Nippon Sheet Glass Company, Limited · TSE:5202
Nippon Sheet Glass — Q3 FY2023/3 Earnings Presentation
36 slides from Nippon Sheet Glass's earnings presentation, Feb 9, 2023
Slide 1: NSG Group 2023/3 Quarter 3 Results
NSG Group 2023/3 Quarter 3 Results (from 1 April 2022 to 31 December 2022) Nippon Sheet Glass Company, Limited Reiko Kusunose Senior Executive Officer & CFO 9th February 2023 9 February 2023 2023/3 Q3 Results Presentation 1
Slide 2: Agenda
Agenda 1. Financial Year ending 31 March 2023 Quarter 3 Results 2. Forecast for Financial Year ending 31 March 2023 3. Update of Transformation Initiatives under Revival Plan 24 (RP24) 4. Summary 9 February 2023 2023/3 Q3 Results Presentation 2 2
Slide 3: Financial Year ending 31 March 2023 Quarter 3 Results
1．Financial Year ending 31 March 2023 Quarter 3 Results 9 February 2023 2023/3 Q3 Results Presentation 3 3
Slide 4: Consolidated Income Statement
Consolidated Income Statement Continued revenue and operating profit increase with price and volume increase, partly helped by weaker JPY. Sales price improvements absorbed continued impact of input costs rise Q3 (3 months) Cumulative (9 months) Sales and OP increased in all businesses. (JPY bn) 202
Slide 5: Change Analysis – Operating profit (9 months cumulative)
Change Analysis – Operating profit (9 months cumulative) Sales vol/mix and price increases absorbed the impact of input and other costs 100 2022/3 Price improvement in all businesses 2023/3 Apr-Dec Apr-Dec including Architectural and Automotive 80 60 40 Sales volume recovery in Automotive 20 Mainly
Slide 6: Change Analysis – Operating profit (Quarter 3 only)
Change Analysis – Operating profit (Quarter 3 only) OP improved significantly due to sales price increases while impacted by energy, material and other cost rises 30 2022/3 Price improvement in 2023/3 Q3 Q3 Architectural and Automotive 20 10 Sales volume recovery in Automotive Mainly significant nat
Slide 7: Others posted an increase of 1.0 billion yen
‘Others’ posted an increase of 1.0 billion yen. Transportation and other costs continued to rise, but were offset by the cost structure reforms implemented in Revival Plan 24 (RP24) and other efforts. 6
Slide 8: Energy Price Movement
Energy Price Movement German natural gas price: still remained high level though declined during Q3 Japanese heavy fuel oil price: moved in high prices above JPY80,000/Kl during Q3 9 February 2023 2023/3 Q3 Results Presentation 7 Next slide 7 shows the movements of energy prices. The left chart show
Slide 9: Glass Market Price Movement
Glass Market Price Movement Dec. 2022 German glass price increased 1.4x from Dec. 2021. Offsetting impact of higher input costs especially natural gas 9 February 2023 2023/3 Q3 Results Presentation 8 Slide 8 shows the glass market price movement in Germany. As explained in change analysis of operati
Slide 10: Consolidated Balance Sheet
Consolidated Balance Sheet Maintained shareholders’ equity ratio above 10% of RP24 target despite goodwill impairment in Q2 (JPY bn) 31 March 31 December Change Decrease of goodwill and 2022 2022 intangible assets due to impairment in Q2 Total Assets 939.3 945.6 6.4 Non-current assets 637.0 621.9 (1
Slide 11: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows Free cash outflow due to working capital movement. Aiming to achieve free cash inflow and RP24 target above JPY 10 billion for the full-year by working capital improvement, consistent with the previous year Q3 (3 months) Cumulative (9 months) Increase in inventor
Slide 12: Segmental Information
Segmental Information 2021/3 Q3 Cum. 2022/3 Q3 Cum. 2023/3 Q3 Cum. Change (JPY bn) Operating Operating Operating Operating Operating Revenue ％ profit after Revenue ％ Revenue ％ Revenue profit profit profit Profit COVID* Architectural 156.1 44% 11.5 5.8 206.9 47% 20.4 275.7 49% 26.2 68.8 5.8 Europe 60
