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Final Phase of “For Tomorrow 2015” & Concept for the Next Initiative
November 2015Asahi Kasei Corporation
1
1. FY 2014 financial results and FY 2015 forecast
2. Progress of “For Tomorrow 2015”1) Financial performance and primary metrics2) Review of “For Tomorrow 2015” 3) Overview by business sector toward
accomplishment of “For Tomorrow 2015”4) Acquisition of Polypore International, Inc.
3. Outline of the next strategic management initiative1) Basic concepts2) Realignment of business sectors
Contents
2
3
Disclaimer
The forecasts and estimates shown in this document are
dependent on a variety of assumptions and economic
conditions. Plans and figures depicting the future do not
imply a guarantee of actual outcomes.
1. FY 2014 financial results
and FY 2015 forecast
4
(¥ billion)
Net sales 1,897.8 966.9 1,019.5 1,986.4 957.4 1,042.6 2,000.0
Operating income 143.3 70.9 87.0 157.9 84.4 79.6 164.0
Ordinary income 142.9 74.2 92.4 166.5 81.4 80.1 161.5
Net income attributable to owners of the parent
101.3 49.5 56.1 105.7 47.2 43.8 91.0
FY 2014FY 2013
FY 2015 forecast1
H1 H2 Total H1H2
forecastTotal
Both net sales and operating income increased year-on-year in FY 2014, achieving the highest-ever figures for the second straight year
⇒ Aiming to reach new record highs in FY 2015for the third consecutive year
1 As of November 2015. Beginning with H1 2015, results of Polypore International, Inc. and its consolidated subsidiaries, acquired on August 26, 2015 (US Eastern time), etc. are included.
FY 2014 financial results and FY 2015 forecast (1)
5
(¥ billion)
FY 2013 FY 2014FY 2015(forecast)2
FY 2013 FY 2014FY 2015(forecast)2
Chemicals & Fibers 912.5 954.6 874.0 47.4 64.6 72.0
Homes & Construction Materials 589.4 603.8 637.0 68.5 63.0 66.5
Electronics3 145.0 150.4 182.0 14.2 14.3 9.0
Health Care 232.4 257.1 290.0 26.7 30.8 37.0
Others4 18.5 20.5 17.0 (13.6) (14.9) (20.5)
Consolidated 1,897.8 1,986.4 2,000.0 143.3 157.9 164.0
Operating incomeSales
1 Beginning with FY 2014, the former Chemicals segment and the former Fibers segment are combined as a new Chemicals & Fibers segment, the former Homes segment and the former Construction Materials segment are combined as a new Homes & Construction Materials segment, and the former Health Care segment and the former Critical Care segment are combined as a new Health Care segment.
2 As of November 2015. 3 Beginning with H1 2015, results of Polypore International, Inc. and its consolidated subsidiaries, acquired on August 26, 2015 (US
Eastern time), etc. are included.4 Includes corporate expenses and eliminations.
Financial performance by segment1
6
FY 2014 financial results and FY 2015 forecast (2)
2. Progress of “For Tomorrow 2015”1) Financial performance and primary metrics
2) Review of “For Tomorrow 2015”
3) Overview by business sector toward
accomplishment of “For Tomorrow 2015”
4) Acquisition of Polypore International, Inc.
7
Megatrends Group Mission and Values
Creating for Tomorrow – the Asahi Kasei Group is creating new things for the future based on the perspectives of “living in health and comfort” and “harmony with the natural environment.”
1. Business Strategy 2. Reformation of corporate systems
Promotion of “one AK” management
1. Global business expansion
2. Creation of new businesses
3. Propagation of our mission, values, and vision
4. Human resource policies
5. Management control, resource allocation
Pursuit of growth1. Expansion of world-leading
businesses2. Creation of new value for society
Promotion of businesses based on living in health and comfort and harmony with the natural environment
1) Environment & Energy2) Residential Living3) Health Care
Basic Strategy
Framework of basic strategy
Streamlining for improved profit structure8
790.9 794.2 912.5 954.6 874.0
498.1 537.7 589.4 603.8
637.0
146.1 131.1
145.0 150.4 182.0 119.5
185.6
232.4 257.1 290.0
0.0
500.0
1,000.0
1,500.0
2,000.0
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015
2,000.01,897.8
1,666.61,573.2
1,986.4 2,000.0(¥ billion)
Net sales under “For Tomorrow 2015”
forecastin November
2015
mid-terminitiativetarget9
Health Care
Electronics
Chemicals & Fibers
Homes & Construction Materials
47.627.0
47.464.6 72.0
48.2
58.2
68.5
63.066.5
6.42.8
14.214.3
19.0
8.823.2
39.7
44.4
51.9
-50
0
50
100
150
“Others” category and corporate expenses and eliminations
Amortization of goodwill, etc.1
Operating income under “For Tomorrow 2015”
1 Amortization of goodwill, etc. related to acquisition of ZOLL and Polypore is excluded from Health Care and Electronics respectively, and shown as “Amortization of goodwill, etc.”
