new 3-year plan (2005-2007)zeon 3-year mid-term management plan pz-3 conceptpz-3pz-3 secure a...
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New 3-Year Plan(2005-2007)
May 19, 2005
President and CEO: Naozumi Furukawa
ZEON 3-Year Mid-term Management Plan
AgendaAgenda
PZ-3 ConceptIndustrial Forecast for 2010Market Size for Target IndustriesPZ-3 Basic Policy PZ-3 Target ResultsBasic Strategies by SegmentBasic Strategies by FunctionPZ-3 Conclusion
Summary of PZ-2 (Plan 2003-2005)
PZ-3(New 3-Year Plan)
Table of Contents 1
ZEON 3-Year Mid-term Management Plan
Summary of PZ-2
Summary PZ-2 2
ZEON 3-Year Mid-term Management Plan
PZPZ--2 Performance Summary2 Performance Summary
Consolidated Results for Target ProfitsPZ-2 forFY2003
FY 2003Results
PZ-2 forFY 2004
FY 2004Results
PZ-2 for FY 2005
ZVA -3 B 2.3 B 0 B 500 M 3 B
Net Sales 215 B 213.3 B 17.6 B 231.4 B More than 23 B
Operating Income 14.5 B 17.9 B 19 B 19.3 B More than 26 B
Interest-bearing Debt 60.5 B 56.3 B 53.6 B 60.0 B or less
D/E Ratio 0.80 0.79 0.70 0.70 or less
3PZ-2の総括
ZEON 3-Year Mid-term Management Plan
Growth in Consolidated IncomeGrowth in Consolidated Income
250,000
200,000
150,000
100,000
0
50,000
25,000
20,000
15,000
10,000
5,000
(Unit: million)
FY 01Results
FY 02 Results
PZ-2 Plan for FY 04
FY 04 Results
Net Sales
Ordinary incom
eO
perating Income
FY 03Results
0PZ-3Plan for FY 05
FY 00Results
Increase in ordinary profits achieved for 5 fiscal years in a row
PZ-2 Summary 4
ZEON 3-Year Mid-term Management Plan
103
193
179
129
260
0
50
100
150
200
250
300
Operating Income(¥100 million)
FY 01Results
FY 02Results
FY 04Results
FY 03Results
FY 05Target
(億円)
2,1331,912
2,314 2,3002,109
0
500
1,000
1,500
2,000
2,500
FY 01Results
FY 02Results
FY 04Results
FY 03Results
FY 05Target
Achieved 1 year earlier
687
600536
563
934
0.700.700.79
1.05
1 .43
0
100
200
300
400
500
600
700
800
900
1,000
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2有利子負債 D/Eレシオ
Balance of Interest-bearing Debt, D/E Ratio
FY 01Results
FY 02Results
FY 04Results
FY 03Results
FY 05Target
(%)
-76
-23
5
30
-49
-100
-80
-60
-40
-20
0
20
40
ZVA
FY 01Results
FY 02Results
FY 04Results
FY 03Results
FY 05Target
Changes in Profit Index (Consolidated)Changes in Profit Index (Consolidated)
PZ-2 Summary
Net Sales
5
(¥100 million)
(¥100 million)(¥100 million)
D/E ratio
Achieved 1 year earlier
Interest-bearing debt
ZEON 3-Year Mid-term Management Plan
Progress by Segment (Consolidated)Progress by Segment (Consolidated)
Specialty Materials
Net Sales Others
Operating Income
For the Specialty Materials Business, results were mostly in line with the PZ-2 plan, however, because results for the Elastomer Business exceeded PZ-2, the ratio of the Specialty Materials Business in operating income did not overtake Elastomers.
