Shinagawa Refra Co., Ltd · TSE:5351
Shinagawa Refra — Shinagawa Refractories — FY2020 Earnings Presentation
47 slides from Shinagawa Refra's earnings presentation, Jun 16, 2021
Slide 1: Shinagawa Refractories: Results for Fiscal Year ended March 2021
Shinagawa Refractories: Results for Fiscal Year ended March 2021
Slide 2: Table of Contents
Table of Contents I. Financial １．Consolidated Financial Highlights ５．Consolidated Balance Sheet ２．Net Sales by Business Segment ６．Consolidated Cash Flows Highlights ３．Operating Income by Business Segment ７．Consolidated Financial Targets for FY2021 for FY 2020 ４．Factors Behind Changes in Operating In
Slide 3: I. Overview of Financial Results for 2020
I. Overview of Financial Results for 2020 (Fiscal Year ended March 2021) Shinagawa Refractories: Results for Fiscal Year ended <March 2021 2
Slide 4: Consolidated Financial Highlights
１． Consolidated Financial Highlights (Unit: Million JPY) FY 2019 FY 2020 YoY Results Results Net Sales 118,973 99,969 ▽16.0% Operating Income 9,597 7,285 ▽24.1% Ordinary Income 9,844 8,220 ▽16.5% (ROS) （8.3％） （8.2％） （▽0.1pt） Profit attributable to 5,550 2,114 ▽61.9% owners of parent ● Japanese crude
Slide 5: Net Sales by Business Segment
２． Net Sales by Business Segment (Unit: Million JPY) FY 2019 FY 2020 YoY Results Results Refractories & Related Products 89,930 75.6 76,648 76.7 ▽14.8% Furnace Construction & Engineering 27,074 22.8 21,505 21.5 ▽20.6% Real Estate & Other Businesses 1,968 1.7 1,814 1.8 ▽7.8% Total 118,973 100.0 99,96
Slide 6: Operating Income by Business Segment
３．Operating Income by Business Segment (Unit: Million JPY) FY 2019 FY 2020 YoY Results Results Refractories & Related Products 8,641 79.5 6,714 77.9 ▽22.3% Furnace Construction & Engineering 1,177 10.8 924 10.7 ▽21.5% Real Estate & Other Businesses 1,057 9.7 979 11.4 ▽7.4% Total 10,877 100.0 8,618 1
Slide 7: Factors Behind Changes in Operating Income (YoY)
４． Factors Behind Changes in Operating Income (YoY) (Unit: Billion JPY) Negative Factors Positive Factors ▽3.2 ＋0.9 Change in Total ▽2.3 Lower Sales Volume 9.5 ▽2.0 Less Profits at Foreign Engineering Group Exchange ▽0.3 Cost Companies Gains ▽0.4 Change in Product Mix Reduction ＋0.8 ＋0.1 7.2 ▽0.5 FY
Slide 8: Consolidated Balance Sheet
５．Consolidated Balance Sheet (Unit: Million JPY) 2020/3 2021/3 Changes ・ Cash & Cash Equivalents +2,895 Current Assets 72,010 71,654 ▽356 ・ Receivables ▽2,660 ・ Inventories ▽558 ・ Tangible & intangible Fixed Assets ▽2,468 Fixed Assets 38,237 38,550 ＋313 ・ Investment & Other Assets +2,780 Total Asset
Slide 9: Consolidated Cash Flows
６．Consolidated Cash Flows (Unit: Million JPY) 【 Main contents of cash flows from operating activities 】 FY 2019 FY 2020 Changes Cash Flows from ・ Income before Income Taxes ＋4,413 Operating Activities 7,769 9,327 ・ Depreciation ＋2,581 Cash Flows from ・ Impairment Loss ＋3,384 Investing Activities ▽3,
Slide 10: Consolidated Financial Targets for FY2021
７． Consolidated Financial Targets for FY2021 (Unit: Million JPY) FY 2020 FY 2021 YoY Results Targets Net Sales 99,969 100.0 108,000 100.0 ＋10.0% Operating Income 7,285 7.3 8,500 7.9 ＋17.0% Ordinary Income 8,220 8.2 9,000 8.3 ＋9.8% Profit attributable to owners of parent 2,114 2.1 5,800 5.4 ＋173.5% N
Slide 11: II. Mid-term Management Plan
II. Mid-term Management Plan Shinagawa Refractories: Results for Fiscal Year ended <March 2021 10
Slide 12: Previous Mid-term Management Plan: Targets vs Results ①
１．Previous Mid-term Management Plan: Targets vs Results ① (The 4th Mid-term Plan: FY 2018 – 2020) ■Final Results of The 4th Mid-term Plan Net Sales （Unit: Billion JPY） （Unit: Billion JPY） FY2020 140.0 Ordinary Income 16.0 Targets＊ Results 119.0 118.9 14.0 120.0 Net Sales 123 100 Billion JPY Billion
Slide 13: Previous Mid-term Management Plan: Targets vs Results ②
