Sekisui Chemical Co., Ltd. · TSE:4204
Sekisui Chemical — FY2021 Earnings Presentation
54 slides from Sekisui Chemical's earnings presentation, Apr 27, 2022
Slide 1: Presentation of Financial Results for FY2021 and the Management Plan
SEKISUI CHEMICAL CO., LTD. Presentation of Financial Results for FY2021 and the Management Plan Keita Kato President April 27, 2022
Slide 2: Results for FY2021 Forex Rate
Results for FY2021 FY2020 FY2021 Forex Rate 1H 2H 1H 2H Assumptions ¥112/US$ - - - ¥129/€ Results ¥107/US$ ¥105US$ ¥110/US$ ¥115/US$ (Avg. rate for each term) ¥121/€ ¥126/€ ¥131/€ ¥130/€ 1
Slide 3: Overview of FY2021 Results
Overview of FY2021 Results ∎Increases in net sales and operating profit essentially in line with forecasts (Jan.); record high ordinary profit ∎Despite a downturn in profit owing to impairment losses incurred by SEKISUI AEROSPACE CORPORATION, bottom line exceeded forecasts (Jan.) ∎Dividend in line w
Slide 4: FY2021 Results: Net Sales and Operating Profit by Divisional Company
FY2021 Results: Net Sales and Operating Profit by Divisional Company ∎Increases in net sales and profit in each segment; substantial profit growth in the HPP and Medical segments ∎Despite exceeding forecasts (Jan.) in the HPP, Medical, and Other segments, the Housing and UIEP segments fell slightly
Slide 5: 1H & 2H FY2021 Results by Divisional Company
1H & 2H FY2021 Results: Net Sales and Operating Profit by Divisional Company ∎Increases in profit in each segment in both the 1H and 2H; profit on a Group-wide basis and in each segment exceeded FY2019 levels in the 2H • HPP: Despite a delay in the recovery from the downturn in automobile production
Slide 6: FY2021 Results: Analysis
FY2021 Results: Analysis ∎Minimize the effect of soaring raw material prices and the impact of prolonged shortages in semiconductor supply through improvements in selling prices and cost reductions, etc.; substantial increase in profit with contributions also from the impact of foreign exchange; ess
Slide 7: FY2022 Plan Forex Rate
FY2022 Plan FY2021 FY2022 Forex Rate 1H 2H 1H 2H ¥115/US$ ¥115/US$ Assumptions - - ¥131/€ ¥131/€ Results ¥110/US$ ¥115/US$ (Avg. rate for - - each term) ¥131/€ ¥130/€ . 6
Slide 8: Overview of FY2022 Plan
Overview of FY2022 Plan ∎Target record-highs in net sales as well as each level of profit ∎Dividend per share of ¥53, up ¥4 (thirteenth consecutive FY of dividend increase) ∎Establish a limit for the acquisition of treasury shares (maximum: 8 million shares / ¥16 billion) FY2022 FY2021 Difference Pl
Slide 9: Market Assumptions
Market Assumptions ∎ Projecting a certain degree of recovery in automobile production; firm trends in smartphones; raw material prices forecast to rise further ∎ Negligible direct impact attributable to Russia incursion into Ukraine (FY2021: Sales to Russia less than 0.05% of Group-wide sales); howe
Slide 10: FY2022 Plan: Net Sales and Operating Profit by Divisional Company
FY2022 Plan: Net Sales and Operating Profit by Divisional Company ∎ Despite anticipating an uncertain and harsh business environment, including trends in raw materials, continued profit growth projected in all segments on the back of successful efforts to secure margins and high-performance product
Slide 11: 1H & 2H FY2022: Net Sales and Operating Profit by Divisional Company
1H & 2H FY2022: Net Sales and Operating Profit by Divisional Company ∎Projecting increases in sales and profit in both the 1H and 2H; forecasts of a certain degree of recovery in market conditions 1H FY2022 2H FY2022 1H FY2021 Difference 2H FY2021 Difference Plan Plan Net Operating Net Operating Net
Slide 12: FY2022 Plan: Analysis
FY2022 Plan: Analysis ∎While raw material prices are expected to remain high, secure margins by thoroughly implementing improvements in selling prices; in addition to projecting a certain degree of recovery in market conditions, sales and profit are expected to increase on the back of efforts to pro
Slide 13: Returns to Shareholders
Returns to Shareholders ∎Also continue to actively provide returns to shareholders in FY2022 Previous Medium- FY2020-2022 Returns to Shareholders Track Record (Billions of yen) term Plan Total dividend payment Payout ratio 30% target 35% or higher Acquisition of treasury shares 66.1 66.5 60.9 63.5 N
