IR Briefing For Q1
Fiscal Year Ending March 2022

October 2021
Inabata & Co., Ltd.

Contents
P.3-

Achievement of Targets in Medium-Term Management
Plan NC2020

P.13- Summary of New Medium-Term Management Plan
NC2023
P.25- Returning Profits to Shareholders
P.28- Corporate Governance
P.37- Summary of Financial Results for Q1 FY03/2022 andFull-Year Outlook

P.40- Reference* In this document, Net income = Net income attributable to owners of parent

2

Achievement of NC2020 Targets◼ Net sales fell short of the target by a wide margin, causing a shortfall in operating profit.
◼ Ordinary profit and profit attributable to owners of parent exceeded targets.
◼ The net debt/equity ratio was lower than projected as the Company made progress in terms of
securing financial soundness.

(Billions of yen)

NC2020 target for
FY03/21(A)

FY03/21
actual(B)

Achievement rate(B)/(A)%

Difference

730.0

577.5

-152.479%

Operating profit

15.5

14.9

-0.5

97%

Operating profit margin

2.1％

2.6％

+0.5％

Ordinary profit

16.0

16.5

+0.5

103％

Profit attributable toowners of parent

12.0

13.7

+1.7

115%

Net debt/equity ratio

0.4x or less

0.06

－

49.2%

USD1=¥110.00

USD1=¥106.10

Net sales

Equity ratio
Exchange rate

Achieved－－

3

NC2020
Differences between Targets and Actual Results for
Net Sales and Operating Profit by Segment◼

Sales fell short of targets in all segments while operating profit achieved its projected target in the Information & Electronics segment.

(Billions of yen)

NC2020target for
FY03/21 (A)FY03/21
actual(B)

Difference(B)-(A)（億円）

Net sales

Operatingprofit

730.0

15.5

577.5

14.9

-152.4-0.5

Segment

Difference

Information &Electronics-36.4

Chemicals-29.0Life industry-27.6

Plastics

-59.1

Other

-0.1

Information &Electronics+1.9

Chemicals-0.8Life industry-1.2

Plastics

-0.2

Other

-0.1

Notes: In the Information & Electronics segment, recorded ¥0.75 billion in reversal of allowance for doubtful accounts at a European subsidiary in FY03/21.
Detailed comparisons between results and targets by segment can be found on page 51 through 58 in the Reference Materials section.
4

NC2020

Net Sales and Operating Profit
Net sales(Billions of yen)

Target

800.0
630.0

660.0

700.0

730.0

400.0
572.1

577.0

586.6

621.1

634.7

600.3

577.5

FY03/15

FY03/16

FY03/17

FY03/18

FY03/19

FY03/20

FY03/210.0（actual） （actual） （actual） （actual） （actual） （actual） （actual）

NC2016

NC2020Operating profit(Billions of yen)

Target

20.0
12.5

13.5

14.5

15.5

10.0
10.7

11.3

12.6

14.9

14.0

13.2

FY03/19

FY03/20

FY03/21（actual） （actual）（actual）

5.9
0.0
FY03/15

FY03/16（actual） （actual）

FY03/17

FY03/18（actual） （actual）✓ Net sales continuously fell short of targets
due in part to delayed new productdevelopment and COVID-19 impact
incurred toward the end of the plan.
✓ Operating profit dropped sharply YoY in
FY03/18 and fell widely short of the target
as the Company recorded ¥6.65 billion inallowance for doubtful accounts following
issues related to a European subsidiary. In
FY03/19, the second year of the plan,
operating profit recovered and met its
projected target.
✓ In FY03/20, both net sales and operating
profit declined, falling short of theirrespective targets.
✓ In FY03/21, despite falling short of its
projected target, operating profit recovered
due in part to rapid 2H business recovery,
reversal of allowance for doubtful accounts,
and a decline in SG&A expenses causedby the COVID-19 pandemic.
5

NC2020

Ordinary Profit and Net Income
Ordinary profit(Billions of yen)

Target

20.0
13.0

14.0

15.0

16.0

10.0
13.2

13.6

12.2

14.3

14.2

FY03/19

FY03/20

16.5✓ Along with operating profit, ordinary profit
and net income declined sharply in
FY03/18, falling short of targets.

6.3
0.0
FY03/15

FY03/16

FY03/17（actual）（actual） （actual）

FY03/18（actual） （actual）

NC2016（actual） （actual）

NC2020Net income(Billions of yen)

FY03/21

Target

20.0

10.0

12.0

10.5

11.0

12.8

11.4

FY03/19

FY03/20

FY03/21（actual） （actual）（actual）

10.0
8.6

9.5

9.6

FY03/15

FY03/16

FY03/17

13.7✓ Ordinary profit achieved its projected target
in FY03/19. It also met projections in
FY03/21 as interest expenses declined due
to interest rates that were lower than
expected and a decrease in borrowings.
✓ Net income achieved its projected targets
in FY03/19 through FY03/21 as theCompany progressively sold strategicallyheld shares and reported gains on the salethat were higher than expected.

6.7

0.0
（actual） （actual）

FY03/18（actual） （actual）

6

Achievement of Key NC2020 Initiatives

Key Initiatives

Assessment

1.

Further expansion and deeper involvement in overseas
businesses△

2.

Focus on markets with growth potential and sectors thathave yet to be developed

See next page3.

Further enhancement of information infrastructure essential
for global management◎

4.

More proactive investment to expand the trading business△5.

Continual review of assets and enhancement of financial
standing◎

6.