Slide 13: Architectural
Architectural (Cum. Rev▲, Profit▲: Q3 Rev▲, Profit ▲) Remarkable revenue increase due to price increases and favourable demand in all regions, partly helped by weaker JPY. OP improved with price increase mitigating input cost rises, particularly energy JPY bn 2022/3 2023/3 Europe (Cum. Rev▲, Profit▲
Slide 14: Second float furnace in Argentina started production
The second float furnace in Argentina started production in the third quarter. 12
Slide 15: Automotive
Automotive (Cum. Rev▲, Profit ▲: Q3 Rev▲, Profit▲) Progress in price improvement resulted in Q3 operating profit for the first time since Q1 of the previous year. Constrained vehicle build due to parts shortage remains but being resolved gradually JPY bn 2022/3 2023/3 Europe (Cum. Rev▲, Profit▲: Q3
Slide 16: Technical Glass
Technical Glass (Cum. Rev▲, Profit▲: Q3 Rev▲, Profit▼) Sales volume decline due to lockdown in China and costs rise leading to worse profitability in Q3. Continued cumulative revenue and OP increase (like-for-like basis without battery separator business disposed in September 2021) JPY bn 2022/3 202
Slide 17: Forecast for Financial Year ending 31 March 2023
2．Forecast for Financial Year ending 31 March 2023 9 February 2023 2023/3 Q3 Results Presentation 15 15
Slide 18: Assumptions for 2023/3 Full-year Forecast
Assumptions for 2023/3 Full-year Forecast Group Full-year revenue, OP, loss before taxation, loss for the period, and net loss forecast revised upward reflecting Q3 cumulative actuals • Depreciation of JPY continuing • Assume continuous input cost increases, with higher energy costs and worldwide in
Slide 19: Automotive and Technical Glass outlook
In Automotive business; Strong market demand expected to continue and car production constraints due to component shortage is assumed to be resolved gradually. Sales price improvements from vehicle manufacturers will be realized as the negotiations progress further. In Japan, Maizuru float which com
Slide 20: Forecast for Financial Year ending 31 March 2023
Forecast for Financial Year ending 31 March 2023 Full-year forecast revised upward based on relatively strong cumulative performance. Loss before taxation, loss for the period and net loss also improved 2023/3 2023/3 2023/3 2022/3 Full-year fcst Full-year fcst Change Q3 Cum. Act Full-year Act (Previ
Slide 21: Update of Transformation Initiatives under Revival Plan 24 (RP24)
3．Update of Transformation Initiatives under Revival Plan 24 (RP24) 9 February 2023 2023/3 Q3 Results Presentation 18 18
Slide 22: Transformation Initiatives under Revival Plan 24
Transformation Initiatives under Revival Plan 24 Continued RP24 initiatives underway for business to grow sustainably. Maintaining shareholder’s equity ratio above target even after large amount of impairment loss Three Reforms Business structure reform • Construction started to install online coa
Slide 23: Restoration of financial stability
despite of decrease in derivative assets reflecting energy price decline, with the promotion of ‘Cost structure reform’ and ‘Business structure reform’, and support from change of the business environments. The Group aims to promote the restoration of a strong financial base with taking advantage of
Slide 24: Summary
4．Summary 9 February 2023 2023/3 Q3 Results Presentation 20 20
Slide 25: Summary
Summary 1. Quarter 3 results of Financial Year ending March 2023 • Continued revenue and operating profit increase with price and volume increase, partly helped by weaker JPY • Higher energy, materials and other costs offset by sales price and volume improvements • Strong performance in Architectura
Slide 26: Notice
