Nippon Shokubai : Financial Results Briefing Material, 4Q-FY2023

Financial Results Briefing

Material for the Fiscal Year

Ending March 2024 (FY 2023)

May 15th, 2024

Kazuhiro Noda, President

• This document is a translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Copyright NIPPON SHOKUBAI CO., LTD. All rights reserved.

Agenda

1. FY2023 Results

1. FY2024 Forecasts

1. Progress of Mid-term Management Plan (FY2022-2024)

IV. Achieving the 2030 Long-term Vision

	Abbreviations
AA	Acrylic acid
AES	Acrylate
SAP	Superabsorbent polymers
EO	Ethylene oxide
EG	Ethylene glycol
VEEATM	Hybrid monomer
SOFC	Solid oxide fuel cell
SOEC	Solid oxide electrolytic cell

2

Highlights

■FY2023 Results

Revenue: 392.0 Operating profit: 16.6 （Billion yen）

• The supply-demand balance deteriorated for many products due to sluggish demand associated with global inflation. Low priced products from China flowed into the Asian region.
• Decrease in profit year on year mainly due to worsening spreads of Acrylate and other products.
• On the other hand, demand for SAP grew in emerging countries, and demand for display-related products bottomed out.

■FY2024 Forecasts

Revenue: 400.0 Operating profit: 15.0 （Billion yen）

• Decrease in profit year on year due to expected narrowing of spreads and increase in fixed costs in the Materials business.
• Demand to gradually recover in the second half of the current fiscal year, although the impact of sluggish demand and the economic slowdown in China will continue for some time.
• Solidify the foundation for the next Mid-term Management Plan by rebuilding strategic product groups, narrowing down growth businesses, and proactively allocating resources.

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Ⅰ . FY 2023 Results

4

FY 2023 Results

FY2023 Consolidated Financial Summary (YoY)

(Billion yen)

Revenue

Operating profit

（Operating profit to revenue）

Share of profit of investments accounted for using equity method

Profit before tax

Profit

attributable to owners of parent

ROE

ROA

Domestic naphtha price (Yen/kL)

USD/JPY

EUR/JPY

FY2022

Actual

419.6

23.5

5.6%

1.9

26.2

19.4

5.5%

5.0%

76,600

135

141

FY2023

Actual

392.0

16.6

4.2%

-1.0

15.7

11.0

3.0%

2.9%

69,100

145

157

Difference

Amount	%
-27.6	-6.6%
-7.0	-29.6%
-	-
-2.9	-
-10.4	-39.9%
-8.4	-43.2%
-2.5p	-
-2.1p	-
-7,500	-9.8%
9	6.8%
16	11.2%

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FY 2023 Results

Segment Revenue and Operating Profit

（Billion Yen)

	Market Domain	FY2022			FY2023			Revenues Increase/
					Decrease Factors
			Actual		Actual	Difference	%		Volume	Price
	AA・SAP		232.1		216.0	-16.1	-6.9%		(+)	(ー)
	Basic materials, others	73.6	67.8	-5.8	-7.8%		(ー)	(ー)
Materials Business	305.7	283.8	-21.9	-7.2%
	Industrial & Household		89.0		80.6	-8.3	-9.4%		(ー)	(ー)
	Energy & Electronics		23.6		26.4	2.8	11.9%		(+)	(ー)
	Others	1.3	1.1	-0.1	-11.3%		(ー)	(+)
Solutions Business	113.9	108.2	-5.7	-5.0%
Total Revenue	419.6	392.0	-27.6	-6.6%	（＋）Increase in sales volume,
			20.9	12.7	-8.2
Materials Business	-39.2%		selling price
			1.5	2.7	1.2		（ー）Decrease in sales volume,
Solutions Business	81.8%		selling price
Eliminations and corporate profit (loss)	1.1	1.1	0.0	2.0%
Total Operating Profit	23.5	16.6	-7.0	-29.6%

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FY 2023 Results

Analysis of Changes in Operating Profit (Total)

Decrease in profit year on year :

Narrowing of spreads for AES, etc., and higher processing costs (impact of inventory valuation difference, higher depreciation, etc.) exceeded the decrease in SG&A mainly decline in lower ocean freight cost.

	Operating profit
(Billion yen)	FY2022	FY2023	Diff.
Actual	Actual
Total	23.5	16.6	-7.0

(Breakdown）
Spread	Selling price	Variable cost		Volume
	differences	differences
-7.8	-36.4	+28.7	-0.1

Including transportation costs difference

＋6.5

Processing cost

Inventory valuation difference

-5.3-3.7

SG&A		Other
		income/
		costs
+6.4	-0.2

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FY 2023 Results

Analysis of Changes in Operating Profit (Materials)

	Operating profit
(Billion yen)	FY2022	FY2023
Actual	Actual

Diff.

(Breakdown）

Spread

Selling price	Variable cost
differences	differences

Volume

Processing cost

Inventory valuation difference

SG&A		Other
		income/
		costs

Materials

20.9

12.7

-8.2

-10.0

-36.0

+26.0

+1.2

-3.8-2.8

+6.1

-1.7

Including transportation costs difference ＋5.7

Spread	•	AA･AES:Narrowing spreads due to
	decline in overseas markets, etc.
	•	AA･AES: Volume increased due to
Volume		sales expansion in emerging countries.
•	SAP: Volume increased due to strong
		demand in emerging countries.
	•	Higher processing costs due to
		negative inventory valuation difference
Processing		and increased depreciation cost in
	Indonesia.
cost, SG&A,
•	Decrease in SG&A due to lower ocean
others		freight (transportation costs).
	•	Impairment loss of fixed assets(China
		subsidiary).

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FY 2023 Results

Analysis of Changes in Operating Profit (Solutions)

	Operating profit
(Billion yen)	FY2022	FY2023
Actual	Actual

Diff.

(Breakdown）

Spread

Selling price	Variable cost
differences	differences

Volume

Processing cost

Inventory valuation difference

SG&A		Other
		income/
		costs

Solutions	1.5	2.7	+1.2	+2.2	-0.4	+2.6

-1.4

-1.3-0.9

+0.3	+1.5

	•	Industrial & Household:Widening
		spread due to falling raw materials
Spread		price.
	•	Energy ＆Electronics : Widening
		spread due to difference in sales mix.
	•	Industrial & Household:Volume
		declined due to weak demand for
Volume		household products.
•	Energy ＆Electronics : Volume
		increased due to bottoming out of
		display-related demand.
Processing
•	Other income/costs
cost, SG&A,
others		Gain on sale of fixed assets(land).

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Ⅱ. FY 2024 Forecasts

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