Toyobo Co., Ltd. · TSE:3101
Toyobo — H1 FY3/24 Earnings Presentation
30 slides from Toyobo's earnings presentation, Nov 9, 2023
Slide 1: Presentation to Investors
November 9, 2023 Presentation to Investors for the Second Quarter Ended September 30, 2023 TOYOBO CO., LTD.
Slide 2: Highlights
Highlights H1 FY 3/24 Results Although sales for polarizer protective films for LCDs increased, sales and operating profit decreased due to decline in demand for reagents for PCR testing, in addition to volume decline and start-up cost for new production equipment for packaging film. Profit for the
Slide 3: (Reference) Operating Profit by Quarter
(Reference) Operating Profit by Quarter (¥ bn.) 10.0 8.0 6.0 4.0 2.0 0.0 -2.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY 3/21 FY 3/22 FY 3/23 FY 3/24 3
Slide 4: Business Environment in the H1 FY 3/24 (Difference from initial forecast)
Business Environment in the H1 FY 3/24 (Difference from initial forecast) Current Condition (H1 FY 3/24) Segment Business Initial Forecast (H1 FY 3/24) Situation* Difference from Initial Forecast Adjustments became prolonged and demand Packaging Adjustments to distributors’ inventories will graduall
Slide 5: Summary of Results: P&L
Summary of Results: P&L (¥ bn.) FY 3/23 FY 3/24 YOY H1 H2 H1 Amount % Net sales 201.1 198.8 199.4 - 1.7 - 0.8% Gross profit 45.2 39.8 41.8 - 3.4 - 7.6% Operating profit 7.9 2.2 2.4 - 5.5 - 70.1% (Ratio to sales) 3.9% 1.1% 1.2% - - Ordinary profit 6.8 - 0.2 1.0 - 5.7 - 84.7% Extraordinary income and
Slide 6: Analysis in Changes in Operating Profit
Analysis in Changes in Operating Profit 10.0 Raw material and fuel costs Prices Volume - 3.5 8.0 + 3.0 - 3.6 6.0 (¥ bn.) Others 4.0 - 1.4 7.9 - Films - Resin and chemicals - Reagents for PCR testing (-) - Packaging film (-) 2.0 - Resin and chemicals (-) - Development of the - Industrial film (+) bus
Slide 7: Summary of Results: BS
Summary of Results: BS (B) (A) (¥ bn.) Mar. 31, 2022 Mar. 31, 2023 Sep. 30, 2023 (A)-(B) Total assets 517.8 588.9 577.2 - 11.7 Cash and deposits 27.2 60.7 29.9 - 30.8 Inventories 96.0 121.9 127.5 +5.6 Property, plant and equipment 227.6 240.2 261.8 +21.6 Net assets 197.1 221.4 221.8 +0.4 Shareholder
Slide 8: Summary of Results: Segment
Summary of Results: Segment (B) (A) (¥ bn.) Net sales Operating profit FY 3/23 FY 3/24 FY 3/23 FY 3/24 YOY H1 H2* H1 H1 H2* H1 (A)-(B) Films 74.3 71.7 78.1 2.4 - 0.8 1.4 - 1.0 Life Science 19.3 18.8 16.6 5.4 3.8 2.4 - 3.0 Environmental and Functional Materials 55.7 55.1 52.5 2.1 1.9 0.4 - 1.8 Functi
