Sumitomo Osaka Cement : FY2023 (ended March 31, 2024)​ Financial Results​ Explanatory Material(1840KB)

Explanatory Materials

(For Fiscal Year Ended March 31, 2024)

May 14, 2024

Table of Contents

1. Progress of FY2023-25Medium-term Management Plan

1. Vision for 2035 (SOC Vision 2035)
2. FY2023-25Medium-term Management Plan
3. Numerical Progress
4. Net Sales and Operating Income by Business and Initiatives to Achieve the Medium-term Management Plan ①②
5. Capital Allocation

1. FY2023 Financial Results/Outlook for 2024

1. Domestic Cement Demand / Our Sales Volume
2. FY2023 Financial Summary
3. FY2024 Earnings Forecast

1. Supplementary Material

2

Table of Contents

1. Progress of FY2023-25Medium-term Management Plan

1. Vision for 2035 (SOC Vision 2035)
2. FY2023-25Medium-term Management Plan
3. Numerical Progress
4. Net Sales and Operating Income by Business and Initiatives to Achieve the Medium-term Management Plan ①②
5. Capital Allocation

1. FY2023 Financial Results/Outlook for 2024

1. Domestic Cement Demand / Our Sales Volume
2. FY2023 Financial Summary
3. FY2024 Earnings Forecast

1. Supplementary Material

3

(1) Vision for 2035 (SOC Vision 2035)

Aim: Company with a strong presence

• Presence as a challenger with thorough differentiation and

unique style

• An environmental solution company that meets the needs of the times*
  ③ Tackle challenge of withdrawing from coal use

• What is an environmental solution company of SOC:
• • A company that provides solutions (products and solutions) to environmental issues toward the realization of a recycling-oriented society and a decarbonized society

Target figures for 2035
Sales	400,000 million yen
Operating	40,000 million yen or more
income
ROE	10% or more
ROIC	6.5% or more

100

Business Portfolio

Transformation

Cement business

50%

Non-cement50% business

4

(2) FY2023-25Medium-term Management Plan

Company-wide strategy

Improving profitability of existing businesses & building foundations for

growth

cement business

Improving

profitability of

existing businesses

• Recovery of profitability in cement business
• Improve profitability by gaining market share for next- generation optical communication components

Building foundations

for growth

• Expand scale and strengthen profitability by concentrating resources on the electronic materials business for semiconductor manufacturing equipment
• Overseas business expansion (Australian business)
• New business development in the decarbonization field

Strengthen management foundation

• Human resource strategy: Investment in people who support business growth and operation of new personnel measures
• R&D strategy: Strengthen R&D to create new businesses in high-performance products and decarbonization fields
• IP strategy: Develop human resources with intellectual property skills and promote utilization of intellectual property information analysis in management strategies (IP landscape)
• DX strategy: Develop infrastructure for solving issues in each business division

in the decarbonization field5

(3) Numerical Progress

Ratio to net sales

Changes in profits

Changes in indicators

(%)

265,000

million yen

222,500 229,500

204,700 million yen million yen 35 million yen

28 28

31

69 72 72 65

FY22		FY23		FY24	FY25
Results		Results		Forecast	Medium-term
					plan
		Cement		Non-cement

(100 million yen)

214

200

153

150

111

103

100 73

50

0

• 50

• • 57
• 100 ▲ 85

FY22 FY23 FY24 FY25

	Results	Results	Forecast Medium-term
				plan
	Operating income		Net income

(%)			8.0 or
	8.1
8.0			more
6.0		5.3	5.0 or
		more
4.0		2.8
	1.8
2.0
0.0
▲ 2.1
▲ 2.0
▲ 3.0
▲ 4.0
FY22	FY23	FY24	FY25
Results	Results	Forecast	Medium-term
			plan
	ROIC	ROE

6

1. Net Sales and Operating Income by Business
   and Initiatives to Achieve the Medium-term Management Plan ①

Cement

(100 million yen)Cement business

100					1,601	1,647	1,730	2,000
	1,403
80							1,600
60										1,200
40										800
							60
20							35		400
0
				▲ 18
			▲195
			FY22		FY23	FY24	FY25
			Results		Results	Forecast	Medium-term
									plan
						Operating income		Sales

