Midterm Plan 2020 Briefing · Waste treatment: Increase cost competitiveness of low-contaminated...
Transcript of Midterm Plan 2020 Briefing · Waste treatment: Increase cost competitiveness of low-contaminated...
Midterm Plan 2020 Briefing
November 17, 2017
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To keep moving forward as a valuable
social entity that contributes to
shareholders, customers, employees,
and local communities
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Introduction
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To achieve our vision
Pursue sustained growth
Solid financial base
Business portfolio that is resistant to changes in the business environment
Strong and flexible business base
Aggressive investmentGrowth fields and growth regions
▷ Major initiatives were properly pursued
Environmental Management & Recycling- Start of operation of a landfill facility in Myanmar and a new incinerator in SingaporeMetal Processing- Sales expansion in China and Thailand & Launch of electroplating business in Mexico Heat Treatment- Launch of heat treatment business in Mexico- Expansion of heat treatment bases in India
Environmental Management & Recycling - Start of operation of a new incinerator for treating low-contaminated PCB waste- Promotion of commercialization of naturally contaminated soil remediation Nonferrous Metals- Construction of a new roaster at Akita Zinc- Start of operation of PGM's new furnace- Promotion of zinc mine projectElectronic Materials- Expand production capacity and sales expansion of silver powder for solar panels
Electronic Materials- Development and sales promotion of new products such as electrode materials for fuel cells and deep-ultraviolet LEDMetal Processing- Sales expansion of copper alloy and electroplating for smartphones and automobiles
Review of the current Midterm Plan (FY2015 through FY2017)
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Further expansion of overseas business
Business expansion by entering growth markets and related fields
Continual reinforcement of business competitiveness
Strengthen the business base and aggressively invest management resources for further growth.
Midterm Plan 2020 (FY2018 through FY2020)
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Evolve into a company equipped with stability and growth potential.
Basic policies
■ Increase competitiveness of existing businesses
■ Expand businesses in growth markets
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Enhance the earning power of existing businesses by
increasing competitiveness in the mature domestic
markets and improving the functions in the recycling and
smelting complex.
Aggressively invest management resources in markets
for “automobiles,” “information and communication,”
“environment and energy” and “healthcare.”
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Expand businesses in growth markets 1) Trends
Automobiles Information and communication
HealthcareEnvironment and energy
IoT-related components
Gasoline vehiclesDiesel vehicles
Transition to intelligent vehicles Getting more sophisticated, smaller, and slimmer
Treatment at hospitals
Environmental regulations tightened globally
Shift to green energyShift to preventive medicine and
health promotion
▷The market in each field is expanding with changes.
Growing environmental awareness
Launch new products
Increase capacity
Expand sales
Expand businesses in growth markets 2) Automobiles
Increase in global
automotive production
Increase in EV and
other eco-friendly cars
Evolution into intelligent vehicles
Copper alloy
Electroplating
Metal-ceramics substrates
Heattreatment
▷ Launch new products targeting the evolution of vehicles▷Increase capacity and expand sales in response to market
expansion
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Base metalsRare metals
Applicationof
magnetic materials
Switches, connectors
Capacitors, inductors
Optical sensors
▷ Address ever-changing market needs with high-performance products and strong development capability
Expand businesses in growth markets 3) Information and communication
Transducers
Connecting components
Copper alloy
InfraredLED
GaAssubstrates
Alloy powder
Sophisticated
Lighter
Smaller
Slimmer
Passive components
- Smartphones- Base stations- Servers
Changes in needs for materials associated with evolution of components
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Expand businesses in growth markets 4)
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Waste treatment in Southeast Asia
Silver powder for solar panels
Wastetreatment
Environmental management and energyEnvironmental management and energy
HealthcareHealthcare
Silver powder
Deep-ultraviolet
LED
InfraredLED
Launch the second landfill facility and introduce the first incinerator in IndonesiaExpand treatment of hazardous waste in Thailand (landfill/ incineration)Launch businesses in neighbor countries
▷ Promote expansion of existing businesses and launch of new businesses
▷Maintain a large market share with quality advantage and production capacity
▷Develop and commercially produce a new LED designed for healthcare sensors of wearable terminals and for disinfection/ sterilization equipment
● Improve the functions in the recycling and smelting complex
Increase competitiveness in existing businesses
Los Gatos Project in Mexico
● Strengthen businesses in the mature domestic markets
- Start construction and operation
of new zinc mine in Mexico
- Increase collection of materials
for recycling
- Improve treatment capabilities
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Aggressive investment of management resources 1)
Investment (Total for 3 years)
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■Environmental Management & Recycling
- Construction of new facilities in Indonesia- Expand waste melting and recycling
business■Nonferrous Metals
- Construction of new zinc mine in Mexico- Increasing ability to treat impurities in
zinc smelting■Electronic Materials
- Facilities for mass production of new products
■Metal Processing- Increasing copper alloy production
capacity■Heat Treatment
- Construction of new heat treatment plants in India
58.4
82.2
110.0
0.0
20.0
40.0
60.0
80.0
100.0
120.0
FY2012-2014 FY2015-2017 FY2018-2020
(Billion Yen) Main items
R&D (Total for 3 years)
Aggressive investment of management resources 2)
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14.6
17.1
20.0
0.0
5.0
10.0
15.0
20.0
25.0
FY2012-2014 FY2015-2017 FY2018-2020
(Billion Yen)
EnvironmentalManagement & Recycling
Nonferrous Metals
Electronic Materials
Metal Processing
Heat Treatment
Pursue sustained growth
13.8
23.3 20.9
27.2
35.0
42.0
35.0 36.5 36.5
50.0
0
10
20
30
40
50
60
70
FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017Estimate
FY2020Estimate
Ord
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y In
com
e (B
illion
Yen
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Environmental Management & RecyclingNonferrous MetalsElectronic MaterialsMetal ProcessingHeat TreatmentOther
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(Reference) Financial data
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Midterm Plan 2020 FY2017 forecast
Ordinary income (FY2020) 50 billion yen 36.5 billion yen
Operating income (FY2020) 45 billion yen 34 billion yen
ROE (FY2020) 12% or more 11%
ROA (FY2020) 10% or more 9%
Operating CF (total for 3 years) 120 billion yen 112 billion yen
Investment (total for 3 years) 110 billion yen 82 billion yen
R&D (total for 3 years) 20 billion yen 17 billion yen
Exchange rateMidterm Plan 2020
(Reference)and metal prices FY2017 H1 average
Exchange rate (¥/$) 115 111.1Zinc ($/t) 2,700 2,780
Copper ($/t) 5,500 6,005
Summary of Each Segment
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1. Business strategies- Increase competitiveness of existing businesses to establish a position as No. 1 in Asia and accelerate increase in market share and launch new businesses in each field and region.
