Nippon Sheet Glass Company, Limited · TSE:5202
Nippon Sheet Glass — Q2 FY2024/3 Earnings Presentation
43 slides from Nippon Sheet Glass's earnings presentation, Nov 9, 2023
Slide 1: NSG Group FY2024/3 Quarter 2 Results
NSG Group FY2024/3 Quarter 2 Results (from 1 April 2023 to 30 September 2023) Nippon Sheet Glass Company, Limited 9 November 2023 1
Slide 2: Presenters: Munehiro Hosonuma and Akihito Okochi
Munehiro Hosonuma Representative Executive Officer President and Chief Executive Officer Akihito Okochi Senior Executive Officer and Chief Financial Officer 9 November 2023 FY2024/3 Q2 Results Presentation 2 2
Slide 3: Agenda
Agenda 1. Financial Year ending 31 March 2024 Quarter 2 Results 2. Forecast for Financial Year ending March 2024 3. Update of Transformation Initiatives under Revival Plan 24 (RP24) 4. Preparation of Next Medium-Term Management Plan 5. Summary 9 November 2023 FY2024/3 Q2 Results Presentation 3 3
Slide 4: 1. Financial Year ending 31 March 2024 Quarter 2 Results
1．Financial Year ending 31 March 2024 Quarter 2 Results 9 November 2023 FY2024/3 Q2 Results Presentation 4 4
Slide 5: Consolidated Income Statement
Consolidated Income Statement Continued revenue and profits increase YoY, exceeding H1 forecasts. Finance expenses increase reflecting higher prevailing interest rates Q2 (3 months) Cumulative (6 months) (JPY bn) H1 Continued revenue and OP increase in Forecast FY2023/3 FY2024/3 Change FY2023/3 FY20
Slide 6: Income statement commentary: exceptional items and finance expenses
It improved by 45.2 billion yen from the previous year since impairment loss of goodwill and intangible assets of 48.8 billion yen were recorded regarding the European Automotive business in the previous year. Net finance expenses increased to 14.0 billion yen by 7.5 billion yen from the previous ye
Slide 7: Change Analysis – Operating profit (Cumulative)
Change Analysis – Operating profit (Cumulative) Energy costs falling year-on-year. Sales price improvement absorbing of material and other cost increases FY2023/3 FY2024/3 H1 Energy price declined largely H1 from PY while material costs 40 rise continued 30 Improvement in Automotive and Architectura
Slide 8: Operating profit change commentary: cost transformation benefits
exceeded the benefits of the Group’s cost transformation initiatives under the RP24. 6
Slide 9: Change Analysis – Operating profit (Quarter 2 only)
Change Analysis – Operating profit (Quarter 2 only) Declining year-on-year energy prices mitigating impact of sales volume decrease and rise in other costs FY2023/3 FY2024/3 Q2 Energy price declined largely Q2 from PY while material costs 20 rise continued 10 Labor and other costs hike surpassed cos
Slide 10: Energy Price Movement
Energy Price Movement German natural gas price: remained stable after decline in Q1 Japanese heavy fuel oil price: increased again in Q2 9 November 2023 FY2024/3 Q2 Results Presentation 8 Next slide 8 shows the movements of energy prices. The left chart shows the movement of the natural gas price in
Slide 11: Glass Market Price Movement
Glass Market Price Movement German glass price decreased, reflecting a move to more challenging market conditions 9 November 2023 FY2024/3 Q2 Results Presentation 9 Slide 9 shows the glass market price movement in Germany. Although glass prices have decreased reflecting stable movement of natural ga
Slide 12: Consolidated Balance Sheet
Consolidated Balance Sheet Shareholders’ equity ratio increased to 12.6% by 2.4pt. Maintaining above 10% of RP24 target 31 March 30 September (JPY bn) Change 2023 2023 Total Assets 951.4 1,001.8 50.4 Mainly due to increase in property, Non-current assets 615.1 658.2 43.1 plant and equipment reflecti
Slide 13: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows Free cash outflow due to working capital increase while inflow in Q2. Aiming to achieve RP24 target of free cash inflow above JPY 10 bn for the full-year Q2 (3 months) Cumulative (6 months) (JPY bn) FY2023/3 FY2024/3 Change FY2023/3 FY2024/3 Change Net cash flows
Slide 14: Segmental Information
Segmental Information FY2022/3 Q2 Cum. FY2023/3 Q2 Cum. FY2024/3 Q2 Cum. Change (JPY bn) Operating Operating Operating Operating Revenue ％ Revenue ％ Revenue ％ Revenue profit profit profit Profit Architectural 132.0 45% 13.6 182.1 48% 15.5 192.9 46% 21.8 10.8 6.3 Europe 54.9 19% 78.8 21% 73.5 18% (5.
