fy2012 first half results briefing contentspromote sales of inkjet inks. promote usage for...

FY2012 First Half Results BriefingCopyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.Copyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.

FY2012 First Half Results Briefing

Toyo Ink SC Holdings Co., Ltd.November 22, 2012

ContentsFY2012 First Half Business PerformanceProgress of Growth Strategy and Developments in FY2012FY2012 Business ForecastNew Products: Overview and Approach to Launch

The forecasts 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 November 22, 2012.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.


Business Performance

First half ofFY2012

1,234

80

79

40

Net sales

Operatingincome

Net income

Recurringincome

Increase/decrease

(%)First half of

FY2011

1,231

74

72

35

0.3

9.1

10.2

FY2012forecast

2,550

160

160

As at March31, 2012

As atSeptember 30,

2012

Increase/decrease

(%)

Accelerate new product development to meet anticipated needs, global development and growth strategies in order 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.

FY2012Management

Policy

FirstHalf

Year-End(forecast)

Dividend(yen) 　6.0 12.0

As atMarch 31,

2012

67650.6

Interest-bearing debt(100 million yen)

Net worth ratio (%)

70050.1

As atSeptember30, 2012

0.43D/E ratio 0.44

1,5571,2742,831

991371

1,362

Current assets

Fixed assets

Total assets

Currentliabilities

Long-termliabilities

Total liabilities

Total net assets

Total of liabilitiesand net assets

1,5631,2832,846

896487

1,383

1,4632,846

0.4

0.7

0.5

1.5

-0.4

0.5

1,4692,831

-9.6

31.3

639

Consolidatedsubsidiaries

Equity methodcompanies

6211

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

11.8 80

6.5%

33.0%Overseassales ratio

Operatingmargin 6.0%

32.2%

0.5(points) 6.3%

0.8(points) 35.0%

1

As at March31, 2012

As atSeptember30, 2012


FY2012 First Half Operating Income andAnalysis of Factors Behind YoY Difference

Remarks Price revision (positive impact of 1,000 million

yen)Impact of price revisions in all segments.

Increased profits due to rise in sales volume(positive impact of 100 million yen)

Rising raw material prices (no impact)Steep price rise for titanium oxide.Increase centered on petrochemical products.Cost down effect due to raw materials substitution

Direct impact of exchange rates (no impact)Average rate for same period last year:

1 USD = 79.155 yenAverage rate for this period: 1 USD = 78.965 yen

Increase/decrease in fixed costs (no impact)Personnel expenses up due to increased welfarecosts, and an increase in overseas employees,which were offset by continued decline in otherfixed costs.

Sluggishness in high function products(negative impact of 500 million yen)

Poor performance of CF materials, adhesives forsolar cell back sheets, etc.

First Half of FY2012 8,000 million yen

First Half of FY2011 7,400 million yen

2

Sluggishness in high function products

Increase/decrease in fixed costs

Increased profit due to increasedsales volum

e

Price revision

Unit: 100 million yen

First Half ofFY2011

First Half ofFY2012

Impact of prices for raw

materials

Direct im

pact of foreign exchange rates

FY2012 First Half Results BriefingCopyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.Copyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.Copyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.Copyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.

Performance by Segment

5.15.1 123.5123.5

3.03.0 411.6411.6

4.94.9 233.0233.0

6.06.0 32.332.3

9.69.6 -30.9-30.9

7.67.6 19.519.5

-5.5-5.5 -38.6-38.6

16.416.4 53.153.1

-0.1-0.1 -28.5-28.5

-3.5-3.5 -7.5-7.5

20.420.4 --

5.15.1 -11.2-11.2

-9.3-9.3 -10.7-10.7

-- --

4.64.6 4.64.6

278278 1010

107107 33

367367 1212

206206 99

7676 22

280280 1010

217217 1616

7171 44

260260 2020

209209 3131

171171 22

331331 3333

2929 55

-32-32 00

1,2341,234 8080

-0.1-0.1 381.5381.5

-6.8-6.8 -27.1-27.1

-1.5-1.5 99.499.4

-1.7-1.7 16.816.8

4.94.9 -10.4-10.4

-0.4-0.4 5.65.6

-1.7-1.7 10.910.9

3.43.4 153.1153.1

-2.8-2.8 24.324.3

4.14.1 26.826.8

-1.1-1.1 -77.7-77.7

5.65.6 -1.0-1.0

-5.7-5.7 -40.1-40.1

-- --

0.30.3 9.19.1

Increase/DecreaseQuarter on Quarter (%)

