Midterm Plan 2020 Briefing. November 17, 2017

Transcription

1 Midterm Plan 2020 Briefing November 17,

2 Introduction To keep moving forward as a valuable social entity that contributes to shareholders, customers, employees, and local communities 2

3 To achieve our vision Pursue sustained growth Aggressive investment Growth fields and growth regions Strong and flexible business base Business portfolio that is resistant to changes in the business environment Solid financial base 3

4 Review of the current Midterm Plan (FY2015 through FY2017) Major initiatives were properly pursued Further expansion of overseas business Environmental Management & Recycling - Start of operation of a landfill facility in Myanmar and a new incinerator in Singapore Metal Processing - Sales expansion in China and Thailand & Launch of electroplating business in Mexico Heat Treatment - Launch of heat treatment business in Mexico - Expansion of heat treatment bases in India Business expansion by entering growth markets and related fields Electronic Materials - Development and sales promotion of new products such as electrode materials for fuel cells and deep-ultraviolet LED Metal Processing - Sales expansion of copper alloy and electroplating for smartphones and automobiles Continual reinforcement of business competitiveness Environmental Management & Recycling - Start of operation of a new incinerator for treating low-contaminated PCB waste - Promotion of commercialization of naturally contaminated soil remediation Nonferrous Metals - Construction of a new roaster at Akita Zinc - Start of operation of PGM's new furnace - Promotion of zinc mine project Electronic Materials - Expand production capacity and sales expansion of silver powder for solar panels 4

5 Midterm Plan 2020 (FY2018 through FY2020) Strengthen the business base and aggressively invest management resources for further growth. Evolve into a company equipped with stability and growth potential. 5

6 Basic policies Expand businesses in growth markets Aggressively invest management resources in markets for automobiles, information and communication, environment and energy and healthcare. Increase competitiveness of existing businesses Enhance the earning power of existing businesses by increasing competitiveness in the mature domestic markets and improving the functions in the recycling and smelting complex. 6

7 Expand businesses in growth markets 1) Trends The market in each field is expanding with changes. Automobiles Gasoline vehicles Diesel vehicles Information and communication IoT-related components Transition to intelligent vehicles Getting more sophisticated, smaller, and slimmer Environment and energy Healthcare Growing environmental awareness Treatment at hospitals Environmental regulations tightened globally Shift to green energy Shift to preventive medicine and health promotion 7

8 Expand businesses in growth markets 2) Automobiles Launch new products targeting the evolution of vehicles Increase capacity and expand sales in response to market expansion Increase in EV and other eco-friendly cars Evolution into intelligent vehicles Increase in global automotive production Launch new products Increase capacity Expand sales Electro plating Base metals Rare metals Copper alloy Application of magnetic materials Metalceramics substrates Heat treatment 8

9 Expand businesses in growth markets 3) Information and communication Address ever-changing market needs with high-performance products and strong development capability Passive components Capacitors, inductors Sophisticated Alloy powder Transducers Optical sensors Smaller Slimmer Infrared LED GaAs substrates - Smartphones - Base stations -Servers Connecting components Switches, connectors Lighter Copper alloy Changes in needs for materials associated with evolution of components 9

10 Expand businesses in growth markets 4) Environmental management and energy Waste treatment in Southeast Asia Promote expansion of existing businesses and launch of new businesses Waste treatment Launch the second landfill facility and introduce the first incinerator in Indonesia Expand treatment of hazardous waste in Thailand (landfill/ incineration) Launch businesses in neighbor countries Silver powder for solar panels Maintain a large market share with quality advantage and production capacity Silver powder Healthcare Develop and commercially produce a new LED designed for healthcare sensors of wearable terminals and for disinfection/ sterilization equipment Infrared LED Deepultraviolet LED 10

11 Increase competitiveness in existing businesses Strengthen businesses in the mature domestic markets Improve the functions in the recycling and smelting complex - Start construction and operation of new zinc mine in Mexico - Increase collection of materials for recycling - Improve treatment capabilities Los Gatos Project in Mexico 11

12 Aggressive investment of management resources 1) (Billion Yen) Investment (Total for 3 years) FY FY FY Main items Environmental Management & Recycling - Construction of new facilities in Indonesia - Expand waste melting and recycling business Nonferrous Metals - Construction of new zinc mine in Mexico - Increasing ability to treat impurities in zinc smelting Electronic Materials - Facilities for mass production of new products Metal Processing - Increasing copper alloy production capacity Heat Treatment - Construction of new heat treatment plants in India 12

13 Aggressive investment of management resources 2) (Billion Yen) 25.0 R&D (Total for 3 years) Environmental Management & Recycling Nonferrous Metals 10.0 Electronic Materials 5.0 Metal Processing 0.0 FY FY FY Heat Treatment 13

14 Pursue sustained growth 70 Environmental Management & Recycling Nonferrous Metals Ordinary Income (Billion Yen) Electronic Materials Metal Processing Heat Treatment Other FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Estimate FY2020 Estimate 14

