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140120120801088831

  1. 1. Flash Report-1Q Results and FY12 Outlook- Teijin Limited August 2, 2012
  2. 2. Outline of FY12 1Q Results
  3. 3. 1. Outline of FY12 1Q Results(1) Consolidated Results Highlights (¥ bn) Quarterly Movement Sales Operating income Net income FCF 300 20 10 60 258.9 250 6.3 5.9 204.0 40 34.0 195.6 200 5 201.9 189.6 11.0 174.3 10 9.7 150 2.9 20 9.6 100 0 1.2 4.9 -1.3 4.9 0 50 -1.6 -3.4 3.7 3.0 -3.1 -13.2 0 0 -5 -20 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q Note: The dotted lines in the graphs above do not include the impact of the standardization of accounting periods 2
  4. 4. 1. Outline of FY12 1Q Results◆ Operating Results FY11 FY12 Difference (¥ bn) 1Q 1Q  Net sales and operating income: Down from Net sales 189.6 174.3 -15.2 the first quarter of FY11, owing to the impact Operating income 11.0 3.0 -8.1 of the European sovereign debt crisis, intensified competition and the revision of OP margin 5.8% 1.7% ― drug reimbursement prices Nonoperating items (net) 1.8 (0.8) -2.5  Ordinary income: Down, reflecting a decline Ordinary income 12.8 2.2 -10.6 in equity in earnings of affiliates Extraordinary items (net) (0.1) (2.5) -2.4  Net loss: Primarily a result of the further deterioration of net extraordinary items Income (loss) before income taxes 12.7 (0.3) -13.0 Income taxes 5.9 1.6 -4.3 Minority interests in income (loss) 0.5 (0.2) -0.7 ◇PL exchange rate Net income (loss) 6.3 (1.6) -7.9 FY11 FY12 EPS (¥) 6.38 (1.66) -8.04 1Q 1Q (January – March)* (April – June) EBITDA *1 22.5 14.3 -8.2 ¥/US$ 82 80 CAPEX *2 5.0 8.0 +3.0 ¥/€ 113 103 Depreciation & amortization 11.4 11.4 -0.1 US$/€ 1.37 1.28 R&D expenses 7.2 7.6 +0.4 * Rates used for FY11 1Q are for the three months ended March 31, 2012, to account for the impact of the standardization of FCF (13.2) 4.9 +18.2 accounting periods *1 EBITDA = Operating income + Depreciation & amortization *2 CAPEX includes investments in intangible assets 3
  5. 5. 1. Outline of FY12 1Q Results◆ Extraordinary items FY11 FY12 Difference (¥ bn) 1Q 1Q  Extraordinary items: Net extraordinary Gain on sales of property, plant items were a loss of ¥2.5 billion, and equipment 0.0 0.1 +0.0 compared with a loss of ¥0.1 billion in Gain on sales of investment fiscal 2011 securities 0.7 — -0.7 • Flood-related expenses: Loss of Others 0.2 0.0 -0.2 ¥0.9 billion due to severe flooding in Thailand (primarily costs for the Extraordinary income, total 0.9 0.1 -0.8 restoration of production Loss on sales and retirement of equipment) noncurrent assets 0.0 0.2 +0.1 • Loss on valuation of investment Loss on valuation of investment securities: ¥0.8 billion securities — 0.8 +0.8  Income taxes, others Impairment loss 0.0 0.7 +0.6 • Loss before income taxes: ¥0.3 Provision for allowance for billion doubtful receivables 0.4 — -0.4 Earthquake-related expenses 0.4 — -0.4 However, amortization of goodwill and equity in earnings of affiliates, Flood-related expenses — 0.9 +0.9 among others, are not tax deductible Others 0.1 0.0 -0.1 Accordingly, income was positive Extraordinary losses, total 1.0 2.6 +1.6 for income tax purposes Extraordinary items, total (0.1) (2.5) -2.4 ⇒ Liable for income taxes Income taxes 5.9 1.6 -4.3Minority interests in income (loss) 0.5 (0.2) -0.7 4
  6. 6. 1. Outline of FY12 1Q Results ◆ Financial Position (Impact of  Total assets: Down, a consequence of March 31, June 30, foreign Difference exchange • Decreases in trades notes and 2012 2012 (¥ bn) rate) accounts receivable Total assets 762.1 739.7 -22.4 -13.7 • Decline in fixed assets, reflecting the progress of depreciation and Shareholders’ amortization equity 292.0 279.8 -12.3 -5.1 Interest-bearing  Shareholders’ equity: Down, owing to debt 261.0 254.7 -6.3 -5.3 • Net loss for the quarter and the payment of cash dividends D/E ratio 0.89 0.91 +0.02  Interest-bearing debt: Down, a result of Shareholders’ • Decrease in the yen value of liabilities 38.3% 37.8% -0.5% denominated in other currencies, equity ratio owing to the strength of the Japanese currency ◆ Cash Flows ◇BS exchange rate March 31, June 30, Operating Investing Financing Cash & cash 2012 2012 FCF (¥ bn) activities activities activities equivalents ¥/US$ 82 79 FY12 1Q +14.0 -9.1 +4.9 -3.7 +1.3 ¥/€ 110 99 FY11 1Q -8.0 -5.3 -13.2 +9.3 -3.9 US$/€ 1.34 1.24Note: Cash flows fall outside the scope of quarterly results reporting under the Financial Instruments and Exchange Act. 5