Increase/DecreaseYear on Year (%)

-2.9-2.9 256.7256.7

-4.4-4.4 37.537.5

-2.3-2.3 153.0153.0

0.50.5 38.938.9

3.73.7 67.567.5

1.21.2 37.437.4

-1.2-1.2 11.011.0

7.87.8 251.6251.6

-1.3-1.3 31.731.7

8.18.1 66.166.1

7.57.5 -32.4-32.4

11.111.1 15.615.6

-7.1-7.1 -46.1-46.1

-- --

2.12.1 34.834.8

OthersOthers

AdjustmentAdjustment

Totalconsolidated

Totalconsolidated

JapanJapan

OverseasOverseas

TotalTotal

JapanJapan

OverseasOverseas

TotalTotal

JapanJapan

OverseasOverseas

TotalTotal

JapanJapan

OverseasOverseas

TotalTotal

Results(100 million yen)Net

salesOperating

income

142142 77

5454 22

188188 1010

106106 55

4040 11

145145 66

105105 66

3838 22

130130 88

103103 1515

9494 33

170170 1515

1414 22

-15-15 00

631631 4141

Printing andInform

ationPackagingPackaging

Polymers and

Coatings

Polymers and

Coatings

Colorants andFunctionalM

aterials

Colorants andFunctionalM

aterials

Netsales

Operatingincome

Netsales

Operatingincome

Second Quarter of FY2012 (three months)

Total results(100 million yen)Net

salesOperatingincome


Netsales

Operatingincome

First Half of FY2012 (six months)

3

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


FY2012 First Half Segment Overview andPerformance by Region

Emergency demand due to the 2011 earthquake brought a slight reduction in netsales on the Japanese market

Profit increased due to stable raw materials prices and the effect of the pricerevision implemented last year

Sales and profit increased in China and Southeast Asia Gravure printing systems and prepresses are recovering, but moved sluggishly

Offset inks performed well with the spread of eco-friendly inks and price revisions

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

Printing materials and equipment reported 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 the strong performance. Also contributed toprofitability in Europe in the 2nd quarter

CF materials remain unstable in Japan Colorants felt the impact of the steep price rise for raw materials, but gained on

solar 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 SoutheastAsia

Electromagnetic shield film grew market share for coating materials

Substantial increase in profits overseas due to the cost-down effect

Polymers and Coatings

Asia-Oceana

Europe

The Americas

Adjustment

Total consolidated

Japan 466 35

187 9

10 1

23 -1

-55 -2

631 41

Net sales Operatingincome

0.7 -0.2

14.1 82.4

52.9 -

-0.3 -

- -

4.6 4.6

0.6 52.0

3.8 15.2

-23.8 -18.6

20.8 -

- -

2.1 34.8

Net sales Operatingincome Net sales Operating

income Net sales Operatingincome Net sales Operating

income

FY2012Actual

928 71

351 14

17 -1

47 -2

-109 -0

1,234 80

0.2 23.7

-1.3 -15.6

-28.7 -

15.4 -

- -

0.3 9.1

Overseas performance was generally poor in the 1st quarter due to the floods in Thailand and the Lunar New Year in China. Steady recovery in the 2nd quarter due to theeffect of sales promotions and stable raw materials prices

Increase/DecreaseQuarter on Quarter (%)


Result(100 million yen)

Second Quarter of FY2012 (three months)Total results

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

First Half of FY2012 (six months)

4


SCC-II Medium-Term Management Plan:Global Expansion Roadmap in Key Countries

5

Main Points in SCC-II FY2012 FY2013 FY2014

China Business expansion of

existing bases andcultivation of inland areas

NorthChina,

East China,SouthChina

Step up sales activities and expand business.

Inlandareas

Construct new bases and expand business.

Vietnam Boost revenues in Ho ChiMinh and Hanoi Hanoi Add new equipment.

