Performance highlights / Performance forecast
直近の業績と業績見通しについて、説明しています。
詳細は、決算短信（PDF：1,056KB）をご参照ください。We explain our latest business results and business forecasts.
For details, please refer to Financial Statements（PDF：647KB）
Consolidated performance highlights
(Fiscal Year Ended December 2024)
Unit: million yen
| Net sales | Operating profit | Ordinary profit | Profit attributable to owners of parent |
|
|---|---|---|---|---|
| 2024年12月期 | 351,064 | 20,414 | 21,008 | 18,540 |
| Growth rate (%) | 9.0 | 52.7 | 63.1 | 90.4 |
| 2023年12月期 | 322,122 | 13,372 | 12,880 | 9,737 |
In the fiscal year under review, the global economy showed signs of picking up in private consumption in Japan, the economy expanded in the United States and India, and Southeast Asia recovered moderately. On the other hand, in China, although there was an increase in supply due to the effects of policy measures, the economy was at a standstill.
In this environment, our corporate group has conducted its business activities based on the following three management policies.
With regard to the first policy, "Transformation into a highly profitable existing business group," sales of viscosity adhesives and liquid inks in overseas packaging-related fields, which are positioned as growth businesses, have expanded mainly in India and Southeast Asia, where capital investment was made during the previous medium-term management plan, and inkjet inks have grown in China and Europe due to the growth of the digital printing market. In addition, sales of functional coating agents, which contributes to the elimination of plastics against the backdrop of heightened environmental awareness, and energy-saving UV and LED inks were strong.
plastic colorants, which is positioned as a revenue-based business, secured profits in the domestic adhesives and liquid inks, where expenses such as raw material and transportation costs increased due to strong sales of automotive and solar cell applications in North America. In Japan, as the information printing market continues to shrink, we have further promoted alliances in terms of production and logistics, promoted the efficiency of the supply chain, and improved profitability.
With regard to the second policy, "Creation of Strategic Priority Businesses," in the display and advanced electronics business, as the shift of the liquid crystal display market to China accelerates further, preparations for the local supply of color filter materials utilizing local partners in China have progressed, and sales of optical semiconductor materials such as CMOS image sensors have been expanded. In addition, sales of display pressure sensitive adhesives in the Chinese market have been expanded, and in the semiconductor-related field, semiconductor-related products such as insulating sheets for semiconductors for electronic devices have been newly adopted, and the development of resin materials for semiconductors has progressed using a pilot plant installed in Japan.
In the mobility and battery-related business, we started production of automotive lithium-ion battery materials in China, but due to the slowdown in the global EV market, shipments were stagnant at our bases in Europe, the U.S., and China. On the other hand, sales of adhesives for lithium-ion batteries increased in response to demand in China and South Korea. In addition, with regard to the construction of a new plant for automotive lithium-ion battery materials in Kentucky, our second plant in North America, and the expansion of facilities in Hungary, we introduced equipment at a timing that matched the market environment, and continued to develop new applications for anode materials and solid-state batteries.
With regard to the third policy, "Reform of the Management Foundation," we worked to strengthen management resources from the perspective of ESG (Environmental, Social, and Governance), and based on the artience Sustainability Vision and ASV2050/2030, we steadily promoted sustainability management, including the introduction of tools for visualizing CO2 emissions.
In addition, in order to strengthen human capital, we conducted employee engagement surveys in Japan and overseas, reviewed our personnel system, and implemented measures that emphasized the perspective of diversity, equity, and inclusion (DE&I), such as increasing the ratio of women hired and establishing a new special subsidiary to support the active participation of people with disabilities. In addition, we focused on activities to penetrate CI in conjunction with the change of the company name and the renewal of the philosophy system.
With regard to DX, including the use of AI, we promoted the use of DX for technological development and production innovation, as well as improving the efficiency of various operations and expanding global procurement through the integrated mission-critical systems we introduced, as well as promoting risk countermeasures such as cybersecurity.
With regard to initiatives to improve capital efficiency and manage with an awareness of stock prices, we have introduced ROIC as a company-wide business management indicator, reduced working capital by improving CCC, and reduced our share holdings and repurchased treasury shares to improve ROE. In addition, in addition to increasing the number of Independent Outside Director employees to strengthen governance, we strengthened IR and SR activities, significantly increased dialogue with shareholders, and worked to reflect this in management measures.
