Consolidated Financial Summary (For the First Half Ended September 30, 2012)

Transcription

1 Consolidated Financial Summary (For the First Half Ended September 30, 2012) October 29, 2012 Listed company: Hitachi Chemical Co., Ltd. (Code number: 4217 Stock exchange: Tokyo and Osaka) (URL Representative: Kazuyuki Tanaka Position of the person: President, Chief Executive Officer and Director Person in charge of the reference: Atsushi Kato Position of the person: Manager, Corporate Communication Center, CSR Management Sector Tel: Date of the release of quarterly report (schedule): November 13, 2012 Date of the start of dividend payment: November 28, 2012 Creates supplemental explanatory materials for quarterly financial summaries: Yes Holds quarterly financial results meeting: Yes (for investment analysts and institutional investors) (Amounts rounded to the nearest million yen) 1. Consolidated Financial Highlights for the First Half Ended September 30, 2012 (April 1, 2012 through September 30, 2012) (1) Consolidated Financial Results (% indicates the rate of +/- compared with the same term of previous fiscal year) Net Sales Operating Income Ordinary Income Net Income First half ended: Million yen % Million yen % Million yen % Million yen % September 30, 2012 September 30, , ,446 (2.7) (4.8) 13,401 15,767 (15.0) (36.9) 13,483 15,909 (15.2) (37.8) 9,001 8, (46.1) Note: Comprehensive income April 1, 2012 through September 30, 2012: 4,622 million yen (187.6%) April 1, 2011 through September 30, 2011: 1,607 million yen ((84.9%)) First half ended: September 30, 2012 September 30, 2011 Net Income per Share (Basic) Yen Net Income per Share (Diluted) Yen - - (2) Consolidated Financial Position Total Assets Total Net Assets Net Worth Ratio Million yen Million yen % As of Sep. 30, 2012 As of March 31, , , , , Reference: Stockholders' equity As of September 30, 2012: 283,849 million yen As of March, 2012: 283,079 million yen 2. Dividend March, 2012 March, 2013 March, 2013 (Forecast) Dividend per Share 1st Quarter 2nd Quarter 3rd Quarter Year-End Total Yen Yen Yen Yen Yen Note: Revision of the latest dividend forecast: Yes Note: FY2012 2nd quarter dividend breakdown: Ordinary Dividend yen / Commemorative Dividend 2.00 yen - 3. Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2013 (April 1, 2012 through March 31, 2013) (% indicates the rate of +/- compared with the previous fiscal year) Net Income per Net Sales Operating Income Ordinary Income Net Income Share (Basic) Million yen % Million yen % Million yen % Million yen % Yen Fiscal year 490, , , , Note: Revision of the latest consolidated financial forecast: Yes

2 * Notes (1) Change in Scope of Consolidation during the term: None (2) Adoption of Special Accounting Methods for Presenting Consolidated Financial Statements: None (3) Changes of Accounting Policies Applied, Changes in Accounting Estimates and Retrospective Restatements (a) Changes of accounting policies applied due to revisions of accounting standards: None (b) Changes of accounting policies other than (a): Yes (c) Changes in accounting estimates: Yes (d) Retrospective restatements: None Note: For more details, please refer to page 5, "Changes of Accounting Policies Applied, Changes in Accounting Estimates and Retrospective Restatments." Note: Effective from the first quarter ended June 30, 2012, the method for depreciation of property, plant and equipment belonging to the Company and domestic consolidated subsidiaries has been changed from the declining balance method to the straight line method. This change is considered a case in which it is difficult to distinguish between a change in accounting standards and a change in accounting estimates, as described in article 10, item 5, of Ordinance on Terminology, Forms and Preparation Methods of Quarterly Consolidated Financial Statements. Accordingly, items (b), Changes of accounting policies other than (a), and (c), Changes in accounting estimates, have both been marked Yes. (4) Number of Shares Issued (Common Stock): (a) Number of shares at the end of the term (Including treasury stock): Sep. 30, 2012: 208,364,913 shares March 31, 2012: 208,364,913 shares (b) Number of treasury stock at the end of the term: Sep. 30, 2012: 116,715 shares March 31, 2012: 115,612 shares (c) Average number of shares during the term: Apr. - Sep : 208,248,539 shares Apr. - Sep : 208,250,801 shares * Information regarding the implementation of quarterly review procedures These quarterly financial results are not subject to quarterly review procedures. Thus, at the time of disclosure of these financial results, the quarterly financial statement review procedures based on the Financial Instruments and Exchange Law, have not been completed. * Explanation on the appropriate use of financial forecasts and other important items The financial forecasts shown on this report are estimated based on information available as of the issuing date of this report, and therefore the actual results for the future terms may differ from these forecasted figures due to various unknown factors. For more information regarding the financial forecast, please refer to page 4, "Qualitative Information on Consolidated Financial Forecast." - 2 -

