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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Asahi Kasei Corporation    3407   JP3111200006

ASAHI KASEI CORPORATION

(3407)
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Asahi Kasei : Fiscal quarter ended June 2020

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08/03/2020 | 11:31pm EDT

Fiscal quarter ended June 2020

- supplementary financial summary -

August 4, 2020

Asahi Kasei Corporation

Contents

1. Consolidated results for fiscal quarter ended June 2020

8 Summary of financial results

9 Statements of income

  1. Balance sheets
  2. Cash flows
  3. Sales and operating income increase/decrease by segment

2. Forecast for first half fiscal 2020

  1. Consolidated operating performance forecast
  2. Sales and operating income forecast by segment

3. Appendix

17-18 Sales and operating income increase/decrease by business category

19-20 Sales and operating income forecast for first half by business category

  1. Overseas sales by business category
  2. Extraordinary income and loss

23-31 Overview of results by segment

32-33 Quarterly sales and operating income by segment

Disclaimer

The forecasts and estimates shown in this document are dependent on a variety of assumptions and

economic conditions. Plans and figures depicting the future do not imply a guarantee of actual outcomes.

2

Focus of Q1 2020 results

  • Operating income in Material decreased as an effect of global economic slowdown resulting from novel coronavirus pandemic, while operating income in Homes and Health Care increased.
  • Material

Basic Materials: Operating income decreased with reduced shipment volumes, effects of lower market prices for petrochemical feedstocks on inventories, and deteriorated terms of trade for acrylonitrile (AN).

Performance Products: Operating income decreased as an effect of significant declines in demand among automobile-related markets and apparel-related markets.

Specialty Solutions: Operating income increased with favorable demand related to communications infrastructure and tablet PCs, while lithium-ion battery separator shipments increased firmly.

  • Homes
    • Operating income increased with firm performance of condominiums in real estate, and a portion of deliveries of order-built homes being postponed from the previous period due to delayed supply of components as an effect of the novel coronavirus.
    • Orders for order-built homes decreased from the year-ago period due to restriction of admission to model homes to prevent the spread of novel coronavirus infection.
  • Health Care
    • Despite negative factors such as reduced outpatient visits and curtailed business activity due to the novel coronavirus, and amortization of goodwill related to the acquisition of Veloxis Pharmaceuticals Inc., operating income increased with shipment growth for ventilators and virus removal filters as an effect of

elevated demand due to the novel coronavirus.

3

Focus of Q2 2020 forecast

  • Q2 operating income expected to be even with Q1 in Material, increase from Q1 in Homes and Health Care; year-on-year, decrease in Material and Homes, increase in Health Care, and decrease overall.
  • Material

Recovery of demand is expected, especially with recovery of vehicle production, but operating income is expected to be even with Q1 as a portion of product shipments spill into Q3. Year-on-year decrease expected with effects of lower petrochemical feedstock prices and declines in demand among automobile-related and apparel-related markets similar to Q1.

  • Homes

Firm performance in real estate such as condominiums expected, but year-on-year operating income decrease with reduced deliveries of order-built homes as measures to prevent novel coronavirus infection make construction work slower, and impact of lower orders for remodeling. Orders for order-built homes expected to recover with gradual recovery of customer visits to model homes and use of digital marketing leveraging IT.

  • Health Care

Year-on-year, operating income decrease expected in Health Care business category with impact of amortization of goodwill related to Veloxis, effect of novel coronavirus, and reduced reimbursement prices in Japan, but operating income increase expected in Critical Care business category centered on increased demand for ventilators; operating income increase expected for Health Care segment overall.

4

Focus of FY 2020 full-year forecast (1)

H2 2020 and full-year forecast

  • Regarding the impact of the novel coronavirus, although it remains difficult to anticipate the spread of infections, economic policies, and recovery of markets in various countries, it is believed that the general trend for recovery of economic activity with measures to prevent infection will continue. Due to obscurity of the market environment outlook, the H2 and full- year forecasts for Material, having a broad scope of business activity, are determined in a range, as are the overall consolidated operating income forecasts.
  • Operating income change from H1 to H2
  • Material
    • Operating income increase expected with improved automobile-related demand due to recovery of vehicle production, and recovery of demand and improved terms of trade for petrochemical products such as AN.
  • Homes
    • Slight operating income increase expected with gradual easing of restrictions to prevent novel coronavirus infection.
    • Orders for order-built homes expected to recover with gradual recovery of customer visits to model homes and use of digital marketing leveraging IT.
  • Health Care
    • Operating income decrease expected as ventilator demand subsides and due to tendency for

Health Care business category fixed costs to occur in H2.

5

Focus of FY 2020 full-year forecast (2)

H2 2020 and full-year forecast (continued)

  • Full-yearforecast (net sales, operating income, year-on-year change)
  • Material
    Net sales decline by around 15% and operating income decline by around 50% with significant impact from novel coronavirus.
  • Homes
    Net sales decline by around 5% and operating income decline by around 30%.
  • Health Care
    Net sales growth by over 15% with contribution from acquired businesses and operating income growth by around 25%.

