Sumitomo Bakelite

Hello, everyone. I'm Fujiwara, the president. I'd like to give a brief presentation. Next slide, please. First, I'd like to announce the results of the previous year. Next, please. As shown here, this is a comparison of March 2023 and March of the previous year, 2024. Sales revenue, business profit, business profit, and long-term profit have increased compared to the previous year. Unfortunately, the ROE alone has slightly decreased. Next, please. This is the net profit from 2018. To tell you what was particularly good, the net profit was 4 years. we were able to continuously improve our business. In this figure, we were able to mark the highest number of sales profits, business profits, and net profits in the past. Next, please. This is the performance of each segment. Compared to the previous year, the semiconductor industry has increased in volume, high-performance plastics have slightly decreased in volume, and the quality of life has increased by about 100 million yen. Next, please. I will not go into detail on this page, but this figure shows the sales volume for each quarter of semiconductor, high-capacity opera, and quality of life. Next slide, please. This is the summary. The sales increased from 2,849 billion yen to 2,870 billion yen, 73 billion yen, and 23 billion yen. Unfortunately, in terms of quantity, the high-tech plastics have pulled quite a bit. Especially in the first half of the previous year. In the first half of the year, the sales did not increase. The same goes for quality of life. The film related to the semiconductor industry did not sell as well as we expected. Due to the influence of the exchange rate, the sales increased to 2873. Next, I would like to talk about interest rates. The interest rate increased from 25.4 billion yen to 27.5 billion yen, which is about 20 billion yen. This is a split between the highest interest rate of the past, 27.5 billion yen, in terms of sales and cost. Next, please. Next, please. We want to achieve 3.9 billion yen in sales, 3.3 billion yen in business profits, and 2.4 billion yen in long-term profits. In other segments, we plan to increase information communication, high-performance plans, and quality of life. Next, please. Hello, everyone. I would like to welcome you all. This year, the total amount of money spent per share of the stock market is 15 yen per share compared to the previous year. What this means is that in April, we will divide the shares into two parts, and this is based on that. The March period of 2024 will be 150 yen per year, and the next period will be 180 yen, and I would like to welcome the shareholders with this. This is an explanation of the previous year and this March. From April of this year, we will enter the first year of the new three-year medium-term plan. Before I explain this, Please go to the next page to see the review of the entire medium-term plan, that is, from 2021 to 2023. Originally, the previous medium-term plan The sales revenue was 2.5 billion yen, and the business profit was 2.5 billion yen. This number was achieved in the first year, so we are correcting the information. We corrected the information, and the business profit was 3 billion yen. Unfortunately, we were not able to reach the 300 billion yen that we had adjusted the information. In the end, we ended up with 27.5 billion yen. However, compared to the past, this is definitely the highest number. As for the semiconductor industry, we have invested a considerable amount of money in it. We are trying to improve it in Europe, China, and Taiwan. In terms of health care, the integration with Kawasumi Chemical Industries has been slow, but I think it is definitely taking shape. Here, we can see the results of sales and business profits from 2020 to 2023, respectively, including HPP and QOL. Over the past three years, there have been a lot of things that have happened, but the bad news is that due to the COVID-19 pandemic, the HPP has become a little worse, but I think that the spread of the share has been almost as expected. Next, I would like to explain how we will proceed with the next medium-term plan. In order to continue to grow as a company, we decided that we would like to pursue our goals as a single organization from the back-cast of 2030. We shared the meaning of the concept of management, purpose, and vision, and set goals from both the financial and non-financial aspects. The financial goals are as described here, and we have set the goal of converting it into a profit standard. The non-financial goals are to solve the important issues of management that will affect future financial issues. In other words, we have firmly defined the concept of management, purpose, and vision. In 2030, we will increase our business profit by 5.5 billion yen. Our business profit rate will be 13%, and our ROE will be 10%. As I said earlier, we do not have a profit margin, but we do have environmental support. We want to convert this to profit rather than scale. This is the purpose of this initiative. This is the reason why we are increasing our business profit and business profit ratio. Next, please. Sustainability. In order to achieve what we want in 2030, we need to further enhance the improvement of corporate value and the business base. The important issues of management are listed in the 12 icons on this page. The most important issue is to create an environment and social value. There are two KPIs here. The first is to work on carbon neutrality. This is an effort to reduce greenhouse gas emissions from the entire group. Our goal is to reduce greenhouse gas emissions by 48% by 2030 and by 2021. This has changed since last year. Until last year, the goal of the Japanese government was to reduce greenhouse gas emissions We have been working to reduce the amount of waste by 2030, but our goal is to achieve it every year. Since 2024, we have reviewed the Paris Agreement's 1.5-degree standard for higher goals. We will also accelerate the development of related technologies. So, we have changed it to 48% reduction. We have changed it to a more strict and high target value. The second is an effort to increase the sales rate of SDGs contributing products. Our goal is 70% in 2030. In 2023, we expect to see an increase of more than 60% and we are currently seeing a steady increase. We will continue to promote our efforts. As an important task force that supports the creation of environmental and social values, four of them are directly involved in the creation