Ho ChiMinh

Commence production.

Achieve steady sales expansion.

Thailand Expand business. Commence production.



Add new equipment.

Add new equipment.

Add new equipment.

Indonesia Attain growth through local

production for localconsumption.

Increase sales.

Build a new plant. Commence production and bolster sales activities.

India

Construct a three-basestructure.

Capture domestic demandto achieve growth.

Serve as a core of theglobal SCM.

North Add a new plant. Step up sales efforts.

Add a new plant.West

South Construct new bases.

Europe Reform the businessstructure.

Commence production in new businesses.

USA Restructure the bases. Reform the business

structure.

Restructure the bases.

Brazil Capture rapidly growingdemand.

Step up sales activities.

Production bases

Expand the business andconduct a feasibility study.


Note: - The head office move is associated with the Kyobashi 2-chome West District Redevelopment Project

Starting with these facilities, we continuing to make changes to product development,Monozukuri (manufacturing) and working styles at SCC

Facilities for the Second Launch

Head office satellite

Sales facility

Informationinfrastructure facility

Mother plant

Launch pad for newbusiness

HD function

Core operatingcompany

Transmission pointfor strategic planning

Reinforce globalmother plant function

Reinforcedevelopment skillsthrough collaborationwith area facilities

Converge R&Dfacilities in Saitama

Develop into headoffice satellite facility

Saitam

a

Past function

Mother plant

Reorganization purpose 11 12 13 14 Future function1615

2011.12Purchase adjoining land

2012.8R&D facility

2012.8Move R&D facility

2014.6Sell a part of the land

2013.10Complete new building

2016.8 (planned)Operate new office from

redeveloped building

2013.5 (planned)Temporary move to building invicinity

2012.7Permission for district redevelopment withadministrative support

JujoK

yobashi

R&D facility

Sales facility

Informationinfrastructure facility

Head office Improve stakeholdersatisfaction

Improve group brandpower

6

-


Growth Strategy Progress andFY2012 Developments

FY2012 Priority Measures

Expand new products, high value-added products.Accelerate global development of high sensitivity UV inks.Promote sales of functional hard coating.

Promote sales of inkjet inks.Promote usage for newspapers and labels.

Adopt local production and 3-grade strategy.Develop middle-grade products for Brazil and emergingmarkets in Asia.

Printing and Information

Promote well-organized global developmentfocused on emerging markets by developingproducts tailored to market needs and adoptinglocal production.



FY2012 Forecast

Actual of the FirstHalf of FY2012 367 12

770 30

7

Actual of the First Halfof FY2012

36,700 million yen

FY2012 Target


FY2012 Target

36,700 million yen

77,000 million yen

77,000 million yen

10,700 million yen

28,800 million yen

Net sales in emerging markets

Sales of new products

9,500 million yen

22,400 million yen

FY2012 First Half Results Briefing


Copyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.Copyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.


Boost development of new eco-friendly products.Release new gravure inks on the market in Japan.Develop biomass inks focused on China.

Promote sales of high-grade flexographic inks.

Global development based on newly developed resins.Promote sales of middle-grade ink focused on SoutheastAsia.

Adopt local production.Improve production performance in India and Vietnam.

Improve sales facilities in inland China and promote saleswith existing facilities.

Packaging

In addition to improving facilities, promote globaldevelopment by leveraging the ability to developproducts from resins to enhance the product lineup.



FY2012 Forecast


575 24

8



28,000 million yen

FY2012 Target


FY2012 Target

28,000 million yen

57,500 million yen

57,500 million yen

1,000 million yen

5,200 million yen


5,400 million yen

11,300 million yen



Boost sales of ICT terminals and other electronic materials.Promote sales of electromagnetic shield film.

Boost development of peripheral materials for solar cells.Promote sales of coatings with excellent light resistance andflame resistance.

Expand can coatings overseas.Accelerate expansion in China and Southeast Asia.

Boost product development for automotive materials,construction materials and other products for reconstructiondemand.

Polymers and CoatingsGrowth Strategy Progress andFY2012 Developments

Reinforce ICT and energy related businessexpansion with unique products that capitalize on acombination of resin, dispersion and coatingtechnologies.


