Toray Indus Inc Unsp/Adr

Thank you very much for joining us today despite your busy schedule. On behalf of Torre 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 Torre's business results for the fiscal year ended March 2026 and the business focus for the fiscal year ending March 2027. Now, I'd like to follow the table of contents shown on page 1. This is a summary of the business performance and forecast. Corporating income of FY2025 slightly decreased year-on-year to 141.9 billion yen due to effects from the stagnant market conditions and inventory adjustment despite the promotion of structural reform and strategic pricing. Corporating income of the fiscal year ending March 2027 is forecasted to increase year-on-year to ¥164, given the profit increase driven by business expansion in the gross business field and promotion of the structural reform while factoring in the risks associated with the situation in the Middle East. In terms of annual dividend, the company plans to pay ¥26 per share of common stock, a ¥6 increase compared with the previous fiscal year. This dividend includes a ¥3 commemorative dividend to mark its 100th anniversary as part of the interim dividend. I will explain the details starting from the next page. I'd like to begin with an overview of business results for the fiscal year ended March 2026. Please turn to page 4. Revenue for the fiscal year ended March 2026 increased 0.9% to ¥2,585.1 billion compared with the previous fiscal year and corporate income decreased 0.6% to ¥141.9 billion. Net income increased 2.1% to ¥79.5 billion. RIC was 4.7%, while ROE was 4.5%. Page 5 is about special items. Special items for the period worsened by ¥29.4 billion compared with the previous fiscal year to ¥-44.7 billion. Toray recorded ¥25.1 billion in payment losses as profitability worsened in the battery separator film business and its subsidiary in the Republic of Korea due to the sluggish EV market, etc. Page 6 about Assets, Liabilities, Equity, and Free Cash Flow As for financial condition, at the end of March 2026, both assets and liabilities were affected by the increase in translated yen amount of overseas subsidiaries because of the depreciation of the yen. Total assets stood at ¥3,477,000,000 up ¥184.4 billion from the end of the previous fiscal year due primarily to increases in trade and other receivables, property, plant and equipment as well as retirement benefit assets. Total liabilities decreased ¥77.1 billion from the end of the previous fiscal year to ¥1,549.1 billion owing mainly to decreases in borrowings. Total equity increased by 107.3 billion yen compared with the end of the previous fiscal year to 1,927.8 billion yen, mainly owing to an increase in other components' equity, despite a decline due to the purchase of treasury shares. Owners' equity was 1,800,000,000 yen, interest-bearing liabilities was 905,600,000 yen, and DE ratio was 0.5. Free cash flow was positive at 144.8 billion yen. The page 7 shows the factor analysis of 0.8 billion yen decrease in cooperating income for the fiscal year ended March 2026 on a year-to-year comparison. The fibers and textures segment remains strong mainly in the apparel applications. Meanwhile, in the performance chemicals segment, cooperating income decreased due to weak sales, battery separator film and lack of temporary factors including reversal of allowance that increased profit in the previous fiscal year. In the carbon fiber composite materials segment, profit decreased due mainly to the impact of demand correction in the industrial applications including businesses, the Follander Structure Reform and Darwin Project. As for the net change in price, strategic pricing has proceeded steadily. Cooperating income decreased 0.6% year-on-year and cooperating income margin fell 0.1 points. Using page 8 and after, I'd like to explain the results of each segment. First, 5,000 textiles. Revenue of this segment exceeded 1 trillion yen for two consecutive fiscal years. Revenue increased 4% to 1,051,000,000 yen compared with the previous fiscal year, and cooperating income rose 6% to 68,000,000 yen. The apparel applications were strong overall, despite the stagnation in the European market and the continued impact of the intensified competition with overseas products. In the industrial applications, amid a sense of stagnation in the markets including the automotive applications, the group strived to reduce costs. Page 9 is the performance chemicals segment. Revenue decreased 5.3% to 894.4 billion yen compared with the previous fiscal year. Corporating income decreased 6.2% to 56.3 billion yen. In the resins and chemicals businesses, the resins business stagnated due to the impact of the slowdown in automotive applications, while the chemicals business was also affected by the worsening market conditions. In the film's business, demand for the electronic component-related applications and the automotive capacitor applications grew, while sales of battery separator films stagnated. In the electronic and information materials business, sales of new products for the power inductor applications expanded, while OLED-related materials and circuit materials were affected by the slow demand for display panels and the intensified competition in China. Page 10 is the carbon fiber composite materials segment. Revenue was almost unchanged even on year 300.1 billion yen and cooperating