Consolidated Financial Report for Fiscal Year Ended December 2019 · 2020-04-17 · Consolidated Financial Report for Fiscal Year Ended December 2019. February . 10, 2020. zXv

© 2020 Nippon Denko Co., Ltd.

zX

Consolidated Financial Report for

Fiscal Year Ended December 2019

February 10, 2020

zXv

Contact: Tadashi Ue, Executive OfficerGeneral Affairs Department

Tel： 03-6860-6800URL: http://www.nippondenko.co.jp

© 2020 Nippon Denko Co., Ltd. zXv

The forecasts contained in this document are based on the information currently available and are inherently subject to uncertainty. Actual results for 2019 may differ.

１．Consolidated Financial Results for FY2019

２．Consolidated Forecast for FY2020

３．Overview of Operations

４．Medium‐Term Business Plan (2018 to 2020)

CONTENTS

1

© 2020 Nippon Denko Co., Ltd. zXv 2

Consolidated FinancialResults for FY2019

1. Consolidated Financial Results for FY2019


1-1. Summary of FY2019Ferroalloys business: Revenues and profits declined due to continuing sluggish conditions in

international markets for high-carbon ferromanganese products and prices have remained high in manganese ore markets.Manganese ore market prices fell rapidly and dramatically at the end of the year.⇒ Losses arose on revaluation of inventories.

Functional Materials business: Sales of ferroboron (for amorphous use) decreased dramatically.Sales of zirconium oxide fell due to the economic downturn accompanying US-China trade frictions.With the exception of sales of alloys for hydrogen storage, business conditions were challenging.Sales of certain products ahead of schedule increased sales in the short term.

Impairment losses were recorded in both the Ferroalloys and Functional Materials businesses.

Environment business: Sales of Recycling Systems were strong.Incinerator ash processing volumes declined due to expanded inspections and repairs of aging incinerator ash melting furnaces.

Electric Power business: The No. 3 power plant came online in February 2019, as scheduled.Power generation increased due to higher than average precipitation.


FY2018 results

FY2019 forecast

announced Nov. 7

FY2019 results

vs. FY2018 YoY Rate of change

Year-over-Year

Rate of change

Year-over-Year

Rate of change

Net sales 73.9 71.0 70.5 -3.4 -5% -0.5 -1%

Operating profit 1.7 -1.4 -5.6 -7.3 - -4.2 -

Operating profit on sales (2.3%) (-2.0%) (-7.9%) (-10.2) - (-5.9) -

Ordinaryprofit 1.9 -2.3 -6.4 -8.3 - -4.1 -

Net income attributable to the

parent2.4 -3.0 -14.2 -16.6 - -11.2 -

Net income per share / yen 16.1 -20.5 -97.2 -113.3 - -76.7 -

bil. yen

1-2. Consolidated Financial Results for FY2019

※1

※2

※3

Yen rate(¥/US$) 110.4 107.0 109.1

*1 4.8 billion yen recorded in revaluation losses on inventories

*2 7 billion yen in impairment losses recorded as extraordinary losses

*3 No year-end dividends paid based on dividend policy (targeting annual consolidated payout ratio of 30%)


1-3. Consolidated Financial Results for FY2019

1. Revaluation losses on inventories recordedSluggish conditions in international markets for manganese ferroalloys productsManganese ore market prices fell rapidly and dramatically at the end of the year.

↓ Lower profitability of inventories4.8 billion yen in revaluation losses recorded as cost of sales

2. Impairment losses recordedFerroalloys business: Sluggish conditions in international product markets and prices have remained high in manganese ore marketsFunctional Materials (ferroboron) business: Sales decreased dramatically, mainly for amorphous use.

