Maximizing Equipment Utilization and Expanding the VA Product Ratio

「Progress in improving the sales mix alongside the shift toward higher-value-added products」

「In response to the severe business environment currently facing the Group and the demand growth expected over the medium to long term, the Group is pursuing the shift away from commodity products under the Business Development initiative of its medium-term management plan, alongside cost reductions through a review of its production structure and other measures.」

「As announced on 16 January 2025, the Group fired up the glass production equipment at its Rossford plant in Ohio, United States. The plant previously produced general architectural glass, but will now produce glass for solar panels.」

「During the third quarter, construction to convert Malaysia's float glass production facilities from general architectural glass to glass for solar panels was completed.」

「Although the European market slowed, revenue and operating profit before separately disclosed items exceeded the year-earlier period because selling prices and sales volumes improved in Asia and the Americas.」

「Revenue and operating profit before separately disclosed items increased from the year-earlier period in many regions, reflecting improved selling prices and higher sales volumes.」

「・New online coating equipment will be installed at an existing float furnace in Malaysia to produce glass for solar panels (production scheduled to begin in the fiscal year ending March 2024).」

「Revenue from the architectural glass business in Asia accounts for 27% of the Group's total revenue from this business. Both revenue and operating profit before separately disclosed items exceeded the year-earlier period. The impact of higher input costs was mitigated by increased sales volumes and stable operations.」

「Despite higher input costs, the impact was more than offset by higher volumes and selling prices, resulting in increases in both revenue and operating profit before separately disclosed items from the year-earlier period.」

「In the architectural glass business, the Group is working to expand glass for solar panels for utility-scale solar projects and develop building-integrated photovoltaic panels for buildings and homes, while transitioning from the commodity window glass business to a high-value-added glass business.」

「Under MTP Phase 2, profitability steadily improved as VA initiatives advanced through the promotion of the VA No. 1 strategy. The Group expanded its architectural glass business in online coating and increased orders for high-value-added automotive glass.」

「Selling prices improved in line with the increase in demand, while profitability also improved due to stable operations and tighter cost management.」

「－ The VA sales ratio is rising (46%), but the product mix still consists largely of existing products, leaving the business structure vulnerable to price competition.」

「In North America, sales volumes of glass for new vehicles were roughly in line with the year-earlier period, but profitability improved due to higher production efficiency.」

「The VA (high-value-added) sales ratio increased to 46%, contributing to an improvement in operating profit.」

「Revenue from the European architectural glass business accounts for 41% of the Group's total revenue from this business. Against a backdrop of strong demand, the market remained robust, resulting in high capacity utilisation and firm selling prices.」

「In Europe's automotive glass business, operating profit in the original equipment (OE) segment improved as sales volumes of high-value-added products increased and cross-site cost reductions made further progress.」

「In the Group's original equipment (OE) glass business, sales volumes remained firm as the market improved. At the same time, operating profit improved as sales volumes of high-value-added products increased and the effects of cost reductions continued to emerge.」

「The market continued to improve on strong demand, and prices remained firm. In addition to the improvement in prices, the continued high level of capacity utilisation led to revenue and operating profit exceeding the year-earlier period.」

「The Group's capacity utilisation has remained high.」

「In Europe, the Group has decided to restart an idle float glass production line in Italy to offset the supply shortfall expected from scheduled maintenance on float glass production lines and to further expand high-value-added products (VA products), including high-transmission glass.」

「Investments in equipment related to expanding online-coated products, including Low-E glass, solar glass and conductive films; investments in processing equipment for energy-saving products, including Spacia; and investments to upgrade furnaces for VA products, including high-transmittance glass.」

「Since formulating the MTP, the Group has made significant progress in its transformation into a “Value-Added Glass Company” by expanding sales of value-added products.」

「The market has continued to improve through the effects of production capacity reductions implemented to date and recovering demand, and the Group’s prices improved further. The Group’s sales volume also increased, particularly for value-added products.」

「We focused on maximizing capacity utilization and expanding the ratio of VA (value-added) products, which are the basic strategies of the MTP.」