Toyo Ink SC Holdings Co., Ltd. Presentation data of …...FY2012 Results Briefing Toyo Ink SC...

FY2012 Results BriefingCopyright © 2013 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.

FY2012 Results Briefing

Toyo Ink SC Holdings Co., Ltd.May 20, 2013

ContentsFY2012 Business PerformanceFY2013 Business ForecastFY2013 Priority Measures by SegmentIntroduction of new products

The forecast or projections set out in this presentation are based on the assumptions andbeliefs of our management in light of the information available to it as of May 20, 2013.Changes in global, economic and business conditions could cause actual results to differmaterially from these forecasts. All amounts are rounded to the nearest 100 million yen.


FY2012 Business Performance

FY2012

2,48717518587

Net sales

Net income

Increase/decrease (%)FY2011

2,45313613472

1.4

28.6

37.4

FY2013forecast

2,700200200

As at March31, 2012

As at March31, 2013

Increase/decrease

(%)

Accelerate new product development to meet anticipated needs, global development and growth strategies to establishourselves as the number one brand.

Improve manufacturing capabilities and risk response. Strengthen corporate governance within the Group and upgrade systems to enable speedy execution.

FY2012 Management

Policy

67650.6

Interest-bearing debt(100 million yen)

Net worth ratio (%)

71152.4

As at March31, 2013

0.43D/E ratio 0.43

As at March31, 2012

1,5571,2742,831

991371

1,362

Current assets

Fixed assets

Total assets

Currentliabilities

Long-termliabilities

Total liabilities

Total net assets

1,6201,3762,996

980402

1,382

1,6132,996

4.0

8.0

5.8

1.5

9.8

5.8

1,4692,831

-1.1

8.5

639

Consolidatedsubsidiaries

Equity methodcompanies

5911

(Unit: 100 million yen) (Unit: 100 million yen)

20.4 100

7.1%

33.9%

Operatingmargin 5.6%

32.2%

1.5(points) 7.4%

1.7(points) 37.0%Overseas sales

ratio

1

As at March31, 2012

As at March31, 2013FY2012 FY2013

(forecast)

Dividend(yen) 12.012.0

¥80.1Average

exchange rate(1$ =)

¥79.6 - ¥90.0

Operatingincome

Recurringincome

Total of liabilitiesand net assets


FY2012 Operating Income and Analysis of FactorsBehind YoY Difference

Remarks Increased profit due to expanded sales of

high function products (positive impact of1,600 million yen)Products related to solar cells were sluggish,but CF- and ICT-related materials performedwell

Increased profit due to rise in sales volume(positive impact of 1,100 million yen)

Price revision (positive impact of 1,100 millionyen)Impact of price revision implemented last term

Direct impact of exchange rates (positiveimpact of 500 million yen)

Impact of raw materials prices (positiveimpact of 200 million yen)Petrochemical product prices fell in the firsthalf, but was on a rising trend in the secondhalf of the term.Titanium oxide prices remained at high levels.Cost-down effect due to raw materialssubstitution

Increase in fixed costs (negative impact of300 million yen)Although the Company continues to cut downon fixed costs, personnel expenses up weredue to increased welfare costs and anincrease in overseas employees.

Others (negative impact of 300 million yen)

FY2012 17,500 million yen


2

FY2011 FY2012

Increased profit due to expandedsales of high function products

Price revision

Direct im

pact of exchange rates

Impact of raw

materials prices

Increase in fixed costs

Others

100 million yen

Increased profit due to a rise insales volum

e


(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.

Performance by Segment

570 27

221 7

751 33

407 18

161 4

562 22

416 26

146 8

510 34

432 66

358 10

668 76

59 9

-64 1


2,487 175

-1.3 293.4

-4.1 10.3

-1.3 143.6

-1.0 13.1

8.1 178.5

1.1 25.3

-3.9 -0.5

10.6 309.8

-2.9 21.8

6.5 32.1

7.7 -13.4

6.7 22.9

-2.9 -34.0

- -

1.4 28.6

Increase/decreaseQuarter on Quarter (%)

Increase/decreaseYear on Year (%)

Others

Adjustment


Total consolidated

Japan

Overseas

Total

Japan

Overseas

Total

Japan

Overseas

Total

Japan

Overseas

Total

Results(100 million yen)Net

salesOperating

income

-6.4 -6.3

7.3 -49.1

-2.6 -25.5

-11.7 -64.6

5.7 -63.4

-7.2 -65.0

-1.8 -50.8

2.8 -32.3

0.1 -45.9

-4.9 -27.5

0.6 2.0

-3.1 -28.5

-22.4 46.2

- -


-3.6

(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.