Slide 15: Architectural
Architectural (Cum. Rev▲, Profit▲: Q2 Rev▲, Profit▲) Revenue increased with strong demand except Europe where sales volume decreased. OP increased with energy prices decline and sales prices improvement offsetting material and other costs rise Europe (Cum. Rev▼, Profit▲: Q2 Rev▼, Profit▲) FY2023/3 F
Slide 16: Architectural commentary: solar glass and Americas
Demand of glass for solar panels remains strong. A new capacity construction in Malaysia to produce glass for solar panels has been completed with a plan to start production in December 2023. In the Americas, revenues and profits were better than the previous year. In North America, sales prices imp
Slide 17: Automotive
Automotive (Cum. Rev▲, Profit▲: Q2 Rev▲, Profit▲) Revenue and OP increased in all regions due to sales volumes and prices improvement FY2023/3 FY2024/3 Europe (Cum. Rev▲, Profit▲: Q2 Rev▲, Profit▲) JPY bn H1 H1 205.2 Asia (Cum. Rev▲, Profit▲: Q2 Rev▲, Profit▲) 171.9 6.3 Americas (Cum. Rev▲, Profit▲:
Slide 18: Technical Glass
Technical Glass (Cum. Rev▼, Profit▼ : Q2 Rev▼, Profit▼) Revenue decreased affected by IT market slowdown. OP also decreased due to material and other costs rise with a worse sales mix FY2023/3 FY2024/3 JPY bn H1 H1 • Fine glass sales affected by IT market slowdown and also worsened sales mix 20.2 19
Slide 19: 2. Forecast for Financial Year ending March 2024
2．Forecast for Financial Year ending March 2024 9 November 2023 FY2024/3 Q2 Results Presentation 16 16
Slide 20: Forecast for Financial Year ending March 2024
Forecast for Financial Year ending March 2024 Upward revision of full-year profit forecasts reflecting relatively solid H1 results. Forecasting highest operating profit since the Lehman shock in 2008 FY2024/3 FY2024/3 FY2024/3 FY2023/3 FY2024/3 (JPY bn) H1 Fcst Full-year Fcst Full-year Fcst Change F
Slide 21: Assumptions for FY2024/3 Forecast
Assumptions for FY2024/3 Forecast Group Full-year profits forecasts revised upward reflecting H1 performance. Continue to promote ‘Restoration of Financial Stability’ in the final year of RP24 • Weaker JPY to continue • Continuous material costs and other costs increase with worldwide inflation tren
Slide 22: Forecast assumptions commentary by business
domestic demand is expected to continue to soften with concerns about an economic recession due to interest rate hikes. In South America, the tight supply and demand environment will continue, and full-year contribution by a new furnace in Argentina is expected. In solar energy glass, continued stro
Slide 23: 3. Update of Transformation Initiatives under Revival Plan 24 (RP24)
3．Update of Transformation Initiatives under Revival Plan 24 (RP24) 9 November 2023 FY2024/3 Q2 Results Presentation 19 19
Slide 24: Transformation Initiatives under Revival Plan 24
Transformation Initiatives under Revival Plan 24 Continued RP24 initiatives to create business structure for sustainable growth Three Reforms Business structure reform • 2nd new float furnace in Argentina contributing to profit • Completed construction to install online coating capacity for solar
Slide 25: RP24 targets commentary
for an operating profit margin of 8%, net profit of over 30.0 billion yen for 3 years cumulatively, shareholders’ equity ratio above 10% and free cash flow over 10.0 billion yen. Return on sales was 6.2%, with cost reduction, expansion of value-added products and sales prices improvement offsetting
Slide 26: Transformation Initiatives: Approach to Sustainability
Transformation Initiatives under Revival Plan 24 Continue to promote ‘Sustainability’ in the final year of RP24 Approach to Sustainability • Published the ‘NSG Group Sustainable Supply Chain Charter’ to enhance and accelerate actions together with supply chain partners to meet the Group’s sustainabi
Slide 27: Sustainability target commentary
We will aim this sustainability target to work towards achievement of execution of our business strategy and development of sustainability. The Group aims to contribute to ‘Eco Society’ which is one of the three focus areas in the medium term vision as a ‘global glass supplier contributing to the wo
Slide 28: 4. Preparation of Next Medium-Term Management Plan
4．Preparation of Next Medium-Term Management Plan 9 November 2023 FY2024/3 Q2 Results Presentation 22 22
Slide 29: Preparation of Next Medium-Term Management Plan
Preparation of Next Medium-Term Management Plan Current Medium-Term Next Medium-Term Management Plan (Image) Management Plan (RP24) FY2025/3~ ~FY2024/3 Aiming for further profit strength and financial stability improvement Structure reform leading to profit growth with keywords of 4 ‘D’ (Decarboniza
Slide 30: Next medium-term plan commentary
infrared reflecting glass and head-up display glass for CASE and EV in Automotive and high modulus, high strength glass fiber MAGNAVI🄬 and low dielectric flake glass in Technical Glass which contribute to the reduction of carbon dioxide emissions and information and communication. We will enhance…
Slide 31: 5. Summary
5．Summary 9 November 2023 FY2024/3 Q2 Results Presentation 24 24
Slide 32: Summary
Summary 1. Financial Year ending 31 March 2024 Quarter 2 Results • Continued revenue and profits increase YoY, exceeding H1 forecasts. Finance expenses increase reflecting higher prevailing interest rates • Energy prices falling year-on-year, together with increases in sales prices, absorbing impact
Slide 33: Notice
Notice The projections contained in this document are based on information currently available to us and certain assumptions that we consider to be reasonable. Hence the actual results may differ. The major factors that may affect the results are the economic and competitive environment in major mar
Slide 34: Appendices
Appendices Financial Year ending 31 March 2024 Quarter 2 Results • Consolidated Income Statement – Quarterly Trend • Revenue & Operating Profit – Quarterly Trend • Segmental Information by Quarter • Revenue & Operating Profit – by Region • Exceptional Items • Foreign Currency Exchange Rates and Sens
Slide 35: Consolidated Income Statement – Quarterly Trend
Consolidated Income Statement – Quarterly Trend FY2022/3 FY2023/3 FY2024/3 （JPY bn） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Revenue 147.7 143.0 152.3 157.6 177.9 197.7 190.6 197.3 208.0 212.2 Operating profit/(loss) 7.2 5.5 1.8 5.5 8.3 6.2 9.7 10.7 14.6 11.5 Operating profit margin 4.8% 3.9% 1.2% 3.5% 4.6% 3.