  7. 7. 1. Outline of FY12 1Q Results◆Analysis of Changes in Operating Results and Financial Position◇ Operating income (¥ bn) ◇Shareholders’ equity (¥ bn) -1.9 ¥bn Sales -12.3 ¥bn Differences in raw volume Valuation materials down Dividends difference on and fuel –4.0 292.0 available-for-s paid prices -3.0 ale securities +1.0 Sales prices and others down and Foreign 4.9 Head office sales mix currency -2.6 279.8 costs down - 1.0 Net loss translation and others 3.0 adjustments -1.6 +2.0 -5.1 * Calculations exclude the impact of accounting period change for some Group companies ’11.4Q ’12.1Q ’12.3 ’12.6◇Total assets ◇Interest-bearing debt -22.4 ¥bn -6.3 ¥bn CAPEX Depreciation & Commercial Loans +8.0 paper 762.1 Amortization -9.6 254.7 -11.4 +2.0 Investments 261.0 Bonds and in securities 739.7 others -13.7 +1.3 Working capital down and others -5.3 ’12.3 ’12.6 ’12.3 ’12.6 6
  8. 8. 1. Outline of FY12 1Q Results(2) Operating Results by Segment (Comparison with FY11 1Q) Sales Operating income FY11 FY12 % FY11 FY12 % Difference Difference (¥ bn) 1Q 1Q Change 1Q 1Q Change Advanced Fibers and Composites 35.5 26.1 -9.3 -26.3% 2.4 (0.3) -2.7 ― Electronics Materials and Performance Polymer Products 46.9 43.7 -3.1 -6.7% 3.2 1.6 -1.5 -49.1% Healthcare 34.9 31.2 -3.7 -10.7% 7.2 3.8 -3.4 -47.5% Trading and Retail 56.0 54.9 -1.1 -2.0% 1.1 0.7 -0.3 -30.9% Total 173.3 156.0 -17.3 -10.0% 13.8 5.8 -8.0 -57.8% Others 16.3 18.4 +2.1 +12.8% 0.3 0.4 +0.1 +36.3% Elimination and Corporate ― ― ― ― (3.1) (3.2) -0.2 ― Total 189.6 174.3 -15.2 -8.0% 11.0 3.0 -8.1 -73.0% 7
  9. 9. 1. Outline of FY12 1Q Results① Advanced Fibers and Composites (Formerly High-Performance Fibers, now also includes Polyester Fibers for Industrial Applications ) (¥ bn) 11/1Q 12/1Q Difference Change Sales Operating income Sales 35.5 26.1 -9.3 26.3% (¥ bn) Operating income 2.4 (0.3) -2.7 —60 5.0 ◆ Summary & Actions ◇ Aramid Fibers: Para-aramid fibers: 2.4 -2.7¥bn • Demand was solid for use in friction materials, tire 2.5 reinforcement materials and fiber optic cables40 -26.3% • Demand for use in ballistic protection products and 35.5 protective clothing entered an adjustment phase Meta-aramid fibers: 0.0 • Exports were sluggish, a consequence of the strong yen and 26.1 -0.3 the economic downturn in Europe ◇ Carbon Fibers and Composites:20 • Demand was favorable for use in aircraft and firm for use in -2.5 compounds • Demand for use in pressure vessels rose in North America, thanks to the expansion of shale gas development • Demand in Asia softened for use in sports and leisure equipment and others0 -5.0 11/1Q 12/1Q 11/1Q 12/1Q ◇ Polyester Fibers for Industrial Applications • Demand for automotive applications was solid 8
  10. 10. 1. Outline of FY12 1Q Results ② Electronics Materials and Performance Polymer Products (Formerly Films and Plastics) (¥ bn) 11/1Q 12/1Q Difference Change Sales Operating income Sales 46.9 43.7 -3.1 -6.7% (¥ bn) Operating income 3.2 1.6 -1.5 -49.1%60 5.0 ◆ Summary & Actions -6.7% ◇ Resin and Plastics Processing: 46.9 Shipments for use in electrical and electronics equipment 43.7 and for use in automotive components recovered favorably. To enhance profitability, we are shifting our focus toward 3.2 compounds40 -49.1% Polycarbonate resin: • We continued to implement sales price revisions in 2.5 response to persistently high prices for key raw materials Processed plastics products: 1.6 • Sales were favorable for automotive applications20 • We pressed forward with efforts to market reverse- dispersion solvent-cast retardation film for use in OELDs • Sales of transparent electroconductive film rallied strongly for use in touch screens ◇ Films: PET film (Japan): Demand from electronics-related markets0 0.0 showed signs of a gradual recovery, although the pace of 11/1Q 12/1Q improvement was gentle 11/1Q 12/1Q PET film (overseas): Disruptions to the supply–demand balance fueled pricing competition 9
  11. 11. 1. Outline of FY12 1Q Results ③ Healthcare (Formerly Pharmaceuticals and Home Health Care) (¥ bn) 11/1Q 12/1Q Difference Change Sales Operating income Sales 34.9 31.2 -3.7 -10.7% (¥ bn) Operating income 7.2 3.8 -3.4 -47.5%60 7.5 7.2 ◆ Summary & Actions ◇ Pharmaceuticals: -47.5% Results reflected the revision of drug reimbursement prices in Japan and increasingly intense competition in the market for osteoporosis treatments -10.7% • Febuxostat (treatment for hyperuricemia and gout):40 5.0 34.9 In Japan, regulatory approval for long-term prescription contributed to a favorable increase in sales; overseas, 31.2 3.8 we continued to expand availability, launching the drug—already available in North America, Europe and the ROK—in Taiwan • Bonalon®* (treatment for osteoporosis):20 2.5 We released Japan’s first intravenous drip–form osteoporosis treatment (May 2012) ◇ Home Healthcare: Fiscal 2012 started on a positive note with increased rental volume for mainstay equipment0 0.0 11/1Q 12/1Q 11/1Q 12/1Q • HOT: We marketed a new model • CPAP: We introduced NemLink monitoring system, which uses mobile phone networks * Bonalon® is the registered trademark of Merck Sharp & Dohme Corp., Whitehouse Station, NJ, U.S.A. 10
