Sekisui Chemical Co., Ltd. · TSE:4204
Sekisui Chemical — FY2020 Earnings Presentation
52 slides from Sekisui Chemical's earnings presentation, Apr 27, 2021
Slide 1: Presentation of Financial Results for FY2020 and the Management Plan
SEKISUI CHEMICAL CO., LTD. Presentation of Financial Results for FY2020 and the Management Plan Keita Kato President April 27, 2021
Slide 2: Results for FY2020: Forex Rate
Results for FY2020 FY2019 FY2020 Forex Rate 1H 2H 1H 2H Assumptions ¥109/US$ ¥108/US$ ¥109/US$ ¥105/US$ ¥124/€ ¥120/€ ¥121/€ ¥126/€ Results ¥109/US$ ¥109/US$ ¥107/US$ ¥105US$ (Avg. rate for each term) ¥121/€ ¥120/€ ¥121/€ ¥126/€ 1
Slide 3: Overview of FY2020 Results
Overview of FY2020 Results ∎Drop in net sales due to the significant impact of COVID-19; decrease at each level of profit; fell short of plans ∎Incidence of structural reform and other expenses (non-operating losses); posted an impairment loss on intangible assets and a gain on sale of land (extraor
Slide 4: FY2020 Results: Net Sales and Operating Income by Divisional Company
FY2020 Results: Net Sales and Operating Income by Divisional Company ∎Substantial decline in profit in each segment due to the significant impact of COVID-19 ∎While the HPP Company was in line with plans, other segments fell slightly short of operating income plans FY2020 FY2019 FY2020 Difference Di
Slide 5: 1H & 2H FY2020 Results by Divisional Company
1H & 2H FY2020 Results: Net Sales and Operating Income by Divisional Company ∎Despite a substantial decrease in profit in the 1H, recovery to essentially the same level as the previous year in the 2H • HPP: Turnaround to increases in sales and profit in the 2H mainly in the Electronics and Mobility
Slide 6: FY2020 Results: Analysis
FY2020 Results: Analysis ∎Despite substantial decreases in sales volumes and product mix as well as consolidated-basis change due to the significant impact of COVID-19, recovery trend in the 2H; progress in efforts aimed at strengthening profitability (reductions in fixed and other costs) Net Sales
Slide 7: FY2021 Plan
FY2021 Plan FY2020 FY2021 Forex Rate 1H 2H 1H 2H ¥109/US$ ¥105/US$ ¥105/US$ ¥105/US$ Assumptions ¥121/€ ¥126/€ ¥127/€ ¥127/€ Results ¥107/US$ ¥105/US$ (Avg. rate for - - each term) ¥121/€ ¥126/€ . 6
Slide 8: Overview of FY2021 Plan
Overview of FY2021 Plan ∎Substantial increases in net sales and each level of profit; recovery in operating income to the same level as FY2019 ∎Dividend per share of ¥49, up ¥2 (twelfth consecutive FY of dividend increase) ∎Establish a limit for the acquisition of treasury stock (maximum: 5 million
Slide 9: Outlook for Market Conditions
Outlook for Market Conditions ∎ Automobile recovery trend expected to continue; smartphone trends projected to be firm; forecast modest recovery in domestic demand Number of Automobiles Manufactured (YoY) Housing・Visitors Sharp recovery from the 2H of FY2020; while this recovery trend is Visitors pr
Slide 10: FY2021 Plan: Net Sales and Operating Income by Divisional Company
FY2021 Plan: Net Sales and Operating Income by Divisional Company ∎Substantial increases in sales and profit in each segment owing to a certain extent of recovery in market conditions as well as high-value-added business and product expansion • HPP: Substantial increases in sales and profit mainly i
Slide 11: 1H & 2H FY2021 by Divisional Company
1H & 2H FY2021: Net Sales and Operating Income by Divisional Company ∎Substantial increases in profit in both the 1H and 2H; recovery in domestic demand over the 2H 1H FY2021 2H FY2021 1H FY2020 Difference 2H FY2020 Difference Plan Plan Net Operating Net Operating Net Operating Net Operating Net Ope