Establishment of global human resource management△

7

Achievement of Key NC2020 Initiatives
2. Focus on markets with growth potential and sectors that have yet to be developed
Key Initiatives

Assessment

2. Focus on markets withgrowth potential and sectorsthat have yet to be developed⚫ Automotive⚫ Life science andmedical⚫ Environment andenergy⚫ Food, including
agriculture(Agricultural field)

◎

×

△

△

Despite heavy impact from the COVID-19 pandemic in the final year of the plan, salesof resins and other products to global customers expanded more than expected,
business in Japan grew, and sales of heat-dissipating materials increased.
Sales of pharmaceutical ingredients failed to grow and fell short of their projected
target due in part to the COVID-19 pandemic.
In the field of regenerative medicine, the Company reported sales of growth media
and devices but did not achieve expansion in sales of new products.
In the home products category, sales of insect repellent and pesticide materials grew
but inbound tourist demand virtually disappeared.

The Company revised its forecast for solar cell sales due suspensions of relatedtransactions in Europe.
The Company focused on system-related projects in Japan.
Despite slight delays to lithium-ion cell-related sales, the Company experienced
growth in terms of associated material sales to Chinese and South Korean
manufacturers.
Cultivation of blueberries and garlic in Hokkaido took more time than expected, but
crop growth was strong nevertheless.
New business development encountered delays.
Sales of imported grass and other types of animal feed were robust.
The Company also reported growth in sales of processed marine products forconveyor-belt sushi restaurants.

We will continue to address unresolved issues under NC2023.

8

NC2020 Focus on Markets with Growth Potential and
Sectors That Have Yet to Be Developed
Principal initiatives in the automotive field
Progress slowed down in FY03/21 due to lockdown-related impact incurred in 1H, but business associated with
Plastics and Chemicals recovered rapidly in 2H.
Plastics:

We are working to increase sales of plastics to global customers, and are also expanding in-country
sales.
Chemicals: We are expanding sales of parts and paint materials, and are focusing on sales of heat-dissipating
materials and parts.
Information & Electronics: Potential exists to sell decorative films.
(Billions of yen)

Sales from principal business in the automotive field (simple totals)

100.0

75.0
10.1
50.0

11.9

10.1

10.9

10.5

Chemicals, Other
Plastics

25.0

46.5

52.6

56.6

FY03/19(actual)

FY03/20(actual)

49.7

58.2

0.0
FY03/18(actual)

FY03/21(actual)Note: Sales figures for plastics primarily reflect sales made to global account users.

FY03/21(midium-termtarget)9

NC2020 Focus on Markets with Growth Potential and
Sectors That Have Yet to Be Developed
Principal initiatives in the environment and energy field
Information & Electronics: Sales of solar cells were down sharply due to discontinuation of transactions at a
European subsidiary, but we intend to focus on the sale of high value-added
materials and systems.
Sales of lithium-ion battery materials to manufacturers in China and South Korea are
increasing.
Chemicals: We will focus on sales of wood chips and particle board.

30.0

Sales from principal business in theenvironment and energy fields (simple totals)

20.0

3.4

(Billions of yen)

Chemicals, Other

10.0

Information & Electronics

2.3

2.6

2.9

7.5

7.2

FY03/20(actual)

FY03/21(actual)

18.6

2.7
8.0

4.9

0.0
FY03/18(actual)

FY03/19(actual)Note: Results for past fiscal years include certain amounts that have been updated.

FY03/21(midium-termtarget)10

NC2020 Focus on Markets with Growth Potential and
Sectors That Have Yet to Be Developed
Principal initiatives in the life science and medical fields
Sales of pharmaceutical ingredients in FY03/21 were sluggish due in part to impact from the COVID-19 pandemic.
Life Industry: With pharmaceutical ingredients (active ingredients and intermediates) sales asa stepping stone, we will focus on advanced medicine.
We will sell Japan-made household products overseas.
Plastics: We will sell plastics to medical device manufacturers (e.g., for syringes).
Information & Electronics: Sales of materials used in protective masks grew.

Sales from principal business in the life scienceand medical fields (simple totals)(Billions of yen)

50.0

5.1
2.1

25.0

1.9
28.3

1.8

Plastics, Other
2.3

Life Industry
33.3

23.1

21.8

20.5

FY03/19(actual)

FY03/20(actual)

FY03/21(actual)

0.0
FY03/18(actual)Note: Results for past fiscal years include certain amounts that have been updated.

FY03/21(midium-term target)

11

NC2020 Focus on Markets with Growth Potential and
Sectors That Have Yet to Be Developed
Principal initiatives in the agricultural field
Life Industry: We are developing the cultivation business, centered on the production of blueberries
and garlic in Hokkaido.
Full-scale shipment of blueberries and garlic will start in FY03/22 or later.
We are concentrating on sales of films for agricultural use (for anti-fogging, for example).

Plastics:

Information & Electronics: Sales of animal feed (imported grass) are increasing.
(Billions of yen)

6.0

Sales from principal business in the agricultural field (simple totals)

4.0

Plastics, OtherLife Industry
2.0

0.0

2.0
2.1

2.4

0.3
FY03/18(actual)

2.2

2.2

0.1

0.0

0.0

FY03/19(actual)

FY03/20(actual)

FY03/21(actual)0.8

Notes: Results for past fiscal years include certain amounts that have been updated.
The figures above do not include sales of frozen goods.

FY03/21(midium-term target)

12◼ Summaryof New Medium-Term Management Plan
New Challenge 2023 (NC2023)

13

NC2023: Basic Policies◼ Second-stage medium-term management plan on the way to our long-term vision, IK Vision 2030
◼ Continues along the same basic trajectory as NC2020, the first-stage plan
◼ Some adjustments have been made based on the degree of achievement associated with targets in
NC2020 and changes in the current business environment.
MissionPeople come first, based on the spirit of "love ( ai )" and " respect ( kei )," andtogether we strive towards contributing to the development of society.

