Resonac Holdings Cp U/Adr

Good morning, everyone. I'm Hideki Somemiya, CFO of Resnick Holdings Corporation. Thank you for your consistent understanding and support for our company. Today, I will explain the consolidated financial results for the first quarter 2025. Please see slide 2 for key takeaways. There are two key points. First, co-operating profit increased year-on-year under IFRS that we started to adapt in the full-year financial results for FY 2024. This is mainly due to the year-on-year strong performance of the semiconductor and electronic materials segment. Overall revenue remained flat due to the sluggish chemical segment, but core operating profit achieved robust growth. Second, Q1 result shows steady progress against the forecast for FY25, which was announced on February 13. Besides this, partly due to the uncertain external environment by tariff of Trump administration among others, the forecast has not been revised as of today. Without further ado, let me explain the summary of consolidated results for the first quarter 2025. Please see slide 3. This slide shows a consolidated result for the first quarter 2025 with a year-on-year comparison. We started to adapt IFRS, and our disclosure in Annual Securities Report for 2024 ended in December, which was disclosed in March 2025, and numbers of the previous year are restated to adapt IFRS retroactively. As a concept to show the earnings of core business, we disclosed core operating profit, which is close to OP in JGAP. Core operating profit is calculated excluding gains and costs attributable to non-recurring factors, and segment profit is based on this core operating profit. Revenue in the first quarter was 321.1 billion yen. Revenue was up and down by segment, but as a total, it was almost flat year-on-year. Co-operating profit was 14.8 billion yen at 5.3 billion yen year-on-year. No recurring items were almost neutral when costs net out from gains, and the profit decreased substantially from the previous year when gains on sales of land and buildings of headquarters were posted. Operating profit was almost same as core operating profit at 14 billion yen, and due to the absence of gain on sales of headquarter, profit decreased by 14.6 billion yen. Profit attributable to owners of the parent was 8.8 billion yen, down by 19.8 billion yen due to currency loss, in addition to the absence of gains on sales of headquarter. EBDA was 38.5 billion yen up 4.8 billion yen year-on-year, and the EBDA margin was 12.0% up 1.5 points. Excluding Crassus Chemical, whose partial spin-off is considered, EBDA margin is 15.0%. Please see next slide, page 4. This is a breakdown of co-operating profit changes from 9.6 billion yen in Q1 2024 to 14.8 billion yen in Q1 2025. Within the year-on-year difference of 5.3 billion yen, sales volume impact was plus 4.2 billion yen, and improvement in semiconductor and electronic material segment account for most of it. Sales price impact was plus 2.1 billion yen, and it includes the impact of depreciation of the yen year-on-year. Chemicals is the only segment to see the profit decrease by sales price, and it is due to the market deterioration of graphite electrode in graphite business. the variable and fixed cost impact was minus 6.6 billion yen as it lowered the profit in all segment by fixed cost including labor cost. Finally, the other's impact was plus 5.7 billion yen, and the majority was in semiconductor and electronics material segment. We had a negative impact by feedstock adjustment due to costly inventory in the hard disk business in the previous year, but it didn't recur this year, and profit from overseas sales companies in Q1 of this year increased. In the following pages, 5 and 6, breakdowns of core operating profit by segment are shown, so please refer to them later. Please see page 7. This slide shows the changes in disclosure segmentation, which started in 2025. As there is no change from the explanation in the previous results meeting, I wouldn't explain in detail, but the two previous sub-segments in mobility segment are consolidated into one as mobility segment. In chemical segment, olefins and the derivatives sub-segment, whose partial spin-off plan is progressing now, will be an independent segment as Crassus chemical segment. Page 8 shows results by segment. This slide shows revenue, cooperating profit, and EBDA margin by segment with year-on-year comparison. The prominent year-on-year change is in semiconductor and electronic materials, and it serves as a key driver with revenue and profit increase, while chemical segment revenue and profit decreased due to sluggish graphite electrode market. From slide 9 to 13, we show segment summaries. On page 9, in semiconductor and electronic materials, revenue increased 14% to 111.2 billion yen. Core operating profit increased 11.2 billion yen year-on-year to 19.6 billion yen. Key drivers for revenue and profit growth were back-end semiconductor materials, whose sales volume increased for advanced semiconductors such as those for AI, and device solutions where HD media revenue increased due to the recovery of the demand for data centers. Segment EBITDA margin improved significantly from 18.9% in the previous year to 27.1%. Moving to mobility on page 10, revenue decreased 8% year-on-year to 46.9 billion yen, and core operating profit decreased 0.4 billion yen year-on-year to 1.1 billion yen. Major reason for decreased revenue was divestiture of secondary battery packaging materials and food packaging materials in Q1 2025. And the weak automotive market in Thailand led to revenue and profit decreases. Page 11 shows innovation enabling materials. Revenue was 22 billion yen almost