Slide 12: FY2021 Plan: Analysis
FY2021 Plan: Analysis ∎Substantial increases in sales volumes and product mix mainly due to a certain extent of recovery in market conditions as well as increased sales of high-value-added products ∎Reduce the impact of high raw material costs through cost reductions; fixed costs focused on growth i
Slide 13: Progress under the Medium-term Management Plan, Drive 2022
Progress under the Medium-term Management Plan, Drive 2022 ∎Restore operating income to the same level as FY2019 while paving the way to achieve the FY2022 Medium-term Management Plan in FY2021 Operating Income FY2009-2013 FY2014-2016 FY2017-2019 FY2020-2022 Performance GS21-SHINKA! SHINKA!-Advance
Slide 14: Drive 2022 Returns to Shareholders
Drive 2022 Returns to Shareholders ∎Also continue to actively provide returns to shareholders in Previous FY2020-FY2022 Medium-term FY2021 Plan Returns to Shareholders Track Record (Billions of yen) Dividends 30% target 35% or higher 66.1 payout ratio Total dividend payment 60.9 63.5 56.7 59.2 DOE A
Slide 15: Drive 2022 ESG Management
Drive 2022 ESG Management ∎ Set key issues and numerical targets to ensure management’s ability to sustain business as identified under the Long-term Vision Key ESG Management Issues, KPIs, and Quantitative Targets Key Issues KPI FY2020 Results FY2022 Targets Products to enhance Products to enhance
Slide 16: Intentionally Blank
Intentionally Blank SEKISUI
Slide 17: Financial Results for FY2020
Tatsuya Nishida Executive Officer Financial Results for FY2020 Head of Corporate Finance & Accounting Department 16
Slide 18: Consolidated Companies
Consolidated Companies Number of Consolidated Companies Mar. 31, 2020 Mar. 31, 2021 Difference Consolidated Increased: 2 Subsidiaries*1 Subsidiaries 163 161 Decreased: 4 Subsidiaries*2 Affiliates Increased: 0 Subsidiaries (Equity Method) 8 8 Decreased: 0 Subsidiaries *1 SEKISUI POLYMATECH EUROPE B.V
Slide 19: Summary of Profit and Loss
Summary of Profit and Loss FY2019 FY2020 Difference (Billions of yen) Net Sales 1,129.3 1,056.6 -72.7 Gross Profit 362.7 330.4 -32.3 Gross Profit Margin 32.1% 31.3% -0.8% Selling, Gen. and Admin. Expenses 274.7 263.1 -11.6 Operating Income 88.0 67.3 -20.7 Gain on sales of land: +3.1 Equity in Earnin
Slide 20: Balance Sheets (Assets)
Balance Sheets (Assets) Mar. 31, Inventories (B/S item) 2021 YoY Ready-built housing (products) 27.3 +10.3 Prepared land for subdivision Mar. 31, 2020 Mar. 31, 2021 Difference housing 58.8 +8.2 (Billions of yen) Land under preparation (work in process) 14.4 -0.6 Cash and Deposits 76.8 87.5 +10.6 Hou
Slide 21: Balance Sheets (Liabilities & Net Assets)
Balance Sheets (Liabilities & Net Assets) (Billions of yen) Mar. 31, 2020 Mar. 31, 2021 Difference Net income Non-interest-bearing Liabilities 353.9 317.6 -36.3 +41.5 Interest-bearing Liabilities 117.7 138.2 +20.5 Dividends paid (Net interest-bearing Liabilities) (40.8) (50.7) (+9.9) -21.0 Retiremen
Slide 22: Consolidated Cash Flows
Consolidated Cash Flows FY2019 FY2020 (Billions of yen) Operating Cash Flows 92.6 75.3 Investing Cash Flows -100.6 -58.5 Financing Cash Flows 15.5 -19.2 Net Increase in Cash and Cash Equivalents 4.5 1.8 Cash and Cash Equivalents at the End of Term 74.7 76.6 Free Cash Flow =Operating Cash Flows + Inv
Slide 23: Depreciation and Amortization, Capital Expenditures, EBITDA
Depreciation and Amortization, Capital Expenditures, EBITDA Goodwill and Other Depreciation*1 Capital Expenditures EBITDA*3 Amortization*2 Differ- Differ- Differ- Differ- FY2019 FY2020 FY2019 FY2020 FY2019 FY2020 FY2019 FY2020 ence ence ence ence (Billions of yen) Housing 9.4 9.7 +0.2 0.1 0 -0.1 15.
