109th Semiannual Business Report April 1, 2010 to September 30, 2010

Transcription

1 To our shareholders and investors 19th Semiannual Business Report April 1, 21 to September 3, 21 Security Identification Code: th

2 TO OUR SHAREHOLDERS enjoyed brisk business in China, as demand for industrial products increased in the Chinese market. In addition, concerns about a possible supply shortage of some components and materials resulted in early placement of orders by various process industries to secure stable production. Consequently, the Company saw the order intake of its servo systems surge temporarily. To meet the rising demand, the Company boosted its production capacity by improving its production lines at the Kangawa Works, which went into service last year, and by extending hours of operation. I would like to take the opportunity of the publication of our 19th Semiannual Business Report to say a few words to you. The Sanyo Denki Group commenced the Sixth Mid-Term Management Plan in April 21. One of the main goals of the plan is to expand new markets in which the Company enjoys a competitive advantage to become resilient to changes in the business environment, while continuing efforts to establish the Company as the "top brand in the industry, the primary goal of the Fifth Mid- Term Management Plan. To achieve this goal, the Company decided to direct efforts to improve the quality of its operations across all corporate activities and to implement a range of measures to deliver uniform and quality products and services to all our customers around the world, while developing the new competitive products. On the new product development front, the Company introduced many products that boast a competitive edge in terms of function, energy-saving and reliability, as scheduled. Consequently, we are pleased to report business results for the first half of the year as described below. For the interim period under review, the Company has decided to pay cash dividends of 5. per share. We intend to steadily implement various measures as planned, despite concerns about a possible recession due to the yen s appreciation. In all our activities, we ask sincerely for your continued support. December 21 1 During the interim six-month period, the equipment industries in Japan, Europe and the United States Shigeo Yamamoto President & CEO

3 CONSOLIDATED FINANCIAL HIGHLIGHTs Net Sales Ordinary Income Net Income (Millions of Yen) 8, 65,749 67,386 6, 49,89 42,55 4, 3,571 33,86 32,467 28,143 2, 15,16 27/3 28/3 29/3 21/3 21/9 First half Full year 6, 5,114 4, 3,71 2,587 2,333 2,231 2, 1, , (1,647) (2,821) 4, 27/3 28/3 29/3 21/3 21/9 First half Full year 5, 4, 3,46 3, 2,342 2,86 2, 1,494 1,368 1,2 1, (193) 1, 2, 3, (3,155) 4, (4,142) 5, 27/3 28/3 29/3 21/3 21/9 First half Full year Net Income per Share Cash Dividends per Share Cash Flow & Free Cash Flow (Yen) (3.13) (5.87) (66.71) 8 27/3 28/3 29/3 21/3 21/9 First half Full year (Yen) /3 28/3 29/3 21/3 21/9 First half Full year 6, 5,33 4, 3,162 2,936 2, 1,465 1, , 4, (4,529) 6, 27/3 28/3 29/3 21/3 21/9 Cash Flow Free Cash Flow Capital Expenditure & Depreciation Net Assets & Return on Equity Total Assets & Return on Assets 8, 6, 4, 2, 3,157 1,824 3,575 2,387 7,397 2,649 2,6 2, ,179 27/3 28/3 29/3 21/3 21/9 Capital Expenditure Depreciation 5, 4, 37,797 39,515 37,214 32,444 33,565 3, , , (.5) (12.1) 27/3 28/3 29/3 21/3 21/9 Net Assets Return on Equity , 65,385 63,838 66,614 59,675 6, 4, 4.8 2, 3.6 7, (.3) (6.6) 27/3 28/3 29/3 21/3 21/9 Total Assets Return on Assets

4 New PRODUCT HIGHLIGHTS "San Ace" is Sanyo Denki s brand name for the cooling system products, such as cooling fans and cooling fan units, manufactured by Sanyo Denki. These are used mainly in servers, power supply equipment, communication equipment and FA equipment. "SANUPS" is the brand name for power supply equipment, including power conditioners for photovoltaic generation systems, uninterruptible power supply (UPS) systems, inverters and engine generators. These are used primarily in communication systems, financial terminals, FA systems, medical care systems and photovoltaic generation systems. "SANMOTION" is the brand name for servo systems, such as servomotors and amplifiers, stepping motors and drivers, controllers and encoders. These are used mainly in robots, semiconductor manufacturing equipment and injection machine. San Ace Low Power Consumption Fan San Ace 6 This product is low power consumption fan sized mm with large air flow and high static pressure. It achieves the energy saving and the environmental preservation of customer's equipment. SANUPS PV Inverter SANUPS P61A This product achieves industry's top level maximum efficiency of 96%. There are 3kW and 5kW under lineup, which are to be introduced in South East and East Asian, Oceania and European markets. It achieves IP65 level of protection, and is superior in waterproof/dustproof performance. It s safely used outside as well. 3

