AGC Group Introduction
- 2. Architectural Glass Sales 358.9 bn yen Business Overview AGC Group (Net sales 1,522.9 billion yen, Operating profit 120.6 billion yen) -Float flat glass -Figured glass -Polished wired glass -Low-E glass -Decorative glass -Fabricated glass for architectural use （Heat Insulating/shielding glass, Disaster-resistant/Security glass, Fire-resistant glass, etc.) -Tempered glass -Laminated glass Automotive Glass Sales 397.3 bn yen -Vinyl chloride -Vinyl chloride monomer -Caustic soda -Urethane -Fluorinated resins -Water and oil repellents -Gases -Solvents -Iodine-related products Fluorochemicals & specialty chemicals Sales 120.5 bn yen Chlor-alkali & urethane Sales 316.6 bn yen -Semiconductor process materials -Optoelectronics materials -Lighting glass products -Laboratory glass, etc. Display Sales 183.4 bn yen Electronic Materials Sales 66.9 bn yen -LCD glass substrates -Specialty glass for display applications -Cover glass for car-mounted displays -Display related materials -Glass for solar power system -Fabricated glass for industrial use For the fiscal year ended December 31, 2018 -Ceramic products -Logistics and financial services, etc. Ceramics/Other Sales 79.0 bn yen OP 2.8 bn yen Glass Sales 757.5 bn yen OP 22.5 bn yen Chemicals Sales 484.4 bn yen OP 71.1 bn yen Electronics Sales 252.6 bn yen OP 24.0 bn yen ©AGC Inc. Life Science Sales 44.9 bn yen -Pharmaceutical and agrochemical intermediates and active ingredients (including biopharmaceuticals) * Sales figures of the sub-segment presents the “sales to external customers”. * The figures of Sales and Operating income of each segment are before eliminations; therefore, the sum of Sales and Operating income of business segments differs from the total AGC Group’s Sales and Operating income. 2
- 3. Net sales：1,522.9 billion yen OP：120.6 billion yen Group Employees： 54,000 -Architectural Glass -Automotive Glass -Electronic Materials -Fluorochemicals -Life science -Architectural Glass -Automotive Glass -Fluorochemicals -Life science -Architectural Glass -Automotive Glass -Display Glass -Electronic Materials -Chlor-alkali & Urethane -Life science -Ceramics ※Sales and operating income by region are before eliminations and cross regional expenses, therefore, the total amounts of sales and operating income for geographic segments do not agree with total sales and operating income of the AGC Group. Japan / Asia Sales：1,005.7 bn yen OP: 138.3 bn yen Employees： 32,000 The Americas Sales： 166.3 bn yen OP: 6.7 bn yen Employees： 5,000 Europe Sales： 351.0 bn yen OP: 16.2 bn yen Employees： 17,100 Results of FY2018 Global Operation ©AGC Inc. 3
- 4. Our Shared Values AGC, an everyday essential part of our world -AGC’s unique materials and solutions make people’s lives better around the world every day- Innovation & Operational Excellence Diversity Environment Integrity “Never take the easy way out, but confront difficulties”Our Spirit Our Mission Group Vision "Look Beyond" ©AGC Inc. 4
- 5. AGC Group’s long-term strategy “Vision 2025” Establishing long-term, stable sources of earnings through the portfolio management ・Architectural glass ・Automotive glass (existing) ・Essential chemicals ・Performance chemicals ・Display glass ・Ceramics Establishing highly profitable businesses through expansion of high value-added businesses ・Mobility ・Electronics ・Life science Core businesses Strategic businesses The AGC Group’s Core Businesses will serve as solid sources of earnings, and Strategic Businesses will become growth drivers and lead further earnings growth. The AGC Group will continue being a highly profitable, leading global material and solution provider. ©AGC Inc. 5
- 6. AGC plus-2020 Develop high-value added businesses that do not get affected by market fluctuations Promote growth strategies for strategic businesses Concentrate management resources in growth regions/where we can win Achieve sustainable growth through strategic M&As AGC plus-2020 serves as the cornerstone toward 2025 ©AGC Inc. 6
- 7. Key measures by business segment Glass 【Architectural glass】 ・Focus on growth regions/where we can win ・Promote highly functional glass for the upcoming smart-city era 【Automotive】 ・Respond to needs for highly functional products designed for eco-friendly cars/automated driving Electronics 【LCD glass】 ・Achieve a smooth shift of production to China/larger-size products and further cost reduction 【Electronics】 ・In semiconductor-related products & optoelectronic materials businesses, get ahead of the times to provide differentiated products Chemicals 【Chlor-alkali】 ・In addition to maximizing the M&A impact, further expand the business base, including capacity increase, in Southeast Asia 【Fluorine】 ・Steadily capture niche global markets by taking advantage of AGC’s unique technologies 【Life Science】 ・Expand the business base by maximizing the effect of M&As ©AGC Inc. 7
- 8. Strategic Businesses Highly profitable businesses with growth potential Mobility Electronics Life Science Arrival of IoT era Longer life expectancy Evolution of transportation infrastructure Increase of global population Building new eco-system Greater safety, security, comfort 【Changes in the macroscopic environment】 Connected cars/ Automated driving, Evolution of information display, Lighter-weight transportation means Arrival of IoT/AI era, Next-generation high- speed communications/ Automated driving, Use of novel devices Safe & secure medical care, Longer life expectancy, Increase of global population Strategic Businesses ©AGC Inc. 8
- 9. Strategic business: Mobility Automated driving Connected cars Evolution of information display Eco-friendly vehicles（EV) AGC’s unique & diverse core technologies respond to the need for more advanced functionalities. Key phrases for next-generation glass “Glass located at best place” “Multi-function” Radio wave transmission HUD Transparent screen Sensor Camera V2X antenna AM/FM/TV antenna Big waves of change Heater Heat-shielding Sound-proof Highly functional glass ©AGC Inc. 9
- 10. Mobility 10 360° “user-friendly” information display - A wide range of advanced solutions for information display - Molding techniques enabling design flexibility （Display cover glass/Glascene™/HUD, etc.) First in the glass industry to build Global, tri-polar antenna R&D! （Europe facility will be completed at the end of 2018) Accelerate R&D for next-generation “connecting” antennas Automated driving Connected cars Evolution of information display ©AGC Inc.
