Company Information. Nitto Denko Corporation Yukio Nagira, President & CEO. May, 日東電工株式会社 NITTO DENKO CORPORATION. All rights reserved.

Transcription

1 Company Information May, 2013 Nitto Denko Corporation Yukio Nagira, President & CEO

2 Contents 1. Review of FY Forecast & direction of FY New mid. term management plan Nitto Conclusion 2

3 1. Review of FY Forecast & direction of FY New mid. term management plan Nitto Conclusion 3

4 FY2012 Operating Results Unit:Billions of Yen FY2011 FY2012 Year-on-year change (%) Net Sales % Operating Income % Ordinary Income % Net Income % Operating Margin 9.3% 10.2% 0.9p ROA (Based on net income) 4.8% 6.3% 1.5p Exchange Rate ( /US$) NA *Net sales & OP income reflects elimination and corporate. 4

5 FY2012 Highlights & Lowlights 1. Year-on-year increase in sales and profit Sales increased by 11%, operating income increased by 22% Medical and Membrane Segments grew out of operating deficit 2. Our customers' production volume adjustment will affect our financial performance starting from the FY2013 January figure Adjustments in the smart phone and tablet device markets will affect us to a notable degree 3. Foresaw market trend and expanded facility investment since mid-term Investment boosted by 2 billion yen to 49.8 billion yen from the initially planned figure (upon completion) 4. ITO film sales boosted by 20% year-on-year We initiated the trend of shifting from conventional glass-type touch screen to film-type touch screens 5

6 Sales & OP results by segments Information fine materials contributed to sale & op and Medical & membrane got out of operating deficit (Bln. ) Net Sales (Bln. ) 56.4 Operating Profit Functional base products (Industrial Tape) Optronics (Information fine materials) Optronics (Excluding Information fine materials) Medical & Membrane Elimination & Corporate Functional base products (Industrial Tape) Optronics Medical & Membrane Elimination & Corporate 6

7 Review of FY2012 / Operating Profit We have succeeded in increasing OP of FY2012 due to order volume expansion & foreign exchange in spite of the impact of price erosion & fixed cost increase. 80 (Bln. ) Analysis of OP from FY2011 to FY Order volume increase +30 Foreign exchange +11 Streamlining operation etc FY Price erosion 25 Fixed cost increase 10 FY

8 Trend of capital investments and R&D expenses In FY2012, capital investments increased 16bln. yen(yoy) and R&D expense increased 2.5bln. Yen(yoy) 60 (Bln. ) Capital investments (completion basis) R&D expense FY08 FY09 FY10 FY11 FY12 8

9 1. Review of FY Forecast & direction of FY New mid. term management plan Nitto Conclusion 9

10 How we position the FY2013 A year to enter the new phase Achieve the capability to compete squarely in the world arena and enter the areas marked with change and growth 10

11 FY2012 results and FY2013 forecast Unit:Billions of Yen FY2012 FY2013 forecast Year-on-year change (%) Net Sales % Operating Income % Ordinary Income % Net Income % Operating Margin 10.2% 12.5% 2.3p ROA (Based on net income) 6.3% 8.5% 2.2p Exchange Rate ( /US$) NA *Net sales & OP income reflects elimination and corporate. 11

12 Sales & OP plan by segments Take on a challenge to the record-high sales & op in FY (Bln. ) Net Sales Functional base products (Industrial Tape) Optronics (Information fine materials) Optronics (Excluding Information fine materials) Medical & Membrane Elimination & Corporate *Assumed exchanged rate in FY2013 : 95/US$ (Bln. ) 56.4 Operating Profit Elimination & Corporate Functional base products (Industrial Tape) Optronics Medical & Membrane Medical & Membrane Elimination & Corporate 12

13 Operating profit of FY2013 We are planning to increase OP of FY2013 due to order volume increase and streamlining operation etc. although petrochemical material cost & overseas labor cost will increase by yen depreciation (Bln. ) Analysis of OP from FY2012 to FY Order volume increase +20 Foreign exchange +40 Streamlining operation etc FY petrochemical materials cost 6.5 Price erosion 32.5 Fixed cost increase 17.5 FY

14 Summary of the FY 2013 strategy Boost up the new ample biz. opportunities by aggressive capital investments Industrial tapes (Functional Base Products Seg.) Optronics (Information Fine Materials) *Promote further globalization *Create Area Niche Top products *Expand the production capacity of ITO films for touchscreen *Continue technological development of ideal optical films for the next growth Optronics (Excluding Information fine materials) Printed circuits Retain the business of printed circuits for HDD as cash cow business by achieving productivity reform Semiconductor manufacturing process materials Launch new products which contribute to customers' production process innovation CMO = Contract Manufacturing Organization Medical & Membrane Medical *Commercial launch of the new drug delivery patch (high blood pressure) & accelerate the biz. expansion of the patch for asthma in China *Strengthen the service functions of the oligonucleotide CMO* business Membrane *Allocate resources into the "unique" kinds of markets, which Nitto has been traditionally good at pursuing 14