↓ Lower business profitability7 billion yen in impairment losses recorded as extraordinary losses


1-4. Consolidated Financial Results for FY2019 (by Segment)

Segment

FY2018 FY2019 vs. FY2018

Net sales

Operating profit

Net sales

Operating profit

Year-over-Year Rate of change

Net salesOperating

ProfitNet sales

Operating Profit

Ferroal loys 47.9 -1.2 45.9 -8.8 -2.0 -7.6 -4% -

Functional Materials 12.0 1.5 11.5 1.4 -0.5 -0.1 -4% -7%

Environment 6.0 1.0 5.3 0.8 -0.7 -0.2 -12% -20%

Electric Power 0.6 0.1 1.3 0.8 +0.7 +0.7 +117% +700%

Non-Ferroalloystotal 18.6 2.6 18.1 3.0 -0.5 +0.4 -3% +15%

Other 7.4 0.3 6.5 0.2 -0.9 -0.1 -12% -33%

Total 73.9 1.7 70.5 -5.6 -3.4 -7.3 -5% -

bil. yen

Ferroalloys: Continuing sluggish conditions in product markets and high ore prices.Revaluation losses on inventories recorded.

Functional Materials: Difficult business conditions except for alloys for hydrogen storageSales of certain products ahead of schedule increased sales in the short term.

Environment: Strong sales of Recycling Systems/lower incinerator ash processing volumes

Electric Power: No. 3 power plant came online as planned.


Primary factors underlying ¥7.3 billion decline in operating profits・Sales price difference -2.1 ・Starting product inventories -2.6・Price difference of raw materials used +1.0・Inventory revaluation difference -4.8・Cost improvements +0.9・Other businesses +0.3

Total - 7.3

7

1.7 bil. yen-2.1

+1.0-2.6

+0.9+0.3

-4.8 -5.6 bil. yen

2018/12 Sales pricedifference

Starting productinventories

Price difference ofraw materials used

Inventoryrevaluationdifference

Cost improvements Other businesses 2019/12

bil. yen

Ferroalloys business

1-5. Consolidated Operating Profit Analysis for FY2019

-7.6

Ferro

allo

ys

busi

ness


Consolidated Forecast for FY2020

2. Consolidated Forecast for FY2020


While results are forecast to improve from last year, harsh conditions are expected to continue.

2-1. Summary of FY2020

Ferroalloys business: Lower ferroalloys sales volume due to reduced domestic crude steel productionDim prospects for strong rebound in international product marketsLower raw material costs than last year

Functional Materials business: Strong sales of battery materialsSigns of improved sales of zirconium oxide, etc. despite expectations of a continuing impact of US-China trade frictions.Continuing slow sales of ferroboron

Environment business: Deployment in domestic growth industries and fields (e.g., pure-water production equipment for hydrogen stations)Increased incinerator ash processing volumes through repairs of incinerator ash melting furnaces and other measures

Electric Power business: Power generation expected to be in line with medium-term plans


FY2019 FY2020

Full-year results Full-year forecastsvs. FY2019


Net sales 70.5 61.0 -9.5 -13%

Operating profit -5.6 3.0 +8.6 -

Operating profit on sales (-7.9%) (4.9%) (+12.8) -

Ordinary profit -6.4 2.0 +8.4 -

Net income attributable to the

parent-14.2 0.0 +14.2 -

Net income per share / yen -97.2 0.0 +97.2 -

bil. yen

10

*Annual impact of yen rate：±¥1 / US$ ±¥170 mil

※１ Annual dividends TBD

※1

Yen rate(¥/US$) 109.1 107.0

2-2. Forecasts of Consolidated Financial Results for FY2020


Segment

FY2018 FY2019 vs. FY2018

Net sales

Operating profit

Net sales

Operating profit


Net salesOperating

ProfitNet sales

Operating Profit

Ferroalloys 45.9 -8.8 37.2 0.2 -8.7 +9.0 -19% -

Functional Materials 11.5 1.4 10.4 0.9 -1.1 -0.5 -10% -36%

Environment 5.3 0.8 6.0 1.1 +0.7 +0.3 +13% +38%

Electric Power 1.3 0.8 1.3 0.7 +0.0 -0.1 ±0% -13%

Non-Ferroalloystotal 18.1 3.0 17.7 2.7 -0.4 -0.3 -2% -10%

Other 6.5 0.2 6.1 0.1 -0.4 -0.1 -6% -50%

Total 70.5 -5.6 61.0 3.0 -9.5 +8.6 -13% -

bil. yen

2-3. Forecasts of Consolidated Financial Results for FY2020 (by Segment)

Reference: Full-year market sensitivity (exchange rate: ¥107/$)