5 SANMOTION AC Servo Amplifier SANMOTION R ADVANCED MODEL DC48V Input Model This product is a high performance servo amplifier with an input power of DC48V. In seeking to make the servo amplifier both smaller and lighter, this product achieves a downsizing by approximately 3% while maintaining the high performance as our conventional product, the AC power input servo amplifier. SANMOTION Controller SANMOTION C High-Speed Field-Bus EtherCAT Interface Model This controller is equipped with a high-speed field-bus EtherCAT interface and increases CPU processing capabilities. The size has become compact by reducing volume by 33% comparing with the existing product. SANMOTION Linear Actuator Stepping Motor SANMOTION F5 Linear Actuator Stepping Motor This 5-phase stepping motor incorporates a ball screw inside the stepping motor and achieved a maximum thrust of 45N and a stroke of 8mm. 4

6 REVIEW OF OPERATIONS During the six-month interim period under review, the outlook of the Japanese economy remained uncertain, as recovery in demand in some markets was overshadowed by concerns about the economic slowdown in Europe and the United States and the sharp appreciation of the yen. In this environment, many orders were placed early by Sanyo Denki s main customers, such as manufacturers of machine tools, robots and manufacturing equipment for semiconductors, in expectation of demand recovery. As a result, consolidated net sales for the six-month interim period under review increased 114.9% year on year, to 32,467 million. Consolidated operating income stood at 2,479 million, while consolidated ordinary income totaled 2,231 million. Net income amounted to 2,86 million. The amount of orders received stood at 37,155 million, and the order backlog amounted to 17,297 million. Cooling Systems Division "San Ace is the brand name for Sanyo Denki s cooling system products. Steady demand from the factory automation industry reported in the first quarter continued, and the Company was able to tap many new customers in the display equipment, photovoltaic generation, fuel cell and electric vehicles industries. We also enjoyed steady demand from the server industry, the traditional large-lot user, and the communication equipment industry both in Japan and abroad. As a result, net sales increased 62.5% year on year, to 8,431 million. The amount of orders received rose 54.3%, to 8,742 million, while the order backlog expanded 47.7%, to 1,987 million. Net Sales Composition Net Sales by Segments 8, Electrical Work Contracting 2.6% Cooling Systems Divisions 26.% 7, Electrical Equipment 7.4% Servo Systems Divisions 53.1% Power Systems Divisions 1.9% 6, 5, 4, 3, 2, 1, 49,89 23,788 28,143 15,777 8, ,451 42,55 5,345 15, ,467 2,395 17,245 15,16 16,394 1,812 7,643 3,732 5,91 3,544 8,632 2,566 5,189 12,379 8,431 29/3 21/3 21/9 First half Full year 5

7 Power Systems Division Servo Systems Division "SANUPS is Sanyo Denki s brand name for power supply equipment. The Company benefited from recovery in demand for power conditioners for photovoltaic generation at public facilities, including for the School New Deal, an initiative in Japan aimed at installing solar power generation systems at public schools. Demand for instantaneous voltage dip compensators for use in press machine and multistory car parks remained firm, while we saw healthy demand for engine generators for government agencies and the telecommunications sector. As a result, net sales increased 38.1% year on year, to 3,544 million. The amount of orders received rose 31.%, to 4,481 million, and the order backlog expanded 23.2%, to 2,88 million. "SANMOTION is Sanyo Denki s brand name for servo systems. Demand for the systems rose sharply, reflecting a rapid rebound in demand for manufacturing equipment for semiconductors, machine tools, robots and injection molding machines chiefly for markets in Asia. As a result, net sales increased 238.7% year on year, to 17,245 million. The amount of orders received rose 25.5%, to 2,422 million. The order backlog expanded 38.9%, to 7,731 million. Electrical Equipment Sales (Sales of products other than those of SANYO DENKI CO., LTD.) Sales of industrial electrical equipment, control equipment and electric materials recovered in general, including in the medical equipment, railway carriages and photovoltaic generation sectors. Net sales amounted to 2,395 million. The amount of orders received totaled 2,579 million, and the order backlog stood at 4,26 million. Electrical Work Contracting Demand was slow to recover in the main lines of this business, including steel mill related equipment, power generation and substation equipment, and electrical equipment. Client companies also tended to postpone repair works. On the other hand, demand related to photovoltaic generation, a new business area for the Company, was firm. As a result, net sales totaled 849 million. The amount of orders received stood at 93 million, while the order backlog amounted to 563 million. 6