FY2012 Forecast


550 40

9



26,000 million yen

FY2012 Target


FY2012 Target

26,000 million yen

55,000 million yen

55,000 million yen

3,900 million yen

10,000 million yen



5,700 million yen

12,000 million yen



Promote sales of CF materials for next-generation FPD.

Promote sales of high value-added products.Promote sales of thermal barrier coatings and other energy-saving products.

Promote sales of solar cell materials and electrode materials.Promote sales of back sheets and functional master batchesfor sealants.

Strengthen the pigments business in China and India.Stabilize and promote joint ventures.

Colorants andFunctional Materials


Promote sales of the strong lineup of FPD materials,and leverage networks to promote the globalexpansion of the colorants business.


FY2012 Forecast


665 66

10



33,100 million yen

FY2012 Target


FY2012 Target

33,100 million yen

66,500 million yen

66,500 million yen

8,900 million yen

21,200 million yen



15,500 million yen

27,500 million yen

FY2012 First Half Results BriefingCopyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.Copyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.Copyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.

FY2012 Segment Performance Forecast

(Unit: 100 million yen)

Packaging

Polymers and Coatings

Colorants andFunctional Materials

Others

Adjustment

Printing and Information

Total consolidated

Asia-Oceana

Europe

The Americas

Adjustment

Total consolidated

Japan 133

30

0

-3

160

0

1,860

790

45

90

2,550

-235

FY2012 forecast

OperatingincomeNet sales

0

770 30

575 24

550 40

665 66

068

-78

1602,550

7.2

3.8

0.7

-

6.3

-

Profitmargin (%)

-

3.9

4.2

7.3

9.9

-

6.3

Changes to the full year forecast

The full year forecast has been adjustedfor some segments.

1. Impact of the China issueImpact on colorants due to the slump in the automotiveindustry

2. Impact of accident at a major chemical manufacturerCost increases due to spread of raw materialssuppliers

The factors outlined below may have an impact onbusiness performance in the future.

11

FY2012 First Half Results BriefingCopyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.

Toyo Ink Group Business Domains

Copyright © 2012 TOYO INK SC HOLDINGS CO., LTD. All Rights Reserved.12

Information &Communication

Use science for present and future livingGravure inks, flexographic inks and adhesives for food packaging / Next-generation cancoatings / Naturally-derived materials / Functional plastic adhesives / Functionaladhesives for automobiles / Medical & health care materials / Other

Living &Healthcare

Achieve innovation through function and processCF materials / Electronics, and FPC-related product group / Touch panel materials /Mobile terminal materials / Next-generation recording materials and coatings / Others

Fine Imaging &Printing

Shift to a sustainable societyNext-generation offset printing inks / Wide gamut inks / Zero VOC inks / Next-generationnewspaper inks / High sensitivity UV inks / Printing pigments and dispersants / Inkjet inksand their materials / Other

Energy &Environment

Develop solutions for generating, conserving, and saving energy for thefuture

Interlayer adhesives used for solar cell back sheets / Solar cell sealants / Adhesives usedfor laminated packing material of secondary batteries / Materials used for secondarybattery electrodes / Soil remediation agent derived from recycled vegetable oil / Other


NP21+NRP net sales (100 million yen)

New products sales ratio (%)

FY2011 Actual

51220.9

Actual of the FirstHalf of FY2012FY2012 Target

24465119.825.5

110

FY2012 Target

67

23

17

3

31

13

6

11

1

57

16

20

19

2

541

FY2012 Target

83

168

263

27

213

Actual of the FirstHalf of FY2012

31

83

93

6

455

FY2011 Actual

91

148

207

9

NP21 (Japan） NRP (Overseas）

New Product Sales Ratio by Business Domain

(Unit: 100 million yen)

Actual of the FirstHalf of FY2012FY2011 Actual

FY2010 Actual

46318.8

13

* 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.


Expanding Packaging Materialsin the Emerging Markets

The market for commodity laminated inks is expanding in Asia. The issue is end userregulations/ European regulations (toluene-free, MEK-free, Swiss regulations etc.)