VisionIK Values

To continually evolve, serving clients and society, through global
operations and meeting their changing needs.
IK Values
Ethics, aspiration, organization, role, symbiosis

IK Vision 2030
IK Vision 2030 (envisioning ourselves around 2030)

Medium-term management plan

Second stage NC2023 (targets for FY03/24)

First stage NC2020 (concluding March 31, 2021)
14

Quantitative Targets of NC2023

FY03/24

Net sales¥670.0 billion

Operating profit¥16.5 billion

Ordinary profit¥17.0 billion

Profit attributable toowners of parent¥16.0 billion

ROE

8％ or more

Net D/E ratio

0.3x or less

Equity ratio

50% or more

Assumed exchange rate

USD1 = JPY105

Note: Sales target based on accounting standards prior to the adoption of
the revised revenue recognition methods: 700.0 billion JPY

15

Key Initiatives for NC2023

1.

Further development of core businesses and horizontal expansion
into growth sectors

２.

Multi-faceted approach to markets with potential for future growthand steady monetization efforts

3.

Intensification of investment targeting future growth

4.

Further upgrades to global management information infrastructure

5.

Continuous review of assets and further improvement of capitaland asset efficiency

6.

Enhancement of human capital utilization efforts
16

Key Initiatives for NC2023
1. Further development of core businesses and horizontal
expansion into growth sectors
Segment
Information &Electronics
Plastics

Key Initiatives•••

Enrich LCD and OLED businesses within the Chinese market
Focus on FPDs for the new generation and peripheral components
Concentrate on the currently expanding business related to industrial inkjet
printers•

Take advantage of global expansion in the plastic compounds business andother operations and achieve business expansion, particularly in theautomotive sector

17Key Initiatives for NC2023
2. Multi-faceted approach to markets with potential for future
growth and steady monetization efforts
Segment

Key Initiatives

Information &Electronics
Plastics
Chemicals••

Expand our lineup of environmental impact-reducing products
Conduct multifaceted rollout of initiatives supporting business in the newenergy sector, 5G-related business, and business associated with
automotive applications and mobilityLife industry（Food and
agriculture）•

Accelerate upstream and downstream expansion through wide-ranging
investment and other initiatives

Life industry(Life science)•Strengthen focus on the regenerative medicine sector and other markets
with growth potential

18Key Initiatives for NC2023
3. Intensification of investment targeting future growth◼ We will consider investing in the following sectors and fields to achieve
expansion in the trading business.
Segment

Information &Electronics
Life industry

Key Initiatives•

Batteries and other elements of renewable energy•

Upstream and downstream domains associated with food products andagriculture (especially processing functions)Regenerative medicine and other growth areas (venture investment, etc.)••

Plastics
Chemicals•

Pursue manufacturing functions with the aim of achieving enrichment in theautomotive sector
Automation and labor saving in manufacturing divisions for compounds, etc.

•

Mobility sector

19Key Initiatives for NC2023
4. Further upgrades to global management information
infrastructure
Key Initiatives••

Embrace new technological trends and promote further digitalization (digital transformation
initiatives)
Establish a global management information infrastructure that will support security
enhancement, business continuity planning, and new workstyles

20

Key Initiatives for NC2023
5. Continuous review of assets and further improvement of
capital and asset efficiency
Key Initiatives••

Further review strategically held shares and reduce them by 50% in three years
Allocate cash earned evenly toward the following three areas:
1) Investment for future growth2) Returns to shareholders
3) Strengthening of financial base21

Key Initiatives for NC2023
6. Enhancement of human capital utilization efforts

Key Initiatives••

Further implement systemic enhancements aimed at supporting global human resource
development and increasing diversity
Strengthen initiatives targeting employee engagement and new workstyle reforms

22

Sales by Segment(Billions of yen)

Information & Electronics

1,200.0

ChemicalsLife Industry

Plastics

Other

1000.01,000.0

800.0

621.1

634.7
0.1

0.1

600.0

(Target)(Target)(Forecast)

600.3

577.5

0.1

635.0

600.0

670.0
0.2

0.2

0.2

0.1

(Goal)

284.0

300.8

286.9

300.0

270.3

248.8

267.0

42.3
76.7

39.0
77.5

36.9
74.1

37.3
66.6

38.8
68.0

42.8
72.0

46.0
77.0

214.9

217.9

218.6

224.5

226.0

236.0

246.0

FY03/18

FY03/19

FY03/20

FY03/21

FY03/22

FY03/23

FY03/24

400.0

200.0

0.0

NC2020Around 2030
IK Vision 2030

NC202323

Operating Profit by Segment
Information & Electronics(Billions of yen)

ChemicalsLife Industry

Plastics

Other

27.50

22.50
(Goal)(Forecast)

17.50

14.97

14.03

13.22

0.13

5.63

5.96
7.50

6.34

2.50

1.31
1.42

1.16
1.20

4.81

4.48

FY03/19

FY03/20

1.92
0.41

-2.50

FY03/18
-2.04

6.20

15.50

16.50
0.10

0.10
6.70

7.05

6.23

0.12
5.54

0.10

0.13

0.13

12.50

16.00

(Target)NC2020

1.56
1.32

2.20
1.50

2.00

2.20

1.35

1.50

6.32

6.00

5.35

5.65

FY03/21

FY03/22

FY03/23

FY03/24

Around 2030
IK Vision 2030

NC2023

Note: Upward revision to the full-year FY03/22 forecast from ¥14.5 billion (as announced on May 11, 2021) to ¥16.0 billion(revised on August 5, 2021)

24

Returning Profits to Shareholders ①◼ As we launch NC2023, we have formulated a new shareholder return policy that
we will implement during the plan.

Adoption of progressive dividends
We will ensure that dividend per share does not decline year on year bycontinually increasing our dividends• We will continue to target a total return ratio of about 30–35%.
• We will swiftly and flexibly conduct treasury stock acquisition.

