Resonac Holdings Cp U/Adr

Hello, everyone. I am Hideki Somemiya, CFO of Retina Codings Corporation. Thank you very much for your understanding and support for our company. Let me explain the financial results overview of Q3 of fiscal 2025. Page 2 is key takeaways. There are three things that I'd like to communicate to you. First, core operating profit in semiconductor and electronic material segment reached a record high on a quarterly basis. In Q3, products for advanced semiconductors used for AI and others were strong. In addition, there was inventory demand for smartphones and others. Second, core operating profit increased year on year, driven by the strong performance of the semiconductor and electronic materials segment, which more than offset the weakness in the chemical segment. Third, compared to fiscal 2025 forecasts announced on February 13 this year, we made steady progress through Q3. Forecast numbers remain unchanged. Now let me explain Q1 to Q3 financial results. Slide number 3 shows the summary of Q1 to Q3 consolidated results comparing fiscal 2024 to 2025. Q1 to Q3 revenue was 986.3 billion yen. Semiconductor and electronic materials revenue grew considerably year-on-year. However, chemical segment and classist chemical segment revenue decreased. Overall revenue declined by 43 billion yen year-on-year. Core operating profit was 72.8 billion yen, up 4 billion yen year-on-year. As for non-recurring items, gain on sale of former headquarters land and buildings increased was booked the same period last year. During Q1 to Q3 this year, impairment losses on business sale and restructuring were recorded. Non-recurring items turned negative to 51.4 billion yen. IFRS-based operating profit was 21.5 billion yen, down 64 billion yen year on year. Profit attributable to owners of the parent was 6 billion yen, down 58.8 billion yen year-on-year, due to the non-recurring items which turned significantly negative as mentioned earlier. EBITDA was 143.9 billion yen, almost flat year-on-year. EBITDA margin was 14.6%, improvement of 0.8 point. Excluding Crassus Chemical, for which we are considering partial spin-off, EBITDA margin was 17.8%. In Q3, the EBITDA margin was 18%. Excluding Crassus Chemical, it was 20.7%. So we exceeded our target of 20% or higher. Page 4 is the breakdown of core operating profit changes from 68.8 billion yen last year to 72.8 billion yen in Q1 to Q3. Looking at the breakdown of 4 billion yen year-on-year increase, sales volume was 7.2 billion yen. Mostly improvement impact of semiconductor and electronic materials. Sales price pushed down the profit by 19.2 billion yen. Sluggish graphite electrode market led to lower sales price. Nafta price was down year on year, and sales price also declined in Crassus chemical segment. Variable and fixed costs pushed up the profit by 13.8 billion yen. Although fixed costs such as labor mainly increased in each segment and raw material costs rose, in Crassus chemical, lower Nafta price pushed up the profit. Lastly, the others pushed up the profit by 2.2 billion yen. This includes the hard disk media business in semiconductor and electronic materials segment having sold off high-cost inventory in the same period last year. Pages 5 and 6 show breakdown of segment core operating profit changes. These are for your reference. Page 7 is Results by Segment. Revenue, co-operating profit, and EBITDA margin are shown by segment comparing fiscal 2024 and 2025. Semiconductor and electronic materials grew 11% in revenue and 40% in profit year-on-year, driving overall results. However, revenue and profit decreased in other segments. Especially in chemical segment, sluggish graphite electrode market led to considerable decline in revenue and the segment ended in deficit. Page 8 is quarterly results by segment. In semiconductor and electronic material segment, In addition to the demand for smartphones, volume of products for advanced semiconductors used for AI and others steadily grew in Q3. Both revenue and core operating profit reached record highs. EBITDA margin was 31.3%. As a result, overall Q3 revenue was 344.2 billion yen. Core operating profit was 38.2 billion yen. EBITDA margin was 18%. Pages 9 to 13 are segment summaries. Page 9 is the semiconductor and electronic materials. Revenue grew by 11% year-on-year to 365.7 billion yen. Core operating profit increased by 21.2 billion yen year-on-year to 74 billion yen. Higher revenue and profit were driven mainly by backend semiconductor materials, whose volume grew for advanced semiconductors, mainly for AI and others, and device solutions where hard disk media revenue rose on the demand recovery for data centers. We understand that the growth of the hard disk media for data center is driven by storage demand expansion, including those based on