Slide 14: Progress under the Medium-term Management Plan Drive 2022
Progress under the Medium-term Management Plan Drive 2022 13
Slide 15: Drive 2022 Progress: Numerical Targets
Drive 2022 Progress: Numerical Targets Medium-term Plan FY2019 Results FY2022 Plan Difference (FY2022 Targets*) Net sales ¥1,129.3 bn. ¥1,241.6 bn. ¥1,220.0 bn. +¥21.6 bn. Operating profit (OPM) ¥88.0 bn. (7.8%） ¥100.0 bn. (8.1%) ¥110.0 bn. (9.0%) -¥10.0 bn. (-0.9%） Net profit ¥59.2 bn. ¥66.5 bn. ¥7
Slide 16: Drive 2022 Progress
Drive 2022 Progress ∎ Despite falling slightly short of the Medium-term Plan, shift steadily to a growth trajectory in FY2022 and target operating profit of ¥100 billion Operating Profit FY2009-2013 FY2014-2016 FY2017-2019 FY2020-2022 Performance GS21-SHINKA! SHINKA!-Advance 2016 SHIFT 2019 -Fusion-
Slide 17: Drive 2022 Progress: Difference from Market Assumptions
Drive 2022 Progress: Difference from Market Assumptions COVID-19 New Housing Starts (By Type) Prolonged impact of COVID-19 to linger through to FY2022; gradual recovery from the 2Q of FY2020 with the effects projected Houses for sale focusing mainly on first buyers expected to exceed to dissipate in
Slide 18: Drive 2022 Progress: Difference from the Medium-term Plan
Drive 2022 Progress: Difference from the Medium-term Plan ∎ The higher-than-expected surge in raw material prices offset by improvements in selling prices as well as cost reductions, etc.; despite efforts to control fixed costs, substantial impact from the drop in demand attributable to the prolonge
Slide 19: Preparations Toward Realizing the Long-term Vision: Strategic Areas MAP
Preparations Toward Realizing the Long-term Vision: Strategic Areas MAP ∎Formulate a strategic areas MAP as a compass for realizing the Long-term Vision, Vision 2030 ∎Expand enhancement areas based on the strategic areas MAP and work toward creating a composite strategy between each domain in innova
Slide 20: Financial Results FY2021
Tatsuya Nishida Financial Results Executive Officer FY2021 Head of Corporate Finance & Accounting Department 19
Slide 21: Consolidated Companies
Consolidated Companies Number of Consolidated Companies Mar. 31, 2021 Mar. 31, 2022 Difference Consolidated Increased: 0 Subsidiaries subsidiaries 161 155 Decreased: 6 Subsidiaries*1 Affiliates Increased: 0 Subsidiaries (Equity Method) 8 8 Decreased: 0 Subsidiaries *1 Muhan Co., Ltd., SEKISUI SYSTEM
Slide 22: Summary of Profit and Loss
Summary of Profit and Loss (Billions of yen) FY2020 FY2021 Difference Net sales 1,056.6 1,157.9 +101.4 Gross profit 330.4 356.0 +25.6 Gross profit margin 31.3% 30.7% -0.5% Selling, general and administrative expenses 263.1 267.1 +4.0 Operating profit 67.3 88.9 +21.6 Share of profit of entities accou
Slide 23: Balance Sheets (Assets)
Balance Sheets (Assets) Mar.31, Inventories (B/S item) 2022 Difference Ready-built housing (products) 25.8 -1.6 Prepared land for subdivision Mar. 31, 2021 Mar. 31, 2022 Difference housing 55.4 -3.4 (Billions of yen) Land under preparation (work in process) 10.5 -3.9 Cash and deposits 87.5 144.5 +57
Slide 24: Balance Sheets (Liabilities & Net Assets)
Balance Sheets (Liabilities & Net Assets) (Billions of yen) Mar. 31, 2021 Mar. 31, 2022 Difference Non-interest-bearing liabilities 317.6 373.6 +56.0 Net income +37.1 Interest-bearing liabilities 138.2 122.6 -15.6 Dividends paid (Net interest-bearing liabilities) (50.7) (-22.0) (-72.7) -21.5 Total l
Slide 25: Consolidated Cash Flows
Consolidated Cash Flows (Billions of yen) FY2020 FY2021 Cash flows from operating activities 75.3 105.0 Cash flows from investing activities -58.5 2.7 Cash flows from financing activities -19.2 -54.7 Net increase in cash and cash equivalents 1.8 57.1 Cash and cash equivalents at end of period 76.6 1
Slide 26: Depreciation, Amortization, Capital Expenditures and EBITDA
Depreciation, Amortization, Capital Expenditures and EBITDA Goodwill and other Depreciation*1 Capital expenditures EBITDA*3 amortization*2 Differ- Differ- Differ- Differ- FY2020 FY2021 FY2020 FY2021 FY2020 FY2021 FY2020 FY2021 ence ence ence ence (Billions of yen) Housing 9.7 9.9 +0.2 0 0 0 13.8 13.
