summary of financial results of fiscal year 2010 ended ... · financial statements to be subject to...
TRANSCRIPT
(Figures rounded down to the nearest million yen)
(% change from the previous year)
Millions of yen Millions of yen Millions of yen Millions of yen
(Note)Comprehensive income March 31, 2011: 5,705 million yen(-77.8%), March 31, 2010: 25,697 million yen (-%)
% % %
Millions of yen Millions of yen
Millions of yen Millions of yen Millions of yen Millions of yen
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- - - -
Mr. Naofumi Negishi, President
Summary of Financial Results of Fiscal Year 2010 Ended March 31, 2011
April 27, 2011Company Name: Sekisui Chemical Co., Ltd.Stock Listings: Tokyo Stock Exchange, Osaka Securities Exchange
1. Consolidated Business Results for the Fiscal 2010 (April 1, 2010 to March 31, 2011)
Scheduled General Meeting ofShareholders:
June 29, 2011
Scheduled date for payment ofdividends:
June 30, 2011
Code Number: 4204URL http://www.sekisui.co.jpRepresentative Director:
Net IncomeNet Sales Operating Income
37.2
Inquiries: Mr. Manabu Yamasaki, General Manager, Corporate Communication Dept.TEL: +81-3- 5521-0522
(1) Consolidated Business Results
55.4% % %
23,574
Scheduled date for submissionof financial statement
June 29, 2011
%FY2010
Recurring Income
102.8FY2009 858,514 -8.1 35,955 7.0
915,492 6.6 49,335 48,292
Net Income toEquity Ratio
Recurring Incometo
Total Assets Ratio
OperatingIncomeRatio
31,076 5.6 11,627 -
yen yen FY2010 44.92 44.92
Net Incomeper Share
Net Income per Share(Diluted)
- 3.5 4.0 4.2(Note)Equity in earnings of affiliated companies March 31, 2011: 1,739 million yen, March 31, 2010: 1,498 million yen
6.9 6.1 5.4
FY2009 22.13
Total Assets Net AssetsShareholders'Equity Ratio
Net Assetsper Share
(2) Consolidated Financial Position
% yen FY2010 790,189 350,045 43.0 650.83
351,706 43.4 651.08(Note) Shareholders' Equity : March 31, 2011: 339,736 million yen, March 31, 2010: 342,041 million yen
FY2009 787,261
Operating Activities Investing Activities Financing ActivitiesEnd of Year Cash and
Cash Equivalents
(3) Consolidated Cash Flows
54,855
2. Dividend StatusDividend Per Share Total Dividend
Payment(full year)
FY2010 64,197 -46,051 -5,197 65,944
(Date of Record)At the end
of 1QAt the end
of 2QAt the end
of 3Q Year-end
-55,496 -5,749FY2009 74,983
% %yen yen yen
Full year
DividendPayout Ratio
(consolidated)
Dividend toequity ratio
(consolidated)
6,807 28.95.00 - 5.00
yen yen Millions of yen
10.00 5,256
28.1
45.2 1.6FY2010 5.00 - 8.00 13.00FY2009
3. Consolidated Outlook for FY 2011 (April 1, 2011 to March 31, 2012) (% change from the previous year)
2.0FY2011 (outlook) 7.00 - 7.00 14.00
Net Sales Operating Income Recurring Income Net Income Net Incomeper Share
Millions of yen % Millions of yen % Millions of yen
7.0 57,000
% Millions of yen % yen Mid-term
(Note) Due to the impact from the earthquake and tsunami, Sekisui Chemical is unable at this time to formulate reasonably accurate estimates orforecasts on which to base consolidated earnings forecasts for the second quarter of fiscal year 2011. The Company will announce a forecast as soon asreasonable assumptions can be formed.
15.5 55,000 13.9 26,000 10.3 49.81Full Year 980,000
-1-
4. Other
a) FY2010 sharesFY2009 shares
b) FY2010 sharesFY2009 shares
c) FY2010 sharesFY2009 shares
Note: Execution chart for audit procedures
Note: An explanation of the application of these changes to the results forecasts is presented in the section on Other Items.
14,162,284
(1) Significant change of subsidiary companies during the term (change of specified subsidiaries that affected the scopeof consolidated reporting): No
(2) Changes in accounting principles, methods or reporting methods affecting the production of the consolidatedfinancial statement (fundamental changes in main reported item for the production of the consolidatedfinancial statement)
a) Changes caused by revisions to accounting principles: Yesb) Changes other than a): NoNote: Please see “Changes to the Basis of Presenting Consolidated Financial Statements” (page 17)for further details.
(3) Number of shares outstanding (common stock)
539,507,285
Forecasts and other forward-looking statements appearing in this report are based on company judgementsformed from available information. Changing conditions in a variety of areas may cause substantial differences inthe actual results. Please refer to page 5, "Full-year-forecast" for the assumptions underlying the forecasts,disclaimer on the use of forecasts, and other related matters.
Average number of shares outstandingduring the current term
524,807,798525,361,030
The Financial Instruments and Exchange Law does not require this brief announcement of the most recentfinancial statements to be subject to audit review. The review procedure of financial statements based on theFinancial Instruments and Exchange Law is not completed at the time of the disclosure of these consolidatedfinancial statements.
Number of shares outstanding at theend of term (including treasury stock)
539,507,285
Treasury stock at the end of term 17,503,791
-2-
Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
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1. Consolidated Business Results
(1) Analysis of Operating Results
1) Fiscal Year 2010 (April 1, 2010, to March 31, 2011)
a. Consolidated Results
Net sales ¥915.4 billion (+6.6% year on year), operating income ¥49.3 billion (+37.2%), ordinary
income ¥48.2 billion (+55.4%), net income ¥23.5 billion (+102.8%)
Sekisui Chemical recorded growth in both sales and income in fiscal 2010. The Company expanded
sales and steadily captured demand in Frontier 7* businesses (in designated high-growth fields), as well
as in emerging countries, notably in the growing Asia region. Brisk demand in the housing business
also increased sales. The robust performance in these areas overcame the adverse effects of the strong
yen and rising raw material prices as well as the negative impact on production and sales activities
from the Great East Japan Earthquake in March. The Company also continued reinforcing its earning
structure by reducing costs, curbing fixed costs, and implementing other measures.
