The SEKISUI CHEMICAL Group recently announced the financial results of the Fiscal Year 2018. The company successfully increased its net profit for the sixth year in a row but unfortunately, the nine-year streak of record highs came to an end as the operating income dropped. The target of an operating income mark of 100 billion yen was not met but with the strength of all Group members, the company will aim for recovery in this Fiscal Year 2019.
The Fiscal Year 2018 was positioned as the “core year” of the Medium-term Management plan “SHIFT 2019 -Fusion-.“ The aim was to strengthen business and accelerate the SHIFT towards a new phase of growth. Group wide, net profit could be increased but operating income dropped.
What does that mean in numbers?
There was an overall sales growth from 1107.4 billion ¥ in FY2017 to 1142.7 billion ¥ in FY2018 – which means an increasement from 9018 million € to 9305 million €. Although this was still short of the 1161 billion ¥ (9454 million €) forecast, securing sales growth in a volatile and difficult business environment is a great achievement.
The reason for sales growth is mainly due to new consolidations and expansion of high-performance products in the automobiles and transportation fields. Increased sales of detached houses by the SEKISUI Housing Company also contributed positively to this growth.
Reduced Operating Income (OPI)
The operating income OPI decreased from 99.2 billion ¥ (808 million €) in FY2017 to 95.7 billion ¥ (779 million €) in FY2018. Despite efforts and initiatives to improve sales volume and product mix, the 100 billion ¥ (814 million €) OPI target could not be reached due to greater than expected effects of advanced fixed costs and raw material costs.
Goals for 2019
The SEKISUI Chemical Group will face the Fiscal Year 2019 with determination and drive. In the final year of the Medium-term Management Plan the company will strive to increase net sales and profit.
The ultimate goal of this year is a record-high net sales of 1175 billion ¥ (9568 million €) and a record OPI of 103 billion ¥ (839 million €). Even though the SEKISUI Chemical Group anticipates a challenging business environment it will take measures to strengthen its business in the face of this. It aims to secure increases in sales and profits across all Divisional Companies by steadily carrying out improvement measures against a harsh economic backdrop. The Group has also made the strategic decision to bring the Medical Business under corporate management to accelerate the pace of growth and the potential of this business. Furthermore, the SEKISUI Chemical Group will strategically invest by concentrating corporate spend on key areas of R&D and will strive to accelerate commercialization of projects.
The SEKISUI CHEMICAL Group will rise to the challenges of FY2019. This Fiscal Year is positioned as the year to achieve the current Medium-term Management plan, create the next one and set us on the track to double the business scope towards a “New Phase of Growth and SHIFT to the Next Stage.”
General background information
The Japanese Fiscal Year (FY) lasts from 1 April to 31 March and therefore does not match with the regular calendar year. FY 2018 describes the period from 1 April 2018 to 31 March 2019. The same principle applies for all other Fiscal Years.
SEKISUI CHEMICAL CO., LTD. discloses financial results in Japanese Yen (¥). However, for a better understanding the figures have been converted into Euro (€). Due to changing exchange rates this is just a rough calculation. This exchange rate is used: 122.8 ¥ = 1 €
*Please note that the numbers cover all businesses of SEKISUI which are High Performance Plastics Company, Housing Company and Urban Infrastructure & Environmental Product Company.