－$2.0/DMTU －$1.0/DMTU ＋$1.0/DMTU ＋$2.0/DMTU

〇5.0 〇2.5 ×2.5 ×5.0

－$200/t －$100/t ＋$100/t ＋$200/t

×5.2 ×2.6 〇2.6 〇5.2

High-carbon ferromanganese product prices (net-sales basis) Manganese ore prices (costs)(bil. yen) (bil. yen)


-5.6 bil. yen

-5.2+5.8

+3.1

+4.5

2019/12 Sales pricedifference

Starting productinventories

Price difference ofraw materials used

Inventoryrevaluationdifference

Cost improvements Other businesses 2020/12Forecast

bil. yen

Ferroalloys business

+0.8 -0.4 3 bil. yen

2-4. Consolidated Operating Profit Analysis (YoY Change)

Primary factors underlying ¥8.6 billion increase in operating profits・ Sales price difference -5.2・ Starting product inventories +5.8・ Price difference of raw materials used +3.1・ Inventory revaluation difference +4.5・ Cost improvements +0.8・ Other businesses -0.4

Total +8.6

+9.0

Ferro

allo

ys

busi

ness


2-5. Other Measures

1. Decreases in executive compensation and managerial salariesDirectors (excluding outside Directors)Executive officers 10-25%(monthly compensation)Consultants Managerial positions: 1-5% (monthly salaries and bonuses;

through end of 2020)

2. Other initiativesVarious measures are scheduled to be implemented to improve costs, revenues, and profits, including asset reductions and reviews of investments.

* We intend to respond dynamically while remaining aware that business results may vary due to the effects of the coronavirus on product sales volumes, product prices, and raw material prices.


2-6. Capital Investment & Financial Planbil. yen

2019 2020Operating profit (loss) -5.6 3.0Depreciation and amortization 2.4 1.7Increase (decrease) in inventories 6.9 3.6Increase (decrease) in other assets -0.4 1.2Income taxes -0.5 -0.3

Cash flow from operating activities 2.9 9.3

Investment -5.1 -6.6Others -1.7 -3.0

Cash flow from investment activities -6.8 -9.6

Cash flow from financing activities 3.3 -0.4

Cash and cash equivalents 7.6 6.9(vs. 2018 -0.7 )

Loans from financial institutions 14.0 13.6Lease obligations 4.7 4.6

18.7 18.2Interest-bearing liabilities including lease obligations

Capital Investment Plan■ Steady progress on the renovation of

aging facilities and the implementation of environmental safety measures

■ Other strategic investments and measures

● Net debt/equity ratio0.21

■ Cash flow from investment activities-9.6 bil. yen

■ Cash flow from financing activities-0.4 bil. yen

■ Interest-bearing liabilities, including lease obligations

18.2 bil. yen

■ Cash flow from operating activities+9.3 bil. yen

Financial Plan

CF

単位：億円タンイオクエン

20192020

Operating profit (loss)-5.63.0

Depreciation and amortization2.41.7

Increase (decrease) in inventories6.93.6

Increase (decrease) in other assets-0.41.2

Income taxes-0.5-0.3

Cash flow from operating activities2.99.3

Investment-5.1-6.6

Others-1.7-3.0

Cash flow from investment activities-6.8-9.6

Cash flow from financing activities 3.3-0.4

Cash and cash equivalents 7.66.9

(vs. 2018-0.7)

Loans from financial institutions 14.013.6

Lease obligations 4.74.6

Interest-bearing liabilities including lease obligations18.718.2

【作成方法】

1. 個別の内容を含め、”内訳X”のシートを完成させる2. 最終確定したら、本シート左表の各対応セルにリンクを貼る (当年度分のみ過年度分は変更がないので値貼付でも可)3. 左表をコピーして、IRファクトブック用のパワーポイント資料に貼付または埋め込む4. 数値の誤りやリンクのズレの有無を確認し、間違いがあれば修正する

