Kureha Corporation · TSE:4023
Kureha — FY2022 Earnings Presentation
35 slides from Kureha's earnings presentation, May 12, 2023
Slide 1: FY2022 Financial Report
FY2022 Financial Report May 12, 2023
Slide 2: Contents
1 Contents I. FY2022 Financial Results III. Progress in Priority Measures • Financial summary 3-6 • PVDF business 26 • Segment performance 7-11 • PGA business 27 • Financial position 12 • Returning to shareholders 28 • Cash flow 13 IV. Supplementary Materials II. FY2023 Financial Outlook • Consolida
Slide 3: I. FY2022 Financial Results
2 I. FY2022 Financial Results (April 1, 2022 – March 31, 2023)
Slide 4: FY2022 Financial Summary (1)
3 FY2022 Financial Summary (1) (¥ billion) Change Vs. FY2021 FY2021 FY2022 YOY • Revenue growth led by Advanced Materials, 22.9 Specialty Chemicals, Specialty Plastics and Revenue 168.3 191.3 (+13.6%) Other Operation, partially offset by weakness -1.0 in Construction Core operating profit 25.3 24.3
Slide 5: FY2021 Financial Summary (2)
4 FY2021 Financial Summary (2) Revenue & Core Operating Profit by Segment (¥ billion) FY2021 FY2022 1H 2H Full-year 1H 2H Full-year Revenue 79.1 89.3 168.3 101.8 89.5 191.3 Advanced materials 28.8 37.9 66.7 47.3 35.4 82.7 Specialty chemicals 12.8 13.4 26.2 17.5 14.3 31.8 Specialty plastics 22.9 21.8
Slide 6: FY2021 Financial Summary (3)
5 FY2021 Financial Summary (3) (¥ billion) Segment Revenue & Core Operating Profit (vs. FY2021) Revenue Core operating profit 82.7 FY2021 FY2021 FY2022 10.0 10.1 9.9 FY2022 66.7 8.6 44.8 46.8 31.8 26.2 18.5 18.7 3.1 2.8 12.2 11.3 1.4 1.8 1.0 0.9 Advanced 機能製品 Specialty 化学製品 樹脂製品 Specialty Constructi
Slide 7: FY2021 Financial Summary (4)
6 FY2021 Financial Summary (4) Other income & expenses / Financial income & expenses (¥ billion) FY2021 FY2022 Core operating profit 25.3 24.3 Adjustments 0.1 -0.2 Other income 1.2 1.2 Notes on ‘Other expenses’ Other expenses 6.5 3.0 FY2021: - ¥5.3bn impairment loss related to the PGA business Opera
Slide 8: Segment Performance: Advanced Materials
7 Segment Performance: Advanced Materials (¥ billion) Vs. FY2021 FY2021 FY2022 Change % Revenue ➚ Operating profit ➚ Advanced Materials Advanced plastics revenue up, profit down Advanced plastics 47.8 63.0 +32% + Sales expansion of PVDF (LiB binder), PPS and PGA (downhole tools for shale Carbon prod
Slide 9: Segment Performance: Specialty Chemicals
8 Segment Performance: Specialty Chemicals (¥ billion) Vs. FY2021 FY2021 FY2022 Change % Revenue ➚ Operating profit ➚ Specialty Chemicals Agrochemicals revenue up, profit down Agrochemicals 7.1 9.3 +32% + Higher fungicide volume - Higher raw material and energy costs Pharmaceuticals 4.2 3.8 -9% - In
Slide 10: Segment Performance: Specialty Plastics
9 Segment Performance: Specialty Plastics (¥ billion) Vs. FY2021 FY2021 FY2022 Change % Revenue ➚ Operating profit ➘ Specialty Plastics Home products/Fishing lines revenue down, profit down Home products 23.2 22.5 -3% - Lower household wrap sales volume - Higher raw material and energy costs Fishing
Slide 11: Segment Performance: Construction
10 Segment Performance: Construction (¥ billion) Vs. FY2021 FY2021 FY2022 Change % Revenue ➘ Operating profit ➘ Construction - Fewer construction projects in the private sector Construction 20.2 21.0 +4% Elimination -8.0 -9.7 -- (Intercompany sale) Revenue 12.2 11.3 -7% Operating profit 1.0 0.9 -11%
Slide 12: Segment Performance: Other Operations
11 Segment Performance: Other Operations (¥ billion) Change Vs. FY2021 FY2021 FY2022 % Revenue ➚ Operating profit ➘ Other Operations • Environmental engineering profit decreased on Environmental engineering 13.4 13.6 +1% flat revenue Logistics 8.2 8.0 -2% • Logistics revenue and profit down Hospital
