Corporate Business Plan

FY2019 - FY2021 Corporate Business Plan Presentation (March 12, 2019)
FY2019-FY2021 Corporate Business Plan
FY2019-FY2021 Corporate Business Plan (Updated May 15, 2019)
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Sumitomo Chemical has formulated and is currently executing its Three-Year Corporate Business Plan for the period from fiscal 2019 to fiscal 2021. Under the slogan "Change and Innovation 3.0 for a Sustainable Future," we will achieve sustained growth for us and build a sustainable society by promoting digital innovation to significantly improve productivity and accelerate innovation.

Overview of the Corporate Business Plan for FY2019 to FY2021

1. What Sumitomo Chemical strives to be

  • What Sumitomo Chemical strives to be

2. Basic policy

(1) Accelerating the development of next-generation businesses

For domains of our next-generation business, we have identified four priority areas which are vitally important for solving serious social challenges or improving Quality of Life and at the same time where the best of the Sumitomo Chemical Group's proprietary technologies can be deployed. Those priority areas are Health Care, Reducing Environmental Impact, Food, and Information and Communication Technology (ICT). To further strengthen our own technological capabilities, we will collaborate with startups, academia and others to build an innovation ecosystem so that we can accelerate delivering innovation autonomously and sustainably and creating new businesses.

(2) Improve productivity through digital innovation

By the expanded use of AI and IoT, we will realize drastic improvement in efficiency and quality in R&D, manufacturing, supply chain, sales, and indirect jobs. In addition, we will make active use of materials informatics to ensure more speedy, efficient and sophisticated R&D.

(3) Further improve business portfolio

We will concentrate management resources on those businesses, as a growth driver, where we can expect sustainable market growth and technology can play a key role as a source of competitiveness.

(4) Build a more robust financial structure

We will ensure closer control of costs and assets through more effectively managed operations, such as rationalization, shorter Cash Conversion Cycle (CCC), and business restructuring or withdrawal, while generating cash flow as planned from capital investments and loans hitherto conducted..

In addition to the four points above, we will also work to: (5) Employ, develop and leverage human resources for sustainable growth; and (6) Ensure full and strict compliance and maintain safe and stable operations.

3. Performance targets

Under the new Corporate Business Plan, the Company has set performance targets on a consolidated basis as follows:

(Billions of yen)

  FY2021 targets FY2018
Sales revenue 2,950.0 2,318.6
Core operating income 280.0 204.3
Operating income (IFRS) 260.0 183.0

Net income attributable

to owners of the parent
150.0 118.0
  • Assumptions for 2021:Naphtha price: ¥51,000/kl
    Exchange rate: ¥110.0/US$



In the medium- to long-term, we aims to consistently achieve the following performance targets:

  Medium- to long-term targets FY2021 targets FY2018
ROE 10% or higher 12.5% 12.3%
ROI 7% or higher 7.1%

7.3%

D/E ratio approx. 0.7 times 0.7 times 0.6 times
Dividend payout ratio approx. 30% - 30%
Profit growth* 7% or higher per year 13% per year -

* Compounded annual growth rate of net income attributable to owners of the parent from FY2015

4. Plans for Investments, R&D Expenditures, etc.

We plan to allocate corporate resources as below for FY2019 to FY2021.

 

Capital Expenditures,

Investments and Loans

R&D Expenditures

Total amount

(Billions of yen)
approx. 700.0 approx. 540.0
Specialty chemicals approx. 70% approx. 90%