0
500
1,000
1,500
2,000
2,500
Others
Elastomers
(¥100 million)
FY 02 Results
FY 03 Results
FY 04 Results
FY 03 PZ-2
FY 04 PZ-2
2,109 2,150 2,133 2,1762,314
0
50
100
150
200
Elastomers
Specialty Materials
FY 02 Results
FY 03 Results
FY 04 Results
FY 03 PZ-2
FY 04 PZ-2
(¥100 million)
129145
179190 193
6PZ-2 Summary
New 3-year Plan (2005-2007)
7
ZEON 3-Year Mid-term Management Plan
PZPZ--3 3 ConceptConceptPZ-3PZ-3
Secure a foothold for the future
Reinforce corporate conditions
2003-2005
PZ-2PZ-2
•Decrease in interest-bearingdebt
•Lowering of D/E ratio
Realize dramatic progressImprove corporate value
2005-2007
・Aggressive investment・Renovation of production・Emphasis on CSR
CSR:Company Social Responsibility
・Reinforcement of R&D
With an eye on the business environment in 2010, PZ-3 lays down the targets for 2007, the midway point.
8PZ-3
ZEON 3-Year Mid-term Management Plan
1050
100
-5
1
Growth Rate(%)
Growth Rate:2%Market Size: ¥10 trillion
Market SizeLog (¥ trillion)
Metal productsAgriculture, forestry, and fisheries
Mining
Food
Textiles
Construction
Industrial electricmachinery
Ceramics and cement
Petroleum, coal
Water worksand waste disposal
Other transportation
Pulp, paper
Precision machinery
Others Non-ferrous metal
Transportation
Real Estate
Iron and steel
ChemicalsOther manufacturing Automobiles
Services forIndividuals
Wholesale and Retail Public servicesElectronic and
Telecommunication Devices
Communications
Household electric machinery
Services for offices
Finance and Insurance
General machinery
Electrical appliances, gas, heat
●
● ●
●10
Industrial Forecast for 2010Industrial Forecast for 2010
Source: Industrial Forecast for 2010, Japan Center for Economic Research
Market Size for Each Industry and Growth RateTarget Industry
●
PZ-3 9
ZEON 3-Year Mid-term Management Plan
PZPZ--3 3 Basic PolicyBasic Policy
Renewing awareness of CSR and striving to establish a company that is trusted by society and a source of pride for employees through “Speed,” “Communication,” and “Contributions to Society.”
Management strategy is consistent with R&D Strategy;
Create new businesses with world-leading technologies that are original and beyond comparison;
Continue to grow and expand businesses.
PZ-3 10
ZEON 3-Year Mid-term Management Plan
PZPZ--3 3 Target Results (Consolidated)Target Results (Consolidated)
FY 2004Results
FY 2005PZ-3 Plan
FY 2007PZ-3 Plan
Net Sales ¥231.4 B ¥241.5 B ¥270 BOperating
Income ¥19.3 B ¥23.0 B ¥33 BComponent ratio of
Specialty Materials in operating income
45% 49% 55%
ROE 10.5% 13% 16%
0.490.640.70D/E ratio
¥4.8 B¥2 B¥0.5 BZVA
Reference Index below
(Preconditions)1. Exchange rate:¥100/USD; ¥135/EUR 2. Naphtha: ¥35,000/kl
PZ-311
ZEON 3-Year Mid-term Management Plan
PZPZ--3 3 Target ResultsTarget Results((ConsolidatedConsolidated))Net Sales Operating Income(¥100 million)
0
500
1,000
1,500
2,000
2,500
300(¥100 million)
Other
Elastomers
Specialty Materials
FY 04 Results
FY 05PZ-3
FY 07 PZ-3
2,3142,415
2,700
0
50
100
150
200
250
300
350 Other
Elastomers
Specialty Materials
FY 04 Results
FY 05PZ-3
FY 07PZ-3
193
230
330
PZ-3 12
ZEON 3-Year Mid-term Management Plan
Elastomer BusinessElastomer Business
C4 Fraction →GPBC5 Fraction →GPI
TiresAutomobile parts
Gloves
World-leading Extraction Technology
Traffic paint
PZ-3 Basic strategy by segment 13
ZEON 3-Year Mid-term Management Plan
Basic StrategyBasic Strategy
Optimizing a Global Supply System
World-leading Quality World-leading Cost Competitiveness
Securing Stable Profit
PZ-3 Elastomer Business 14
ZEON 3-Year Mid-term Management Plan
Key Measures for Achieving Key Measures for Achieving PZPZ--33Renovation of
Production
Production at optimum locations