Slide 24: Depreciation, Capital Expenditures, R&D Expenditure
Depreciation and Amortization, Capital Expenditures, Research and Development Expenditure (Billions of yen) FY2020 FY2021 Plan Difference Depreciation 42.9 44.3 +1.4 Goodwill and Other Amortization 6.4 5.7 -0.7 Capital Expenditures 55.3 58.0 +2.7 EBITDA 116.6 136.0 +19.4 Research and Development Exp
Slide 25: Overview of FY2021 Plan and Returns to Shareholders
Overview of FY2021 Plan and Returns to Shareholders FY2021 FY2020 Difference (Billions of yen) (Plan) Net Sales 1,056.6 1,132.6 +76.1 Operating Income 67.3 86.0 +18.7 Ordinary Income 62.6 86.0 +23.4 Net Income Attributable to Owners of the Parent 41.5 60.0 +18.5 Dividend per Share (Yen) 47 49 +2 Div
Slide 26: Intentionally Blank
Intentionally Blank SEKISUI
Slide 27: High Performance Plastics Company
High Performance Plastics Ikusuke Shimizu Company Company President 26
Slide 28: HPP Company: Performance Trends
HPP Performance Trends Company ∎ FY2020: Despite a substantial decrease in profit owing to the impact of COVID-19, return to increases in sales and profit in the 2H; also progress in improving the profit structure ∎ FY2021: Recovery to profit levels in excess of FY2019 owing to a positive turnaround
Slide 29: HPP Company: FY2020 Results Analysis
HPP FY2020 Results: Analysis Company ∎ Essentially offset decreases in sales volumes and product mix by reducing fixed and other costs; minimized the extent of profit decline excluding the impacts of consolidated-basis change and foreign exchange ∎ Despite substantial decreases in sales volume and p
Slide 30: HPP Company: Overview of FY2021 Plan
HPP Overview of FY2021 Plan Company ∎ Substantial increases in sales volumes and product mix mainly in the three strategic fields ∎ Minimize the impact of high raw material costs through other cost reductions; also control fixed costs to FY2019 levels; continue to implement cost innovation initiativ
Slide 31: HPP: Three Strategic Fields and Cost Innovation
HPP Three Strategic Fields and Cost Innovation Company ∎ Achieved an increase in sales in the Electronics and Mobility fields and a recovery to the same level as the previous year in the Building and Infrastructure filed in the 2H of FY2020; substantial increases in sales in each of the three strate
Slide 32: HPP: Growth Engines
HPP Growth Engines Company ∎ Strengthen measures aimed at generating growth while capturing the wave of medium- to long-term needs expansion in each of the three fields; also focus on fostering next-generation growth domains Progress of Growth Measures in the Three Fields Mobility Electronics 〜 High
Slide 33: Housing Company
Toshiyuki Kamiyoshi Housing Company Company President 32
Slide 34: Housing Company: Performance Trends
Performance Trends Housing Company ∎FY2020: Substantial decline in profit owing to the downturn in orders as a result of COVID-19; almost a full recovery in the 2H • Despite a substantial decline in new housing and renovation orders in the 1H, recovery to the same level as the previous year in the 2
Slide 35: Housing Company: FY2020 Results Analysis
FY2020 Results: Analysis Housing Company ∎Despite decreases in the number of houses sold and renovation sales due to COVID-19, progress in fortifying the business structure and controlling fixed costs • Housing: Despite a substantial decline in the number of houses sold, progress in fortifying the b
Slide 36: Housing Company: Overview of FY2021 Plan
Overview of FY2021 Plan Housing Company ∎Recovery in operating income to the same level as FY2019 owing to increases in the number of houses sold and renovation marginal profit as well as contributions from the Town and Community Development Business and other factors • Housing: Return to the same l
Slide 37: New Housing Orders
New Housing Orders Housing Company ∎ Recovery in orders to the same level as FY2019 owing to new developments in three key measures aimed at generating growth (sales force, product strategies, and land strategies) Customer and Order Trends Order Results and Plan Visitors Number of Orders by Type of
Slide 38: Stock Business, Town and Community Development
Stock Business (Renovation, Real Estate), Housing Town and Community Development Company ∎ Shift to a YoY increase in Renovation Business orders; Strengthen renovation collaboration in the Real Estate Business Stock Business (Renovation) * %: YoY Stock Business (Real Estate) Increase periodic diag
