Resonac Holdings Corporation · TSE:4004
Resonac — FY2022 Earnings Presentation
33 slides from Resonac's earnings presentation, Feb 14, 2023
Slide 1: 2022 Consolidated Financial Results
2022 Consolidated Financial Results Hideki Somemiya, CFO Director & Managing Corporate Officer February 14, 2023
Slide 2: Key Takeaways
Key Takeaways - 2022, compared to 2021, net sales saw a decrease by 27 billion yen. Despite a major sales increase in Chemical segment, a series of business divestitures during 2021 resulted in a smaller sales figures. Worsening outside environment lead to a decreased income in Chemical and Semicond
Slide 3: Table of Contents
Table of Contents 1. Consolidated Financial Statements for 2022 2. 2023 CQ1 Performance Forecast 3. Path to Achieve 2025 Income Targets ©Resonac Holdings Corporation All Rights Reserved.
Slide 4: Summary (2021 vs. 2022)
Summary (2021 vs. 2022) (Unit: Billions of Yen; except Cash dividends per Share and Net income per Share) （Ref.) Based on ongoing businesses *1 (Unit: Billions of Yen) Increase/ Increase/ 2021 2022 Decrease 2021 2022 Decrease Net sales 1,419.6 1,392.6 (27.0) Net sales 1,248.9 1,382.8 133.9 Operating
Slide 5: Breakdown of Operating Income Changes (2021 vs. 2022)
Breakdown of Operating Income Changes (2021 vs. 2022) (Unit: Billions of Yen) One-off gain in 2021 from reversal of previous inventory write-downs * Does not include the impact of deconsolidation of Shoko Co., Ltd. ©Resonac Holdings Corporation All Rights Reserved. 5
Slide 6: Sales, Operating Income and EBITDA: Segmental Breakdown
Sales, Operating Income and EBITDA: Segmental Breakdown (2021 vs. 2022) (Unit: Billions of Yen) Segment 2021 2022 Increase/Decrease Sales 422.9 427.2 4.2 1% Semiconductor and Operating Income 49.6 44.2 (5.3) (11%) Electronic Materials EBITDA 100.3 95.3 (5.0) (5%) Sales 173.8 180.6 6.8 4% Mobility Op
Slide 7: Semiconductor and Electronic Materials
Segmental Summary (2021 vs. 2022) Semiconductor and Electronic Materials (Unit: Billions of Yen) Increase/ 2021 2022 Performance Overview Decrease Sales increased due to the strong demand in the first half of Sales 422.9 427.2 4.2 1% 2022, despite a demand slowdown in the second half and the influen
Slide 8: Mobility
Segmental Summary (2021 vs. 2022) Mobility (Unit: Billions of Yen) Increase/ 2021 2022 Performance Overview Decrease Sales 173.8 180.6 6.8 4% Sales increased as the automobile production recovered in the second half, while some products faced weak consumer-use Automotive Products 131.3 146.4 15.1 12
Slide 9: Innovation Enabling Materials / Chemicals
Segmental Summary (2021 vs. 2022) Innovation Enabling Materials / Chemicals (Unit: Billions of Yen) Increase/ 2021 2022 Performance Overview Decrease Sales decreased as sales volume down, despite raised Innovation Sales 143.3 141.1 (2.2) (2%) product prices as raw material prices skyrocketed. Enabli
Slide 10: Non-operating Income/Expenses, Extraordinary Profit/Loss
Non-operating Income/Expenses, Extraordinary Profit/Loss Non-operating Income/Expenses Extraordinary Profit/Loss (Unit: Billions of Yen) (Unit: Billions of Yen) Increase/ Increase/ 2021 2022 Decrease 2021 2022 Decrease Gains on sale of 6.0 5.2 (0.8) Interest/Dividends investment securities (7.7) (13
Slide 11: Consolidated Balance Sheet
Consolidated Balance Sheet Consolidated Balance Sheet (Unit: Billions of Yen) Dec. 31, Dec. 31, Increase/ Dec. 31, Dec. 31, Increase/ Assets Liabilities and net assets 2021 2022 Decrease 2021 2022 Decrease Cash and deposits 236.2 187.1 (49.1) Notes and accounts payable 207.7 195.4 (12.4) Notes and a
Slide 12: Table of Contents
Table of Contents 1. Consolidated Financial Statements for 2022 2. 2023 CQ1 Performance Forecast 3. Path to Achieve 2025 Income Targets ©Resonac Holdings Corporation All Rights Reserved.