「最後のチェックを確実に行うこと！」

D Eレシオ

D/Eレシオ有利子負債ユウリシフサイ÷株主資本カブヌシシホン

19年12月末ネンガツマツ20年12末予想ネンマツヨソウ

ネットD/Eレシオ（有利子負債ユウリシフサイ-現預金ゲンヨキン）÷株主資本カブヌシシホン現預金残高ゲンヨキンザンダカ7,5846,865

短期借入金タンキカリイレキン9,0002,000

長期借入金(１年内含む）チョウキカリイレキンネンナイフク4,98711,590

有利子負債残高ユウリシフサイザンダカ13,98713,590

株主資本カブヌシシホン54,61055,112

19年12月末支払配当シハライハイトウ0

D/Eレシオ13,987÷54,610＝0.256当期純利益（税後）トウキジュンリエキゼイゴ502

ネットD/Eレシオ（13,987-7,584）÷54,610＝0.117リース債務サイム4,7174,585

　　　リース短期タンキ(131)(131)

リース債務込みサイムコ　　　リース長期チョウキ(4,585)(4,454)

D/Eレシオ18,704÷54,610＝0.343

ネットD/Eレシオ（18,704-7,584）÷54,610＝0.204

20年12末予想

D/Eレシオ13,590÷55,112＝0.247

ネットD/Eレシオ（13,590-6,865）÷55,112＝0.122

リース債務込みサイムコ

D/Eレシオ18,175÷55,112＝0.330

ネットD/Eレシオ（18,175-6,865）÷55,112＝0.205


Overview of Operations

3. Overview of Operations


3-1. Ferroalloys (Crude steel production volumes, high-carbon ferromanganese production volumes)

■ Production in Japan

Crude steel production

● 2018: 104.3 mil. tons

■ World production● 2018: 1,808.6 mil. tons

China: Despite setting a new record for production volume, future prospects remain uncertain due to trade fictions with the US and a slowing domestic economy.

India: While production is up YoY on a calendar-year basis, production appears to have slowed recently.Europe: Down YoY due to factors such as decreased auto demand due to US-China trade frictions, although

the downward trend showed recent signs of bottoming out.

High-carbon ferromanganese

Due to increased production in India and elsewhere, supply remained largely unchanged YoY despite reduced production by major producers in Europe.

● 2018: 4.43 mil. tons

■ World production

● 2019: 1,869.9 mil. tons

● 2019: 4.44 mil. tons

● 2019: 99.28 mil. tons(Down 5% YoY)

(Up 3% YoY)

(Largely unchanged YoY)


3-1. Ferroalloys (Outlook for 2020)

●2020: 1. Domestic demand for HCFeMn will decrease slightly from 2019.

Outlook for 2020

Domestic production of crude steel is projected to remain below 100 mil. tons. However, demand for higher quality steel will remain strong.

2. Sales will decrease due to a slowing HCFeMn market.Although these sales declined throughout 2019, they have trended up since the end of 2019.

3. Production costs will decrease due to falling raw material costs and other factors

Production costs will decrease due to the effects of falling market prices last year and other factors.

■ Outlook for 2020

FY2019 FY2020 vs FY2019Year-over-Year Rate of change

Net sales 45.9 37.2 -8.7 -19%

Operating profit -8.8 0.2 +9.0 -

bil. yen

*Facilities: Tokushima and Kashima plants


3-1. Ferroalloys (Ferroalloys and Manganese Ore Market Price Trends)

2

4

6

8

10

12

14

16

18

500

1,000

1,500

2,000

2,500

3,000

3,500

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

($/t) Manganese Ore and High-Carbon Ferromanganese Quarterly Market (2008 -)

高炭素フェロマンガン欧州市況($/t・左軸)

マンガン鉱石($/Mn%・右軸)

($/Mn%)

・ High-Carbon Ferromanganese priceJan. 2018 ⇒ $1,336/tJan. 2019 ⇒ $1,224/t (down approx. 8% from Jan. 2018)Dec. 2019 ⇒ $993/t (down approx. 19% from Jan. 2019)2020 most recent price ⇒ $1,014/t

1,3361,224

9871,014

7.15

8.9

7.19

3.9

4.3

2

4

6

8

10

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2018.1 2018.7 2019.1 2019.7 2020.1

($/Mn%)($/t)2018.1–2020.2 detailed view monthly trendsMarket Price Trends

－$2.0/DMTU －$1.0/DMTU ＋$1.0/DMTU ＋$2.0/DMTU

〇5.0 〇2.5 ×2.5 ×5.0－$200/t －$100/t ＋$100/t ＋$200/t

×5.2 ×2.6 〇2.6 〇5.218

・ Manganese Ore PricesJan. 2018 ⇒ $7.15/DMTUJan. 2019 ⇒ $7.19/DMTU (largely unchanged from Jan. 2018)Dec. 2019 ⇒ $3.90/DMTU (down approx. 46% from Jan. 2019)2020 most recent price ⇒ $4.30/DMTU