(¥ billion)
FY 2013FY 2012FY 2011 FY 2015forecast
in November 2015
FY 2015mid-terminitiativetarget10
Health Care1
Electronics1
Chemicals & Fibers
Homes & Construction Materials
160.0157.9143.3
92.0104.3
164.0
FY 2014
Primary financial metrics
FY 2011 FY 2012 FY 2013 FY 2014FY 2015
(planned)1
Dividends per share ¥14 ¥14 ¥17 ¥19 ¥20
Payout ratio 35.1% 36.4% 23.5% 25.1% 30.2%
Net income per share (EPS) ¥39.89 ¥38.43 ¥72.48 ¥75.62
Net income per total assets (ROA) 3.9% 3.3% 5.5% 5.4%
Net income per shareholdersʹ equity (ROE)2 8.1% 7.1% 11.7% 10.6% 8.2%
ROIC2 6.9% 5.7% 7.7% 7.5% 6.4%
D/E ratio2 0.26 0.47 0.33 0.25 0.45
1 As of November 2015.2 Approximate figures for FY 2015.
11
Aiming at continuous dividends increase, with basic standard
for payout ratio of 30%
Investmentfor
expansionR&D
M&A and
alliances
Investment for growth and shareholder returns
Shareholder returnsInvestment for growth
Consistently generating cash flow
12
Investment for growth under “For Tomorrow 2015”
Existing businesses¥540 billion
Acquisition of Polypore
Approx. ¥260 billion FY 2015 budgetApprox. ¥110 billion
Non-linear growth ¥460 billion
FY 2011–FY 2013• Acquisition of Crystal IS• Acquisition of ZOLL• Construction of initial production
plant for UVC LEDs
Total approx. ¥200 billion
FY 2011• Capacity increase for S-SBR in Singapore• Capacity increase for acetonitrile in Korea• Capacity increase for insulation panels• Research complex for pharmaceuticals
FY 2012• Acquisition of sales rights for
overactive bladder therapeutic drug• Capacity increase for Bemberg• Overseas expansion of Hipore
FY 2013• Acquisition of full ownership
of Tenac JV in China• Capacity increase for
polycarbonate diol(new plant in China)
• Overseas expansion of Hipore
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015plan
FY 2014• Capacity increase for spunbond in
Thailand• Capacity increase for Roica in
Thailand• New plastic compound plant in US• New production facility for the active
ingredient of Recomodulin
13
Review of “For Tomorrow 2015”
Basic strategy of “For Tomorrow 2015” Outcome/Review
Pursuit of growth
1. Expansion of world-leading businesses
2. Creation of new value for society1) Environment & Energy2) Residential Living3) Health Care
3. Streamlining for improved profit structure
Acrylonitrile in Korea and Thailand, S-SBR in Singapore, Bemberg, Roica, spunbond in Thailand, Hipore in Korea, photosensitive dry film in China, etc.
1) Environment & Energy- Progress in UVC-LED- Acquisition of Polypore
2) Residential Living- Group-wide study centering on
“HH 2015” demonstration house- Development of innovative lifestyle proposals
corresponding to diversified residential needs3) Health Care
- Acquisition of ZOLL; entry into critical care
- Strengthening of petrochemical operations in Japan- Group-wide implementation of streamlining project
14
Position of FY 2015
Completing “For Tomorrow 2015” and preparingfor the next mid-term management initiative
Forging solid earnings base1) Maintenance/expansion of solid earnings 2) Completion of the streamlining project
Extension of businesses with growth prospects
Steps to create new businesses
15
Overview by business sector (1)Chemicals & FibersChemicals
Enhancement of profitability
Petrochemicals- Establishment of optimum production
configuration and enhancement of competitiveness
Performance polymers- Synthetic rubber
Overseas capacity increase in line with growth in demand
- Engineering plasticsCompounds to replace metal in vehicles
Performance chemicals- Focus on high value–added products such
as functional chemicals and additives
Consumables- Enhancement of profitability
FibersAdvancing global growth
Bemberg regenerated cellulose fiber- Application development as
one-of-a-kind product- Capacity increase
Roica elastic polyurethane filament- Global development of brand for high-
function/high-quality product- Expanding in hygienic applications- Strengthening Southeast Asian
operations
Nonwovens- Offering distinctive products for
wide range of applications- Capacity increase for spunbond in Thailand
Leona nylon 66 filament- Accelerating growth in airbags16
HomesContinuing enhancement of order-built homes and extending real estate and remodeling
Hebel Haus unit homes and Hebel Maisonapartment buildings- Pursuit of high-function/
high-durability homes for urban living
- Innovative lifestyle proposals- Apartment buildings for utilization of
property
Real estate and remodeling- Condominium business based on building
consensus- Leveraging existing Hebel Haus
customer base Enhancement of rental managementExpansion of remodeling
Construction MaterialsExtending insulation materials and foundation systems
Insurance materials- Capacity increase for Neoma high-
performance phenolic foam panels
Foundation systems- Expanding into civil engineering
works, railway stations, etc.,in addition to building construction
Autoclaved aerated concrete (AAC)- Enhancement of profitability
Overview by business sector (2)Homes & Construction Materials
17
UVC-LED- Quality improvement and cost reduction- Studying various applications
Water analysis, water sterilization, medical applications, food applications, etc.
Electronic devicesExtending into automotive and infrastructure applications from consumer electronics and smartphone-related markets
LSIs/compound semiconductors- Delivering value to customers through
solution-proposal approach
Electronic materialsAdvancing global growth and pursuing high added value
Hipore Lithium ion battery separator- Capacity increase- Promotion of high-end products- Overseas processing facilities
Photosensitive dry film (DF)for printed wiring boards- Market development in China
(production bases in Suzhou and Changshu)
- Continuing expansion
Photoproducts- Advancing strategy as Asian market leader,
setting the trend for printing plates
Overview by business sector (3)Electronics
18
February 2015 decision to acquire PolyporeFocusing on growth strategy in high-potential battery separator business
- R&D and production technologies- Marketing- Human resouces, corporate culture
Polypore International, Inc.