of values. The yellow ones are the competition with customers, innovation, human resources, and digital transformation. Next, please. As I said before, the medium-term policy is a functional product called Sumitomo Bakelite, and considering the company's hope, we aim to reach the niche and top share and challenge the portfolio reform that leads to value creation. There are three strategies. The first is to optimize product structure and strengthen the profitability of existing businesses. This means that we will make current businesses more profitable. We will use SBOIC, which is still the company's standard, to measure capital efficiency. We will also focus on the charging area, semiconductor, mobility, and health care. In the middle of the medium-term strategy, we want to create new products and new solutions that have environmental and social value associated with SDGs. Of course, if the company's profits go up, it will be impossible to extend existing products. We want to keep building new products. We are not doing this alone, but we are working together with various related companies and suppliers to create new products. The third medium-term strategy is to increase the unity of individuals and organizations and maximize the full power of all companies. Since I became president, I have been saying the keyword of the year, human power improvement, for four years. I think it's been five years. It's almost autumn, so I think the human power has improved a little. This time, I would like to talk about the improvement of all vehicles in combination with the improvement of human power. In particular, we would like to further improve the activities of CS, Customer Satisfaction, and One Subway. For customers, One Subway is like Sumitobay. It is one-sided, and it contributes to customers' needs and unmet needs. In other words, we will have young people of all ages participate in this kind of activities. If you don't like it, you can get rid of it. I think we have come a long way from the bottom-up. Next, please. We have to work on reducing capital costs and corporate value. This is the number of business profits, business interest rates, and interest rates that were divided into the medium-term plan in 2024, 2025, and 2026. On the far right is the number of 5.5 billion yen in 2030. These are the numbers of the new medium-term plan. Next, please. Specifically, each semiconductor, I call it the section of semiconductor, high-performance, and quality-of-life. I call it the three pillars. However, the three pillars do not necessarily mean that the economy will deteriorate, so I want to make these three segments important. First of all, I would like to talk about the semiconductor sector. I think this is the top share for us at Fuji. The sales and expansion of the current line-up, The third is the development of new, next-generation semiconductor materials. The third is to cooperate with society, not just by ourselves. In particular, we want to create an open lab in each country to shorten the distance between us and our customers. The picture shows the strengthening of social cohesion. I would like to participate in various consortiums such as academia, and I would like to strengthen the line-up by cooperating with equipment manufacturers and material manufacturers to solve customer issues. This is where AI and real semiconductors come in handy. The next page is about the new company, SHASAI. This is the mobility related to semiconductors. On the left is the self-made motor, the ECU and TCU, and the power module. The fourth is the rotor of the magnet. We are also working on the resinization of the stator. Recently, the main components of epoxy molding compounds have been transfer molding and compression molding. However, when customers become car manufacturers, the demand for injection is growing. So, we developed an injection grade, and it has already been realized. In the future, there will be about two people in the Indian market for marketing. to India and build a relationship with the future information and companies in India. In terms of mobility, we originally had a target of 1.2 billion yen by 2025, but we are moving forward. Currently, we have 1.8 billion yen by 2023. In 2026, we will increase it by 1 billion yen to 1.8 billion yen. The original plan was 1.2 billion yen in 2025, but I think we are moving forward with a lot of progress. Next, please. As you can see, the interest rate is still low. We need to increase this by more than 10%. We need to strengthen the revenue of existing areas and convert portfolios into high-value products. Unlike in the past, Even if you say that you sold 200 tons of resin, if you make 200 tons of something with very little profit, it will only produce CO2. I think it is necessary to change that portfolio. Then there is environmental response, biomass, or heat-resistant recycling. We are working on research to bring back phenol to the recycle. As you can see in the picture, this is an airplane. Airplanes are definitely in the upper right-hand side. I think this is one of the aims of the airplane. Power modules, e-axels, as well as phenols and heat-sensitive resin are still in use, so we will continue to work on them. We will also work on chemical recycling in response to the environment. We will also work on lignin resin from plants that do not originate from oil. We want to create materials and materials that are of higher value. Next, I will talk about the quality of life. I would like to talk about the three-year profit of quality of life. I would like to increase the profit by 10% in the third year. I would like to increase the profit by 10% in the second year. This is based on medical equipment and bio. We are strengthening our revenue and global business, especially since we export a lot of medical equipment. We are working globally to make American-made medical equipment, so we will further strengthen it. Bio-new products. This is still a long story, but we developed a device that can do the same thing as animal experiments without doing animal experiments with our own devices. One of these is regenerative medicine. In terms of medicine, we want to develop low-priced devices that are less burdensome for patients. In terms of biome, we are aiming for the future of renewable energy. The next page on the Quality of Life is about the film sheet. The film sheet is about the global development of high-end products. We have about 70% of the share of PTP in OXYGEN, but we could only sell