The year’s operating income result vastly exceeded the initial target of the GS21-SHINKA!
medium-term management plan.
Management continued implementing measures to promote sustainable growth in the Frontier 7 fields.
In the automotive field, the Company expanded production capacity for high-performance interlayer
films in Japan and at the interlayer film material (PVB) plant in Europe. In the medical field, the
Company consolidated its Chinese subsidiaries to enhance their ability to meet demand in the Asia
market, and concluded an agreement to acquire the diagnostic reagents business of U.S.-based
Genzyme Corporation.
*The Frontier 7 business fields are the housing stock, pipeline renewal, overseas water infrastructure,
performance materials, automotive, IT, and medical fields.
b. Business Results by Company (April 1, 2010, to March 31, 2011)
Housing
Net sales ¥418.6 billion (+5.1%), operating income ¥24.3 billion (+25.6%)
The Housing Company recorded growth in sales and income on a boost in orders with support from
government housing policies, which helped overcome the impact from the temporary suspension of
operations at production bases mainly in the Tohoku region, construction delays, and other
consequences of the Great East Japan Earthquake.
The new housing construction business generated year-on-year growth in housing unit orders through
Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
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successful campaigns promoting the environmental, economical, and high-performance features of its
products that harnessed the market stimulation provided by tax reductions, subsidies, and other
government programs. Also contributing were growing sales of products with readily perceivable cost
performance and special products commemorating the 40th anniversary of the housing business’s
establishment. The business also continued strengthening its earning structure, primarily by integrating
the management of its production and sales systems.
The living environment business substantially raised the value of orders from the previous fiscal year
on demand stimulated by government home refurbishing subsidy programs and expanded sales of its
solar power generation systems and other mainstay products. A new homeowner support office was
also created with the objectives of strengthening ties with customers and establishing a cyclical
business model.
Urban Infrastructure and Environmental Products
Net sales ¥195.5 billion (+0.5%), operating income ¥1.5 billion (–)
The UIEP Company recorded flat sales from the previous year as the domestic business suffered from
factors including the post-earthquake interruptions in production and shipment operations for PVC pipe
and other products while business overseas continued posting solid results. Despite the flat sales,
ongoing efforts to enhance operating efficiency through the reduction of fixed costs and other measures
enabled the company to post operating income for the fiscal year, thereby recovering profitability.
In Japan, recovering housing demand generated increasing unit sales of the core PVC pipe and rain
gutter products, among other products, but intensifying competition forced down product prices and
prevented a significant increase in sales revenue. Sales were also sluggish for water-supply
polyethylene pipes, reinforced plastic composite pipes, and other public works-related products.
In overseas operations, the plastic sheet business achieved a strong performance on recovering demand
in the aircraft industry. The pipeline renewal business realized growth in sales and income, largely from
increased orders for SPR method projects in the United States, large project orders in Russia, and
results emerging from SPR method projects in Eastern Europe.
High Performance Plastics
Net sales ¥281.6 billion (+13.7%), operating income ¥24.3 billion (+27.0%)
Sales of some HPP Company products were affected by client factory shutdowns after the earthquake,
but solid sales in the strategic automotive and IT fields resulted in substantial increases in both sales
and income for the year.
Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
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Sales in the AT field of interlayer films for laminated glass, polyolefin foam, and other products rose
sharply on growing demand from emerging countries, particularly in Asia, and market recovery in
Japan, Europe, and the United States. These trends overcame the adverse effects of the strong yen and
steeply rising raw material prices. The HPP Company also began operations of two facilities in the
interlayer films business during the year: the expanded production line for high-performance interlayer
films at the Minakuchi Plant in Shiga in June 2010 and a second production line at the interlayer film
material (PVB) plant in Europe in January 2011.
In the IT field, strong growth in shipments of flat-panel TVs and mobile phones fueled steady sales of
LCD panel-related products until the second quarter. Although customer inventory adjustments started
affecting the sales pace in the third quarter, sales volumes ultimately increased year on year for LCD
fine particles and other liquid-crystal chemicals.
In the medical field, overall sales declined moderately year on year due to the fallback from the
previous fiscal year’s surge in sales of influenza diagnostic reagents. However, the
non-influenza-related diagnostic reagents businesses achieved a growth in sales, supported by brisk
sales of diagnostic equipment. During the quarter, the Company acquired the diagnostic reagents
business of U.S.-based Genzyme Corporation and established a new company in February 2011, with
the aim of accelerating the development of global business operations.
2) Fiscal Year 2011 Forecast
a. Consolidated Forecast
Net sales ¥980.0 billion (+7.0%), operating income ¥57.0 billion (+15.5%), ordinary income ¥55.0
billion (+13.9%), net income ¥26.0 billion (+10.3%)
Sekisui Chemical will endeavor to realize across-the-board increases in sales and income in fiscal 2011
by further expanding business in the high-growth Frontier 7 fields and continuing to improve operating
efficiency by effectively responding to rises in raw material costs and strictly controlling fixed costs
and other expenses, excluding those for growth investment.
The GS21-SHINKA! medium-term management plan focuses on “business model reform” as a
fundamental strategy for responding to the evolving demand structures for each internal company, to
ensure sustainable business growth.