Slide 9: (Reference) Operating Profit by Quarter (by Segment)
（Reference) Operating Profit by Quarter (by Segment) (¥ bn.) FY 3/23 FY 3/24 Q1 Q2 Q3* Q4* Q1 Q2 Films 2.5 - 0.0 - 0.4 - 0.4 1.2 0.2 Life Science 2.1 3.3 2.6 1.2 1.4 1.0 Environmental and Functional Materials 0.9 1.2 0.8 1.1 - 0.7 1.0 Functional Textiles and Trading - 0.4 - 0.7 - 0.7 - 0.7 - 0.7 - 0
Slide 10: Films
Films (¥ bn.) FY 3/23 FY 3/24 YOY Q1 Q2 H1 Q1 Q2 H2 Amount % Net sales 39.2 35.2 74.3 39.0 39.1 78.1 +3.7 +5.0% Operating profit 2.5 - 0.0 2.4 1.2 0.2 1.4 - 1.0 - 41.0% (OPM) 6.3% - 3.3% 3.2% 0.5% 1.8% - - Shipping results in the domestic market for OPP* film for Packaging film food packaging (Q1 FY
Slide 11: Life Science
Life Science (¥ bn.) FY 3/23 FY 3/24 YOY Q1 Q2 H1 Q1 Q2 H1 Amount % Net sales 8.7 10.6 19.3 8.1 8.4 16.6 - 2.7 - 14.2% Operating profit 2.1 3.3 5.4 1.4 1.0 2.4 - 3.0 - 55.7% (OPM) 24.6% 30.9% 28.0% 16.6% 12.4% 14.5% - - Biotechnology - Sales of reagents for PCR testing for COVID-19 declined signific
Slide 12: Environmental and Functional Materials
Environmental and Functional Materials (¥ bn.) FY 3/23 FY 3/24 YOY Q1 Q2 H1 Q1 Q2 H2 Amount % Net sales 27.9 27.8 55.7 25.0 27.6 52.5 - 3.2 - 5.8% Operating profit 0.9 1.2 2.1 - 0.7 1.0 0.4 - 1.8 - 82.6% (OPM) 3.3% 4.3% 3.8% - 3.7% 0.7% - - Resin and chemicals - Increased shipping of engineering pla
Slide 13: Functional Textiles and Trading
Functional Textiles and Trading (¥ bn.) FY 3/23 FY 3/24 YOY Q1 Q2 H1 Q1 Q2 H2 Amount % Net sales 22.2 23.2 45.3 22.2 23.5 45.7 +0.3 +0.7% Operating profit - 0.4 - 0.7 - 1.1 - 0.7 - 0.1 - 0.9 +0.3 - (OPM) - - - - - - - - Textiles - Earnings improved as a result of the withdrawal of unprofitable produ
Slide 14: Forecasts for FY 3/24
Forecasts for FY 3/24 Modest recovery in demand for film and the impact of raw material and fuel prices remaining high led us to revise our operating profit forecast downward to ¥10.0 billion. Net profit is forecasted to be ¥1.0 billion. Dividend is expected to remain unchanged. (¥ bn.) FY 3/23 FY 3
Slide 15: Forecasts by Segment
Forecasts by Segment (¥ bn.) Net sales Operating profit FY 3/23 FY 3/24 FY 3/23 FY 3/24 Previous YOY forecasts Results* Forecasts Results* Forecasts (Aug. 2023) Films 146.1 155.0 1.6 5.5 +3.9 8.8 Life Science 38.1 34.0 9.2 4.7 - 4.5 5.2 Envrionmental and Functional Materials 110.8 115.0 4.0 3.0 - 1.