Together with curtailment of corporate expenses, overall operating income expected to decrease by around 30% to ¥120-130 billion. While the severe operating environment and uncertainty about the outlook persist, efforts will be made to improve performance by curtailing fixed costs, reducing inventories, and making swift and appropriate management decisions according to changes in the environment.

Shareholder returns

  • Basic policy for stable dividends and continuously increased dividends remains unchanged.
  • Interim dividends to be determined based on H1 results and full-year forecast after Q2, annual dividends to be determined based on full-year results and ascertaining effect of novel

coronavirus on the subsequent fiscal year.

6

1. Consolidated results for fiscal

quarter ended June 2020

7

Summary of financial results

Q1 2019

Q1 2020

Net sales

502.1

455.2

Operating income

41.3

30.1

Ordinary income

44.0

30.2

Net income attributable to owners of the parent

24.4

13.6

¥/US$ exchange rate (market average)

110

108

¥/€ exchange rate (market average)

123

118

(¥ billion)

Increase % change (decrease)

(46.9) -9.3%

(11.2) -27.2%

(13.7) -31.3%

(10.8) -44.3%

(2)

(5)

8

Statements of income

(¥ billion)

Q1 2019

Q1 2020

Increase

% change

% of sales

% of sales

(decrease)

Net sales

502.1

100.0%

455.2

100.0%

(46.9)

-9.3%

Cost of sales

339.4

67.6%

305.3

67.1%

(34.1)

-10.0%

Gross profit

162.7

32.4%

149.9

32.9%

(12.8)

-7.9%

Selling, general and administrative expenses

121.4

24.2%

119.8

26.3%

(1.6)

-1.3%

Operating income

41.3

8.2%

30.1

6.6%

(11.2)

-27.2%

Net non-operating income (expenses)

2.6

0.1

(2.5)

of which,

net financing income (expense)

1.7

1.3

(0.3)

net equity in earnings (losses) of affiliates

2.2

(0.1)

(2.3)

foreign exchange gains (loss)

(0.9)

(0.4)

0.5

Ordinary income

44.0

8.8%

30.2

6.6%

(13.7)

-31.3%

Net extraordinary income (loss)

(0.2)

(4.8)

(4.5)

Income before income taxes

43.8

8.7%

25.5

5.6%

(18.3)

-41.8%

Income taxes

18.8

11.2

(7.7)

Net income attributable to non-controlling interests

0.5

0.7

0.2

Net income attributable to owners of the parent

24.4

4.9%

13.6

3.0%

(10.8)

-44.3%

9

Balance sheets

(¥ billion)

Current assets

Cash and deposits

Notes and accounts receivable-trade Inventories

Other current assets

Noncurrent assets

Property, plant and equipment Intangible assets1 Investments and other assets1

Total assets

1

Goodwill

Interest-bearing debt

2

D/E ratio

At end of

At end of

Increase

At end of

At end of

Increase

Mar. 2020

Jun. 2020

(decrease)

Mar. 2020

Jun. 2020

(decrease)

1,107.4

1,070.9

(36.5)

Liabilities

1,438.8

1,409.0

(29.8)

208.0

210.1

2.1

Current liabilities

842.5

689.1

(153.4)

331.0

278.5

(52.5)

2

596.3

719.9

123.6

Noncurrent liabilities

477.8

497.1

19.3

Net assets

1,383.5

1,379.1

(4.4)

90.6

85.1

(5.5)

Shareholders' equity

1,302.8

1,294.0

(8.8)

1,714.8

1,717.2

2.4

Capital stock

103.4

103.4

-

653.7

664.7

11.1

Capital surplus

79.6

79.7

0.0

715.2

696.4

(18.9)

Retained earnings

1,125.7

1,116.9

(8.8)

345.9

356.1

10.2

Treasury stock

(6.0)

(6.0)

(0.0)

Accumulated other

56.5

61.0

4.5

comprehensive income

Noncurrent liabilities

24.1

24.1

(0.0)

2,822.3

2,788.1

(34.2)

Total liabilities and net assets

2,822.3

2,788.1

(34.2)

365.7

355.5

(10.2)

703.8

710.8

7.0

0.52

0.52

0.01

1 Figures at the end of March 2020 retroactively revised reflecting PPA (purchase price allocation) results completed in Q1 2020 related to Veloxis Pharmaceuticals Inc. acquired on March 3, 2020 (CET).