Applications- Mobile electronics- Power tools- Eco-friendly vehicles- Energy storage systems
Energy Storage Segment1
Sales: $450 millionOperating income: $87 million (segment income before corporate expenses)
Lithium-ion battery separatorSales: $127 million
Lead-acid battery separatorSales: $323 million
Applications- Automobiles, trucks, and buses- Forklifts- Backup power
Acquisition of Polypore
1 Polypore results for 2014. 19
Consumer electronics(compact storage batteries)
Portable devices Including laptop PCs, tablets, and audio players
Mobile communication devices Cellphones and smartphones
Appliances and tools(storage batteries)
Vacuum cleaners and other appliances Electric bicycles Lawnmowers and gardening tools
Automotive Storage batteries for eco-friendly vehicles Hybrid, plug-in hybrid, and electric vehicles
Energy storage systems
Grid management Backup power
Celgard’s Business Overview
Massive growth potential
Market overview
Notes
Manufacturer of separators for lithium-ion batteries, leveraging advanced technologiesHas strong footing in dry-process separatorsFocusing on eco-friendly vehicles with high growth potential Greater demand for hybrid and electric vehicles in
response to tighter emissions controls and fuel efficiency requirements
Increasing motorization, particularly in emerging countries20
Daramic’s Business Overview
Market environment
Notes
Has firm footing in lead-acid battery separator market Strong supply capability through broad product lineup and global operations
Million units
Global Vehicles in Use/Parc1994–2019 CAGR = 6%
Replacement demand accounts for 80%1 of automotive battery sales Ongoing battery replacement revenues
1 Polypore estimates as of February 2015.
0250500750
1,0001,2501,500
1994 1999 2004 2009 2014 2019
(source: BMI)
E
21
E
PharmaceuticalsExpansion of operation centering on new drugs
Teribone osteoporosis drug- Continuing expansion
Recomodulin recombinant thrombomodulin- Accelerating global clinical study
Advancing new drug development
Critical CareAdvancing global growth
LifeVest wearable defibrillator- Expansion in the US- Accelerating operations in Japan and
Europe
Expansion of acute critical care businesses
Continuing strong growthMedical devices
Strengthening constitution of dialysis-related business and extending bioprocess business
Blood purification (dialysis-related and apheresis products)- Enhancing competitiveness
Bioprocess- Accelerating global growth
0
50
100
150
Sales of ZOLL
FY 2012
Overview by business sector (4)Health Care
(billion ¥)
22
FY 2013 FY 2014 FY 2015forecast
(As of Nov. 2015)
3. Outline of the next strategicmanagement initiative1) Basic concepts
2) Realignment of business sectors
23
Creating new value for society Change in market needs leading to growth
Asahi Kasei- Broad scope of business
- Diverse technologyand human resources
Market- Value for society
- Business fields with growth potential
Pursuing diversified business
24
Ishin-05FY 2003–2005
Selective diversification
Creation ofcash flow
Growth Action – 2010FY 2006–2010
Business portfolio realignment for expansion and growth
Strategic investment(Shifting to growth)
For Tomorrow 2015FY 2011–2015
Expansion of world-leading businesses
Creation of new value for society
Pursuit of growth
Next strategic initiative
FY 2016–2018Pursuit of growth and
profitabilityCreation of new businesses
Growth through diversity
Basic concepts of the next initiative
25
Current Asahi Kasei Corp.
Asa
hi K
asei
E-m
ater
ials
Asa
hi K
asei
C
hem
ical
s
Asa
hi K
asei
Fib
ers
Asa
hi K
asei
Con
stru
ctio
n M
ater
ials
Asa
hi K
asei
Pha
rma
Asa
hi K
asei
Med
ical
ZOLL
Med
ical
Asa
hi K
asei
Hom
es
Asa
hi K
asei
Mic
rode
vice
s
Asahi Kasei Corp.Operating holding company
Operating function Holding company function
Material Homes Health Care
(From April 2016)
Transformation of business sector and corporate configuration (1)
26
Enhancing competitiveness through advancement/integration of “knowledge and technology” and “human resources” within the group, and further accelerating “challenge and creation” toward increased corporate value
Advancement/integration for- Accelerated growth- Enhanced ability to create
new businesses - Heightening specialization and
efficiency
Deploying management in 3 new business sectors with different assignments
Assignment by business sector
Material: Increaced profitability
Homes: Continuous stable growth
Health Care: High growth
Across the group: Enhanced ability
to create new businesses
Transformation of business sector and corporate configuration (2)
27
Toward growth through innovation
1. Growth of businesses Contribution to the world Creation of new value focusing on businesses with
high growth potential
2. Growth of human resources Further promoting “diversity” with respect for
employee individuality Providing a wealth of opportunities for growth,
experience, and self-development Encouraging trans-organizational interactions
3. Compliance and safety Compliance and safety as prerequisites for business
operation28
Creating for TomorrowThe commitment of the Asahi Kasei Group:
To do all that we can in every era to help the people of the world
make the most of life and attain fulfillment in living.
Since our founding, we have always been deeply committed to contributing to the development of society,
boldly anticipating the emergence of new needs.
This is what we mean by “Creating for Tomorrow.”