Management is actively offering its full cooperation in supplying temporary housing, PVC pipes, and
other essentials needed to reestablish lifelines as part of reconstruction efforts after the earthquake.
Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
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b. Company Forecasts
Housing
Net sales ¥444.0 billion (+6.0%), operating income ¥27.0 billion (+10.8%)
The Housing Company is implementing measures to sustain the steady growth momentum in an
uncertain business environment characterized by an anticipated scaling down of government’s housing
market stimulus measures as well as anticipated electricity shortages, parts and materials shortages, and
other repercussions from the earthquake.
The company will make all-out efforts for the reconstruction from the earthquake.
The new housing construction business will aim to further differentiate the Company and expand
market share during the year. Marketing activities will leverage the integrated production and sales
management systems and be tailored to meet specific local regional characteristics. A full-fledged
campaign will be launched for “Smart Heim” products incorporating the Company’s Home Energy
Management System (HEMS) and solar power generation systems. These activities along with
continuing efforts to fortify the business’s earning power are expected to provide the Housing
Company with the momentum necessary for achieving its targeted growth in sales and income for the
year.
The living environment business will continue seeking to expand sales of solar power generation
systems and other mainstay products, including its unit bath and kitchen products. The business will
also fortify its business base by increasing the number of salespeople, conducting education and
training programs for employees, and other measures to enhance their proposal capabilities. The
business is also completing the creation of a new cyclical business model centering on support services
for Sekisui Heim homeowners.
The housing business operation in Thailand is also being fortified to get on track for expansion.
Urban Infrastructure and Environmental Products
Net sales ¥206.0 billion (+5.3%), operating income ¥5.0 billion (+232.7%)
The UIEP Company is placing the highest priority on emergency activities assisting in the
post-earthquake reconstruction. The company has set up the Disaster Reconstruction Project, which is
utilizing the domestic and overseas production bases to secure a stable supply of products for Eastern
Japan and respond promptly to needs in the affected areas.
The company is also accelerating growth strategies to expand its business. The company aims to
increase domestic sales by concentrating management resources in the markets for stock, energy-saving,
Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
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and seismic-resistant pipe products, where demand is expected to grow, while also revamping its
business model and broadening its business range.
Overseas, the company’s sheet business is focusing on capturing aircraft industry demand and
developing new business areas. The pipeline renewal business is fortifying its value chain by improving
its project organization structures in the United States and Europe. The reinforced plastic composite
pipes business is aiming to expand sales in the Uygur Autonomous Region in Xinjiang, China, and
further realize results in China’s coastal areas.
The UIEP Company will work to lower the breakeven point for sales by continuing initiatives to fortify
the earnings base and by improving operating efficiency through ongoing cost reductions, to offset the
impact of the steeply rising raw material prices.
High Performance Plastics
Net sales ¥310.0 billion (+10.1%), operating income ¥26.0 billion (+6.6%)
The HPP Company is aiming to realize growth in sales and income in fiscal 2011. The company plans
to accelerate the implementation of growth strategies centered on the automotive, IT, and medical
fields—three strategic business fields to ensure the business maintains its growth momentum amid the
uncertain business environment caused by the earthquake’s impact on the supply chain.
In the automotive field, the company will seek to maximize utilization of the overseas bases to
construct the optimal global production and sales structure for its mainstay interlayer films for
laminated glass products. The company will also develop synergies with the polyvinyl alcohol (PVA)
resin business to further strengthen its competitiveness.
In the IT field, the company plans to boost sales of liquid-crystal chemical, tapes, films, and other LCD
panel-related products while also expanding its lineup of new products for next-generation technologies
and cultivating new businesses.
In the medical field, the company plans to leverage its overseas bases including Sekisui Diagnostics,
LLC, which was established after the acquisition of the diagnostic reagents business of U.S.-based
Genzyme Corporation, to accelerate the full-fledged development of its global business.
Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
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(2) Consolidated Financial Position
1) Cash Flow (April 1, 2010, to March 31, 2011)
In fiscal year 2010, net cash provided by operating activities increased ¥64.1 billion from the previous
fiscal year. The increase was primarily attributable to such factors as ¥39.8 billion in income before
income taxes and minority interests, ¥34.5 billion in depreciation and amortization, a ¥9.5 billion
increase in notes and accounts payable, a ¥6.3 billion increase in advances received, and ¥2.7 billion in
amortization of goodwill, which more than offset a ¥13.3 billion decrease in inventories, ¥13.0 billion
in income taxes paid, and a ¥6.0 billion increase in notes and accounts receivable.
Net cash used in investing activities amounted to ¥46.0 billion. The decline was primarily due to
expenditures that included a ¥21.2 billion investment for the acquisition of property, plant, and
equipment focused on priority and growth fields and ¥17.6 billion in payments for the placement of
time deposits.
Net cash used in financing activities amounted to ¥5.1 billion. The main elements were ¥5.5 billion in
dividend payments, a ¥2.1 billion payment to acquire treasury stock, and ¥2.4 billion net increase in
interest-bearing debt.
The result of the above was cash and cash equivalents totaling ¥65.9 billion at the end of fiscal year
2010.
2) Fiscal Year 2011 Forecast
Business operations will continue to be conducted with investment concentration in priority and growth
fields and an emphasis on cash flow with the objectives of generating free cash flow and further
fortifying the Company’s financial position.
Trend in Cash Flow Indicators
FY2007 FY2008 FY2009 FY2010 FY2011
(Forecast)
Equity ratio (%) 45.9 45.8 42.6 43.4 43.0
Shareholders’ equity ratio based on market value (%)
56.6 40.5 34.0 42.3 43.0
Ratio of interest-bearing liabilities to cash flow
2.7 2.9 3.6 1.8 1.9
Interest coverage ratio
20.4 12.6 13.1 29.4 24.6
Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
- 9 -
Notes: Equity ratio = Equity / Total assets
Shareholders’ equity ratio based on market value = Total market value of listed shares / Total assets
Ratio of interest-bearing liabilities to cash flow = Interest-bearing debt / Cash flow
Interest coverage ratio = Cash flow / Interest payments
1. All indicators are calculated from consolidated figures.
2. Total market value of listed shares is calculated by multiplying the closing stock price at the fiscal
term end by the total number of shares outstanding at the fiscal term end.