15 Capital investments and R&D expenses Plan the record-high capital investments focusing on Information fine materials of Optronics segment (Bln. ) R & D expense Capital investments (completion basis) Information fine materials 67% Total capital investments in FY2013 : 90 bln. yen 15

16 Information fine materials : LCD panel q ty & sales forecast Expand the sales for growing smartphones & tablet PCs LCD panel production forecast in 2013 (M units) Application CY2012 CY2013 YOY TV % Monitor % Notebook PC % Tablet PC % Mobile phone 1,860 2,000 +8% Smartphone % Nitto s sales forecast by applications in 2013 TV Monitor 63% Smart phone Tablet PC *Smartphone & tablet PC includes the sales of ITO film & optical tapes as well as optical films for notebook PC 16

17 Functional Base Products(F.B.P/Industrial tape) : Expansion of the on the spot" business model Centered on emerging markets, create ANT products by conducting all the steps from development, material procurement, production and distribution l locally on the spot This "on the spot" business model best suits the automotive business Turkey *Sanitary materials India China *Infrastructure, home appliances and automotive Mexico. Indonesia *Automotive Brazil *Automotive *ANT products =Area Niche Top products *Automotive *New automotive production plant launch (2013) 17

18 Global development of medical businesses Pursue business around the world with drug delivery patches, oligonucleotide drugs and molecular targeting DDS technology China: Establish Nitto business brand, centered on the drug delivery patches business [Action plan] Promote asthma care drugs Launch production & development site in Suzhou Expand product portfolio Suzhou Drug delivery patches Shanghai Japan Molecular targeting DDS technology California Oligonucleotide drugs Massachusetts Ohio. Japan: As Medical Div.'s mother plant, develop products & technologies for worldwide markets [Action plan] Development & production of drug delivery patches Driving molecular targeting DDS technology USA: New technological and business development site [Action plan] Expand oligonucleotide business Develop next generation drug delivery patches 18

19 Change of cash flow Cash flow in 2013 will be slightly negative because of the aggressive capital investments for our growth Result of FY2012 (Bln. ) Operating cash flow Forecast of FY2013 (Bln. ) Operating cash flow Investment cash flow cash flow Financial cash flow Translation adjustments Investment cash flow 22 Financial cash flow 19

20 Trend of dividends Just as the previous year s figure, 100 yen per year is planned for FY2013. We will adjust the figure as necessary in accordance with external environment and situations concerning our operating income Yen per share 25 Yearly dividend per share Mid-year dividend per share ( ) Under Review FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY (100) (100) ( ) ( ) ( ) 20

21 1. Review of FY Forecast & direction of FY New mid. term management plan Nitto Conclusion 21

22 Concept of the new mid-term management plan "Nitto-2015" Proactively take on new challenges and achieve continuous innovation to revive our growth potential Healthy business growth Get back on the growth track Continuous growth of existing businesses Pursuit of new businesses The action plan under "Nitto-2015" ( ) Further globalization Strengthen emerging market development efforts Enter the market on our own Enter through M&A and external collaboration Qualitative improvement Simultaneously pursue business growth (integrate both efforts) Reform corporate culture Evolve management infrastructure Human resources growth Develop "Nitto Person Company management handled by "Nitto Persons", regardless of gender or nationality, who have Nitto DNA Ideal shape of enterprise we would like to achieve in 2018: A centennial company trusted by society and embraced with pride by its employees, achieving ever-lasting growth 22

23 Sales & OP plan Plan to achieve the record-high sales & op in 2013 Target CAGR from FY12 to FY15 is 11% for sales & 20% for op Sales 1000 (Bln. ) bln. 96 bln. Operating Profit 120 bln. 10.1% 12.5% 13.0% Net Sales 765 Operating Margin OP (Bln. ) 列 *Assume 95/US$ for 2013 and

24 Sales plan by regions Aiming for the sales expansion outside of Japan, specially emerging countries 1, (Bln. ) % 53% 54% 31% 27% 25% 列 Europe North America South Asia East Asia Japan 24

