Toagosei Co., Ltd. · TSE:4045
Toagosei — FY2022 Earnings Presentation
42 slides from Toagosei's earnings presentation, Feb 17, 2023
Slide 1: Financial Results for FY2022
Financial Results for FY2022 February 17, 2023
Slide 2: Table of Contents
Table of Contents １． Results for FY2022 P.2 ２． Earnings Forecast for FY2023 P.11 ３． Medium-Term Management Plan P.24 ４． Reference Materials P.35 1
Slide 3: Results for FY2022
Results for FY2022 2
Slide 4: Overview of Results for FY2022
Overview of Results for FY2022 FY2021 FY2022 Change Rate of Change 160,825 4,511 2.9% Net sales (Millions of yen) 156,313 [168,765] [12,451] [8.0%] 14,382 (3,293) (18.6%) Operating income (Millions of yen) 17,676 [14,477] [(3,199)] [(18.1%)] 8.9% (2.4P) Operating income ratio 11.3% － [8.6%] [(2.7P)]
Slide 5: Analysis of Changes in Operating Income
Analysis of Changes in Operating Income (Billions of yen) Volume Unit price Fixed costs 4
Slide 6: Summary of Financial Results for FY2022
Summary of Financial Results for FY2022 Business Environment The supply chain was disrupted by the increase in the number of people infected with COVID-19 and by Russia’s invasion of Ukraine. The price of resources and food rose. That led to historical levels of inflation. The yen depreciated
Slide 7: Consolidated Results (by Segment)
Consolidated Results (by Segment) (Millions of yen) Before applying the Net sales FY2021 FY2022 revenue recognition standards Change Before applying the Volume Unit price revenue recognition A B C standards B－A C－A Commodity Chemicals 70,312 74,225 76,471 (4,687) 8,600 3,913 6,159 Polymer & Oligomer
Slide 8: Consolidated Statement of Income
Consolidated Statement of Income (Non operating Income/Expenses and Extraordinary Income/Losses) (Millions of yen) (Millions of yen) Non-operating FY2021 FY2022 Change Extraordinary FY2021 FY2022 Change income/expenses income/losses Interest and dividend Gain on sales of Income 995 1,088 93 investme
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet (Millions of yen) Dec. 31, 2021 Dec. 31, 2022 Change Dec. 31, 2021 Dec. 31, 2022 Change Current assets 145,168 138,985 (6,183) Total liabilities 52,343 54,328 1,985 Cash and deposits Notes and accounts (1) 52,457 40,366 (12,090) Payable 18,391 19,653 1,262 Notes and accoun
Slide 10: Consolidated Cash Flow Statements
Consolidated Cash Flow Statements (Millions of yen) FY2021 FY2022 Change Cash flows from operating activities A 21,219 10,988 (10,230) Cash flows from investment activities B (10,239) (3,579) 6,659 Free cash flow C=A+B 10,980 7,409 (3,571) Cash flows from financial activities D (8,644) (9,464) (819)
Slide 11: Overview of Consolidated Subsidiaries (Results for FY2022)
Overview of Consolidated Subsidiaries (Results for FY2022) (Millions of yen) Net income (loss) Ownership Net sales Operating income (loss) attributable to owners of Company name Segment parent (%) FY2021 FY2022 FY2021 FY2022 FY2021 FY2022 1 Toa Techno-Gas Commodity Chemicals 100 4,625 3,517 557 76 3
Slide 12: Earnings Forecast for FY2023
Earnings Forecast for FY2023 11
Slide 13: Challenges in FY2023
Challenges in FY2023 Business Environment We expect the global economic growth rate in 2023 to slow down. The situation in Ukraine and inflation and interest rate trends are uncertain. We think there will be changes in the supply chain structure due to antagonism between the U.S. and China. Ch
Slide 14: Consolidated Results Forecast for FY2023
Consolidated Results Forecast for FY2023 (Millions of yen) FY2022 results FY2023 1H FY2023 2H FY2023 forecast Change (A) (forecast) (forecast) (B) (B-A) Net sales 160,825 85,300 93,500 178,800 17,974 Operating income 14,382 6,300 7,700 14,000 (382) Operating income ratio 8.9% 7.4% 8.2% 7.8% (1.1P) N
Slide 15: Analysis of the Forecasted Changes in Operating Income
Analysis of the Forecasted Changes in Operating Income (Billions of yen) Volume Unit price Fixed costs Forecasted operating income for 2023 14
Slide 16: Consolidated Results Forecast for FY2023 (by Segment)
Consolidated Results Forecast for FY2023 (by Segment) (Millions of yen) Net sales FY2023 FY2022 results Change Factors for change forecast [Increase] Acrylic monomer, caustic soda Commodity Chemicals 73,929 84,800 10,871 and caustic potash Polymer & Oligomer 35,809 36,500 691 [Increase] Acrylic olig
Slide 17: Overview of Consolidated Subsidiaries (FY2023 Forecast)
