Dowa Holdings Co., Ltd. · TSE:5714

Dowa — FY2021 Earnings Presentation

46 slides from Dowa's earnings presentation, May 19, 2022

Slide 1: Corporate Strategy Briefing
Corporate Strategy Briefing FY2021 (FY ended March 2022) May 19, 2022
Slide 2: Full Year Results for FY2021, FY2022 Full Year Forecasts
Full Year Results for FY2021, FY2022 Full Year Forecasts Record profit was achieved in FY2021, reflecting an increase in profits that resulted from rising market prices and the results of our own initiatives. On the other hand, in FY2022, demand is expected to remain strong but an increase in sales
Slide 3: Factor Analysis of Ordinary Income (Year-on-Year)
Factor Analysis of Ordinary Income (Year-on-Year) (billion yen) 76.0 Major factors for change FY2021 Results Purchasing conditions for ・Purchase conditions (T/C) for smelting raw materials improved from the (2.0) previous year but payout deteriorated. smelting raw materials Electricity costs, ・Unit
Slide 4: Major Market Trends (1)
Major Market Trends (1) (Compared to Q1 of FY2020) Volume of treated waste (Japan) Volume of collected recycling materials Volume of zinc produced 120 97 102 102 120 90 92 94 130 96 99 107 120 111 107 110 103 106 108 110 110 105 103 100 100 102 102 102 100 100 93 100 100 96 96 91 89 92 90 84 86 90 8
Slide 5: Major Market Trends (2)
Major Market Trends (2) (Compared to Q1 of FY2020) Volume of sales of LEDs Volume of sales of copper rolled products Volume of carburizing treatment (for automobiles) 200 100 129 168 220 138 161 162 280 169 201 229 260 180 200 240 217 213 154 180 167 165 166 220 199 201 199 160 146 163 162 193 153 2
Slide 7: Review of Midterm Plan 2020 (1): Achievements
Review of Midterm Plan 2020 (1): Achievements The initiatives included in Midterm Plan 2020 were steadily executed in each business, with monetization achieved in some of them. All management targets were exceeded due to the achievement of record profit in FY2021. Policy Segment Expand businesses in
Slide 8: Review of Midterm Plan 2020 (2): Views on business portfolio
Review of Midterm Plan 2020 (2): Views on business portfolio It was reconfirmed that all of the businesses constituting our business portfolio have high earnings strength. The necessity to reorganize business portfolio will remain low for the time being, so efforts will continue to be focused on exp
Slide 9: Review of Midterm Plan 2020 (3): Future tasks
Review of Midterm Plan 2020 (3): Future tasks While some achievements were made in financial terms, efforts to strengthen our businesses must be continued because they are essential for adapting to the rapidly changing external environment. It is also important to continue meeting requests from stak
Slide 11: Future Direction of the DOWA Group
Future Direction of the DOWA Group To achieve the vision (our goal in 2030), the DOWA Group will drive initiatives to achieve an improvement in both its economic value and social value, thus improving its corporate value and contributing to building a sustainable society. Vision (our goal in 2030) C
Slide 12: Business Environment to 2030 (1): Resource Recycling and Waste Treatment
Business Environment in the Period Leading to 2030 (1): Resource Recycling and Waste Treatment The pursuit of a resource-recycling society has been accelerated globally. Needs for recycling have increased further. At the same time, the value of recycling has also increased. While waste treatment dem
Slide 13: Business Environment to 2030 (2): Provision of Excellent Materials and Technologies
Business Environment in the Period Leading to 2030 (2): Provision of Excellent Materials and Technologies Demand for materials and technologies for automobiles (xEVs) and renewable energy will increase further in response to megatrends, such as moves to achieve carbon neutrality. As in the previous
Slide 14: Social Issues and the DOWA Group’s Material Issues
Social Issues and the DOWA Group’s Material Issues Social issues that the DOWA Group should contribute to solving have been identified in light of the business environment, stakeholders' expectations and requests, etc. Those issues are positioned as the DOWA Group’s Materiality, and initiatives will
Slide 15: Basic Strategy for Solving the DOWA Group’s Material Issues
Basic Strategy for Solving the DOWA Group’s Material Issues Make it the basic strategy under the Midterm Plan 2024 to work on initiatives to acquire opportunities by evolving the recycling-oriented business model and reduce risks by strengthening sustainability management, so as to solve the DOWA Gr
Slide 16: Evolution of Recycling-oriented Business Model
Evolution of Recycling-oriented Business Model © 2022 DOWA HOLDINGS CO., LTD. 16
Slide 17: Focus (1): Enhancing Metal Recycling
