Toray Indus Inc Unsp/Adr

Thank you very much for joining us today despite your busy schedule. On behalf of Torrey Group, I'd like to take this opportunity to extend my gratitude towards your continued understanding and your interest in our management and business activities. Now, I'd like to report Torrey's business results for the third quarter ended December 31, 2024, and the business forecast for the fiscal year ending March 2025. Now, I would like to follow the table of contents shown on page 1. This is a summary of the business performance and forecast. Corporating income of the 9 months was 108.8 billion yen, a significant increase compared with the same period of the previous fiscal year. Based on the business performance for the 9 months and other factors, the entire business forecast for the fiscal year ending March 2025 remains unchanged from November 7, 2024, despite some revision of segment breakdown. Furthermore, the company is proceeding with share buybacks in line with the resolution at the Board of Directors meeting held on November 7, 2024. As of the end of January 2025, the total repurchase price of shares has reached 23.6 billion yen, equivalent to 24 millions of shares. I will explain the details starting from the next page. I would like to begin with a brief summary of business results for the third quarter ended December 31, 2024. Please turn to page 4. Consolidated revenue for the nine months increased 5.2% compared with the same period a year earlier to ¥1,923.9 million. Corporating income increased 14.9% to 108.8 billion yen and the profit increased 64.6% to 75.2 billion yen. Page 5 is about special items. Special items for the 9 months improved by 0.9 billion yen to negative 4.9 billion yen compared with the same period of the previous fiscal year. As for 1.9 billion yen of economic compensation, The company posted estimated compensation to employees accompanying the production transfer from a resin compound manufacturing and sales subsidiary in China. As for financial condition at the end of December 2024, both assets and liabilities were affected by the increase in translated yen amounts from its overseas subsidiaries, due to depreciation of the currency. Total assets stood at 3,505.1 billion yen up 38.5 billion yen from the end of the previous fiscal year due to increases in inventories and tangibly fixed assets such as property, land and equipment. Total liabilities decreased 29 billion yen from the end of the previous fiscal year to 1,591.2 billion yen owing mainly to decreases in bonds and borrowings. Total equity increased by 67.5 billion yen compared with the end of the previous fiscal year to 1,913.9 billion yen. Owners' equity was 1,799.7 billion yen, interest-bearing liabilities was 925.8 billion yen, and DE ratio was 0.51. Free cash flow was positive at 88.3 billion yen. Page 7 explains about capital expenditures, depreciation and amortization, and R&D expenditures. Capital expenditures for the nine months increased by 49.6 billion yen to 144.5 billion yen on the year-to-year comparison. Meanwhile, Depreciation and amortization increased by 0.7 billion yen to 99.7 billion yen. R&D expenditures increased by 2.6 billion yen to 52.8 billion yen compared with the same period of the previous fiscal year. The table on the page 8 describes revenue and cooperating income by segments. In addition, the graph on this page shows the fact analysis of 31.6 billion yen increase in cooperating income for the nine months on a year-to-year comparison. Production and sales in the fibers and textiles, performance chemicals, and carbon fiber composite materials segments have expanded, capturing demand increase and recovery. As for the net change in price in addition to the decrease in raw material and fuel prices, strategic pricing has contributed to the increase in cooperating income. Cooperating income increased 40.9% compared with the same period of the previous fiscal year, and cooperating income margin rose 1.4 points as a result of capturing the strong demand and promotion of structural reform. Using Phase 9 and after, I'd like to explain the results of each segment. First, 5,000 textiles. Revenue of the overall segments increased 3.9% to ¥774.6 billion compared with the same period a year earlier, and cooperating income increased 14.1% to ¥50 billion. Apparel applications were robust overall, as sales momentum of the fall winter clothing in Japan and shipment from the overseas trading subsidiaries were strong. In the industrial applications, The automobile applications were affected by production decline in some automobile manufacturers in Japan and worsening market conditions in Europe. Page 10 is the performance chemicals segment. Revenue increased 7.9% to 712 billion yen compared with the same period a year earlier. Corporating income significantly increased. A 97.4% increase to 48.1 billion yen as demand recovery and improvement in the utilization rate in the film's business have contributed to improvement in profit. I would like to explain the conditions of each business on the next page. The resins and chemicals business were affected by the production decline in some Japanese automobile manufacturers. but demand recovered in non-automobile applications for China and ASEAN. In the thermos business, profit improved due to the demand growth in electronic parts-related applications owing to rebound from inventory adjustment in the supply chain, as well as improvement in the utilization rate. In the electronic and information materials business, demand for OLED-related materials and circuit materials saw some recovery. Breakdown