Before revision : goodwill ¥149.1 billion, investments and other assets ¥5.5 billion

After revision : goodwill ¥45.2 billion, intangible assets ¥133.6 billion, noncurrent liabilities ¥24.3 billion

2 Excluding lease obligations.

10

Cash flows

(¥ billion)

Q1 2019

Q1 2020

a. Net cash provided by (used in) operating activities

15.9

50.1

b. Net cash provided by (used in) investing activities

(16.4)

(32.8)

c. Free cash flows [a+b]

(0.5)

17.3

d. Net cash provided by (used in) financing activities

(5.3)

(16.4)

e. Effect of exchange rate change on cash and cash equivalents

(4.3)

(0.5)

f. Net increase (decrease) in cash and cash equivalents [c+d+e]

(10.1)

0.3

g. Cash and cash equivalents at beginning of period

180.5

204.8

h. Increase in cash and cash equivalents resulting from

0.1

1.7

changes in scope of consolidation

i. Cash and cash equivalents at end of period [f+g+h]

170.5

206.8

11

Sales and operating income increase/decrease by segment

(¥ billion)

Increase (decrease) due to:

Net

of which,

Q1 2019

Q1 2020

increase

% change

Sales

Sales

due to

Others

(decrease)

volume

prices

foreign

exchange

Material

Sales

271.4

204.7

(66.7)

-24.6%

(46.6)

(3.9)

Operating

25.9

8.9

(17.0)

-65.7%

(16.1)

(16.2)

(1.4)

15.3

income

Homes

Sales

144.6

150.9

6.3

+4.4%

0.4

7.0

Operating

9.9

10.8

0.8

+8.4%

(0.9)

(1.0)

-

2.8

income

Health Care1

Sales

82.7

95.7

13.0

+15.7%

8.5

4.7

Operating

12.6

15.5

2.9

+22.9%

3.9

(0.2)

(0.0)

(0.8)

income

Others

Sales

3.5

3.9

0.4

+11.7%

0.4

-

Operating

0.3

0.7

0.4

-

0.3

-

-

0.1

income

Corporate expenses

Operating

(7.4)

(5.8)

1.6

-

-

-

-

1.6

and eliminations

income

Consolidated

Sales

502.1

455.2

(46.9)

-9.3%

(37.3)

7.7

Operating

41.3

30.1

(11.2)

-27.2%

(12.8)

(17.4)

(1.4)

18.9

income

1 Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in Health Care segment from Q1 2020.

12

2. Forecast for first half fiscal 2020

13

Consolidated operating performance forecast

FY 2019

FY 2020 forecast

H1

H1

Q1

Q2

Q1

Q2

a

b

Net sales

502.1

566.6

1,068.6

455.2

523.8

979.0

Operating income

41.3

60.4

101.7

30.1

35.9

66.0

Ordinary income

44.0

61.3

105.3

30.2

36.3

66.5

Net income attributable to

24.4

53.5

77.9

13.6

19.4

33.0

owners of the parent

¥/US$ exchange rate

110

107

109

108

105

106

(market average)

¥/€ exchange rate

123

119

121

118

120

119

(market average)

(¥ billion)

Increase

(decrease) % change b-a

(89.6) -8.4%

(35.7) -35.1%

(38.8) -36.8%

(44.9) -57.6%

(2)

(2)

14

Sales and operating income forecast by segment

Sales

(¥ billion)

FY 2019

FY 2020 forecast

Net

H1

H1

Increase

% change

Q2

Q1

Q2

Q1

(decrease)

a

forecast

b

b-a

Material

271.4

288.9

560.2

204.7

227.3

432.0

(128.2)

-22.9%

Homes

144.6

188.9

333.4

150.9

179.1

330.0

(3.4)

-1.0%

Health Care1

82.7

84.9

167.6

95.7

113.3

209.0

41.4

+24.7%

Others

3.5

3.9

7.4

3.9

4.1

8.0

0.6

+8.3%

Consolidated

502.1

566.6

1,068.6

455.2

523.8

979.0

(89.6)

-8.4%

Operating income

FY 2019

FY 2020 forecast

Net

H1

H1

Increase

% change

Q2

Q1

Q2

Q1

(decrease)

a

forecast

b

b-a

Material

25.9

31.0

56.9

8.9

9.1

18.0

(38.9)

-68.3%

Homes

9.9

22.8

32.7

10.8

13.2

24.0

(8.7)

-26.6%

Health Care1

12.6

13.3

25.9

15.5

20.0

35.5

9.6

+37.0%

Others

0.3

0.8

1.1

0.7

0.3

1.0

(0.1)

-5.9%

Corporate expenses

(7.4)

(7.5)

(14.9)

(5.8)

(6.7)

(12.5)

2.4

-

and eliminations

Consolidated

41.3

60.4

101.7

30.1

35.9

66.0

(35.7)

-35.1%

1 Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in Health Care segment from Q1 2020.