29
Reference
30
Chemicals
Health Care
Homes
Fibers
Electronics
Others
ConstructionMaterials
Sales: 2,000.0 Operating Income: 164.0
25.0
5.0
13.0
62.0
59.0
12.0
0.5
587.0
142.0
50.0
17.0
148.0
134.0740.0
(¥ billion)
FY 2015 sales and operating income forecast1by business category2
Chemicals & Fibers44%
Homes & Construction
Materials32%
Electronics 9%
Health Care & Critical Care
15%
Share of sales by segment3
182.0
Critical Care
9.0
31 Share of operating income by segment3
Homes & Construction
Materials36%
Electronics 5%
Health Care & Critical Care
20%
Chemicals & Fibers39%1 As of November 2015.
2 Corresponding to the former operating segments. Figures for operating income by business category include intrasegmenttransactions which are eliminated from the segment totals.
3 Pie charts exclude “Others” category and“corporate expenses and eliminations.”
History of business portfolio transformation, change in sales composition
Bembergregenerated cellulose
Viscose rayon fiber
Acrylic fiber
Nylon fiber Chemicals
Homes & Const. Mat.
Health CareElectronics
Expansion into synthetic fiber businesses
• Construction of petrochemical complex
• Start of housing business
• Start of LSI and photosensitive dry film businesses
• Formation of pharmaceuticals business unit and consolidation with Toyo Jozo Co., Ltd.
• Development of housing business
• Business portfolio restructuring
• Expansion of global businesses
Further growth by adapting to
changing needs of society
Fibers
Homes & Const. Mat.
Chemicals
32
Homes & Const. Mat.
1950 1965 1980
19952010
FY 2014 financial results and FY 2015 forecastby business category1
(¥ billion)
FY 2013 FY 2014FY 2015(Forecast)2
FY 2013 FY 2014FY 2015(Forecast)2
Chemicals 791.6 824.3 740.0 38.9 54.2 59.0
Fibers 120.9 130.3 134.0 8.6 10.5 13.0
Homes 534.4 551.8 587.0 63.0 59.2 62.0
Construction Materials 55.0 52.0 50.0 5.5 4.1 5.0
Electronics3 145.0 150.4 182.0 14.2 14.3 9.0
Health Care 152.5 146.5 148.0 30.3 26.7 25.0
Critical Care 79.8 110.6 142.0 (3.5) 4.1 12.0
Others4 18.5 20.5 17.0 (13.6) (15.2) (21.0)
Consolidated 1,897.8 1,986.4 2,000.0 143.3 157.9 164.0
Operating incomeSales
1 Corresponding to the former operating segments. Figures for operating income by business category include intrasegmenttransactions which are eliminated from the segment totals.
2 As of November 2015. 3 Beginning with H1 2015, results of Polypore International, Inc. and its consolidated subsidiaries, acquired on August 26, 2015
(US Eastern time), etc. are included. 4 Includes corporate expenses and eliminations.
33
34
Primary investments by business category1
(¥ billion)Depreciation and
FY 2013 FY 2014FY 2015
forecast3FY 2013 FY 2014
FY 2015
forecast3FY 2013 FY 2014
FY 2015
forecast3
Chemicals 30.8 31.9 33.0 31.1 28.8 15.2 15.2
Fibers 8.0 9.8 16.0 5.9 6.8 3.1 3.0
Homes 8.7 9.2 8.0 5.9 6.5 2.2 2.3
Construction Materials 6.4 1.7 1.0 2.2 3.0 0.9 0.8
Electronics 14.6 11.6 18.0 14.3 13.9 16.4 17.1
Health Care 9.5 6.5 6.0 10.0 8.9 19.7 21.4
Critical Care 8.7 10.1 15.0 10.0 11.2 6.2 8.3
Others 1.4 1.4 1.5 1.0 1.1 0.1 0.1 Corporate expenses, assets, and eliminations
4.5 6.9 7.5 5.7 5.9 7.5 7.3
Total 92.4 89.1 106.0 86.1 86.1 94.0 71.1 75.5 85.0
Amortization of goodwill 8.8 9.3
amortization2Capital expenditures R&D expenditures
1 Corresponding to the former operating segments.2 Amortization of goodwill is excluded and shown separately below the table.3 As of November 2015.4 Beginning with H1 2015, results of Polypore International, Inc. and its consolidated subsidiaries, acquired on August 26, 2015 (US
Eastern time), etc. are included.
4
Petrochemicals Performance polymers
Caustic soda Leona nylon 66 Membranes
Chlorine Tenac POM
Nitric acid Xyron mPPE
Ethylene ABS, SAN Duranate HDI-based polyisocyanate
Propylene Synthetic rubber & elastomer Polycarbonatediol (PCD)