Slide 13: Financial Position
12 Financial Position (¥ billion) Assets Liabilities and Equity Mar. 31 Mar. 31 Mar. 31 Mar. 31 Change Change 2022 2023 2022 2023 Cash and cash equivalents 30.6 32.2 1.6 Trade and other payables 29.5 27.7 -1.8 Trade and other receivables 35.8 31.9 -4.0 Interest-bearing debt 28.5 26.3 -2.2 Inventorie
Slide 14: Cash Flow
13 Cash Flow (¥ billion) FY2021 FY2022 Change Profit before income tax 20.4 23.0 2.6 Depreciation 11.6 11.6 0.1 Other -3.4 -11.9 -8.5 Cash flow from operating activities 28.6 22.7 -5.8 Cash flow from investing activities -11.0 -11.1 -0.1 Free cash flow 17.6 11.6 -5.9 Cash flow from financing activit
Slide 15: II. FY2023 Financial Outlook
14 II. FY2023 Financial Outlook (April 1, 2023 – March 31, 2024)
Slide 16: FY2023 Financial Forecast (1)
15 FY2023 Financial Forecast (1) (¥ billion) Vs. FY2022 FY2022 FY2023e Change • Revenue to remain on par with prior year 1H 2H FY YOY as growth in PGA, PPS, agrochemicals -1.3 and industrial chemicals offset lower PVDF Revenue 191.3 96.0 94.0 190.0 (-0.7%) prices (reflecting lower raw material price
Slide 17: FY2023 Financial Forecast (2)
16 FY2023 Financial Forecast (2) Revenue & Core Operating Profit by Segment (¥ billion) FY2022 FY2023e 1H 2H Full-year 1H 2H Full-year Revenue 101.8 89.5 191.3 96.0 94.0 190.0 Advanced materials 47.3 35.4 82.7 39.0 40.0 79.0 Specialty chemicals 17.5 14.3 31.8 19.0 15.6 34.6 Specialty plastics 23.8 2
Slide 18: FY2023 Financial Forecast (3)
17 FY2023 Financial Forecast (3) Segment Revenue & Core Operating Profit (vs. FY2022) (¥ billion) Revenue FY2022 Core operating profit FY2022 82.7 79.0 FY2023e 13.0 FY2023e 10.1 8.6 46.8 47.1 31.8 34.6 5.6 18.7 17.3 2.8 11.3 12.0 1.8 1.2 1.7 0.9 0.5 機能製品 化学製品 Advanced 樹脂製品 Construction Specialty Spe
Slide 19: FY2023 Financial Forecast (4)
18 FY2023 Financial Forecast (4) Reassessment of PGA-related inventory Valuation PGA resin inventory decreased as we executed inventory optimization measures during the past few years, including the suspension of resin production. As a result, the loss in the PGA resin inventory value recognized in
Slide 20: Segment Performance Forecast: Advanced Materials
19 Segment Performance Forecast: Advanced Materials (¥ billion) Vs. FY2022 FY2022 FY2023e Change % Revenue ➘ Operating profit ➚ Advanced Materials Advanced plastics revenue down, profit up Advanced plastics 63.0 57.5 -9% + Improved profit in PGA - Lower PVDF prices (reflecting lower raw material Car
Slide 21: Segment Performance Forecast: Specialty Chemicals
20 Segment Performance Forecast: Specialty Chemicals (¥ billion) Vs. FY2022 FY2022 FY2023e Change % Revenue ➚ Operating profit ➘ Specialty Chemicals Agrochemicals revenue up, profit down Agrochemicals 9.3 10.4 +12% + Higher fungicide sales volume - Higher R&D expenses Pharmaceuticals 3.8 4.1 +7% +14
Slide 22: Segment Performance Forecast: Specialty Plastics
21 Segment Performance Forecast: Specialty Plastics (¥ billion) Vs. FY2022 FY2022 FY2023e Change % Revenue ➚ Operating profit ➘ Specialty Plastics Home products revenue down, profit down Home products 22.5 21.7 -4% + High-level prices maintained through the year (after raised in 2H FY22) Fishing lin
Slide 23: Segment Performance Forecast: Construction
22 Segment Performance Forecast: Construction (¥ billion) Vs. FY2022 FY2022 FY2023e Change % Revenue ➚ Operating profit ➘ Construction + Steady growth in civil engineering and private Construction 21.0 20.5 -3% construction - Intensifying competition Elimination - Higher construction material costs