Specialization
World-leading quality
World-leading cost
Optimizing a global supply system
Thorough stabilization of processes
Pursuit of 100% of yield
Global optimizationStreamlining in brand and
name packaging
Developing new uses to generate high-added value
Streamlining and conversion of production facilities
PZ-3 Elastomer Business 15
ZEON 3-Year Mid-term Management Plan
PZPZ--33::Elastomer BusinessElastomer Business
Target Results for FY 2007 Net Sales ¥147.7 B Operating Income: ¥12.1 B
Net Sales Operating Income(¥100 million)
FY 02Results
FY 05 PZ-3
FY 07 PZ-3
FY 03Results
FY 04 Results
1,238 1,2611,384 1,426 1,477
0
200
400
600
800
1000
1,200
1,400
1,600(¥100 million)
FY 02Results
FY 05PZ-3
FY 07PZ-3
FY 03Results
FY 04Results
102
121
108
94
73
0
20
40
60
80
100
120
140
16PZ-3 Elastomer Business
ZEON 3-Year Mid-term Management Plan
Specialty Materials BusinessSpecialty Materials Business
DVD playersMobile phones
Digital camerasLCD
televisions
Disks
ZEONORFILM®
Prisms and lenses
Light diffusion panels
Light guide plates
Laser beam printers Perfumes
Chemicals for semiconductor manufacturing Lenses
PZ-3 Basic Strategy by Segment 17
ZEON 3-Year Mid-term Management Plan
Basic StrategyBasic Strategy
Strengthen precision processing technology that makes the most of ZEON’s
own materials
Strengthen technology platforms based on original, world-leading technology
Dramatic expansion of business
User-oriented Marketing
PZ-3 Specialty Materials Business 18
ZEON 3-Year Mid-term Management Plan
Key Measures for Achieving Key Measures for Achieving PZPZ--33
Customer-oriented
De facto standard Continuous releaseof new products
Striving for 5 targeted fields
Establishing a supply system for “only one” product
Priority investments in production facilities
Strengthening technology platforms
Priority on placement of research personnel
Sharing the development road map
Proposal-type sales and development
PZ-3 Specialty Materials Business 19
ZEON 3-Year Mid-term Management Plan
PZPZ--33::Specialty Materials BusinessSpecialty Materials BusinessNet Sales Operating Income
86
45
75
112
181
0
50
100
150
200
FY 02 Results
FY 05 PZ-3
FY 07 PZ-3
FY 03 Results
FY 04 Results
Target Results for FY 2007 Net Sales: ¥64.1 B Operating Income: ¥18.1 B
313
641
255
369451
0
100
200
300
400
500
600
700
FY 02 Results
FY 05 PZ-3
FY 07 PZ-3
FY 03 Results
FY 04 Results
(¥100 million) (¥100 million)
PZ-3 Specialty Materials Business 20
ZEON 3-Year Mid-term Management Plan
Basic Strategy by FunctionBasic Strategy by Function
R&D Strategy
Production Strategy
Investment Strategy
Financial Strategy
CSR Strategy
CSR:Company Social responsibility
PZ-3 21
ZEON 3-Year Mid-term Management Plan
Monthly “President’s Hearing”
1. Integrating management strategy with R&D strategy
3.Strategic strengthening of technology platforms
① Experiment on request type Use of a “triangle network”② Road map type Close relationship with users③ Solution Proposal type
Creating markets with original technology
Round the clock development Industry-Government-AcademicCooperation
Creating more business with “Hit SBU”
2.Increasing R&D speed and improving success rate
Use of simulation
Continuous release of
new products
Contributions to society
Speed
Com
munication
3 Patterns of R&D Themes
R&D StrategyR&D Strategy
22PZ-3 Basic Strategy by Function
ZEON 3-Year Mid-term Management Plan
Shift in R&D ExpensesShift in R&D Expenses
Increase in R&D expenses due to priority distributions to Specialty Materials Business
4,000
5,000
6,000
7,000
8,000
9,000
10,000
FY 2000 FY 2001 FY 2002 FY 2003 FY 2005PZ-3
(¥ Million)
FY 2004
23PZ-3 R&D Strategy
ZEON 3-Year Mid-term Management Plan
Production StrategyProduction Strategy
