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transcript
“For Tomorrow 2015”Mid-term Management Initiative
(FY 2011–2015)progress and outlook
May 27, 2014Toshio Asano
PresidentAsahi Kasei Corporation
1
1. Position of FY 2014(1) Advancing “For Tomorrow 2015”(2) Considering growth strategy for
FY 2016 onward“Contributing to the World through Innovation”
2. Actions taken on April 1, 2014(1) Governance configuration enhanced (2) R&D configuration reorganized
2
Strategic overview
Megatrends Group Mission and Values
Creating for Tomorrow – the Asahi Kasei Group is creating new things for the future based on the perspectives of “living in health and comfort” and “harmony with the natural environment.”
1. Business Strategy 2. Reformation of corporate systems
Promotion of “one AK” management
1. Global business expansion
2. Creation of new businesses
3. Propagation of our mission, values, and vision
4. Human resource policies
5. Management control, resource allocation
Pursuit of growth1. Expansion of world-leading
businesses2. Creation of new value for society
Promotion of businesses based on living in health and comfort and harmony with the natural environment
1) Environment/energy-related2) Residential living-related3) Health care-related
Basic Strategy
Framework of basic strategy
Streamlining project for improved profit structure3
Enhanced governance configuration
Health CareHomes &
ConstructionMaterials
Chemicals & Fibers
Electronics(electronic materials,electronic devices)
Synergy Synergy
SynergySynergy
Increasing earningsAccelerating innovation4
(¥ billion)
FY 2012 FY 2013 FY 2014 forecast
Total H1 H2 Total H1 H2 Total
Net sales 1,666.6 919.0 978.8 1,897.8 973.0 1,043.0 2,016.0
Operating income 92.0 74.3 69.1 143.3 67.0 83.0 150.0
Ordinary income 95.1 72.9 70.0 142.9 67.0 84.0 151.0
Net income 53.7 46.6 54.6 101.3 39.0 51.0 90.0
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FY 2013 results and FY 2014 forecast (1)
61 In the Critical Care business category, results for FY 2012 were included beginning on April 27, 2012, while results are subject to consolidation
throughout the entire period beginning with FY 2013.
Sales (¥ billion)FY 2012Total H1 H2 Total H1 H2 Total
Chemicals & Fibers 794.2 456.8 455.7 912.5 476.0 500.0 976.0Homes & Construction Materials 537.7 266.2 323.2 589.4 287.0 324.0 611.0Electronics 131.1 74.7 70.3 145.0 76.0 76.0 152.0
Pharmaceuticals & devices 133.5 75.8 76.8 152.5 76.0 82.0 158.0Critical Care1 52.1 37.5 42.3 79.8 46.0 52.0 98.0
Health Care 185.6 113.3 119.1 232.4 122.0 134.0 256.0Others 18.0 8.0 10.5 18.5 12.0 9.0 21.0
1,666.6 919.0 978.8 1,897.8 973.0 1,043.0 2,016.0
Operating incomeFY 2012Total H1 H2 Total H1 H2 Total
Chemicals & Fibers 27.0 27.6 19.9 47.4 26.5 32.5 59.0Homes & Construction Materials 58.2 29.6 38.9 68.5 28.5 32.5 61.0Electronics 2.8 9.3 4.9 14.2 7.0 8.0 15.0
15.9 16.4 13.9 30.3 13.0 16.0 29.0Gross operating imcome before PPA impact 7.3 4.6 5.0 9.6 5.6 7.0 12.6PPA impact2 (11.0) (6.6) (6.4) (13.1) (6.1) (6.0) (12.1)
(3.7) (2.0) (1.5) (3.5) (0.5) 1.0 0.5Healthe Care 12.3 14.3 12.4 26.7 12.5 17.0 29.5Others 2.2 0.8 0.9 1.7 0.5 1.0 1.5Corporate expenses and eliminations (10.5) (7.3) (8.0) (15.3) (8.0) (8.0) (16.0)
92.0 74.3 69.1 143.3 67.0 83.0 150.0
FY 2014 forecast
FY 2014 forecast
Pharmaceuticals & devices
Critical Care1
Consolidated
Consolidated
FY 2013
FY 2013
2 Impact of amortization and depreciation of goodwill, other intangible assets, etc. from purchase price allocation revaluation.