income was 17.6 billion yen, a 21.7% decrease from the previous fiscal year. In the aerospace applications, sales for a major customer have steadily recovered accompanying the alleviation of inventory adjustment in supply chain. In the sports applications, sales of the high-end products for outdoor leisure were steady. However, inventory adjustment of the general-purpose products continued. In the industrial applications, the pressure vessel applications entered an adjustment phase and recovery of the wind turbine blade applications were also delayed. Page 11. In the environment and engineering segment, revenue increased 12.8% to 266.9 billion yen compared with the previous fiscal year, and cooperating income increased 11.2% to 28.8 billion yen. In the water treatment business, reverse osmosis or RO membranes for the Middle East and plant construction projects in Japan remained solid. However, the business was affected by the stagnant market conditions in China and intensified competitions. As for sub-stories in Japan, sales of engineering and construction sub-stories remained strong. Page 12 is the life science segment. Revenue decreased 1.4% to 52.4 billion yen compared with the previous fiscal year and cooperating income increased by 0.7 billion yen to negative 0.1 billion yen. In the pharmaceutical business, overseas sales grew mainly in China, but sales in Japan were affected by the penetration of generic versions. In the medical devices business, sales of hemodialysis dialysis and capsules stagnated, but efforts were made to shift towards high-value added products and to reduce costs. Page 13 shows the business results of major subsidiaries and regions. At Toray International, sales were strong mainly in the fibers and textiles, but affected by the cost increase. At the subsidiaries in Southeast Asia, in the fibers and textiles business, demand for the apparel applications and automotive applications in the industrial applications was weak. In the performance chemicals business, spread of ABS resins has improved. After subsidiaries in China, in the fibers and textiles business, the operating applications were steady. In the performance chemicals business, the chemical business was impacted by the worsened market conditions. As for a sub-series in the Republic of Korea, 5,000 Texas business saw an increase in cooperating income due to the effect of structural reforms such as scaling down of unprofitable applications. In the performance chemicals business, sales of battery separator film was stagnant. Next, I'd like to explain the consolidated business forecast for the fiscal year ending March 2027. Please turn to page 15. The global economy is expected to continue with the gradual recovery phase. The Japanese economy is also expected to continue with its gradual recovery. However, downside risks remain, including escalating tensions in the Middle East and the resulting rise in raw material prices and supply constraints, as well as prolonged impacts that may weigh on the global economy. Further, the current economic conditions will be affected by the direction of the US trade and foreign policies together with responses from other countries, trends in AI-related demand, and slowdown in the Chinese economy. These factors may significantly affect supply chains and trade structures in the medium to long term. For the fiscal year ending March 2027, Tora expects revenue of 2,830,000,000 yen, cooperating income of 160,000,000 yen, and profit attributable to owners of parents of 90,000,000 yen, taking into consideration anticipated business expansion in growth fields and profit increase through promotion of structural reforms while factoring in the risks associated with the situation in the Middle East. Page 16 shows our semi-annual forecast by segment. Revenue and cooperating income are expected to increase across all segments driven by capturing demand expansion in the fibers and textures, performance chemicals, and carbon fiber composite materials segments as well as the effects of strategic pricing and profitability improvement projects. Page 17 shows the comparison of cooperating income between the actual results for the fiscal year ended March 2026 and forecasts for the fiscal year ending March 2027 with breakdowns into segments. Page 18 explains the trends in capital expenditures, depreciation and amortization, and R&D expenditures. Capital expenditures for the fiscal year ending March 2027 are expected to be ¥160 billion, depreciation and amortization ¥140 billion, and R&D expenditures ¥86 billion. Page 19 shows shareholders' return. Toray has maintained a basic policy of stable continuous dividends while providing shareholders' return in line with business performance growth. Under Ignition 2028, the company will maintain this approach as its foundation while pursuing progressive dividends driven by profit growth as well as flexible share buybacks, taking into account the company's financial position and capital structure. In terms of interim dividend in the fiscal year ending March 2027, Tore expects to pay ¥13 per share of common stock. This includes ¥3 of 100th anniversary commemorative dividend. The company plans ¥13 of year-end dividend. Consequently, the annual dividend per share for the fiscal year will be 26 yen, an increase of 6 yen from the previous fiscal year. This concludes my presentation. Thank you very much.