TOKYO OHKA KOGYO CO., LTD. Business Results

Transcription

1 TOKYO OHKA KOGYO CO., LTD. Business Results Fiscal Year ended March 2016 May 11, 2016

2 Contents 1. Consolidated Business Results for FY Consolidated Performance Forecasts for FY2017 p.2 p.12 1

3 Consolidated Business Results for FY2016

4 Summary (Millions of yen) FY2015 FY2016 Change % Net sales 88,086 89,969 +1, Operating income 13,253 12,438 (814) (6.1) Ordinary income 14,443 12,684 (1,759) (12.2) Profit attributable to owners of parent 8,818 7,716 (1,101) (12.5) Average exchange rate (US$): 109.7/$ (FY2015) 119.3/$ (FY2016) Net Sales: Began to decline in the fourth quarter and did not achieve the revised forecast (announced Nov. 5, 2015); however, net sales increased. Operating Income: Decreased due to the impact of performance decline in the Equipment Business, etc. Profit attributable to owners of parent: Decreased due to the decline in operating income and foreign exchange losses. 3

5 Non-operating Expenses or Income/ Extraordinary Losses or Income (Millions of yen) FY2015 FY2016 YoY Non-operating expenses or income 1, (944) Interest and dividend income (Foreign exchange related losses/gains) Foreign exchange (loss) gain Loss(gain) on valuation of derivatives (+999) +1,459 (460) ( 371) (642) +270 (1,370) (2,101) +731 New plant related expenses (496) +496 Operating preparation expenses (339) (339) Extraordinary losses or income (141) (906) (764) Gain on revision of retirement benefit plan Gain on sale of investment securities (622) +50 Impairment loss Loss on valuation of investment securities (622) - (752) (108) (87) (108) 4

6 Results by Business Segment FY2015 FY2016 (Millions of yen) Change % Net sales 88,086 89,969 +1, Material business 84,611 87,280 +2, Electronic functional materials 49,818 51,134 +1, High purity chemicals 34,844 35,931 +1, Other (52) Equipment business 3,475 2,689 (786) (22.6) Operating income 13,253 12,438 (814) (6.1) Material business 16,355 16,203 (152) (0.9) Equipment business 20 (423) (443) - Eliminations and corporate (3,122) (3,342) (219) - (Note) Net sales of the Equipment Business are the figures after elimination of inter-segment sales. 5

7 Breakdown of the Change in Operating Income (Material Business) FY2015 result vs FY2016 result Expenses increase ( 2.2billion) 16.4 billion Impact of sales increases, etc billion Impact of exchange rate changes and discounted selling prices + 0.5billion 16.2 billion FY2015 Result ( 0.2 billion) FY2016 Result 6

8 Sales Breakdown of Material Business Net Sales (Millions of yen) 20,000 15,000 21,804 22,248 21,987 21,848 22,182 (267) (9) 46 9,198 9,341 9,268 9,041 9,175 21, ,446 10,000 5,000 12,873 12,817 12,603 12,817 12,960 12, /3Q 2015/4Q 2016/1Q 2016/2Q 2016/3Q 2016/4Q Electronic functional materials High purity chemicals Other 7

9 (Reference) Electronic Functional Materials Division Sales Composition of Electronic Functional Materials by Type High-density integration Other 9% LCD 18% 11% ArF 23% g+i FY2015 Full-year result 17% KrF 22% High-density integration Other g+i 11% 17% 12% FY2016 KrF LCD Full-year 22% 13% result ArF 26% Sales Composition of Semiconductor Photoresist by Region Asia 60% FY2015 Full-year result Japan 20% North America 15% Asia 57% FY2016 Full-year result Japan 20% North America 18% 5% Europe 5% Europe 8

10 Equipment Business Net sales/order backlog (Millions of yen) 2,000 1,500 1,629 1,499 1,975 1,870 1,210 1,719 1, /1H 2015/2H 2016/1H 2016/2H Net sales Order backlog (Millions of yen) 2015/1H 2015/2H 2016/1 H 2016/2H Year-end order backlog 1,180 1,072 1,440 1,140 (Note) The net sales of the equipment business is the figure after elimination of inter-segment sales. 9

