Resonac Holdings Corporation · TSE:4004
Resonac — Showa Denko K.K. — Q2 2017 Earnings Presentation
34 slides from Resonac's earnings presentation, Aug 8, 2017
Slide 1: Second Quarter 2017 Financial Results - Consolidated
Evolving unique chemical company Second Quarter, 2017 Financial Results - Consolidated - SHOWA DENKO K.K. August 8, 2017 Toshiharu Kato, CFO Director & Corporate Officer Performance forecast and other statements pertaining to the future as contained in this presentation are based on the information
Slide 2: Consolidated Companies and Selected Data
Consolidated Companies Consolidated subsidiaries: 50 2 companies newly consolidated Showa Denko New Material (Zhuhai) Co., Ltd. Shanghai Showa Highpolymer Trading Co., Ltd. Equity method applied: 12 Newly applied or excluded: none Selected Data (Average figure) Jan.- Jun. Jan.- Jun. Increase/ 20
Slide 3: Summary
Summary 2016 (Jan.1 – Jun.30) vs. 2017 (Jan.1 – Jun.30) (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2016 2017 decrease Net Sales 318.7 372.2 53.5 Operating Income 11.6 35.0 23.5 Non-operating income and expenses, net -3.8 -12.8 -9.0 Interest/Dividends income and expenses -0.9 -0.6 0.3 Equi
Slide 4: Extraordinary Profit/Loss
Extraordinary Profit/Loss (Unit: Billions of Yen) Jan.-Jun., 2016 Jan.-Jun., 2017 Increase/decrease Extraordinary Profit 0.5 0.2 -0.2 Gain on sales of fixed assets 0.3 0.1 -0.3 Gain on sales of investment securities 0.1 0.2 0.1 Other 0.1 0.0 -0.1 Extraordinary Loss -6.1 -9.6 -3.6 Loss on sales
Slide 5: Consolidated Sales by Segment
Consolidated Sales by Segment (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2016 2017 Decrease 【Olefins】 sales increased (naphtha price up, shipment volumes slightly up) 86.0 123.9 37.9 【Organic chemicals】 sales increased (vinyl acetate, ethyl acetate: Petrochemicals shipment volumes up, mar
Slide 6: Consolidated Operating Income by Segment
Consolidated Operating Income by Segment (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2016 2017 Decrease 【Olefins】 profit significantly increased (continuation of high operation, market price up) Petrochemicals 7.4 16.2 8.8 【Organic chemicals】 profit increased (vinyl acetate, ethyl acetate:
Slide 7: Operating Income Breakdown by Factor
Operating Income Breakdown by Factor (Unit: Billions of Yen) 40.0 6.4 35.0 35.0 30.0 7.5 25.0 11.3 20.0 -1.7 15.0 11.6 10.0 5.0 0.0 Jan.-Jun.'16 Volumes Price changes, net Cost reductions Others Jan.-Jun.'17 Showa Denko 2nd Quarter, 2017 Consolidated Financial Results 7
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet (Unit: Billions of Yen) Assets Dec. 31, Jun.30, Increase/ Liabilities and Net Assets Dec. 31, Jun.30, Increase/ 2016 2017 decrease 2016 2017 decrease Cash and deposits 69.9 76.5 6.6 Notes and accounts payable 104.0 102.5 -1.5 Notes and accounts receivable 143.8 139.2 -4.6
Slide 9: Total Assets, Interest-bearing Debt and D/E Ratio
Total Assets Interest-bearing Debt and D/E ratio (Unit: Billions of Yen) Dec. 31, Jun.30, Increase/ 2016 2017 decrease Total assets 932.7 929.1 -3.6 Interest-bearing debt 359.9 348.5 -11.4 Debt/Equity ratio 1.16 times 1.10 times -0.06p Stockholders’ Equity ratio 31.8% 32.6% 0.8p Showa Denko
Slide 10: Interest-bearing Debt
Interest-bearing Debt 500.0 D/E Ratio （Unit: Billions of Yen) 1.20 1.20 1.16 1.10 1.09 400.0 1.02 383.1 368.8 359.9 353.7 348.5 342.3 300.0 200.0 2012 2013 2014 2015 2016 2017 Jun.30 Equity ratio 29.2% 30.6% 29.7% 31.5% 31.8% 32.6% Showa Denko 2nd Quarter, 2017 Consolidated Financial Results 10
Slide 11: Consolidated Cash Flows
Consolidated Cash Flows (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2016 2017 decrease CF from Operating Activities 21.0 43.0 22.0 CF from Investing Activities -33.6 -11.3 22.3 Free CF -12.6 31.7 44.3 CF from Financing Activities 0.1 -16.2 -16.3 Others -3.8 -0.2 3.7 Increase/decrease