- 11. Electronics 11 Next-generation high-speed communications, Automated driving Use of novel devices (AR/VR/drones, etc) Sustainable growth of the electronics- related markets Semiconductor/sensor will be used in all products in the world Parts and materials will be required to have more advanced functionality (lighter-weight, greater strength, higher heat dissipation, superior heatproof, lower loss, etc.) EUV mask blanks Infrared absorbing glass filterArrival of IoT/AI era Provide consumable materials, highly functional parts and materials to the electronics parts/materials market that continue growing ©AGC Inc.
- 12. FY2017 FY2018 FY2019e FY2020e FY2025e 20 12©AGC Inc. EUVL mask blanks sales Sales fourfold 20 billion yen or more Sales target of EUV mask blanks 10 18 30 FY2017 FY2018e FY2019e FY2020e EUVL device shipments Source：Created by AGC, based on ASML’s report from SEMICON Japan 2018. Electronics Semiconductor-related products FY2025 40 billion yen or more （billion yen） Market trend ・ Market will continue to grow, pushed by technology trend such as “low energy consumption”, “downsizing”, “high-efficiency”, and “high durability”. AGC’s outlook ・ Fourfold sales in FY2020 from FY2018, and to have 50% market share for EUV mask blanks. ・Increase sales mainly in high-end consumables for other electronic materials such as CMP slurry. FY2020 40
- 13. Impregnation technology 13©AGC Inc. composite Base material Inorganic filler Adhesive fluorinated resin (Fluon+TM EA-2000) Example of AGC’s applications Composite technology CCL manufacturing Glass antenna for buildings On-glass antennas for automotive R2R technology Base station antenna Acquired CCL business of Park Electrochemical and Taconic Market trend Communication technologies continues to advance, such as 5G, “super high-speed / higher capacity”, and “ultra-high-capacity connection”. AGC’s strength ・ AGC can satisfy the needs for “low loss CCL/ highly efficient” inorganic and organic materials“. ・ AGC can offer its technology from base materials to finished products. ・ AGC has technology, human resources, and networks of business partners for application development. Electronics -next-generation high-speed communication related products- Antenna ≫ AGC’s technology ＋ partners = new value 60 billion or more Sales target for next-generation high-speed communication related products Already contributing to OP CCL ≫ can supply in any form (base materials/technology/CCL) Will contribute to OP AGC’sbusinesssolutions FY2025
- 14. Japan Europe/USA Synthenic pharmaceutical Bio pharmaceutical FY2017 FY2018 FY2019e FY2020e FY2025e 14©AGC Inc. Life Science Sales of Life science business （billion yen） Market trend ・ Market of prescribed drug will be 1,070B USD (approx.120 trillion yen) in 2022, and biopharmaceutical will account for 30% of the market. ・ CAGR in 2018-2024 is estimated to be 5% for synthetic pharmaceutical, and 9% for biopharmaceutical. AGC’s business expansion ・ Continue to expand business globally by capacity increase and M&As. CAGR 20% Sales target for Life science AGC’s expansion for global operation Chiba: Expand GMP compliant synthetic pharmaceutical capacity tenfold (from Oct 2019) Spain: Acquired Malgrat Pharma Chemicals （2019） Chiba: New cGMP compatible facilities for mammalian cell production （from July 2019） USA: Triples biopharmaceutical production capacity （from July 2020） Capacity increase M&A Capacity increase Capacity increase 65 billion or more （previous: 60 billion） FY2020 FY2025 100 65 44.9 36.7 100 billion or more
- 15. Life science 15 ・ Integrated businesses in Japan, United States and Europe as “AGC Biologics” (Headquarter in Seattle, from January 2018 onward) ・ Further capacity increase at a plant in Europe (scheduled from 3Q 2018) Started global, integrated management of AGC’s bioscience business to provide high-quality services to customers around the world ©AGC Inc.
- 16. Disclaimer ■This material is solely for information purposes and should not be construed as a solicitation. Although this material (including the financial projections) has been prepared using information we currently believe reliable, AGC does not take responsibility for any errors and omissions pertaining to the inherent risks and uncertainties of the material presented. ■We ask that you exercise your own judgment in assessing this material. AGC is not responsible for any losses that may arise from investment decisions based on the forecasts and other numerical targets contained herein. Copyright AGC Inc. No duplication or distribution without prior consent of AGC Inc. ©AGC Inc. 16
- 17. END