11 Balance Sheets As of March 31, 2016 (Millions of yen) YoY Current assets 87,114 (3,939) Cash and deposits Notes and accounts receivable Inventories 50,876 17,921 12,999 (3,090) (1,500) +1,444 Property, plant and equipment 47,913 (1,458) Intangible assets 749 (185) Investments and other assets 31,523 (1,979) Current liabilities 17,130 (2,164) Notes and accounts payable 7,787 (2,010) Non-current liabilities 2,899 (670) Total net assets 147,270 (4,728) Total assets 167,300 (7,563) Buildings and structures +2,190 Machinery and equipment (2,354) Tools, furniture and fixtures +1,057 Land (107) Construction in progress (2,243) Retained earnings +858 Treasury stock (2,056) Valuation difference on available-for-sale securities (1,043) Remeasurements of defined benefit plans (1,844) 10

12 Cash Flows FY2015 FY2016 (Millions of yen) Cash flows from operating activities +13, ,902 Income before income taxes and minority interests +14, ,777 Depreciation +4,276 +5,631 Increase (decrease) in allowance for doubtful accounts Decrease (increase) in trade notes and accounts receivable (94) (18) (2,119) +1,200 Decrease (increase) in inventories (368) (1,755) Decrease (increase) in trade notes and accounts payable +3,121 (1,522) Increase (decrease) in advances received (692) (5) Income taxes paid (3,935) (4,157) Cash flows from investing activities (10,197) (4,385) Cash flows from financing activities (2,110) (9,268) Translation adjustments +1,138 (298) Net increase (decrease) in cash and cash equivalents +2,408 (2,049) Major breakdown: Purchase of property, plant and equipment (5,335) Major breakdown: Purchases of treasury stock (6,304) Cash dividends paid (2,849) (incl. minority shareholders) 11

13 Consolidated Performance Forecasts for FY2017

14 Earnings Forecasts (Full-year) (Millions of yen) FY2016 FY2017 Forecasts Results Change % Net sales 89,969 87,100 (2,869) (3.2) Operating income 12,438 7,700 (4,738) (38.1) Ordinary income 12,684 8,300 (4,384) (34.6) Profit attributable to owners of parent 7,716 5,300 (2,416) (31.3) Exchange rate assumptions(us$): 119.3/$ (FY2016) 105.0/$ (FY2017) Net sales: Expected to decrease 3.2% due to a decline in Material Business sales affected by a slowdown in semiconductor and LCD markets and the yen s appreciation, despite an increase in Equipment Business sales. Operating income: Expected to decrease 38.1% assuming $1= 105, partly due to increase in depreciation following aggressive capital investment. Profit attributable to owners of parent:expected to decrease 31.3% due to the decline in operating income. 13

15 Capital Investments/Depreciation/R&D (Millions of yen) 15,000 14,577 12,500 11,700 10,000 7,500 5,000 2,500 6,157 6,211 6,389 5,332 4,038 3,758 3,162 2,672 7,276 6,903 4,276 5,919 7,015 5,631 8,100 6, /3 13/3 14/3 15/3 16/3 17/3 (Forecast) Capital investments Depreciation R&D 14

16 Performance Forecasts by Business Segment FY2016 FY2016 Full-year forecasts Full-year results Change % Net sales 89,969 87,100 (2,869) (3.2) Material business 87,280 82,400 (4,880) (5.6) Electronic functional materials (Millions of yen, %) 51,134 50,800 (334) (0.7) High purity chemicals 35,931 31,500 (4,431) (12.3) Equipment business 2,689 4,700 +2, Operating income 12,438 7,700 (4,738) (38.1) Material business 16,203 11,400 (4,803) (29.6) Equipment business (423) Eliminations and corporate (3,342) (3,700) (357) - (Note) The net sales of the equipment business is the figure after elimination of inter-segment sales. 15

17 Breakdown of the Change in Operating Income (Material Business) FY2016 Result vs FY 2017 Forecast Expenses increase ( 1.3 billion) Impact of sales increases, etc billion 16.4 billion Impact of Exchange rate changes and discounted selling prices ( 4.3 billion) 11.4 billion FY2016/3 Full-year result ( 4.8 billion) FY2017/3 Full-year forecast 16

18 Sales Breakdown of Material Business (Forecast) Net Sales (Millions of yen) 50,000 40,000 40, ,053 43,835 43, ,800 41, ,000 16,304 18,539 18,309 17,621 15,700 15,800 20,000 10,000 24,127 25,690 25,420 25,714 25,000 25, /1H 2015/2H 2016/1H 2016/2H 2017/1H (Forecast) 2017/2H (Forecast) Electronic functional materials High purity chemicals Other (Note) The second half forecast is obtained by subtracting first-half results from the full-year forecast. 17

