Resonac Holdings Corporation · TSE:4004
Resonac — Showa Denko K.K. — Q2 2018 Earnings Presentation
36 slides from Resonac's earnings presentation, Aug 8, 2018
Slide 1: Second Quarter, 2018 Financial Results - Consolidated
Evolving unique chemical company Second Quarter, 2018 Financial Results - Consolidated - SHOWA DENKO K.K. August 8, 2018 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, Selected Data
Consolidated Companies Consolidated subsidiaries: 61 Excluded: 1 Baotou Showa Rare Earth Hi-tech New Material Co., Ltd. (Electronics, liquidated） Equity method applied: 11 Newly applied or excluded: none Selected Data (Average figure) Jan.- Jun. Jan.- Jun. Increase/ 2017 2018 decrease Exchange
Slide 3: Summary
Summary 2017 (Jan.1 – Jun.30) vs. 2018 (Jan.1 – Jun.30) (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2017 2018 decrease Net Sales 372.2 455.8 83.7 Operating Income 35.0 78.1 43.1 Non-operating income and expenses, net -12.8 -0.3 12.5 Interest/Dividends income and expenses -0.6 -0.5 0.1 Equi
Slide 4: Extraordinary Profit/Loss
Extraordinary Profit/Loss (Unit: Billions of Yen) Jan.-Jun., 2017 Jan.-Jun., 2018 Increase/decrease Extraordinary Profit 0.2 0.5 0.3 Gain on sales of fixed assets 0.2 0.3 0.1 Gain on liquidation of subsidiaries － 0.2 0.2 Other 0.1 0.1 0 Extraordinary Loss -9.6 -2.0 7.6 Loss on sales and retire
Slide 5: Consolidated Sales by Segment
Consolidated Sales by Segment (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2017 2018 Decrease 【Olefins】 sales decreased (shipment volumes down due to shutdown maintenance) 123.9 115.4 -8.5 【Organic chemicals】 sales increased Petrochemicals (vinyl acetate, ethyl acetate: market prices up) 【S
Slide 6: Consolidated Operating Income by Segment
Consolidated Operating Income by Segment (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2017 2018 Decrease 【Olefins】 profit decreased (shipment volumes down due to shutdown maintenance) 16.2 7.4 -8.7 【Organic chemicals】 profit decreased (time lag between the rise in raw material Petrochemical
Slide 7: Operating Income Breakdown by Factor
Operating Income Breakdown by Factor (Unit: Billions of Yen) Showa Denko 2nd Quarter, 2018 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/ 2017 2018 decrease 2017 2018 decrease Cash and deposits 77.2 89.3 12.0 Notes and accounts payable 120.8 132.1 11.3 Notes and accounts receivable 176.0 186.1 10
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/ 2017 2018 decrease Total assets 1,024.7 1,055.8 31.1 Interest-bearing debt 346.7 321.1 -25.6 Debt/Equity ratio 0.95 times 0.74 times -0.21p Stockholders’ equity ratio 34.0% 39.6% 5.6p Showa D
Slide 10: Interest-bearing Debt
Interest-bearing Debt （Unit: Billions of Yen) D/E ratio 500.0 1.20 1.20 1.16 450.0 1.02 0.95 400.0 383.1 368.8 0.74 353.7 359.9 346.7 350.0 321.1 300.0 250.0 200.0 2013 2014 2015 2016 2017 2018 Jun.30 Equity ratio 30.6% 29.7% 31.5% 31.8% 34.0% 39.6% Showa Denko 2nd Quarter, 2018 Consolidated Financi
Slide 11: Consolidated Cash Flows
Consolidated Cash Flows (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. 2018 Increase/ Revised 2017 2018 decrease Forecast* CF from Operating Activities 43.0 52.2 9.2 120.0 CF from Investing Activities -11.3 -25.5 -14.2 -60.0 Free CF 31.7 26.7 -5.0 60.0 CF from Financing Activities -16.2 -12.9 3.3 -
Slide 12: Selected Data (Consolidated)
Selected Data (Consolidated) (Unit: Billions of Yen) Jan.-Jun. Jan.-Jun. Increase/ 2017 2018 decrease Interest/dividend income less interest expenses -0.6 -0.5 0.1 Capital expenditures 17.4 20.7 3.3 Depreciation and amortization 18.7 19.8 1.1 R&D expenditures 9.0 10.3 1.3 Number of employees 10
Slide 13: Capital Expenditures/Depreciation by Segment
Capital Expenditures/ Depreciation by Segment (Unit: Billions of Yen) Jan.-Jun., 2017 Jan.-Jun., 2018 Increase/decrease Capital Capital Capital Depreciation Depreciation Depreciation expenditures expenditures expenditures Petrochemicals 1.1 3.4 3.7 3.0 2.6 -0.5 Chemicals 5.2 4.1 4.1 4.4 -1.1 0.3 Ele