Focus (1): Enhancing Metal Recycling Focus efforts on enhancing metal recycling to increase the ratio of products derived from materials for recycling to the output (metals we produce). Further enhance global resource recycling, which is essential for realizing a circular economy and a carbon-neutra
Slide 18: Focus (2): Achieving both Resource Recycling and Decarbonization
Focus (2): Achieving both Resource Recycling and Decarbonization (Long-term Initiatives) Take initiatives such as reducing fossil fuel consumption and fuel conversion in addition to ensuring stable material procurement and enhancing recycling, so as to evolve the recycling-oriented business model in
Slide 19: Focus (3): Enhancing Products and Services Targeting Growth Markets
Focus (3): Enhancing Products and Services Targeting Growth Markets Focus efforts on developing and expanding sales of new products and services by identifying technology trends and needs in each market accurately. Make sure to tap into the growth potential of each market by making effective use of
Slide 20: Focus (4): Reinforcing the Structure for Supporting New Businesses and Technologies
Focus (4): Reinforcing the Structure for Supporting the Development of New Businesses and Technologies DOWA x Tohoku University Co-creation Research Center was established in April 2022. Exceptional technological seeds at Tohoku University and technologies of DOWA will be integrated with the aim of
Slide 21: Strengthening Sustainability Management
Strengthening Sustainability Management © 2022 DOWA HOLDINGS CO., LTD. 21
Slide 22: Focus (5): Building a Sustainability Promotion Structure
Focus (5): Building a Sustainability Promotion Structure A framework for regularly discussing important sustainability issues and polices and measures to address such issues was built in April 2022. Important matters are reported to the Board of Directors so that the overall DOWA Group will address
Slide 23: Focus (6): Enhancing Risk Management Structure and Strengthening Corporate Governance
Focus (6): Enhancing Risk Management Structure and Strengthening Corporate Governance Enhance risk management system by building The Four Lines Model with DOWA Holdings' Board of Directors at the top. Plan introduction of a restricted stock compensation plan and begin to disclose directors' skills m
Slide 24: Focus (7): Tackling Climate Change
Focus (7): Tackling Climate Change Specific targets and measures for achieving the FY2030 GHG reduction targets are planned to be announced in the period of the Midterm Plan 2024. Information is planned to be disclosed in accordance with the recommendations of the Task Force on Climate-related Finan
Slide 25: Focus (8): Enhancing Human Capital
Focus (8): Enhancing Human Capital Building an organization that continues growing is essential for achieving the Mission and Vision (our goal in 2030). Drive initiatives to enhance human capital with key initiatives of developing human resources who make changes happen and securing diverse human re
Slide 26: Focus (9): Driving Digital Transformation (DX)
Focus (9): Driving Digital Transformation (DX) DX basic policy: Manufacturing transformation (DOWA Transformation) The DOWA Group will accelerate and sophisticate data utilization with digital technologies to develop its adaptability to change, thus strengthening its main business of resource recycl
Slide 28: Financial Targets
Financial Targets Midterm Plan 2020 (results) Midterm Plan 2024 経常利益 Ordinary Income Billion yen （FY） 2018 2019 2020 2021 2022 2024 Operating Income 80.0 76.0 (billion yen) 18.6 25.9 37.4 63.8 50.0 60.0 70.0 70.0 13.6 Ordinary Income 12.0 (billion yen) 24.3 28.9 37.2 76.0 55.0 70.0 60.0 55.0 50.0 10
Slide 29: Basic Policy on Capital Management
Basic Policy on Capital Management Basic Policy on Capital Management We aim to achieve sustainable growth and maximize our corporate value to achieve our Mission and Vision (our goal in 2030). To achieve these targets, we will implement capital measures with an appropriate balance between growth in
Slide 30: Dividend Policy
Dividend Policy DOWA regards the payment of dividends to shareholders as one of its top management priorities. The Company sets out a policy of increasing dividends as performance allows, while ensuring sufficient internal reserves for bolstering the corporate structure and expanding business in the
Slide 31: Allocation of Funds (Cash Allocation)
Allocation of Funds (Cash Allocation) Capital Investment (120.0 billion yen) By segment By investment category Billion yen Billion yen 23.0 Investment in growth Environmental Management 6.0 Capital 6.0 & Recycling Maintenance and Cash Flows Investment Nonferrous Metals 20.0 replacement 18.0 36.0 fro
Slide 32: (Ref.) Capital Investment, R&D
(Ref.) Capital Investment, R&D Capital Investment R&D The total amount of investment increased slightly compared to In Nonferrous Metals, cost of overseas mineral exploration increased. the last three years. In Electronic Materials, cost of samples, etc. increased reflecting sales Billion yen Billio