15

3. Appendix

16

Sales and operating income increase/decrease by business category1 (i)

(¥ billion)

Increase (decrease) due to:

Net

of which,

Q1 2019

Q1 2020

increase % change

Sales

Sales

due to

Others

(decrease)

volume

prices

foreign

exchange

Sales2

81.1

59.8

(21.3)

-26.2%

(8.8)

(0.8)

Basic Materials

Operating

(11.6)

(0.2)

8.8

(1.7)

(10.4)

-119.2%

(3.8)

5.0

income

Sales2

108.6

67.9

(40.7)

-37.5%

(37.6)

(0.9)

Performance Products

Operating

(2.1)

(0.4)

10.4

1.4

(9.0)

-86.7%

(13.1)

6.2

income

Sales2

71.3

70.3

(1.0)

-1.5%

1.1

0.3

Specialty Solutions

Operating

(2.4)

(0.8)

5.4

7.8

2.4

+43.6%

0.8

4.0

income

Sales2

10.4

6.7

(3.7)

-36.0%

(1.2)

(2.5)

Others in Material

Operating

-

-

1.3

1.4

0.1

+9.4%

(0.0)

0.1

income

Sales

130.6

139.1

8.5

+6.5%

2.6

7.0

Homes

Operating

(1.2)

-

8.8

9.8

1.0

+11.6%

(0.3)

2.5

income

Sales

14.0

11.9

(2.1)

-15.3%

(2.3)

-

Construction Materials

Operating

0.2

-

1.3

1.1

(0.2)

-15.0%

(0.6)

0.3

income

  1. Figures for operating income by business category include intrasegment transactions which are eliminated from the segment totals.
  2. Beginning with FY 2020, method of consolidation adjustment in Material segment is changed. FY 2019 sales results are recalculated in

accordance with the change.

17

Sales and operating income increase/decrease by business category1 (ii)

(¥ billion)

Increase (decrease) due to:

Net

of which,

Q1 2019

Q1 2020

increase

% change

Sales

Sales

due to

Others

(decrease)

volume

prices

foreign

exchange

Health Care2

Sales

34.3

36.5

2.2

+6.5%

(0.2)

3.0

Operating

6.8

5.7

(1.0)

-15.4%

(0.1)

(0.5)

(0.0)

(0.4)

income

Sales

48.4

59.2

10.8

+22.3%

8.8

1.7

Critical Care

Operating

5.9

9.8

3.9

+67.3%

4.0

0.3

(0.0)

(0.4)

income

Sales

3.5

3.9

0.4

+11.7%

0.4

-

Others

Operating

0.3

0.7

0.4

-

0.3

-

-

0.1

income

Corporate expenses

Operating

(7.4)

(5.8)

1.6

-

-

-

-

1.6

and eliminations

income

Sales

502.1

455.2

(46.9)

-9.3%

(37.3)

7.7

Consolidated

Operating

41.3

30.1

(11.2)

-27.2%

(12.8)

(17.4)

(1.4)

18.9

income

  1. Figures for operating income by business category include intrasegment transactions which are eliminated from the segment totals.
  2. Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in Health Care business category from Q1 2020.

18

Sales forecast for first half by business category

(¥ billion)

FY 2019

FY 2020 forecast

Increase

H1

H1

(decrease)

% change

Q1

Q2

a

Q1

Q2

b

b-a

Basic Materials1

81.1

85.2

166.3

59.8

59.2

119.0

(47.3)

-28.4%

Performance Products1

108.6

109.4

217.9

67.9

89.1

157.0

(60.9)

-28.0%

Specialty Solutions1

71.3

84.8

156.1

70.3

70.7

141.0

(15.1)

-9.7%

Others in Material1

10.4

9.5

19.9

6.7

8.3

15.0

(4.9)

-24.6%

Homes

130.6

174.3

304.9

139.1

166.9

306.0

1.1

+0.4%

Construction Materials

14.0

14.5

28.6

11.9

12.1

24.0

(4.6)

-16.0%

Health Care2

34.3

35.8

70.1

36.5

39.5

76.0

5.9

+8.4%

Critical Care

48.4

49.1

97.5

59.2

73.8

133.0

35.5

+36.4%

Others

3.5

3.9

7.4

3.9

4.1

8.0

0.6

+8.3%

Consolidated

502.1

566.6

1,068.6

455.2

523.8

979.0

(89.6)

-8.4%

  1. Beginning with FY 2020, method of consolidation adjustment in Material segment is changed. FY 2019 sales results are recalculated in accordance with the change.
  2. Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in Health Care business category from Q1 2020.

19

Operating income forecast for first half by business category1

(¥ billion)

FY 2019

FY 2020

Increase

H1

H1

(decrease)

% change

Q1

Q2

Q1

Q2

a

b

b-a

Basic Materials

8.8

11.3

20.1

(1.7)

1.2

(0.5)

(20.6)

-102.5%

Performance Products

10.4

10.2

20.7

1.4

3.1

4.5

(16.2)

-78.2%

Specialty Solutions

5.4

9.5

14.9

7.8

4.7

12.5

(2.4)

-16.4%

Others in Material

1.3

(0.1)

1.2

1.4

0.1

1.5

0.3

+27.7%

Homes

8.8

21.3

30.1

9.8

12.7

22.5

(7.6)

-25.2%

Construction Materials

1.3

1.5

2.7

1.1

0.4

1.5

(1.2)

-45.2%

Health Care2

6.8

7.2

14.0

5.7

3.8

9.5

(4.5)

-32.1%

Critical Care

5.9

6.1

11.9

9.8

16.2

26.0

14.1

+118.2%

Others

0.3

0.8

1.1

0.7

0.3

1.0

(0.1)

-5.9%

Corporate expenses

(7.4)

(7.5)

(14.9)

(5.8)

(6.7)

(12.5)

2.4

-

and eliminations

Consolidated

41.3

60.4

101.7

30.1

35.9

66.0

(35.7)

-35.1%

  1. Figures for operating income by business category include intrasegment transactions which are eliminated from the segment totals.
  2. Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in Health Care business category from Q1 2020.