Slide 36: Revenue & Operating Profit – Quarterly Trend
Revenue & Operating Profit – Quarterly Trend Architectural (JPY bn) 96.5 93.6 95.8 97.2 85.6 90.3 10.7 74.8 75.0 8.9 11.9 9.9 Americas 64.5 67.5 29.8 28.7 26.7 30.8 33.8 7.5 24.5 21.0 21.6 7.7 7.4 Asia 19.5 6.8 6.6 17.4 6.1 26.1 25.8 24.5 26.8 22.9 28.0 Europe 24.5 21.5 19.3 21.0 Operating profit 40
Slide 37: Segmental Information by Quarter
Segmental Information by Quarter FY2022/3 FY2023/3 FY2024/3 (JPY bn) Q1 Q2 Q3 Q4 Cum. Q1 Q2 Q3 Q4 Cum. Q1 Q2 Cum. Revenue: Architectural 64.5 67.5 74.8 75.0 281.8 85.6 96.5 93.6 90.3 365.9 95.8 97.2 192.9 Europe 27.8 27.1 29.3 31.8 116.0 38.2 40.6 39.1 39.1 157.1 38.1 35.4 73.5 Asia 19.3 21.0 24.5 2
Slide 38: Revenue & Operating Profit – by Region
Revenue & Operating Profit – by Region FY2023/3 Q2 Cum. FY2024/3 Q2 Cum. Change (JPY bn) Operating Operating Operating Revenue ％ Revenue ％ Revenue profit/(loss) profit/(loss) profit/(loss) Europe 153.3 41% 1.0 162.3 39% 2.9 9.0 1.8 Asia 96.1 26% 11.4 107.1 25% 16.3 11.0 4.9 Americas 124.7 33% 7.1 14
Slide 39: Exceptional Items
Exceptional Items FY2023/3 FY2024/3 (JPY bn) Q2 Cum. Q2 Cum. Settlement of litigation matters - net 2.7 0.9 Reversal of previous impairments - 0.2 Restructuring costs, including employee termination (0.1) (0.0) payments Gain on disposal of subsidiaries 1.1 - Write down of inventories - (0.2) Impairm
Slide 40: Foreign Currency Exchange Rates and Sensitivity
Foreign Currency Exchange Rates and Sensitivity Average rates used FY2022/3 FY2023/3 FY2024/3 FY2024/3 Original Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Forecast GBP 153 152 153 153 163 163 164 163 172 177 160 EUR 132 131 131 130 138 139 140 141 150 153 134 USD 109 109 112 112 129 134 137 135 138 140 134 BRR 2
Slide 41: Depreciation & Amortization, Capital Expenditures, R&D Expenditures
Depreciation & Amortization, Capital Expenditures, R&D Expenditures FY2023/3 FY2024/3 FY2024/3 (JPY bn) Q2 Cum. Q2 Cum. Full-year Forecast Depreciation & 19.7 21.9 44.0 Amortization Capital expenditures 17.6 24.5 47.7 Ordinary 15.1 17.6 Strategic projects 2.5 6.9 R&D expenditures 4.6 4.9 10.0 Archit
Slide 42: News Releases ― May to November 2023
News Releases ― May to November 2023 15-Jun-23 NSG Group Formulated the Diversity, Equity & Inclusion (DEI) Policy Vanity Mirror With NSG’s Anti-fouling Coating Technology Adopted in the Executive Lounge Grades for New 22-Jun-23 Toyota Alphard and Vellfire 26-Jun-23 NSG Group - New Solar Array Opene
Slide 43: GROUP
GROUP 36
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