Toray Industries (3402) Investor Day 2023 Part 1 summary

AP-G 2025 strategy and financial targets

• AP-G 2025 prioritizes sustainable growth in Sustainability Innovation and Digital Innovation businesses, targeting related revenue of ~60% of total by FY2025.

• Five strategies pair growth and value creation with product and operational excellence, people-centric management, and stronger risk management and governance.

• FY2025 targets: revenue ¥2,800bn vs ¥2,489.3bn in FY2022; core operating income ¥180bn vs ¥96bn; core operating margin 6% vs 3.9%.

• FY2025 targets include ROIC ~5% vs 2.7%, ROE ~8% vs 5%, positive cumulative FCF over three years, and D/E of 0.7 or lower.

• Profit improvement focuses on higher capacity utilization, growth-field sales, value-based pricing, working-capital reduction, and continued restructuring of low-growth, low-profitability businesses.

Growth investment and value creation

• Growth-field investment totals ¥450bn, including ¥270bn for capital investment and ¥180bn for R&D.

• Strategic pricing will address customer and product price gaps against costs; semiconductor-film initiatives link lower defects and customer cost savings to higher prices.

• Global sales operations, external collaboration, and DX-enabled value chains aim to expand customer solutions; a material concierge service was planned for 2023, with development rework targeted to fall to one-quarter or less.

• Ultrasuede brand value rose 5.2-fold, from ¥6.6bn in FY2017 to ¥34.2bn in FY2022; future brand initiatives include plant-based raw materials and global branding in carbon-fiber composites.

• Technology Center priorities were expected to add over ¥200bn in FY2025 revenue; planned R&D investment was ~¥220bn in the current three-year program, up from ~¥195bn previously.

R&D and sustainability developments

• R&D combines four core technologies with engineering, chemical-process, and analytical capabilities; digital investment of ¥20bn supports simulation, process monitoring, and supply-chain planning.

• A group-wide digital-skills base of 2,000 people is planned, including over 20 senior experts, over 200 leaders, over 600 associates, and over 1,200 general digital personnel.

• SI business products enabling resource recycling target ¥400bn revenue in FY2030; recycled, biomass-derived, or CO2-recycled inputs are targeted to reach 20% of PET and nylon core-polymer raw materials.

• Hydrogen plans include second plants for fuel-cell and electrolyte-membrane materials in 2023 and 2024, respectively; water-electrolysis application of hydrocarbon membranes targets practical use by 2025.

• New nylon raw materials from inedible biomass reached lab-scale high-purity adipic acid production; commercialization is targeted around 2030.