-34.3

-0.7 201.1

1.5 32.7

1.1 140.9

-4.6 -48.9

12.6 -198.1

-0.3 -25.1

-5.1 -49.3

19.2 -

-2.6 -18.4

5.7 12.9

26.8 536.5

10.7 74.5

-11.3 -8.8

- -


2.9

(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.

39.4

141 8

59 1

190 9

94 2

43 1

136 3

99 3

38 2

125 5

108 15

93 4

166 18

13 3

-15 0

(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.

615

(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.(Note) The segment performance for Japan and overseas does not take into account eliminations between regions.

38

Printing andInformation

Packaging

Polymers andCoatings

Colorants andFunctionalMaterials

Netsales

Operatingincome

Netsales

Operatingincome

Fourth Quarter of FY2012 (three months)

Total results (100 million yen)Net

salesOperatingincome


Netsales

Operatingincome

FY2012 Full year

3


FY2012 Segment Overview and Performance by Region

Growth was sluggish in the first half due to a reaction to the emergency demandresulting from the 2011 earthquake during the previous term

Sales and profit increased in China and Southeast Asia due to growth in eco-friendly products

Gravure printing systems and prepresses are recovering, but moved sluggishly Raw materials prices started to rise in the 4th quarter

Eco-friendly inks increased in Japan, but exports declined due to the adoption oflocal production

In the Asia region, the 1st quarter was sluggish due to the Lunar New Year, butperformance recovered starting in the 2nd quarter (overseas: April-June)

Printing materials and equipment recorded a temporary loss due to businessrestructuring

Printing and Information Packaging

Although usage for printing inks was sluggish, commodity and processedpigments performed well for automotive purposes

High-function pigments sustained strong performance. Also contributed toprofitability in Europe

CF materials decreased slightly in the 4th quarter, but was relatively stable in thesecond half of the term

Colorants felt the impact of the steep price rise for raw materials, but gained onsolar cells

Colorants and Functional Materials Inventory adjustment related to solar cells caused a substantial drop in

adhesives Coatings remain sluggish in Japan, but results improved, especially in Southeast

Asia Expanded sales of electromagnetic shield film for coating materials continued Adhesives and resin were impacted by an accident at a raw materials

manufacturer

Polymers and Coatings

Asia-Oceania

Europe

The Americas

Adjustment

Total consolidated

Japan

FY2012Actual Net sales Operating

income Net sales Operatingincome Net sales Operating

income Net sales Operatingincome Net sales Operating

income

451 32

192 8

14 1

24 -1

-66 -2

615 38

-6.9 -30.6

2.5 -25.4

17.1 -28.5

6.9 -

- -

-3.6 -34.3

-0.8 2.2

13.5 267.9

-39.4 -

16.9 -

- -

2.9 39.4

1,864 148

731 32

42 1

93 -4

-243 -1

2,487 175

0.3 26.9

4.1 29.2

2.0 -

13.1 -

- -

1.4 28.6

Increase/decreaseQuarter on Quarter (%)


Result(100 million yen)

Fourth Quarter of FY2012 (three months)Total results

(100 million yen)Increase/decreaseYear on Year (%)

FY2012 Full year

4


Non-VOC sheet-fed inks, High sensitivity UV inks, bioethanol-based inks, high-functionflexographic inks, products related totelecommunications/automobiles/healthcare/energy, high-function adhesives forlabels/construction materials

New products

Expanded sales in the CF market in South Korea/Taiwan; progress in alliance oncommodity pigments in China/India; colorants plant launched in Indonesia; new printingink plant built for reinforced production (Brazil, No. 2 plant in India, Vietnam)

Global

Reinforced promotions through various types of exhibitions (drupa, Tokyo Pack,International Rechargeable Battery Expo, private shows)No.1 brand

Major Progress in “SCC-II Renaissance Plan”

Innovation in manufacturing Management capitalizing on headquarters◆ Complement global production of CF-related products, set up an efficient and

stable supply structure◆ Rationalization of the domestic production structure and set up a global

supply structure◆ Distribute risks related to raw materials supply that results from reinforced

global procurement

◆ TOYOCOLOR Co., Ltd. Established: colorants, strengthened synergy in themedia materials business