FY 2013 results and FY 2014 forecast (2)
forecastin May 2013
790.9 794.2 912.5 976.0
498.1 537.7 589.4
611.0 146.1 131.1
145.0 152.0
119.5 185.6
232.3 256.0
0
500
1,000
1,500
2,000
FY 2011 FY 2012 FY 2013 FY 2014 FY 2014 FY 2015
2,0002,016.01,897.8
1,666.61,573.2
Health Care
Electronics
Chemicals & Fibers
Homes & Construction Materials
1,800.0
(¥ billion)
Net sales under “For Tomorrow 2015”
7
latest forecast target
47.627.0
47.559.0
48.2
58.2
68.561.0
6.42.8
14.215.0
8.823.2
39.741.5
-50
0
50
100
150
160.0150.0143.3
92.0104.3
Health Care*
Electronics
Homes & Construction Materials
135.0
“Others” category and corporate expenses and eliminations
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Amortization of goodwill, etc.*
Operating income under “For Tomorrow 2015”
Chemicals & Fibers
* Health Care includes operating income of Critical Care excluding amortization of goodwill from FY 2012.Amortization of goodwill etc. related to acquisition of ZOLL is shown as “Amortization of goodwill, etc.“
(¥ billion)
FY 2013FY 2012FY 2011 FY 2014latest forecast
FY 2015target
FY 2014forecast
in May 2013
FY 2014–2015 actions toward completion of “For Tomorrow 2015”
Chemicals & Fibers
Achieving results from measures to expand business and to strengthen foundations of petrochemicals• Chemicals: Reaping fruits of investment in world-leading
businesses. Unification of naphtha crackers at end of March 2016.
• Fibers: Growing in hygienic materials. Growing in materials for ethnic garments and in functional materials.
Homes & Construction
Materials
Advancing growth with new lifestyle proposals• Homes: Expanding sales of products with higher degree of
freedom in design such as NEXT HEBEL HAUS™.• Construction Materials: Growing insulation material business.
ElectronicsReinforcing overseas business and expanding applications• Devices: Growth in automotive and infrastructure applications.• Materials: Growth in lithium-ion battery (LIB) separator for both
consumer electronics and automotive applications.
Health Care
Accelerating growth through expansion of ZOLL• Pharmaceuticals: Expanding sales of Teribone™ and
Recomodulin™. • Devices: Advancing global growth.• Critical Care: Global growth of LifeVest™, etc.
Completing “For Tomorrow 2015” to achieve ¥160 billion operating income
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10
Steps toward further growth from FY 2016 onward
* Comprising upper management of Asahi Kasei Pharma, Asahi Kasei Medical, ZOLL, and the holding company.
Chemicals & Fibers
Advancing portfolio transformation• Accelerating growth in performance polymers, performance
chemicals, and consumables.• Development of new process technology.• Development of new applications for existing products.
Homes & Construction
Materials
Adapting to changes in society• Materializing results from HH2015 demonstration house.• Establishment of Residential Synergy Initiative.• Expansion of peripheral operations (remodeling, real estate, other
services for owners, etc.)
ElectronicsCommercializing businesses from “For Tomorrow” project• Developing applications and advancing commercialization.• Full-scale business expansion for both devices and materials in
automotive field.
Health Care
Growing to become the 3rd main pillar of business with Chemicals and Homes• Advancing growth strategy through Health Care Council*.• Advancing drug discovery research, reinforcing the product
pipeline.