15 (Reference) Financial data Midterm Plan 2020 FY2017 forecast Ordinary income (FY2020) 50 billion yen 36.5 billion yen Operating income (FY2020) 45 billion yen 34 billion yen ROE (FY2020) 12% or more 11% ROA (FY2020) 10% or more 9% Operating CF (total for 3 years) 120 billion yen 112 billion yen Investment (total for 3 years) 110 billion yen 82 billion yen R&D (total for 3 years) 20 billion yen 17 billion yen Exchange rate and metal prices Midterm Plan 2020 (Reference) FY2017 H1 average Exchange rate ( /$) Zinc ($/t) 2,700 2,780 Copper ($/t) 5,500 6,005 15

16 Summary of Each Segment 16

17 Environmental Management & Recycling 1. Business strategies - Increase competitiveness of existing businesses to establish a position as No. 1 in Asia and accelerate increase in market share and launch new businesses in each field and region. - Build the foundation of new businesses that will be the next mainstay businesses in light of global trends in environmental management. 2. Financial data Ordinary income: 10.0 billion yen (FY2020) Operating income: 10.0 billion yen (FY2020) Investment: 29.4 billion yen (total for 3 years) R&D: 1.4 billion yen (total for 3 years) 3. Major actions Waste treatment: Increase cost competitiveness of low-contaminated PCB waste treatment. Expand melting and recycling waste business. Soil remediation: Construct new landfill facility in Japan. Promote naturally contaminated soil remediation. Recycling: Increase overseas collection of materials for recycling. Strengthen metal recycling by enhancing the separation facilities. Southeast Asia: Expand waste treatment business by constructing new facilities and increasing treatment capacity. New business: Promote commercialization of food waste recycling. 17

18 Nonferrous Metals 1. Business strategies - Strengthen the business by improving the functions in the recycling and smelting complex. 2. Financial data Ordinary income: 15.0 billion yen (FY2020) Operating income: 10.0 billion yen (FY2020) Investment: 40.1 billion yen (total for 3 years) R&D: 2.9 billion yen (total for 3 years) 3. Major actions Precious metals and copper: Increase production of tin by Kosaka Smelting & Refining. Improve treatment capabilities. Platinum metals: Increase collection of resources by expanding overseas bases. Improve ability to handle difficult-to-treat materials. Zinc: Expand the annual zinc production at Akita Zinc to 220,000 tons by increasing ability to treat impurities. Strengthen processing plant in Thailand and expand sales in Southeast Asia. Resource development: Start construction and operation of new zinc mine in Mexico. 18

19 Electronic Materials 1. Business strategies - Launch new businesses, develop new niche/top products, and make them major sources of earnings. - Expand business domains further to growth markets such as automobiles and healthcare. 2. Financial data Ordinary income: 10.5 billion yen (FY2020) Operating income: 10.0 billion yen (FY2020) Investment: 11.6 billion yen (total for 3 years) R&D: 12.3 billion yen (total for 3 years) 3. Major actions Semiconductors: Develop and mass produce LEDs for healthcare businesses. Electronic materials: Maintain a high market share of silver powder for solar panels. Advanced fine materials: Increase market shares and production capacity for recording materials, carrier powder, and ferrite powder. New development: Expand sales of deep-ultraviolet LED for healthcare/ disinfection and increase line of conductive materials. Commercialize new magnetic materials for automobiles. 19

20 Metal Processing 1. Business strategies - Expand businesses by focusing efforts on automobiles and IoT-related fields. - Increase earning potential further by establishing the business base that is resistant to changes in the business environment. 2. Financial data Ordinary income: 9.0 billion yen (FY2020) Operating income: 9.0 billion yen (FY2020) Investment: 17.7 billion yen (total for 3 years) R&D: 2.5 billion yen (total for 3 years) 3. Major actions Copper rolled products: Electroplating: Metal-ceramics substrates: Increase production and expand sales of copper alloys to meet growing demand for electric vehicles, intelligent vehicles, and IoT. Enhance the processing businesses in China, Thailand and Taiwan. Establish a plant in Mexico. Improve competitiveness by optimizing lines of a plant in Japan. Expand sales of substrates for trains and automobiles as well as industrial machinery and develop new products. 20

21 Heat Treatment 1. Business strategies - Increase revenues further by taking advantage of the strengths of the current business model. - Pursue initiatives in new business domains. 2. Financial data Ordinary income: 4.0 billion yen (FY2020) Operating income: 4.0 billion yen (FY2020) Investment: 8.7 billion yen (total for 3 years) R&D: 0.9 billion yen (total for 3 years) 3. Major actions Industrial furnaces: Boost sales of new furnaces in India and North America. Enhance the manufacturing network in Japan, India, and China. Expand furnace maintenance business and develop new products. Heat treatment processing: Increase domestic capacity and establish new plants in India to meet growing demand for automobile-related products. Increase the capacity of plants in Thailand and Indonesia. Promote automation and labor-saving at plants in Japan. 21

22 *The earnings forecasts and other forward-looking statements in these materials are based on information currently available at this time and on certain premises that the Company assumes to be reasonable. Actual performance may differ materially from such forecasts due to a variety of factors. 22