◼ FY03/22 (forecast)
Annual dividend ¥70（interim ¥30

year-end ¥40）

Note: Total return ratio (%) = (dividend amount + amount of treasury shares acquired) / consolidated net income x 100

25

Returning Profits to Shareholders ②

Annual dividends per share and indicators of shareholder return
(Yen)
80

Dividend

Dividend payout ratio

Total return ratio

70

80.0%

63
60

40
40

30
20

33

36

34.8%

40

48

60.0%

53

46.5%
31.9%

Approx.
30–35%
target

31.1%

31.1%

24.1%

23.7%

25.6%

(604)

(707)

(891)

(679)

(936)

(425)

FY03/14

FY03/15

FY03/16

FY03/17

FY03/18

FY03/19

FY03/20

FY03/21

FY03/22(actual)(actual)(actual)(actual)(actual)(actual)(actual)(actual)(forecast)

21.9%

0

36.4%

30.0%

27.6%
28.1%

27.5%

40.0%

20.0%

22.7%

0.0%

Note: The figures in parentheses at the bottom of the bar chart show the amount of treasury stock acquired (in millionsof yen) during the period.

26

Earnings per Share

(Yen)
280

265.80229.13240

211.36188.82200

151.91160

137.01

156.25137.20109.92

120

80

40

（604）

（707）

（891）

（679）

（936）

（425）

FY03/14

FY03/15

FY03/16

FY03/17

FY03/18

FY03/19

FY03/20

FY03/21

FY03/22（actual）（actual）（actual）（actual）（actual）（actual）（actual）（actual）（forecast）

0

Note: Figures in parentheses at the bottom of the bar graph indicate own-share purchases conducted during the year (inmillions of yen).

27

◼ Corporate Governance28

Corporate Governance ①
Experience and expected roles of directors and auditors
Inabata, a global business operator, has in place a corporate governance structure that
supports the Board of Directors' decision making and enables the Company to fulfill
supervisory functions over executive officers' business execution.

(Note) * denotes an independent outside officer.

29

Corporate Governance ②・Three outside directors (of total of nine directors)
We aim to enhance supervisory functions and increase corporate value by taking advantage ofthe outside directors’ extensive experience and wide-ranging insight into company business.

Kiyoshi Sato*

Kenji Hamashima*

Lead outside director/Chair of Nominating
and Remuneration Committee

Background

Background

Former President and CEO - Tokyo Electron
Ltd.
Current Director (Outside) – Shibaura
Machine Co., Ltd. and Mazda Motor Corp.

Former President and Chief Executive
Officer – Ushio Inc.

Reasons for appointment

Reasons for appointment

Mr. Hamashima has extensive
Mr. Sato has extensive experience in global
experience in global businessbusiness operations as top management of aoperations as top management of aleading producer ofmanufacturer handling applied optics
manufacturing equipment for
products and industrial machinery.
semiconductors and flat panel displays.

Takako Hagiwara*
Background
Current Representative Director, DDD
Corp.
Current Outside Director, Twinbird Corp.
Current Outside Director, NEC Capital
Solutions Ltd.

Reasons for appointment
Ms. Hagiwara has extensive experience
as a member of top management incharge of HR at a major electronics
manufacturer that operates multiples
businesses globally.

(*) Mr. Kiyoshi Sato, Mr. Kenji Hamashima and Ms. Takako Hagiwara are registered as independent outside officers with the TSE.

30

Corporate Governance ③
The following initiatives were implemented to enhance governance

1. Established the Nominating and Remuneration Committee(voluntary) (FY3/2016)
Ensures objectivity, fairness and transparency with respect to theappointment and dismissal of senior management, nomination ofcandidates for directors, Audit & Supervisory Board members, andexecutive officers, and determination of director remuneration• Chairperson : independent outside director• Current membership: 1 internal director and 3 independent outside
directors• Held seven times during FY 03/2021

31

Corporate Governance ④
2. Evaluating the board of directors
Objective - To enhance corporate value by increasing the effectivenessand transparency of the board of directors

FY03/18
Conducted third-party evaluation of all directors and Audit & Supervisory Board
members using surveys and individual interviews

FY03/19, FY03/20
Performed a self-evaluation using a survey format

FY03/21
Conduct third-party evaluation every three years⇒ In April 2021, disclosed summary of evaluation and measures going forward

32

Corporate Governance ⑤
2. Evaluating the board of directors
FY03/2021（third-party evaluation）

Summary of evaluation

・ The composition and operating status of the Board received high marks
overall.
・ Open and lively discussions were confirmed.
・ Outside officers (directors and auditors) made contributions.
・ The composition, role, and operation of the Nominating and Remuneration
Committee were appropriate.

Issues to be addressed
・Further discussion on medium- to long-term management and strategies
・Strengthening corporate functions
・Continued review of the composition of the Board to respond to changes inthe business environment
・Sharing deliberation summaries of the Nominating and Renumeration
Committee at Board meetings
33

Corporate Governance ⑥
3. Officer Remuneration
Remuneration of Directors*■Cash remuneration

・Fixed remuneration
・Performance-based remuneration: Determined based on profit before income
taxes (excluding gains on the sale of a portion of strategically held shares)■ Performance-based stock remuneration
・Board Benefit Trust (BBT)(Introduced in June 2018 to enhance motivation to contribute to medium- to long-term
expansion in corporate value)

Ratio of performance-based remuneration to fixed remuneration in FY03/2021
Performance-based remuneration
43.2％*Excluding outside directors

Fixed remuneration
56.8%

Target:seven directors
Total: 318mn yen
34

Corporate Governance ⑦
4. Strategically Held Shares[Policy on retention and reduction]
・ Further review strategically held shares and reduce them by 50% inthree years (NC2023)
・Allocate cash earned evenly toward the following three areas:
1) Investment for future growth2) Returns to shareholders
3) Strengthening of financial base
Sales of strategically held shares

FY03/17
FY03/18
FY03/19
FY03/20
FY03/21¥4,549 million¥9,017 million¥5,298 million¥3,026 million¥2,944 million
35

Human Resource Development
Our strengths lie in our human resources and information
Regarding the development of human resources, our most important assets
Initiatives to further enhance on-site capabilities, our forte✓ Since 2018, we have held workshops at 36 locations in 14 countries to promote “IK Values.”
More than 700 local staff members participated.
✓ We continued to hold the Global Staff Meeting. However, we cancelled the meeting scheduled for
May 2021 due to the novel coronavirus pandemic.
✓ In April 2021, we conducted an employee engagement survey.
A total of about 1,400 employees participated at the head office and 16 major overseas bases of
the trading division.