flat year-on-year, and core operating profit also remained flat at 2.1 billion yen. Page 12 shows chemical segment. Revenue decreased 16% year-on-year to 37.7 billion yen, and core operating profit decreased 5.5 billion yen to the loss of 6.3 billion yen. Revenue and profit decreased mainly due to the graphite business as the sales volume and price decreased due to the weak market condition of graphite electrode. The absence of reversal gain of inventory write-downs in the previous year also impacted as well as sales decrease. Final page of segment summary, page 13 shows Crassus Chemical. Revenue was up 4% year-on-year to 78.7 billion yen and core operating profit increased 0.4 billion yen to 0.8 billion yen. Sales volume impacted positively year-on-year due to the higher NAFTA prices and less scheduled maintenance of derivatives. This is the end of segment summary. Page 14 shows major items below core operating profit. On the left, details of non-recurring items, and on the right, financial income and cost and equity earnings are shown with year-on-year changes. On the left part, non-recurring items deteriorated 19.9 billion yen year-on-year, and this is due to the gains on sales of headquarter land and buildings in the previous year. In this first quarter, gain on business reorganization and others, mainly gain on business transfer of secondary battery packaging materials and food packaging materials, was 5.2 billion yen. Total of business restructuring expenses and extra retirement payment was 4.8 billion yen on the expense side. and they were posted along with the structural reform of graphite electrode business. To be specific, as a first action to optimize the graphite electrode capacity, we decided to liquidate business spaces in Malaysia and China, and its relevant one-off cost was posted. Financial income and cost deteriorated 6.3 billion yen year-on-year, as shown in the right part. The major reason is foreign exchange loss with further appreciation of the yen toward the end of the quarter, though in the first quarter in the previous year, foreign exchange gain was posted. Finally, equity in earnings improved by 2.1 billion yen year-on-year. Page 15 shows a consolidated balance sheet. On the asset side on the left, total assets at the end of the fiscal year was 2 trillion 101.1 billion yen down 71.5 billion yen from the end of the previous fiscal year. It was caused by the decreasing asset held for sale, which is included in other non-current assets due to the transfer of the regenerative medicine business as well as decreased trade receivables. Total liabilities were ¥1,439.9 billion, down ¥40.7 billion from the end of the previous fiscal year. This decreased due to the payoff of liability held for sale, as well as the decrease in trade payables. Total equity was 661.2 billion yen down 30.8 billion yen from the end of the previous fiscal year. The major cause is the appreciation of the yen to 149.5 yen to a dollar at the end of March in this first quarter as shown in the appendix, which led to the decrease in exchange differences on translation of foreign operations. 26.4 billion yen under IFRS. Another major move was retained earnings down 2.7 billion yen as a decrease through dividend payment more than offset the increase by quarterly profit. Regarding the major indicators shown below, The net DE ratio increased slightly from 0.74 in the previous year to 0.77 with a decrease in total equity and almost unchanged net debt. One additional comment. This balance sheet is as of the end of March, but as already announced, at the end of April, we repaid 137.5 billion yen of subordinated loan before due date, and that will increase the ratio to slightly over one time. We continue to work on the improvement of financial position targeting a net D ratio of one time or less. Finally, the ratio of equity attributable to owners of the parent two total assets, which is equivalent to shareholders' equity ratio, remained almost flat at 30.3%. Page 16 and 17 show the supplemental information about the adoption of IFRS and its impact, including those for FY20-24 results. Page 16 shows the result of FY23 and 24 with the IFRS applied retroactively. and the forecast for FY 2025. We didn't revise the forecast for 2025 as of today, and it remains unchanged from the announcement on February 13th. On the right, 2025 forecast and the difference from the results in 2024 are shown. As mentioned at the beginning, for earnings of core business, which was shown as OP in JGAAP, please refer to core operating income under IFRS. core operating income will be up 5.9 billion yen year-on-year. But no recurring items include the one-off loss, including those with a structural reform in graphite electrode, and profit attributable to owners of the parent will decrease by 47.5 billion yen. Page 17 shows major transition impact breakdown from JGAP to IFRS. The greatest impact is, as mentioned earlier, the non-amortization of Goodwill in IFRS made improvement of 17.2 billion yen. On the other hand, exterior gains and losses on retirement benefits impact are negative as it is not amortized under IFRS, though it was amortized on the profit side under J-GAP. The cost of property tax and cost related to scheduled maintenance will affect quarterly number, though they wouldn't affect the full year number. Under IFRS, the cost of property tax is recognized upon assessment, and cost related to scheduled maintenance is recognized as it occurs. In our case, expenses will be concentrated in the first half, in particular Q1. Page 18 onwards are appendix, so please refer to them at your convenience. This concludes my presentation. Thank you very much for your attention.