• Securing fair prices
• Responding to the 2024 Problem of Driver Shortages in Logistics
• Expanding use of fossil energy alternatives
• Developing Australian downstream business

Advanced materials

(100 million yen)Advanced materials

100								355	400
		217
80								300
				187	158
60							200
40
	54					69	100
20
				29	16
0
			FY22	FY23	FY24	FY25
			Results	Results	Forecast	Medium-term
								plan
					Operating income		Sales

7

• Expanding production capacity with a new manufacturing building
• Implementing semi- automated and labour-saving manufacturing processes to strengthen competitiveness in quality and cost
• Developing next-generation electrostatic chuck (ESC)

1. Net Sales and Operating Income by Business
   and Initiatives to Achieve the Medium-term Management Plan ②

Mineral resources

Cement-related products

(100 million yen)

Mineral resources business

50				180					200
134	146		152
40
30												Operating
20									100			income
25	31	34	33
10								Sales
0
			FY22	FY23	FY24	FY25
			Results	Results	Forecast	Medium-term
						plan
	(100 million yen)
				Cement-related products
50				250	271				300
	221	217
40
											Operating
30									200
20												income
				23
10		15	15	17				100			Sales
0
			FY22	FY23	FY24	FY25
			Results	Results	Forecast	Medium-term
						plan

• Acquiring and retaining new customers
• Operating the shipping berth for Shuho Mine upon completion of its extension
• Advancing new development projects to secure mineral content
• Participating in large-scale projects
• Expanding orders received for urban construction and civil engineering work
• Enhancing labor-saving and productivity through construction
  ICT

Optoelectronics

(100 million yen)

Optoelectronics business

50				79		100
40								Operating
30
							income
20						50
24	20	20	7			Sales
10
0
▲ 1	▲ 7	▲ 5
		FY22	FY25
		FY23	FY24
		Results	Results	Forecast	Medium-term
					plan
								8

• Acquiring customer endorsement through sample evaluation
• Establishing a mass production system

(5) Capital Allocation

(%)	Cross-shareholdings/net assets
26.4

FY2023-25 Plan

30		22.6	19.6
20
10
		10% or less
0
22/3	23/3	24/3	27/3
	(FY21)	(FY22)	(FY23)	(FY26)

• Cross-shareholdings= non-consolidated investment securities amount

*Strategic

shareholdings / net assets ratio Aim for

less than 20% in

FY2023and less

than 10% in FY2026

*Aim for a total

payout ratio of 50% or more on average over three years based on continued stable dividend payments

Shareholder

return

180

FY23 Results

• Amount: 4,100 million yen FY24 Forecast
• Amount: 9,000 million yen

FY23-24 Average total payout ratio: 51%

FY23 Results

• Amount: 43,700 million yen

FY24 Forecast

• Amount: 28,000 million yen

Supplementary comments

• Profitability improvement
• Decrease in coal inventories

Operating

CF

717

Operating

CF

1,110

Capital

investment/

Overseas

investment

Shareholder
	FY23 Results
return
131		• Amount: 28,900 million yen
	FY24 Forecast
		• Amount: 31,000 million yen

Capital

investment/

Overseas

FY23 Results

• Amount: 13,900 million yen

FY24 Forecast

• Amount: 4,000 million yen

Sale of cross-shareholdings

• 17,800 million yen

Sale of

assets, etc.

179

Sale of

assets, etc.

200

1,080

Others

50

investment FY23 Results

• Amount: 24,600 million yen
  599 FY24 Forecast
• Amount: -8,000 million yen

Supplementary comments

• Change in interest-bearing

Others	debt: 16,400 million yen
166

in (FY23-24

cumulative)

in out

9

out (FY23-24	Unit: 100 million yen
cumulative)

Table of Contents

1. Progress of FY2023-25Medium-term Management Plan

1. Vision for 2035 (SOC Vision 2035)
2. FY2023-25Medium-term Management Plan
3. Numerical Progress
4. Net Sales and Operating Income by Business and Initiatives to Achieve the Medium-term Management Plan ①②
5. Capital Allocation

1. FY2023 Financial Results/2024 Earnings Forecast

1. Domestic Cement Demand / Our Sales Volume
2. FY2023 Financial Summary
3. FY2024 Earnings Forecast

1. Supplementary Material

10