19 (Reference) Electronic Functional Materials Division Sales Composition of Electronic Functional Materials by Type Other High-density integration 12% LCD 13% 10% FY2015 Full-year result ArF 26% g+i 17% KrF 22% Other High-density integration g+i 10% 17% 15% FY2016 Full-year KrF LCD forecast 23% 10% ArF 25% Sales Composition of Semiconductor Photoresist by Region Asia 57% FY2015 Full-year result Japan 20% North America 18% Asia 56% Japan 24% FY2016 Full-year forecast 15% North America 5% Europe 5% Europe 18

20 (Note) This presentation material contains forward-looking statements that describe future prospects of TOKYO OHKA KOGYO CO., LTD. (the Company) in terms of business planning, earnings and management strategies. Such statements are based on management s judgement, derived from information available to it at the time such information was prepared. Readers are cautioned not to rely solely on these forward-looking statements, as actual results and strategies may differ substantially according to changes in the Company s business environment.

21 Medium-Term Plan 2018 Medium-Term Plan 2018 (From April 1, 2016 to March 31, 2019) -Challenge for the Future!- May 11, 2016

22 Contents TOK Medium-Term Plan 2015 Outlook for Next Medium-Term Plan Review of TOK Medium-Term Plan 2015 TOK Medium-Term Plan 2018 Outline/Earnings Targets Company-wide strategy ROE/Return to Shareholders 1

23 Operating income (Billions of yen) Global financial crisis Urgent business profitability 09/ TOK Medium-Term Plan 2015/ Next Medium-Term Plan 3 Structural reforms Lean corporate structure Target Achieved 150 record-high profits /3 11/3 12/3 13/3 14/3 15/3 16/3 FY2017 FY2019 FY2021 Buget Target Target Despite profit decline forecast in the first year, aim for new record profit in the final year Fiscal Year 2021 Target Achieved record-high profits, but growth faltered in the final year, missing the target Outlook for Next Medium-Term Plan (TOK Medium-Term Plan 2018) TOK Midium-Term Plan 2015 CAGR:+16.5% TOK Midium-Term Plan 2018 CAGR:+6.8% 200 2

24 2. Review of TOK Medium-Term Plan 2015 Sales Target Achievement of Mainstay Products (Note)Size of diagram does not reflect the sales volume. Electronic functional materials Surpassed( ) Almost achieved ( ) Unachieved( ) High purity chemicals Succeeded in differentiation based on development and sales expansion of high-quality grade tailored to customer s processes. ArF:Driven by North American sales KrF: Contribution from double-digit annual growth in Asia g+i :Secured positive growth High purity chemicals ArF LCD materials High-density integration materials Succeeded in sales expansion among major OSAT manufacturers and developing new customers. LCD materials:change in industry environment, no progress on new adoption New business / New material Renewable energy (photovoltaic related): Did not progress as expected, lackluster performance Rechargeable battery: Rechargeable microbatteries, etc.: Not commercialized Equipment business:delay in market startup KrF g+i New business / New material High-density integration materials (Millions of yen) Equipment business Target 2016/3 Results Net sales 99,000 89,969 Material business 88,000 87,280 Electronic functional materials 62,300 51,134 High purity chemicals 25,500 35,931 Other Equipment business 11,000 2,689 Operating income 15,000 12,438 Material business 16,800 16,203 Equipment business 1, Eliminations and corporate 3,300 3,342 3

25 3. TOK Medium-Term Plan 2018 Outline/Earnings Targets Growth strategies to reverse a first-year profit decline, aiming for record-high profits (Millions of yen) 2016/3 2019/3 Change CAGR Net sales 89, , , % Material business 87, , , % Electronic functional Materials 51,134 68, , % High purity chemicals 35,931 37,000 +1, % Other 214 5,000 +4,785 - Equipment business 2,689 10,000 +7, % Operating income 12,438 15,000 +2, % Material business 16,203 17, % Equipment business 423 1,700 +2,123 - Eliminations and corporate 3,342 3, Ordinary income 12,684 15,000 +2, % Profit attributable to Owners parent 7,176 10,000 +2, % Exchange rate(us$/yen) (Millions of yen) 2011/3~13/3 TOK Medium-Term Plan 2015 (2014/3~16/3) TOK Medium-Term Plan 2018 (2017/3~19/3) Change Capital investments 10,195 27,774 34,000 +6,226 D e p r e c i a t i o n 12,190 12,581 22,000 +9,419 R & D 18,729 20,308 24,000 +3,691 4