As a result, net sales for the fiscal year under review increased to 351,064 million yen (up 9.0% year-on-year), operating income increased to 20,414 million yen (up 52.7% year-on-year), ordinary income increased to 21,008 million yen (up 63.1% year-on-year), and net income attributable to owners of parent increased to 18,540 million yen (up 90.4% year-on-year).
During the consolidated fiscal year under review, there were signs of a recovery of consumer spending in Japan. The U.S. and Indian economies expanded. Southeast Asia’s economies recovered moderately. In China, supply increased due to policy measures, but the economy remained stagnant.
Amid this business environment, the Group operated its business activities in line with the following three management policies.
The first policy is the transformation of existing business groups into highly profitable ones. In the overseas packaging materials related business, which the Group identifies as a growth business, sales of pressure sensitive adhesives, other adhesives and liquid ink products increased, primarily in India and Southeast Asia, where the Group engaged in capital expenditures during the period of the previous medium-term management plan. Additionally, sales of inkjet inks rose in China and Europe, driven by the expansion of the digital printing market. As environmental awareness increases, sales of functional coatings that contribute to the reduction of plastic usage and energy-saving UV and LED curable inks were strong.
In the plastic colorants business, which the Group considers a stable earnings base business, sales of colorants for automotive and solar cell applications remained solid in North America. Profits from adhesives and liquid ink products were affected by rising raw material and transportation costs in Japan. The Group secured a profit by improving efficiency through product integration and cost cutting. As the information-related printing market continued to contract, the Group improved profitability in the domestic offset ink business by forming new production and logistics alliances and promoting supply chain efficiency.
The second policy is the creation of strategic priority business groups. In the Display & Advanced Electronics Related Businesses, the LCD display market in China grew rapidly. In this environment, the Group made progress in preparing for the local supply of materials for color filters in collaboration with local partners. The Group also expanded its sales of materials for optical semiconductors, including CMOS image sensors. Sales of pressure sensitive adhesives for displays increased in the Chinese market. The Group began providing semiconductor insulation sheets for electronic devices. The development of resin materials for semiconductors progressed at a pilot plant in Japan.
In the Mobility & Battery Related Businesses, the Group began manufacturing materials for lithium-ion batteries for automotive applications in China. However, shipments from production facilities in Europe, the United States, and China were slow due to a global downturn in the EV market. Sales of adhesives for lithium-ion batteries increased as the Group captured demand in China and South Korea. The Group has been establishing a new plant to produce materials for lithium-ion batteries used in automotive applications in Kentucky, USA, which is the second production base in North America, and expanded its facilities in Hungary. The Group implemented equipment tailored to the market environment and continued to develop products for new applications, particularly for anode materials and all-solid-state batteries.
The third policy is the transformation of the management foundation. The Company strived to strengthen its management resources with an emphasis on environmental, social and corporate governance (ESG) criteria. It steadily promoted sustainability management in line with the artience asv2050/2030 Sustainability Vision. The Company implemented a tool for visualizing CO2 emissions.
To enhance its human resources, the Company conducted an engagement survey of its employees in Japan and overseas and reviewed its personnel system. Additionally, the Group also implemented initiatives focusing on diversity, equity and inclusion (DE&I). This included increasing the percentage of new hires that are women and establishing a special subsidiary to support the active participation of people with disabilities. The Company sought to make sure that employees are aware of the corporate identity (CI) following the change of its business name and corporate philosophy system.
The Company promoted the use of digital transformation technologies, including artificial intelligence, to drive the development of technology and production innovation. It improved operational efficiency across many functions and expanded global sourcing by utilizing an integrated core business system. It also strengthened measures to address cyber security and other risks.
To enhance capital efficiency and adopt management practices that consider share prices, the Company introduced return on invested capital (ROIC) as a key business management indicator throughout the organization. The Company focused on improving the cash conversion cycle (CCC) and reducing working capital. Additionally, the Company decreased the shares held and repurchased treasury shares to improve return on equity (ROE). To enhance governance, the Company increased the number of independent outside directors. Additionally, the Company enhanced its investor relations (IR) and shareholder relations (SR), thereby significantly increasing dialogue with shareholders and incorporating their feedback into management initiatives.