(People)70%* of respondents replied that theyshared Inabata’s corporate philosophy,
vision, and management policy and thatthey wanted to participate in realizing them.

Number of overseas personnel in the trading divisionand people on overseas assignment
Trading division

People on overseas assignment

1,000

663

693

737

764

783

787

500

0

93

95

94

90

93

End-FY03/16

End-FY03/17

End-FY03/18

End-FY03/19

End-FY03/20

92
End-FY03/21*Note: The percentage of respondents who chose either (5) Strongly agree or (4) Agree on a five-point Likert scale.
The number of people on overseas assignment is as of the first day of the following month.

36

Summary of Financial Results forQ1 FY3/2022 and Full-Year Outlook

37

Consolidated Results Review－Q1 FY3/2022
Net sales:¥

162.6 billion ¥128.7 billion in Q1 FY03/21

Net sales increased owed to recovery from a substantial slump a year ago
in the wake of the COVID-19 pandemic.

Operating profit:¥5.5 billion+151.2% YoY

Operating profit rose on increases in net sales and operating profit margin.

Ordinary profit:¥6.4 billion+110.0% YoY

Ordinary profit increased on operating profit growth.
ProfitProfit attributable
attributable toto¥billion+294.4% YoY
ownersowners ofof parent:
parent:Bottom-line profit grew due to an increase in ordinary profit and gain on salesof investment securities.

7.9* Inabata has adopted Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) effective from Q1 FY03/22,
which had a negative impact on net sales of ¥5.1 billion.

38

Consolidated Results Review －Q1 FY3/2022

Upward revisions to full-year profit forecasts(Billions of yen)
YoY change
Q1 FY3/21

Q1 FY3/22
(A)

128.7

162.6

Operating profit

2.2

5.5

Ordinary profit

3.0

Profit attributable toowners of parent

Net sales

Exchange rate
(USD/JPY)

Amount

+33.9

%

-

Forecast
announced
May. 11, 2021

Revised forecast
announced
Aug. 5, 2021

(B)

Achievement
rate（A)/(B)

600.0

600.0

27.1%

+3.3 +151.2%

14.5

16.0

35.0%

6.4

+3.3 +110.0%

15.0

17.0

38.0%

2.0

7.9

+5.9 +294.4%

14.0

16.0

49.8%

107.63109.52+1.89

105.00110.00* Inabata has adopted Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) effective from Q1
FY03/22, which had a negative impact on net sales of ¥5.1 billion.

39

Reference40Summary of the Company

About Inabata:
1. Founded in 1890
Founded in Kyoto in 1890 as Inabata Senryoten – animporter of dyestuffs
The business was later expanded, with the focus on
chemicals

Inabata Dye Shop
(Nishijin, Kyoto)

Asia

Europe2. A globally expanding, multi-faceted
trading company

The
Americas
India

China
Japan

SE Asia

Around 60 locations in across 17 countries
Business functions include market development, manufacturing &processing, logistics, finance, etc.
Planning and proposals based on expertise and know-how of products
and markets
41

Summary of the Company

3. 4 Business Segments
Operating in 4 segments:Information & Electronics,
Chemicals, Life Industry and Plastics
Life
Industry

6%
Chemicals

12%
Materials for pharmaceuticals
and household products,
agricultural and marine
products

Plastics
43%

FY 03/21 Sales

Plastic materials,
compounds, various film andsheet products

577.5 billion JPY
Information& Electronics

Resin and rubber materials,
materials and additives forpaints, inks, adhesives
Lumber, laminated timber,housing equipment

39%
LCD components, inkjet andtoner materials, LED materials

42Regional Business Development
Operating in Japan and at about 60 locations in 17 countries

Inabata Group Sales by regionJapan
22 bases of operation in
2 countries - China &South Korea

46.6％

25 bases of operation in 8
countries, including
Singapore and Thailand

Northeast
Asia

Southeast
Asia

21.1％

FY 03/21 Sales

27.2％

577.5 billion JPY
5 bases of operationin 4 countries,
including UK & France

Europe
1.6％(NB) No. of overseas countries and operation bases as of July 1, 2021
(NB) No. of operation bases includes affiliates

The
Americas

3.5%

9 bases ofoperation in 3
countries, including
USA & Mexico
43

Inabata’s Wide Range of Capabilities
Highly specialized people
empowered with cutting-edge information

44

Inabata’s Strengths [Manufacturing and Processing]Our strategy involves expanding our trading business by swiftly grasping with information
regarding the development of new products and market trends by drawing on our worldwide
processing bases and trading company offices.
Plastics compounds: Formed by adding flame
retardants and other additives to raw plastic

Compounding
facility

Plastics
manufacturer
Proposal

Information

Collaboration

Component
manufacturer
Information

Product
manufacturer
ProposalInquiries on plastics andcoating materials

Information onmaterials

Tradingcompany office

Expanding trading businessby leveraging ourmanufacturing capabilities
Trading company capabilities

45

Inabata’s Strengths [Plastic Compounding Facilities]
China

Plastics Compound
Business Office (Japan)

12,600 MT/Y•••

VietnamShares information
Coordinates facilities andraw materials
Reduces costs bypurchasing in bulk

42,000 MT/Y

ThailandPhilippines

38,400 MT/Y

10,800 MT/Y
Building and dismantling plants in line with customers’
relocation strategies
Providing consistent service quality everywhere

Malaysia
27,600 MT/Y

Indonesia
37,200 MT/Y

183,600 MT/Y: 7 sites in 7 countries (As of July 1, 2021)

Mexico15,000 MT/Y
46

Sales and Operating Profit in the Manufacturing Sector
Manufacturers and processing consolidated subsidiaries:
FY03/21 - 22 companies
Sales(Billions of yen)