AI. Segment EBITDA margin improved greatly from 25.5% the year before to 29.1%. Page 10 is mobility. Revenue decreased by 12% year-on-year to 132.1 billion yen. Co-operating profit decreased by 1.9 billion yen year-on-year to 2 billion yen. Lower revenue is mostly due to divestiture of secondary battery packaging materials and food packaging materials in Q1, as well as a decline in demand for some domestic customers. Both revenue and profit were down. Page 11 is innovation enabling materials. Revenue decreased by 5% year-on-year to 67.9 billion yen. Co-operating profit decreased by 0.7 billion yen to 8.1 billion yen. Revenue and profit decreased due to lower demand for certain products impacted by sluggish automobile market. Phase 12 is chemicals. Revenue declined by 17% year-on-year to 125.9 billion yen. Co-operating profit declined by 9.2 billion yen to the loss of 7.4 billion yen. Lower revenue and profit come mostly from graphite. Electrode business where both sales volume and price dropped due to weak graphite electrode market conditions. While gains from the reversal of the inventory write-downs were booked same period last year, in Q1 to Q3 this year, there were valuation losses. The last segment summary page 13 shows Krasas Chemical. Revenue decreased 8% year-on-year to 222.8 billion yen. Co-operating profit decreased by 1.8 billion yen to 3.3 billion yen. Lower NAFTA prices led to lower selling prices and revenue dropped. Co-operating profit decreased due to a deterioration in inventory valuation differences. The results by segment has been completed. Page 14 is the major items below the co-operating profit. On the left, we have the list of the non-recurring items. On the right, year-on-year comparison of the financial income growth. costs and equity in earnings. Starting with the left non-recurring items, these worsened by 68 billion yen year-on-year. Because of the gains on sale of the former headquarters land and building, this was positive same period last year. In Q1 to Q3 this year, we booked impairment losses for transfer of businesses and provision for business structure improvement. This is mainly for the business transfer of Fiam Energy Technology engaged in lead-acid battery business and automotive molded parts business. Other items during Q1 to Q3 have not changed much since the first half. Gain on business reorganization and others was 6.9 billion yen, mainly from divestiture of secondary battery packaging materials and food packaging materials. Total of business restructuring expenses and extra retirement payments was 5.3 billion yen, mainly from restructuring of graphite electrode business. Moving to the right-hand side, total financial income cost improved 3.8 billion yen year-on-year, while FX loss was recorded in the same period last year, where weaker yen during the Q1 to Q3 this year led to small FX gain. As there was negative impact of one-time cost adjustment during the same period last year, the equity in earnings increased by 2.5 billion yen year-on-year. Next, page 15 shows consolidated balance sheet. starting from the left. Total assets at the end of September this year was 2 trillion 69.7 billion yen, down 102.9 billion yen from the end of December last year. This is mainly due to the lower cash and cash equivalents due to the corporate bond redemption and others. Assets held for sale increased due to the transfers from the trade receivables and inventories and others following the decision to transfer Fiam Energy Technology and Automotive Molded Parts business. Total liabilities were 1,398,000,000,000 yen. down 82.4 billion yen from the end of December 2024 due to the lower interest-bearing liabilities. Total equity was 671.5 billion yen, down 20.5 billion yen from the end of December last year. Biggest reason behind the decline is stronger yen up to 148.4 yen to the dollar at the end of September, as shown in appendix, which led to 13.6 billion yen decrease overall of the conventional foreign currency translation adjustment or exchange differences on translation of foreign operations under IFRS. Major indicators are shown at the bottom. Net DE ratio increased to 0.98 times from the 0.78 times at the December end. This was due to the early repayment of 137.5 billion yen of subordinated loans, which are recognized as 50% equity by Japan Credit Rating Agency. Through the regular senior loans and others at the end of April, we continue to improve our financial position, targeting a stable net debt equity ratio of one time or lower. Lastly, equity ratio attributable to owners of the parent, which corresponds to the conventional equity ratio, improved slightly to 31.2% from December end. Pages 16 and onwards are appendix, and these are for your reference. That concludes my presentation. Thank you very much for your attention.