Reorganized R&D configuration
From FY 2011“For Tomorrow” projects
• Environment & Energy
• Residential Living
• Health Care
From FY 2014• “New Business Development” changed
to “Corporate Research & Development”• “Group Synergy” projects• R&D at core operating companies
Newfields
Peripheralto
establishedbusiness
Near-term FutureDegree of certainty of market growth
“Group Synergy”projects
Energy & Environment R&D Center
Residential Synergy Initiative
Healthcare R&D Center
Core operating company R&D
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Core operating company R&D
"For Tomorrow"
projects
Advanced research
laboratories
Newfields
Peripheralto
establishedbusiness
Near-term Future
FY 2011
FY 2012
FY 2013
FY 2014 plan
Non-linear growth
measures (FY 2011–FY 2013)
Strategic investment for growth
Investment in existing businesses
¥550 billion
Concept for ¥1 trillion of investment during “For Tomorrow 2015”(total for 5 years)
Further growth(new operations, M&A)
¥250 billionFY 2014 budget (decision-adopted basis)approx. ¥120 billion
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¥450 billion
Decisions adopted in FY 2011–FY 2013• Acquisition of ZOLL• Acquisition of Crystal IS;
construction of initial production plant for UV LEDs
• Establishment of joint venture for lithium ion capacitors (LICs)
Total approx. ¥200 billion
Decisions adopted in FY 2011• Capacity increase for S-SBR in Singapore• Capacity increase for acetonitrile in Korea• Capacity increase for insulation panels• Research complex for pharmaceuticals
Decisions adopted in FY 2012• Acquisition of sales rights for
overactive bladder therapeutic drug• Capacity increase for Bemberg™• Overseas expansion of Hipore™
Decisions adopted in FY 2013• Acquisition of full ownership of
Tenac™ JV in China• Capacity increase for polycarbonate
diol (new plant in China)• Overseas expansion of Hipore™
Bemberg™ regenerated cellulose fiber• Application development as a world-only productDevelopment of markets in ethnic garments, major apparel brands, Europe, China
• Expansion of plant (Nobeoka), 10% capacity increase
Acrylonitrile (AN) material for ABS resin and acrylic fiber• Start of commercial production at propane-process plant in Thailand
• Start-up of additional line in Korea• Closure of older lines in Japan• Strengthening of position as the top supplier in Asia
2010 2012 2014
Asahi Kasei production capacity for AN
200 kt in Thailand
245 kt in Korea750 kt
965 kt 960 kt
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Capturing market growth, strengthening market position
Roica™ elastic polyurethane filament• Global development of brand for high-function/high-quality product
• Expanding in hygienic applications, strengthening Southeast Asian operations
Roica™ plants
Japan
TaiwanThailand
GermanyChina
Development of world-leading businesses (1)
2010 2014
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Asahi Kasei plants for DF
Fuji(coating/slitting)
Suzhou and Changshu(coating/slitting)
Taiwan(slitting)
S-SBR synthetic rubber for fuel-efficient tires• Plants in SingaporePhase 1: completion of 50 kt/y plantPhase 2: new 50 kt/y plant under construction
• Receipt of Pirelli Supplier Award 2013
Asahi Kasei production capacity for S-SBR
Domestic plants
Phase 1 plant in Singapore
Phase 2 S’poreplant und. const.
Global market forecast: 490 kt
Production capacity 62 kt
130 kt
50 kt
Hipore™ lithium-ion battery separator• Start-up of new line in Hyuga• Growth in high-function products• Expanding overseas supply capabilityExpansion of processing capacity in KoreaCompletion of processing facility in China
Photosensitive dry film (DF)for printed wiring boards• Development in ChinaEstablishment of technology center in SuzhouStart-up of new plant in Changshu(120 million m2/y capacity)
• Continuing expansion of sales and production in line with market growth
0
10
20
30
2011 2015forecast
2020forecast
2025forecast
2030forecast
(million/year)
Fuel cell (FCV)
Battery electric (BEV)
Plug‐in hybrid (PHEV)
Hybrid electric (HEV)
Development of world-leading businesses (2)
Global electric-driven vehicle demand forecast (Asahi Kasei est.)
Strengthening foundations in petrochemicals, transforming the portfolio
Strengthening foundations of petrochemical operations in Japan• Unification of naphtha crackers with Mitsubishi Chemical Corp.
(end of March 2016)• Structural improvement of styrene monomer, acrylonitrile-butadiene-styrene
(ABS) resin, and styrene-butadiene latex businesses (during FY 2015)• Closure of AN plant in Kawasaki (August 2014)
Concept for domestic operations• Optimized production infrastructure • Developing leading-edge petrochemical technology
Measures to secure stable, high earnings in Chemicals• Investing in new businesses, application development, and growth fields• Advancing world-leading businesses: AN and S-SBR• Further expansion in Asia and North America: intermediates for high-
performance polyurethanes (Duranate™ and Duranol™), plastic compounds, etc.
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Chemicals & Fibers (1)
Residential LivingStrengthening consumables
Alignment with new values
Regenerated cellulose fibersFunctional material:Bemberg™
Facial masks:Bemliese™
Health CareStrengthening pharma-related business
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Business base for various developments
Environment & Energy (automotive-related)
• Intermediates• Functional chemicals for drug manufacture
• Drug packaging
Expanding in diaper applicationsSpunbond nonwovens and Roica™Meeting needs of the ageing society
Reducing vehicle weight Enhancing comfort and safety• Engineering plastics
Compounds to replace metal• Nonwovens
Reducing weight of seats
• Leona™ filamentGrowth in airbags
• Duranate™Material for low VOC paint
Cellulose nanobeads for diagnostics
Chemicals & Fibers (2)
Homes & Construction Materials
Residential Living
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New lifestyle proposals
0
50
100
150
200
2010 2011 2012 2013 2014forecast
Real estateRemodeling
2011 2012 2013 2014
Expansion of insulation material businessAnnual growth ≥10%
Enhancing Hebel Haus™ businessLifestyle proposals
•Proposals for urban living, earthquake resistance, inheritance strategy
•Studying overseas business
Further expansion of real estate and remodeling operations
Expansion of other peripheral operations•Other services for owners•Materializing results from HH2015 demonstration house
Expanding construction materials businessMeeting needs for enhanced infrastructure
•Demand from reconstruction from earthquake
•Preparation for Tokyo Olympics•Meeting needs of urbanization, ageing society, etc.