(Millions of yen)

Operating profit

2,000

60.0

55.0

51.8

40.0

1,603

1,587

FY03/20

FY03/21

1,500
1,000

20.0

500

0.0

0
FY03/20

FY03/21

Notes: Simple sum of sales. Results for FY03/20 have been converted at the exchange rate for FY03/21.
In FY03/21, the Company made a partial change to the classification of group companies and added a manufacture andprocessing company (based in Japan) to consolidated subsidiaries (marine products processing company Ikkoen Co., Ltd.)47

IK Vision 2030, Our Long-Term Vision◆Inabata’s aspirations for itself in around 2030
Function: Further enhancing multifaceted capabilities (such as
manufacturing, logistics, and finance) in addition to trading

Scale:

Reach consolidated net sales of ¥1 trillion at an early stage

Overseas business: 70% or more
Portfolio: At least one-third of business from segments other thanInformation & Electronics and Plastics

Formulated May 201748

Net Sales and Operating Profit(Operating profit: Billions of yen)
35.0(Net sales: Billions of yen)
1,200.0

IK Vision 2030

1,000.0 30.0

1,000.0

Net sales

Operating profit
25.0

800.0
(Goal)(Target)

600.0

561.1
500.0
442.7
410.7

400.0

634.7
621.1
600.3
586.6

577.5

464.4
14.0 13.2

12.6

331.7

670.0
635.0
600.0

20.0

(Forecast)

14.9

16.0 15.5

16.5

15.0

10.0

10.9
7.6

200.0

7.6
5.5

4.2

5.0

5.9

3.5

0.0

0.0

NC2023

Note: Operating profit target for FY03/22 was revised upward (released on August 5, 2021)

49

Overseas Sales and Operating Profit(Net sales: Billions of yen)

(Operating profit: Billions of yen)800

Net sales

Operating profit
18600

Operating profit grew by five times over 17 years

14

10
400
7.3
6.1
4.9
3.3
200
1.6

3.6

4.2

3.5

2.3

1.6
170.9

84.1

0
JPY
per
USD

110.2

284.3

294.0

340.6
327.7

305.4

6.9
6
316.3

312.9

308.5

211.6
186.5

159.3

3.9

2.0

185.0
150.5

3.7

5.1

5.8

7.9

2

186.7

152.2

-0.7

FY03/04 FY03/05 FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 FY03/19 FY03/20 FY03/21
107.1

104.2

118.0

119.1

114.1

91.0

92.1

81.4

77.7

79.8

100.1

109.7

120.1

108.3

110.8

110.9

108.7 106.1

Around2030-2(IK Vision 2030)

NC202050

NC2020 Target Achievement by Segment 【Information & Electronics】(Billions of yen)

300.0

Sales

FY03/20 actual

FY03/21 actual
(A)

Sales

218.6

224.5

261.0

86％

Operating profit

4.48

6.32

4.40

144％

Operating profit
margin

2.0％

2.8％

1.7％

―

(Billions of yen)

200.0

（億円）
224.5

100.0

261.0

（億円）

0.0
FY03/21(actual)

FY03/21(goal)◼ NC2020 operating profit target
Main reasons for differences between actual andtarget figures(Billions of yen)

8.00

Operating profit

•
•
•
•

4.00
6.32
4.40

•
•

0.00
FY03/21(actual)

FY03/21(goal)•

Increase in FPD material sales
Reversal of allowance for doubtful
accounts at a European subsidiary
Lower SG&A expenses
Discontinuation of solar cell transactions at a
European subsidiary
Decision to forgo low-margin VMI
transactions
Increase in remote work (home-use inkjet
printers)
Same as above (office multifunction printers)

NC2020target for
FY03/21 (B)⇒Achievement
rate（A)/(B)

Achieved

COVID19

Operatingprofit

Sales

＋
＋
+

＋
－

－
+

＋

＋

－

－

－

51
Notes: In the Information & Electronics segment, recorded ¥0.75 billion in reversal of allowance for doubtful accounts at a European subsidiary in FY03/21.
When excluding the impact of ¥750 million from this reversal of allowance for doubtful accounts, the OPM in the Information & Electronics segment in FY03/21 was 2.5%.

NC2020 Net Sales and Operating Profit 【Information & Electronics】
Net sales(Billions of yen)

Target

400.0
229.0

235.0

250.0

261.0

✓

Sales continuously fell short of targets due to a
decline in business related to European
subsidiaries, and the decision to shelve lowmargin VMI transactions in the OA-related
business.

✓

The Company reported a segment operating loss
in FY03/18 due to the posting of ¥5.9 billion inallowance for doubtful accounts associated with aEuropean subsidiary.

✓

Segment operating profit exceeded targets in
FY03/19 and FY03/20 as performance related to
FPDs, an important source of earnings, grew inChina and results associated with solar cells andsemiconductors came up strong in Japan.

✓

Segment operating profit came in above forecast
in FY03/21 due to strong business, a decline in
SG&A expenses caused by the COVID-19
pandemic, and a reversal of allowance for doubtful
accounts.