3. Operating cash flow is the cash flow of operating activities reported in the consolidated statement of
cash flows.
4. Interest-bearing debt represents the total amount of debt on which the company pays interest
reported in the consolidated balance sheet. The interest payment amount is the amount reported in the
consolidated statement of cash flows.
3) Fundamental Profit Distribution Policy and Dividends for Fiscal Years 2010 and 2011
Increasing corporate value and returning profit to shareholders are fundamental management objectives
at Sekisui Chemical. The management objective for shareholder return is to maintain a stable dividend
level with a target dividend payout ratio of 30% on a consolidated basis.
The company pays dividends twice annually, with the dates of record set as the last day of the first half
(September 30) and the last day of the fiscal year (March 31). In line with company policy, when in
possession of surplus funds, these funds are used for share buyback programs to enhance shareholder
return as well as to improve capital efficiency and increase earnings per share. Internal cash reserves
are utilized for R&D, capital investment, strategic investment, loans and investments, and other
activities essential to the future growth of corporate value.
In fiscal year 2010, the Company distributed a first half dividend of ¥5 and a second half dividend of
¥8 for a full-year dividend distribution of ¥13 per share.
In fiscal year 2011, the Company plans to provide a first half dividend of ¥7 and a second half dividend
of ¥7 for a full-year dividend distribution of ¥14 per share.
Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
Ⅳ. Consolidated Financial Statement (Fiscal Year 2010) (1) Consolidated Balance Sheets
End Fiscal Year 2009 End Fiscal Year 2010As of March 31, 2010 As of March 31, 2011
45,175 75,02139,783 38,688
106,739 109,26320,001 10,50140,197 39,33216,822 19,14631,645 37,01518,536 22,361
759 6332,393 2,5319,715 12,341
691 1,11812,049 12,530
-986 -999343,524 379,485
Buildings and structures 89,395 85,005Machinery, equipment and vehicles 66,940 64,515Land 69,314 69,184Leased assets 8,044 7,163Construction in progress 17,918 5,516Other 5,371 4,867Total property, plant and equipment, net 256,985 236,253
Goodwill 22,909 19,290Software 4,180 4,341Leased assets 263 381Other 6,426 5,799Total intangible assets 33,780 29,813
Investments in securities 116,582 105,307Long-term loans 793 552Long-term prepaid expenses 1,244 1,124Deferred income taxes 25,191 27,340Other 11,093 11,569Allowance for doubtful accounts -1,934 -1,258Total investments and other assets 152,970 144,636
443,736 410,704787,261 790,189
Advance payments
(Assets)Current Assets
(Millions of Yen)
Other current assets
Cash and depositsNotes receivable
Land for sale
Allowance for doubtful accounts
Property, plant and equipment, netNon-current assets
Total current assets
Work in processRaw materials and supplies
Deferred income taxes
Accounts receivableMarketable securitiesMerchandise and finished goods
Total non-current assetsTotal assets
Investments and other assets
Intangible assets
Prepaid expenses
Short-term loans
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
End Fiscal Year 2009 End Fiscal Year 2010As of March 31, 2010 As of March 31, 2011
Notes payable 8,783 7,324Accounts payable 113,181 118,027Short-term debt and currentportion of long-term debt
28,001 40,325
Bonds redeemable within one year 10,000 -Lease obligations 3,627 3,102Accrued expenses 25,119 27,257Accrued income and other taxes 8,342 9,107Deferred income taxes 123 162Allowance for employees’ bonuses 13,188 14,308Allowance for directors' bonuses 227 223Provision for compensation forcompleted constructions
1,286 1,127
Advances received 37,812 44,153Other 35,580 35,981Total current liabilities 285,275 301,101
Bonds less current maturities 10,000 10,000Long-term debt less current 76,761 66,702Lease obligations 4,694 4,378Deferred income taxes 4,397 4,949Accrued retirement benefits 48,608 47,761Other 5,816 5,249Total long-term liabilities 150,279 139,042
435,554 440,143
Common stock 100,002 100,002Capital surplus 109,307 109,307Retained earnings 154,353 172,689Treasury stock, at cost -10,839 -13,017Total shareholders’ equity 352,823 368,982
Unrealized holding loss on -1,037 -8,202Deferred gain (loss) on hedges 74 -123Unrealized gain on land revaluation 199 199Translation adjustments -10,017 -21,119Total Accumulated othercomprehensive income
-10,781 -29,245
503 6119,160 9,697
351,706 350,045787,261 790,189
Total net assetsTotal liabilities and net assets
Stock acquisition rightsMinority interests
(Liabilities)
Long-term liabilities
Accumulated other comprehensive
Shareholders’ equity
Total liabilities(Net assets)
Current liabilities
(Millions of Yen)
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
(2) Consolidated Statement of Income and Consolidated statement of comprehensive income(Consolidated Statement of Income)
Fiscal Year 2009 Fiscal Year 2010(From April 1, 2009 (From April 1, 2010to March 31, 2010) to March 31, 2011)
858,514 915,492606,123 645,468252,390 270,023216,434 220,68835,955 49,335
Interest income 790 646Dividends income 2,021 1,533Equity in earnings of affiliates 1,498 1,739Miscellaneous income 2,986 3,785Total non-operating income 7,295 7,704
Interest expenses 2,253 2,297Interest on commercial papers 27 -Sales discounts 277 305Foreign exchange loss 998 2,504Miscellaneous expenses 8,619 3,641Total non-operating expenses 12,175 8,748
31,076 48,292
Gain on sales of property, plant and equipment 1,015 -Total extraordinary income 1,015 -
Reorganization costs 2,302 3,967Disaster loss - 1,239Loss on devaluation of investments in securities - 1,109Loss on impairment of fixed assets and goodwill 3,456 984Loss on sales or disposal of property, plant 2,988 1,189Total extraordinary loss 8,747 8,491
23,344 39,80111,510 14,025-1,000 1,09610,509 15,122
- 24,6781,207 1,103