◆ Reorganization of group companies in both Japan and overseas◆ Continued strengthening of CSR management

SCC- I(FY2010)

Revival Plan completed

Net sales

OperatingincomeOverseas salesratio

245,700 million yen

19,100 million yen

32.2%

SCC-II Renaissance PlanFY2011 FY2012 FY2013

Recovery toregeneration

Toward anew creation

Leap towardthe next step

245,300million yen

13,600million yen

32.2%

248,700million yen

17,500million yen

33.9%

270,000million yen

20,000million yen

37.0%

SCC-III

(FY2014 – FY2016)

Planned forannouncement atthe results briefingfor the secondquarter of FY2013

5

Strengthen research and development in L&H and E&E fields

Major issues ahead of the nextmedium-term management plan

Move into uncharted territory,strengthen product lineup for a givenarea

Global improvement of brand power

Copyright © 2013 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.


Actual Results of Priority Measures that Support theCompany’s Growth Strategy (corporate tie-ups and M&A)

Business Location Company name Impact on business performance

Pigments China Jiangsu Toyo Yabang Pigment Co., Ltd.(new company, equity stake 50%)

(Partner)Yabang Investment Holding Group Co., Ltd.

Create a pigment production and salesstructure for the global market

Supply pigment of excellent quality and cost toour Group’s product-oriented businesses,such as that for printing inks, located aroundthe world

Pigments India HEUBACH TOYO COLOUR PVT. LTD.(new company, equity stake 50%)

(Partner)Heubach Colour Pvt. Ltd.

UV Belgium TOYO-ARETS INTERNATIONAL NV(company name change planned, equity stake 100%)

(Acquired company)ARETS INTERNATIONAL NV

Establish a production base in Europe Strengthen sales network in Eastern Europe,

Africa, etc. Optimize the supply chain Enhance product grades Scale of ARETS’s sales around 5,500 million

yen (2012)

Business Location Company name Impact on business performance

Corporate tie-ups

M&A

Copyright © 2013 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.6

FY2016Net sales target

6,500 millionyen/year



As a UVbusiness forthe Toyo InkGroup



Expansion Plans in Key Countries



FY2013 Segment Performance Forecast

Promote three growth strategies (new products/businesses, global development, No.1 brand) with improved customer satisfaction asthe foundation

Strengthen support activities for the medium-term management plan (Renaissance Plan) and regenerate a manufacturing base withearnings capacity

Create a framework that supports global/speedy strategic management

FY2013Management

Policy


Asia-Oceania

Europe*

The Americas

Adjustment

Total consolidated

Japan

Performance byregion Increase/

decrease (%)

Net sales (unit: 100 million yen)

5.3

1,900-0.9

84016.7

100136.4

1107.3

- -250

2,700

Full year

920

410

40

50

-120

1,300

First half total Increase/decrease (%)

8.6

1.9

14.9

138.2

18.5

-

Increase/decrease (%)

Operating income (unit: 100 million yen)

18.3

1556.2

4248.1

3-

0-

- 0

200

Full year

75

20

1

-1

0

95


14.0

5.0

32.3

129.0

-

-

Packaging


Colorants and FunctionalMaterials

Others

Adjustment

Printing and Information

Total consolidated

Performance bysegment Increase/

decrease (%)

Net sales (unit: 100 million yen)

-

8002.3

6003.6

5705.7

7308.7

4.8 65

-65

5.3 2,700

Full year

375

290

275

360

30

-30

1,300


-

6.5

6.8

11.7

9.2

10.3

8.6

Increase/decrease (%)

Operating income (unit: 100 million yen)

-

4052.4

3036.6

457.4

8524.5

- 0

0

18.3 200

Full year

19

14

21

41

0

0

95


-

20.2

38.0

32.4

11.4

-

14.0

* ARETS is included starting from the second quarter.


Growth Strategy Progressand FY2013 Developments

FY2013 Priority Measures

Expand new products and high value-addedproductsAccelerate global development of high sensitivityUV inksPromote sales of functional hard coating

Promote sales of inkjet inksPromote usage for newspapers and labels

Adopt local production and 3-grad strategyDevelop middle-grade products for Brazil andemerging markets in Asia.