Insulation materials
•Completion of new Neoma™ production line
•Energy efficiency and comfort
Sales in ¥ billion
forecast
FY
FY
Environment & EnergyDevices
Electronics
New business
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Providing solutions, transforming the portfolio
Analyticalapplications
Greater weight in automotive/ infrastructure fields to balance with consumer electronics/smartphones•Sensor technology•Analog-digital conversion technology
Start-up of UV LED businessInitial production plant in Fuji
Expansion in battery field
•Next-generation battery materials •Fuel cell membranes
Development and commercialization of new materialsWire-grid polarization film, etc. based on microfabrication and optical technology
Lithium ion capacitor (LIC) business• JV with FDK Corp.•Next-generation energy storage device
•Growth of Hipore™•Development of other LIB materials
Materials
Water
Air
Food
Health
Air purification,preventing airborne infection
Pure laboratory
water
Waterqualitytesting
Energy Drinkingwater
Industrial andconsumer use
Sterilizationof general
merchandise
Foodapplications
Water sterilizationapplications
Medical applications
Fuel cells,water purification
Health Care
Health Care
19
(Q4 2011 = 100)
(FY 2010=100)
Reinforcement as an engine of growth, becoming the third main pillar of operations
Critical CarePositive consolidated operating income in FY 2014 after amortization of goodwill etc.•Approval of main products in Japan—Thermogard™ temperature management system, LifeVest™ wearable defibrillator, X Series™ defibrillators for professional use
•Continued strong growth for LifeVest™
Accelerated drug discovery and development• Smooth expansion of Teribone™
• Accelerating global Phase III study for Recomodulin™
• Strengthening of product pipeline; Phase III study in Japan for zoledronic acid*
Hemodialysis and therapeutic apheresis:Accelerating expansion with product lineups aligned with needs in different countries and regions
Planova™ virus removal filters and Sepacell™ leukocyte reduction filters:Accelerating development of emerging markets
* bisphosphonate agent for once-yearly injection
FY
Financial metrics after “For Tomorrow 2015”
Execution of “For Tomorrow 2015”
FY 2015 net sales ¥2 trillionFY 2015 operating income ¥160 billionFY 2011-2015 strategic investment ¥1 trillion
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FY 2012 FY 2013FY 2014(planned)
FY 2015(outlook)
Payout ratio 36.4% 23.5% 26.4%
Net income per share (EPS)1 ¥38.43 ¥72.48 ¥64
Net income per total assets (ROA)1 3.3% 5.5% 5%
Net income per shareholdersʹ equity (ROE)1 7.1% 11.7% 9% 10%
Shareholdersʹ equity per share (BPS)1 ¥581.05 ¥653.15 ¥695
ROIC1 5.7% 11.7% 7% 7%
D/E ratio1 0.47 0.33 0.3 0.5
Dividends per share ¥14 ¥17 ¥17
1 Approximate figures for FY 2014 and FY 2015.
Toward sustainable growthAdvancing Responsible Care (RC)Environmental protection, product safety, operational safety, workplace safety & hygiene, and employee health as paramount management issues
Streamlining project (enhancing the profit structure)Measures to heighten profitability through greater energy efficiency, higher yield, review of procurement, etc. (from FY 2012)
NEXT project (adoption of new information system)Enhancement and establishment of infrastructure to facilitate greater synergy within the Asahi Kasei Group
Respect for employee individuality• “Action Win-Win”
Reformation of way of working to embody the corporate philosophy• “Share The Values”
Initiative to share the Group Values
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Opening a new phase of growth through “For Tomorrow 2015”
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Creating for TomorrowThe commitment of the Asahi Kasei Group:
To do all that we can in every era to help the people of the world
make the most of life and attain fulfillment in living.
Since our founding, we have always been deeply committed to contributing to the development of society,
boldly anticipating the emergence of new needs.
This is what we mean by “Creating for Tomorrow.”