25 Capital Investment Plan In order to foster healthy business growth, we have planned a capital investment of a record-high 200 to 230 billion yen for 3 years over the FY Business-based(FY13~15) Regional-based(FY13~15) Medical & Membrane Industrial Tape (Functional base products) 30% Optronics 60% South Asia Others Europe & the US East Asia 26% Japan 38% Total:200~240 bln. yen *Medical & Membrane includes the company-wide IT investments Total:200~240 bln. yen 25

26 Information Fine Materials: How to achieve competitive superiority Nitto will continue to achieve competitive superiority by defeating the commoditization due to the change of biz. model and creating the new demand by the newlydeveloped products Development of innovative products and technologies Added value for customers New business model "Roll to panel" (intellectual property) Quality and technological improvement Commoditization Polarizer LCD display Timeline OLED 26

27 Functional Base Products(Industrial tape): Unique strength exerted in accordance with the industrial life cycle With our extensive product line consisting of 13,500 products, we introduce products optimum to each market in accordance with its stage of development. We create new Area Niche Top products in the areas marked with change and growth. Industrial development phase GDP per capita (USD) Underdeveloped Developing Developed Safety & Security Infrastructure Sanitary Convenience Home appliance IT devices Cars Houses Comfort Increased awareness for medical and environmental issues African countries India Vietnam Indonesia China Thailand Turkey Russia Brazil Mexico Europe North America Japan, Korea, Taiwan

28 Functional base products(industrial tape) : Creation of ANT product Every social infrastructure needs anticorrosion material Water pipe Buried tank Underwater pile Valve Expanding the corrosion damage of social infrastructure will cause the serious accidents or economic losses Thermal power plant Bridge girder Petrochemical complex tank 28

29 Functional base material(industrial tape) : Status of anticorrosion material in China Solve the problem of social infrastructure in China with Nitto's cultivated skills and know-how for years Features in anticorrosion market in China Nitto's status & Nitto s product line-up (1)Started the market investigation since 2011 (1)Assign the highest priority to the investments for the economic growth (2) Economic loss by corrosion is huge Nitto s anticorrosion products : The products are superior to the method, property, economical aspect and environmentally safety etc. (2) Collaboration with Executive Doctor, Hou of CAE(China Academy of Engineer) (3) Decided to set up a new company of anticorrosion material in Qingtao Remove corrosion Coat primer Stick with tape Apply topcoat Nitto supplying products フ ライマー Primer Tape テーフ トッフ コート Topcoat Qingtao Hailan Nitto Technology. Co. Ltd. Capital : 25M CNY Capital Construction : Nitto Denko 67% Qingtao Hailan Material Technology 33% Products:Anticorrosion & waterproof materials Foundation : June 2013 Start of production : October 2013 Sales target : Initial year 2bln. yen bln. yen 29

30 Pursuing new opportunities: How we understand our entrance to new markets We ll develop the market at once by allocating management resources in case water vein connects for Nitto even if it seems isolated from our conventional markets Health Automotive Electronics Environmental solutions Capital investment etc. Information & Technology etc. Water vein (=the trigger point of growing/changing market) M&A or collaboration due to the timing & time axis 30

31 Our strategy was to relentlessly pursue new opportunities - Now we are starting to see actual results In the Green, Clean & Fine domains, we introduced products which made our customers say "This is exactly what we wanted!" MARINGLIDE (Antifouling protection film for marine applications) Introduced film-based antifouling which can substitute conventional paint-based method PENJEREX (Transparent energy-saving window insulation film) The film features thermal insulation along with solar heat rejection warm Start sales from 2014 Sales target : 3 bln. yen per year for FY2015 A new thermosetting thermal resistant encapsulation sheet for LED Introduced the industry s first-ever sheet-based encapsulation method Molecular targeting DDS technology Developing antifibrotic therapies. Clinical study is planned to start in the USA. STALOGY (personal stationary) Nitto's subsidiary NITOMS introduced high-end personal stationery Sales target : 6 bln. yen per year for FY2015 Target : Gain FDA approval in 2018 Sales target : 1 bln. yen per year for FY

32 1. Review of FY Forecast & direction of FY New mid. term management plan Nitto Conclusion 32

33 For healthy and sustainable business growth By accomplishing the "Nitto-2015 mid-term plan, we will stabilize our profit structure and get back on the development track which leads us to the further growth. Sales & OPM image by 3 segments in OP Margin 2015 Optronics 2015 Industrial Tape Medical & Membrane Sales

34 Return to growth focusing on 3 strategies! Depreciation of yen Growth 34

35 <Notes> This materials include forecasts and forward-looking statements determined by the Company based on the currently available information that include risks and uncertainties. Please acknowledge that actual results may vary significantly due to a number of important factors. Brand Statement of Nitto Denko Group At Moments of Change with Brilliant Technology and Flexible Attitude 35