Notice The projections contained in this document are based on information currently available to us and certain assumptions that we consider to be reasonable. Hence the actual results may differ. The major factors that may affect the results are the economic and competitive environment in major mar
Slide 27: Appendices
Appendices Financial Year ending 31 March 2023 Quarter 3 Results • Consolidated Income Statement – Quarterly Trend • Revenue & Operating Profit – Quarterly Trend • Segmental Information by Quarter • Revenue & Operating Profit – by Region • Exceptional Items • Foreign Currency Exchange Rates and Sens
Slide 28: Consolidated Income Statement – Quarterly Trend
Consolidated Income Statement – Quarterly Trend 2021/3 2022/3 2023/3 （JPY bn） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Revenue 91.9 129.7 135.8 141.9 147.7 143.0 152.3 157.6 177.9 197.7 190.6 Operating profit/(loss) (0.6) 3.8 4.8 5.0 7.2 5.5 1.8 5.5 8.3 6.2 9.7 Operating profit margin － 2.9% 3.5% 3.6% 4.8%
Slide 29: Revenue & Operating Profit – Quarterly Trend
Revenue & Operating Profit – Quarterly Trend Architectural (JPY bn) 96.5 93.6 85.6 10.7 74.8 75.0 8.9 Americas 64.5 67.5 29.8 28.7 59.4 7.5 24.5 54.2 57.0 6.6 Asia 21.0 6.8 21.6 7.7 44.9 17.4 6.1 19.5 26.1 2.7 13.4 14.1 15.9 22.9 25.8 Europe 9.7 4.6 4.1 24.5 21.5 18.6 20.5 4.2 18.9 19.3 21.0 Operati
Slide 30: Segmental Information by Quarter
Segmental Information by Quarter 2021/3 2022/3 2023/3 (JPY bn) Q1 Q2 Q3 Q4 Cum. Q1 Q2 Q3 Q4 Cum. Q1 Q2 Q3 Cum. Revenue: Architectural 44.9 54.2 57.0 59.4 215.5 64.5 67.5 74.8 75.0 281.8 85.6 96.5 93.6 275.7 Europe 16.0 22.2 22.4 24.5 85.2 27.8 27.1 29.3 31.8 116.0 38.2 40.6 39.1 118.0 Asia 19.2 18.6
Slide 31: Revenue & Operating Profit – by Region
Revenue & Operating Profit – by Region 2022/3 Q3 Cum. 2023/3 Q3 Cum. Change (JPY bn) Operating Operating Operating Revenue ％ Revenue ％ Revenue profit/(loss) profit profit/(loss) Europe 176.5 40% (1.5) 232.4 41% 6.2 55.9 7.7 Asia 133.1 30% 15.7 145.9 26% 16.1 12.8 0.4 Americas 131.4 30% 8.0 185.6 33%
Slide 32: Exceptional Items
Exceptional Items 2022/3 2023/3 (JPY bn) Q3 Cum. Q3 Cum. Restructuring costs (0.1) (0.2) Impairment of goodwill & intangible assets - (48.8) Settlement of litigation matters - net (0.3) 2.7 Gain on disposal of subsidiaries and businesses 4.4 1.5 Gain on disposal of non-current assets - 0.6 Others 0.
Slide 33: Foreign Currency Exchange Rates and Sensitivity
Foreign Currency Exchange Rates and Sensitivity Average rates used 2021/3 2022/3 2023/3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 GBP 133 135 136 139 153 152 153 153 163 163 164 EUR 118 121 123 124 132 131 131 130 138 139 140 USD 107 106 106 106 109 109 112 112 129 134 137 BRR 19.9 19.8 19.7 19.7 20.6 20.8 2
Slide 34: Depreciation & Amortization, Capital Expenditures, R&D Expenditures
Depreciation & Amortization, Capital Expenditures, R&D Expenditures 2022/3 2023/3 2023/3 (JPY bn) Q3 Cum Q3 Cum Full-year Forecast Depreciation & 27.7 30.2 39.0 Amortization Capital expenditures 15.3 26.3 40.0 Ordinary 13.4 22.6 Strategic projects and other 1.9 3.7 R&D expenditures 6.1 6.8 9.5 Archi
Slide 35: Energy Cost Breakdown (2022/3→2023/3)
Energy Cost Breakdown (2022/3→2023/3) Energy costs +78%＊ YoY for the Group, +104% for natural gas. Natural gas prices still in high levels, although declined during Q3. Huge cost pressures in Europe and Americas by region, and in Architectural by business 2022/3 (Q3 Cumulative) Group Group natural g
Slide 36: Energy Cost Breakdown (by region)
Energy Cost Breakdown (by region) Significant impact to worldwide energy costs by natural gas price hike, especially in Europe and Americas Europe +108% Americas +60％ Natural gas Electricity +25％ Heavy fuel oil Asia Left:2022/3 (Q3 Cumulative) Others Right:2023/3 (Q3 Cumulative) 9 February 2023 2023
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