Medium-Term Management Plan
2024-2028
February 20, 2024
Toyo Tanso Co., Ltd.
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1. Medium-Term Management Plan 2024-2028 | P. 3 |
2. Sustainability | P. 17 |
3. Appendix | P. 22 |
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1. Medium-Term Management Plan
2024-2028
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Summary of the Medium-Term Management Plan (FY2024-FY2028)
Point 1 Aim for further business growth, driven by semiconductor applications FY2028 targets - net sales: 88.0 billion yen, operating profit: 22.0 billion yen, operating profit margin: 25%, ROE: 12%
Demand for SiC semiconductor applications, in particular, will remain elevated and profitability will expand
Percentage of net sales from all semiconductor applications to rise to 60% in FY2028 (FY2023 result: 40%)
Sales for FY2027 under the plan to rise by approximately 20% over the levels of the previous plan* in real terms, excluding the impact of exchange rates
SiC semiconductor applications - For SiC wafers: special graphite products for electronics applications
For SiC epitaxial: compound materials SiC-coated graphite products
Point 2 Capital investment to total 76.5 billion yen over five years
Continue to invest aggressively and strengthen production capacity throughout the entire Toyo Tanso Group to capture vigorous demand for semiconductor applications and maintain a top- level market share
Point 3 Set a standard for the dividend payout ratio of at least 30% under our shareholder returns policy
Enhance the return of profits to shareholders more stably, taking into consideration the funds required for capital investment
Point 4 Use financial leverage
Implement borrowings in addition to cash on hand and operating cash flow during the term of the plan to fund enhanced shareholder returns and a high level of capital investment
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* Medium-term Management Plan (2023-2027) announced February 2023 4
Targets for the Medium-Term Management Plan (2024-2028)
FY2023 | FY2024 | FY2028 | (Reference) | |||
(forecast) | (target) | FY2027 | ||||
(previous target*1) |
Net sales
Operating
profit
Operating profit ratio
ROE
49.2 billion yen 54.0 billion yen 88.0 billion yen 66.5 billion yen 9.2 billion yen 10.9 billion yen 22.0 billion yen 13.5 billion yen
18.8% | 20.2% | 25.0% | 20.3% | |||
9.3% | 8.7% | 12% | 10% | |||
Exchange rate
FY2023:¥140.6/US$, ¥152.0/€, ¥19.8/RMB
FY2024/FY2028:¥135/US$, ¥149/€, ¥19/ RMB
FY2027 (at the time of the previous plan): ¥124/US$, ¥136/€, ¥18/ RMB
EBITDA*2 of approx. 31.0 billion yen in FY2028 (EBITDA margin of approx. 35%)
*1 Medium-term Management Plan (2023-2027) announced February 2023 *2 Operating profit +depreciation
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Outlook for the Semiconductor Market
- High growth is forecast to continue for the SiC device market, with CAGR of around 40%.
- The Si (silicon) wafer market is expected to grow at 5% or more per year (based on the number of wafers produced).
SiC device market
(Unit: Yen, millions)
Industrial applications Energy applications
Electric train car applications
Automotive and electronic equipment applications
ICT product applications Consumer product applications
CAGR 40%
(2023→2028)
(Current)
(Previous)
2 0 1 9 | 2 0 2 0 | 2 0 2 1 | 2 0 2 2 | 2 0 2 3 | 2 0 2 4 | 2 0 2 5 | 2 0 2 6 | 2 0 2 7 | 2 0 2 8 | 2 0 2 9 | 2 0 3 0 |
Source: Our estimate based on Fuji Keizai (2022, 2023) data
The growth in the SiC semiconductor market has led to a continuing rise in the inquiries we receive, with expanding demand for SiC epitaxial applications in particular.
Net sales for SiC semiconductor applications are forecast to rise to four times FY2023 levels by FY2028, with SiC semiconductor applications accounting for around 30% of total net sales.
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Net Sales Targets by Product/Application
- Special graphite products for electronics applications and compound materials SiC-coated graphite products are forecast to experience even higher growth due to strong demand for SiC semiconductor applications.