20

Overseas sales by business category

(¥ billion)

Q1 2019

Q1 2020

Overseas

Overseas

Increase

% change

Total sales

% of total

Total sales

% of total

(decrease)

sales

sales

Basic Materials1

81.1

40.8

50.4%

59.8

25.3

42.3%

(15.5)

-38.1%

Performance Products1

108.6

65.1

60.0%

67.9

34.5

50.8%

(30.7)

-47.1%

Specialty Solutions1

71.3

47.3

66.3%

70.3

47.5

67.7%

0.3

+0.6%

Others in Material1

10.4

0.2

1.5%

6.7

0.3

4.3%

0.1

+88.2%

Homes

130.6

5.1

3.9%

139.1

4.1

3.0%

(0.9)

-18.6%

Construction Materials

14.0

-

-

11.9

-

-

-

-

Health Care2

34.3

11.8

34.3%

36.5

15.5

42.4%

3.7

+31.7%

Critical Care

48.4

47.9

99.0%

59.2

58.8

99.3%

10.9

+22.7%

Others

3.5

0.4

10.8%

3.9

0.4

10.8%

0.0

+11.4%

Total

502.1

218.6

43.5%

455.2

186.4

40.0%

(32.1)

-14.7%

Asia

111.7

22.2%

84.6

18.6%

(27.1)

-24.3%

of which, sales to China

48.1

9.6%

44.6

9.8%

(3.6)

-7.4%

The Americas

73.5

14.6%

69.2

15.2%

(4.2)

-5.8%

Europe

28.0

5.6%

26.4

5.8%

(1.6)

-5.8%

Other countries

5.4

1.1%

6.2

1.4%

0.8

+15.4%

Sales, excluding Homes and

357.5

213.5

59.7%

304.2

182.3

59.9%

Construction Materials

1 Beginning with FY 2020, method of consolidation adjustment in Material segment is changed. FY 2019 sales results are recalculated in accordance with the change.

2 Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in Health Care business category from Q1 2020.

21

Extraordinary income and loss

(¥ billion)

Q1 2019

Q1 2020

Increase

(decrease)

Gain on sales of investment securities

0.5

0.0

(0.5)

Gain on sales of noncurrent assets

0.4

0.1

(0.3)

Total extraordinary income

0.9

0.1

(0.8)

Loss on valuation of investment securities

-

0.0

0.0

Loss on disposal of noncurrent assets

1.0

1.7

0.7

Impairment loss

0.0

0.0

(0.0)

Business structure improvement expenses

0.1

3.1

3.0

Total extraordinary loss

1.1

4.8

3.7

Net extraordinary income (loss)

(0.2)

(4.8)

(4.5)

22

Material segment (i)

(¥ billion)

Net sales

Q1 20191

Q1 2020

Increase

% change

(decrease)

Material segment

271.4

204.7

(66.7)

-24.6%

Basic Materials

81.1

59.8

(21.3)

-26.2%

Performance

108.6

67.9

(40.7)

-37.5%

Products

Specialty

71.3

70.3

(1.0)

-1.5%

Solutions

Others

10.4

6.7

(3.7)

-36.0%

Operating income2

Q1 2019

Q1 2020

Increase

% change

(decrease)

Material segment

25.9

8.9

(17.0)

-65.7%

Basic Materials

8.8

-1.7

(10.4)

-119.2%

Performance

10.4

1.4

(9.0)

-86.7%

Products

Specialty

5.4

7.8

2.4

+43.6%

Solutions

Others

1.3

1.4

0.1

+9.4%

Basic Materials

Operating income decrease:

(-) Deteriorated terms of trade and decreased shipments of acrylonitrile

(-) Inventory valuation loss by the gross average method due to decreased prices for feedstock prices such as naphtha

1 Beginning with FY 2020, method of consolidation adjustment in Material segment is changed. FY 2019 sales results are recalculated in accordance with the change.

2 Figures for operating income by business category include intrasegment transactions which are eliminated from the segment totals

23

Material segment (ii)

Performance Products

Operating income decrease:

  1. Improved terms of trade due to decreased prices for feedstock such as naphtha

(-) Decreased shipments of automobile-related products

(-) Decreased shipments of fiber products for apparel applications

Highlights

  • May, decision to close spunbond nonwoven fabric plant in Nobeoka, Miyazaki

Specialty Solutions

Operating income increase:

  1. Increased shipments of Li-ion battery separator
  1. Increased shipments of electronic materials for communications infrastructure and tablet PCs

(-) Decreased shipments of automobile-related products

24

Homes segment (i)

(¥ billion)

Net sales

Q1 2019

Q1 2020

Increase

% change

(decrease)

Homes segment

144.6

150.9

6.3

+4.4%

Homes

130.6

139.1

8.5

+6.5%

Order-built homes, etc.

