Investor Relations

“We will fully leverage a stable financial base and aggressively spend in growth areas to continuously increase corporate value.”|Tomoo Shibuya|Member of the Board, Managing Director, Head of Financial Group

Financial Strategy Aimed at Sustainable Growth

The Nippon Kayaku Group is building a robust financial foundation that will enable it to flexibly respond to a changing business environment in order to achieve sustainable growth well into the future. Under the CSR key themes (materiality) identified from the standpoint of CSR management, we will pursue business operations with an eye toward the Sustainable Development Goals (SDGs), aiming to become a company that is trusted by and earns the satisfaction of all stakeholders.
 In the fiscal year ending March 31, 2021, the Functional Chemicals Business and Safety Systems Business were impacted by the COVID-19 pandemic, but the Pharmaceuticals Business was doing well. Our policy to maintain a well-balanced portfolio around our three core segments remains unchanged. We will implement financial activities to maintain the optimal fiscal condition, which includes carrying out funding considerate of capital costs, while maintaining a stable equity ratio.
 We will correctly grasp market needs in order to achieve the vision for each of our businesses, and seek to enhance corporate value by speeding up the development of new businesses/products and expanding our business globally, while clarifying the business and product domains where we will deploy our management resources.

Performance, Financial Status, Cash Flow for the Fiscal Year Ended March 31, 2021

In the fiscal year ended March 31, 2021, the middle fiscal year of Mid-term Business Plan KAYAKU Next Stage, net sales and profit were declined compared to the previous year, because the Functional Chemicals Business and Safety Systems Business were impacted by COVID-19 pandemic, and the Pharmaceutical Business was affected by NHI price revisions. Meanwhile, we maintained our stable financial condition by generating sound cash flows.

1. Operating Results

In the fiscal year ending March 31, 2021, net sales came in at 173.4 billion yen, and operating income at 15.2 billion yen and net income at 12.6 billion yen, all down year on year. The ratio of net sales for our there core segments was 42% for Functional Chemicals, 29% for Pharmaceuticals, 24% for Safety Systems, indicating we continued to maintain a well-balanced portfolio.
 By core segment, the Functional Chemicals Business saw profits decline, despite an increase in sales from the previous year due to the growth of Catalyst Business. The Pharmaceuticals Business saw both sales and profits grow due to the growth of biosimilars. The Safety Systems Business saw both sales and profits decline year on year due to the decline in automobile markets.

Composition of Net Sales (unit: billion yen)
Composition of Net Sales (unit: billion yen)
Composition of Operating Income by Industry Segment (unit: billion yen)
Composition of Operating Income by Industry Segment (unit: billion yen)

2. Financial Position

We have continued to maintain a stable financial condition. Total asset as of the end of the fiscal year ended March 31, 2021 totaled 294.5 billion yen and net assets came in at 228.3 billion yen, both up compared to the end of the previous fiscal year. These increases were attributed to securities for total assets, and retained earnings and transition adjustments for net assets.

Financial Position
Financial Position

3. Cash Flows

We exhibited sound cash managements. Net cash provided by operating activities was at 24.4 billion yen, of which the decrease in inventory was a positive factor, while the increase in notes and accounts receivable-trade was a negative factor. Cash flow from investing activities resulted in 17.6 billion yen in expenditures, and cash flow from financing activities was negative 8.4 billion yen. Free cash flow was at 6.8 billion yen, with the net cash position of 28.1 billion yen, maintaining a condition of effectively no borrowings.

Cash Flows
Cash Flows

View on Shareholder Return

We regard the return of profits to our shareholders as important. Our mid-term goal for the dividend payout ratio is 40% of profit attributable to owners of parent, while taking a stable and sustainable level of profit return and the level of retained earnings into consideration. Retained earnings are to be allocated for capital investment and R&D investment in growing businesses to enhance the value of the Nippon Kayaku Group.
 Annual dividends in the fiscal year ended March 31, 2021 were 30 yen per share, with a consolidated payout ratio of 40.7%. Also, from May 2021 to September 2021 we will be acquired 3.10 million shares (up to) of treasury stock for 3 billion yen (up to, 1.82% of total number of shares issued [excluding treasury shares]). We also plan to declare annual dividends of 30 yen per share in the fiscal year ending March 31, 2022. This will consist of interim dividends of 15 yen per share and year-end dividends of 15 yen per share.

Dividend per Share/Dividend Payout Ratio
Dividend per Share/Dividend Payout Ratio
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