Slide 34: Environmental Management & Recycling (1) Outline of Midterm Plan 2024
Environmental Management & Recycling (1) Outline of Midterm Plan 2024 Business strategy Contribute to building a safe, secure future by continuing to create solutions with high customer satisfaction as Asia's top runner in the environmental management field. Financial data Operating income Ordinary
Slide 35: Environmental Management & Recycling (2) Major Initiatives (details)
★: New initiatives to pursue under Environmental Management & Recycling (2) Major Initiatives (details) the Midterm Plan 2024 Expanding treatment of hazardous Waste treatment Expanding treatment of fluorocarbons and other hazardous waste waste Expanding recycling Increasing the volume of recycling D
Slide 36: Nonferrous Metals (1) Outline of Midterm Plan 2024
Nonferrous Metals (1) Outline of Midterm Plan 2024 Business strategies Enhance resource recycling further and deliverer the full potential of resources. Building a sustainable Nonferrous Metals business model. Financial data Operating income Ordinary income Capital investment R&D 30.0 billion yen 36
Slide 37: Nonferrous Metals (2) Major Initiatives (details)
★: New initiatives to pursue under Nonferrous Metals (2) Major Initiatives (details) the Midterm Plan 2024 Treating more materials for recycling Introduction by handling impurities ★ of test facilities Tests and development Start of operation Precious metals and copper smelting Increasing the produc
Slide 38: Electronic Materials (1) Outline of Midterm Plan 2024
Electronic Materials (1) Outline of Midterm Plan 2024 Business strategies Expand the business in growth markets such as energy, information and communication, automobiles, and healthcare. Provide unique products needed in society, such as ones for achieving carbon neutrality and ones for the healthc
Slide 39: Electronic Materials (2) Major Initiatives (details)
★: New initiatives to pursue under Electronic Materials (2) Major Initiatives (details) Semiconductors the Midterm Plan 2024 Increasing production capacity of Start mass production Construction work for increasing production Start of operation short-wavelength-infrared LEDs and photo diodes (PD) for
Slide 40: Metal Processing (1) Outline of Midterm Plan 2024
Metal Processing (1) Outline of Midterm Plan 2024 Business strategies Continue to invest aggressively in growth markets (applications and regions) to tap into new demand surely. Contribute to society by providing products and services which reduce environmental risks. Financial data Operating income
Slide 41: Metal Processing (2) Major Initiatives (details)
★: New initiatives to pursue under Metal Processing (2) Major Initiatives (details) the Midterm Plan 2024 Sales expansion to small terminals for automotive use Increasing sales of high-value-added products Sales expansion to terminals for industrial machinery Copper rolled products Construction for
Slide 42: Heat Treatment (1) Outline of Midterm Plan 2024
Heat Treatment (1) Outline of Midterm Plan 2024 Business strategies Take the moves towards carbon neutrality as an opportunity and drive initiatives to reinforce sales, manufacturing, and development structures. Achieve steady growth in growing markets (overseas and new markets). Financial data Oper
Slide 43: Heat Treatment (2) Major Initiatives (details)
★: New initiatives to pursue under Heat Treatment (2) Major Initiatives (details) the Midterm Plan 2024 Developing and expanding sales of heat treatment facilities which realize Developing a new furnace ★ Internal demonstration testing Starting sales of mass-production furnaces carbon neutrality Ind
Slide 44: (Appendix 1) Assumptions and Sensitivities
(Appendix 1) Assumptions and Sensitivities Sensitivity (Operating Income / FY2022) Million yen Assumptions Fluctuation Sensitivity Exchange rate 120.0 ¥/$ ±1 ¥/$ 680 Copper 10,000 $/ton ±100 $/ton 40 Zinc 3,800 $/ton ±100 $/ton 420 * Exchange rate sensitivity; Nonferrous Metals 540 million yen and E
Slide 45: (Appendix 2) Factor Analysis of Ordinary Income
(Appendix 2) Factor Analysis of Ordinary Income Billion yen Factors of losses Factors of gains (35.0) 29.0 76.0 (2.0 ) 70.0 (5.5 ) (3.0 ) (8.4 ) 21.1 (3.2 ) (4.9 ) (4.0 ) 7.9 (4.0 ) FY2021 Purchasing Electricity Other Depreciation Labor Mine Equity Hedge Metal prices Sales FY2024 conditions costs ma
Slide 46: Forward-looking statements
Forward-looking statements made in this document, such as business forecast, are based on the information available at this time and on certain premises that the Company assumes to be reasonable. Actual performance may differ materially from such forecasts due to a variety of factors. © 2022 DOWA HO