it in Japan. Although it is a very high hurdle, we are now looking for a way to expand to Europe by, for example, monomaterialization. There is also the increase in revenue. This is due to the fact that there is a big gap between the two. However, it seems that the most advanced industry is the smart factory industry. The industry that used to rely on human resources is now being automated to increase revenue. As for new products, we are aiming for food loss and environmental response. such as increasing the expiration date of food, and using biomass materials. The industrial functional materials on the right also continue to transform the portfolio. There are high-quality chemical materials, In addition, we would like to focus on the power of power generation sheets, especially for electric vehicles. In addition, we would like to implement the implementation of new high-quality products. I don't know if we can achieve this in the medium term, but we are paying a lot of attention to the technology of electrochromics, If you press a button, it turns black, and if you press a button, it returns to its original state. This is the technology we use to develop sheets. In terms of sheet waterproofing, we are expanding the demand in the residential area, and we are developing a structure that makes it easy for us to install solar panels. We would like to extend the demand for sheet waterproofing by combining solar panels. Next slide, please. This is the level of HPP QOL in the medium-term plan. As you can see, HPP QOL is expected to exceed 20% by the end of 2026. HPP QOL is not satisfied at all, but it is expected to go up to 7.5%. QOL is 11.5%, so we expect to exceed 10% as a whole. Next, please. In the medium-term strategy, new products, new solutions. As I mentioned earlier, without new products, There will be no growth. We have been working on projects for a long time. We started with a mini project. The project leader can be a young person. We had people who were motivated to do interesting things become project leaders. The project was also gradually becoming more and more green, which led to the development of the next business unit. The heat dissipation material was developed, and the light circuit material was also a business unit. It hasn't been sold yet, but I'm looking forward to it, so I gave it to the business department. Then, MI, Material Informatics. I was active in various fields such as data science development, and I used computers to work on the structure of polymers. I also improved my practical skills, so I made it a promotion department. E-Accel and BNY are still running as projects. I don't know what will happen to them. It is a system that measures the know-how. It is not profitable to sell only helmets that measure the know-how, so it is a strategy for health care to put software in it. Not only that, we are also adding soft solutions, such as the BMI solution, the electronic light bulb, and the chemical recycle. We are disassembling phenol once again and returning it to phenol. In the past, it was divided into quality of life, electronic materials, and high-performance plastics, but now it is divided into different uses. First, ICT, then cars, mobility, and health care. We are currently in the process of implementation and realization, and we are currently selling a part of it. In other words, we want to develop new products in such a market. For example, Terahertz is a market that will definitely grow in terms of light transmission, and I think it is very important for us. Therefore, We put a lot of effort into this area, such as the Terra Health sun and the Hikari Dooharu, and launch the product. The EVTOL on the right is an electric vertical landing gear. We are also aware of the car that flies in the sky. We have been using automobiles and aircrafts for a long time, but now we are just flying automobiles. I think we can use the technology we have been using so far. We are paying attention to this market. The third is the red area, which is energy saving batteries. In this respect, energy is something that cannot be left out when it comes to environmental response, so we have increased our demand for energy that can be maintained. Therefore, we would like to make a Japanese product that will be the only one to use new materials. Digital Health Solution Business. As I mentioned earlier, in our healthcare business related to medicine and bio, we would like to be aware of providing solutions rather than just selling devices. As the digitalization of medical devices is progressing, we would like to continue to do so. Next, please. It's about people. People, things, and money. We've been moving forward for the past five or six years, but the most important thing is human capital. So, DE&I, as Mr. Kakita said, we also have SB School, OneSum, and Customer Satisfaction, which enhance individual autonomy and unity of the organization to maximize the full power. To put it more flatly, we don't do top-down. In the end, it will be decided by the top-down, but if there is no bottom-up proposal, it will not grow, so I would like to change the style of the company with that in mind. Next, this is the last one. Then, what kind of money will be used? By distributing management resources based on capital costs, first of all, equipment investment, this is already for the last three years, I think there are existing attacks, robots, etc., but I want to use about 5 billion yen. Growth investment. This is the new product. Research and development. Research and development is about 4% to 5% of the total sales, but that is not enough. We need to invest about 2 billion yen in this area to launch new products. We also need to support DX and GX. We need to invest 5 billion yen in strategic investment. This is a strategic M&A. We are focusing on that. As I mentioned earlier, we want to invest about 5 billion yen in land exploration and new products such as terahertz. As for the return on investment, we are looking at about 3 billion yen in disbursements over the next three years. We have been working on the return on investment policy First of all, we want to restore the interest rate in a stable and continuous manner. We haven't changed that. Last year, we said that we would aim to achieve 30% of the success of the decommissioning, but this time, we want to increase the success of the decommissioning by 10% and return 40% to Mr. Kanagawa. This concludes the three-year medium-term plan. Thank you very much for your attention.