【 Reference 】 Full-year Market Sensitivity (Yen rate107 yen/$)Sales price (Net Sales) (bil. yen) Manganese Ore Prices (Cost) (bil. yen)

FMnH Market (Europe)($/t・left axis)

Mn Ore Market ($/Mn%・right axis)


3-1. Ferroalloys (Overseas Projects)

■ Pertama Ferroalloys Sdn. Bhd. (Malaysia)

Implementing various measures to improve project earnings

Seeking to realize profitability beginning in

2H 2020

Overseas Projects

19

• Silicomanganese, ferrosiliconAll six electric furnaces are currently operating.Ferrosilicon production volume plans for 2019 have been achieved.Equipment upgrades are underway for silicomanganese.Production volume plans are expected to be achieved after completion in 2H 2020.

• FMnMLOperations will resume at the two electric furnaces after equipment upgrades.

Products MT/Year Electric FurnacesSiMn 160,000 33 MVA × 3 unitsFeSi 60,000 33 MVA × 3 unitsFMnML 54,000 5 MVA × 2 units


3-1. Ferroalloys (Overseas Projects)

0

30

60

90

120

150

180

210

2015 2016 2017 2018 2019

Kudumane mine production and sales volume trends*

Manganese ore production (mil. t)

Manganese ore sales volume (mil. t)

*Sales volume includes low-grade products.2019Production: Largely unchanged YoY due to continuing high prices and strong demandSales volume: Down slightly YoY due to problems with the railway between the mine and the port

Manganese Mining Investment

2.95

9.58.9

3.9

4.3

2

3

4

5

6

7

8

9

10

($/Mn%)Monthly trends in high-grade manganese ore

Manganese ore ($/Mn%, right axis)

• Acquired manganese mining (Kudumane mining) interests in South Africa in June 2013 and began mining operations.

• Began full-scale shipping to China in August 2013.• The Company receives Kudumane ore each year.• We acquired new mining operation interests in November 2016.

Commercial production began in November 2018.• We will strive to balance earnings across the entire Mn business by responding to fluctuations in

ferroalloy conditions and ore prices.

Contributing to Company profits

since 2017

⇒ Since reaching $8.90 in April 2018, prices have continued to trend downward, briefly reaching $3.90 due to reduced crude steel production in China in the autumn and winter. Recent signs point a potential rebound.


3-2. Functional Materials

■ Business environment

■ Outlook for 2020

【Functional Materials】

● High CASE-related demand and strong sales of EV battery materials

● High demand for high-quality functional materials with the start of 5G businesses

■ 2020 initiatives● Continuing stable production of Metal hydride alloys and

products under contract to Sumitomo Metal Mining● Capturing reliable demand for high quality functional

materials such as Zr/Mn chemical products and boron products

CASE

5G

Cathode materials for lithium-ion batteries

Ferroboron

Mn chemicals

Boron products

Zirconia

Metal hydride alloys

bil. yen Growing demand for functional materials driven by waves of CASE

and 5G business growth

*Facilities: Toyama, Myoko, and Tokushima plants


Net sales 11.5 10.4 -1.1 -10%

Operating profit 1.4 0.9 -0.5 -36%


3-3. Environment

● Strong performance in surface treatments related to auto parts last yearDomestic auto demand projected to trend downward long-term

● Sales are increasing of equipment for producing pure water for hydrogen stations.


■ 2020 initiatives● Unearthing demand related to auto parts

Focusing on sales of equipment for producing pure water for hydrogen stations

● Planning for the implementation of practical initiatives to advance business development in Thailand

【 Melting and Solidification of Incineration Ash in Electric Furnace: CDK 】

Hydrogen station

A hydrogen station at Toyota Ecoful TownSupplies hydrogen to the SORA fuel-cell bus operating in Toyota City.

【Environment business outlook for 2020】 bil. yen


■ 2020 initiatives● Growth in demand for recycling due to chronic shortages of landfill sites.