Slide 27: Depreciation, Amortization, Capital Expenditures, Research and Development Expenditure
Depreciation, Amortization, Capital Expenditures, Research and Development Expenditure FY2021 FY2022 Plan Difference (Billions of yen) Depreciation 44.3 47.5 +3.2 Goodwill and other amortization 4.4 2.5 -1.9 Capital expenditures 52.5 65.0 +12.5 EBITDA 137.6 150.0 +12.4 Research and development expen
Slide 28: Overview of FY2022 Plan and Returns to Shareholders
Overview of FY2022 Plan and Returns to Shareholders FY2022 FY2021 Difference (Billions of yen) (Plan) Net sales 1,157.9 1,241.6 +83.7 Operating profit 88.9 100.0 +11.1 Ordinary profit 97.0 100.0 +3.0 Profit attributable to owners of the parent 37.1 66.5 +29.4 Dividend per share (Yen) 49 53 +4 Payout
Slide 29: High Performance Plastics Company
High Performance Plastics Ikusuke Shimizu Company Company President 28
Slide 30: HPP Company Performance Trends
HPP Performance Trends Company ∎ FY2021: Amid the prolonged harsh business environment owing to such factors as high raw material costs and the impact of the shortage in semiconductor supply, return to a growth trajectory owing to expansion in three strategic fields and ongoing efforts to strengthen
Slide 31: HPP FY2021 Results: Analysis
HPP FY2021 Results: Analysis Company ∎ Despite the negative impacts of high raw material costs, a decrease in automobile production owing to shortages in the supply of semiconductors, and shortages in containers, substantial increase in profit driven by the three strategic fields ∎ Impact of the fur
Slide 32: HPP FY2022 Plan: Analysis
HPP FY2022 Plan: Analysis Company ∎ Despite high raw material costs and ongoing uncertainty surrounding the business environment, projecting a certain degree of recovery in automobile market conditions owing to improvements in the supply of semiconductors ∎ Offset the impacts of soaring raw material
Slide 33: HPP Three Strategic Fields and Cost Innovation
HPP Three Strategic Fields and Cost Innovation Company ∎ FY2021: Increases in sales and profit in each of the three strategic fields ∎ FY2022: Increase in sales in each of the three strategic fields owing to a certain degree of recovery in automobile and smartphone market conditions, improvements in
Slide 34: HPP Growth Engines
HPP Growth Engines Company ∎ Strengthen measures aimed at securing continuous growth in each of the three fields; also focus on fostering next growth domains Progress of Growth Measures in the Three Fields Mobility ～ High-performance interlayer film sales growth Electronics ～ Focus on the Non-LCD fi
Slide 35: Housing Company
Toshiyuki Kamiyoshi Housing Company Company President 34
Slide 36: Housing Company Performance Trends
Housing Performance Trends Company ∎ FY2021: Despite the prolonged impact of COVID-19, set a record high in net sales; despite the growing impact of soaring component costs, upswing in profit owing to an increase in the number of houses sold and successful efforts to reduce costs; fell short of fore
Slide 37: Housing FY2021 Results: Analysis
Housing FY2021 Results: Analysis Company ∎Despite a substantial increase in net sales and higher profit, fell short of forecasts (Jan.) owing to the prolonged impact of COVID-19, delays in component delivery, and the impact of disasters • Housing: Increase in the number of houses sold on the back of
Slide 38: Housing FY2022 Plan: Analysis
Housing FY2022 Plan: Analysis Company ∎ Projecting an increase in profit on the back of increases in the number of new houses sold as well as unit prices and an increase in renovation sales; plans to offset the growing impact of soaring component costs through efforts to reduce costs and level out s
Slide 39: Housing New Housing Orders
Housing New Housing Orders Company ∎Expand the number of orders by further strengthening the three growth strategies; focus on increasing unit prices (strengthen smart houses, etc.) Customer and Order Trends Order Results and Plan Visitors Number of Orders by Type of Construction New Housing Orders
Slide 40: Stock Business (Renovation, Real Estate), Town and Community Development
Stock Business (Renovation, Real Estate), Housing Town and Community Development Company ∎ Strengthen the three renovation measures aimed at generating growth (structure, products, productivity); focus on expanding the real estate frontier domain (BeHeim, etc.) Stock Business (Renovation) * %: YoY S