79.5

80.7

1.2

+1.5%

(Asahi Kasei Homes)

Real estate

31.7

41.5

9.8

+30.8%

(Asahi Kasei Realty & Residence)

Remodeling

13.7

12.0

(1.6)

-12.0%

(Asahi Kasei Reform)

Other housing-related, etc.

5.6

4.8

(0.8)

-15.0%

Construction Materials

14.0

11.9

(2.1)

-15.3%

Operating income1

Q1 2019

Q1 2020

Increase

% change

(decrease)

Homes segment

9.9

10.8

0.8

+8.4%

Homes

8.8

9.8

1.0

+11.6%

Order-built homes, etc.

3.7

3.6

(0.1)

-2.9%

(Asahi Kasei Homes)

Real estate

3.6

5.2

1.5

+42.4%

(Asahi Kasei Realty & Residence)

Remodeling

1.3

1.0

(0.2)

-17.8%

(Asahi Kasei Reform)

Other housing-related, etc.

0.2

0.0

(0.2)

-90.7%

Construction Materials

1.3

1.1

(0.2)

-15.0%

Operating income increase:

  1. Firm performance of pre-built homes in real estate
  1. Increased deliveries of order-built homes

(-) Decreased number of remodeling works

Home order trend

Year-on-year 47.8% decrease in value of new orders for order-built homes due to restriction of admission to model homes.

1 Figures for operating income by business category include intrasegment transactions which are eliminated from the segment totals.

25

Homes segment (ii)

(¥ billion, % indicates year-on-year comparison)

Value of new orders

Sales of order-built

Sales of real estate1

Sales of

Other

Consolidated

Order

during the term

homes, etc.

Pre-built

Rental

Other

Total

remodeling

sales2

backlog

homes

housing

FY16

H1

206.6

(-4.9%)

183.5

(-0.1%)

11.8

41.2

1.8

54.8

27.0

(0.5)

264.8

(+2.6%)

538.8

H2

194.3

(+6.1%)

220.8

(-3.1%)

9.5

43.5

1.6

54.6

29.1

0.8

305.3

(-6.1%)

515.8

annual

400.9

(+0.1%)

404.3

(-1.8%)

21.3

84.7

3.4

109.4

56.1

0.4

570.2

(-2.2%)

FY17

H1

193.1

(-6.5%)

182.7

(-0.4%)

12.0

45.3

1.6

59.0

26.8

0.1

269.6

(+1.8%)

528.9

H2

212.5

(+9.4%)

224.1

(+1.5%)

14.7

47.8

2.5

65.1

28.4

1.1

318.7

(+4.4%)

520.9

annual

405.6

(+1.2%)

406.8

(+0.6%)

26.8

93.2

4.2

124.1

55.2

2.2

588.3

(+3.2%)

FY18

H1

210.1

(+8.8%)

175.5

(-4.0%)

16.8

49.7

1.6

68.1

27.2

1.0

271.8

(+0.8%)

557.8

H2

241.5

(+13.6%)

228.2

(+1.8%)

13.2

52.1

2.1

67.4

31.2

6.1

332.9

(+4.5%)

575.0

annual

451.6

(+11.3%)

403.7

(-0.8%)

29.9

101.8

3.7

135.4

58.4

7.1

604.7

(+2.8%)

FY19

Q1

91.2

(-7.0%)

79.5

(+15.4%)

3.5

26.9

1.3

31.7

13.7

5.6

130.6

(+12.8%)

590.8

Q2

110.7

(-1.2%)

117.8

(-5.9%)

4.0

27.5

1.0

32.6

18.3

5.7

174.4

(+11.7%)

589.0

H1

201.9

(-3.9%)

197.3

(+12.4%)

7.6

54.4

2.3

64.3

32.0

11.3

304.9

(+12.2%)

H2

198.4

(-17.8%)

218.4

(-4.3%)

28.0

56.8

2.8

87.6

29.4

9.0

344.4

(+3.4%)

578.2

annual

400.3

(-11.3%)

415.7

(+3.0%)

35.5

111.2

5.1

151.9

61.3

20.4

649.3

(+7.4%)

FY20

Q1

47.6

(-47.8%)

80.7

(+1.5%)

12.0

28.6

0.9

41.5

12.0

4.8

139.1

(+6.5%)

549.0

Q2 forcast

88.6

(-20.0%)

100.3

(-14.8%)

18.0

29.9

1.1

49.0

13.5

4.2

166.9

(-4.2%)

540.4

H1 forecast

136.2

(-32.6%)

181.0

(-8.3%)

30.0

58.5

2.0

90.5

25.5

9.0

306.0

(+0.4%)

  1. Income from maintenance service which was previously included in SG&A is included in sales beginning with FY 2019.
  2. Results of Erickson Framing Operations LLC and its consolidated subsidiaries, acquired on November 30, 2018 (US Eastern time), are included from Q4 2018.