◆ Pursuit of thorough stabilization of processes◆ Investment in facilities that are error-free and where
mistakes do not result in injury◆ Measures to stimulate plants◆ Moving forward with unification and streamline of brand
name packaging
Aiming to Realize Advanced Control
All out effort of the Group for cost reduction
Target amounts:Totals for 2005-2007: ¥12 B
Society’s TrustC
o-existence with
the Com
munity
Thorough pursuit of safe, stable production by renovation of production
24PZ-3 Basic Strategy by Function
ZEON 3-Year Mid-term Management Plan
Investment StrategyInvestment Strategy
126
166
216
0
50
100
150
200
250
① Expansion of repair expenses and investment for environmental safety② Investment for safety and stabilization of processes③ Investment for realizing advanced control (automation, FP)
Investment for strengthening capabilities of work sites
Total Investment
¥65 billion
in 3 years
FY 2003Results
FY 2004Results
PZ-3Average
(¥ 100 million) Shift in capital investment
PZ-3 Basic Strategy by Function 25
5 fields
① Displays (flat-panel displays) ② Computers (semi-conductors)③ Recording (storage including DVDs)④ Communications(optical fiber, insulation materials)⑤ Energy (materials for batteries)
With an eye on 2010, strategic investment for new businesses
ZEON 3-Year Mid-term Management Plan
Financial StrategyFinancial StrategyEstablishing firm financial conditions aimed at stable expansion of corporate value
Continuing a stable dividend policy for shareholders
(2005-2007)
Operating cash flow
Over ¥80 billion
Current income
Depreciation expenses
Increase/decrease
In working capital
¥40 B
¥42 B
-¥2 B
Investment
Over ¥65 billion
Dividends
◆Dividend policy
Purchase of Treasury stock
Strategic investment Undertaking swift steps for M&A and other activities
◆Strategic Investment
◆InvestmentAggressively carrying out strategic investment for expanding new businesses with an eye on 2010.
26PZ-3 Basic Strategy by Function
ZEON 3-Year Mid-term Management Plan
CSR StrategyCSR Strategy
A company that is trusted by society with employees proud to work for ZEON
Strengthening the
compliance systemRealizing safe plants Co-existence with local
communities
・Implementation of compliance education・Preparing for a risk prevention system
・Reacquisition of voluntary safety certification・Investing in environmental and safety measures・Raising awareness at plants
・Associating with local communities・ Messages in local newspapers,
advertising inserts
A company is a public institution for society
27PZ-3 Basic Strategy by Function
ZEON 3-Year Mid-term Management Plan
PZPZ--3 3 ConclusionConclusion
Further strengthening Further strengthening ““Proud ZeonProud Zeon””
Maintaining continuous increases in income and profits
Business Mission
Elastomer Business
Specialty Materials Business
Securing stable profits
Dramatic expansion of business
Marketing StrategySelective priority allotment of management resources
R&
D Strategy
Production Strategy
Renovation of
production
Creating technology
PZ-3(PProudroud Zeon-3)
Improving Corporate Value
28PZ-3 Conclusion
ZEON 3-Year Mid-term Management Plan
Speed
Communication
Contributing to society
29
ZEON 3-Year Mid-term Management Plan
ForwardForward--Looking StatementLooking Statement
ZEON’s plans, forecasts, and others data appearing in this presentation were calculated based on information which was currently available and therefore includes risks and uncertainties. Actual results may differ depending on various factors.
Public Relations Department, ZEON Corporation
Shin Marunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan
Tel: +81-3-3216-2747Fax: +81-3-3216-0501
30