Slide 13: 2023 CQ1 Forecast (Consolidated)
2023 CQ1 Forecast (Consolidated) (Unit: Billions of Yen) 2023 CQ1 Segment Forecast Sales 80.0 Semiconductor and - Unable to estimate 2023 full year consolidated Electronic Materials Operating Income (10.5) forecast. Rational estimation difficult at this point; Sales 43.0 disclose promptly when ratio
Slide 14: Table of Contents
Table of Contents 1. Consolidated Financial Statements for 2022 2. 2023 CQ1 Performance Forecast 3. Path to Achieve 2025 Income Targets ©Resonac Holdings Corporation All Rights Reserved.
Slide 15: 2025 Financial Targets and 2022 Results
2025 Financial Targets and 2022 Results Will not take back “Long-term Vision” income targets in the face of worsening outside environment - Determined to undergo structural reforms while making steady forward-looking investments - Achieve 2025 income targets through V-shaped recovery - Decides to ta
Slide 16: Path to Achieve EBITDA Margin Target
Path to Achieve EBITDA Margin Target Achieve 2025 EBITDA margin target through business growth and structural reforms EBITDA margin improvement bridge (2022 to 2025) 3~4% Portfolio restructuring 2%~ Structural reforms of unprofitable businesses 3%~ Growth in profitable businesses/price raise/improve
Slide 17: Structural Reforms to be Done
Structural Reforms to be Done Determined to drastically improve profitability; undergo structural reforms toward 2025 Further concentrate resources into core-income Portfolio restructuring businesses For Life Science Business, examine strategic options including an alliance with outside partners Get
Slide 18: Capital Allocation Plan Kept Intact
Capital Allocation Plan Kept Intact - Operating cash flow from 2022 to 2026 estimated approximately 800 billion yen, 200 billion short of 1 trillion announced previous year - No major change in investment plans; Planning asset sales to make up for the shortage Capital Allocation Plan (illustrative,
Slide 19: Net D/E Ratio and Financing Costs
Net D/E Ratio and Financing Costs - Net D/E ratio saw an improvement to 1.08 by the end of 2022; 2023 likely to result in an increase - Aiming for an additional cash creation and a debt repayment. Financing costs dropped through refinancing (Unit: Times) Adjusted Net D/E ratio* and Debt + Preferred
Slide 20: Asset Streamlining
Asset Streamlining Sold almost all cross-held shares; sold unutilized assets including land Sales amount or improvement Initiatives compared to pre-integration (Unit: Billions of Yen) Long-term Vision Update Forecast 2022 Results Working Capital Reduction*1 25.0 13.0 Cross-held Shares Sales*2 20.0 4
Slide 21: Initiatives to Improve Profit Structure
Initiatives to Improve Profit Structure “Long-term Vision” announced profitability improvement through integration; achieved initial target earlier by an year, while fell short of the estimate set previous year (Unit: Billions of Yen per year) Initiatives Improvement compared to pre-integration Long
Slide 22: Appendix
Appendix ©Resonac Holdings Corporation All Rights Reserved.
Slide 23: (Reference) Consolidated Companies, Key Outside Factors
(Reference) Consolidated Companies, Key Outside Factors Consolidated Companies Consolidated subsidiaries: 108 (-16 from Dec. 31, 2021) -10: Transfer of ISOLITE GmbH and related companies -6: Integration of Graphite Electrode business bases in Europe (-3), Liquidation of Showa Denko (Dalian) Co., Ltd
Slide 24: (Reference) Consolidated Cash Flows
(Reference) Consolidated Cash Flows (Unit: Billions of Yen) 2021 2022 Increase/Decrease Full Year Full Year CF from operating activities 115.3 100.3 (14.9) CF from investing activities 28.6 (54.7) (83.3) Free CF 143.9 45.7 (98.2) CF from financing activities (121.7) (104.0) 17.8 Others 14.6 10.0 (4.
