FY2018 Mid-Year Financial Results

Transcription

1 FY218 Mid-Year Financial Results Ken Shido, President & COO The first section of the Tokyo Stock Exchange (securities code: 7294) This is an internal English translation of the YOROZU 218 Mid-year Financial Report issued in the Japanese language and is provided solely for the convenience of English speaking readers. In case of discrepancy the Japanese version prevails. YOROZU CORPORATION.218 All Rights Reserved. Agenda Ⅰ. FY218 Mid-Year Financial Results Ⅱ. FY218 Annual Forecast Ⅲ. Update on Earnings Recovery in the US Ⅳ. Recent Activities Ⅴ. Redistribution of Profits to Shareholders YOROZU CORPORATION. 218 All Rights Reserved. 2 1

2 Ⅰ. FY218 Mid-Year Financial Results Ⅱ. FY218 Annual Forecast Ⅲ. Update on Earnings Recovery in the US Ⅳ. Recent Activities Ⅴ. Redistribution of Profits to Shareholders YOROZU CORPORATION.218 All Rights Reserved. 3 Consolidated Financial Statement Summary for FY218 Mid-Year (Year on Year) FY218 Mid-Year FY217 Mid-Year Year on Year Previous Forecast for FY18 Mid-Year 2 Difference from Previous Forecast Sales 82,433 85,79-3.8% 83,5-1.3% Operating Income 2,589 3, % 2,6 -.4% Ordinary Income 2,79 3, % 2,8 -.4% Net Profit 1 1,673 2, % 1,6 +4.6% FY218 Mid-Year FY217 Mid-Year Differences Rate of changes Net Profit per Share 7.4 yen yen yen -35.3% Rate Applied to Consolidated Statement yen/$ yen/$ yen/$ -3.3% 1 Net profit attributable to the parent company shareholders 2 Estimated figures disclosed on May 1, 218 (No changes in estimated figures disclosed on Aug. 9, 218) Sales: Dropped as a decrease in sales of US eroded China s boosting sales Operating income: Dropped due to output decline in US, Mexico and Japan despite significant improvement in Tennessee Ordinary income: Dropped on unfavorable foreign exchange fluctuation Net profit: A further reason for the drop is impact of corporate tax cuts in US due to US facility loss YOROZU CORPORATION.218 All Rights Reserved. 4 2

3 Consolidated Sales by Customer (FY17 Mid-Year to FY18 Mid-Year ) 1, 9, 8, 7, 6, 5, 4, 3, 2, 85,79 Toyota Honda Nissan 82,433 Toyota Honda Nissan -431 (-12.2%) -1,975 (-12.7%) -2,16 (-3.6%) Customer FY17 Mid-Year (%) FY18 Mid-Year (%) Nissan Gr * 58, % 56, % Honda Gr 15, % 13, % Toyota Gr 3, % 3,91 3.7% Isuzu 2, % 2, % Mazda 1,672 2.% 1, % Suzuki 1, % 1,68 2.% Kubota 1,23 1.2% 1,92 1.3% VW 439.5% 772.9% GM Gr 258.3% 24.% Others 1, % 1, % Total 85,79 1.% 82,433 1.% * Sales to Renault included 1, 217 Mid-Year 218 Mid-Year Decline in sales due to a drop in sales to Nissan and Honda YOROZU CORPORATION.218 All Rights Reserved. 5 Analysis on Change Factors of Consolidated Operation Income (FY17 Mid-Year to FY18 Mid-Year) 8, 6, 4, 2, 3, Cost saving +444 Profit from die equipment +157 Foreign exchange profit Sales drop Profit fall Cost reduction in response to customer request -686 Cost increase attributed to newly launched production base Consolidation Depreciation adjustment -16 2,589 FY217 Mid- FY218 Mid- Year Results Year Results Despite favorable effects of cost-saving efforts and die profits, operation income went down due to Alabama startup costs and a sales drop owing to production shrinking in Japan YOROZU CORPORATION.218 All Rights Reserved. 6 3