MarketTrends

Release BioEco® bioethanol-based inks on the Chinese market, and aim forenvironmentally responsive, local production for local consumption

Release MULTISTARTM toluene-free, MEK-free ink on the market for commoditylaminated ink, which is growing at a spectacular rate in southeast Asia

Total solution: Reinforce proposals for sets based on combinations withlaminated adhesives for the volume zone

Liquid ink production facilities in Asia Existing facilities

China (3 production facilities), South Korea, Thailand,Malaysia, Indonesia, the Philippines

New facilitiesIndia (Delhi: October 2012)Vietnam (Ho Chi Minh: Plan to start operations in Feb2013)

Key products inemerging countries

14

* Brazil (Plan to start operations in FY2013)

BioEco® MULTISTARTM Laminated adhesives

China

India

Vietnam

Thailand

Malaysia

Indonesia

The Philippines

South Korea

Brazil

Sales target forFY2013 200 million yen* 2,000 million yen* 3,100 million yen

* Start commercial production in FY2012 2,700 million yen in FY2012


Expanding the Inkjet Products Group Overseas

In advanced countries, growth in the sign market is leveling off and moving towardenvironmental alternatives. Emerging markets are in the midst of expansionDigitization is expanding in the POD market for small-lot, on-demand information support witha focus on Europe and the United States

Production facilities for inkjet inks Existing facilities

Japan, India New facilities

France (2013) Under consideration

United States, Brazil

Key products by area

Start full-scale production in France of POD-UV IJinks for the European label market

Investigate local production of POD water-based IJinks for newspaper use in North America wheremultilingual needs are strong

Promote overseas production of solvent IJ ink forsigns in emerging markets

15

Net sales forecast for FY2012 2,500 million yen

Japan

For signs

Asia

Europe

The Americas

Middle East • Africa

POD

Net sales target for FY2013 3,000 million yen

MarketTrends


Expanding ICT Related Products

16

Promote sales of display materials for mobiles andrespond to Chinese market

Release new products for new display systems Develop new materials and release to the market Promote sales of products responding to high-

definition/ lightweight/ thinner film

Mobile market expansion and TSP support, thinner/ multi-functional/ power-saving, eco-friendlyDiversification of display systems (OLED, high-definition)

OLED materials

Coatings

Conductive materials

Adhesives

Sales structure for the ICT related business

FY 2012 FY 2013

(100 million yen)

Silver pasteCu layer

ITO layer

Example of materials related to smartphonesTSP unit

Polarizing plate

Resist ink FPC

Coating materialswith a refractive indexadjustment function The CDP® high refractive

overcoat The Lioduras® ultra-high

refractive hard coatConductive material

with high precision support The REXALPHA® high precision

silver paste

Clear overcoat layerRefractive index adjustment layer

Cyclo-olefin polymer

Optical adhesivesfilm thickness reduction andsuperior durabilityThe LIO OPTO® thin film PSA The DYNA LEO® ultraviolet

adhesive The Lioduras® optical hard coat

PSAAdhesiveHard coat

Protection filmProtection film

PVA polarizerPVA polarizer

TACTAC

TACTAC

LIOELM®TSS®

High in brightness andtransparency

Resist process forhigh resolution

Electromagnetic shielding film

Film thickness reduction andsuperior durability

MarketTrends


Expanding Materials for Lithium Ion Batteries

Lithium-ion batteries are increasing in size for in-vehicle, fixed use. The issues are stableproduction and bringing down costs for widespread use

Lithium-ion battery materialsLIOACCUM® Series

17

High solid contentShorten slurry production time,reduce costs

Dispersion /Dispersant

Carbon dispersantsCarbon dispersion varnish

Highly conductive, decreasedinternal resistance

Dispersion /DispersantCNT dispersants

EffectCore technologiesNMP-based

High solid contentImproved adhesionBring down cost of coating process

Ink development,Dispersed resincomposite

Composite inkTM

EffectCore technologiesWater-based

Cross-section of lithium-ion batterypositive electrode

Aluminum foil

Composite layer

CB coating

Improved adhesionImproved corrosion resistance

Dispersion /Dispersant

Dispersant for carbon-coated foil

EffectCore technologiesSolvent-based /Water-based

Solvent removal

MarketTrends

fy2012 first half results briefing contentspromote sales of inkjet inks. promote usage for...

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