Acrylonitrile Aluminum paste
Styrene SB latex
Cyclohexanol Functionaladditives
Ceolus microcrystalline cellulose
MMA Explosives Explosives
Polyethylene Metal cladding
Polystyrene Saran Wrap cling film
Packaging products
1 Based on results for FY 2014.
Specialty products
Microza MF/UF membranes
Ion-exchange membranes & systems
Share of sales1
Approx. 80% Approx. 20%
Performance chemicals
Consumables
Business portfolio of ChemicalsChemicals & Fibers
35
Main monomer products within Chemicals
Asahi Kasei Chemicals Main competitors
Main applications Asahi Kasei’s position/strengthsCapacity
(kt/y) Company Capacity(kt/y)
Share(%)
Acrylonitrile 960 Ineos 1,345 20 Acrylic fiber, ABS resin; captive use for ABS, adiponitrile
2nd largest producer in the world(150 kt/y plant in Kawasaki closed in Aug. 2014, 100 kt/y plant in Mizushima dedicated to another product)
Styrene 710(currently)
Sinopec Group
Styrolution
Shell
4,222
3,652
2,720
13
11
8
EPS, ABS, SB latex, unsaturated polyester, SBR; captive use for PS, ABS, SB latex, SBR
320 kt/y plant in Mizushima to close in Mar. 2016, business to focus on domestic market and captive use
390(after strengthening3)
Methyl methacrylate
170 Mitsubishi Rayon
1,554 37 MS, MBS, coating materials; captive use for PMMA
Proprietary, cost-competitive C4 process
Adipic acid 170 Invista
Rhodia
650
525
16
13
Polyurethane; captive use for nylon 66
Top-tier producer in Asia
Cyclohexanol 170 BASF
DSM
812
595
8
6
Adipic acid, caprolactam; captive use for adipic acid
Mainly for captive use
1 Asahi Kasei estimate. 2 Share of production capacity, Asahi Kasei estimate.3 Strengthening of petrochemical operations in Japan announced in February 2014.
As of May 27, 2015
1
Chemicals & Fibers
2
36
2010 2012 2013 2015
4
5
6
'09 '10 '11 '12 '13 '14 '15
Acrylonitrile
Global demand forecast (Asahi Kasei estimate)
Basic strategyStrengthening of position as No. 1 supplier in Asian market by establishing optimum production configuration in Asia and enhancing competitiveness
Major growth in Asia
750 kt200 kt in Thailand
245 kt in Korea
Asahi Kasei Group annual production capacity
Current status Future outlookTechnological strength
- No. 1 catalyst technology for propylene process and propane process
- Environmentally superior, efficient production process technology
Further enhancement of catalyst technology for propane process, etc.
Cost-competitiveness
Top level- Plant in Thailand, using
low-cost propane as feedstock
- Tongsuh Petrochemical in Korea (earnings from by-product)
Enhancement of cost-competitiveness including derivative products
Supply capacity No. 1 in Asia Establishment of optimum production configuration in Asia: Japan, Korea, and Thailand
Customer service
No. 1 in the Far East and ASEAN
(million tons)
965 kt total
1,210 kt total
960 kt total
FY
Plant at Tongsuh Petrochemical, AN subsidiary in Korea
Chemicals & Fibers
37
Synthetic rubber: S-SBR
0
50
100
150
200
250
300
2010 2013 2015 20200.0
0.5
1.0
1.5
2010 2015 2020
(million tons)Global demand forecast for S-SBR for fuel-efficient tires
(Asahi Kasei estimate)
In-house production by tire manufacturers
Open market
1 SBR is mainly used for tire tread. S-SBR is the optimum material to enable high fuel efficiency to be achieved while maintaining high grip performance.
Top share in Asian market for solution-polymerized SBR (S-SBR)1 for fuel-efficient tires
Continuous-polymerization process to provide S-SBR with well-balanced fuel efficiency and grip performance
Growing demand for fuel-efficient tires with more stringent environmental standards, especially in developed countries
Capacity expansion mainly overseas, in line with demand growth; new plant in Singapore—50 kt/y in 2013 and 50 kt/y expansion in 2015
Asahi Kasei production capacity for S-SBR for
fuel-efficient tires
Tread
Additional capacity(overseas)
Phase 2Singapore plantPhase 1Singapore plant
Domestic capacity
(thousand tons)
38
Chemicals & Fibers
Global promotion of growth strategy; reinforcement of auto-related businesses- Enhancement of global operations for production (compounding), sales, and technical service (e.g. Construction of second plant for plastic compounds in the US, establishment of sales
subsidiary in Mexico)- Sales expansion for competitive grades of Leona, Tenac, and Xyron for automotive applications
Engineering plasticsChemicals & Fibers
Strategy by product1. Leona nylon 66
Strengthening of businessstructure and enhancement of product and application development