3 (Attached Documents) 1. Review of Operations In the period from April 1, 2012 through September 30, 2012, Hitachi Chemical showed the business results that net sales were 234,043 million yen, a decrease of 2.7% from the same term of the previous fiscal year. Net sales decreased in both the Functional Materials Segment and the Advanced Components and Systems Segment, amid concerns of a prolonged downturn in the semiconductor-related market against the backdrop of the worldwide economic slowdown. As a result, operating income decreased by 15.0% to 13,401 million yen, and ordinary income decreased by 15.2% to 13,483 million yen compared with the same term of the previous fiscal year. Meanwhile, net income increased by 8.4% to 9,001 million yen compared with the same term of the previous fiscal year. This is because the compensation of approximately 1.9 billion yen received from Tokyo Electric Power Company, Incorporated following the accident at the Fukushima Dai-ichi Nuclear Power Station was recorded as extraordinary profit in the first half of the fiscal year. The segmental results are shown below (with the internal sales among the segments eliminated.) Functional Materials Segment Sales in this segment were 124,732 million yen, a decrease of 3.3% from the same term of previous fiscal year. (1) Electronics Materials Sales of epoxy molding compounds for semiconductors decreased compared with the same term of the previous fiscal year due to the sluggish semiconductor market. Sales of die bonding materials for semiconductors remained almost the same compared with the same term of the previous fiscal year due to their increased adoption for smartphones and tablet PCs, and etc., despite the sluggish semiconductor market. Sales of slurry for chemical mechanical planarization increased compared with the same term of previous fiscal year due to an increase in sales of the products suitable for finer technology nodes of semiconductor design rules. Sales of varnishes remained almost the same compared with the same term of previous fiscal year due to decreasing demand for use in home appliances and etc., in spite of their use for automobiles showing solid growth (2) Inorganic Materials Sales of carbon anode materials for lithium ion batteries decreased compared with the same term of previous fiscal year with a decrease in demand for eco-friendly automobiles. Sales of carbon products increased significantly compared with the same term of previous fiscal year due to the results of progressing recovery plan of the transference of carbon brushes production to new sites, in response to the ceased operation resulted by the incident at the Fukushima Dai-ichi Nuclear Power Station. Sales of ceramics decreased compared with the same term of previous fiscal year due to a lower demand from certain customers for products used in semiconductor manufacturing equipment. (3) Polymer Science Materials Sales of synthetic resins for paints remained almost the same compared with the same term of previous fiscal year due to a lower demand for paints used in industrial machinery, and etc., despite growth in sales for paints used in building materials. Sales of adhesive films decreased compared with the same term of previous fiscal year, reflecting a decline in demand for semiconductor-molding s release sheet and etc. Sales of anisotropic conductive films for displays remained almost the same compared with the same term of the previous fiscal year due to increasing sales for smartphones and tablet PCs, despite shrinking demand for LCD TVs

4 Sales of contactless IC cards and tags increased compared with the same term of previous fiscal year due to an increasing demand in the amusement field. (4) Printed Wiring Board Materials Sales of copper-clad laminates for printed wiring boards decreased compared with the same term of previous fiscal year reflecting a decrease in demand of those for use as substrates in semiconductor packages. Sales of photosensitive dry films for printed wiring boards decreased compared with the same term of previous fiscal year due to a lapse in demand for printed wiring boards in China. Advanced Components and Systems Segment Sales in this segment were 109,311 million yen, a decrease of 1.9% from the same term of previous fiscal year. (1) Automotive Products Sales of plastic molded products increased compared with the same term of the previous fiscal year due to increasing sales of housing for intelligent power module for eco-friendly automobiles. Sales of friction materials increased compared with the same term of previous fiscal year due to the results of progressing recovery plan of the transference of production to new sites, in response to the ceased operation resulted by the incident at the Fukushima Dai-ichi Nuclear Power Station. Sales of powder metal products increased compared with the same term of previous fiscal year due to the automobile manufacturers recoveries and rebounds from the impacts of the Great East Japan Earthquake. (2)Energy Storage Devices and Systems Sales of vehicle batteries remained almost the same compared with the same term of previous fiscal year due to decreased sales in automobile repairs, in spite of increased sales of the products used in eco-friendly automobiles equipped with an idle-stop systems, and etc. Sales of industrial batteries and systems increased compared with the same term of previous fiscal year due to growing sales of products used in backup power sources for telecommunications providers. Sales of capacitors decreased compared with the same term of previous fiscal year as a result of a decline in capital investment for photovoltaic power generation system in Europe, and etc. (3) Electronics Components Sales of printed wiring boards decreased compared with the same term of previous fiscal year due to a decline in demand for the use in semiconductor testers, and etc. (4) Others Sales of diagnostics / instruments increased compared with the same term of previous fiscal year due to increased sales mainly for allergy diagnostic kits. 2. Qualitative Information on Consolidated Financial Forecast As for the economic outlook, amid the continued global economic slowdown and struggling exports, consumer spending is expected to slow mainly due to the end of subsidies for eco-friendly automobiles. There are also concerns that the Japanese economy will backslide from the recovery after the earthquake to a recession. Even under these uncertain conditions, the Group will continue to implement measures, including utilizing advantages of the establishment and expansion of overseas production bases, accelerating the expansion into the global market, expanding businesses in the environmental and energy areas and generating new businesses and products. It will also promote the "middle range strategy" aimed at a further increase in sales and profits by introducing cost-competitive products into markets in emerging countries through strategic pricing. In addition, the Group will make every possible effort to strengthen cost-competitiveness through production innovation, and to further reduce fixed and product costs through fundamental reform of the business process, thereby improving profitability