8 CONSOLIDATED FINANCIAL STATEMENTs Consolidated Balance Sheets FY211 (As of September 3, 21) FY21 (As of March 31, 21) Change FY211 (As of September 3, 21) FY21 (As of March 31, 21) Change ASSETS: LIABILITIES: Current Assets 44,29 38,525 5,765 Current Liabilities 3,44 26,298 4,16 Cash and bank deposits Notes and accounts receivabletrade Securities Merchandise and finished goods Work in process Raw materials and supplies Costs on uncompleted construction contracts Other receivables Deferred tax assets Others Less: Allowance for doubtful accounts Fixed Assets Property, plant and equipment, net 7,284 19, ,927 4,31 6, ,558 (3) 26,689 2,613 6,222 17,916 2,593 3,346 5, ,939 (31) 28,88 21,16 1,61 1, ,376 (17) (38) (1,399) (492) Notes and accounts payabletrade Short-term debts Accrued income taxes Allowance for directors bonuses Other current liabilities Long-term Liabilities Long-term debts Lease obligations Reserve for retirement benefits Deferred tax liabilities Deferred tax liabilitiesrevaluation Negative goodwill Other long-term liabilities Total Liabilities NET ASSETS: Shareholders Equity Common stock Capital surplus Retained earnings Treasury stock, at cost Valuation and Translation Adjustments Net unrealized holding gain (loss) on securities Revaluation reserve for land, net of tax 14,79 11, ,588 7,9 4, , ,414 33,537 9,926 11,46 13,4 (89) (556) (88) ,927 1, ,512 7,87 4,427 1, , ,169 31,71 9,926 11,46 11,22 (888) , ,76 (86) (42) (69) 6 (245) (137) (12) 3,245 1,836 1,838 (1) (729) (387) Intangible assets Foreign currency translation adjustments (1,125) (783) (341) Investments and other assets Total Assets 5,79 7,98 6,687 66,614 (978) 4,366 Minority Interests Total Net Assets Liabilities and Net Assets ,565 7, ,444 66, ,12 4,366 7

9 Consolidated Statements of Income Consolidated Statements of Cash Flows FY211 (Six months ended September 3, 21) FY21 (Six months ended September 3, 29) Change FY211 (Six months ended September 3, 21) FY21 (Six months ended September 3, 29) Change Net Sales Cost of Sales Gross Profit Selling, General and Administrative Expenses Operating Income (Loss) Non-operating Income Interest income Dividend received Grant Amortization of negative goodwill Other Non-operating Expenses Interest expense Foreign currency translation loss Other Ordinary Income (Loss) Extraordinary Profit Gain on sales of fixed assets Gain on sale of investments in securities Other Extraordinary Loss Loss on sales of fixed asset Loss on disposal of fixed assets Loss on sales of investments in securities Loss on revaluation of investments in securities Claim expenses Directors' retirement benefits Other Income (Loss) before Income Taxes Income taxes Income before Minority Interests Minority Interests (Loss) Net Income (Loss) 32,467 25,414 7,53 4,573 2, , ,977 (153) 2, ,86 15,16 14, ,83 (3,157) (2,821) (2,856) 331 (33) (3,155) 17,361 1,981 6, ,637 (213) 2 2 (247) 62 (33) 37 (6) ,52 (7) () (6) () 4 29 (42) 19 4,834 (485) 2, ,242 Cash Flows from Operating Activities Income (Loss) before Income Taxes Depreciation (Increases) decrease in notes and accounts receivabletrade (Increases) decrease in inventories Increases (decrease) in notes and accounts payabletrade Others Subtotal Income taxes paid Others received Cash Flows from Investing Activities Purchase of property, plant and equipment Proceeds from purchase of investments in subsidiaries resulting in change in scope of consolidation Others Cash Flows from Financing Activities Increases in short-term debts Repayments of long-term debts Dividends paid Purchase of treasury stock Others Cash and Cash Equivalents Translation Difference Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period 1,465 1,977 1,25 (2,247) (2,86) 2, ,64 (147) (27) (456) (588) ,473 (64) (246) (2) (1) (322) 1,168 5,928 7,97 36 (2,856) 1,344 3, (1,755) (968) (37) 358 (1,87) (541) 45 (574) (245) (17) (64) ,227 5,496 1,14 4,834 (94) (5,93) (3,531) 4,347 1,895 1,548 (454) 1 (815) 499 (846) (467) 1,24 1,23 (66) (1) 15 (36) (413) ,6 8

