UACJ : Results Briefing and Q&A Summary (5.7MB)

UACJ Corporation

Financial Results Briefing for the Fiscal Year Ended March 2024

May 13, 2024

Event Summary

[Company Name]	UACJ Corporation
[Company ID]	5741-QCODE
[Event Language]	JPN
[Event Type]		Earnings Announcement
[Event Name]	Financial Results Briefing for the Fiscal Year Ended March 2024
[Fiscal Period]	FY2024 Annual
[Date]		May 13, 2024
[Number of Pages]	43
[Time]		15:30 - 16:30
		(Total: 60 minutes, Presentation: 27 minutes, Q&A: 33 minutes)
[Venue]		Webcast
[Venue Size]
[Participants]
[Number of Speakers]	7
		Miyuki Ishihara	Chairman of the Board
		Shinji Tanaka	Representative Director, President
		Teruo Kawashima	Director, Executive Vice President
		Joji Kumamoto	Executive Officer, Director, Managing
			Executive Officer
		Kouzo Okada	Executive Officer, Chief Executive, Finance
			and Accounting Division
		Midori Narita	Executive Officer, Chief Executive, Corporate
			Sustainability Division
		Kaoru Ueda	General Manager, IR, Finance Department
[Analyst Names]*	Atsushi Yamaguchi	SMBC Nikko Securities
		Yu Shirakawa	Morgan Stanley MUFG Securities
		Yuji Matsumoto	Nomura Securities
		Shinichiro Ozaki	Daiwa Securities
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Harunobu Goroh

UBS Securities

*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or whose questions were read by moderator/company representatives.

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Presentation

Ueda: For today's financial result briefing, we will use the FY2023 financial results presentation materials and the abridged version of the fourth medium-term management plan. If you do not have the materials at hand, please visit our website. Although information including forward-looking statements may be provided in this presentation, such information is only our current forecast. Please note that actual results may differ significantly from these forward-looking statements due to various factors.

Let me now introduce our company's attendees today. This is Miyuki Ishihara, Chairman of the Board.

Ishihara: I am Ishihara. Thank you.

Ueda: This is Representative Director, President, Shinji Tanaka.

Tanaka: My name is Tanaka. Thank you for your cooperation.

Ueda: This is Teruo Kawashima, Director, Executive Vice President.

Kawashima: My name is Kawashima. Thank you for your cooperation today.

Ueda: This is Joji Kumamoto, Executive Officer, Director, Managing Executive Officer.

Kumamoto: My name is Kumamoto. Thank you for your cooperation.

Ueda: This is Kouzo Okada, Executive Officer, Chief Executive, Finance and Accounting Division.

Okada: My name is Okada. Thank you for your cooperation.

Ueda: This is Midori Narita, Executive Officer, Chief Executive, Corporate Sustainability Division.

Narita: I am Narita. Thank you for your cooperation.

Ueda: I am Kaoru Ueda, General Manager, IR, Finance Department, and I will be your moderator today. Thank you very much for your cooperation.

Ishihara, will explain the results for FY2023, which we announced today, and Kawashima will explain the outlook for FY2024. Please join us as we review the presentation materials.

Mr. Ishihara, thank you for your time.

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Ishihara: Okay, I will start from page one.

Before I explain the financial results today, I would like to start with some general points for everyone. In terms of business income, we were able to end this fiscal year with a significant increase of JPY22.1 billion over the previous year. We would like to thank all of you for your support.

In Japan, the surcharge pricing system introduced in H2 of FY2022, which reflects surging energy and additive metal prices in product prices, contributed throughout the year. In addition, the improvement of the management structure through the structural reforms that have been carried out until March 2023 has contributed to an increase in business profit despite the difficult business environment.

TAA also experienced very difficult market conditions, but increased margins and reduced costs to increase earnings, and at the same time, UWH was able to recover order volumes, resulting in a turnaround in profitability.

For FY2024, we have projected a full-year business profit of JPY43.5 billion, anticipating an increase in sales in anticipation of a gradual turnaround in the business environment in Japan. The annual dividend for FY2024 is planned to be JPY100 per share, with a target payout ratio of at least 30% of final profits. Kawashima will give a detailed report on the plan for FY2024 later.

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On page four, you will see the business profit and volume or factors that contributed to the increase.

As for the factors contributing to the increase in profit, in Japan and TAA, the effect of price revisions and improved manufacturing costs, which led to a significant increase in profit margins, contributed significantly to the increase in profit.

In addition to a recovery in order volumes, Whitehall has seen a significant cost reduction effect.

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The figures are shown on page five.

Compared to FY2022, the results for FY2023 show an increase of JPY22.1 billion in business income and an increase of JPY15.2 billion in net income.

Please refer to page six, which shows the change in volume.

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On page seven, we present a waterfall comparison of FY2022 and FY2023 as an analysis of business income. In particular, the increase in TAA income had a significant impact, and among other things, there was a temporary change in supply and demand, which made a very positive contribution. The increase in profit was mainly due to Whitehall's return to profitability, domestic sales, and the impact of energy and additive metals prices.

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On page eight, we show a comparison with the February forecast, which shows the effect of three months of temporary demand for TAA.

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Page 9 shows the consolidated balance sheet, and among other things, we believe that the major achievement of our efforts is that we have now reduced inventories by JPY40.8 billion toward the end of the fiscal year.

Page 10, in the resulting consolidated cash flow, free cash flow was JPY58.7 billion positive. The D/E ratio was 1x, lower than the target of 1.2x set in the third medium-term management plan.

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