Slide 12: Selected Data (Consolidated)
Selected Data (Consolidated) (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2016 2017 decrease Interest/dividend income less interest expenses -0.9 -0.6 0.3 Capital expenditures 16.9 17.4 0.5 Depreciation and amortization 19.6 18.7 -0.9 R&D expenditures 8.7 9.0 0.3 Number of employees: p
Slide 13: Capital expenditures/Depreciation by Segment
Capital expenditures/ Depreciation by Segment (Unit: Billions of Yen) Jan.-Jun., 2016 Jan.-Jun., 2017 Increase/decrease Capital Capital Capital Depreciation Depreciation Depreciation expenditures expenditures expenditures Petrochemicals 1.5 2.7 1.1 3.4 -0.4 0.7 Chemicals 3.8 3.7 5.2 4.1 1.4 0.3 Elec
Slide 14: Total number of employees and breakdown by location
Total number of employees and breakdown by location 12,000 10,234 10, 577 10,561 9,890 10,146 10,097 10,000 8,000 5,932 5,802 5,905 5,873 6,075 6,069 6,000 4,000 4,329 4,645 4,688 2,000 4,088 4,071 4,028 Japan Overseas 0 2012 2013 2014 2015 2016 June, 2017 Japan 58.7% 57.7% 56.1% 55.6% 59.9% 60.1% O
Slide 15: Selected Data, Forecast
Selected Data, Forecast (Unit: Billions of Yen) 2016 2017 Increase/ Actual Revised Forecast* decrease Exchange rate: ¥/US$ 2017 earlier forecast** 108.4 1H 111.8 1H actual 112.4 1H 0.6 2H 105.9 2H revised 105.0 2H -0.9 Domestic naphtha price: ¥/KL 2017 earlier forecast** 38,600 1H 33,000 1H actual
Slide 16: 2017 Forecast
2017 Forecast (Unit: Billions of Yen except Cash dividends per Share and Net income per Share) 2017 2017 Increase/ 2016 Increase/ Earlier decrease Actual Revised decrease Forecast* Forecast** (against earlier) Net Sales 671.2 762.0 90.8 745.0 17.0 Operating Income 42.1 60.0 17.9 54.5 5.5 Non-operati
Slide 17: Consolidated Net Sales by Segment, 2017 Forecast
Consolidated Net Sales by Segment, 2017 Forecast (Unit: Billions of Yen) 2017 2016 Increase/ 2016 Increase/ Earlier decrease Actual Revised decrease Forecast** (against earlier) Forecast* Petrochemicals 185.8 240.0 54.2 235.0 5.0 Chemicals 134.5 148.0 13.5 145.0 3.0 Electronics 120.5 130.0 9.5 123.0
Slide 18: Consolidated Operating Income by Segment, 2017 Forecast
Consolidated Operating Income by Segment, 2017 Forecast (Unit: Billions of Yen) 2017 2017 Increase/ 2016 Increase/ Earlier decrease Actual Revised decrease Forecast** (against earlier) Forecast* Petrochemicals 20.7 25.0 4.3 23.5 1.5 Chemicals 13.8 15.0 1.2 15.0 0.0 Electronics 15.0 22.0 7.0 18.5 3.5
Slide 19: Capital expenditures/Depreciation Forecast by Segment for 2017
Capital expenditures/Depreciation Forecast by Segment for 2017 (Unit: Billions of Yen) 2016 2017 Increase/decrease Actual Revised Forecast* Capital Capital Capital Depreciation Depreciation Depreciation expenditures expenditures expenditures Petrochemicals 3.4 5.7 4.0 6.9 0.6 1.2 Chemicals 12.9 7.4
Slide 20: Summary (Reference)
Summary (Reference) CQ1 (Jan.1 – Mar.31), 2017 v s. CQ2 (Apr.1 – Jun.30), 2017 (Unit: Billions of Yen) Increase/ CQ1, 2017 CQ2, 2017 decrease Net Sales 183.2 189.0 5.8 Operating Income 19.7 15.3 -4.4 Non-operating income and expenses, net -2.0 -10.8 -8.8 Interest/Dividends income and expenses -0.3 -
Slide 21: (Reference) Consolidated Sales by Segment
(Reference) Consolidated Sales by Segment (Unit: Billions of Yen) CQ1, CQ2, Increase/ 2017 2017 decrease 【Olefins】 sales decreased (C4 fraction, cracked fuel oil: market price down) Petrochemicals 64.6 59.3 -5.3 【Organic chemicals】 sales slightly decreased 【SunAllomer Ltd.】 sales slightly increased
Slide 22: (Reference) Consolidated Operating Income by Segment
(Reference) Consolidated Operating Income by Segment (Unit: Billions of Yen) CQ1, CQ2, Increase/ 2017 2017 decrease 【Olefins】 profit decreased (C4 fraction, cracked fuel oil: market price down) Petrochemicals 10.6 5.6 -5.0 【Organic chemicals】 profit maintained at the CQ1 level 【SunAllomer Ltd.】 prof