4 Sales and Operating Income by Region (Before Consolidated Adjustment, FY17 Mid-Y to FY18 Mid-Y) Sales 6, 4, 2, -1,65-5.3% 3,259 28,654-5, % +3, % 39,726 34,2 26,11 29,45 Changes Rate of changes Operating Income 4, 2, - 2, FY217 Mid-Y FY218 Mid-Y % 2,883 FY217 Mid-Y Japan 2, % -1,61 1, % FY217 Mid-Y 1,358 FY218 Mid-Y Japan Americas Asia Japan: Operating income fell due to a decrease in die and part sales and it led to a profit fall. Americas: Output falls caused a drop in earnings in US and Mexico. Operating income was negatively affected by Alabama base startup and fixed costs in Mexico despite a bump in sales at Tennessee. Asia: Sales increased in China and profits increased in Thailand as a result of improved operations YOROZU CORPORATION.218 All Rights Reserved. FY218 Mid-Y FY217 Mid-Y FY218 Mid-Y Americas FY217 Mid-Y FY218 Mid-Y FY217 Mid-Y FY218 Mid-Y Asia 7 Consolidated Balance Sheet Summary (FY218 Mid-Year) Current Liabilities 4,826 45,632-4,86 Fixed Liabilities 32,631 32, Total Liabilities 73,458 78,68-4,61 Shareholders Equity 83,955 82,845 +1,11 Other Accumulated Comprehensive Income Sep. 218 Mar. 219 Differences Current Assets 63,257 69,59-6,333 Fixed Assets 14,354 15,493-1,139 Total Assets 167, ,83-7,472-5,466-2,992-2,474 Non-controlling Interest, etc. 15,663 17,162-1,499 Net Asset 94,153 97,15-2,862 Total Liabilities and Net Asset 167, ,83-7,472 Cash -1,793 Electronically recorded monetary claims +212 Inventories -48 Notes and acc ts receivable -3,287 Other current assets -1,57 Tangible fixed assets -1,214 Electronically recorded monetary obligations -59 Notes and accounts payable -2,686 Short term debts -1,183 Net profit +1,673 Dividend payment -88 Valuation difference +13 Foreign currency translation adjustment -2,632 Reduction in accounts receivable and payable decreased total assets and liabilities. YOROZU CORPORATION.218 All Rights Reserved. 8 4

5 Ⅰ. FY218 Mid-Year Financial Results Ⅱ. FY218 Annual Forecast Ⅲ. Update on Earnings Recovery in the US Ⅳ. Recent Activities Ⅴ. Redistribution of Profits to Shareholders YOROZU CORPORATION.218 All Rights Reserved. 9 Forecast Summary for FY218 Consolidated Statement Profit and Loss(Year on Year) FY218 Forecast FY217 Statement Year on Year FY218 Previous Forecast 2 Difference from Previous Forecast Sales 169, 171, % 171, -1.2% Operating Income 5,2 6, % 6,4-18.8% Ordinary Income 5,3 5, % 6,3 15.9% Net Profit 1 3,1 2, % 4, -22.5% FY218 Forecast FY217 Statement Difference Rate of change Net Profit per Share yen yen yen +14.1% Exchange Rate Applied to Consolidated Statements 11. yen/$ yen/$ yen/$ -2.% Sales: A decline is expected due to a reduction of US customers. Operating income: Will be affected by sales drops in US and growing fixed costs of strategic investment despite steady improvement in Tennessee. Net profit: A rise is projected as tentative negative impact of US corporate tax cuts is removed. YOROZU CORPORATION.218 All Rights Reserved. 1 Net profit attributable to the parent company shareholders 2 Estimated figures disclosed on May 1, 218 (No changes in estimated figures disclosed on Aug. 9, 218) 1 5

6 Consolidated Sales by Customer (FY17 Statement to FY18 Forecast) 18, 16, 14, 12, 1, 8, 6, 4, 2, 171, , Toyota Honda Nissan FY217 Results Toyota Honda Nissan FY218 Forecast -731 (-1.3%) -3,42 (-11.4%) -1,61 (-.9%) FY17 Customer (%) FY18 Forecast (%) Statement Nissan Gr* 117, % 116, % Honda Gr 29, % 26, % Toyota Gr 7,16 4.1% 6, % Isuzu 5,188 3.% 5,14 3.% Mazda 3, % 3,81 2.3% Suzuki 2,72 1.6% 2, % Kubota 2,28 1.2% 2, % VW 785.5% 2, % GM Gr 342.2% 64.% Others 2, % 3, % Total 171,536 1.% 169, 1.% * Sales from Renault included A decrease in profits is expected due to a drop in sales to Nissan and Honda YOROZU CORPORATION.218 All Rights Reserved. 11 Analysis of Changes in Consolidated Operating Income (FY17 Statement to FY18 Forecast) 14, 12, 1, 8, 6, 4, +1,537 Cost saving +1,54 Profit from die equipment +55 Foreign currency effects Sales decrease -63 Cost reduction in response to customer request -1,837 Cost increase attributed to newly launched production base -4 Depreciation -197 Consolidation adjustment , 6, Profit fall 5,2 FY217 Statement FY218 Forecast Despite cost savings and profits from dies, a profit fall is expected due to growing costs of Alabama setup and weak sales in Mexico which has suffered from long term suspension of operations at customer production facilities. YOROZU CORPORATION.218 All Rights Reserved. 12 6