200.0
209.3

211.6

221.0

214.9

217.9

218.6

224.5

FY03/15

FY03/16

FY03/17

FY03/18

FY03/19

FY03/20

FY03/210.0（actual） （actual） （actual） （actual） （actual） （actual） （actual）

NC2016

NC2020Operating profit

Target(Billions of yen)

8.00

3.70

4.00

4.20

4.40

4.00
4.48

3.83

3.99

6.32

4.81

4.48

FY03/19

FY03/20(2.04)

0.00
FY03/15

FY03/16

FY03/17

FY03/18

FY03/21（actual） （actual） （actual） （actual） （actual） （actual） （actual）(4.00)

52

NC2020 Target Achievement by Segment 【Chemicals】
100.0

Sales

FY03/20 actual

FY03/21 actual
(A)

74.1

66.6

95.7

70％

Operating profit

1.20

1.32

2.20

60％

Operating profit
margin

1.6％

2.0％

2.3％

―

(Billions of yen)

（億円）
95.7

50.0

Sales

66.6
（億円）
0.0
FY03/21(actual)

FY03/21(goal)◼ NC2020 operating profit target

3.00

Operating profit

•
•

•
2.20

1.00

•

1.32

•

0.00
FY03/21(actual)

FY03/21(goal)⇒

Main reasons for differences between actual andtarget figures(Billions of yen)

2.00

NC2020target for
FY03/21 (B)•Sluggish performance in the former
Housing & Eco Materials segment
Sluggish export sales in the former Housing &Eco Materials segment
Slow sales of heat-dissipating products

Achievement
rate（A)/(B)Not achieved
COVID19

Weak sales of raw materials used in
substances such as paints, inks, andadhesives－

Review of transactions at a European
subsidiary
Lower SG&A expenses＋

Operatin
g profit

Sales

－

－

－

－

－
－

－
－

－

－

＋

Notes: In FY03/21, the Company targeted segment operating profit of ¥2.2 billion and aimed to acquire ¥600 million of this total from the former Housing & Eco
Materials segment.
Segment operating profit fell short of its target by ¥880 million and ¥450 million of this shortfall occurred in the former Housing & Eco Materials segment.

53

NC2020 Net Sales and Operating Profit 【Chemicals】
Net sales(Billions of yen)

Target

150.0

100.0

50.0

91.7

95.7

80.7

85.7

77.1

73.0

73.1

76.7

77.5

74.1

66.6

FY03/15

FY03/16

FY03/17

FY03/18

FY03/19

FY03/20

FY03/21✓

Sales continuously fell short of targets due
primarily to sluggish performance in the former
Housing & Eco Materials segment.

✓

Segment operating profit fell sharply YoY in
FY03/18 due to the posting of ¥750 million inallowance for doubtful accounts associated with aEuropean subsidiary.

✓

Segment operating profit improved in FY03/19 but
continued to fall short of its targets throughFY03/21 as sales fell short of expectations amid
impact from factors such as a lack of progress
associated with planned export business in theformer Housing & Eco Materials segment.

0.0（actual） （actual） （actual） （actual） （actual） （actual） （actual）

NC2016

NC2020Operating profit(Billions of yen)

Target

3.00
2.00

2.00

1.50

2.20

1.70

1.00
1.35

1.43

1.42

1.26

1.20

1.32

FY03/20

FY03/210.41

0.00
FY03/15

FY03/16

FY03/17

FY03/18

FY03/19

Note: The Housing & Eco Materials segment was
combined with the Chemicals segment in FY03/20.
FY03/19 results have been calculated according to
the new alignment.

（actual） （actual） （actual） （actual） （actual） （actual） （actual）

54

NC2020 Target Achievement by Segment 【Life Industry】(Billions of yen)

80.0

Sales

FY03/20
actualFY03/21 actual(A)

NC2020target for
FY03/21 (B)

36.9

37.3

65.0

57％

Operating profit

1.16

1.56

2.80

56％

Operating profit
margin

3.2％

4.2％

4.3％

―

(Billions of yen)
Sales

（億円）
40.0
65.0

37.3
（億円）

◼ NC2020 operating profit target

0.0
FY03/21(actual)

FY03/21(goal)

Main reasons for differences between actual andtarget figures(Billions of yen)

4.00

Operating profit

•
•
•

2.00
2.80

•
•

1.56

•

0.00
FY03/21(actual)

FY03/21(goal)⇒•

Pharmaceutical ingredients (supply
resumption delays at suppliers)
Same as above (decline in the use of
influenza drugs)
Food-related (plans suspended at a European
subsidiary)
Same as above (delays in the launch of
new businesses)
Same as above (sluggish sales to restaurants
and food service facilities)
Same as above (growth in fishery productsales to conveyor-bent sushi restaurants)
Lower SG&A expenses

Achievement
rate（A)/(B)Not achieved
COVID19－－＋

Operatingprofit

Sales

－

－

－

－

－

－

－

－

－

－

＋

＋

＋

55

NC2020 Net Sales and Operating Profit 【Life Industry】
Net sales(Billions of yen)

Target

80.0
59.0

54.0

65.0

47.0

40.0
41.0

40.4

42.3

39.0

36.9

37.3

FY03/15

FY03/16

FY03/17

FY03/18

FY03/19

FY03/20

FY03/21（actual）（actual） （actual）

34.6
0.0

（actual） （actual）

NC2016

NC2020Operating profit(Billions of yen)（actual） （actual）

Target
2.80

3.00
2.30

2.50

2.00

2.00
1.92
1.00
1.03

1.52

1.82

1.31

1.16

FY03/19

FY03/20✓ Sales continuously fell short of targets. The
Company noted a particular shortfall interms of progress associated with new
food-related business planned through aEuropean subsidiary.
✓ Segment operating profit came close toachieving its target in FY03/18 thanks tosolid performance from pharmaceuticalingredients and steady home productrelated results but began to fall off in
FY03/19. Food-related profit was alsostagnant as the Company incurred upfront
expenses. Consequently, segment
operating profit continuously fell
substantially short of targets.