Create synergy effect with ARETS at an earlystage

Printing and Information

Promote onsite production and productdevelopment tailored to market needs toachieve global expansion with a focus onemerging markets, using a flexible approach

Net sales Operatingincome

FY2013 Forecast

FY2012 Actual 75,100 3,300

80,000 4,000

9

FY2012 Actual

75,100

FY2013 Target

FY2012 Actual FY2013 Target

80,000

22,900 23,000

Net sales in emerging markets (Unit: million yen)

Sales of new products (Unit: million yen)

20,000 26,000

Unit: million yen

75,100 80,000




Packaging Materials

In addition to improving facilities, promoteglobal development by leveraging the abilityto develop products from resins to enhancethe product lineup


Unit: million yen


FY2013 Forecast

FY2012 Actual 56,200 2,200

60,000 3,000

Strengthen development of environmentallyconscious productsRelease new gravure inks on the market in JapanDevelop biomass inks focused on China

Promote sales of high-grade flexographic inks

Global development of newly developed resinsPromote sales of middle-grade ink focused onSoutheast Asia

Adopt local productionStart operations of newly constructed plants in Indiaand Vietnam and strengthen sales

Start operation of a production facility in inland Chinaat an early stage

10

FY2012 Actual

56,200

FY2013 Target


56,200

60,000

60,000

2,100 8,000


11,600 14,200





Boost sales of ICT terminals and other electronicmaterialsPromote sales of electromagnetic shield filmPromote market development for UV adhesives foruse in polarization plates

Boost development of peripheral materials for solarcellsPromote sales of coatings with excellent lightresistance and flame resistance

Expand can coatings overseasAccelerate expansion in China and Southeast Asia

Boost production development for automotivematerials, construction materials and other productsfor reconstruction demand



Reinforce ICT and energy related businessexpansion with unique products thatcapitalize on a combination of resin,dispersion and coating technologies

Unit: million yen


FY2013 Forecast

FY2012 Actual 51,000 3,400

57,000 4,500

11

FY2012 Actual

51,000

FY2013 Target


51,000

57,000

57,000

7,500 20,000


11,600 14,800




Promote sales of CF materials for next-generationFPD

Improve profitability of the colorants businessCreate a network of overseas basesPromote sales of functional master batches

Promote sales of high value-added productsPromote sales of thermal barrier coatings and otherenergy-saving products

Strengthen development of solar cell materials andsecondary battery materials

Strengthen the pigments business in China andIndiaStabilize and promote joint ventures

Colorants andFunctional Materials


Promote sales of the strong lineup of FPDmaterials, and leverage networks to promotethe global expansion of the colorantsbusiness

Unit: million yen


FY2013 Forecast

FY2012 Actual 66,800 7,600

73,000 8,500


FY2012 Actual

66,800

FY2013 Target


66,800

73,000

73,000

12,90018,500



31,90039,600


FY2013 Operating Income and Analysis of Factors(Forecast)




Remarks

Increased profit due to increased salesvolume (positive impact of 4,000 million yen)

Growth in high function products (positiveimpact of 1,000 million yen)Expanded sales of CF materials, ICT-relatedproducts in China, etc.

Price revision (positive impact of 1,000 millionyen)Gravure inks, colorants, etc.

Direct impact of exchange rates (positiveimpact of 800 million yen)Forecast rate this term 　US$1=90 yen

Increase in fixed costs (negative impact of3,000 million yen)Costs related to ARETSIncrease in depreciation

Impact of raw materials prices (negativeimpact of 1,300 million yen)Prices surged centering on petrochemicalproducts.

FY2012 FY2013

Increased profit due to a rise in sales volume

100 million yen

Grow

th in high function products

Price revision

Direct im

pact of exchange rates

Increase in fixed costs

Impact of raw

materials prices


Capital Investment and Depreciation

Capital investment Depreciation

FY2011 actual 93 (Acceptance basis)

FY2012 actual 133 (Acceptance basis)

FY2013 plan 150 (Order basis) 105

93

89

(Unit: 100 million yen)



Major capital expenditures planned in FY2013-Japan CF paste production facility (TOYOCOLOR Co., Ltd.

Moriyama Factory)Chemical plant (TOYOCOLOR Co., Ltd. Fuji Factory)

- India New printing inks plant (Toyo Ink India Pvt. Ltd.)-South Korea CF paste production facility (Sam Young Ink & Paint

Mfg. Co., Ltd.)-Brazil Printing inks plant (Toyo Ink Brasil Ltda.)