7 Sales and Operating Income by Region (Before Consolidation Adjustment, FY17 Statement to FY18 Forecast) Sales 1, 5, -2, % 6,147 57,366-4, % 75,85 7,436 +2, % 56,39 58,568 Changes Rate of changes Operating Income 5, FY217 Japan FY218 FY217 America % ,84 3, % FY218 FY217 3,38 FY218 Asia % 3,56-5, FY217 FY218-2,15 FY217-1,788 Japan America Asia Japan: Sales will drop owing to a decrease in die sales. Operating profit will remain the same level. Americas: Although a sales decrease, no great loss is expected thanks to significant rise in Tennessee. Asia: Sales will be boosted in China and Indonesia but it will be offset by depreciation expense of 35t press installed in China. YOROZU CORPORATION.218 All Rights Reserved. 13 FY218 FY217 FY218 Capital Investment and Depreciation Capital Investment Depreciation 3, 3, Asia Asia Americas 24,643 25, 25, Americas Japan 5,16 2,13 Japan 19,9 2,17,833 2, 11,4 15,5 6,936 6, 15, 6,76 15, 1,87 11,915 12,2 5,511 1,87 14,31 8,373 1,592 1, 1, 6,632 8,138 9,3 8,373 5,262 9,265 8,22 5, 5, 5,236 4,939 4,6 1,88 1,769 FY214 FY215 FY216 FY217 FY218 FY214 FY215 FY216 FY217 FY218 (Forecast) (Forecast) YOROZU CORPORATION.218 All Rights Reserved. 14 7

8 Ⅰ. FY218 Mid-Year Financial Results Ⅱ. FY218 Annual Forecast Ⅲ. Update on Earnings Recovery in the US Ⅳ. Recent Activities Ⅴ. Redistribution of Profits to Shareholders YOROZU CORPORATION.218 All Rights Reserved. 15 Update on Earnings Recovery in the US Changes in Workforce Number and Turnover Rate at Tennessee Number of workers 2,5 2,14 2, Total workers Turnover rate % ,5 12.9% 1, , 5 3.1% 1 5 FY217 Support from Japan FY218 (Dispatch of officer, Centralized control of kaizen, Instructions) Early startup of Alabama Better employee benefits (pay raise) Headcount and turnover rate have been reduced steadily with the help of kaizen at Tennessee. Effects of kaizen are not enough to ensure achievement of break-even in 218 due to output declines. YOROZU CORPORATION.218 All Rights Reserved. 16 8

9 Update on Earnings Recovery in the US Kaizen example at Tennessee Number of operators Inspection: 1 Packaging: 2 - Inspection and packaging are fully automated - No human operators Kaizen-based mindset and voluntary behavior have been widespread among local staffs. YOROZU CORPORATION.218 All Rights Reserved. 17 Action Plan for Earnings Recovery in the US Alabama Startup (Alabama) Commencement of Delivery for New Altima (from Aug. 218) Jidoka assembly line YOROZU CORPORATION. 218 All Rights Reserved. 18 9

10 Ⅰ. FY218 Mid-Year Financial Results Ⅱ. FY218 Annual Forecast Ⅲ. Update on Earnings Recovery in the US Ⅳ. Recent Activities Ⅴ. Redistribution of Profits to Shareholders YOROZU CORPORATION.218 All Rights Reserved. 19 Outline of Recent Activities (1) Strategies to Improve Profitability (2) Further Progress in Product Competitiveness and Development Capability (3) Enhancement of Corporate Capabilities (4) Quality Awards in FY218 YOROZU CORPORATION.218 All Rights Reserved. 2 1

11 Strategies to Improve Profitability 1 Daimler Jidoka Line (adopted in an overseas site) ダイムラーの動画 Appearance of jidoka welding line Launched a serial production of suspension that is mounted on Mercedes-Benz A-Class Sedan YOROZU CORPORATION. 218 All Rights Reserved. 21 Strategies to Improve Profitability 2 Jidoka of Press (adopted in a domestic site) Unmanned material handling robot (eye robot) has made real jidoka YOROZU CORPORATION. 218 All Rights Reserved