2. Tenac POMProduction and sales expansion of low-VOC products in both Mizushima, Japan, and Zhangjiagang, China.
3. Xyron mPPEDevelopment in OA, PV, automotive, and new applications
4. Stylac ABS, ASCompletion of structuralimprovement
5. PP compoundSales expansion leveraginglaunch of 2nd plant in US andsales subsidiary in Mexico
6. Sunvieo TPV (Thermoplastic vulcanizate)
Accelerating sales activities
Operating sites
Development of global operations2013: Acquisition of full ownership of Tenac JV in Zhangjiagang, China
Jun. 2015: Establishment of sales subsidiary in Mexico
Jan. 2016: Start of operation of second conpound plant in the US (scheduled)
2016 onward: Capacity increase (new plant and/or expansion under study)
Resin plantCompound plantContracted compound plantTechnical service, R&DSales office
Belgium
SuzhouGuangzhou
Hong Kong
Thailand Shanghai
Zhangjiagang
2nd plant in US
Mexico
US
Singapore: XyronJapanKawasaki: SAN Mizushima: Tenac, ABS resinsNobeoka: Leona
39
Business field Product Position
Membranes Microza UF and MF membranes Top-tier world share: No.1 share in the US municipal water treatment market
Aciplex ion-exchange membranes No. 1 world share
Membrane-process electrolysis plants
No. 1 world share (cumulative installed basis)
Performance chemicals
Duranate HDI-based polyisocyanate No. 1 domestic share
Polycarbonatediol (PCD) No. 1 domestic share
PVDC latex, Polydurex silicone-modified acrylic latex
PVDC latex, No. 2 world share: 20%
Acetonitrile No. 1 domestic share
Functional additives Ceolus microcrystalline cellulose No. 1 domestic share
Specialty products in ChemicalsChemicals & Fibers
40
Bemberg regenerated cellulose• Only producer in the world• Global development for wide range of applications such as
linings, functional innerwear, and ethnic garments• Capacity expansion in Nobeoka; start-up in June 2014,
capacity increase by 10%
Roica high-function spandex• Global development of high-function and high-quality brand;
production plants in Japan, Taiwan, China, Thailand, and Germany
Functional nonwovens produced with proprietary technology• Offering distinctive nonwovens made of different materials and by different
production processes for wide range of applications• Capacity expansion for spunbond in Thailand to meet growing
demand in hygienic applications; start-up of additional 20 kt/y line in November 2015, with total capacity doubling to 40 kt/y
Leona nylon 66 filament with superior strength and thermal resistance
• Sales expansion in automotive airbag application in addition to tire cord application
Main products in FibersChemicals & Fibers
41
0
200
400
600
2005 2010 2011 2012 2013 2014 2015
Financial performance and actions in Homes
Unit-homes & apartment buildings• Extension of superiority in three-
story homes and two-generation homes
• Establishment of No.1 position in innovative lifestyle proposals
• Community-specific proposals• Greater product variation• Distinctive products suited to urban
needs
(¥ billion)
Remodeling and other operations• Enhanced product proposal
capability; i.e. remodeling for energy conservation
• Renovation
Operating income¥28.2 B
Sales growth trendIncreased operating income through cost reductions in home construction
businesses and expansion of housing-related operations
Remodeling, etc.
Real estate-related
Unit homes andapartment buildings
FY
Homes & Construction Materials
42
Real estate-related operations• Maximum utilization of land value
with operations focused on obtaining accord, etc.
Operating income¥36.5 B
Operating income¥54.3 B
Operating income¥59.2 B
Operating income¥46.3 B
Operating income¥63.0 B
forecastIn November
2015
Operating income¥62.0 B
“Long Life Home” strategy Hebel Haus high-end urban homes Exceptional resistance to earthquake and fire Substantial after-sale service (60-year inspection system)
Development of unique concept homes • A pioneer of three-story and two-generation homes• Market launch of two-generation homes with innovative features;
adapting to various family compositions and newer lifestyles Strategic marketing
• Development of urban markets from Kanto westward• Focus on rebuilding demand
More than 7 million houses in 3 major areas in Japan are non-compliantwith current earthquake resistance standards
• Promotion with Hebel Haus “street-corner showrooms” Services for the 300,000 units sold to date
• Steady increase in orders at remodeling business• Increased units under rent guarantee at real-estate business
Homes & Construction Materials
43
Sales1 and order trends in HomesHomes & Construction Materials
1 Product categories are revised from FY 2012. A portion of sales previously included in pre-built homes is now included in order-built homes, etc. Otherwise, sales in the previous pre-built homes category are now included in real estate.
2 As of November 2015.
(¥ billion, % indicates year‐on‐year comparison)
44
Othersales
Orderbacklog
FY11 189.4 (+4.2%) 145.9 (+16.3%) 1.5 40.6 (+8.3%) 200.0 (+15.2%) 403.0
182.5 (+5.6%) 193.7 (+9.7%) (+14.2%) 252.0 (+6.9%) 391.8
annual 371.9 (+4.9%) 339.6 (+12.4%) (+11.8%) 452.0 (+10.4%)
Pre‐builthomes
Rentalhousing
Other Total
FY12 207.5 (+9.5%) 4.4 23.3 1.1 28.8 1.2 213.0 (+6.5%) 441.5
204.9 (+12.3%) 16.2 24.5 1.1 41.9 0.7 273.1 (+8.4%) 444.6
annual 412.4 (+10.9%) 20.6 47.8 2.2 70.6 1.9 486.2 (+7.6%)
FY13 251.9 (+21.4%) 181.0 (+12.1%) 4.5 26.2 1.4 32.1 0.8 238.4 (+11.9%) 519.9
169.4 (‐17.3%) 213.1 (+3.5%) 24.8 27.9 1.1 53.7 1.1 296.0 (+8.4%) 481.5
annual 421.3 (+2.2%) 394.1 (+7.3%) 29.3 54.1 2.5 85.8 1.9 534.4 (+9.9%)
FY14 217.6 (‐13.6%) 187.9 (+3.9%) 9.8 29.3 1.4 40.6 1.1 256.0 (+7.4%) 516.3
208.0 (+22.8%) 216.2 (+1.5%) 18.0 31.8 1.6 51.4 0.9 295.8 (‐0.1%) 514.5
annual 425.7 (+1.0%) 404.2 (+2.6%) 27.8 61.1 3.1 92.0 2.0 551.8 (+3.3%)
FY15 217.3 (‐0.2%) 183.8 (‐2.2%) 10.4 33.5 1.7 45.6 0.9 258.0 (+0.8%) 554.6
218.4 (+5.0%) 230.2 (+6.5%) 29.1 39.0 1.3 69.4 1.1 329.0 (+11.2%) 547.2
annual forecast2 435.7 (+2.4%) 414.0 (+2.4%) 39.5 72.5 3.0 115.0 2.0 587.0 (+6.4%)
21.6
24.7
(‐14.7%)
46.3
11.8
11.9
205.9
Sales of real estate
(+26.5%)
(‐35.7%)
Sales of order‐builthomes, etc.