● Establishing stable processing structures through systematic preventive maintenance in preparation for equipment aging

*Facilities: Kashima Plant, Chuo Denki Kogyo

【Functional Materials】 *Facility: Koriyama Plant


Net sales 5.3 6.0 +0.7 +13%

Operating profit 0.8 1.1 +0.3 +38%


3-4. Electric Power

Power plants

Power generation

(kWh)Started operation

No. 2power plant

4,461 November 2017No. 3

power plant6,621 February 2019

Notes: The annual power generated is equivalent to power consumption of approx. 15,000 residences.

■ Hydropower business taking advantage of feed-in tariff system

● A full power generation structure has been achieved and is now fully operational.

● Stable operation continues, with a focus on equipment maintenance management.

Horomangawa No. 3 Power Plant dam

bil. yen


Net sales 1.3 1.3 +0.0 ±0%

Operating profit 0.8 0.7 -0.1 -13%


Medium-Term BusinessPlan (2018 to 2020)

4. Medium‐Term Business Plan (2018 to 2020)


4-1. Medium‐Term Business Plan (2018 to 2020)

2015 2016 2017 2018 2019 2020 2021 ... 2025

Milestones on the way to our 100th anniversary in 2025

Medium-term business plan (2018 to 2020)

Concentrate on core

competencies

100th anniversary

4Cores

4Cores+

Strengthening our business base

⇒Build complete business portfolio

© 2020 Nippon Denko Co., Ltd. 26zXv

4-1. Medium‐Term Business Plan (2018 to 2020)

• Further develop the 4 core businesses: Ferroalloys, Functional Materials, Environment, and Electric Power

Build complete systems for stable consolidated earnings

• Fully unify and align management resourcesDemonstration of maximum synergies

• Build corporate platformBecome a group that earns community trust and reliance

“4 Cores” + building a platform for the company’s future existence

Basic policies of the Medium-Term Business Plan


4-2. Progress report of the Medium‐Term Business Plan

Ferroalloys

Electric Power

Functional Materials

To establish stable operations through the comprehensive

control of equipment and operations.

To ensure stability in manufacturing subcontracting

(for battery materials) and establish efficient production systems suited to demand.

Full power generation at the Horomangawa Power Plant (two generators).

“4 Co res”

Build complete systems for stable consolidated earnings

Environment To proactively deploy water treatment and equipment in Japan and

internationally; to implement incinerator ash melting at full capacity.


4-2. Progress report of the Medium‐Term Business PlanBuilding a platform for the company’s future existence_1

Planned total investment over three years: 20 billion yen

Infrastructure enhancement

Strategic business investment

Renovations of aged facilities, environmental safety, cost improvements→ Starting with high-risk facilities that require rapid response→ Implementation based on necessity, feasibility, and investment

efficiency

Investments linked to business expansion→ Flexible implementation reflecting changes in the business

environment

2018 2019【 Results： 30%】【 Results： 25%】

2020

⇒ Ascertaining importance and implementing investments accordingly

【 Planned: 10% 】


4-2. Progress report of the Medium‐Term Business PlanBuilding a platform for the company’s future existence_2

Streamlining

• Affiliates reorganization Chuden Sangyo (stock transfer)Nichiden Sangyo, Hidaka Energy (liquidated)

• Withdrawing from the fertilizer business

Main Measures 2019 results 2019 plans

Reform working styles

• Adopting telecommuting system• Establishing new special childcare leave (encouraging men

to take childcare leave)• Adopting a defined-contribution pension plan

• Expanding sites eligible for flextime• Efforts to adopt interval working system

Promote participation and advancement of women

• Earning Kurumin*1 certification• Establishing system for reorienting

ordinary staff to career-track positions

• Efforts to earn Eruboshi*2 certification

Enhance value of consolidated companies

• Posting basic environmental policies on the website• Adopting executive stock-based compensation plan

• Enhancing the Business Continuity Plan (BCP)

DENKO WAY activities

• Continuing three priority activities(New 5S, visualization, inventory control)

• Obtaining ISO 45001 and ISO 14001 certification (first in industry to obtain ISO 45001 certification)

• Continuing three priority activities• Adoption of plant key performance indicators (KPIs)• Using KPIs to set goals and promote improvement activities

Other

• Initiating study on adopting a new backbone business system

• Strengthening IT security• Adopting internal controls awards system

• Continuing to study potential upgrades for the new backbone business system

• Developing an environment for employment of people with disabilities

• Promoting business reforms(Enhancing internal controls, reducing risk, improving business efficiency)

*1 Certification as a childcare support company by the Minister of Health*2 Certification as the Company promoting women’s participation in the workplace


4-3. Comparison to the Medium‐Term Business Plan for 2020We do not expect to achieve the targets of the Medium-Term Business Plan for 2020.