Overview of Consolidated Subsidiaries (FY2023 Forecast) (Millions of yen) Net income (loss) Net sales Operating income (loss) attributable to owners of Ownership parent Company name Segment (%) FY2023 FY2023 FY2023 FY2022 FY2022 FY2022 forecast forecast forecast 1 Toa Techno-Gas Commodity Chemicals
Slide 18: Trends in Consolidated Results
Trends in Consolidated Results (Millions of yen) (Yen) 30,000 120.00 28,299 108.14 24,840 24,782 101.31 24,800 25,000 100.00 96.85 23,039 22,184 89.33 20,000 78.91 80.00 17,676 16,408 62.43 14,382 14,000 15,000 60.00 13,782 13,771 12,748 12,336 12,494 10,387 10,600 10,000 40.00 8,142 5,000 20.00 0 0
Slide 19: Reference for Consolidated Performance
Reference for Consolidated Performance (Billions of yen) FY2023 FY2018 FY2019 FY2020 FY2021 FY2022 (forecast) Capital investment (Acceptance basis) 12.5 15.8 13.6 11.9 22.8 15.6 Capital investment (Approval basis) 17.0 16.9 11.8 24.9 26.0 37.5 Depreciation and amortization 8.3 9.2 9.8 10.6 10.4 10.8
Slide 20: Consolidated Performance Reference Figure Trends
Consolidated Performance Reference Figure Trends (Millions of yen) (Millions of yen) 210,000 50,000 205,969 206,425 201,764 40,000 200,000 193,764 192,885 30,000 79.8% 190,000 186,419 78.4% 20,000 77.9% 77.7% 77.7% 77.3% 180,000 11,692 11,534 11,376 11,208 11,065 10,925 10,000 170,000 0 FY2018 FY201
Slide 21: EBITDA/PP&E Ratio Trends
EBITDA/PP&E Ratio Trends (Millions of yen) (Millions of yen) 100,000 50,000 95,574 90,774 78,301 78,193 40,000 74,376 67,083 28,299 30,000 24,782 24,840 24,800 50,000 23,039 22,184 36.9% 35.3% 20,000 31.0% 28.3% 27.4% 26.6% 10,000 0 0 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 (forecast) PP&E (left s
Slide 22: Shareholder Return Trends
Shareholder Return Trends Total return ratio 200.0% 95.3% 96.4% 100.0% 69.7% 62.1% 26.5% 28.9% 38.0% 0.0% (Millions of yen) (Yen) 12,000 38 36 36 36 36 10,000 34 8,000 30 32 30 6,000 4,000 4,299 30 6,000 28 3,882 28 26 4,000 26 24 2,000 3,948 3,881 4,554 4,408 4,216 3,422 3,685 22 0 20 2017年 FY2017
Slide 23: ESG Initiatives
ESG Initiatives Jun. 2019 Endorsed the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) Aug. 2021 Held an event for the Riko Challenge (science and technology challenge) organized by the Cabinet Office, Ministry of Education, Culture, Sports, Science and Technology (
Slide 24: ESG Initiatives
ESG Initiatives Mar. 2019 Abolished anti-takeover measures Mar. 2019 Elected a female director for the first time Mar. 2020 Introduced a restricted share remuneration system for directors Oct. 2021 Revised the Toagosei Group Basic Policy on Corporate Governance • Aim for improved shareholder returns
Slide 25: Medium-Term Management Plan
Medium-Term Management Plan • Review of the Medium-Term Management Plan (2020 to 2022) • About the Medium-Term Management Plan (2023 to 2025) 24
Slide 26: Summary of the Previous Medium-Term Management Plan (2020 to 2022)
Summary of the Previous Medium-Term Management Plan (2020 to 2022) Basic Policies (1) Expand high-value-added products business (2) Creation of new business units, including the “fourth core” business that will underpin the future of Toagosei Group (3) Strengthen core businesses and execute business
Slide 27: Review of the Quantitative Targets in the Previous Medium-Term Plan
Review of the Quantitative Targets in the Previous Medium-Term Management Plan (2020 to 2022) FY2022 target FY2022 results Net sales * 163.0 billion yen 168.7 billion yen Operating income (Operating income ratio) * 17.0 billion yen [10.4%] 14.4 billion yen [8.6%] EBITDA * (Earnings before interest,
Slide 28: Review of Actions in the Previous Medium-Term Management Plan
Review of Actions in the Previous Medium-Term Management Plan (2020 to 2022) • Reinforced high-purity liquid hydrogen chloride Expansion of • Reinforced polymers for LIB high-value-added • Reinforced functional adhesives products • Took over flocculants sales business • Opened Takaoka Creation Labor
Slide 29: Overview of the 2025 Medium-Term Management Plan
Overview of the 2025 Medium-Term Management Plan Leap Forward to the Next 2025 We will accelerate the pace of growth of our group by enhancing our R&D capabilities and expanding our high-added-value products for which we achieved a certain level of results in the previous Medium-Term Management Plan
Slide 30: Basic Policies and Key Initiatives in the 2025 Medium-Term Plan
