MORESCO Group delivers sustainable one-of-a-kind products

The 65th Ordinary General
Meeting of Shareholders(From Mar 1, 2022 to Feb 28, 2023)

Tokyo Stock Exchange Prime Market 5018 (Petroleum and Coal Products)
May 30, 2023

Copyright © MORESCO Corporation All Rights Reserved.

Table of contents•
Business report
01•
Consolidated financial report
02•
Choice of market segments
03•
Progress of the 9th Medium-Term Management Plan
04

•
05

Growth strategy for realizing a sustainable society

06

Proposals for the General Meeting of Shareholders
and Introduction of Directors
2
Copyright © MORESCO Corporation All Rights Reserved.

Table of contents•
Business report
01•
Consolidated financial report
02•
Choice of market segments
03•
Progress of the 9th Medium-Term Management Plan
04

•
05

Growth strategy for realizing a sustainable society

06

Proposals for the General Meeting of Shareholders
and Introduction of Directors
3
Copyright © MORESCO Corporation All Rights Reserved.

Current business environment– car production volume
Changes in the number of automobiles produced inareas where our bases are located

5,384

5,381
5,003

4,728

881

720

FY2019

Unit: 10,000 units(Year-on-year %)FY2020
Japan

China

(+22%)

912

1,010 (+11%)2,606

2,700 ( +4%)

765

790

FY2021

FY2022

America( +3%)Southeast/South Asia

Source: Created in-house based on data published by MarkLines
Note 1: Aggregated data based on our fiscal year (Japan: March to February of the following year; Overseas: January to December)
Note 2: Southeast/South Asia counts only Thailand, Indonesia and India, which are our bases.

4
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Current business environment– Fluctuations in major raw material prices and standards
Dubai oil price$/b

Money order

¥/$

120
142.6

110
100

150
140
130

90

84.7

80

120
110

70

100

60
50

90

40

80

30

70

19-4Q

20-4Q

21-4Q

22-4Q
Domestic naphtha price

1,000 yen/kL

80

73

60
40
20
19-4Q

20-4Q

21-4Q

22-4Q
5

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Consolidated income statement[Revenue increase] Correction of product selling prices[Decrease in profit] Soaring raw material prices
Unit : million yen

FY2021

FY2022YoY

Net Sales

27,30030,333+11.1％

Gross Profit

8,725

8,129

▲6.8％

7,291

7,606

+4.3％

Operating Income

1,434

523

▲63.5％

Non-operating profit &
loss

577

523

▲9.3％

Ordinary Income

2,011

1,046

▲48.0%

Extraordinary profit &
loss

833

－

－

Income before Income
Tax

2,844

1,046

▲63.2%Net Income *

1,808

615

▲66.0%

Selling, General and
Administrative Expenses* Profit attributable to owners of parent, the same below
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6

Consolidated sales ratio by division
Others(Including 0.7% in the Device
Materials Division)

6%Note) Created based on the consolidated sales ratio
for the fiscal year ending February 2023

Synthetic Lubricants Division

6%
7%
2%

Liquid Paraffin &Sulfonates Division

13%

Functional Fluids
Division

6%

3%
3%

9%

7%

50%

10%

Consolidated
sales
30,33315%(Unit: million yen)Fire-resistant hydraulic fluid

3%
18%High vacuum pump oil
Cutting Fluids

12%

Die casting lubricant
Lubricant for hot forging

Hot Melt Adhesive Division

Others

Sanitary material application

25%

Adhesive application, etc.
Liquid paraffin
Sulfonate, etc.
High temperature lubricating oils

Hard disk surface lubricant

7
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Functional Fluids Division[Sales] 16.0% increase year on year (15,105 million yen)
[Sales volume] 1.0% decrease year on year

Unit: million yen
4,586
4,035

3,536
3,059

3,127

2,577

1,920

➢ JapanDecrease in sales volume due todecrease in automobile production
volume by major customers

1,626

1,140

925

731

863

High

Hydraulic

Die casting

Cutting

Lubricantvacuumfluid

lubricantFluidsfor hot

pump oil➢ AbroadSoutheast Asia: Market recovery from
2H onwards
China: Slight increase YoY
Othersforging

FY2021

FY20228
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Hot Melt Adhesive Division[Sales] 13.0% Increased year on year (7,664 million yen)
[Sales volume] 3.3% Increased year on year

Unit: million yen

5,445➢ JapanSales of sanitary material applications
were firm, and sales of adhesive
applications increased.