Slide 24: Segment Performance Forecast: Other Operations
23 Segment Performance Forecast: Other Operations (¥ billion) Vs. FY2022 FY2022 FY2023e Change % Revenue ➘ Operating profit ➘ Other Operations • Environment engineering revenue and profit down Environmental - The absence of large PCB waste treatment 13.6 12.9 -5% engineering projects (completed in p
Slide 25: Cash Flow Forecast
24 Cash Flow Forecast (¥ billion) FY2022 FY2023e Change Profit before income tax 23.0 22.0 -1.0 Depreciation 11.6 12.6 1.0 Other -11.9 -9.8 2.1 Cash flow from operating activities 22.7 24.8 2.0 Cash flow from investing activities -11.1 -21.4 -10.3 Free cash flow 11.6 3.3 -8.3 Cash flow from financin
Slide 26: III. Progress in Priority Measures
25 III. Progress in Priority Measures
Slide 27: Expanding Advanced Materials Businesses - PVDF
26 Expanding Advanced Materials Businesses - Polyvinylidene fluoride (PVDF) - PVDF Business Revenue 50050 (¥ billion) • Market: The lithium-ion battery (LiB) market continued to grow in FY2022 driven by the LiB application Other applications expansion of electric vehicles, most notably in China and
Slide 28: Expanding Advanced Materials Businesses - PGA
27 Expanding Advanced Materials businesses - Polyglycolic acid (PGA) - PGA Frac Plug Sales Trends Market: U.S. oil production rebounded to over 90% of (Number of frac plugs sold) pre-pandemic levels, while gas production exceeded pre-pandemic levels. Oil and gas production expected to increase gradu
Slide 29: Returning to Shareholders
28 Returning to Shareholders Kureha’s basic policy on the distribution of earnings is to maintain stable dividends with a target dividend payout ratio of 30% or more, while enhancing internal reserves to enable active investment in future business expansion. To meet shareholders’ expectations, Kureh
Slide 30: IV. Supplementary Materials
29 IV. Supplementary Materials
Slide 31: Consolidated Companies: Revenue & Assets
30 Consolidated Companies: Revenue & Assets (¥ billion) FY2021 FY2022 Change Revenue Total assets Revenue Total assets Revenue Total assets Kureha Corporation 89.6 211.1 108.2 223.9 18.6 12.8 Kureha Trading Group 26.3 14.7 27.6 15.1 1.3 0.4 Kureha Corporation 41.6 -- 55.2 -- 13.5 -- Kureha Trading G
Slide 32: Consolidated Companies: Revenue & Assets
31 Consolidated Companies: Revenue & Assets (¥ billion) FY2021 FY2022 Change Revenue Total assets Revenue Total assets Revenue Total assets Kurehanishiki Construction 16.2 11.8 17.3 12.9 1.1 1.2 Group Construc- Kureha Service Group 4.0 2.8 3.7 1.8 -0.3 -1.0 tion Consolidation adjustments -8.0 -- -9.
Slide 33: Key Performance Indicators (1)
32 Key Performance Indicators (1) (¥ billion) Capital investment Depreciation expenses 12.1 12.6 11.7 11.6 11.6 21.2 10.3 10.2 9.9 10.3 16.5 6.1 14.9 14.3 14.3 5.9 5.9 5.9 13.2 5.4 5.1 5.0 5.4 11.4 10.3 6.7 9.8 7.4 8.2 8.2 7.6 6.0 5.5 5.8 9.8 5.0 5.1 4.9 5.0 6.0 5.8 5.7 5.7 5.4 4.8 4.0 5.8 6.7 6.1 6
Slide 34: Key Performance Indicators (2)
33 Key Performance Indicators (2) ROE ROIC 10% 9.0% 8% 8.4% 8.1% 7.0% 7.7% 7.4% 6.3% 6.5% 6.1% 6.6% 6.3% 8% 7.1% 7.2% 6% 4.9% 5.8% 6% 4.1% 3.5% 4% 2.9% 4% 2% 2% 0% 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2015 2016 2017 2018 2019 2020 2021 2022 2023 estimate estimate ROA DE Ratio 10% 1 7.1% 7
Slide 35: Disclaimer
34 Disclaimer • This presentation material is provided for a deeper understanding of our company, and is not intended to be used as a solicitation for investment or other activities. • This material has been prepared by our company based on the information available at the time of the presentation.