Slide 39: Urban Infrastructure & Environmental Products Company
Urban Infrastructure & Yoshiyuki Hirai Environmental Products Company Company President 38
Slide 40: UIEP Company: Performance Trends
UIEP Performance Trends Company ∎ FY2020: While profit decreased due to the substantial impact of COVID-19 (stoppages in domestic construction, overseas lockdowns, and slowdown in aircraft sheet demand), progress in improving profitability on the back of successful efforts to reduce costs and implem
Slide 41: UIEP Company: FY2020 Results Analysis
UIEP FY2020 Results: Analysis Company ∎ Despite substantial decreases in sales volumes and product mix owing to the drop in housing starts, significant decline in domestic non-residential demand as well as lockdowns and the slowdown in aircraft sheet demand overseas, minimized the extent of profit d
Slide 42: UIEP Company: Overview of FY2021 Plan
UIEP Overview of FY2021 Plan Company ∎ FY2021: Gradual recovery in demand toward the 2H; recovery in operating income to the level prior to COVID-19 through increased sales of prioritized products, overseas business expansion, and passing on raw material price increases to product prices • Japan: Su
Slide 43: UIEP: Three Strategic Fields and Structural Reforms
UIEP Three Strategic Fields and Structural Reforms Company ∎ FY2021: Increase in sales in the Piping and Infrastructure and Building and Living Environment fields Net Sales in the Three Strategic Fields Advanced Materials • Sheets: Despite a substantial decrease in aircraft-related demand, completed
Slide 44: Growth Strategy (Prioritized Products, Overseas)
UIEP Growth Strategy (Prioritized Products, Overseas) Company Expansion in Prioritized Products (Establish a winning pattern using DX; operations to comments at Chiba Solution Center in May 2021) Prioritized Products Sales Product Examples (Products to enhance sustainability and Premium Framework) •
Slide 45: Medical Business
Futoshi Kamiwaki Medical Business Director, Senior Managing Executive Officer Head of Business Strategy Department 44
Slide 46: Medical Business: Performance Trends
Performance Trends Medical Business ∎ FY2020: Impact of COVID-19 mainly on the number of outpatient tests, substantial decline in profit ∎ FY2021: The effects of COVID-19 to dissipate with a return to a growth trajectory mainly in the Diagnostics (overseas) business; work toward record high profits
Slide 47: Medical Business: FY2020 Results Analysis
FY2020 Results: Analysis Medical Business ∎ Despite a decrease in profit in the 1H owing to a downturn in the number of outpatient tests (Diagnostics (Japan)) and the impact of lockdowns (Diagnostics (overseas)), operating income recovered to the same level as the previous year in the 2H mainly thro
Slide 48: Medical Business: Overview of FY2021 Plan
Overview of FY2021 Plan Medical Business ∎ Return to a growth trajectory on the back of a recovery in market conditions, expand sales of new products while focusing on the Diagnostics (overseas) business ∎ Promote efforts aimed at strengthening the production structure and development Net Sales Anal
Slide 49: Medical: Overview by Business
Overview by Business Medical Business ∎ FY2021: Recovery in the Diagnostics (Japan) business and accelerated growth in the Diagnostics (overseas) and Pharmaceutical Science businesses; further focus on the development and sales expansion of new products Net Sales by Business and Overview of Progress
Slide 50: Forward-looking statements notice
This slide presentation may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statemen
Slide 51: Housing Company Results and Plan: Main Data
Housing Company Results and Plan 1. Main data in Housing5 business FY2020 FY2019 1H 2H Full Year 1H 2H Full Year Net Sales (Billions of yen) 230.6 254.6 485.3 256.9 256.0 512.9 Housing 161.2 175.3 336.5 179.3 181.1 360.4 CONSOLIDATED Renovation 41.5 46.2 87.6 49.4 45.6 95.0 Other 28.0 33.2 61.2 28.2
Slide 52: Housing Orders and Housing Starts
Housing Company Results and Plan 2. Housing orders FY2021 (Plan) FY2020 FY2019 (Millions of yen) 1H 2H Full Year 1H 2H Full Year 1H 2H Full Year Year-start Backlog 184,800 182,000 - 205,400 194,500 - 219,500 217,320 - New construction ・Renovation Growth Rate -10% -6% - -6% -11% - +6% +2% - New Order