Fiscal 2013 - Apr 1, 2013 to Mar 31, 2014 - Financial Results Apr 30, 2014
CONTENTS Financial Results for FY2013 1 Performance Forecasts for FY2014 2 3 Rolling Three-Year Plan ４ Supplementary Data 2
1 Financial Results for FY2013 1. Financial Highlights 2. Net Sales/Operating Income by Business Segment 3. Changes in Operating Income 4. Results for Companywide Profitability Improvement 3
1 Financial Results for FY2013 1. Financial Highlights Consolidated (year-on-year change) (Billions of yen) Difference FY2012 FY2013 Amount % 258.6 287.3 +28.6 +11 Net sales 6.7 20.2 +13.4 +199 Operating income 3.2 14.9 +11.7 +363 Ordinary income (37.9) 10.2 +48.1 - Net income (loss) (108.98) 29.37 Net income per share (yen) 83 100 Exchange rate (¥/$) 57,500 67,300 Domestic naphtha price (¥/kl) Qualitative information (Net sales) ¥287.3 billion, up 11% Pluses: increased sales volume of cement and related products, selling price revisions of petrochemicals and other products, increased sales volume of vinyl chloride monomer (VCM) as a result of resolution of plant difficulties that occurred in the previous year Minus: decreased sales volume of polycrystalline silicon (Operating income) ¥20.2 billion, up 199% Plus: companywide thoroughgoing cutbacks in expenditure Minus: domestic naphtha price hikes 4
1 Financial Results for FY2013 1. Financial Highlights Consolidated (year-on-year change) (Billions of yen) Difference FY2012 FY2013 Amount % 258.6 287.3 +28.6 +11 Net sales 6.7 20.2 +13.4 +199 Operating income 3.2 14.9 +11.7 +363 Ordinary income (37.9) 10.2 +48.1 - Net income (loss) (108.98) 29.37 Net income per share (yen) 83 100 Exchange rate (¥/$) 57,500 67,300 Domestic naphtha price (¥/kl) Qualitative information (Ordinary income) ¥14.9billion, up 363% Plus: decrease in costs of idle operations Minus: borrowing-related costs which arose from the procurement of funds through a subordinated loan (Net income) ¥10.2 billion, back into the black Pluses: extraordinary gains/losses improved, because the Company posted neither impairment loss on polycrystalline silicon manufacturing facilities nor loss from inventory revaluation, both of which were posted in the previous fiscal year; income tax expenses decreased, because the Company did not post a reversal of deferred tax assets in the period under review, which was posted in the previous fiscal year 5
1 Financial Results for FY2013 1. Financial Highlights Consolidated (compared with the previous fiscal year-end) (Billions of yen, except Shareholders’ equity ratio and D/E ratio) As of Mar 31, 2013 As of Mar 31, 2014 Changes 518.2 576.3 +58.0 Total assets 217.5 229.6 +12.1 Shareholders’ equity Shareholders’ equity ratio 42.0% 39.9% (2.1 pts) 187.7 240.7 +53.0 Interest-bearing debt 0.86 1.05 +0.19 D/E ratio 0.59 0.74 +0.15 Net D/E ratio* 625.29 660.18 Net assets per share (yen) Qualitative information *Net D/E ratio: (Interest-bearing debt – Cash and deposits, Cash equivalents, Money held in trust)/Shareholders’ equity (Total assets) Increase factors: increase in tangible fixed assets due to construction of polycrystalline silicon manufacturing facilities in Malaysia; increased securities (negotiable certificates of deposit) due to the procurement of funds through a subordinated loan (Shareholders’ equity) Increase factor: increase in retained earnings and improvement of foreign currency translation adjustments arising from the weaker yen (Interest-bearing debt) Increase factor: increased long-term loans payable as a result of the procurement of funds through the subordinated loan 6
1 Financial Results for FY2013 2. Net Sales/Operating Income by Business Segment (Year-on-year change) (Billions of yen) FY2012 FY2013 Difference Operating Operating Operating Net sales Net sales Net sales % % income income income Chemicals 77.3 0.4 86.4 2.2 +9.1 +12 +1.8 +424 Specialty Products 52.8 0.3 52.4 6.0 (0.3) (1) +5.6 +1457 Cement 69.9 5.3 78.9 6.6 +9.0 +13 +1.3 +25 Life & Amenity 51.0 2.9 57.0 4.8 +6.0 +12 +1.9 +66 Others 40.1 2.6 47.2 4.1 +7.1 +18 +1.5 +59 Total 291.3 11.6 322.2 24.0 +30.9 +11 +12.3 +105 Inter-segment eliminations (32.6) (4.9) (34.9) (3.7) (2.2) - +1.1 - and corporate-wide expenses 258.6 6.7 287.3 20.2 +28.6 +11 +13.4 +199 Consolidated results (Note 1) Sales and operating income shown above include inter-segment transactions. (Note 2) From Fiscal 2013, the Advanced Components segment has been renamed the Life & Amenity segment. (Note 3) From FY 2013, the Company has changed its accounting method of allocating costs to each segment. Net sales and operating income for FY2012 have been recalculated reflecting this change. 7