  12. 12. 1. Outline of FY12 1Q Results ④ Trading and Retail (Now also includes Polyester Fibers for Apparel) (¥ bn) 11/1Q 12/1Q Difference Change Sales Operating income Sales 56.0 54.9 -1.1 -2.0% (¥ bn) -2.0% Operating income 1.1 0.7 -0.3 -30.9%60 5.0 56.0 54.9 ◆ Summary & Actions ◇ Products Converting: Textiles and apparel:40 • Brisk shipments of knits, men’s suits and formal wear for spring and summer supported firm results in the Tokyo metropolitan area in the first three months of fiscal 2012, although overall sales declined, owing to dwindling sales 2.5 of apparel in the Nagoya–Gifu area and of filaments and textiles -30.9% Industrial textiles and materials:20 • Sales of products for automotive applications remained 1.1 robust, while sales of general-purpose products, including materials for construction/civil engineering 0.7 applications and nonwoven materials, were firm ◇ Polyester Fibers for Apparel:0 0.0 Owing to persistently soft markets, we were forced to engage 11/1Q 12/1Q 11/1Q 12/1Q in intense pricing competition 11
  13. 13. 1. Outline of FY12 1Q Results ◆ Quarterly operating income and loss trends * For the purpose of comparison, figures for January–March 2012 are presented as aggregates of results of domestic and overseas consolidated subsidiaries excluding the impact of the standardization of accounting periods In all our materials businesses, particularly plastics, income began to recover from April 2012, in tandem with rising operating rates, thanks to actions taken in fiscal 2011 to shrink inventories (¥ bn) 2 April–June 2012 1 January–March April–June October– January– 2012 2012 December 2011 March 2012 0 October–Decembe r 2011 -1 -2 -3 Fibers (advanced and polyester fibers) Films and plastics 12
  14. 14. FY12 Outlook
  15. 15. 1. Outlook for FY2012(1) Assessment of the operating environment Economic growth is expected to flag noticeably worldwide, including in the PRC and other emerging economies In July 2012, the IMF revised its economic outlook for several countries 2012 2011 2013 (Actual) Annual (Forecast) January–March April–June Percent change (Forecast) United States 1.7 1.9 1.8 2.1 ⇒ 2.0 2.4 ⇒ 2.3 Europe 1.5 - 0.0 - 2.1 - 0.3 0.9 ⇒ 0.7 PRC 9.2 8.1 7.6 8.2 ⇒ 8.0 8.8 ⇒ 8.5 Japan - 0.7 4.7 1.6 2.0 ⇒ 2.4 1.7 ⇒ 1.5 Sources: International Monetary Fund; National Bureau of • Protracted financial crisis in Europe Statistics (PRC); The Japan Research Institute, Limited Shrinking national budgets, revision or postponement of public works projects ⇒ Expected to affect aramid fibers (for use in ballistic protection products and protective clothing), carbon fibers (for use in pressure vessels and wind turbine blades) and film (for use in solar cells) • Slowing economic growth in the PRC Falling exports to Europe, a sixth consecutive quarter of slowing economic growth ⇒ Expected to affect films and plastics, electronics materials and carbon fibers (for use in sports and leisure equipment) With the supply–demand balance again likely to soften, pricing competition is expected to intensify 14
  16. 16. 2. Outlook for FY12 (2) Movement of Results (¥ bn) Annual Sales 2H Operating income 1H Operating income Operating incomeSales Net income Annual net income 1,000 943.4 75 854.4 815.7 800.0 765.8 750 48.6 [791.0] 50 34.0 [35.3] 35.0 28.0 13.4 25 18.0 27.0 500 2.9 13.4 10.7 20.5 25.2 20.7 12.0 15.1 2.8 [13.8] 7.0 12.0 0 FY08 FY09 FY10 Actual FY11 Actual FY12 Outlook Actual Actual 250 -35.7 -43.0 -25 0 -50 Note: Figures in square brackets in the graphs above exclude the impact of the standardization of accounting periods 15
  17. 17. 2. Outlook for FY12(3) Summary of Outlook for FY12 FY12 Difference ◆ Dividends Declared for Fiscal 2011 and FY11 Forecast for Fiscal 2012 (¥ bn) Outlook Amount % 854.4 -54.4 -6.4% FY11 FY12 Difference Net sales [791.0] 800.0 [+9.0] [+1.1%] (¥/share) Outlook 34.0 +1.0 +2.8% Interim 3.0 3.0 ―Operating income [35.3] 35.0 [-0.3] [-0.9%] Year-end 3.0 3.0 ― 4.0% ― +0.4%Operating margin [4.5%] 4.4% [-0.1%] Annual dividends 6.0 6.0 ― 34.3 -1.3 -3.7% Ordinary income [35.9] 33.0 [-2.9] [-8.0%] 12.0 +0.0 +0.2% Net income [13.8] 12.0 [-1.8] [-13.0%] Mar. 31, Mar. 31, Difference (¥ bn) ’12 ’13 Assets: EBITDA *1 86.3 85.0 -1.3 Inventories 109.0 110.0 +1.0 CAPEX *2 32.3 50.0 +17.7 Total 762.1 780.0 +17.9 Depreciation & amortization 52.3 50.0 -2.3 Interest-bearing debt 261.0 250.0 -11.0 *1 EBITDA = (Operating income + Depreciation & amortization) R&D expenses 31.8 34.0 +2.2 *2 CAPEX includes investments in intangible assets FCF 18.5 15.0 -3.5Note: Figures in square brackets in the graphs above exclude the impact of the standardization of accounting periods ◆Exchange rate and Crude Oil Price Forecast for FY12 JPY per USD : 80 JPY per EUR : 97 Dubai crude oil price : US$105/barrel 16