Slide 14: Total number of employees and breakdown by location
Total number of employees and breakdown by location 12,000 10, 577 10,561 10,864 10,589 10,234 10,146 10,000 Japan 8,000 5,905 5,932 5,873 6,087 Overseas 5,834 6,075 6,000 4,000 4,329 4,645 4,688 4,071 4,777 4,755 2,000 0 2013 2014 2015 2016 2017 June, 2018 Japan 57.7% 56.1% 55.6% 59.9% 56.0% 55.1%
Slide 15: Selected Data, Forecast
Selected Data, Forecast (Unit: Billions of Yen) 2017 2018 Increase/ Actual Revised Forecast* decrease Exchange rate: ¥/US$ 2018 earlier forecast** 110.0 1H 112.4 1H actual 108.7 1H -3.7 2H 112.0 2H revised 105.0 2H -7.0 2018 earlier forecast** ¥/€$ 130.0 1H 121.6 1H actual 131.6 1H 10.0 2H 131.7 2H
Slide 16: 2018 Forecast
2018 Forecast (Unit: Billions of Yen except Cash dividends per Share and Net income per Share) 2018 2018 Increase/ 2017 Increase/ Earlier decrease Actual Revised decrease Forecast** (against earlier) Forecast* Net Sales 780.4 985.0 204.6 935.0 50.0 Operating Income 77.8 170.0 92.2 137.0 33.0 Non-ope
Slide 17: Consolidated Net Sales by Segment, 2018 Forecast
Consolidated Net Sales by Segment, 2018 Forecast (Unit: Billions of Yen) 2018 2018 Increase/ 2017 Increase/ Earlier decrease Actual Revised decrease Forecast** (against earlier) Forecast* Petrochemicals 251.1 258.0 6.9 243.0 15.0 Chemicals 148.8 159.0 10.2 155.0 4.0 Electronics 123.1 114.0 -9.1 117.
Slide 18: Consolidated Operating Income by Segment, 2018 Forecast
Consolidated Operating Income by Segment, 2018 Forecast (Unit: Billions of Yen) 2018 2018 Increase/ 2017 Increase/ Earlier decrease Actual Revised decrease Forecast** (against earlier) Forecast* Petrochemicals 33.4 20.0 -13.4 20.0 0 Chemicals 16.5 18.0 1.5 18.0 0 Electronics 21.9 15.0 -6.9 17.0 -2.0
Slide 19: Capital expenditures/Depreciation Forecast by Segment
Capital expenditures/Depreciation Forecast by Segment for 2018 (Unit: Billions of Yen) 2017 2018 Increase/decrease Actual Revised Forecast* Capital Capital Capital Depreciation Depreciation Depreciation expenditures expenditures expenditures Petrochemicals 2.8 6.9 6.1 5.2 3.3 -1.7 Chemicals 9.6 8.5
Slide 20: Summary (Reference)
Summary (Reference) CQ1 (Jan.1 – Mar.31), 2018 v s. CQ2 (Apr.1 – Jun.30), 2018 (Unit: Billions of Yen) Increase/ CQ1, 2018 CQ2, 2018 decrease Net Sales 214.7 241.2 26.5 Operating Income 34.4 43.7 9.3 Non-operating income and expenses, net -1.6 1.3 2.9 Interest/Dividends income and expenses -0.3 -0.2
Slide 21: (Reference) Consolidated Sales by Segment
(Reference) Consolidated Sales by Segment (Unit: Billions of Yen) CQ1, CQ2, Increase/ 2018 2018 decrease 【Olefins】 sales increased (shipment volumes up due to shutdown maintenance) Petrochemicals 53.8 61.6 7.8 【Organic chemicals】 sales increased (shipment volumes up, market prices up) 【SunAllomer Lt
Slide 22: (Reference) Consolidated Operating Income by Segment
(Reference) Consolidated Operating Income by Segment (Unit: Billions of Yen) CQ1, CQ2, Increase/ 2018 2018 decrease 【Olefins】 profit increased (shipment volumes up due to shutdown maintenance) 3.3 【Organic chemicals】 profit decreased (time lag between the rise in raw material Petrochemicals 4.1 0.7
Slide 23: (Reference) Quarterly Operating Income
(Reference) Quarterly Operating Income 2018 (Unit: Billions of Yen) 2017 50.0 43.7 40.0 34.4 30.0 21.9 20.9 19.7 20.0 15.3 10.0 0.0 CQ1 CQ2 CQ3 CQ4 Showa Denko 2nd Quarter, 2018 Consolidated Financial Results 23
Slide 24: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Petrochemicals》 《Chemicals》 (Unit: Billions of Yen) 2018 (Unit: Billions of Yen) 2018 12.0 6.0 2017 2017 10.6 5.2 10.0 5.0 9.3 4.4 4.1 7.9 3.8 8.0 4.0 3.6 3.1 6.0 5.6 3.0 4.1 4.0 3.3 2.0 2.0 1.0 0.0 0.0 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 Showa Denko 2n