4,791➢ Abroad
Increased sales in India and Indonesia.
855

Sanitary966

Adhesive
FY2021

1,139

1,253

Others

FY2022
9
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Liquid Paraffin & Sulfonates Division[Sales] 9.0% increase year on year (3,793 million yen)
[Sales volume] 9.3% decrease year on year

Unit: million yen

2,747➢ Liquid Paraffin
Sales volume for polystyrene plasticizer
applications decreased.

2,545

676

➢ Sulfonates
Volume decreased due to the impact ofthe decrease in automobile production
volume by major domestic customers.

777
259

Liquid paraffin

Sulfonate
FY2021

269

OthersFy2022
10
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Synthetic Lubricants Division[Sales] 13.7% decrease year on year (1,703 million yen)
[Sales volume] 22.9% decrease year on year

Unit: million yen
1,243

1,038

➢ High temperature
Sales decreased due to inventory
adjustments by customers.
678

613

➢ Hard disc surface Lubricants
Sales decreased due to the impact ofsluggish data center investment.

53

High temperature

Hard disk surface

lubricating

lubricant

FY2021

52

Others

FY2022

11
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Table of contents•
Business report
01•
Consolidated financial report
02•
Choice of market segments
03•
Progress of the 9th Medium-Term Management Plan
04

•
05

Growth strategy for realizing a sustainable society

06

Proposals for the General Meeting of Shareholders
and Introduction of Directors
12
Copyright © MORESCO Corporation All Rights Reserved.

Consolidated income statement[Revenue increase] Correction of product selling prices[Decrease in profit] Soaring raw material prices
Unit : million yen

FY2021

FY2022YoY

Net Sales

27,30030,333+11.1％

Gross Profit

8,725

8,129

▲6.8％

7,291

7,606

+4.3％

Operating Income

1,434

523

▲63.5％

Non-operating profit &
loss

577

523

▲9.3％

Ordinary Income

2,011

1,046

▲48.0%

Extraordinary profit &
loss

833

－

－

Income before Income
Tax

2,844

1,046

▲63.2%Net Income *

1,808

615

▲66.0%

Selling, General and
Administrative Expenses* Profit attributable to owners of parent, the same below
Copyright © MORESCO Corporation All Rights Reserved.

13

Sales and Gross Profit Margin Trends
Unit : ％Unit : million yen

30,000amount of sales

27,92228,806Gross profit margin

30,333 40.0

27,30027,06424,47925,00034.1
20,000

32.4

32.3

32.0

32.0
30.0

15,00026.8

10,000

5,000

0

20.0
FY2017FY2018FY2019FY2020

FY2021

FY2022
14

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Consolidated income statement
Unit : million yen

FY2021

FY2022YoY

Net Sales

27,30030,333+11.1％

Gross Profit

8,725

8,129

▲6.8％

Selling, General and
Administrative Expenses

7,291

7,606

+4.3％

1,359

1,246

▲8.3％

Operating Income

1,434

523

▲63.5％

Non-operating profit& loss

577

523

▲9.3％

Ordinary Income

2,011

1,046

▲48.0%

Extraordinary profit &
loss

833

－

－

Income before Income
Tax

2,844

1,046

▲63.2%

1,808

615▲66.0%

R&D expenses

Net Income ** Profit attributable to owners of parent, the same below
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Increase/Decrease
Factor/Breakdown(Factor) Increase in SG&A expenses for overseas
subsidiaries due to yen depreciation(Factor) Decrease due to organizational restructuring
Excluding this impact, YoY +1.8%(Breakdown) Exchange gain 295 million yen
Equity-method subsidiary revenue 148 million yen

15Profit and loss by segment
Unit : million yen

Japan
805
438
33

China

OperatingincomeNorth America
19,637

432
350

311

External
sales

2,957

FY2020
21年２期

3,625

3,814

107

18,385
17,220

FY2020
21年２期

43

FY202122年２期

FY202223年２期
631

FY202122年２期

FY202223年２期

87Southeast/South Asia

FY2020
21年２期

789

FY2021
22年２期

1,011

FY2022
23年２期

123
86
6

3,671

FY2020
21年２期

4,501

FY2021
22年２期

5,870

FY202223年２期
16Copyright © MORESCO Corporation All Rights Reserved.