１．Previous Mid-term Management Plan: Targets vs Results ② (The 4th Mid-term Plan: FY 2018 – 2020) PRIMARY INITIATIVES ● Developing New Markets SALES ● Improving the Profit margin ● Cost Reduction in Productions Yield / Productivity Improvement & Further Promotion of Recycling ● Cost Reduction in Pro
Slide 14: The 5th Mid-term Management Plan: Business Environment
２．The 5th Mid-term Management Plan (FY 2021-2023) Business Environment Japan World No prospect yet for the end of Definite signs of recovery in COVID-19 various countries spreading infection Declining steel demand in Japan triggers further blast furnaces Expecting increasing steel Steel shutdown & s
Slide 15: The 5th Mid-term Management Plan: Financial Targets
３．The 5th Mid-term Management Plan (FY 2021-2023) Financial Targets (Consolidated) ■ Financial Targets in FY2023 Net Sales （Billion JPY） （Billion JPY） Ordinary Income FY 2023 140 16.0 Targets 120 115 14.0 Net Sales 115 billion JPY 108 100 11.5 12.0 Ordinary 100 Income 11.5 billion JPY 9.0 ROS 10.0 8
Slide 16: Mission Statement & Primary Action Plans
４．The 5th Mid-term Management Plan (FY 2021-2023) Mission Statement & Primary Action Plans Achieving record profits by providing innovative new products that exactly Mission meet our customers’ needs, with the highest degree of competitiveness in Statement quality and cost produced using our most ad
Slide 17: Business Expansion in Japan: Sales & Market Expansion ①
５．Primary Action Plans １ Business Expansion in Japan １） Sales & Market Expansion of Refractories & Ceramic Fibers ① 【Action Plans】 【Targeted Markets】 Further Promoting Value ● Sales Expansion Addition Approaches Integrated Steel mills, Mini Mills &Cement ●Packaging Refractory Sales with Construction
Slide 18: Business Expansion in Japan: Sales & Market Expansion ②
５．Primary Action Plans １ Business Expansion in Japan １） Sales & Market Expansion of Refractories & Ceramic Fibers ② Sales Expansion of Monolithic Refractories to Non-Iron & Steel Markets 【Monolithic Refractories ● Monolithic Steel Ladle Sales Targets in Index】 ● Packaging Refractory Sales with （FY 2
Slide 19: Sales & Market Expansion ③: Synergies with Isolite Insulating Products
５．Primary Action Plans １ Business Expansion in Japan １） Sales & Market Expansion of Refractories & Ceramic Fibers ③ ～ Expanding Synergies with Isolite Insulating Products～ Introducing New Innovative Products by Technology Integration 【Shinagawa】 【Isolite】 Refractory Technologies Ceramic Fiber Techno
Slide 20: Integrated Services from Design to Construction
５．Primary Action Plans １ Business Expansion in Japan ２） Integrated Services from Design to Construction Providing Integrated R&D PRODUCTION R&D Center East & West Works Solutions as Group Companies Shinagawa Group ENGINEERING MARKETING & SALES Engineering Div. Domestic Sales Div. Group Companies Ove
Slide 21: Further Accelerating New Products Development
５．Primary Action Plans １ Business Expansion in Japan ３） Further Accelerating New Products Development ～ Reinforcing Research Functions with Academic-Industrial Collaboration ～ 【SEN with Anti-Clogging Property for Improving Steel Quality】 Test Product Development & Water Modeling by Fluid Calculation
Slide 22: Optimizing Production Processes
５．Primary Action Plans １ Business Expansion in Japan ４） Optimizing Production Processes ～ Enhancing Cost Competitiveness of Monolithic Refractories～ Consolidating Monolithic Refractories Production in West Japan 3 Locations (Ako, Hinase, Teikoku Yogyo) ➡ 1 Location (Ako) 【West Japan Area】 Ako #2 Pla
Slide 23: New Investments for Increasing Productivity
５．Primary Action Plans １ Business Expansion in Japan ４） Optimizing Production Processes ～ New Investments for Increasing Productivity ～ Major Projects Automated Stacker Crane ① High-Rised Warehouse ②Introducing High-Speed Weighing System ③Increasing Mixer Capacity Control Panel Construction Schedul
Slide 24: Overseas Business Expansion: Action Plans to Increase Global Presence ①