12 Improve Product Competitiveness / Development Capabilities Development of light weight product; plan in 218 to 22) ~ ~22 Innovative evolution of our products Light weight/ High stiffness/ Low cost By applying new structure / new manufacturing methods/ new materials 221~ ~217 Reduced 15% of the weight of RR AXLE BEAM in FY217 -> Planned for commercialization 218~22 New structure & super high-tensile steel Reduce weight - 15% New structure & super high tensile steel plate and multi-material (resin and aluminum) Reduce weight - 3% Evolution through development of new manufacturing methods (for joining, forming and rust prevention) Development of new products for the future/suspension system development = Increase added-value YOROZU CORPORATION. 218 All Rights Reserved. 23 Further Progress in Product Competitiveness & Development Capability Item Old Model New Model Main Material General Plate Thickness Number of Major Parts Weight Altima (previous model) SOP US: June, MPa class 1.8mm 54MPa class 1.6mm kg New Altima SOP US: August, 218 Front SUSPENSION MEMBER for Altima in North America Development with light-weight technology 25.6kg -2.2% Offering simplified structure and thin plates significantly cuts off the weight in North American specifications YOROZU CORPORATION. 218 All Rights Reserved

13 Enhancement Corporate Capabilities Organization review Strengthening advanced development Elevate Advanced Development Gr. to new R&D Dept., with the aim of stepping up research and development of new manufacturing methods and new structural parts. Mfg Eng Dept. Advanced Dev. Kaizen R&D Dept. Dev. & Test Previous organization R&D Dept. Adv. Dev. Gr. Integrate whole process One Management Collaborate Mfg Eng Dept. Kaizen Gr. Dev. & Prototype Gr. Collaborate Collaboration Product Eng Dept. Super high tensile steel forming Aluminum forming Multi materials Parts integration Light-weight suspension Electrified Suspension YOROZU CORPORATION.218 All Rights Reserved. 25 Enhance Corporate Capabilities Organization review Established new Diversity Promotion Group Bring together and shape the ideas from the Smart Work Committee and the proposals from departments. 国籍 Nationality 年齢 Age 性別 Gender 人種 Race 障がい Challenged 文化 Culture 価値観 Value ライフスタイル Lifestyle YOROZU CORPORATION. 218 All Rights Reserved

14 Quality and Development Awards in FY218 Mid-Year Finalist to Quality Award from Nissan North America (Mexico) Appreciation Award for Quality Activities from Toyota Motor East Japan (YC) Quality and Delivery Excellence Award from Honda Brasil (Brasil) Thai Regional Quality Award from Nissan Motor Thailand (Thailand) Excellence in Quality Award from Hino Motors USA (US) Certificate of Achievement from Isuzu Motors (YC) YOROZU CORPORATION. 218 All Rights Reserved. 27 Ⅰ. FY218 Mid-Year Financial Results Ⅱ. FY218 Annual Forecast Ⅲ. Update on Earnings Recovery in the US Ⅳ. Recent Activities Ⅴ. Redistribution of Profits to Shareholders YOROZU CORPORATION.218 All Rights Reserved

15 Financial Strategy: Extension of Shareholders Benefit Program (Yen/Share) % Incl. commemorative dividend 5% 8 58yen 35.5% 35.4% 59yen 35.% 35% 35% 4% yen 53yen 46yen 26yen 18 2yen 2.1% 19 18yen 19yen 4 16yen 17yen Interim dividend Final dividend Forecast Forecast Forecast Memorial dividend Dividend payout ratio Continue 35% as the target payout ratio in FY218 onward 3% 2% 1% % YOROZU CORPORATION.218 All Rights Reserved. 29 FY218 First-half Financial Results Thank you for your attention Yorozu Website YOROZU CORPORATION.218 All Rights Reserved. 3 15

16 Disclaimer and Copyright Please note that this document contains the forward-looking statements. We ensure that the business forecast, estimation and future strategies are based on the information we reasonably obtained as of the date of this document and the judgment from normally-anticipated assumptions and beliefs. However, such forward-looking statements do not provide any guarantees for the future performance and may involve risks, uncertainties and other factors which cause material differences in any future results or performance expressed or implied in this document. We aim to proactively provide fair disclosure of accurate and necessary information to investors and other related individuals, but we ask you not to place undue reliance on such forward-looking statements herein to make any decisions. In light of the copyright policy, please be advised that unauthorized reproduction or distribution of this document for any purpose is strictly prohibited. Thank you very much for your understanding and cooperation. Contact Us Yorozu Corporation Person responsible: AKIRA SASO Vice President (CEVP&CFO), General Manager of Finance Dept. Contact personnel: YOSHITAKE TAKAHASHI, Finance Dept. TEL FAX YOROZU CORPORATION.218 All Rights Reserved