  18. 18. 2. Outlook for FY12 (4) Changes in Net Sales and Operating Income for FY11-FY12 FY11 Annual FY12 (Outlook) Annual Additional (¥ bn) 1H 2H Subtotal period * Total 1H 2H Total Advanced Fibers and Composites 71.9 63.9 135.8 17.4 153.2 55.0 65.0 120.0 Electronics Materials and Performance Polymer Products 93.0 87.7 180.6 34.7 215.4 90.0 95.0 185.0Net Sales Healthcare 68.0 71.5 139.5 3.5 143.0 65.0 85.0 150.0 Trading and Retail 123.1 131.9 255.0 7.7 262.7 120.0 135.0 255.0 Total 356.0 354.9 711.0 63.3 774.3 330.0 380.0 710.0 Others 37.5 42.5 80.1 0.0 80.1 40.0 50.0 90.0 Total 393.6 397.5 791.0 63.3 854.4 370.0 430.0 800.0 Advanced Fibers and Composites 5.5 1.1 6.6 0.6 7.2 0.5 2.5 3.0 Electronics Materials and 5.7 (0.8) 4.9 (1.2) 3.7 2.0 6.0 8.0Operating Income Performance Polymer Products Healthcare 11.9 14.5 26.4 (0.5) 25.9 9.0 19.0 28.0 Trading and Retail 2.8 3.8 6.6 (0.0) 6.6 2.0 5.0 7.0 Total 25.9 18.6 44.5 (1.1) 43.4 13.5 32.5 46.0 Others 1.3 2.4 3.7 0.0 3.7 1.5 3.0 4.5 Elimination and Corporate (6.6) (6.3) (13.0) (0.2) (13.1) (8.0) (7.5) (15.5) Total 20.7 14.6 35.3 (1.3) 34.0 7.0 28.0 35.0* The impact of the standardization of accounting periodsNote: Figures for FY2011, the fiscal year ended March 31, 2012, have been restated to conform with the Company‘s revisedsegmentation. Revised figures are unaudited. 17
  19. 19. 2. Outlook for FY12◆ Outlook by Segment FY12 Previous Outllook* FY12 Revised Outlook Difference (¥ bn) 1H 2H Total 1H 2H Total Advanced Fibers and Composites 70.0 75.0 145.0 55.0 65.0 120.0 -25.0 Electronics Materials and Performance Polymer Products 95.0 100.0 195.0 90.0 95.0 185.0 -10.0 Net Sales Healthcare 70.0 80.0 150.0 65.0 85.0 150.0 ― Trading and Retail 125.0 135.0 260.0 120.0 135.0 255.0 -5.0 Total 360.0 390.0 750.0 330.0 380.0 710.0 -40.0 Others 40.0 50.0 90.0 40.0 50.0 90.0 ― Total 400.0 440.0 840.0 370.0 430.0 800.0 -40.0 Advanced Fibers and Composites 5.0 6.0 11.0 0.5 2.5 3.0 -8.0 Electronics Materials and Performance Polymer Products 3.0 5.0 8.0 2.0 6.0 8.0 ― Operating Income Healthcare 12.0 16.0 28.0 9.0 19.0 28.0 ― Trading and Retail 2.5 4.5 7.0 2.0 5.0 7.0 ― Total 22.5 31.5 54.0 13.5 32.5 46.0 -8.0 Others 1.5 3.0 4.5 1.5 3.0 4.5 ― Elimination and Corporate (8.0) (7.5) (15.5) (8.0) (7.5) (15.5) ― Total 16.0 27.0 43.0 7.0 28.0 35.0 -8.0 *Announced on May 9,2012 18
  20. 20. 2. Outlook for FY12(5) Analysis of Changes in Operating Income Forecast ◆ Comparison with FY11 Changes in sales (¥ bn) Decrease in raw prices and Cost materials costs product mix Advance Sales volume reductions +9.0 development -15.0 increases +8.0 costs, others 35.3 +11.0 Includes ¥4.0 billion -13.3 35.0 attributable to reduction of procurement costs * Calculations exclude the impact of accounting period change for some Group companies FY11 FY12 (Forecast) ◆ Comparison with Previous Forecast Changes in sales Decrease in raw prices and Cost materials costs product mix reductions 43.0 +5.0 -8.0 Sales volume +2.0 decrease Includes ¥2.0 billion -7.0 35.0 attributable to reduction of procurement costs Previous forecast Current forecast 19
  21. 21. 2. Outlook for FY2012(6) Factors contributing to anticipated improvement in operating income in the fiscal 2012 second half, compared with the first half Despite slowing macroeconomic growth, we still expect results to begin improving gradually toward the end of the second half of fiscal 2012 Measures implemented in each segment are also projected to contribute to further improvements in the second half (¥ bn) FY FY 1H 2H Increase Principal contributing factors Expanded For automotive applications and to emerging economies for use in fiber optic cables salesAdvanced Fibers and 0.5 2.5 2.0 Completion of major regular maintenance of aramid fibers production facilities in theComposites Reduced first half, full restoration of production at flood-damaged facilities in Thailand, making costs use of recycled pulp (aramid fibers) Films: For use in reflective film for LED-backlit LCD televisions and highly durable solar cell back sheets ExpandedElectronics Materials Plastics: Owing to accelerated