11,627 23,574Minority interestsNet income
Ordinary incomeExtraordinary Income
Non-operating expenses
Selling, general & administrative expensesOperating Income
Net salesCost of sales
Income before minority interests
(Millions of Yen)
Adjustment for corporate and other taxes
Non-operating income
Total of corporate tax and other taxes
Gross profit
Corporate tax, inhabitant tax, and enterprise taxIncome before income taxes and minority interests
Extraordinary loss
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
Consolidated statement of comprehensive income
Fiscal Year 2009 Fiscal Year 2010(From April 1, 2009 (From April 1, 2010to March 31, 2010) to March 31, 2011)
- 24,678
Unrealized holding gain (loss) on securities - -7,211Deferred gain (loss) on hedges - -197Translation adjustments - -11,617Equity equivalent of equity method affiliate - 53Total other comprehensive income - -18,972
- 5,705
Comprehensive income attributableto owners of the parent - 5,110
Comprehensive income attributableto minority shareholders - 594
Income before minority interestsOther comprehensive income
Comprehensive income
(Millions of Yen)
(breakdown)
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
(3) Consolidated Statements of Capital Surplus and Retained Earnings, and changes in Shareholders' Equity
Fiscal Year 2009 Fiscal Year 2010(From April 1, 2009 (From April 1, 2010to March 31, 2010) to March 31, 2011)
100,002 100,002
Total Changes - -100,002 100,002
109,307 109,307
Cancellation of treasury stock -0 -0Total Changes -0 -0
109,307 109,307
146,931 154,353
Dividends on retained earnings -4,025 -5,256Net income 11,627 23,574Increase in retained earnings due to increase in consolidatedsubsidiaries
0 19
Total Changes 7,421 18,336154,353 172,689
-10,833 -10,839
Acquisition of treasury stock -20 -2,178Cancellation of treasury stock 14 1Total Changes -5 -2,177
-10,839 -13,017
345,408 352,823
Dividends on retained earnings -4,205 -5,256Net income 11,627 23,574Increase in retained earnings due to increase in consolidatedsubsidiaries
0 19
Acquisition of treasury stock -20 -2,178Cancellation of treasury stock 13 0Total Changes 7,415 16,158
352,823 368,982
Balance at the end of the previous accouting periodChanges
Balance at the end of the current accouting periodTotal shareholders' equity
Treasury stock
Balance at the end of the previous accouting periodChanges
Balance at the end of the previous accouting periodChanges
Balance at the end of the current accouting period
Balance at the end of the current accouting periodRetained earnings
Balance at the end of the current accouting period
Shareholders’ Equity
Balance at the end of the current accouting period
Balance at the end of the previous accouting periodChanges
Capital surplus
Balance at the end of the previous accouting periodChanges
Common stock
(Millions of Yen)
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
Fiscal Year 2009 Fiscal Year 2010(From April 1, 2009 (From April 1, 2010to March 31, 2010) to March 31, 2011)
-11,227 -1,037
10,190 -7,164Balance at the end of the current accouting period 10,190 -7,164
-1,037 -8,202
7 74
Changes in items other than shareholders' equity (net) 66 -197Total Changes 66 -197
74 -123
224 199
Changes in items other than shareholders' equity (net) -24 0Total Changes -24 0
199 199
-12,411 -10,017
Changes in items other than shareholders' equity (net) 2,394 -11,101Total Changes 2,394 -11,101
-10,017 -21,119
-23,408 -10,781
Changes in items other than shareholders' equity (net) 12,626 -18,464Total Changes 12,626 -18,464
-10,781 -29,245
386 503
117 107117 107503 611
8,334 9,160
826 536826 536
9,160 9,697
330,721 351,706
-4,205 -5,25611,627 23,574
0 19
-20 -2,17813 0
13,569 -17,81920,985 -1,660
351,706 350,045
Changes in items other than shareholders' equity (net)Total Changes
Balance at the end of the current accouting period
ChangesDividends on retained earningsNet incomeIncrease in retained earningsdue to increase in consolidated subsidiariesAcquisition of treasury stockCancellation of treasury stock
ChangesChanges in items other than shareholders' equity (net)Total Changes
Balance at the end of the current accouting periodTotal net assets
Balance at the end of the previous accouting period
ChangesChanges in items other than shareholders' equity (net)Total Changes
Balance at the end of the current accouting periodMinority shareholders' interests
Balance at the end of the previous accouting period
Total other comprehensive incomeBalance at the end of the previous accouting periodChanges
Balance at the end of the current accouting periodShare subscription rights
Balance at the end of the previous accouting period
Changes
Balance at the end of the current accouting periodForeign currency translation adjustments
Balance at the end of the previous accouting periodChanges
Balance at the end of the current accouting period
Deferred gains or losses on hedgesBalance at the end of the previous accouting periodChanges
Balance at the end of the current accouting periodUnrealized gain on land revaluation
Balance at the end of the previous accouting period
Total other comprehensive incomeUnrealized holding gain (loss) on securities
Balance at the end of the previous accouting periodChangesChanges in items other than shareholders' equity (net)
Balance at the end of the current accouting period
(Millions of Yen)
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
(4) Consolidated Statements of Cash Flows
Fiscal Year 2009 Fiscal Year 2010(From April. 1, 2009 (From April. 1, 2010to March. 31, 2010) to March. 31, 2011)