Balance Sheet (Consolidated)
Unit : million yen

FY2022

Increase/
Decrease

FY2022

Increase/
Decrease

Cash & Deposit

4,256

255

Trade Payable

5,144

836

Notes and Accounts
Receivable-trade

7,595

752

Interests bearing debt
(Current)

2,853

1,943

Inventories

6,306

979

Other Current Liabilities

2,074

▲319

653

217

Other Noncurrent Liabilities

707

▲140

18,8102,203

10,778

2,321

8,610

307

Capital Stock・Capital
Surplus4,095

1

Intangible Assets

589

▲43

Retained Earnings

13,760242

Investments and Others

4,008

543

Treasury Stock

△567

▲183

Accumulated Other
Comprehensive Income

1,246

511

Non-Controlling Interest

2,706

117

Other
Current Assets
Property, Plant andEquipment

Total Liabilities

Fixed Assets

13,207806

Total Net Assets

21,240688

Total Assets

32,0173,009

Total Liability & Assets

32,017

3,009Note) Increase/Decrease: Comparison with the end of Feb. 2022
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17

Interest-bearing Debt
[Reasons for the increase] Increase in working capital due to increased
sales, increase in new investments such as construction of new factories

FY2021

FY2022

Increase /Decrease

Short-term
Borrowing *

560

2,381

+1,822Long-term
Borrowing

350

472

+122

Total Borrowing

910

2,853

+1,943

Unit : million yen* Includes long-term loans payable within one year

Interest-bearing
Debt Ratio

3.1%

8.9%
18

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Capital Investment・Depreciation
FY2021

FY2022

Increase /Decrease

MORESCO

340

311

△29

Consolidated
Subsidiary

939

1,007

+68

Total Capital
Investment

1,279

1,318

+39

Depreciation

1,210

1,212

+2

Unit : million yen

FY2022 Major capital investment details (acquisition basis)➢ MORESCO

Renewal of production equipment➢ MORESCO (ZHEJIANG) FUNCTIONAL MATERIAL CO., LTD.

Construction of a functional fluids production plant (under construction)➢ Ethylene Chemical CO., LTD.

Office building (complete)

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19

FY2023 plan
➢ Assumptions for the plan for the next fiscal year
Crude oil price: $90/b Exchange rate: $130/yen

Unit :
million yen
Net Sales

FY2022YoY

FY2023

YoY

30,333+11.1%

34,500+13.7%

Operating
Income523 △63.5%

Ordinary
Income1,046 △48.0%

1,600+53.0%

615 △66.0%

700+13.8%Net Income

1,400 +167.7%

20
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Dividend status
FY2021 Results

FY2022 Results

1,808 million yen

615 million yen

Dividend amount

375 million yen

369 million yen

Dividend/Share

40 yen40 yen*Net income*Determined at the general meeting➢ Scheduled to increase dividend by 5 yen in FY2023

Dividend per share: 45 yen (including acommemorative dividend of 5 yen)21
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Table of contents•
Business report
01•
Consolidated financial report
02•
Choice of market segments
03•
Progress of the 9th Medium-Term Management Plan
04

•
05

Growth strategy for realizing a sustainable society

06

Proposals for the General Meeting of Shareholders
and Introduction of Directors
22
Copyright © MORESCO Corporation All Rights Reserved.

Choice of market segment➢ Resolved selection to standard market

23
Copyright © MORESCO Corporation All Rights Reserved.

Table of contents•
Business report
01•
Consolidated financial report
02•
Choice of market segments
03•
Progress of the 9th Medium-Term Management Plan
04

•
05

Growth strategy for realizing a sustainable society

06

Proposals for the General Meeting of Shareholders
and Introduction of Directors
24
Copyright © MORESCO Corporation All Rights Reserved.

Progress of the 9th Medium-Term Management Plan

Unit : million yen

Net sales (by division) and ordinary income trends

40,00034,50030,33327,06430,00022,32927,2991,859

24,425

2,220
209

8,600

7,664

20,000

3,793
1,703

4,400
1,730

350
Device Materials

OthersHot Melt Adhesive
Liquid Paraffin & Sulfonates
Synthetic Lubricants

10,00015,105

17,200

FY2022

FY2023Functional Fluids

0

FY20182,500

FY2019FY2020

2,202
1,568

FY2021

2,011

1,046

1,030

1,600

経常利益

0

19/2期

20/2期

21/2期

22/2期

23/2期

24/2期
25

Copyright © MORESCO Corporation All Rights Reserved.