shift of focus to compounds, efforts to bolster sales of salesand Performance 2.0 6.0 4.0 processed plastics products (electroconductive film, reverse-dispersion solvent-castPolymer Products retardation film) Reduced Completion of major regular maintenance of resin production facilities in the first half, costs improvement in cost per unit of production Expanded Febuxostat (Japan and overseas), new formulations of Bonalon, CPAP ventilators salesHealthcare 9.0 19.0 10.0 Reduced Costs for materials used in home healthcare equipment, sales and administrative costs costsTrading and Retail 2.0 5.0 3.0 Seasonal factors, cost reductions (streamlining of organization, others)Others 1.5 3.0 1.5 Seasonal factors influencing performance of the IT business We will take steps to cut costs related to technological development, production, procurement and logistics, as well as SG&A expenses—guided by the newly established Group Cost Structure Reform Promotion Subcommittee—and implement crucial Group structural reforms, with the aim of reducing costs Groupwide. 20
  22. 22. 2. Outlook for FY2012(7) Analysis of the operating environment and outlook for performance in key businesses Fiscal 2012 is the first year of CHANGE for 2016. Guided by this, we are implementing basic strategies for transforming our four fundamental portfolios Business Current operating environment Medium- to long-term trends Advanced Fibers and • The European sovereign debt crisis • Needs remains strong for materials that reduce the weight of finished products, thus Composites has provoked stagnation and slowing growth at helping to lower energy consumption, and for materials that contribute to greater the macroeconomic level safety and security, underscoring projections that growth will remain high High-performance • Owing to fiscal austerity in Europe and the • Demand is forecast to increase substantially in emerging economies (for use in fiber fibers (aramid fibers, United States, demand for certain applications, optic cables, ballistic protection products and protective clothing, as well as for others) including ballistic protection products and infrastructure-related applications) protective clothing, has entered an adjustment phase • Growth in demand for automotive applications is expected to remain stable • Efforts to develop new products and expand applications will proceed (e.g., offshore oilfield related applications, ultrahigh-molecular-weight polyethylene products) Carbon fibers and • Competition is intensifying, owing to a steady • Stable growth in demand and high profitability is forecast to continue for use in composites stream of new market entrants aircraft • The adoption of CFRP by automakers is expected to accelerate • Demand looks set to strengthen for general industrial applications, including wind turbine blades and pressure vessels for natural gas–related applications Healthcare • The aging of society and the increasing prevalence of lifestyle-related diseases are likely to remain key factors Pharmaceuticals • Competition in the market for osteoporosis • New formulations of Bonalon are expected to help maintain and eventually expand treatments is intensifying market share • Febuxostat has been approved for long-term • Sales of febuxostat are forecast to increase favorably both in Japan and overseas prescription (Japan) Home healthcare • Guidelines for diagnosing SAS in • Growth in the market for CPAP devices is projected to remain high cardiovascular disease have been revised (bolstered by launch of models with new functions and increase in the number of (Japan) sleep labs) ⇒ CPAP equipment is increasingly prescribed by cardiovascular specialists We continue to see these and other promising growth businesses as key income drivers over the medium to long term 21
  23. 23. 2. Outlook for FY12 (7) Financial Highlights FY08 FY09 FY10 FY11 FY12 Actual Actual Actual Actual Outlook ROA *1 1.9% 1.6% 6.1% 4.5% 5% ROE *2 -12.3% -12.4% 9.1% 4.2% 4% Operating margin 1.9% 1.8% 6.0% 4.0% 4.4% D/E ratio 1.18 1.18 0.94 0.89 0.9 Shareholders’ equity ratio 35.0% 33.0% 37.3% 38.3% 37% Earnings per share (¥) (43.7) (36.3) 25.6 12.2 12.2 Dividends per share (¥) 5.0 2.0 5.0 6.0 6.0 Total assets(¥ bn) 874.2 823.1 761.5 762.1 780.0 Interest-bearing debt (¥ bn) 361.3 320.3 267.4 261.0 250.0 EBITDA(¥ bn)*3 85.3 75.3 105.0 86.3 85.0 *1 ROA= Operating income/Total assets *2 ROE= Net income/Shareholders’ equity *3 EBITDA = Operating income + Depreciation & amortization 22