56.2

37.2

30.3

23.8

-25.5

0.0

30.0

60.0

90.0

Medium-TermBusiness Plan

target

Forecast businessresults

Consolidated net sales

Ferroalloys Non-ferroalloys

bil. yen

3.2

0.2 -3.0

0.0

1.0

2.0

3.0

4.0


target

Forecastbusiness results

Ferroalloys operating profits

4.8

2.8 -2.0

0.01.02.03.04.05.06.0


target

Forecastbusiness results

Non-ferroalloys operating profits

bil. yen

bil. yen

Breakdown of -3.0 bil. yen decreaseProduct market: -5.7Ore market: +3.2Product demand: -0.9Other: +0.4

Breakdown of -2.0 bil. yen decreaseFunctional materials: -10

Primary factors: Lower demand for ferroboron (for amorphous use)

Environment: -10Primary factors: Lower processing

volumes due to delays in repairs of incinerator ash melting furnaces

61.0

86.5

Ferroalloys• Various measures realized to improve

revenues and profitsBattery materials

• Planned monthly production under contract achieved

• Responding to growing demand for metal hydride alloys

Electric Power• Power plant production completed and full

generation begun

Targets reached

-2.0


4-4. Toward the Next Medium‐Term Business Plan

We do not expect to achieve the targets of the current Medium-Term Business Plan. Thus, we will strive to realize further returns to shareholders by incorporating the following matters into the next Medium-Term Business Plan:

1. Reliably securing the results of measures already implemented

2. Steady improvements in and stabilization of the Ferroalloys business

3. Stabilizing revenues and profits by continuing to strengthen the revenue and profit foundations of the other three businesses


Consolidated management indicators

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Net sales mil. yen 71,987 71,212 60,425 54,408 75,864 82,902 58,486 71,346 73,944 70,477Operating profits mil. Yen 10,238 8,796 3,723 3,593 2,720 2,046 1,717 9,639 1,701 -5,572Business profits mil. Yen 10,310 8,881 3,794 3,678 2,840 2,190 1,855 9,839 1,839 -5,160Ordinary profits mil. Yen 10,538 8,860 3,516 3,978 2,286 211 1,614 9,239 1,947 -6,426Net income mil. Yen 5,989 4,604 -516 2,273 10,807 -14,181 -116 7,988 2,352 -14,240Total assets (ending) mil. Yen 73,405 72,152 71,731 71,752 116,511 92,827 84,563 98,447 99,786 85,224Shareholder equity (ending) mil. Yen 50,721 54,218 52,819 54,538 76,737 62,281 61,815 68,372 69,111 54,609Interest-bearing debt (ending) mil. Yen 5,160 5,150 2,770 1,600 13,468 10,630 7,891 4,927 10,432 13,987Shareholder equity ratio (ending) ％ 69.10 75.14 73.63 76.01 65.86 67.09 73.10 69.45 69.26 64.08Total shares issued and outstanding K shares 110,433 110,433 110,433 110,433 146,741 146,741 146,741 146,741 146,741 146,568Treasury stock K shares 261 274 279 293 304 306 306 308 309 1Ending shareholder equity per share yen 459.29 490.96 478.29 493.86 522.94 424.43 421.26 465.94 470.98 372.59Net income per share yen 54.36 41.80 -4.69 20.64 85.17 -93.84 -0.80 54.55 16.06 -97.20Dividends per share yen 10.00 8.00 5.00 5.00 5.00 5.00 5.00 13.00 5.00 -Return on equity (ROE) ％ 11.81 8.49 -0.98 4.17 14.08 -22.77 -0.19 11.68 3.40 -26.08Return on assets (ROA) ％ 14.05 12.31 5.29 5.13 2.44 2.36 2.19 9.99 1.84 -6.05Return on sales (ROS) ％ 14.32 12.47 6.28 6.76 3.74 2.64 3.17 13.79 2.49 -7.32Ratio of ordinary profit to net sales ％ 14.64 12.44 5.82 7.31 3.01 0.25 2.76 12.95 2.63 -9.12