Income before income taxes and minority interests 23,344 39,801Depreciation and amortization 34,525 34,530Amortization of goodwill 3,083 2,730Loss on impairment of fixed assets and goodwill 3,456 984Loss on disposal of fixed assets 2,950 1,106Loss on revaluation of marketable and investment securities - 1,109Decrease (increase) in provision for retirement benefits 387 -704Interest and dividend income -2,811 -2,179Interest expenses 2,557 2,602Equity in earnings of affiliates -1,498 -1,739Increase in notes and accounts receivable -2,865 -6,071Increase (decrease) in inventories 13,293 -13,347Increase in notes and accounts payable 753 9,538Increase in advances received 4,332 6,359Other 6,395 2,522Subtotal 87,904 77,244Interest and dividends received 3,257 2,616Interest paid -2,546 -2,606Surcharge paid -7,965 -Income taxes refund 4,868 -Income taxes paid -10,535 -13,056Net cash provided by operating activities 74,983 64,197
Purchases of property, plant and equipment -37,061 -21,232Proceeds from sales of property, plant and equipment 2,285 424Payments for placement of time deposits - -17,646Purchases of investments in securities -1,389 -3,154Proceeds from sales or redemption of investment in securities 2,056 -Acquisition of investments in subsidiariesresulting in change in scope of consolidation
-2,908 -
Acquition of securities in subsidiaries - -683Acquisition of businesses -16,288 -Purchase of stock of consolidated subsidiaries from minority -201 -12Purchase of intangible assets -1,990 -2,529Increase in short-term loans - -121Other -0 -1,096Net cash used in investing activities -55,496 -46,051
Decrease (increase)in short-term debt, net -9,007 29Repayments of finance lease obligations -5,083 -3,944Decrease in commercial paper -20,000 -Proceeds from long-term debt 32,545 14,160Repayment of long-term debt -4,419 -7,755Proceeds from issuance of bonds 10,000 -Payment for redemption of bonds -5,382 -Cash dividends paid -4,209 -5,260Cash dividends paid to minority shareholders of consolidated -152 -284Purchase of treasury stock - -2,171Other -40 29Net cash provided by (used in) financing activities -5,749 -5,197
602 -2,48814,339 10,45940,488 54,855
28 629
54,855 65,944Cash and cash equivalents at end of year
Net increase in cash and cash equivalentsCash and cash equivalents at beginning of yearIncrease in cash and cash equivalentsfrom initial consolidated subsidiary
Financing activities
Effect of exchange rate change on cash and cash equivalents
Investing activities
(Millions of Yen)
Operating activities
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
Additional Information The Company is applying the “Accounting Standards for Presentation of Comprehensive Income” (ASBJStatement No. 25, June 30, 2010) from this fiscal year. However, the amounts for the “accumulated othercomprehensive income” and “total accumulated other comprehensive income” in the previous fiscal year arereported in terms of “valuation and translation adjustments” and “total of valuation and translation adjustments.”
(5) Notes regarding the premise of a going concernNo significant changes during the term under review.
(6) Important items regarding the basis of preparation of the consolidated financial statementsNo significant changes in the period since the Summary of Financial Results for the Fiscal Year 2008issued on June 26, 2009.
(7) Changes in important items regarding the basis of preparation of the consolidatedfinancial statements
Change in accounting standards:The Company is applying the “Accounting Standard for Asset Retirement Obligations” (ASBJ Statement No. 18,March 31, 2008) and “Guidance on Accounting Standard for Asset Retirement Obligations” (ASBJ GuidanceNo. 21, March 31, 2008) beginning with the consolidated fiscal year under review.The effect of this change was immaterial to the consolidated financial statements and the segment informationfor the year ended March 31, 2011.
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
6. Segment Information
a) Business SegmentsFiscal Year 2009(April. 1, 2009 to March. 31, 2010) (Millions of yen)
Housing
UrbanInfrastructure
&Environmental
HighPerformance
Plastics
OtherBusiness
Total
Eliminationsor
UnallocatableAccounts
Con-solidated
I. Net sales & Operating income Net sales: (1)To third parties 398,130 182,689 241,390 36,304 858,513 - 858,514 (2)Intersegment 115 11,960 6,293 6,480 24,849 (24,849) -
Total 398,245 194,649 247,683 42,785 883,363 (24,849) 858,514 Operating expenses 378,834 197,058 228,476 42,452 846,822 (24,264) 822,558 Operating income (loss) 19,410 2,409 19,207 332 36,541 (585) 35,955II. Assets、Depreciation andamortization、Loss on asset impairmentand Capital expendituresAssets 190,323 160,321 270,652 43,606 664,904 122,356 787,261 Depreciation and amortization 8,065 7,614 16,112 2,032 33,824 700 34,525 Loss on asset impairment 2,213 556 686 - 3,456 - 3,456 Capital expenditures 6,405 5,059 30,690 716 42,873 1,176 44,049
b) Geographical SegmentsFiscal Year 2009(April. 1, 2009 to March. 31, 2010) (Millions of yen)
Japan United States Europe Asia Others TotalEliminations
or unallocatableaccounts
Consolidated
I. Net sales and Operating income Net sales: (1)To third parties 739,820 33,310 38,550 40,160 6,671 858,514 - 858,514 (2)Intersegment 30,664 3,683 1,823 2,509 366 39,047 (39,047) -
Total 770,485 36,993 40,373 42,670 7,037 897,561 (39,047) 858,514
Operating expenses 738,892 36,792 38,600 41,307 6,045 861,637 (39,079) 822,558
Operating income 31,593 201 1,773 1,363 992 35,923 32 35,955
II. Assets 525,014 47,664 50,161 46,107 6,233 675,181 112,080 787,261
c) Overseas Net Sales
Fiscal Year 2009(April. 1, 2009 to March. 31, 2010)
United States Europe Asia Others Total
37,604 41,543 55,035 6,800 140,983
858,514
4.4 4.8 6.4 0.8 16.4
Notes: 1. Country and regional segments are classified on the basis of geographic proximity.2. Principal countries and regions:(1) United States: The United States of America(2) Europe: Germany, the United Kingdom, the Netherlands, Switzerland, Italy, Spain and France(3) Asia: Thailand, South Korea, Singapore, China, Taiwan, and UAE(4) Other: Mexico, Australia and Brazil
3. Overseas sales represent the amount of sales within each country or region and exclude sales of the parent company andconsolidated subsidiaries in Japan.