  24. 24. Disclaimer Regarding Forward-Looking Statements and Business RisksDisclaimerAny statements in this document, other than those of historical fact, are forward-looking statements about the futureperformance of Teijin and its Group companies, which are based on management’s assumptions and beliefs in light ofinformation currently available, and involve risks and uncertainties. Actual results may differ materially from these forecasts.Business RisksThe Teijin Group recognizes certain risks as having the potential to affect its operating results and/or financial position. As of thedate of this document, these risks included, but were not limited to, the risks listed below.(1) Market-related risk The Teijin Group manufactures and sells products, the sales of which may be affected by market conditions, competition with other companies and price fluctuations arising thereof, as well as fluctuations in raw materials prices and fuel costs, and such market factors as fluctuations in foreign exchange and interest rates.(2) Product quality risk Teijin’s pharmaceuticals and home health care businesses manufacture and sell products that may affect the lives of users. Accordingly, quality issues relating to such products have the potential to negatively affect, among others, the Group’s operating results, financial position and public reputation.(3) R&D-related risk in the pharmaceuticals business R&D in the pharmaceuticals business is characterized by significant investments of funds and time. Pharmaceuticals discovery research has a high incidence of failure to discover promising drugs. There are also risks that plans to apply for regulatory approval may be abandoned or that approval may be rescinded.(4) Risks related to overseas operations The Teijin Group has operations overseas. These operations are vulnerable to the impact of fluctuations in foreign exchange rates, as well as enforcement of new or unexpected changes to existing laws, regulations or tax systems that exert an adverse impact on the Group; economic fluctuations; or social unrest triggered by acts of terror or war.(5) Risks related to accidents and disasters In the event of a major natural disaster or unforeseen accident that results in damage to the Teijin Group’s production facilities or significantly impedes the Group’s supply chain, such developments may have a negative impact on the Group’s operating results and/or financial position. This material is based on the consolidated results for FY12 1Q announced at 11:30 A.M. on August 2, 2012 (local time in Japan). All product names in this document are registered trademarks. 23
  25. 25. (Supplementary Information)Consolidated Balance Sheets Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, (¥ bn) ’11 ’11 ’11 ’11 ’12 ’12 Total assets 761.5 782.0 784.5 775.8 762.1 739.7 Current assets 336.9 358.3 369.4 375.6 361.8 352.1 Fixed assets 424.6 423.8 415.1 400.2 400.3 387.7 Total liabilities and net assets 761.5 782.0 784.5 775.8 762.1 739.7 Liabilities 453.8 468.3 474.2 469.7 449.9 440.2 (Interest-bearing debt) 267.4 284.6 288.0 285.0 261.0 254.7 Net assets 307.7 313.8 310.3 306.0 312.2 299.5 Note: For more information, see Teijin’s quarterly results report (Consolidated Financial Results for the First Quarter of FY12). 24
  26. 26. (Supplementary Information) Consolidated Statements of Income FY11 FY12 FY11 1Q vs (¥ bn) 1Q 2Q 3Q 4Q 1Q FY12 1Q Net Sales 189.6 204.0 201.9 258.9 174.3 -15.2 Cost of sales 133.9 147.9 147.8 199.6 127.5 -6.4 Gross profit 55.7 56.1 54.1 59.3 46.8 -8.9 SG & A 44.7 46.5 44.4 55.7 43.9 -0.8 Operating income 11.0 9.6 9.7 3.7 3.0 -8.1 Nonoperating items (net) 1.8 (0.8) 0.2 (0.9) (0.8) -2.5 (Balance of financial expenses) (0.4) (0.9) (0.7) (1.5) (0.3) +0.1 (Equity on gains and losses of unconsolidated subsidiaries and affiliates) 2.6 1.3 0.8 0.6 0.4 -2.2 Ordinary income 12.8 8.9 9.9 2.7 2.2 -10.6 Extraordinary items(net) (0.1) (1.9) (1.8) (2.7) (2.5) -2.4 Income (loss) before income taxes 12.7 7.0 8.1 0.0 (0.3) -13.0 Income taxes 5.9 3.5 2.2 3.2 1.6 -4.3 Minority interests (net) 0.5 0.6 (0.0) (0.0) (0.2) -0.7 Net income (loss) 6.3 2.9 5.9 (3.1) (1.6) -7.9 Note: For more information, see Teijin’s quarterly results report (Consolidated Financial Results for the First Quarter of FY12). 25