Table of contents•
Business report
01•
Consolidated financial report
02•
Choice of market segments
03•
Progress of the 9th Medium-Term Management Plan
04

•
05

Growth strategy for realizing a sustainable society

06

Proposals for the General Meeting of Shareholders
and Introduction of Directors
26
Copyright © MORESCO Corporation All Rights Reserved.

New product development for new energy vehicles*➢ Focus on developing and expanding sales of new release agents and cutting
fluids for non-ferrous metals➢ Strengthen the Chinese R&D system and capture environment-related markets

Changes in automobile sales in China
New energy vehicle

（万台）
3,000

2,627

Others

2,686

2,760

2,500

2,000

33%

1,500

Sales ratio

1,000

500

0

352
2021 results

689
2022 results

900
2023 forecast

Source: Compiled in-house based on statistical data from the China Automobile Manufacturers Association*The Chinese government classifies electric vehicles (EV), plug-in hybrid vehicles (PHV), and fuel cell vehicles (FCV) as new energy vehicles
Copyright © MORESCO Corporation All Rights Reserved.

27

Minimum quantity spray type Die casting lubricant➢ Contribution to climate change and biodiversity
Amount of releaseagent applied

Amount of waste liquid

Cycle time

Release agent spray

99.6% reduction

Elimination of liquid waste
due to release agent

13% reduction

Air blow

60% reduction* Calculated value per die gast machine

CO2 reduction

Wastewater reduction

7.5tons per year

200 tons per year
28

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R&D system for solving social issues••

Cross-departmental development system in-house and incollaboration with industry, government, and academia
Launch of company-wide project MOLGAD
MODevelopment of organic photovoltaic
materials

Division B

Division C

Foreignsubsidiary
Cooperatingcompany
University

R&D
meeting・Solving basic
issues・Solving
common issues

LContinue development in the life
science fieldGA
In-house production of polymers from
non-petroleum-derived raw materials

D
Application of DX technology

Creation of new technologies andnew core technologies

Application of VOC removal technology
to high value-added materials

Division A・・・
29
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Contribution to solar power generation in urban areas
Development of materials for improving the power generation efficiency of organic
thin-film solar cells (OPV) through industry-academia collaboration
CO2 payback time（number of months）
42

Single crystal Si solar cell

OPV (power generation efficiency 5%)

OPV (power generation efficiency 10%)
「Playable Week 2023」
Takanawa Gateway Station 3rd Anniversary Event

13 ← current situation
6 ← Development goal

*Recovery period of CO2 generated from materials to device
manufacturing by photovoltaic power generation

Effective power generation by combination of OPV and perovskite type(non-silicon type solar cell)Can be installed on the roof or wallsof existing buildings：
perovskite solar cellLighter weight andhigher efficiency thanSi solar cells

Transparent,
lightweight, design

Development and evaluation ofhigh-performance encapsulants
for perovskite solar cells

Windows of buildings, indoors
OPV（See-through） 30
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Development progress in the life science field

Promoting joint research anddevelopment for drug discovery
with university-launched ventures

Sample evaluation underway at amajor cosmetics manufacturer

For anti aging and sun protection

×

Nanoemulsion can be expected toenhance functionality

Improvement of lifestyle-related diseases can be expected
Promoting drug discovery activities targeting autophagy
Obtain key compounds with enhanced pharmacological activity

2023
First patent application scheduled

Nanoemulsion
MORESCO-NANOREACH

12nm

Intercellular spaceabout 40nm

stratum
corneum

Autophagy research is research that leads tothe prevention and treatment of various
phenomena and diseases related to aging

granularlayer

31
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Generation of petrochemical materials from biomass

liquid fertilizer
Hydrogen(H２)

animal waste

Rawgarbagesewagesludge,Discarded
ingredients,
etc.