14


Information &Communication

Living &Healthcare

Fine Imaging &Printing

Energy &Environment

Toyo Ink Group Business Domains

Use science for a safe and secure livingGravure inks, flexographic inks and adhesives for food packaging / Next-generation can coatings / Naturally-derived materials / Functional plasticadhesives / Functional adhesives for automobiles / Medical and health carematerials / Other

Shift in devices brought about by controlling the properties of materialsCF materials / Electronics and FPC-related product group / Touch panelmaterials / Mobile terminal materials / heat conductive materials / Other

Science that leads to color communicationNext-generation offset printing inks / Wide gamut inks / Non-VOC sheet-fed inks/ Next-generation newspaper inks / High sensitivity UV inks / Pigments anddispersions for printing inks / Inkjet inks and their materials / Other

Develop a future for energy and the environment with original technologyInterlayer adhesives used for solar cell back sheets / Solar cell sealants /Adhesives used for laminated packing material of secondary batteries / Materialsused for secondary battery electrodes / Materials related to fuel cells / Thermalcontrol materials / Other

15 Copyright © 2013 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.


New product sales(100 million yen)

New product sales ratio (%)

FY2011Actual

51220.9

FY2013Target

FY2012Actual

69555525.722.3

* NP21: A management indicator of the sales figures of new products at domestic companies.* NRP: A management indicator of the sales figures of new products at overseas affiliates.* Products are removed from the count three years after the first market launch.

New Product Sales Ratio by Business Domain

FY2010Actual

46318.8

16

57

NRP

16

20

19

2

455

NP21

91

148

207

9

FY2011Actual

(Unit: 100 million yen)

695

190

270

220

15

NP21+NRP

FY2013Target

512

Total

107

168

226

11

104

29

50

23

2

451

NP21

59

186

194

12

FY2012Actual

NRP

555

Total

88

236

217

14


Development of ICT and Electronics Related Products

Product development that tailors to new materials, newframework, change in production method

17

FY2012 Net sales actual

FY2016 Net sales target

3,200 million yen

15,000 million yen

JPCA (June 5-6, 2013; location: Tokyo Big Site) planned to be exhibited


Additional surface ink REXWIN® SB UV adhesive REXWIN® UA UV adhesive (black) Developed product

Hard coat surface Lioduras® LCH Anti-blocking hard coat surface Lioduras® TYAB Fingerprint-resistant hard coat Lioduras® EFC Anti-soiling hard coat Lioduras® S / F / SF

Optical adhesive ORIBAIN®

Adhesive sheet LIOELM® FS

Electromagnetic shield film TSS®

High refractive hard coat Lioduras® TYZ/TYT Anti-blocking hard coating Lioduras® TYAB Silver paste REXALPHA®

Insular resist sheeting LIORESIST® NSP Protective film for ITO LIOELM® LE


Development into the Growing Thermal ControlMaterials Market (heat conductive materials)

Specialty materials Materials processing Converting components

Resin design Thermal dispersiontechnology Coating technology

Source of heat

Heat sink

Heat Heat

Automobiles (power devices,batteries, interior/exteriorsurface)

Highly integrated circuitFlexible circuitHigh-power transistorConsumer electronics/electronics

Peripheral materials for batteries(solar cells, secondary batteries)

18

FY2016Net sales target 500 million yen


Thermal related technology fields

Thermally conductiveinsulating adhesive sheets

LIOELM®/TSU®700 Series

Shaping materials for thermallyconductive adhesive sheets

LioplaxTM TET®/PPM® SeriesCreate

Store

Save

Thermoelectricswitch materials

Thermal storagematerials

Thermally conductivematerials


Responding to the Diversifying Needs of UV Printing

Become the global No. 1 in the UV inkmarket by growing through synergy

19

FY2010

FY2011

FY2012

Sales begins for highsensitivity UV printer (Japan)

Sales begins for highsensitivity UV printers(Europe/United States)

Launch sale of highsensitivity UV ink

Explore markets inEurope, US

Begins localproduction in the US

Sheet-fed printing Replacement with UVprinting accelerated demand

Aim at the popularization of UV printing in thepackage printing fieldAccelerate global expansion

High-quality, highly sensitive ink that promotes thepopularization of UV printing in the commercialprinting field (rheology control technology,emulsifying technology)

TIG’s initiativesMarket trends

Launch sale of high-speed ink

High speed/revolutionaryFY2013


FY2016 Net sales target

15,000 million yen

30,000 million yen


ComplementmutuallyProducts, markets,production bases,sales networks

FY2012 FY2016

Quarity

High-qualityprintingmarket

Generalprintingmarket

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