  27. 27. (Supplementary Information)◆ Nonoperating items ◆ Extraordinary items FY11 FY12 FY11 FY12 (¥ bn) 1Q (¥ bn) 1Q Interest income 0.6 0.1 Gain on sales of property, plant and equipment 0.3 0.1 Dividend income 0.7 0.4 Gain on sales of investment securities 1.3 ― Equity in earnings of affiliates 5.3 0.4 Gain on sales of subsidiaries and affiliates stocks 0.7 ― Foreign exchange gain 0.2 ― Net gain related to flooding 0.3 ― Other income 1.1 0.4 Others 0.3 0.0Nonoperating revenues, total 8.0 1.3 Extraordinary income, total 2.9 0.1 Interest expense 4.9 0.9 Loss on sales and retirement of 1.0 0.2 Foreign exchange loss ― 0.8 noncurrent assets Loss on valuation of investment Other expenses 2.8 0.5 securities 0.2 0.8Nonoperating expenses, total 7.7 2.1 Loss on impairment 2.6 0.7Nonoperating items, total 0.2 (0.8) Earthquake-related expenses 0.3 ― Flood-related expenses ― 0.9 Loss on revision of retirement benefit plan 3.3 ― Others 2.0 0.0 Extraordinary losses, total 9.4 2.6 Extraordinary items, total (6.5) (2.5) 26
  28. 28. (Supplementary Information)◆ Outlook for FY12 FY11 FY12 (Outlook) Annual Annual 1Q 2Q 3Q 4Q 1Q 2Q 2H (¥ bn) Total TotalNet sales 189.6 204.0 201.9 258.9 854.4 174.3 195.7 430.0 800.0Operating income 11.0 9.6 9.7 3.7 34.0 3.0 4.0 28.0 35.0Ordinary income 12.8 8.9 9.9 2.7 34.3 2.2 3.8 27.0 33.0Net income (loss) 6.3 2.9 5.9 (3.1) 12.0 (1.6) 1.6 12.0 12.0EBITDA * 22.5 21.4 21.4 21.1 86.3 14.3 85.0Depreciation &amortization 11.4 11.7 11.7 17.5 52.3 11.4 50.0R&D expenses 7.2 8.0 7.4 9.3 31.8 7.6 34.0FCF (13.2) (3.4) 1.2 34.0 18.5 4.9 15.0 *EBITDA = Operating income + Depreciation & amortization 27
  29. 29. (Supplementary Information) Dubai Crude Oil Prices  Benzene Prices($/BL) (Cent/gal) ’09 ’10 ’11 ’12 ’09 ’10 ’11 ’12140 500 450120 400100 350 30080 Dubai Crude oil prices 250 Benzene60 20040 150 10020 50 0 0 【Source: Teijin estimates based on data published by Platt’s】 【Source: Teijin estimates based on data published by Dewitt】 28
  30. 30. (Supplementary Information) Yen/Dollar, Yen/Euro Exchange Rates Dollar/Euro Exchange Rates(¥/EUR) ($/EUR)’08 (¥/$) ’08 ’09 ’10 ’11 ’12 ’09 ’10 ’11 ’12170 1.7 Jul. 2008 ¥168/ €1.00160 Jul. 2008 ¥/€ 1.6 $1.56/ €1.00150 Month-end TTM140 ¥/€ 1.5 $/€130 3-month 3-month average average120 Jun. 2012 1.4 Jul. 2008 ¥99/ €1.00110 ¥107/ $1.00100 ¥/$ 1.3 3-month average 90 Jun. 2012 1.2 ¥/$ $1.24/ €1.00 80 Month-end $/€ TTM Jun. 2012 Month-end 70 ¥79/ $1.00 TTM 1.1 60 50 1 29
  31. 31. (Supplementary Information) Polyester Fibers Prices, Raw Materials Prices(Cent/kg) ’09 ’10 ’11 ’12 (Cent/kg) ’09 ’10 ’11 ’12 250 Filament yarn 500 Staple Fibers POY 150D 200 Cotton Price 400 150 300 100 200 PTA SF 1.5D 50 EG SPREAD 100 PTA SPREAD EG 0 0 【Source: Teijin estimates based on data published by PCI】 30
  32. 32. (Supplementary Information) Sales of Principal Pharmaceuticals (¥ bn) FY11 FY12 Product Target disease Annual 1Q 2Q 3Q 4Q 1Q TotalBonalon®* Osteoporosis 5.2 5.2 5.4 4.7 20.5 3.3Onealfa® Osteoporosis 2.7 2.7 3.0 2.7 11.1 1.8Osteoporosis total 7.9 7.9 8.4 7.4 31.6 5.1Mucosolvan® Expectorant 2.4 2.1 3.0 2.4 9.9 2.1Venilon® Severe infection 2.3 2.2 2.6 2.3 9.4 2.4Laxoberon® Laxative 1.0 1.0 1.1 1.0 4.2 1.0Synvisc DispoTM Osteoarthritis pain in the knee 0.4 0.4 0.5 0.3 1.7 0.4Tricor® Hyperlipidemia 0.3 0.4 0.6 0.2 1.5 0.4Bonalfa® Psoriasis 0.3 0.3 0.4 0.3 1.4 0.4Alvesco® Asthma 0.3 0.3 0.3 0.4 1.3 0.3Spiropent® Bronchodilator 0.2 0.2 0.3 0.2 1.0 0.2 Feburic® Hyperuricemia and gout 0.5 0.0 0.1 0.3 0.9 0.7 * Bonalon® is the registered trademark of Merck Sharp & Dohme Corp., Whitehouse Station, NJ, U.S.A. Note: Drugs shown are those with annual sales in excess of ¥1.0 billion 31
  33. 33. (Supplementary Information)◆ Development Status by Therapeutic Area (As of June 30, 2012) Phase of Clinical Trials Approved/New Phase I Phase II Phase III Filed Launch Bone and joint GTH-42J GTH-42V *1 disease ITM-058 *2 [Bonalon® ] [Bonalon® ] Respiratory NA872ET disease [Mucosolvan®] Cardio-vascular ITM-077 ITM-014 *3 and metabolic disease NTC-801 [Somatuline® ] GGS [Venilon® ] TV-02H Other (New indication for [Bonalfa® Ointment] microscopic (PRC) polyangiitis) *1 GTH-42V was approved for manufacture and marketing in Japan in January 2012 and Commenced sales in Japan in May 2012. *2 Phase II clinical trials for ITM-058 began in May 2012. *3 ITM-014 was approved for manufacture and marketing in Japan in June 2012. Notes: Bonalon® is the registered trademark of Merck Sharp & Dohme Corp., Whitehouse Station, NJ, USA. Somatuline® is the registered trademark of Ipsen Pharma, Paris, France. 32