Basic Policies and Key Initiatives in the 2025 Medium-Term Management Plan Basic Policies (1) Strengthen development capabilities for new products and novel technologies (R&D costs in 2025: +20% (compared to 2022) / Ratio of high-value-added products in net sales in 2025: 48%) (2) Increase overseas
Slide 31: Materiality – Operations
Materiality – Operations Materiality - Operations 2022 2025 Evaluation Indicator (Target) Net sales 160.8 billion yen 183.0 billion yen Operating income 14.3 billion yen 20.0 billion yen [Operating income margin] [8.9%] [11.0%] Establish a stronger presence EBITDA* 24.8 billion yen 32.0 billion yen
Slide 32: Materiality – Business Foundation
Materiality – Business Foundation Materiality – Business Foundation 2022 2025 Evaluation Indicator (Target) Contribution to a Reduction in GHG sustainable society emissions (24%) (35%) (Compared to 2013) Develop and utilize Ratio of women in diverse talent pool managerial positions 3.4% 5.0% EPS 101
Slide 33: Net Sales and Operating Income in 2025
Net Sales and Operating Income in 2025 Net Sales Operating Income (Unit: Billions of yen) 2022* 2025 2022* 2025 Commodity Chemicals 73.9 77.0 6.8 7.5 Polymer & Oligomer 35.8 43.0 4.2 6.5 Adhesive Material 11.1 15.0 (0.2) 1.0 Performance Chemicals 10.4 15.0 2.3 3.0 Plastics 27.7 31.0 1.7 3.0 Other 1.
Slide 34: Medium-Term Management Plan (2023 to 2025): Action Plan
Medium-Term Management Plan (2023 to 2025): Action Plan Action Plan Target • Reinforce manufacturing equipment for high- value-added products • Expand R&D equipment Amount of cumulative Investment investment from 2023 to • Develop infrastructure such as logistics facilities 2025: 68 billion yen • In
Slide 35: Medium-Term Management Plan (2023 to 2025): Balance of Funds
Medium-Term Management Plan (2023 to 2025): Balance of Funds ● Changes in our net cash balance (Billions of yen) * Net cash balance = Cash and equivalents – Interest-bearing debt Income Expenditure Payout ratio: 30% or more Treasury stock buyback: 20.0 70.0 or more 68.0 47.3 25.0 Balance at Balance
Slide 36: Reference Materials
Reference Materials 35
Slide 37: Sub-segment Year-on-Year Comparison of Net Sales (Commodity Chemicals)
Sub-segment Year-on-Year Comparison of Net Sales (Commodity Chemicals Business) Year-on-year Comparison Commodity Chemicals FY2022 4Q FY2022 1Q to 4Q Reason for the Change Business (Accounting (Cumulative Period) Period) • Sales volume decreased Inorganic chemicals 119% 113% • There were sales price
Slide 38: Sub-segment Year-on-Year Comparison of Net Sales (Polymer and Oligomer)
Sub-segment Year-on-Year Comparison of Net Sales (Polymer and Oligomer) Year-on-year Comparison Polymer and Oligomer FY2022 4Q FY2022 1Q to 4Q Reason for the Change Business (Accounting (Cumulative Period) Period) • Sales volume of products for automobile- Polymers 85% 93% related applications decre
Slide 39: Sub-segment Year-on-Year Comparison of Net Sales (Adhesive Materials)
Sub-segment Year-on-Year Comparison of Net Sales (Adhesive Materials) Year-on-year Comparison Adhesive Materials FY2022 4Q FY2022 1Q to 4Q Reason for the Change Business (Accounting (Cumulative Period) Period) • Sales volume decreased Instant glue 101% 104% • Net sales increased partly due to the de
Slide 40: Sub-segment Year-on-Year Comparison of Net Sales (Performance Chemicals)
Sub-segment Year-on-Year Comparison of Net Sales (Performance Chemicals Business) Year-on-year Comparison Performance Chemicals FY2022 4Q FY2022 1Q to 4Q Reason for the Change Business (Accounting (Cumulative Period) Period) • Sales volume of ion-trapping agents for electronic parts decreased Inorga
Slide 41: Sub-segment Year-on-Year Comparison of Net Sales (Plastics)
Sub-segment Year-on-Year Comparison of Net Sales (Plastics Business) Year-on-year Comparison Plastics Business FY2022 4Q FY2022 1Q to 4Q Reason for the Change (Accounting (Cumulative Period) Period) • There were sales price revisions due to an Piping equipment 99% 105% increase in raw material and f
Slide 42: Cautionary note on earnings forecasts
The earnings forecasts include forecasts based on information available as of the date of the publication of this document. Actual results may differ to the figures contained herein due to various factors which may change in the future. This document is not intended to solicit investment. Please