26

Health Care segment (i)

(¥ billion)

Net sales

Q1 2019

Q1 2020

Increase

% change

(decrease)

Health Care segment

82.7

95.7

13.0

+15.7%

Health Care1

34.3

36.5

2.2

+6.5%

Critical Care

48.4

59.2

10.8

+22.3%

Operating income increase:

  1. Good performance of Critical Care business centering on ventilators
  1. Increased shipments of Planova virus removal filters

(-) Increased amortization of goodwill and intangible fixed assets due to acquisition of Veloxis

Operating income2

Q1 2019

Q1 2020

Increase

% change

(decrease)

Health Care segment

12.6

15.5

2.9

+22.9%

Health Care1

6.8

5.7

(1.0)

-15.4%

Critical Care

5.9

9.8

3.9

+67.3%

Highlights

  • May, obtainment of new drug approval in China for Flivas agent for dysuria treatment
  • June, introduction of the ZOLL AED 3 defibrillator in
    US
  1. Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in Health Care business category from Q1 2020.
  2. Figures for operating income by business category include intrasegment transactions which are eliminated from the segment totals.

27

Health Care segment (ii)

Sales of Health Care business category

(¥ billion)

FY 2019

FY 2020

Q1

H1

Q1

Pharmaceuticals1

15.8

33.3

18.0

Medical devices

18.5

36.8

18.5

Total

34.3

70.1

36.5

Main pharmaceuticals sales

FY 2019

FY 2020

(Sales region, monetary unit)

Q1

H1

Q1

Asahi Kasei Pharma

Teribone

(Japan, billion)

6.4

14.4

6.6

Recomodulin

(Japan, billion)

2.9

6.1

2.4

Kevzara

(Japan, billion)

0.8

1.9

1.2

Flivas

(Japan, billion)

0.7

1.4

0.5

Bredinin

(Japan, billion)

0.7

1.4

0.6

Elcitonin

(Japan, billion)

0.5

1.1

0.3

Reclast

(Japan, billion)

0.4

0.7

0.3

Veloxis Pharmaceuticals

Envarsus XR

(US, $ million)

27

1 Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in pharmaceuticals from Q1 2020.

28

Health Care segment (iii)

Main pharmaceuticals products

Generic name

Classification

Indication

Formulation

Asahi Kasei Pharma

Teribone

Teriparatide acetate

Synthetic human parathyroid

Osteoporosis with high risk of fracture

Injection

hormone (PTH)

Reclast

Zoledronic acid

Osteoporosis drug

Osteoporosis

Injection

Recomodulin

Recombinant

Anticoagulant

Disseminated intravascular coagulation

Injection

thrombomodulin alfa

Kevzara

Sarilumab

Interleukin-6 inhibitor

Rheumatoid arthritis not responding well to

Injection

(rDNA origin)

conventional treatments

Flivas

Naftopidil

Dysuria treatment

Benign prostatic hyperplasia

Tablet

Elcitonin Inj. 20S

Elcatonin

Osteoporosis drug

Osteoporosis pain

Injection

Bredinin

Mizoribine

Immunosuppressant

Rheumatoid arthritis, kidney transplantation,

Tablet

nephrotic syndrome, lupus nephritis

Veloxis Pharmaceuticals

Envarsus XR

Tacrolimus extended-

Immunosuppressant drug

Kidney transplantation

Tablet

release tablets

29

Health Care segment (iv) Pharmaceutical pipeline

Development

Code name, form,

Classification

Indication

Region

Origin

Remarks

stage

generic name

AK1820, injection/

Invasive fungal

Phase III

capsule,

Antifungal agent

Japan

Licensed

infections

isavuconazole

ART-123, injection,

Chemotherapy-

Additional

Phase II

recombinant

Anticoagulant

induced peripheral

Japan

In-house

indication

thrombomodulin alfa

neuropathy (CIPN)

Phase II

AK1830, oral

Analgesic

Pain associated with

Japan

Licensed

osteoarthritis

Approved

Flivas, tablet,

Dysuria treatment

Benign prostatic

China

In-house

(overseas)

naftopidil

hyperplasia

Pending

HE-69, tablet,

Lupus nephritis,

Additional

approval

Immunosuppressant

China

In-house

mizoribine

nephrotic syndrome

indication

(overseas)

ART-123, injection,

United

Phase III

Severe sepsis with

States,

recombinant

Anticoagulant

In-house

(overseas)

coagulopathy

Europe,

thrombomodulin alfa

etc.