5 Note that the following adjustments have been made to the financial forecast for FY [Fiscal year ending March 31, 2013] Forecast [A] Previous Forecast [B] Amount of Increase/decrease [A-B] Increase/decrease Rate Net Sales 490, ,000 (20,000) (3.9)% Operating Income 31,500 38,000 (6,500) (17.1)% Ordinary Income 30,500 37,000 (6,500) (17.6)% Net Income 19,000 23,500 (4,500) (19.1)% 3. Items Regarding Notes (1)Changes of Accounting Policies Applied, Changes in Accounting Estimates and Retrospective Restatements (Change in method of depreciation of property, plant and equipment) Previously, the declining balance method was used to depreciate property, plant and equipment belonging to the Company and domestic consolidated subsidiaries (the straight line method was used for buildings (excluding annexes) acquired after April 1, 1998). Effective from the first quarter ended June 30, 2012, the straight line method has been used for deprecation of these assets. As customers continue to develop their operations on a global scale with increasing speed, the Group has been actively expanding overseas operating sites on the basis of the medium-term management policy with the purposes of capturing the demand in overseas markets as well as supplying products in a stable manner in a case of disaster, after experiencing the operation halts in some production sites resulting from the Great East Japan Earthquake. As a result of these efforts, these established facilities will sequentially commence operation in the fiscal 2012 and onward. As for the domestic bases, we expect production volumes to be secured through the business system shifted toward high-value-added products, and the facilities will continue to operate in a stable manner. For these reasons, the Company decided that utilizing the straight line method for depreciation of property, plant and equipment belonging to the Company and domestic consolidated subsidiaries better reflected the actual circumstances regarding the Company s business operations. As a result of this change, the first half s operating income, ordinary income, and income before income taxes and minority interests all increased 882 million yen in comparison to the forecasts calculated using the former method

6 4. Consolidated Financial Statements (1) Consolidated Balance Sheets As of March 31, 2012 As of September 30, 2012 Assets Current assets Cash and deposits 37,703 39,021 Trade notes and accounts receivables 107, ,374 Short-term investment in securities 1, Finished goods 19,160 20,090 Work in process 10,387 10,842 Raw materials 12,972 13,312 Deposits to related companies 38,698 35,213 Other current assets 22,195 20,490 Less allowance for doubtful receivables (1,639) (1,451) Total current assets 248, ,890 Fixed assets Net property, plant and equipment Buildings and structures, net 43,551 43,087 Machinery, equipment and transportation equipment, net 49,500 49,096 Lands 18,334 18,622 Other fixed assets, net 19,910 24,765 Total net property, plant and equipment 131, ,570 Intangible assets Goodwill 24,683 24,610 Other intangible assets 5,022 4,698 Total intangible assets 29,705 29,308 Investments and other assets Investments in securities 14,173 13,797 Other assets 18,008 18,929 Less allowance for doubtful receivables (699) (625) Total investments and other assets 31,482 32,101 Total fixed assets 192, ,979 Total assets 440, ,

7 As of March 31, 2012 As of September 30, 2012 Liabilities Current liabilities Trade notes and accounts payables Short-term debt Income taxes payable Provision for loss on disaster Other current liabilities Total current liabilities Fixed liabilities Debentures Long-term debt Retirement and severance benefits Provision for directors' retirement benefits Other fixed liabilities Total fixed liabilities Total liabilities Net assets Stockholders' equity Common stock Capital surplus Retained earnings Treasury stock Total stockholders' equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustments Total accumulated other comprehensive income Minority interests Total net assets Total liabilities, net assets 50,367 48,862 15,931 17,149 5,204 6, ,900 33, , ,517 20,000 20,000 4,739 7,057 16,544 16,842 1, ,792 2,900 44,328 47, , ,902 15,454 15,454 36,113 36, , ,578 (191) (192) 299, , (166) 176 (17,188) (21,455) (16,622) (21,104) 4,160 4, , , , ,