367.3
23.7
Consolidated
Value of new ordersduring the term
Sales of order‐builthomes
Sales of pre ‐built homes
Orderbacklog
46.5
88.7
Sales ofremodeling
Othersales
Value of new ordersduring the term
Consolidatedsubsidiaries
Consolidated
161.4
53.6
27.3
24.5
28.1
52.6
H2
H2
H1
H1 26.3 H2
H1 27.8
H2
forecast228.2
56.0
H1
H2
H1
Hebel autoclaved aerated concrete (AAC)- No. 1 share in Japan- Lightweight and highly durable with outstandingflame-resistance and thermal insulation
Neoma and Jupii insulation panels - Long-lasting, world-leading insulation performance - Eco-friendly material with no CFCs used during production
- High flame resistance; carbonizes without spreading flame- Capacity expansion; start-up in March 2014
Eazet and ATT Column- Eco-friendly piling systems installed with minimal noise,
vibration, and soil for disposal- Widely adopted in construction and civil engineering works,
with high reliability and adoptability to construction sites
Hebel
Neoma foam
Eazet
Main products in Construction MaterialsHomes & Construction Materials
45
Business field Product PositionElectronic devices
Mixed-signal LSIs World’s No. 1 share in 3-axis electronic compasses
Hall elements (magnetic sensors) World’s No. 1 share: 70%Electronic materials Hipore Li-ion rechargeable battery
separator World’s No. 1 share
Photosensitive dry film World top-3 share: 30%
Glass fabric World’s No. 1 share in ultra-thin glass fabric
Pimel semiconductor buffer coats World top-3 share in photosensitive products
Photomask pellicles World top-3 share, and world’s No. 1 share for LCD panels
APR photosensitive resin, AFP photosensitive plates, printing plate making systems
World’s No. 2 share in photosensitive resin
Electronic products Electronics
46
Electronic materials (1) Hipore lithium-ion battery separator
Electronics
47
Basic strategy● Proactive expansion in line with market
growth• Expansion in mobile applications• Capturing demand in automotive
applications
Mobile applications
Further growth in separator market through proactive launch of new products and expansion of production capacity
Automotive applications
Growth in rapid-growing automotive applications, utilizing technical strength and customer service capability established in mobile applications
Technological development• Development of high-function membranes suited to
various customer needs• Utilizing technology to produce lower cost separator
ProductionMoriyama: production of high-function membranes, “mother factory” for production technology innovationHyuga: capacity expansion as high-volume production site Overseas: reinforcement of processing functions in Korea and China
Marketing1. Mobile applications
• Reinforcement of local sales functions in key markets2. Automotive applications
• Proactive establishment of supply to LIB producers for automotive applications
Global demand forecast for LIB separator (Asahi Kasei estimate)
Fiscal year0
100
200
300
400
500
600
'13 '14 '15 '16 '17
Mobile Applications10% Annual Growth
Mobile applicationsAutomotive applications
Growing market in
automotive applications
(million m2)
Sunfort photosensitive dry film for printed wiring boards• World top-3 share of 30%, domestic share above 50% • Production bases are the world’s largest plant in Suzhou,
China, plant in Fuji, Japan, and new plant in Changshu, China, started up in Oct. 2013; total capacity exceeding400 million m2/y
• Establishment of technology center in Suzhou in March 2012 to meet various needs of Chinese customers
Expansion of ultra-thin glass fabric businessPimel semiconductor buffer coats
• World top-3 share in photosensitive type• Increasing share with new gradesPhotomask pellicles for LSIs and LCDs
• Full lineup of pellicles compatible with all exposure sources from g-line to ArF
• World top-3 share, and world’s No. 1 supplier for large LCDs
• Provision of pellicles for 10G LCD panels
Electronic materials (2)
Pellicles
Photosensitive dry film
Electronics
48
Audio and voice solutions• Automotive AVN, premium audio systems,
portable audio devices, etc.
Sensing solutions• World’s No. 1 share in electronic compass
Widely adopted in smartphones, tablet PCs,and other portable terminals
• World’s No. 1 share in Hall elements (magneticsensors)
• Unique solutions, such as human sensors, gas sensors, and coreless electric-current sensors
Strengthening of overseas marketing bases• North America, China, Korea, Taiwan, and Europe
Plant in Nobeoka
ElectronicsElectronic devices (1) Analog/digital mixed-signal LSIs
49
Electronic devices (2)
2005 2010 2015
Infraredsensor
Ultra-compact and high-speed responseApplications- Non-contact
temperature measurement
- Detection of human body
- Gas sensors
“For Tomorrow 2015” initial image of sales path (as of 2011)
Accelerating overseas developmentPursuing high quality
Pursuing high profitability and firm presence in specific areas, though small scale in semiconductor industry
Coreless electric-current
sensor
Geographic breakdown
Breakdown by application
Infrared sensors, coreless electric-current
sensors, magnetic sensors for automobile,
etc.
