NIPPON SHOKUBAI CO., LTD. This Announcement is a translation of the original; "Shihon Kosuto ya Kabuka wo Ishiki Shita Keiei no Jitsugen ni Muketa Taio ni Tsuite" written in Japanese, for convenience purpose only, and in the event of any discrepancy, the original in Japanese shall prevail.
June 18, 2024 | |
For Immediate Release | |
Company: | NIPPON SHOKUBAI CO., LTD. |
Representative: | Kazuhiro Noda, President and |
Representative Member of the Board | |
(Code number: 4114, Prime Market, | |
Tokyo Stock Exchange) | |
Contacts: | Takeharu Tatsumi, General Manager |
of Corporate Communications Dept. | |
(Tel: +81-3-3506-7605) |
Action to Implement Management that is Conscious of Cost of Capital and Stock Price
(Updates on Progress)
NIPPON SHOKUBAI CO., LTD. has discussed at the Board of Directors the current situation on cost of capital and profitability, and the progress in actions to enhance corporate value.
Please refer to the attached document for details of action to implement management that is conscious of cost of capital and stock price.
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Action to Implement Management
that is Conscious of Cost of Capital and Stock Price
－Updates on Progress－
June 18th, 2024
NIPPON SHOKUBAI CO., LTD.
Copyright NIPPON SHOKUBAI CO., LTD. All rights reserved.
1
Agenda
Ⅰ．Summary of previous announcement on 20th June 2023
Ⅱ．New additional actions to increase corporate value
- Progress in actions announced on 20th June 2023
（References）Analysis of current situation
Copyright NIPPON SHOKUBAI CO., LTD. All rights reserved.
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Ⅰ．Summary of previous announcement on 20th June 2023
- The followings are "the analysis of current situation, targets, actions and initiatives", which was announced in June last year.
Analysis of current situation
- ROE is lower than the cost of shareholders' equity.
- PBR has been lower than 1.0x for the last several years.
Target
- Achieve the ROE targets set out in the long-term vision and mid-term management plan of 7.5% in FY2024 and at least 9.0% in FY2030, and achieve PBR of at least 1.0x by taking additional actions.
Initiatives
- In addition to the actions of the long-term vision and mid-term management plan (three transformations), the following additional actions will be implemented.
Initiatives | ||||
Business Transformation（Expand the Solutions business, Achieve the Materials business Resilience） | ||||
Actions in Long-term vision and | ||||
Environmental Transformation（Reduce GHG emissions and expand sales of environmentally friendly | ||||
mid-term management plan | products） | |||
Organizational Transformation（Human resource development and promotion） | ||||
Previously added actions | Optimization of leverage level | |||
on top of the mid-term | ||||
Improvement in liquidity | ||||
management plan | ||||
(20th June 2023) | Enhancing dialogue with shareholders and investors | |||
Copyright NIPPON SHOKUBAI CO., LTD. All rights reserved. | 3 | |||
Ⅱ．New additional actions to improve corporate value
-
New management and financial strategies have been added onto the actions announced last year to improve corporate value. (Newly introduced in May 2024)
・The following chart shows the relationship between the issues and actions to improve PBR. ・Specific details and progress are given from the next slide onwards.
Improve
PBR
Issues
Improve
profitability
Improve
ROA
Improve | Improve | |
ROE | asset efficiency |
Increase leverage
Raise expectations | |||||||
for growth | |||||||
Improve | Raise | ||||||
liquidity | |||||||
PER | Lower | ||||||
the cost | |||||||
of equity | Efforts for | ||||||
ESG | |||||||
Actions | Additional actions to improve | ||||||||
Actions announced last year | |||||||||
corporate value | |||||||||
Business Transformation | |||||||||
→P.11 | |||||||||
Optimization of leverage level | |||||||||
→P.13 | ＋ | Revision in | Revision in | ||||||
Management | Financial | ||||||||
Strategy | Strategy | ||||||||
Enhancing dialogue with | |||||||||
shareholders and investors | →P.6~7 | →P.8~9 | |||||||
→P.14 | |||||||||
Improvement in liquidity | |||||||||
→P.13 | |||||||||
Environmental | →P.12 | ||||||||
Transformation | |||||||||
Organizational | →P.12 | ||||||||
Transformation | |||||||||
4 | |||||||||
Copyright NIPPON SHOKUBAI CO., LTD. All rights reserved. |
Ⅱ．New additional actions to improve corporate value
Revision in Management Strategy | Revision in Financial Strategy |
- Revision of management and financial strategies to improve corporate value announced in May 2024, without waiting for the next mid-term management plan to be drawn up.
*Please refer toFinancial Results Briefing Material for the Fiscal Year Ended March 2024 (FY 2023)
Reference: Financial Results Briefing Material for the Fiscal Year Ended March 2024 (FY 2023)
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Ⅱ．New additional actions: Revision in Management strategy
Revision in Management Strategy
■ Selected "Growth Business" and determined to actively invest resources in those businesses.
Reference: Financial Results Briefing Material for the Fiscal Year Ended March 2024 (FY 2023)
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6
Ⅱ．New additional actions: Revision in Management strategy
Revision in Management Strategy
Reference: Financial Results Briefing Material for the Fiscal Year Ended March 2024 (FY 2023)
Copyright NIPPON SHOKUBAI CO., LTD. All rights reserved.
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Ⅱ．New additional actions: Revision in Financial strategy
Revision in Financial Strategy
- Set specific targets and timing for reduction of cross-shareholdings and financial leverage (shareholders' equity ratio)
- Decided to start ROIC business management
＜Balance Sheet＞ | Reference: Financial Results Briefing Material for the Fiscal Year Ended March 2024 (FY 2023) |
Future Policy
Reduction of
shareholders' equity
ratio to near 60%
ROIC business management
50% reduction of
Cross-Shareholdings
Copyright NIPPON SHOKUBAI CO., LTD. All rights reserved. | 8 |
Ⅱ．New additional actions: Revision in Financial strategy
Revision in Financial Strategy
- Revised the cash allocation policy of the current mid-term management plan and decided a policy to aim for both increased profits and improved capital efficiencythrough proactive investment in growth and shareholder returns.
＜Cash Allocation Policy＞ | Reference: Financial Results Briefing Material for the Fiscal Year Ended March 2024 (FY 2023) |
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Nippon Shokubai Co. Ltd. published this content on 18 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 June 2024 06:24:08 UTC.