Note: Companywide assets, including those listed in the eliminations or unallocatable accounts category,were 198,969 million yen in fiscal year 2009. This mainly consisted of cash and cash equivalentsand long-term investments (investment securities) held by the parent company, assetsrelated to administrative departments and deferred tax assets.
2. Principal countries and regions other than Japan:(1) United States: The United States of America(2) Europe: Germany, the United Kingdom, the Netherlands, Switzerland, Italy, Spain and France(3) Asia: Thailand, South Korea, Singapore, China, Taiwan, and UAE(4) Other: Mexico, Australia and Brazil
3. The amounts and primary items of corporate assets that have been eliminated or are classifiedas corporate are the same items presented in the “Note” to “Segment Information by Business”
Notes: 1. Country and regional segments are classified on the basis of geographic proximity.
I. Overseas net sales (millions of yen)
II. Consolidated net sales (millions of yen)
III. Overseas net sales as a ratio of consolidated net sales
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
(Millions of yen)
Housing
UrbanInfrastructure &Environmental
Products
HighPerformance
PlasticsTotal
I. Net sales:(1)To third parties 418,620 184,443 275,122 878,186 37,305 915,492(2)Intersegment 66 11,126 6,520 17,713 5,835 23,548
Total 418,687 195,570 281,642 895,900 43,140 939,041Operating income (loss) 24,379 1,503 24,397 50,281 -127 50,153Assets 196,715 161,309 257,843 615,868 42,057 657,926Other Item Depreciation and amortization 7,287 6,953 17,638 31,879 1,956 33,836 Investment in equity-method affiliate 6,454 - - 6,454 - 6,454 Increase in tangible fixed assets and intangible fixed assets 5,708 5,556 12,111 23,375 1,235 24,611
2:Depreciation and amortization and increase in tangible fixed assets and intangible fixed assets include depreciationrelated to long-term prepaid expenses and associated costs.
Note1: The Other segment is not a reporting segment, which includes manufacturing and sales of flat panel displaymanufacturing equipment, agricultural and construction materials, and provision of services.
a) Overview of the Reporting SegmentsThe Company’s reporting segments are determined on the basis that separate financial information of such segments areavailable and examined periodically by the Board of Directors to make decisions regarding the allocation of managementresources and assess the business performances of such segments. Sekisui Chemical has divided its business operations into the three segments of Housing, Urban Infrastructure &Environmental Products (UIEP), and High Performance Plastics (HPP) based on manufacturing methods, products,sales channels, and other business similarities. Each business segment formulates comprehensive strategies and developsbusiness activities for its products in Japan and overseas.
The Housing business comprises of manufacturing, construction, sales, refurbishing, and other operations related tounit housing. The UIEP business comprises of manufacturing, sales, and construction operations related to PVC pipes and joints,polyethylene pipes and joints, pipe and drain renewal materials and construction methods, reinforced plastic pipe, andconstruction materials. The HPP business comprises of manufacturing and sales of interlayer films for laminated glass, polyolefin foam, tape,LCD fine particles and photosensitive materials, diagnostic drugs and other products.
c) Net sales, income (loss), assets data by reporting segmentFiscal 2009 (April 1, 2009 to March 31, 2010)
Reporting Segment
Other(Note)
I. Segment Information
b) Valuation method for reporting segment profit (loss) and asset amountsThe accounting methods for the reporting business segments is presented in accordance with “Important fundamental matters forpreparing consolidated financial statements.” The reporting segment profit figures are based on operating profit. Intersegmentinternal rates of return and the amounts transferred are presented based on the current market prices at the time of this report.
Segment data for the consolidated year beginning April 1, 2009, and ending March 31, 2010, is presented in the segment informationsection of the consolidated financial statements and is not provide herein because it would be identical to data presented inaccordance with the “Revised Accounting Standard for Disclosures about Segments of an Enterprise and Related information” (ASBJStatement No. 17 of March 27, 2009).
Fiscal 2010 (April 1, 2010 to March 31, 2011)
Total
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
Total of reporting segments 895,900Other Business Sales 43,140Inter-segment elimination total -23,548Net Sales
Total of reporting segments 50,281Other Business income (loss) -127Inter-segment elimination total -196Corporate expenses (Note) -620Operating Income
Total of reporting segments 615,868Assets classified as “other” 42,057Inter-segment elimination total -72,479Corporate assets 204,742Total Assets
Assets (Millions of Yen)
790,189Note: Corporate assets are assets not associated with the reporting segments.The main items were non-consolidated cash and deposits, long-terminvestments (investments in securities), assets related to administrative operations and deferred income taxes.
