Sumitomo chemicals 20111212_e
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Sumitomo chemicals 20111212_e Presentation Transcript

  • 1. Creative Hybrid Chemistry For a Better Tomorrow December 12, 2011 Masakazu Tokura President
  • 2. Agenda Overview of FY2011 Performance 2 Sumitomo Chemical’s Current Position 6 Review of Major Strategic Initiatives 8 Over the Last 10 Years Current Management Priority Issues 13 and Development of New Businesses3rd Chemical Conference hosted by Deutsche Securities Inc. 1
  • 3. Overview of FY2011 Performance
  • 4. Outlook for FY2011 (Billions of yen) FY2010 FY2011 Change Sales 1,982.4 2,020.0 +37.6 Operating Income 88.0 75.0 -13.0 Ordinary Income 84.1 72.0 -12.1 Net Income 24.4 10.0 -14.4 Naphtha Price ¥47,500/kl ¥55,500/kl Exchange Rate ¥85.74/US$ ¥79.00/US$3rd Chemical Conference hosted by Deutsche Securities Inc. 3
  • 5. FY 2010 Full-Year Forecast by Sector (Billions of yen) FY2010 FY2011 Change (Forecast) Sales 302.3 300.0 -2.3 Basic Chemicals Op. Income 20.6 17.0 -3.6 Petrochemicals Sales 649.9 710.0 +60.1 & Plastics Op. Income 11.1 15.0 +3.9 IT-related Sales 322.3 300.0 -22.3 Chemicals Op. Income 26.1 13.0 -13.1 Health & Crop Sales 250.8 275.0 +24.2 Sciences Op. Income 23.3 29.0 +5.7 Sales 410.6 385.0 -25.6 Pharmaceuticals Op. Income 28.7 20.0 -8.7 Sales 46.6 50.0 +3.4 Others Op. Income -21.9 -19.0 +2.9 Sales 1,982.4 2,020.0 +37.6 Total Op. Income 88.0 75.0 -13.03rd Chemical Conference hosted by Deutsche Securities Inc. 4
  • 6. FY 2010 First Half Results (Billions of yen) FY 2010.1H FY 2011.1H Change Sales 989.2 998.3 +9.0 Operating Income 53.0 54.0 +1.0 Equity in Earnings of Affiliates 7.5 1.0 -6.5 Ordinary Income 52.1 49.0 -3.1 Extraordinary Gains/Losses -29.6 -28.4 +1.2 Income Taxes -10.9 -13.9 -3.0 Minority Interests -9.1 -9.4 -0.3 Net Income 2.5 -2.7 -5.2 Naphtha Price ¥46,200/kl ¥57,000/kl Exchange Rate ¥88.91/US$ ¥79.75/US$ Interim Dividend ¥3/Share ¥6/Share3rd Chemical Conference hosted by Deutsche Securities Inc. 5
  • 7. Sumitomo Chemical’s Current Position
  • 8. Sumitomo Chemical’s Current Position Last 10 Years 2 to 3 Years Next 10 to 20 Years Promote creative hybrid chemistry and solution oriented development Environment Life and Sciences ICT Energy Pave the way for future growth (Tackle management priority issues) Established Quickly maximize Rabigh Launched DSP, and expanded returns from Project Acquired IT-related major projects Enhance financial Sepracor Chemicals strength Rigorously select investments Improve asset turnover Globalization Promote globally integrated management 2001 2011 2020~303rd Chemical Conference hosted by Deutsche Securities Inc. 7
  • 9. Review of Major Strategic Initiatives Over the Last 10 Years
  • 10. Management Priority Issues Over the Last 10 Years Last 10 Years 2 to 3 Years Next 10 to 20 Years Promote creative hybrid chemistry and solution oriented development Environment Life and Sciences ICT Energy Pave the way for future growth (Tackle management priority issues) Established Quickly maximize Rabigh Launched DSP, and expanded returns from Project Acquired IT-related major projects Enhance financial Sepracor Chemicals strength Rigorously select investments Improve asset turnover Globalization Promote globally integrated management 2001 2011 2020~303rd Chemical Conference hosted by Deutsche Securities Inc. 9
  • 11. Results Achieved in Major Projects Management Strengthen Gain critical mass in fundamentals of Develop Priority pharma business to petrochemicals new core business Issues achieve strong growth business Launch of Dainippon Establishment and Major Implementation of Sumitomo Pharma, expansion of Projects Rabigh Project acquisition of IT-related Chemicals Sepracor in US Sector Approx. ¥166.0 bn Approx. ¥219.0 bn Approx. ¥355.0 bn Investment (equity investment and (increased shareholding (cumulative capital lending) and acquisition) expenditures Total project cost $10.1 bn in 10 years since inception) Results Petrochemicals & Pharmaceuticals IT-related Chemicals Sales Plastics Sector Sector Sector (FY00→FY10) (¥375.5 bn → ¥649.9 bn) (¥156.7 bn → ¥365.9 bn) (¥60.2 bn → ¥322.3 bn)3rd Chemical Conference hosted by Deutsche Securities Inc. 10