1.56

0.00
FY03/15

FY03/16

FY03/17

FY03/18

FY03/21（actual） （actual） （actual） （actual） （actual） （actual） （actual）

56

NC2020 Target Achievement by Segment 【Plastics】(Billions of yen)

400.0

Sales

FY03/20 actual

FY03/21 actual(A)

NC2020target for
FY03/21 (B)

Sales

270.3

248.8

308.0

81％

Operating profit

6.23

5.63

5.90

95％

Operating profit
margin

2.3％

2.3％

1.9％

―

(Billions of yen)

（億円）
200.0

308.0
248.8
（億円）
0.0
FY03/21(actual)

FY03/21(goal)◼ NC2020 operating profit target(Billions of yen)

8.00

Operating profit

•
•
•
•

4.00
5.63

5.90

•
•

•

0.00
FY03/21(actual)⇒Achievement
rate（A)/(B)Not achieved

Main reasons for differences between actual andtarget figures

COVID19

OperatingprofitDecrease in commodity resin sales
Decrease in high-performance resin sales
Drop in plastics prices
Increase in the share of sales from highperformance resins
Struggling at our compounds plant
Favorable film-related performance (Group
companies)

－
－

－
－

Sales

－
－
－

＋
－
－

－
＋
－

－
＋
－

Decrease in sporting goods-related sales

FY03/21(goal)

57

NC2020 Net Sales and Operating Profit 【Plastics】
Net sales(Billions of yen)

Target

400.0
273.0

285.0

299.0

308.0

200.0
250.4

251.1

251.8

FY03/15

FY03/16

FY03/17

286.9

300.0

FY03/18

FY03/19

270.3

248.8

FY03/20

FY03/210.0✓ Sales reached targets in FY03/18 andFY03/19 but fell short in FY03/20 due to a
decline in plastics prices and came up
short again in FY03/21 due to substantial
impact from global lockdowns imposed in
response to the COVID-19 pandemic
during 1H.

（actual） （actual） （actual） （actual） （actual） （actual） （actual）

NC2016

NC2020Operating profit

Target(Billions of yen)

8.00

5.10

5.30

5.60

5.90

6.34

6.23

5.63

FY03/19

FY03/20

4.00
3.73

4.43

5.39

5.54

FY03/17

FY03/18✓ Segment operating profit met its targets
from FY03/18 through FY03/20 as theCompany reported steady growth in resultsfrom the automotive and other businesses.
In both FY03/19 and FY03/20, segment
operating profit exceeded the target for the
final year of the plan, but in FY03/21, theplan’s actual final year, segment operating
profit declined due to substantial impact
from the COVID-19 pandemic and came inshort of its target.

0.00
FY03/15

FY03/16

FY03/21（actual） （actual） （actual） （actual） （actual） （actual） （actual）

58

Achievement of Key NC2020 Initiatives
More proactive investment to expand the trading business
Key Initiatives

Assessment

More proactive investment to expand
the trading business• Make minority investments,
primarily to expand the tradingbusiness• Consider majority investments,
but with limited risk and scale△(Billions of yen)

FY03/18
actualFY03/19
actualWe did not achieve key initiatives as planned due in partto impact from the COVID-19 pandemic.
Although we will continue to focus primarily on
expanding the trading business, under NC2023, we will
additionally concentrate on conducting more active
investment in endeavors such as M&A.

FY03/20
actualFY03/21
actual

NC2020
Actualcumulative
results

Growthinvestment

3.86

2.31

1.85

0.86

8.90

Fixed
investment

1.59

2.03

2.01

2.40

8.03

Total

5.45

4.34

3.86

3.26

16.93
59

Equity Capital, Net Interest-Bearing Debt,
Net Debt/Equity Ratio(Billions of yen)

Equity capital

Net interest-bearing debt

Net debt/equity ratio

200.0(Times)

0.80

179.2

173.8
162.9
150.0

145.9

141.4

0.60

100.0

0.40

0.28
50.0

39.4

0.19

30.3

0.16
23.4

0.20

0.06

0.09
16.1

9.7

0.0

0.00

End-FY03/18 End-FY03/19 End-FY03/20 End-FY03/21 End-June/21

Notes: Equity capital = Net assets – stock acquisition rights – non-controlling interests
Net debt/equity ratio = (Interest-bearing debt – cash and deposits) / equity capital

60

Trends in Cash Flow(billions of yen)
Operating CF
Real Operating CF*
Investment CF

25
20
15
10
5
0

FY 3/09 FY 3/10 FY 3/11 FY 3/12 FY 3/13 FY 3/14 FY 3/15 FY 3/16 FY 3/17 FY 3/18 FY 3/19 FY 3/20 FY 3/21

-5
-10
-15
-20
(millions of yen)
Operating CF
Change in WC
Real Operating CF*
Investment CF

FY 3/10 FY 3/11 FY 3/12 FY 3/13 FY 3/14 FY 3/15 FY 3/16 FY 3/17 FY 3/18 FY 3/19 FY 3/20 FY 3/21
5,976
8,495 -15,534 19,400-764
8,354 11,866
1,840
5,960 12,510 10,690 17,613-968 -3,748 -20,357
3,414 -15,244 -11,179
5,821 -9,367 -2,249
7,071
70
-1154
6,944 12,243
4,823 15,986 14,480 19,533
6,045 11,207
8,209
5,439 10,620 18,767-5,529 -1,436 -1,629
277 -5,467 -3,044
-161
4,504
5,086
743
-525
-423

* Cash flows associated with operating activities – Cash flows associated with change in working capital
Working capital = Trade receivables + Inventory – Trade payables

61

Trends in Share Price

Inabata’s Share Price for the past 10 years
JPY/share62



Trends in Share Price

Inabata’s share price performance vs. TOPIX for the past 10 years(09/2012=100)
Continuing strong yen

LDP wins majority in the election.
Start of the Abe Cabinet (Dec.)

INABATA63

 IR queries should be directed to:
IR Department
Financial Management Office

Inabata & Co., Ltd.
E-mail inabata-ir@inabata.com (Contact: Ms. Ryoko Mitsui) A Cautionary Note Regarding Future Estimates
The data and future predictions contained in this document are based on information available andjudgments applicable at the time of the document’s release. Consequently, the data and future forecasts
contained herein may include elements that are subject to change, and the reader should be aware that thisdocument and its contents are no guarantee of future performance.
 Re:Numerical Format
Units of ‘billion’, ‘hundred million’ and ‘million’ JPY in this document use figures that have been rounded
down. Consequently, there may be some discrepancy between individual values and total values, or values
showing changes between sets of data.
64