- Build the foundation of new businesses that will be the next mainstay businesses in light of global trends in environmental management.
2. Financial dataOrdinary income: 10.0 billion yen (FY2020) Operating income: 10.0 billion yen (FY2020)Investment: 29.4 billion yen (total for 3 years) R&D: 1.4 billion yen (total for 3 years)
3. Major actionsWaste treatment: Increase cost competitiveness of low-contaminated PCB waste treatment.
Expand melting and recycling waste business.Soil remediation: Construct new landfill facility in Japan. Promote naturally contaminated
soil remediation.Recycling: Increase overseas collection of materials for recycling.
Strengthen metal recycling by enhancing the separation facilities.Southeast Asia: Expand waste treatment business by constructing new facilities and
increasing treatment capacity.New business: Promote commercialization of food waste recycling.
Environmental Management & Recycling
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1. Business strategies- Strengthen the business by improving the functions in the recycling and smelting complex.
2. Financial dataOrdinary income: 15.0 billion yen (FY2020) Operating income: 10.0 billion yen (FY2020)Investment: 40.1 billion yen (total for 3 years) R&D: 2.9 billion yen (total for 3 years)
3. Major actionsPrecious metals and copper: Increase production of tin by Kosaka Smelting & Refining.
Improve treatment capabilities. Platinum metals: Increase collection of resources by expanding overseas bases.
Improve ability to handle difficult-to-treat materials.Zinc: Expand the annual zinc production at Akita Zinc to 220,000 tons
by increasing ability to treat impurities.Strengthen processing plant in Thailand and expand sales inSoutheast Asia.
Resource development: Start construction and operation of new zinc mine in Mexico.
Nonferrous Metals
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1. Business strategies- Launch new businesses, develop new niche/top products, and make them major sources of
earnings.- Expand business domains further to growth markets such as automobiles and healthcare.
2. Financial dataOrdinary income: 10.5 billion yen (FY2020) Operating income: 10.0 billion yen (FY2020)Investment: 11.6 billion yen (total for 3 years) R&D: 12.3 billion yen (total for 3 years)
3. Major actionsSemiconductors: Develop and mass produce LEDs for healthcare businesses.Electronic materials: Maintain a high market share of silver powder for solar panels.Advanced fine materials: Increase market shares and production capacity for recording
materials, carrier powder, and ferrite powder.New development: Expand sales of deep-ultraviolet LED for healthcare/ disinfection
and increase line of conductive materials.Commercialize new magnetic materials for automobiles.
Electronic Materials
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1. Business strategies- Expand businesses by focusing efforts on automobiles and IoT-related fields.- Increase earning potential further by establishing the business base that is resistant to changes in the business environment.
2. Financial dataOrdinary income: 9.0 billion yen (FY2020) Operating income: 9.0 billion yen (FY2020)Investment: 17.7 billion yen (total for 3 years) R&D: 2.5 billion yen (total for 3 years)
3. Major actionsCopper rolled products: Increase production and expand sales of copper alloys to meet
growing demand for electric vehicles, intelligent vehicles, and IoT.Enhance the processing businesses in China, Thailand andTaiwan.
Electroplating: Establish a plant in Mexico. Improve competitiveness byoptimizing lines of a plant in Japan.
Metal-ceramics substrates: Expand sales of substrates for trains and automobiles as well asindustrial machinery and develop new products.
Metal Processing
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1. Business strategies- Increase revenues further by taking advantage of the strengths of the current business model.- Pursue initiatives in new business domains.
2. Financial dataOrdinary income: 4.0 billion yen (FY2020) Operating income: 4.0 billion yen (FY2020)Investment: 8.7 billion yen (total for 3 years) R&D: 0.9 billion yen (total for 3 years)
3. Major actionsIndustrial furnaces: Boost sales of new furnaces in India and North America.
Enhance the manufacturing network in Japan, India, and China.Expand furnace maintenance business and develop new products.
Heat treatment processing: Increase domestic capacity and establish new plants in India tomeet growing demand for automobile-related products.Increase the capacity of plants in Thailand and Indonesia.Promote automation and labor-saving at plants in Japan.
Heat Treatment
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*The earnings forecasts and other forward-looking statements in these materials are based on information currently available at this time and on certain premises that the Company assumes to be reasonable. Actual performance may differ materially from such forecasts due to a variety of factors.
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