915,492
Income (Millions of Yen)
49,335Note: Corporate expenses are mainly general administrative expenses not attributable to a reporting segment.
d) Difference between the total of reporting segments in incomes (losses) and the corresponding amounts reportedin the consolidated financial statements, and the primary items contributing to the difference
(Items related to the difference)Fiscal 2010 (April 1, 2010 to March 31, 2011)
Net Sales (Millions of Yen)
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Sekisui Chemical (4204) Summary of Financial Results for the Fiscal Year 2010 Ended March 31, 2011
(Millions of Yen)
Other itemReportingSegment
OthersAdjustedamount
Thecorresponding
amountsreported in theconsolidated
financialstatements
Depreciation and amortization 31,879 1,956 694 34,530Investment in equity-method affiliate 6,454 - 21,806 28,260Increase in tangible fixed assets and intangiblefixed assets
23,375 1,235 658 25,269
Fiscal 2010 (April 1, 2010 to March 31, 2011)a. Product and service information
This information is presented in the segment data and is therefore omitted here.
b. Geographical information1.Net Sales
(Millions of Yen)Japan United States Europe Asia Others Total
Net Sales 735,480 52,800 50,654 67,574 8,983 915,492
2.Property, plant and equipment, net(Millions of Yen)
Japan United States Europe Asia Others Total Property, plant and equipment, net 180,814 17,091 20,101 16,304 1,942 236,253
c. Loss on impairment of fixed assets(Millions of Yen)
Housing
UrbanInfrastructu
re &Environme
ntal
HighPerformanc
e Plastics
OtherBusiness
Eliminations or
Unallocatable Accounts
Total
Loss on impairment of fixed assets - 211 773 - - 984
d. Goodwill(Millions of Yen)
Housing
UrbanInfrastructu
re &Environme
ntal
HighPerformanc
e Plastics
OtherBusiness
Eliminations or
Unallocatable Accounts
Total
Amortization of goodwill at this term -33 1,019 1,746 -1 - 2,730Balance at the end of the current accouting perio -5 4,629 14,666 - - 19,290
(Additional information)
II. Relevance information
The Company is applying the “Revised Accounting Standard for Disclosures about Segments of an Enterprise andRelated information” (ASBJ Statement No. 17 of March 27, 2008) and “Guidance on the Accounting Standard forDisclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No.20 of March 21, 2008)from this fiscal year.
Note: Adjustment for investment in equity-method affiliate represents the amount invested in equity-method affiliatecompanies which are not associated with the reporting segments.
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- 22 -
Material post-balance sheet events
(Transfer of business and acquisition of stock)
Sekisui Chemical determined at its Board of Directors Meeting on November 10, 2010,
to proceed with the acquisition of the diagnostics business of Genzyme Corporation, of
the United States, and concluded an agreement on November 18, 2010 to acquire the
company.
A new company will be established to combine the operations in the United States and
United Kingdom and Sekisui Chemical will, on January 31, 2011, acquire the assets of
the diagnostics business of Genzyme Corporation in the United States and United
Kingdom and the shares of the subsidiaries in Canada and Germany.
The Group’s overseas subsidiary companies currently utilize December 31 as the date
for the settlement of accounts. Sekisui will include the new subsidiaries in its
consolidated earnings reports beginning in fiscal 2011 utilizing the subsidiaries'
full-year results for the period January 1 to December 31
Transfer of business
(1) Name of Company Genzyme Corporation
(2) Description of business Development, manufacture and distribution of clinical
diagnostics
(3) Purpose of business transfer Fortify development of the medical business’s
overseas clinical diagnostics operations
(4) Transfer date January 31, 2011
(5) Transfer price US$116 million (United States)
US$74 million (United Kingdom)
(6) Profile of the new company
① U.S. subsidiary Name: Sekisui Diagnostics, LLC.
Equity stake: Sekisui America Corporation 100%
(100% subsidiary of Sekisui Chemical in the United
States)
② U.K. subsidiary Name: Sekisui Diagnostics(UK)Ltd.
Equity stake: Sekisui Europe B.V. 100%
(100% subsidiary of Sekisui Chemical in the Europe)
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Acquisition of stock
(1) Name of Companies Genzyme Diagnostics P.E.I. Inc. (Canada)
Genzyme Virotech G.m.b.H. (Germany)
(2) Description of business Development, manufacture and distribution of clinical
diagnostics
(3) Purpose of business transfer Fortify development of the medical business’s
overseas clinical diagnostics operations
(4) Stock purchase date January 31, 2011
(5) Purchase price US$58 million (Canada)
US$15 million (Germany)
(6) Profile of the subsidiary after the stock acquisition
① Canada subsidiary Name: Sekisui Diagnostics P.E.I. Inc.
Equity stake: Sekisui Diagnostics, LLC. 100%
(100% subsidiary of Sekisui America Corporation, of the
United States, in which Sekisui Chemical holds a 100%
stake)
② Germany subsidiary Sekisui Virotech G.m.b.H.
Equity stake: Sekisui Europe B.V. 100%
(100% subsidiary of Sekisui Chemical in Europe)
(1) Summary introduction of new subsidiaries1) Company name: SUZUTORA Corporation2) Description of business: Thin-film business(ITO film for touch panel)Textile business(nano-metal coating to textiles、fabricated to synthetic leather)3)Capital stock: 30 million yen4) Net Sales: 4.3 billion yen (Fiscal Year 2010 Ended August 31, 2010)
(2) Number of shares acquired and Percentage of shares held by Sekisui Chemical after the acquisition 13 shares (100%)
The Company acquired Suzutora Corporation and made it a subsidiary company on April 27, 2011. The purpose ofthe acquisition was to broaden the High Performance Plastics Company’s business range in the IT field.
(Abbreviated Disclosure)This information is presented in the spirit of providing full information about the Company’s activities. The informationpresented in this report has been abbreviated following the understanding that full disclosure concerning any associated leasetransactions, related party transactions, derivative transactions, stock options, or other such transactions is not necessary fora quarterly earnings report.
(Acquisition of stock)
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