30

Health Care segment (reference)

Financial performance of Critical Care business category in US dollars

($ million)

FY 2019

FY 2020

Q1 2020 vs Q1 2019

Q1

H1

H2

Total

Q1

Increase

% change

(decrease)

Net sales

440

897

983

1,880

550

110

+24.9%

Gross operating income before PPA1 impact

84

175

199

374

127

43

+51.0%

Goodwill2

(20)

(43)

(50)

(93)

(25)

(5)

Other intangible assets, etc.2

(11)

(22)

(22)

(45)

(11)

0

Amortization/depreciation from PPA1 revaluation

(31)

(65)

(72)

(138)

(36)

(5)

Consolidated operating income

53

110

126

236

91

38 +70.9%

  1. Purchase price allocation
  2. Figures shown for goodwill and other intangible assets, etc. consist of the following:
    1. Amortization of goodwill and other intangible assets, etc. based on Japan GAAP and US GAAP in relation to acquisition of ZOLL by Asahi Kasei in April 2012
    2. Amortization of goodwill and other intangible assets, etc. based on Japan GAAP in relation to acquisitions by ZOLL after April 2012

(Figures shown for gross operating income before PPA impact include amortization of intangible assets, etc. based on US GAAP in relation to acquisitions by ZOLL after April 2012.)

31

Quarterly sales by segment

(¥ billion)

FY 2019

FY 2020

FY 2020

Q1

Q2

Q3

Q4

Q1

Q2

forecast

Material segment

271.4

204.7

227.3

288.9

275.7

257.3

Basic Materials

1

81.1

59.8

59.2

85.2

83.2

72.9

Performance Products

1

108.6

109.4

103.6

99.2

67.9

89.1

Specialty Solutions

1

71.3

84.8

80.1

76.8

70.3

70.7

Others

1

10.4

9.5

8.7

8.3

6.7

8.3

144.6

150.9

179.1

Homes segment

188.9

156.3

214.7

Homes

130.6

139.1

166.9

174.3

141.9

202.5

Construction Materials

14.0

14.5

14.4

12.2

11.9

12.1

Health Care segment

82.7

84.9

83.5

86.7

95.7

113.3

Health Care

2

34.3

36.5

39.5

35.8

32.3

30.9

Critical Care

48.4

49.1

51.2

55.8

59.2

73.8

Others

3.5

3.9

4.4

4.5

3.9

4.1

Consolidated

502.1

455.2

523.8

566.6

519.9

563.1

  1. Beginning with FY 2020, method of consolidation adjustment in Material segment is changed. FY 2019 sales results are recalculated in accordance with the change.
  2. Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in Health Care business category from Q1 2020.

32

Quarterly operating income by segment1

(¥ billion)

FY 2019

FY 2020

FY 2020

Q1

Q2

Q3

Q4

Q1

Q2

forecast

Material segment

25.9

31.0

22.2

13.3

8.9

9.1

Basic Materials

8.8

11.3

6.1

0.4

(1.7)

1.2

Performance Products

10.4

10.2

7.8

5.3

1.4

3.1

Specialty Solutions

5.4

9.5

8.4

7.1

7.8

4.7

Others

1.3

(0.1)

(0.0)

0.5

1.4

0.1

Homes segment

9.9

22.8

13.4

26.6

10.8

13.2

Homes

8.8

21.3

12.1

25.2

9.8

12.7

Construction Materials

1.3

1.5

1.8

1.1

1.1

0.4

Health Care segment

12.6

13.3

9.9

7.7

15.5

20.0

Health Care2

6.8

7.2

3.8

0.1

5.7

3.8

Critical Care

5.9

6.1

6.1

7.7

9.8

16.2

Others

0.3

0.8

0.9

1.2

0.7

0.3

Corporate expenses

(7.4)

(7.5)

(7.8)

(11.8)

(5.8)

(6.7)

and eliminations

Consolidated

41.3

60.4

38.5

37.0

30.1

35.9

  1. Figures for operating income by business category include intrasegment transactions which are eliminated from the segment totals.
  2. Results of Veloxis Pharmaceuticals Inc., acquired on March 3, 2020 (CET), are included in Health Care business category from Q1 2020.

33

The commitment of the Asahi Kasei Group:

To do all that we can in every era to help the people of the world

make the most of life and attain fulfillment in living.

Since our founding, we have always been deeply committed to contributing to the development of society,

boldly anticipating the emergence of new needs. This is what we mean by "Creating for Tomorrow."

Disclaimer

Asahi Kasei Corporation published this content on 04 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2020 03:31:03 UTC

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Sales 2021 1 983 B 18 778 M 18 778 M
Net income 2021 87 039 M 824 M 824 M
Net Debt 2021 412 B 3 901 M 3 901 M
P/E ratio 2021 14,6x
Yield 2021 3,69%
Capitalization 1 269 B 12 033 M 12 016 M
EV / Sales 2021 0,85x
EV / Sales 2022 0,79x
Nbr of Employees 40 689
Free-Float 95,5%
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Average target price 958,89 JPY
Last Close Price 914,70 JPY
Spread / Highest target 25,7%
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NameTitle
Hideki Kobori Executive President & Representative Director
Yutaka Shibata Director, Head-Information Technology & Finance
Hiroshi Shirai General Manager-Research & Development
Masumi Shiraishi Independent Outside Director
Shuichi Sakamoto Director & Senior Managing Executive Officer
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