  • 12. Expansion in the Last Ten Years Sales (Billions of yen) 2,500 1,982 2,000 1,897 1,790 1,788 1,557 1,621 1,500 1,296 1,111 1,158 Starts operation 1,018 Starts production of Rabigh complex 1,000 of polarizing films in Taiwan Acquires Sepracor Starts production of polarizing films in Korea Decides to invest in Rabigh project 500 Establishes IT-related Forms Dainippon Sumitomo Pharma Chemicals Sector 0 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY20103rd Chemical Conference hosted by Deutsche Securities Inc. 11
  • 13. Globalization in the Last 10 Years Overseas Operations by Geography Percentage of overseas Asia North America production in 2010: 40% Europe Middle East and Africa Central and South America Oceania and Others Percentage of Sales Outside of Japan (Billions of yen) (%) 10,000 1,000 50.0 8,000 800 40.0 6,000 600 30.0 Forms comprehensive business tie-up and makes strategic investment in Nufarm 4,000 400 Decides to implement Rabigh 20.0 Project; Completes the 2nd phase Starts production of Rabigh complex; expansion of MMA in Singapore Acquires Sepracor Starts production of 2,000 200 Completes the 3rd phase 10.0 polarizing film in Taiwan expansion of MMA in Singapore Starts production of polarizing film in South Korea Acquires CDT 0 0 0.0 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY20103rd Chemical Conference hosted by Deutsche Securities Inc. 12
  • 14. Current Management Priority Issuesand Development of New Businesses
  • 15. Current Management Priority Issues: Enhance Financial Strength Last 10 Years 2 to 3 Years Next 10 to 20 Years Promote creative hybrid chemistry and solution oriented development Environment Life and Sciences ICT Energy Pave the way for future growth (Tackle management priority issues) Established Quickly maximize Rabigh Launched DSP, and expanded returns from Project Acquired IT-related major projects Enhance financial Sepracor Chemicals strength Rigorously select investments Improve asset turnover Globalization Promote globally integrated management 2001 2011 2020~303rd Chemical Conference hosted by Deutsche Securities Inc. 14
  • 16. Enhance Financial Strength Rigorously select Increase returns investments and keep investment cash flows Improve asset on major strategic within the range of turnover projects operating cash flows Enhance Financial Strength • Maintain positive free cash flow • Reduce interest bearing liabilities • Improve debt to equity ratio Secure greater strategic freedom to aggressively pursue growth opportunities3rd Chemical Conference hosted by Deutsche Securities Inc. 15
  • 17. Quickly Maximize Returns from Major Projects: Rabigh Project Performance Trends for Petro Rabigh (US$ millions) 2010 2011 2011 2011 Achieve sustained profitability 1-4Q 1Q 2Q 3Q Sales from Full operation Refinery 10,416 3,381 1,744 3,290 expected in 2012 Business Sales from Profitable since Petrochemical 2,074 633 290 470 September 2011 Business Operating -30 189 -104 -72 Stable operation Income Completed periodical Net Income 56 186 -107 -75 maintenance in August 20113rd Chemical Conference hosted by Deutsche Securities Inc. 16
  • 18. Quickly Maximize Returns from Major Projects: LATUDA LATUDA Sales Projection in the US Additional indications and expansion of markets (Billions of yen) Schizophrenia Canada: NDS submitted in June 2011 Japan: New Phase III study under preparation China: IND submitted in September 2011 Schizophrenia (change of maximum dose) 50 US: sNDA submitted in June 2011 Bipolar disorder (depression) US: sNDA planned for 2012 Bipolar maintenance US, Europe and other: Phase III studies to be initiated in 2Q 2011 0 FY2011 FY2012 FY2014 MDD with mixed features (Forecast) (Target) (Target) US: Phase III studies to be initiated in 2Q 20113rd Chemical Conference hosted by Deutsche Securities Inc. 17
  • 19. Current Management Priority Issues: Promote Globally Integrated Management Last 10 Years 2 to 3 Years Next 10 to 20 Years Promote creative hybrid chemistry and solution oriented development Environment Life and Sciences ICT Energy Pave the way for future growth (Tackle management priority issues) Established Quickly maximize Rabigh Launched DSP, and expanded returns from Project Acquired IT-related major projects Enhance financial Sepracor Chemicals strength Rigorously select investments Improve asset turnover Globalization Promote globally integrated management 2001 2011 2020~303rd Chemical Conference hosted by Deutsche Securities Inc. 18