Strengths of our electronic device business Weaknesses Opportunities
• Analog signal processing • Strong record in magnetic sensors• Compound semiconductor
technology
• Mainly limited to consumer electronics
• Inadequate development of overseas business
Large undeveloped
market
JapanChina & Taiwan
Europe & US
Japan
Europe & US
China &Taiwan
Mobile electronicsOther
consumer electronics
Industrial/infrastructure
Automotive
Magnetic sensors
LSIs
Power management
LSIs
Electronic compass
(among LSIs)
Creation and addition of new businesses
Creation of new businesses
FY FY FY
Electronics
50 Geographic breakdown
Breakdown by application
Sales (¥ billion)
Generic name Mechanism/substance class
Indication Formulation FY12 FY13 FY14 FY15forecast1
Teribone Teriparatide acetate
Synthetic human parathyroid hormone (PTH)
Osteoporosis with high risk of fracture
Injection 17.0 26.9 25.4 27.4
Recomodulin Recombinant thrombomodulinalpha
Anticoagulant Disseminated intravascular coagulation
Injection 9.4 12.6 11.7 12.9
Flivas Naftopidil Selective α-1 blocker Benign prostatic hypertrophy
Tablet 14.2 14.2 13.2 9.3
Elcitonin Elcatonin Eel calcitonin derivative
Osteoporosis pain Injection 10.0 7.9 6.1 5.3
Bredinin Mizoribine Immunosuppressant Rheumatoid arthritis, kidney transplantation, nephroticsyndrome, lupus nephritis
Tablet 6.0 6.3 5.6 5.3
Main products
Pharmaceuticals (1)Health Care
51
1 As of November 2015.
Pharmaceuticals (2)Health Care
Product pipelineDevelopment stage
Code name, form, generic name Remarks Classifications Indication Origin
ApprovedXIAFLEXAK-160, injection
New biologicCollagenase clostridium histolyticum
Dupuytren’scontracture Licensed
Pending approval
AK156, injection, zoledronic acid
New efficacy, new dose; once-yearly administration
Bisphosphonate Osteoporosis Licensed
Phase II HC-58, injection, elcatonin Additional indication Calcitonin Shoulder hand
syndrome In-house
Phase III(overseas)
ART-123, injection, recombinant thrombomodulinalpha
New biologic Recombinant human thrombomodulin
Severe sepsis with coagulopathy
In-house
HE-69, mizoribine Additional indication ImmunosuppressantLupus nephritis, nephroticsyndrome
In-house
Phase II (overseas) AK106 New chemical entity Anti-inflammatory Rheumatoid
arthritis In-house
52
Hemodialysis-related products- Leading position in hemodialysis-related products market in Japan
No. 1 share in dialyzers: approx. 40%1
- Business alliance with JMS Co., Ltd. Advancing and developing the field of hemodiafiltration (HDF) leveraging respective strengths
- Accelerated overseas development to meet needs in different countries and different regions
Development of alliance strategy leveraging competitiveness of dialyzer - Strengthening of strategic alliance with NxStage Medical, Inc.Expansion of treatment options with advancement of therapeutic
apheresis2
- Leukocytapheresis (LCAP) indicated for ulcerative colitis, etc.- Cell-free and concentrated ascites reinfusion therapy (CART)3
Medical devices (1) Hemodialysis and therapeutic apheresis
Health Care
531 Asahi Kasei estimate.2 A therapy to remove pathogenic substances from blood through extra-corporeal circulation.3 Availability of ascites filters and ascites concentration columns for CART is currently limited to Japan.
Planova virus removal filters- World’s No. 1 share; contributing to improved viral safety and productivity in manufacturing processes for biopharmaceuticals and plasma derivatives
Expansion of global demand for bioprocess products- Medium-term to long-term market growth for biopharmaceuticals and plasma derivatives ≥10% per year
- Tightening regulations for virus removal, proliferation ofbiosimilar products
- Growth in emerging markets (China, India, South America)
Proactive development of business responding to increasing demand
- Reinforced development of markets in China and other Asian countries inaddition to main markets of Europe and US
- New spinning plant for Planova BioEX; start-up in August 2016
Medical devices (2) Planova / Bioprocess operations
Health Care
54
Entry into critical care business through acquisition of ZOLL Medical Corporation of the US in April 2012
- Establishment: 1980- Head office: Massachusetts, US- A specialized manufacturer of medical devices for acute critical care, with
resuscitation technology as core technology- No. 1 share in the world in defibrillators
ZOLL Medical Corporation
Critical Care (1)Health Care
AEDautomated external defibrillators
LifeVestwearablecardioverterdefibrillator
Defibrillators for hospitals and EMS
RescueNetdata management suite for fire and EMS
AutoPulsenon-invasive cardiac support pump
Thermogardtemperature management systems
Unique, innovative medical device
Only player in intravascularcooling
No. 1 sharein the US
No. 1 share in the world
Main products
55
• The only product of its kind to receive regulatory approval- Wearable external defibrillator for patients at risk of sudden cardiac arrest
(average usage duration 2 months)- Features a noninvasive configuration (removable)
• Superior service-based business model in US: ZOLL rents the device to patients and provides them with healthcare services (including explanations on use). ZOLL receives reimbursement from health insurance providers.
• In the US alone, there are over 300,000 cardiac patients per year. Their need for cardiac arrest protection during high-risk periods leaves ample room for extending the LifeVest sales growth trend over the long term.
• Sales in Germany and other European countries are growing; has been used by over 100,000 patients worldwide.
• Start of service offering the device in Japan in April 2014.
Health Care
56
Critical Care (2) LifeVest growth potential
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