8 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Consolidated statements of income) (First half ended September 30, 2012) First half ended Sep. 30, 2011 (Apr. 1, Sep. 30, 2011) First half ended Sep. 30, 2012 (Apr. 1, Sep. 30, 2012) Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income Non-operating income 240, , , ,148 55,242 54,895 39,475 41,494 15,767 13,401 Interest income Dividends income Royalty income Equity in earnings of affiliates Other non-operating income 1,041 1,460 Total non-operating income 2,818 3,444 Non-operating expenses Interest expenses Loss on disposal of fixed assets Foreign exchange losses 1,081 1,069 Other non-operating expenses 809 1,371 Total non-operating expenses 2,676 3,362 Ordinary income 15,909 13,483 Extraordinary profit Gain on sales of property, plant and equipment Compensation income - 1,899 Total extraordinary profit 661 1,899 Extraordinary loss Loss on disaster 1,164 - Total extraordinary loss 1,164 - Income before income taxes and minority interests Income taxes Income before minority interests Minority interests in income Net income 15,406 15,382 6,440 6,052 8,966 9, ,307 9,

9 (Consolidated statements of comprehensive income) (First half ended September 30, 2012) First half ended Sep. 30, 2011 (Apr. 1, Sep. 30, 2011) First half ended Sep. 30, 2012 (Apr. 1, Sep. 30, 2012) Income before minority interests 8,966 9,330 Other comprehensive income Valuation difference on available-for-sale securities (527) (558) Deferred gains or losses on hedges (1,060) 342 Foreign currency translation adjustments (5,598) (4,373) Share of other comprehensive income of associates accounted for using equity method (174) (119) Total other comprehensive income (7,359) (4,708) Comprehensive income 1,607 4,622 (Comprehensive income attributable to) Comprehensive income attributable to owners of the parent 1,814 4,519 Comprehensive income attributable to minority interests (207)

10 (3) Notes on Premise of Going Concern: Not applicable (4) Segment Information In light of the conversion of Shin-Kobe Electric Machinery Co., Ltd., into a wholly owned subsidiary, the Company established the Energy Devices & System Business Headquarters on April 1, In conjunction with this, certain products manufactured by Shin-Kobe Electric Machinery Co., Ltd. were switched from the Advanced Components and Systems Segment to the Functional Materials Segment effective starting from the first quarter ended June 30, Segment information for the first half of the previous fiscal year has been restated to reflect the changes. (a)overview of reportable segment The Company s reportable segment includes items in the constituent units of our business, for which separate financial information is available, and those items to be reviewed periodically by the Board of Directors of the Company to determine the allocation of management resources and evaluate business results. The Company is developing business activities based on the organizational structure that is categorized depending on the degree of product processing, from materials through components to parts. Based on the above, according to the degree of product processing, the Company determines two reportable segments, namely categorizing materials as Functional Materials Segment and the components and parts as Advanced Components and Systems Segment. In the Functional Materials business, the Company manufactures and sells Electronics Materials, Inorganic Materials, Polymer Science Materials, Printed Wiring Board Materials and etc. In the Advanced Components and Systems business, the Company manufactures and sells Automotive Products, Energy Storage Devices and Systems, Electronics Components and etc

11 (b) Information related to net sales and profit or loss for each reportable segment First half ended September 30, 2011 (April 1, 2011 through September 30, 2011) Sales Item Functional Materials Reportable segment Advanced Components and Systems Total Adjustment (Note 1) Amounts shown on consolidated statements of income (Note 2) (1) Sales to outside customers 129, , , ,446 (2) Intersegment sales 4, ,399 ( 4,399) - Total 133, , ,845 ( 4,399) 240,446 Segment profit 13,400 2,386 15,786 ( 19) 15,767 Note 1: Segment profit adjustments are the amounts eliminated for intersegment transactions. Note 2: Segment profit is adjusted to be consistent with operating income shown on consolidated statements of income. First half ended September 30, 2012 (April 1, 2012 through September 30, 2012) Sales Item Functional Materials Reportable segment Advanced Components and Systems Total Adjustment (Note 1) Amounts shown on consolidated statements of income (Note 2) (1) Sales to outside customers 124, , , ,043 (2) Intersegment sales 3, ,454 ( 4,454) - Total 128, , ,497 ( 4,454) 234,043 Segment profit 11,932 1,489 13,421 ( 20) 13,401 Note 1: Segment profit adjustments are the amounts eliminated for intersegment transactions. Note 2: Segment profit is adjusted to be consistent with operating income shown on consolidated statements of income. (5) Notes on Significant Changes in Stockholders' Equity: Not applicable