26 4-1. TOK Medium-Term Plan 2018 Company-wide strategy As an R&D-driven company, focus on high added value to establish presence Renew mainstay products ArF Increasing demand for 1Xnm generation, win customers adopting 10nm or less KrF Increase adoption of thick-film photoresists for 3D-NAND High-density integration materials New/advanced processing applications (e.g. FO-WLP) MEMS materials Display materials High value-added materials for advanced process High purity chemicals Introduce new Clean Solution New Business/New Materials Commercialize focus themes (functional films, NIL, etc.) Develop promising themes Accelerate creation of new themes established Corporate Venturing Div. Promote business renewal Develop new business domains (Open Innovation, etc.) Versatile applications of the products CMOS image sensor applications Electronic components application Power device application 5

27 4-2. TOK Medium-Term Plan 2018 Company-wide strategy Evolution of strategy of building a close relationship with customers Transition from structure-building to harvesting stage TOK EUROPE B.V. (NETHERLAND) CHANG CHUN TOK (CHANGSHU) CO., LTD. (CHINA) TOKYO OHKA KOGYO AMERICA, INC. (U.S.A.) Shanghai Representative Office Singapre Office TOK TAIWAN CO., LTD (TAIWAN) R&D Plant Plant Sales Plant Sales TOK ADVANCED MATERIALS CO., LTD(KOREA) Demonstrate technological capabilities and realize growth targets based on long-term relationships of trust with customers ArF:Increase market share + KrF(Further increase market share by 3D-NAND application as a pillar) High-density integration materials (Expand newly developed products) High Purity Chemicals (Capture needs for higher quality products) Chinese marker (Strengthen customer support structure) 6

28 4-3. TOK Medium-Term Plan 2018 Company-wide strategy Focus on three equipment fields and strengthen sales based on three approaches Coating machine for LCD Spin Coater for thick film TSV equipment field Zero Newton Bonding machines Next-generation OLED Display manufacturing equipment UV curing machines Approach to prototype OLED display development line Approach to the new applications/new line Zero Newton Deboneing machines Approach to Foundry/OSAT Utilization of TSV technology Developing machines for thick film :repair remodel :3 equipments field ~2013/3 TOK Medium-Term Plan 2015 (From April 1, 2013 to March 31, 2016) TOK Medium-Term Plan 2018 (From April 1, 2016 to March 31, 2019) FY2021~ 7

29 5-1. ROE FY2021 Approach to improving ROE TOK Medium-Term Plan 2018(From April 1, 2016 to March 31, 2019 From April 1, 2016 to March 31, 2019) :Period of upfront investment for growth ROE target (FY2019) : over 7% Achieve targets based on profit growth Aim to realize over 8% in FY2021 8

30 5-2. Returns to Shareholders Enhance returns to shareholders with emphasis on dividends Dividend per share ( ) ( Annual dividends per share Dividend payout ratio (Consolidated) Year-end end Interim % % % 64(Plan) (Plan Plan) 35.8% (Forecast) 52.7% (Forecast Forecast) (Forecast Forecast) Dividend policy (FY2017 onwards) Considering the current level of dividends, continuously distribute dividends with a consolidated dividend payout ratio of over 40% (* Lift consolidated dividend payout ratio guideline from over 30% to over 40%) Purchase of treasury stock Implement flexibly from a long-term perspective Operating income ( 億円 ) 2013/3 2014/3 2015/3 2016/3* 2017/3 2019/3 (Plan) (Target) *FY2016: Including 4 yen of commemorative dividend for 75th anniversary in FY2016 9

31 (Note) This presentation material contains forward-looking statements that describe future prospects of TOKYO OHKA KOGYO CO., LTD. (the Company) in terms of business planning, earnings and management strategies. Such statements are based on management s judgement, derived from information available to it at the time such information was prepared. Readers are cautioned not to rely solely on these forward-looking statements, as actual results and strategies may differ substantially according to changes in the Company s business environment.