Dehydration reaction &high temperature/highpressure reaction

methaneoxidation
reaction

CO₂

methanehydrocarbon(-CH２-)ｎmethanol, etc.

power
generation

Reuse for biogas
plant

By-product
Water(H2O)

surplus heat

BiogasBiogas plant(≒ Fermentation tank)✅ Lubricant✅ Polymer raw
material

fermentation heat

Electricity sales orenergy for synthesis

Litter（Livestock litter）
32
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Strengthening the system for global expansion➢ Assign executive officers in charge of each area to respond quickly to customer needs➢ Strengthen area-specific R&D functions and accelerate the launch of new products

China
•
•

Early stabilization of new factoryStrengthen development system•

A leading force for new energy
vehicles(establish R&D center)MainofficeNorth America•••

Consider collaboration with othercompanies in the same industry
Strengthen sales to US customers
Consider establishing a subsidiary
in Mexico & business expansion

Southeast/South Asia••

Business expansion and system
maintenance in Thailand
Expand hot melt business in ASEAN

33
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Strengthen IR activities
Expand IR-related information dissemination tools and actively engage in dialogue with investors◆ As of March 1, 2023, we will establish an IR Department under the CFO to strengthencommunication functions, such as handling integrated reports (Japanese and English).

Sustainability
special pageMay 2022

November
2022

2023

2024

Information
Disclosure
Based on
TCFD
Recommendations

ESG data
disclosure●●

Human rights
due diligence

Humancapitalmanagement

●

●

TNFD

Publication ofIntegrated
Report●●●34
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Efforts to decarbonize
Reduce GHG emissions from in-house energy consumption by 46％ by 2030 (compared to 2013)

Achievecarbon neutrality by 2050, including supply chain

GHG emissions Adjusting

Scope 3 target settings for release during this term

November 11, 2022
Expression of support

Changes in GHG Emissions of the MORESCO Group (Domestic)
Unit: t- CO2

10,906

7,240

2013 comparison
5,725(▲46％)

2013

2017

2018

2019

Scope1 direct discharge

2020

2021

2022

Scope2 indirect emissions

2030

2021

▲24％

2022*

▲33％

*The reduction rate for 2022 is a provisional
figure using the electric power emission factor
before finalization for the current fiscal year

35
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Initiatives for health management
Excellent Health and Productivity Management Organization(Large Enterprise Category)

Certified for 3 consecutive years*A system to honor corporations that practice particularly excellent health management(Ministry of Economy, Trade and Industry)

Health management

declaration
MORESCO believes that the physical and mental health of
its employees is essential for the sustainable developmentof the company. We will promote the health of ouremployees in order to realize "a company where

each and every person grows up in a richenvironment and creates new value."

Structure
The officer responsible for healthmanagement(The President and Representative
Director)

The Director of Human
Resourcesindustrial physician

Human Resources
Department

Health insurance
association

Public Relations
Department

36
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Table of contents•
Business report
01•
Consolidated financial report
02•
Choice of market segments
03•
Progress of the 9th Medium-Term Management Plan
04

•
05

Growth strategy for realizing a sustainable society

06

Proposals for the General Meeting of Shareholders
and Introduction of Directors
37
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Proposal No.1
・Appropriation of surplus

１．Year-end dividend
20 yen per share of common stock
Total amount 184,550,600 yen（Annual dividend ¥40 per share）
２．Appropriation of other surplus
Set aside 450 million yen from retained
earnings carried forward
38
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Proposal No.２
・Election of five directors（Excluding directors who are Audit and Supervisory Committee members）

Candidates

Motohisa
NobuhiroYasuo
Hirofumi
HirokoMorozumi
Sewaki
SakaneFujimotoFuji
39

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Introduction of directors
・Directors（Excluding directors who are Audit and Supervisory Committee members）

Motohisa
NobuhiroYasuo
Hirofumi
HirokoMorozumi
Sewaki
SakaneFujimotoFuji

40
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Head Office / R&D Center

Kobe City

Kobe Airport➢ Forecasts, strategic goals and other forward-looking information in this presentation are basedon the judgements of MORESCO at the time this presentation was prepared. This information
may be revised without prior notice.
➢ Investors are cautioned not to rely entirely on the forecasts and goals in this presentation when
making investment decisions. MORESCO assumes no responsibility for any resulting losses.
➢ This presentation may not be copied or reused in any other way without the prior consent of
MORESCO.

https://www.moresco.co.jp/

2023/5/30

41
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