of increase in cooperating income per segment is shown on the graph on the right. In addition to the demand recovery in the regents and CMS business, effect of the profitability improvement project, or DEPRO, implemented at overseas subsidiaries contributed to the increase in cooperating income. Page 12 is the carbon fiber composite materials segment. Revenue increased 6.7% to ¥223.2 billion compared with the same period or year earlier, and the segment posted cooperating income of ¥14.1 billion, 24.1% increase from the same period or year earlier. In the aerospace applications, the pace of recovery slows due to impacts of the recent inventory adjustments. However, cooperating income increased owing to decreases in utility costs from lower electricity and natural gas prices in Europe. I would like to explain the status of each application on the next page. In the airspace applications, although sales for major customers were affected by the recent inventory adjustments, demand has steadily recovered year on year. In the sports applications, inventory adjustments continued in the general-purpose products for outdoor leisure, but sales of high-end products were strong. In the industrial applications, the wind turbine blade applications continued its gradual recovery. Page 14, in the environment and engineering segment, revenue decreased 1.6% to 162.5 billion yen compared with the same period a year earlier. Corporating income increased 16.4% to 17 billion yen. In the water treatment business, demand remained strong, but shipments for major projects in the Middle East were strong. Furthermore, sales of an engineering subsidiary in Japan were generally strong. Page 15 is the life science segment. Revenue increased 2.2% to 39.2 billion yen compared with the same period a year earlier, and cooperating incomes decreased by 0.1 billion yen to negative 0.9 billion yen. The pharmaceutical business was impacted by the penetration of generic versions of our drugs and the NHS drug price revision. In addition, sales volume was stagnant overseas. In the medical devices business, shipment of dialysers was strong in Japan and overseas, but affected by the soaring prices of raw materials and fuels. Page 16 shows the business results of major sub-stories and regions. At Toro International, sales of resins and fumes were strong. At the subsidiaries in Southeast Asia, in the fibers and textile business, the automobile applications in the industrial applications were strong. In the performance chemicals business, demand for ABS resins in China and ASEAN was on a recovery trend. At the subsidiaries in China, in the fibers and textile business, the apparel applications and industrial applications especially the automobile applications, were strong. In the performance chemicals business, sales of resins were strong, but the chemicals business was affected by periodic maintenance of facilities. As for subsidiaries in the Republic of Korea, in the fibers and textiles business, supply and demand balance of nonwoven fabric worsened. However, the spread of firmness and staple fibers improved. In the performance chemicals business, Sales of films and electronic and information materials were strong. Next, I would like to explain the consolidated business forecast for the fiscal year ending March 2025. Please turn to page 18. The global economy is likely to gradually improve along with the declining inflation rate and monetary easing. The Japanese economy is also expecting a gradual recovery. However, the downward risks for the economy in Japan and overseas include potential changes in the fiscal and trade policies in the U.S. under the Trump administration, prolonged real estate recession in China, political instability in Europe, rising geopolitical risks, as well as changes in the Bank of Japan's monetary policy and foreign exchange fluctuations. Taking into consideration its business performance for the nine months of the fiscal year, and the business environment, for the fiscal year ending March 31, 2025, total and full-year consolidated forecast of revenue, cooperating income, and profit attributable to owners or parents remain unchanged from November 7, 2024, despite some revision of segment breakdown. This forecast from January onward is based on an assumed foreign currency exchange rate of 145 yen to the U.S. dollar, Page 19 shows the consolidated business forecast for the fiscal year ending March 2025 by segment. Page 20 shows the comparison of cooperating income between the forecast announced on November 7, 2024 and the new forecast with breakdowns into segments. The factors behind the differences are shown on the right side of the table. I would like to give a supplementary explanation on the current business environment and forecast for the carbon fiber composite materials segment. The business performance in the third quarter of FY2024 worsened compared with the previous quarter due mainly to inventory adjustment in the supply chains and that customers in the aerospace and industrial applications. Going forward, in the aerospace applications, Production rate improvement is planned at the major customers and we expect sales recovery and expansion from the temporary inventory adjustment in the supply chain. In the industrial application, demand was weak mainly in Europe and was affected by inventory adjustment at customers. However, sales of compressed natural gas or CNG tanks continue to grow gradually and expansion of sales volume is expected in conjunction with promoting sales expansion of differentiated products. This concludes my presentation. Thank you very much.