The SEKISUI CHEMICAL Group announced the financial results of the Fiscal Year 2017 lately. The company increased its operating income for the ninth consecutive year and set record net profits for the fifth year in a row. The operating income mark of 100 billion Yen has not been met but the Fiscal Year 2018 is meant to open up a new phase of growth to achieve this milestone.
Fiscal Year 2017 was the first year of the medium-term management plan “SHIFT 2019 – FUSION –”. The SEKISUI CHEMICAL Group achieved high numbers in each aspect of profit: the operating income increased for the ninth consecutive year and is on a high level together with net profits for the fifth year in a row.
What does that mean in numbers?
Despite high raw material costs, the SEKISUI CHEMICAL Group has managed its funds wisely in investments, developments and returns. The effects of these efforts are visible in the following numbers*:
Sales increasement
There is an overall sales growth from 1065.8 billion ¥ in 2016 to 1107.4 billion ¥ in 2017 – which means an increasement from 8358 million € to 8681 million €.
The reason for sales growth in FY 2017 is mainly caused by the expansion of the High Performance Plastics Company. Moreover, the Group balanced high raw material costs by adjusting product prices and reducing other costs. This included the controlling and reconsidering of fixed costs (except growth investments).
Record-setting operating income (OPI)
The operating income (OPI) rose from 96.5 billion ¥ (756 million €) in 2016 to 99.2 billion ¥ (778 million €) in 2017. The operating income ratio slightly decreased from 9,1% to 9%, which fits the goal that was set in January 2017.
Despite all positive numbers, the long-awaited OPI goal of 100 billion Yen was not achieved. 2018 is meant to be the year of a new phase of growth though, reaching out to the 100 billion Yen milestone.
European performance
In Europe, total sales increased from 55.8 billion ¥ (437 million €) to 60.6 billion ¥ (475 million €) compared to FY 2016.
For FY 2018, one of the main strategic initiatives in Europe is to increase the production of high-performance interlayer films and PVB resin to drive the successful business. Furthermore, foam business plants should be consolidated as part of the constant structural reform.
Global goal for 2018: Improve sales through new products and businesses
For Fiscal Year 2018 (April 2018 until March 2019), SEKISUI CHEMICAL Group wants to achieve a new phase of growth with portfolio and sales improvement. FY 2018 is the core year of the medium-term management plan “SHIFT 2019 – FUSION –”.
SEKISUI CHEMICAL Group is facing a tough financial year due to rising raw material costs, the strengthening Yen and the risk of economic downturn due to trade protectionism. The financial climate is very difficult but by investing resources in a focused manner, a dynamic financial reform should be achieved. Strategy is to avoid investing in aspects that are neither essential nor urgent. And another important approach is to achieve FUSION in between the group – unity and working together while fulfilling ones’ individual responsibilities should be obvious for every single employee.
The ultimate goal for the entire SEKISUI CHEMICAL Group in FY 2018 are net sales of 1168 billion ¥ (9159 million €) with an operating income of 102 billion ¥ (799 million €) and an OPI ratio of 8,7% worldwide.
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 2017 describes the period from 1 April 2017 to 31 March 2018. 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: 128 ¥ = 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.
