Artience (4634) Q3 2024 earnings summary

Executive summary

• Sales and profits for the first three quarters of FY2024 significantly exceeded the previous year, driven by strong overseas growth, effective cost management, and robust segment performance despite domestic cost pressures and global economic headwinds.

• Net sales for the first three quarters rose 9.2% year-over-year to ¥260.2 billion, with operating profit up 73.1% to ¥15.8 billion and profit attributable to owners of parent up 74.8% to ¥12.6 billion.

• Overseas expansion in gravure inks, adhesives, and UV curable inks contributed to strong performance, aided by facility expansions and price revisions.

• The business environment showed modest global recovery, but demand was sluggish in China, parts of Europe, and Southeast Asia.

• Strategic focus included transforming business groups for higher profitability and strengthening the management foundation.

Financial highlights

• Net sales rose to ¥260.2 billion, up 9.2% year-over-year for the first three quarters.

• Operating profit increased 73.1% to ¥15.8 billion; ordinary profit up 53.2% to ¥15.0 billion.

• Profit attributable to owners of parent grew 74.8% to ¥12.6 billion.

• Operating margin improved to 6.1% from 3.8% year-over-year.

• Gross profit margin increased to 21.5% from 19.4% year-over-year.

Outlook and guidance

• FY2024 full-year forecast remains unchanged: net sales ¥355.0 billion (+10.2% YoY), operating profit ¥20.0 billion (+49.6% YoY), profit attributable to owners of parent ¥16.5 billion (+69.5% YoY), and basic EPS ¥311.89.

• Color filter materials expected to remain sluggish in Q4; sensor-related materials to stay solid.

• CNT dispersions for LiBs sales projected to fall to ¥3.4 billion for FY2024, with muted recovery in Europe/US and continued EV market weakness into FY2025.

• Overseas markets like India and Southeast Asia expected to remain strong, though some price declines anticipated.

• No changes to previously announced earnings or dividend forecasts.