  • 20. Quickly Maximize Returns from Major Projects: Promote Globally Integrated Management Basic Chemicals IT-related Chemicals Singapore Korea Increase methyl methacrylate Building a touch sensor panel s ea on ers cti production capacity production facility Ov du Europe Building a sapphire substrate production facility Studying investments in DPF o production facilities China Pr Built a supply chain 40% FY2010 Pharmaceuticals US Launched LATUDA Europe License agreement with Takeda Pharmaceuticals for the joint development and exclusive commercialization of lurasidone Petrochemicals and Plastics Health & Crop Science Singapore Australia Building a S-SBR production plant Comprehensive business alliance with Nufarm Saudi Arabia US Studying Rabigh Phase II project Collaboration with Monsanto3rd Chemical Conference hosted by Deutsche Securities Inc. 19
  • 21. Globalization FY2011 FY2010 1H Overseas sales to total sales 53% 54% Overseas production to total production 40% 41% Overseas assets to total asset 35% 37% Overseas headcount to total headcount 38% 39%3rd Chemical Conference hosted by Deutsche Securities Inc. 20
  • 22. Development of New Businesses Last 10 Years 2 to 3 Years Next 10 to 20 Years Promote creative hybrid chemistry and solution oriented development Environment Life and Sciences ICT Energy Pave the way for future growth (Tackle management priority issues) Established Quickly maximize Rabigh Launched DSP, and expanded returns from Project Acquired IT-related major projects Enhance financial Sepracor Chemicals strength Rigorously select investments Improve asset turnover Globalization Promote globally integrated management 2001 2011 2020~303rd Chemical Conference hosted by Deutsche Securities Inc. 21
  • 23. Promote Creative Hybrid Chemistry and Solution Oriented Development Environment and Energy Food, Health, Security and Safety For a better life Environment Information and Life Sciences Communication and Energy Technology Contribute to the sustainable development Business of society opportunities Sustainable profit Sumitomo Chemical’s technologies and products 住友化学の技術・製品3rd Chemical Conference hosted by Deutsche Securities Inc. 22
  • 24. Creative Hybrid Chemistry Design of Design of functional functional inorganic organic materials Device design chemicals and polymers Combine these core technologies Creative Hybrid Chemistry High-precision Catalyst processing design Genomics3rd Chemical Conference hosted by Deutsche Securities Inc. 23
  • 25. Environment and Energy Design of Design of High-precision functional Catalyst functional organic Device design Genomics processing inorganic design chemicals and materials polymers Cathode materials for lithium-ion secondary batteries Separators for lithium-ion secondary batteries Alumina for lithium-ion secondary batteries Organic photovoltaics Photovoltaic cell encapsulants PLED lighting LED sapphire substrates Materials for power semiconductor Diesel particulate filter3rd Chemical Conference hosted by Deutsche Securities Inc. 24
  • 26. For a Better Life Design of Design of High-precision functional Catalyst functional organic Device design Genomics processing inorganic design chemicals and materials polymers Polymer light emitting diodes Organic semiconductor (printed electronics) Semiconductor materials for smartphones Polarizing film for 3D TVs3rd Chemical Conference hosted by Deutsche Securities Inc. 25
  • 27. Commercialization Timeline Commercialization Timeline 2011 2015 2020~ Silicon solar cells Ultra-high-efficiency Organic thin-film photovoltaics (HEVA, electrode paste, etc.) photovoltaic Energy (epitaxial wafer) Proton exchange membrane Creation fuel cells (automotive applications) Energy Separators for lithium-ion Cathode materials for high voltage lithium-ion Storage secondary batteries secondary batteries Sapphire substrates and Energy alumina for LED lighting PLED lighting Saving applications Energy Power semiconductors for epitaxial wafers Management High thermal conductive resin Environment Diesel particulate filters CO2 separation PLED displays ICT Organic semiconductors Polarizing films for 3D TVs3rd Chemical Conference hosted by Deutsche Securities Inc. 26
  • 28. Food, Health, Security and Safety Design of Design of High-precision functional Catalyst functional organic Device design Genomics processing inorganic design chemicals and materials polymers OLYSET Net Pharmaceuticals (LATUDA) Crop protection Chemicals (Crop Stress Management) Household Insecticides3rd Chemical Conference hosted by Deutsche Securities Inc. 27