Slide 16: Analysis in Changes in Operating Profit
Analysis in Changes in Operating Profit Prices Volume 15.0 +5.0 - 1.0 Others - 3.1 Raw material and fuel costs - 1.0 10.0 （¥ bn.） - Films - Resin and chemicals - R&D and testing expenses - Depreciation 10.0 5.0 10.1 - Reagents for PCR testing (-) - Development of the - Industrial film (+) business b
Slide 17: Management Policy in FY 3/24 (Announced in May 2023)
Management Policy in FY 3/24 (Announced in May 2023) Recover earning power to create the future 1. Thorough safety, disaster prevention and quality assurance, and compliance 2. Recover earning power (1) Price revisions: Prices that match value. Carrying out our responsibility for supply. Creating th
Slide 18: Main actions by businesses (Progress)
Main actions by businesses (Progress) Segment Action plan (Planned in May 2023) Progress* Pillar of income. Recovery of income - Packaging film: Improve OP margin by further price revisions. D Full-fledged launch of new production line and new product. Films - Mold releasing film for MLCC: Respond t
Slide 19: Action to Implement Management Conscious of Cost of Capital and Stock Price
Action to Implement Management that is Conscious of Cost of Capital and Stock Price PBR ROE ROA ROS 0.56 2.9 % 1.0 % 1.5 % Market Net profit Net profit Net profit Reorganization of capitalization Business Portfolio Shareholder’s Shareholder’s Total assets Net sales equity equity Total asset 1. Impro
Slide 20: Regarding the 2025 Medium-Term Management Plan
Regarding the 2025 Medium-Term Management Plan Given the changes in the business environment and the downward revisions to the performance forecasts for the current fiscal year, we are revising the 2025 Medium-Term Management Plan. (We plan to announce the results of this revising in May 2024.) 20
Slide 21: Appendix
TOYOBO Appendix
Slide 22: Business performance
Business performance (¥bn.) FY 3/23 FY 3/24 Net sales Q1 Q2 Q3* Q4* Full year* Q1 Q2 Films 39.2 35.2 35.6 36.1 146.1 39.0 39.1 Life Science 8.7 10.6 10.0 8.8 38.1 8.1 8.4 Environmental and Functional Materials 27.9 27.8 26.7 28.3 110.8 25.0 27.6 Functional Textiles and Trading 22.2 23.2 22.3 24.8 92
Slide 23: FY 3/24 Business Environment (H2 Forecasts)
FY 3/24 Business Environment (H2 Forecasts) Segment Business Current condition (H1 FY 3/24) Forecasts (H2 FY 3/24) Inventory adjustment became prolonged and Recover moderately after end of inventory Packaging demand recovery delayed adjustment Shipment of polarizer protective films for LCDs to Deman
Slide 24: Product price revisions for Rising raw material and fuel prices
Product price revisions for Rising raw material and fuel prices (thousand ¥/kl) 100 Naphtha price 75 in Japan 50 25 0 3/16 2015 3/17 2016 3/18 2017 3/19 2018 3/20 2019 3/21 2020 3/22 2021 3/23 2022 3/24 2023 (FY) ($/t) 500 Coal prices (Australian thermal coal 400 market prices) 300 200 100 0 3/16 20
Slide 25: Major CAPEX
Major CAPEX Investment amount Start of Segment Details (¥bn., round number) operation - Processing equipment Unit 2 of mold releasing film for MLCC (Tsuruga) 6.0 *1 H2 FY 3/23*2 Films - OPP film equipment (Inuyama) 7.0 H1 FY 3/24*2 - Equipment of mold releasing film for MLCC (Utsunomiya) 20.0 H2 FY
Slide 26: 2025 Medium-Term Management Plan: Reorganization of the Business Portfolio
2025 Medium-Term Management Plan: Reorganization of the Business Portfolio (Announced in May 2022) Assess and stratify each business into 4 quadrants with 2 axes: “Profitability” and “Growth potential” - Profitability : Return on capital employed (ROCE) = Operating profit / Capital employed ※Target
Slide 27: Topics: Integrated Report
Topics: Integrated Report Toyobo Group’s Integrated Report “TOYOBO REPORT 2023” released Main contents • Our long-term vision “Sustainable Vision 2030” and the “2025 Medium-Term Management Plan (FY 3/23 – FY 3/26)” • CEO message • Innovation creation vision • Overview by business, examples of CSV, s
Slide 28: Topic: Positive Impact Finance
Topic｜Positive Impact Finance “Positive Impact Finance” financing agreement concluded • This loan is designed to comprehensively analyze and evaluate the environmental, social, and economic impact of a company's activities, and to provide continuous support for those activities. • The targets set fo
Slide 29: Please Note
Please Note The business performance forecasts and targets included in the business plans contained in this presentation are based on information known to the Company’s management as of the day of presentation. Please be aware that the content of the future forecasts may differ significantly from ac
Slide 30: ©️ TOYOBO CO., LTD. All rights reserved.
©️ TOYOBO CO., LTD. All rights reserved.