Slide 23: (Reference) Quarterly Operating Income
(Reference) Quarterly Operating Income 2017 (Unit: Billions of Yen) 2016 25.0 19.7 20.0 16.6 15.3 15.0 13.9 10.0 8.7 5.0 2.9 0.0 CQ1 CQ2 CQ3 CQ4 Showa Denko 2nd Quarter, 2017 Consolidated Financial Results 23
Slide 24: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Petrochemicals》 《Chemicals》 (Unit: Billions of Yen) (Unit: Billions of Yen) 2017 5.0 2017 12.0 2016 2016 10.6 4.3 4.1 10.0 4.0 3.8 3.1 8.0 7.3 3.0 2.9 5.9 5.6 6.0 2.5 6.0 2.0 4.0 2.0 1.5 1.0 0.0 0.0 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 Showa Denko 2nd Qu
Slide 25: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Electronics》 《Inorganics》 (Unit: Billions of Yen) (Unit: Billions of Yen) 2017 2017 2.0 2016 2016 8.0 6.1 1.0 6.0 5.8 0.2 4.4 0.0 4.0 CQ1-0.1 CQ2 CQ3 CQ4 2.8 -1.0 -0.7 -0.7 1.9 -2.0 0.0 -2.0 CQ1 CQ2 CQ3 CQ4 -2.4 (note) From 2017 SDK changes the segm
Slide 26: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Aluminum》 《Others》 (Unit: Billions of Yen) 2.0 2017 (Unit: Billions of Yen) 2017 1.0 2016 2016 1.7 1.6 1.5 1.5 1.3 1.2 0.5 1.0 0.2 0.2 0.2 0.1 0.1 0.0 CQ1 CQ2 CQ3 CQ4 0.5 -0.1 0.2 0.0 -0.5 CQ1 CQ2 CQ3 CQ4 (note) From 2017 SDK changes the segmentatio
Slide 27: Delay in announcement of 2016 financial results and other related documents
Delay in announcement of 2016 financial results and other related documents SDK postponed announcement of its consolidated financial results for the year ended in December 2016, which was originally scheduled to be on February 14, 2017, until April 25, 2017. This delay was caused by the occurrence o
Slide 28: Topics
Topics [General] ● Decided not to renew reaction policy on large-scale share purchases SDK decided not to renew its Reaction Policy on Large-scale Purchases of the Company’s Stock Certificates (Reaction Policy), which was due to expire at the close of its 108th ordinary general meeting of shareholde
Slide 29: Topics
Topics [General] ● Incorporated into ESG indexes for investment In July 2017, SDK was incorporated into three ESG indexes for investment: “FTSE Blossom Japan Index” provided by FTSE International Limited and Frank Russel Company (FTSE Russell, a member of London Stock Exchange Group); and “MSCI Japa
Slide 30: Topics
Topics [Inorganics segment] ● Decided to sell the whole shares of ICA ICA, in which SDK holds a 20% stake, operates an alumina plant located in Tayan District, West Kalimantan, Indonesia. Recently, SDK discussed about the way to manage the plant of ICA in the future with ANTAM, which is the parent c
Slide 31: Topics
Topics [Aluminum segment] ● Decided to expand high-purity aluminum foil plant in China SDK decided to increase its capacity in China to produce high-purity aluminum foil, which is a major material for aluminum electrolytic capacitors. SDK will increase the capacity of Showa Denko Aluminum (Nantong)
Slide 32: Topics
Topics [Aluminum segment] ● Showa Aluminum Can decided to establish second production base in Vietnam Showa Aluminum Can Corporation (SAC), a consolidated subsidiary of SDK, acquired Hanacans Joint Stock Company, a can manufacturer of Vietnam, in May 2014. Since then, SAC has been introducing its le
Slide 33: Topics
Topics [Aluminum segment] ●Showa Denko Group established JV with Carabao Group in Thailand SDK, Showa Aluminum Can Corporation (SAC), which is a consolidated subsidiary of SDK, and Carabao Group Public Company Limited (CBG), which is a beverage maker and has the second largest share in the energy dr
Slide 34: Showa Denko 2nd Quarter, 2017 Consolidated Financial Results
Showa Denko 2nd Quarter, 2017 Consolidated Financial Results 34