Share priceMaximum share price during period yen 728 691 416 410 338 329 266 545 528 249Minimum share price during period yen 500 306 172 241 241 207 145 242 193 148

Sheet1

2009年ネン2010201120122013201420152016201720182019

Net salesmil. yen61,82871,98771,21260,42554,40875,86482,90258,48671,34673,94470,477

Operating profitsmil. Yen77510,2388,7963,7233,5932,7202,0461,7179,6391,701-5,572

Business profitsmil. Yen83710,3108,8813,7943,6782,8402,1901,8559,8391,839-5,160営業利益+受取利息・配当金

Ordinary profitsmil. Yen92210,5388,8603,5163,9782,2862111,6149,2391,947-6,426

Net incomemil. Yen1715,9894,604-5162,27310,807-14,181-1167,9882,352-14,240

Total assets (ending)mil. Yen66,23673,40572,15271,73171,752116,51192,82784,56398,44799,78685,2242014年ネン2015年ネン2016年ネン2017年ネン2018年ネン2019年ネン

Shareholder equity (ending)mil. Yen45,07550,72154,21852,81954,53876,73762,28161,81568,37269,11154,609767371886456228150153961815975896683726249006911199321954609712062

Interest-bearing debt (ending)mil. Yen7,0805,1605,1502,7701,60013,46810,6307,8914,92710,43213,987

Shareholder equity ratio (ending)％68.0569.1075.1473.6376.0165.8667.0973.1069.4569.2664.08

Total shares issued and outstandingK shares110,433110,433110,433110,433110,433146,741146,741146,741146,741146,741146,568146,741,292146,741,292146,741,292146,741,292146,741,292146,568,067

Treasury stockK shares2402612742792933043063063083091

Ending shareholder equity per shareyen408.17459.29490.96478.29493.86522.94424.43421.26465.94470.98372.59

Net income per shareyen1.5654.3641.80-4.6920.6485.17-93.84-0.8054.5516.06-97.20純利益/期中平均株式数ジュンリエキキチュウヘイキンカブシキスウ

Dividends per shareyen3.0010.008.005.005.005.005.005.0013.005.00-

Return on equity (ROE)％0.3811.818.49-0.984.1714.08-22.77-0.1911.683.40-26.08

Return on assets (ROA)％1.2614.0512.315.295.132.442.362.199.991.84-6.05

Return on sales (ROS)％1.3514.3212.476.286.763.742.643.1713.792.49-7.32

Ratio of ordinary profit to net sales％1.4914.6412.445.827.313.010.252.7612.952.63-9.12

Share price

Maximum share price during periodyen776728691416410338329266545528249

Minimum share price during periodyen192500306172241241207145242193148

スライド番号 1CONTENTS1. Consolidated Financial Results for FY20191-1. Summary of FY20191-2. Consolidated Financial Results for FY20191-3. Consolidated Financial Results for FY2019 1-4. Consolidated Financial Results for FY2019 (by Segment)1-5. Consolidated Operating Profit Analysis for FY20192. Consolidated Forecast for FY20202-1. Summary of FY20202-2. Forecasts of Consolidated Financial Results for FY20202-3. Forecasts of Consolidated Financial Results for FY2020 (by Segment)2-4. Consolidated Operating Profit Analysis (YoY Change)2-5. Other Measuresスライド番号 153. Overview of Operationsスライド番号 17スライド番号 18スライド番号 19スライド番号 20スライド番号 21スライド番号 22スライド番号 23スライド番号 244. Medium‐Term Business Plan (2018 to 2020) スライド番号 26“4 Cores” + building a platform for �the company’s future existence �スライド番号 28Building a platform for the company’s future existence_1スライド番号 30スライド番号 31スライド番号 32スライド番号 33

Documents

Consolidated Financial Report for Fiscal Year Ended December 2019 · 2020-04-17 · Consolidated Financial Report for Fiscal Year Ended December 2019. February . 10, 2020. zXv