５．Primary Action Plans ２ Overseas Business Expansion １） Action Plans to Increase Global Presence ① 1. Local Sales Collaboration Fully Utilizing Global Sales/Services Networks ・Increasing Expats in Major Markets ・Further Promoting Sales Collaboration with Local Producers SHENYANG SAM HEFENG China, SE
Slide 25: Action Plans to Increase Global Presence ②
５．Primary Action Plans ２ Overseas Business Expansion １） Action Plans to Increase Global Presence ② Further Promotion of Group Collaboration: Marekting & Sales of Isolite Products by Shinagawa Globally ：Isolite Global Production Locations: Japan, China, Taiwan & Malaysia 【Indonesia】 SRI is acting as
Slide 26: Increasing Trend of Overseas Sales
５．Primary Action Plans ２ Overseas Business Expansion ２） Increasing Trend of Overseas Sales The 5th Mid-term Management Plan Overseas Sales 22.0 billion JPY Sales by Japan vs Overseas* (Consolidated) 20％ ＊Overseas Sales ＝ Export from Japan＋ Sales by Overseas Production Locations Overseas Sales 16.1 b
Slide 27: New Market Development: Expanding Business Portfolio for the Future
５．Primary Action Plans ３ New Market Development Expanding Business Portfolio for the Future Market Developments for New Innovative Non-Refractory Products Project ① 【Allophane】 Project ② 【Fine Ceramics】 Cleaning agent for dry cleaning, Various parts for Semiconductor / LCD Now Now manufacturing equi
Slide 28: Capital Investment of 14 billion JPY for 2021-2023
５．Primary Action Plans ４ Capital Investment Expanding Capital Investment for the Future Growth Capital Investment of 14 billion JPY for 2021-2023 Capital Investment 【Goals for the Investment】 By 3 Years Plan （Billion JPY） ●Optimizing Production Process 16.0 14.0 ・Consolidating Monolithic Refractorie
Slide 29: Policy for Profits Return to Shareholders
６．The 5th Mid-term Management Plan (FY 2021-2023) Policy for Profits Return to Shareholders Revision to the Dividend Policy（Dividend Payout Ratio) Dividend Policy Dividend per Share & Payout Ratio “Considering the important of enhancing (JPY) （円） Dividend per Share Payout Ratio (%) the return of pro
Slide 30: Shinagawa's Commitment to ESG Management
７．Shinagawa’s Commitment to ESG Management SDGs: Shinagawa’s Goals Contribution to society through customers by launching environment-friendly products ●Reducing the burden on the global environment by promoting the use of recycled materials ●Saving energy and reducing workload by promoting the use
Slide 31: III. Supplementary Notes
Ⅲ．Supplementary Notes Shinagawa Refractories: Results for Fiscal Year ended <March 2021 30
Slide 32: History
１．History [Established in 1875] [Established in 1938] Shinagawa Shirorenga Co., Ltd. JFE Refractories Corporation (First private company in Japan to (Operated as a subsidiary of the Kawasaki Steel manufacture fire bricks) Corporation Group since 1944) Increasing market presence and establishing reli
Slide 33: Consolidated Net Sales and Ordinary Income for Past 13 Years
２．Consolidated Net Sales and Ordinary Income for Past 13 Years （Million JPY） Net Sales Ordinary Income （Million JPY） 140,000 14,000 Merged on October 1, 2009 Consolidated financial results for the fiscal year ended March 119,067 118,973 120,000 2010 combine the consolidated financial results of Shin
Slide 34: Refractory Industry: Foundation of Society
３． Refractory Industry: Foundation of Society ● Many varieties of materials used in public infrastructure such as iron and steel, nonferrous metals, cement, glass are manufactured in furnaces at extremely high temperature with refractory lining. ● The refractory industry provides foundational suppor
Slide 35: Major Products 1/2
４．Major Products 1/2 Refractories are industrial materials that can resist ultra- high temperatures in excess of 1,500 degrees Celsius. Refractories Approximately 80% of refractory production is consumed NextClose-up 次頁で Page by the steel industry. Shaped Refractories Monolithic Refractories Mold Po