1 Financial Results for FY2013 3. Changes in Operating Income (Year-on-year change) By Business Segment (Billions of yen) • Companywide cost reduction (+) • Selling price increase due to the weaker yen and other factors (+) • Decrease in depreciation owing to the loss on impairment of • Other differences (+) facilities (+) 20.2 • Transfer of costs of idle operations (non-operating expenses) (+) • Increased sales volume (+) • Decrease in sales volume of polycrystalline silicon (-) • Increased fuel cost due to the weaker yen (-) • Increase in the cost of sales due to a drop in the operating rate (-) • Companywide cost reduction (+) +2.7 • Companywide cost reduction (+) +1.9 • Resolution of problems at the VCM Plant (+) +1.3 • Selling price revisions of petrochemicals (+) • Price rise of domestic naphtha (-) • Companywide cost reduction (+) +5.6 6.7 • Increase in sales volume of plastic lens-related materials +1.8 and other products (+) • Selling price increase due to the weaker yen (+) • Restructuring of the plastic window sash business (+) • Companywide cost reduction (+) FY2012 Chemicals Specialty Cement Life & Corporate FY2013 Products Amenity and others 8
1 Financial Results for FY2013 3. Changes in Operating Income (Year-on-year change) (Billions of yen) By Factor 20.2 Profit Improvement Plan +3.0 +3.2 Increased sales volume (+) Selling price revision (+) +7.2 6.7 Other differences (+) FY2012 Companywide Impairment loss and Others FY2013 cost reduction valuation loss Note: The amounts of Companywide cost reduction and impairment impact represent the amounts by which operating income excluding inventory differences are affected. 9
1 Financial Results for FY2013 4. Results for Companywide Expenditure Reduction Expenditure reduction in FY2013 Overhead : ¥1.2 billion (Billions of yen) Purchasing : ¥2.9 billion Distribution : ¥0.7 billion Repairs : ¥1.5 billion 8.3 Personnel : ¥1.8 billion Overhead : ¥0.3 billion 1.6 (Q4) Purchasing : ¥1.7 billion Distribution : ¥0.5 billion Repairs : ¥0.5 billion 0.8 (Q3) Personnel : ¥2.0 billion 5.0 3.2 (Q2) 2.7 (Q1) Targeted amount of expenditure reduction for FY2013 Amount of expenditure reduction (compared with FY2012 forecasts, as of Feb. 28, 2013 when we achieved in FY2013 announced the Plan) Note 1: As for purchasing and distribution expenses, increase or decrease arising from quantity or currency exchange rates are excluded. Note 2: The amount of expenditure reduction achieved in FY2013 means a year-on-year decrease in expenses that are subject to our reduction policy. 10
2 Performance Forecasts for FY2014 1. Future Business Environment 2. Basis for Performance Forecasts 3. Performance Forecasts 4. Performance Forecasts by Business Segment 5. Operating Income Change 11
2 Performance Forecasts for FY2014 1. Future Business Environment Chemicals ◆ Anticipate to confront a persistently harsh operating environment due largely to domestic naphtha prices that are likely to remain at high levels. - We will look to secure earnings through selling price revisions as well as cost reductions, while we will review the chlorine derivatives portfolio. Specialty Products ◆ Although the market is on the path of recovery in both semiconductor and solar cell fields, the polycrystalline silicon business is forecast to confront a persistently harsh operating environment due to the glut in supply. - At Tokuyama Malaysia, we will start selling solar cell-grade polycrystalline silicon, while we endeavor to optimize production conditions of semiconductor-grade polycrystalline silicon. Cement ◆ Public- and private-sector demand for cement is anticipated to remain robust. - Although distribution costs are expected to increase due mainly to the reinforcement of transportation capability, we will work to secure earnings by securing sales volume and maintaining stable supply. Life & Amenity ◆ In the domestic market, demand is expected to bottom out owing to economic recovery. On the other hand, in overseas markets, demand is anticipated to grow mainly in emerging nations. - We will work to secure earnings by focusing on developing new products that meet customer needs and expanding sales in growing markets. 12
Performance Forecasts for FY2014 2 2. Basis for Performance Forecasts 1H FY2013 2H FY2013 FY2013 FY2014 Results Results Results Forecasts Domestic naphtha price 64,700 69,900 67,300 67,000 (¥/kl) Exchange rate 99 102 100 100 (¥/$) 13
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