Slide 25: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Electronics》 《Inorganics》 (Unit: Billions of Yen) (Unit: Billions of Yen) 10.0 39.0 2018 2018 2017 33.4 2017 34.0 8.0 29.0 6.1 6.3 24.9 6.0 6.0 24.0 19.0 4.0 3.5 2.9 14.0 2.8 9.0 2.0 4.7 4.0 2.3 0.2 0.0 CQ1 CQ2 CQ3 CQ4 -1.0 CQ1 CQ2 CQ3 CQ4 -0.1 Show
Slide 26: (Reference) Quarterly Operating Income by Segment
(Reference) Quarterly Operating Income by Segment 《Aluminum》 《Others》 (Unit: Billions of Yen) 2018 (Unit: Billions of Yen) 2018 2017 1.5 2017 2.0 1.8 1.7 1.6 1.0 1.5 0.8 1.4 1.3 0.5 0.5 0.4 1.0 0.2 0.2 0.0 CQ1 CQ2 CQ3 CQ4 -0.1 0.0 CQ1 CQ2 CQ3 CQ4 -0.5 Showa Denko 2nd Quarter, 2018 Consolidated Finan
Slide 27: Topics - General
Topics [General] ● Received “Top 100 Global Innovators” award, 3 years in a row In January 2018, SDK received “The Clarivate Analytics 2017 Top 100 Global Innovators” award. Clarivate Analytics, formerly the Intellectual Property & Science business of Thomson Reuters, selected the top 100 global inn
Slide 28: Topics - General
Topics [General] ● Offered treasury stock through International Offering On March 6, 2018, SDK’s Board of Directors resolved that the Company would offer 6 million shares of its treasury stock through an international offering, and the offer price of those shares was determined at ¥4,544 per share o
Slide 29: Topics - General
Topics [General] ● SDK and Cinnamon starts to develop database system equipped with AI to utilize technical documents SDK and Cinnamon Inc. (Cinnamon) has decided to jointly develop a database system equipped with artificial intelligence (AI) to utilize technical documents. To be specific, SDK and C
Slide 30: Topics - Petrochemicals segment
Topics [Petrochemicals segment] ● JXTG Energy and SDK receive subsidy for project to strengthen bases of petroleum complexes in Oita Complex Area A joint project of SDK and JXTG Nippon Oil & Energy Corporation (JXTG Energy) to strengthen cooperation between oil refinery and petrochemical complex in
Slide 31: Topics - Chemicals segment
Topics [Chemicals segment] ● Opened the second branch of Shanghai Showa Chemicals Co., Ltd. aiming to strengthen sales of high-purity gases for electronics in China In March 2018, SDK established a branch of Shanghai Showa Chemicals Ltd. (SSC) in Wuhan, Hubei Province, China, aiming to strengthen it
Slide 32: Topics - Electronics segment
Topics [Electronics segment] ● LIB material “VGCFTM” received a Grand Prize in “Low CO2 Kawasaki Brand ‘17” In February 2018, SDK’s VGCFTM, carbon-nanofiber additive to cathodes and anodes of lithium ion batteries (LIBs) to improve electrical conductivity, received a Grand Prize in the Product and T
Slide 33: Topics - Inorganics segment
Topics [Inorganics segment] ● Decided to transfer shares in Indonesia Chemical Alumina to ANTAM SDK reached basic agreement with PT ANTAM Tbk (ANTAM) on the sale of SDK’s whole shares in PT. INDONESIA CHEMICAL ALUMINA (ICA) to ANTAM, in which SDK had a 20% stake. SDK resolved at its Board of Directo
Slide 34: Topics - Aluminum segment
Topics [Aluminum segment] ● Strengthened R&D function for aluminum alloy materials In February 2018, SDK established a laboratory named “Aluminum Product Evaluation Center” in its Kitakata Plant located in Fukushima Prefecture. Kitakata Plant is SDK’s base to develop and manufacture cast and forged
Slide 35: Topics - Others segment
Topics [Others segment] ● Decided to additionally expand capacity for producing high-grade SiC epitaxial wafers for power devices In April 2018, SDK expanded its capacity for producing high-quality-grade silicon carbide (SiC) epitaxial wafers for power devices, which had already been marketed under
Slide 36: Showa Denko 2nd Quarter, 2018 Consolidated Financial Results
Showa Denko 2nd Quarter, 2018 Consolidated Financial Results 36