Slide 36: Close-up: Spray Dried Tower for Mold Powders
【Close-up】 Spray Dried Tower: Producing Mold Powders for Continuous Casting※1 High Quality Mold Powders for Continuous Casting is Essential for Producing High Quality Steel Products ※1：What is Continuous Casting? Ladle SEN Powder Layer Molten powder slag layer Tundish Molten powder Mold slag film la
Slide 37: Major Products 2/2
４．Major Products 2/2 Ceramic fiber Advanced ceramics Lightweight Ceramic material with a broad range of characteristics material featuring including excellent electrical insulation properties, abrasion low thermal resistance, corrosion resistance, chemical stability, conductivity and mechanical stre
Slide 38: Key Features and Strengths
５．Key Features and Strengths Leading Company of Ultra-High 1 Temperature Technologies Solid Customer Base with Highly-Advanced 2 Technological Capabilities 3 Global Business Expansion Shinagawa Refractories: Results for Fiscal Year ended March 2021 37
Slide 39: Ultra-High Temperature Technology: Key Two Technologies
６．Key Features and Strengths (1) Ultra-High Temperature Technology ① Key Two Technologies Leading Company of Ultra-High Temperature Technology Solid Technology Development and Commercialization Capabilities supported by Key Two Technologies ●Furnace Design ●Refractories ●Engineering Services Refract
Slide 40: Customer-Oriented Technological Support
６．Key Features and Strengths (1) Ultra-High Temperature Technology ② Customer-Oriented Technological Support Closely work with customers with Advanced Technologies and Proven Track Records in Four Divisions: Design, Manufacturing, Furnace Construction and Analysis & Development. Technical Research C
Slide 41: Development Capability to Meet Customer Needs
６．Key Features and Strengths (1) Ultra-High Temperature Technology ③ Development Capability to Meet Customer Needs World-Class Facilities and Resources allow our Research Center to Propose and Develop Optimal Products for Customers EDS Analysis Data (Color Map) Elements present in the area can be de
Slide 42: Solid Customer Base
７．Key Features and Strengths (2) Solid Customer Base Solid Customer Base with Highly-Advanced Technological Capabilities Supplying Optimal High Quality Products for Various Customers Industries Globally Ultra High Temperature Technologies are Iron & Steel industry is our main customer base, Essentia
Slide 43: Successful Business Expansion Globally
８．Key Features and Strengths (3) Global Business Expansion Successful Business Expansion Globally Since 1997 when we launched JV company in China, Shinagawa has been expanding our global presence by establishing production sites in Australia, New Zealand, the US, Indonesia and India. ■Overseas Net S
Slide 44: Overseas Business Locations
９．Overseas Business Locations Expanding Global Footprint by increasing Overseas Business Locations in China, Oceania, Asia and the Americas with our focus of Proximity to Customers Liaoning Shinagawa Hefeng Metallurgical Material Shenyang Shinagawa Metallurgy Materials Expat Engineers in China Shina
Slide 45: Japan and Overseas Refractory Supply Coverages
１０．Japan and Overseas Refractory Supply Coverages [Overseas] [Japan] Developing Stable Supply System Optimal Supply System with Enhanced by Establishing Overseas Efficiency and Effectiveness to support our Production Sites with a Focus of Domestic Customer Base Proximity to Customers Okayama ・Shaped
Slide 46: Disclaimer
Disclaimer This document is intended to provide information on the results for the fiscal year ended March 2021 (April 2020 – March 2021) and is not intended to solicit investment in securities issued by the Company. The document was prepared based on data available as of June 16, 2021. Opinions, fo
Slide 47: Shinagawa Refractories: Results for Fiscal Year ended March 2021
Shinagawa Refractories: Results for Fiscal Year ended March 2021
Shinagawa Refractories — FY2020 Earnings Presentation on 6ix