Slide 41: Urban Infrastructure & Environmental Products Company
Urban Infrastructure & Yoshiyuki Hirai Environmental Products Company Company President 40
Slide 42: UIEP Company Performance Trends
UIEP Performance Trends Company ∎ FY2021: Offset the impact of soaring raw material prices through improvements in selling prices as well as the recovery in overseas sales; secured increases in sales and profit ∎ FY2022: Focus on securing margins through improvements in selling prices to offset the
Slide 43: UIEP FY2021 Results: Analysis
UIEP FY2021 Results: Analysis Company ∎Improvements in selling prices fail to match the pace of soaring raw material prices; secured increase in sales and profit by expanding sales of prioritized products and overseas sales growth ∎Results below forecasts (Jan.) owing to further spread of COVID-19 w
Slide 44: UIEP FY2022 Plan: Analysis
UIEP FY2022 Plan: Analysis Company ∎Address selling price improvement delays from the previous FY; target a substantial increase (record high) in profit by focusing on improving selling prices to offset the further surge in raw material prices as well as expanding prioritized product and overseas sa
Slide 45: UIEP Three Strategic Fields and Structural Reforms
UIEP Three Strategic Fields and Structural Reforms Company ∎ FY2022: Projecting an increase in sales on the back of contributions from the effects of improvements in selling prices in each of the three strategic fields Advanced Materials Net sales in the Three Strategic Fields • Sheets: Continued mo
Slide 46: UIEP Growth Strategy (Prioritized Products, Overseas)
UIEP Growth Strategy (Prioritized Products, Overseas) Company Product Examples Expansion of Prioritized Products Piping and Piping and Piping and Strengthen the appeal of SDG contribution products while Infrastructure Infrastructure Infrastructure Advanced Materials maximizing use of the Chiba Sol
Slide 47: Medical Business
Futoshi Kamiwaki Medical Business Director, Senior Managing Executive Officer Head of Business Strategy Department 46
Slide 48: Medical Business Performance Trends
Medical Performance Trends Business ∎ FY2021: Recovery in diagnostics demand both in Japan and overseas, contributions also from an increase in COVID-19 diagnostics demand; steady growth in the Pharmaceutical Sciences Business, secured record high profit ∎ FY2022: Despite expectations of a decrease
Slide 49: Medical FY2021 Results: Analysis
Medical FY2021 Results: Analysis Business ∎Growth in demand for COVID-19 diagnostic kits mainly in the U.S., steady trends in diagnostics market conditions in Japan and overseas, substantial increases in net sales and profit ∎Contributions from new pharmaceutical ingredients also in the Pharmaceutic
Slide 50: Medical FY2022 Plan: Analysis
Medical FY2022 Plan: Analysis Business ∎Despite expectations of a decrease in demand for COVID-19 diagnostic kits in the U.S., strengthen profitability in the Diagnostics Business by promoting the switch to new products; steadily expand orders also in the Pharmaceutical Sciences Business; target rec
Slide 51: Medical Overview by Business
Medical Overview by Business Business ∎ Firm trends in both the Diagnostics and Pharmaceutical Sciences businesses; operations to commence at a new Pharmaceutical and Fine Chemicals factory building (Iwate) in March 2023; accelerating genetic testing and other product development while shifting prio
Slide 52: Forward-looking statements
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 53: Housing Company Results and Plan
Housing Company Results and Plan 1. Main data in Housing5 business FY2021 FY2020 1H 2H Full Year 1H 2H Full Year Net sales (Billions of yen) 249.8 265.4 515.2 230.6 254.6 485.3 Housing 171.6 183.1 354.7 161.2 175.3 336.5 CONSOLIDATED Renovation 45.9 46.2 92.1 41.5 46.2 87.6 Other 32.4 36.1 68.4 28.0
Slide 54: Housing Company Results and Plan: Housing Orders
Housing Company Results and Plan 2. Housing orders FY2022 Plan FY2021 FY2020 (Millions of yen) 1H 2H Full Year 1H 2H Full Year 1H 2H Full Year Year-start Backlog 185,000 192,000 - 184,800 192,500 - 205,400 194,500 - New construction ・Renovation Growth Rate ±0% ±0% - -10% -1% - -6% -11% - New Orders