Slide 25: Capital Expenditures, Depreciation, R&D, Financial Costs and Employment Cost
(Reference) Capital Expenditures, Depreciation, R&D expenditures, Financial costs and Employment cost (Consolidated) (Unit: Billions of Yen) 2021 2022 Increase/Decrease Full Year Full Year Capital expenditures 78.6 107.1 28.4 Depreciation and amortization* 97.7 92.7 (5.0) R&D expenditures 46.8 47.1
Slide 26: Costs of the integration with former Showa Denko Materials
(Reference) Costs of the integration with former Showa Denko Materials Co., Ltd. (Unit: Billions of Yen) 2021 2022 Item Full Year Oct.-Dec. Full Year Post-merger integration (PMI) expenses* (7.2) (2.0) (5.3) (Operating expenses) Interest on borrowing related to acquisition of shares, preferred stock
Slide 27: Capital Expenditures: Segmental Breakdown
(Reference) Capital Expenditures: Segmental Breakdown (Unit: Billions of Yen) 2021 2022 Segment Increase/Decrease Full Year Full Year Semiconductor and Electronic 33.3 44.3 11.1 Materials Mobility 9.5 8.9 (0.6) Innovation Enabling Materials 7.9 7.6 (0.3) Chemicals 14.1 19.5 5.4 Others 13.8 26.8 12.9
Slide 28: Depreciation: Segmental Breakdown
(Reference) Depreciation: Segmental Breakdown (Unit: Billions of Yen) 2021 2022 Segment Increase/Decrease Full Year Full Year Semiconductor and Depreciation*2 36.0 37.8 1.8 Electronic Materials Amortization of goodwill 13.3 13.3 0 Depreciation*2 16.2 17.3 1.1 Mobility Amortization of goodwill 2.1 2.
Slide 29: Summary (CQ3 2022 vs. CQ4 2022)
(Reference) Summary (CQ3 (Jul.-Sep.), 2022 vs. CQ4 (Oct.-Dec), 2022) (Unit: Billions of Yen) Jul.-Sep. Oct.-Dec. Increase/ 2022 2022 Decrease Net sales 378.1 358.5 (19.7) Operating income 16.5 5.8 (10.6) Non-operating income and expenses, net 0.8 (10.6) (11.4) Ordinary income 17.3 (4.8) (22.0) Extra
Slide 30: Sales and Operating Income 2021: Segmental Breakdown
(Reference) Sales and Operating Income 2021: Segmental Breakdown (Consolidated) (Unit: Billions of Yen) 2021 Segment Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Full Year Semiconductor and Sales 91.1 105.1 114.1 112.6 422.9 Electronic Materials Operating Income 8.3 12.9 13.4 15.0 49.6 Sales 46.3 43.2 41
Slide 31: Sales and Operating Income 2022: Segmental Breakdown
(Reference) Sales and Operating Income 2022: Segmental Breakdown (Consolidated) (Unit: Billions of Yen) 2022 Segment Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Full Year Semiconductor and Sales 107.3 113.0 112.0 94.8 427.2 Electronic Materials Operating Income 12.9 13.9 13.0 4.4 44.2 Sales 44.4 42.3 48
Slide 32: (Reference) Topics
(Reference) Topics Segment Topics About structural reform in Resonac Holdings Corporation and Resonac Corporation accompanying the Showa Denko Group’s transformation into a holding company structure Changes in Corporate Management General Showa Denko Establishes Integrated Data Pipeline to Collect,
Slide 33: Note
Note Performance forecast and other statements pertaining to the future as contained in this presentation are based on the information available as of today and assumptions as of today regarding risk factors that could affect our future performance. Actual results may differ materially from the fore