As a result, net sales for the fiscal year under review rose to 351,064 million yen (up 9.0% year on year). Operating profit stood at 20,414 million yen (up 52.7% year on year) and ordinary profit came to 21,008 million yen (up 63.1% year on year). Profit attributable to owners of parent was 18,540 million yen (up 90.4% year on year).
Earnings forecast
(Fiscal Year Ending December 2025)
Announced on February 14, 2025
Unit: million yen
| Net sales | Operating profit | Ordinary profit | Profit attributable to
owners of parent |
|
|---|---|---|---|---|
| Term ending December 2025 (Forecast) | 370,000 | 22,000 | 21,000 | 17,500 |
| Term ended December 2024 | 351,064 | 20,414 | 21,008 | 18,540 |
| Growth rate (%) | 5.4 | 7.8 | ▲0.0-0.0 | ▲5.6-5.6 |
While the economic environment is expected to continue recovering moderately in the next fiscal year, there are downside risks to the economy, such as the effects of continued high interest rates in Europe and the United States and the stagnation of the real estate market in China. In addition, the environment surrounding the Group is expected to be severe, such as the impact of rising prices, future policy trends in the United States, and the situation in the Middle East, but by implementing measures to address the following issues, the business forecast for the next fiscal year is net sales of 370.0 billion yen (up 5.4%), operating income of 22.0 billion yen (up 7.8%), and ordinary income of 21.0 billion yen (down 0.0%). Net income attributable to owners of parent is expected to be 17.5 billion yen (down 5.6%).
◆ Issues to be addressed
In the next consolidated fiscal year, which is the second year of the new medium-term management plan "artience 2027," we will promote each business as follows.
In the colorants and functional materials business, we will take priority measures to meet market needs, such as establishing a local production system to increase our share of materials for liquid crystal displays color filter in the Chinese market. In the field of optical semiconductor materials, we will steadily expand our business and further expand the scope of our business through the development of next-generation technologies and application developments. In addition, in the automotive lithium-ion battery materials, we will continue to establish production systems in Europe, the U.S., China, and Japan while keeping an eye on the business environment, while also diversifying earnings opportunities by further acquiring new hires and expanding our product mix, such as conductive additives for anode and LMFP. At the same time, we will promote the development of next-generation technologies such as solid-state batteries.
In the polymer coatings-related business, we will promote the development of viscous adhesives products that meet the needs of China, the U.S., and India, and optimize the supply chain from a global perspective and further increase production. In order to expand the effects of the M&A conducted in 2023, can coatings will work to create synergies by strengthening the network between its bases globally. In the electronics-related materials business, we will expand our track record of semiconductor products, promote the development of differentiated products using pilot plants and the acquisition of mass production technologies, and accelerate business expansion with a view to alliances and M&A.
In the package-related business, we will continue to capture growth in overseas markets such as India and Southeast Asia. In China, we will rebuild the cooperative system between our bases in order to strengthen production, sales, and technology for further growth. We will start operations at a new plant in Turkey to accelerate our expansion not only in the Turkish market but also in the EMEA region (Europe, the Middle East, and Africa). In addition, we will continue to develop and deploy environmentally-friendly products that are ahead of customer needs.
In the printing and information-related business, based on the belief that the domestic information printing market will continue to shrink, we will further improve efficiency, including through alliances. In addition, we will expand sales of UV and LED inks that meet energy-saving needs, and promote the development of sheet-wafer inks and functional coating agents that contribute to the elimination of plastics, and accelerate the expansion of overseas markets and product development in the paper container packaging market.
In addition to these business activities, we will promote initiatives to strengthen our management foundation as a practice of sustainable management. Through various measures such as the renewal of our personnel and human resource development systems, the promotion of DE&I, and the implementation of business idea contests, we will improve engagement and foster a culture of challenge, and strengthen human capital by working to secure human resources in conjunction with our business strategy. In addition, we will promote the dissemination of capital efficiency indicators such as ROIC and implement them in our business activities. Furthermore, based on the artience Sustainability Vision and ASV2050/2030, we will continue our efforts to meet social demands such as reducing environmental impact. In terms of digital transformation, we will promote product development and operational reforms, such as offensive and defensive DX initiatives, and the practical introduction of generative AI into material development and business strategies. In addition, we will continue to work to disseminate the new CI and philosophy system both inside and outside the company, and further promote the construction of a new brand.