DOWA Holdings — FY2021 Earnings Presentation on 6ix

Dowa — FY2021 Earnings Presentation

Slide 1: Corporate Strategy Briefing

Slide 2: Full Year Results for FY2021, FY2022 Full Year Forecasts

Slide 3: Factor Analysis of Ordinary Income (Year-on-Year)

Slide 4: Major Market Trends (1)

Slide 5: Major Market Trends (2)

Slide 6: Review of Midterm Plan 2020

Slide 7: Review of Midterm Plan 2020 (1): Achievements

Slide 8: Review of Midterm Plan 2020 (2): Views on business portfolio

Slide 9: Review of Midterm Plan 2020 (3): Future tasks

Slide 10: Midterm Plan 2024 (FY2022–FY2024)

Slide 11: Future Direction of the DOWA Group

Slide 12: Business Environment to 2030 (1): Resource Recycling and Waste Treatment

Slide 13: Business Environment to 2030 (2): Provision of Excellent Materials and Technologies

Slide 14: Social Issues and the DOWA Group’s Material Issues

Slide 15: Basic Strategy for Solving the DOWA Group’s Material Issues

Slide 16: Evolution of Recycling-oriented Business Model

Slide 17: Focus (1): Enhancing Metal Recycling

Slide 18: Focus (2): Achieving both Resource Recycling and Decarbonization

Slide 19: Focus (3): Enhancing Products and Services Targeting Growth Markets

Slide 20: Focus (4): Reinforcing the Structure for Supporting New Businesses and Technologies

Slide 21: Strengthening Sustainability Management

Slide 22: Focus (5): Building a Sustainability Promotion Structure

Slide 23: Focus (6): Enhancing Risk Management Structure and Strengthening Corporate Governance

Slide 24: Focus (7): Tackling Climate Change

Slide 25: Focus (8): Enhancing Human Capital

Slide 26: Focus (9): Driving Digital Transformation (DX)

Slide 27: Management Targets

Slide 28: Financial Targets

Slide 29: Basic Policy on Capital Management

Slide 30: Dividend Policy

Slide 31: Allocation of Funds (Cash Allocation)

Slide 32: (Ref.) Capital Investment, R&D

Slide 33: Strategies in Each Business

Slide 34: Environmental Management & Recycling (1) Outline of Midterm Plan 2024

Slide 35: Environmental Management & Recycling (2) Major Initiatives (details)

Slide 36: Nonferrous Metals (1) Outline of Midterm Plan 2024

Slide 37: Nonferrous Metals (2) Major Initiatives (details)

Slide 38: Electronic Materials (1) Outline of Midterm Plan 2024

Slide 39: Electronic Materials (2) Major Initiatives (details)

Slide 40: Metal Processing (1) Outline of Midterm Plan 2024

Slide 41: Metal Processing (2) Major Initiatives (details)

Slide 42: Heat Treatment (1) Outline of Midterm Plan 2024

Slide 43: Heat Treatment (2) Major Initiatives (details)

Slide 44: (Appendix 1) Assumptions and Sensitivities

Slide 45: (Appendix 2) Factor Analysis of Ordinary Income

Slide 46: Forward-looking statements