  34. 34. (Supplementary Information)◆ Status of New Products (As of June 30, 2012) Dosage Brand name (Generic name) Target disease Medical properties/characteristics Remarks form Bonalon® Bag for I.V. Infusion Osteoporosis Intravenous form of Bonalon, currently Injection Licensed in from Merck 900 µg sold as an osteoporosis drug; holds & Co., Inc. (USA) (alendronate sodium hydrate) promise as an alternative prescription in Commenced sales in cases where patients are unable to take Japan on May 10, 2012 oral medications or where patient noncompliance is an issue; also promising because less likely than oral drugs to cause side effects in the upper gastrointestinal tract.◆ Approved (As of June 30, 2012) Dosage Brand name (Generic name) Target disease Medical properties/characteristics Remarks form Somatuline® Subcutaneous Acromegaly Suppresses the excessive secretion of Injection Licensed in from Ipsen Injection Pituitary Gigantism growth hormones associated with Pharma SAS (France) (lanreotide acetate) acromegaly; pharmaceutical formulation Received approval in facilitates sustained release and extended June, 2012 pharmaceutical action, while prefilled syringe format makes it more convenient than existing acromegaly drugs and thus more conducive to patient compliance. Notes: Bonalon® is the registered trademark of Merck Sharp & Dohme Corp., Whitehouse Station, NJ, USA. Somatuline® is the registered trademark of Ipsen Pharma, Paris, France. 33
  35. 35. (Supplementary Information)◆ Newly Developed Pharmaceutical Candidates【 Filed 】 (As of June 30, 2012) Code No. (Generic Target disease Medical properties/characteristics Dosage Remarks name) formTV-02H Psoriasis vulgaris Licensing-out of Bonalfa high ointment 20µg/g to Topical Filed with PRC’s State(tacalcitol monohydrate) China; This product will offer an additional ointment Food and Drug treatment option for psoriasis in China. Although Administration in two strengths (2µg/g and 20µg/g) of Bonalfa September 2010 ointment are available in Japan, only Bonalfa (Supplemental NDA to ointment 2µg/g is available in China at present. Bonalfa ointment 2µg/g )GTH-42J Osteoporosis Oral jelly formulation of Bonalon (alendronate Oral jelly Licensed in from Merck(alendronate sodium sodium hydrate), currently sold as an osteoporosis & Co., Inc. (USA)hydrate) drug; intended as the world’s first jelly-form Filed in Japan in osteoporosis treatment; offers promise as an August 2011. alternative for osteoporosis patients who dislike taking pills because it is easy to swallow and moderately firm, so holds shape; also promising because it is easily managed by elderly individuals. 34
  36. 36. (Supplementary Information)【Phase II】Code No. (Generic name) Target disease Medical properties/characteristics Dosage Remarks formITM-077 Type II diabetes Consists glycemic control with low risk of Injection Licensed in from Ipsen(taspoglutide) hypoglycemia, which stimulating glucose- Pharma SAS (France) dependent insulin secretion; Has body weight loss effect; once-weekly dosage is possible, enhancing convenience; Also expecting it protects and promotes regeneration of pancreatic beta cells, which secrete insulin.NTC-801 Atrial fibrillation Promising atrial selective anti-arrhythmic drug for Oral Developing jointly with and flutter the treatment and prevention of atrial fibrillation Nissan Chemical and flutter; expecting that it does not cause Industries, Ltd. ventricular side effects, such as arrhythmogenic or negative inotropic action, a problem with existing anti-arrhythmic drugs.GGS (freeze-dried Microscopic Drug’s anti-inflammatory and immunoregulatory Injection Developing jointly withsulfonated human polyangiitis actions mitigate autoimmune vasculitis; also Kaketsuken (Newimmunoglobulin) promising as a treatment for mononeuritis indication) multiplex, a neuropathic disorder that is not alleviated by standard therapies.ITM-058 Osteoporosis Promising for the treatment of osteoporosis due to Injection Licensed in from Ipsen potency in promoting bone formation, resulting in a Pharma SAS (France) rapid increase in bone density and reduction in the risk of fracture. Superior to existing PTH derived drugs in its ability to increase bone density and its safety (minimal risk of hypercalcemia). 35
  37. 37. (Supplementary Information) 【Phase I】Code No. (Generic name) Target disease Medical properties/characteristics Dosage Remarks formNA872ET Expectorant Small, sustained-release tablet-form version of Oral Licensed in from(ambroxol hydrochloride) Mucosolvan (ambroxol hydrochloride) that is Boehringher Ingelheim smaller than Mucosolvan L Capsule and thus easier GmbH (Gernany) to take. This version is promising because it allows easier apportioning of single doses 36
  38. 38. (Supplementary Information) CAPEX, Depreciation & Amortization, and R&D Expenses CAPEX/Depreciation & R&D Expenses Amortization (¥ bn) (¥ bn) 100 CAPEX Depreciation & Amortization 80 75.8 40 37.6 67.4 33.4 34.0 61.9 31.5 31.8 60 56.4 52.3 50.0 50.0 40 36.3 20 32.3 29.2 20 0 0 08 09 10 11 12 08 09 10 11 12 Outlook Outlook 37

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