type forging fluids completed / Production in Thailand started Forging Fluids Market (2016) 2018- Launch graphite-fr
Slide 27: MORESCO HM&LUB INDIA PRIVATE LIMITED
MORESCO HM&LUB INDIA PRIVATE LIMITED Established and Incorporation Registration Completed To be the production and sales base for hot melt adhesive & lubricants in India Ahmedabad 27
Slide 28: 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 t