FY2024 | FY2028 | CAGR | (Reference) | ||||
(Unit: Yen, billions) | FY2023 | ||||||
FY2027 | CAGR | ||||||
(forecast) | (target) | 2023→2028 | |||||
(previous target*1) | 2022→2027 | ||||||
Special graphite products | 24.0 | 27.2 | 41.9 | 11.8% | 32.2 | 9.8% | ||
Carbon products for | ||||||||
general industries | 4.1 | 3.5 | 4.7 | 3.0% | 5.4 | 6.6% | ||
(for mechanical applications) | ||||||||
Carbon products for | ||||||||
general industries | 4.4 | 5.0 | 7.3 | 10.6% | 7.2 | 8.6% | ||
(for electrical applications) | ||||||||
Compound materials and | 14.1 | 16.5 | 31.2 | 17.3% | 19.2 | 14.2% | ||
other products*2 | ||||||||
Related goods*2 | 2.4 | 1.5 | 2.6 | 0.9% | 2.4 | -12.2% | ||
Total | 49.2 | 54.0 | 88.0 | 12.3% | 66.5 | 8.7% | ||
*1 | Medium-term Management Plan (2023-2027) announced in February 2023 | |
*2 | The classifications used for net sales by product/application have changed as follows: | |
(Before change) Three major products of compound materials: SiC-coated graphite products, C/C composite products, graphite sheet products | ||
Other: Compound products other than the three products listed above, related goods | ||
(After change) Compound materials and other products: SiC-coated graphite products, C/C composite products, graphite sheet products, and compound | ||
products other than the three products listed above | ||
Related goods: Related goods | 7 | |
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Business Portfolio
- Identify businesses as growth, stable, and differentiation businesses to implement flexible and appropriate strategy.
High | Growth | SiC- | |
coated | |||
graphite | |||
products | |||
C/C | |||
composite | |||
Potential | Special | ||
of market | Carbon | graphite | Graphite |
growth | products | sheet | |
products for | |||
mechanical | |||
applications | |||
Carbon | |||
products for | |||
electrical | |||
applications | |||
Middle | Stability | Differentiation | |
Middle | Volatility | High |
Current earnings
Future earnings
Contribute to business stability, with | Business development focusing | High-growth businesses driving |
little fluctuation in demand or | ||
on high-added-value domains | earnings | |
profitability | ||
■ Carbon products for mechanical | ■ Expand market share in high-added-value | Sales expansion leveraging the features and |
applications | domains such as semiconductors, which have | strengths of each product |
Become more cost competitive, and strengthen | high quality requirements | ■ SiC-coated graphite products: |
automotive applications and sales expansion in | ■ Strengthen cost resilience and reduce the | |
overseas markets | Enhanced production capacity | |
■ Carbon products for electrical applications | burden on domestic manufacturing through | ■ C/C composite products: |
Utilize strengths (delivery time, service) to | measures such as the utilization of contract | Technical service capacity, including design |
manufacturing for more general-purpose | ||
pursue a higher share of growth markets (Asia, | ■ Graphite sheet: | |
domains | ||
home appliances and power tools) and increase | ||
Customization to customer specifications | ||
contribution | ||
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Strategies by Product/Application: Special Graphite Products
(Unit: Yen, billions) | 41.9 | |
24.0 | 27.2 | CAGR |
11.8% | ||
FY2023 | FY2024 | FY2028 |
(forecast) | (target) |
Dies for continuous casting
EDM electrodes
Single-crystal silicon
manufacturing componentsSiC crystal
(Crucibles/Heaters)growth components
Strategy
Pursue greater competitive strength and secure profitability through stronger sales expansion in high-added-value domains
■ Electronics applications
・Our global top market share has been maintained for Si wafers (products for single-crystal silicon manufacturing), and we aim to further increase the share through strategies appropriate to each region.
・For SiC wafers (products for compound semiconductor applications), we will leverage our global sales network to build a firm position in Europe, the US, and China. We will also consider strengthening production systems to prepare for rising demand.
・For products for solar cell manufacturing applications, we will pursue differentiation from Chinese graphite manufacturers, including in the sale of value-added products, firmly premised on securing profitability.
■ General industry applications
We aim to differentiate ourselves from other companies and expand profits through high-added-value sales (materials grade and processing).
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Strategies by Product/Application: Carbon Products for General
Industries [Carbon Products for Mechanical Applications]
(Unit: Yen, billions) | 4.7 | Contact strips of | |
4.1 | 3.5 | pantograph | |
CAGR | |||
3.0% | Bearings | ||
FY2023 | FY2024 | FY2028 | Sealing rings |
(forecast) | (target) | ||
Strategy
Strengthen technological and production initiatives as a Group, including overseas subsidiaries, through measures such as enhancing manufacturing techniques (materials, processing, etc.), the automation of manufacturing, and cost reductions
・We anticipate market growth of 5% or higher* in automotive applications, and higher for applications related to the shift to EVs, and we will position these as a focus to offset a reduction in internal combustion engine-related applications.
・We will also raise the proportion of overseas sales from its current low level, and strengthen the processing capabilities of local subsidiaries.
・Pursue appropriate resource allocation and pioneer new applications with a focus on profitability and market trends.
*Our estimate
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Toyo Tanso Co. Ltd. published this content on 05 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 March 2024 08:52:08 UTC.