Note: The above forecasts are based on information available as of the date of announcement on February 14, 2025, and actual results may differ from the forecasts due to various factors in the future.
In the next fiscal year, the economy is expected to continue its moderate recovery. However, there is the risk that a downturn will occur due to persistently high interest rates in the United States and Europe and the stagnant real estate market in China. The Group also expects the business environment to be harsh with challenges such as rising prices, the potential impacts of future US policies, and the ongoing conflicts in the Middle East. This notwithstanding, the Group forecasts net sales of 370,000 million yen (growth rate of 5.4%), operating profit of 22,000 million yen (growth rate of 7.8%), ordinary profit of 21,000 million yen (growth rate of minus 0.0%), and profit attributable to owners of parent of 17,500 million yen (growth rate of minus 5.6%) as a result the measures to address the issues described on following our challenges.
◆Our challenges
In the next fiscal year, which is the second fiscal year under the “artience 2027,” the new medium-term management plan, the Group will move forward with each business as described below.
In the Colorants and Functional Materials Related Business, the Group will implement key initiatives include establishing a production system in China to meet market needs for increasing market share of materials used in LCD color filters there. The Group plans to steadily grow the optical semiconductor business. It aims to expand the scope of the business by developing next-generation technologies with a diverse range of applications. The Group intends to establish a system for manufacturing lithium-ion battery materials for automotive applications in Europe, the United States, China and Japan, taking into account the business environment, and assuming that the shift to electric vehicles will remain consistent in the medium to long term. The Group also aims to gain new customers for these products and expand its product lines, including conductive agents for negative electrodes and LMFP batteries, to diversify its profit opportunities. At the same time, the Group will push ahead with the development of next-generation technologies, including all-solid-state batteries.
In the Polymers and Coatings Related Business, the Group plans to develop pressure sensitive adhesives to meet needs, primarily in China, the United States and India. The Group aims to optimize the supply chain on a global scale and increase capacity of production. As for can coatings, the Group will enhance its global network to expand the effect of the mergers and acquisition in 2023 and generate synergy. Regarding materials related to electronics, the Group aims to enhance the performance of products used in semiconductors. The Group plans to accelerate business expansion by promoting the development of differentiated products and the acquisition of mass production technologies through the use of a pilot plant. The Group also considers forming alliances as well as pursuing mergers and acquisitions.
In the Packaging Materials Related Business, the Group aims to capture growth in overseas markets, particularly in India and Southeast Asia. In China, the Group will rebuild the collaborative system among our business sites to enhance production, sales and technology and achieve further growth. The Group will accelerate its market expansion from Turkey to Europe, the Middle East and Africa (EMEA) following the commencement of operations at a new plant in Turkey. Meanwhile, the Group will develop environmentally friendly products in anticipation of emerging customer needs for these products.
In the Printing and Information Related Business, the Group aims to further improve efficiency in anticipation of a continued contraction in Japan’s information-related printing market in Japan. To achieve this, the Group is considering forming alliances. The Group intends to take steps to expand the sales of UV and LED curable inks to address the demand for energy saving solutions and develop sheet-fed printing inks and functional coatings that contribute to plastic reduction. The Group will also accelerate its expansion into overseas markets and the development of products for the paper container and packaging market.
In addition to undertaking these business activities, the Group will enhance to build a management foundation to implement sustainable management practices. The Group aims to enhance employee engagement and foster a corporate climate that encourages employees to embrace challenges by reforming the personnel and human resource development systems, implementing DE&I initiatives and conducting business idea contests and other related efforts. Additionally, it will enhance its human resources through various talent acquisition initiatives linked to business strategies. The Group will encourage the use of ROIC and other indicators of capital efficiency to enhance business operations. Additionally, the Group will continue actions to address the demands of society, including initiatives aimed at reducing environmental impact, in accordance with the asv2050/2030, artience Sustainability Vision. The Group is committed to proactively and reactively moving forward with digital transformation. It will implement initiatives to transform product development and other operations, including using generative artificial intelligence in its material development and business strategy creation activities. Meanwhile, the Group will continue to strive to increase awareness of the new Corporate Identity and Philosophy System both internally and externally while promoting the establishment of its new brand.
Note: The above forecasts are based on the information available as of February 14, 2025. Actual results could differ materially from these forecasts due to various factors in the future.