  • 29. PLED (Printing Method)Production costs are lower with printable PLEDs because the equipment needed costs less and the production process is simpler. Small-molecule organic light emitting diodes Polymer light emitting diodes (SMOLEDs) (PLEDs) Vacuum deposition system equipped with multiple Applicable to various types of printing machines as Manufacturing needed equipment deposition chambers. •Inkjet printer •Slit die coater Dry process Wet process Vacuum deposition Printing method Production method process Many layers Few layers Structure of layers3rd Chemical Conference hosted by Deutsche Securities Inc. 28
  • 30. PLED Lighting R, G, and B units are incorporated into polymer during synthesis → Dissolve polymer in solvent to produce ink → Print Print Structure and production process Small-molecule organic light emitting diodes Polymer light emitting diodes Production To produce lighting products, the deposition To produce lighting products, the printing process process process needs to be repeated many times. needs to be repeated very few times. HIL HTL R G B ETL EIL IL W Many layers Cathode EIL (electron injection layer) Few layers Structure of layers ETL (electron transport layer) EML (emissive layer) Blue EML (emissive layer) Green Cathode EML (emissive layer) Red EML (emissive layer) White HTL (hole transportation layer) IL (hole injection layer) HIL (hole injection layer) Anode (ITO) Anode (ITO) Glass substrate Glass substrate Planning to display our PLED lighting in Light+Building 2012, Europe’s largest trade fair, in April 20123rd Chemical Conference hosted by Deutsche Securities Inc. 29
  • 31. Strategy for Printable Polymer Organic Light Emitting Diodes Applications in Printed Electronics Organic semiconductor PLED lighting Organic photovoltaics PLED materials for displays3rd Chemical Conference hosted by Deutsche Securities Inc. 30
  • 32. DPF (Diesel Particulate Filter) Sumitomo Chemical Developed an innovative aluminum titanate DPF DPF is Global Demand for DPFs a diesel particulate filter for diesel vehicles (Millions of DPFs per year) 16 12 8 Enforcement of 4 EURO 6 DPF Diesel engine 0 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 (CY) Filtering process Share of diesel-powered Emits exhaust passenger vehicles in Europe (%) 80 70.4 70.1 1999 2009 60 41.9 40 30.7 Takes in The surface filters out 20 exhaust particulates 0 France Spain Italy Germany3rd Chemical Conference hosted by Deutsche Securities Inc. 31
  • 33. Commercialization Strategy for DPF Implementing a steady plan to enter European market in 2013 targeting diesel-powered passenger-vehicles Targeting gasoline-powered vehicles in Asia and US and commercial vehicles globally in the long-term. Euro5 Euro6 Post Euro6 9 GPF (Gasoline (Millions of DPFs per year) 8 Particulate Filter) 7 6 Commercial 5 vehicles and Commence commercial production construction 4 and enter market machines 3 Passenger 2 vehicles 1 0 CY2012 CY2013 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 Launch production Launch production Launch production in first factory in second factory in third factory3rd Chemical Conference hosted by Deutsche Securities Inc. 32
  • 34. Thank you for your attention. Our CSR activities to support areas struck by the Great East Japan Earthquake. Sales of produce made in the areas struck by the earthquake. Sumitomo Chemical employees volunteering in the areas struck by the earthquake.3rd Chemical Conference hosted by Deutsche Securities Inc. 33
  • 35. Forward-Looking Statements Statements made in this material with respect to Sumitomo Chemical’s plans, projections, strategies, beliefs, and future performance that are not historical facts are forward-looking statements that are based on information available at the time of the preparation of this material and include risks and uncertainties. Factors that could materially affect actual results of Sumitomo Chemical’s future performance include, but are not limited to, economic conditions in the areas of Sumitomo Chemical’s business, demand for Sumitomo Chemical’s products in markets, downward price pressure on Sumitomo Chemical’s products resulting from intensifying competition, Sumitomo Chemical’s ability to continue to provide products that are accepted by customers in highly-competitive markets, and movements of currency exchange rates.3rd Chemical Conference hosted by Deutsche Securities Inc. 34