10 Investor Information Breakdown by Type of Shareholders Securities Companies 751,95 shares 1.16% Foreign Investors 2,387,134 shares 3.68% Other Japanese Corporations 26,399,122 shares 4.7% Breakdown by Number of Shares Held Treasury Stock 1,78,656 shares 1.66% Individuals and Others 23,116,219 shares 35.64% Financial Institutions 11,127,899 shares 17.16% Number of Shares and Shareholders (As of September 3, 21) Number of Authorized Shares 25,, shares Number of Issued Shares 64,86,935 shares Number of Shareholders 6,951 Major Shareholders (As of September 3, 21) Thousands % of Total Name of Shares Shares KYODO KOGYO CO., LTD. 9, SN Kohsan Ltd. 7, SANYO KAIHATSU CO., LTD. 2, Mizuho Bank Ltd. 2, TOKIO MARINE & NICHIDO FIRE INSURANCE CO., LTD. 1, The Master Trust Bank of Japan, Ltd. (trust account) 1, Sanyo Kogyo Co., Ltd. 1, Nippon Life Insurance Company 1, Japan Trustee Services Bank, Ltd. (trust account) 1, THE HACHIJUNI BANK, LTD Notes 1 The number of shares shown in the above list are rounded down to the nearest thousand shares. 2 The Company holds 1,78 thousand shares of treasury stock, which is excluded from the major shareholders listed above. 1 to 999 shares.5% 1, to 4,999 shares 12.2% 5, to 9,999 shares 5.35% Stock Price Range (Tokyo Stock Exchange) (As of September 3, 21) Stock Price (Yen) 1, 8 6 More than 5, shares 71.93% 1, to 49,999 shares 1.2% Trading Volume (Thousands of shares) 5, 2,

11 Corporate Data Corporate Data (As of November 1, 21) Company Name SANYO DENKI CO., LTD. Established December 1936 Head Office , Kita-otsuka Toshima-ku, Tokyo Paid-in Capital , Japan TEL: ,926 million Number of Employees 2,721 (Consolidated) 1,684 (Sanyo Denki Co., Ltd.) Board of Directors and Corporate Auditors (As of November 1, 21) Chief Director* Shigeo Yamamoto Director* Kaoru Tamura Director* Nobumasa Kodama Director Yuichiro Miyake Director Toru Suzuki Corporate Auditor (Full time) Sakon Hatanaka Corporate Auditor Hisashi Yamamoto Corporate Auditor Hisayuki Ogura Corporate Auditor Takeshi Yamamoto *Operating Officer Operating Officers (As of November 1, 21) President and Chief Operating Officer Shigeo Yamamoto Major Operating Officer In charge of Supply, General Manager of Supply Headquarters Kaoru Tamura Major Operating Officer In charge of Technical Development, General Manager of Cooling Systems Div., General Manager of Power Systems Div. Nobumasa Kodama Major Operating Officer In charge of Quality Control, General Manager of Servo Systems Div., Manager of Planning Dept. Shigejiro Miyata Major Operating Officer In charge of Sales Organization, General Manager of Sales Headquarters, In charge of Overseas Sales Bases Yoshimasa Matsumoto Operating Officer In charge of Administrative Organization, In charge of Finance and Accounting, Manager of Finance Dept. Akira Tsukada Operating Officer Representative of Ueda Factories President and Chief Director of SANYO DENKI Techno Service Co., Ltd. Shigeto Murata Operating Officer In charge of Production Organization and Production Engineering, Deputy General Manager of Servo Systems Div. Kazuyuki Kitazawa Operating Officer Deputy General Manager of Sales Headquarters, In charge of NTT Business Yasuyuki Koizumi Operating Officer Deputy General Manager of Sales Headquarters, In charge of Servo Systems Business, Area Sales Manager of Central Japan, Area Sales Manager of West Japan District Yoichi Ebihara Organization (As of November 1, 21) The Board of Directors Chief Director Directors The Board of Operating Officers President and Chief Operating Officer Operating Officers The Board of Corporate Auditors Auditing Dept. Finance Dept. Accounting Dept. General Affairs Dept. Personnel Dept. Legal Dept. Communication System Control Dept. Planning Dept. Public Relations Dept. Sales Headquarters Cooling Systems Div. Power Systems Div. Servo Systems Div. Supply Headquarters Export Control Committee for World Security The Board of Education Business Process Innovation Committee Editorial Board of Technical Report Editorial Board of In-house Newsletter Committee of Business Conducts Environmental Committee Disciplinary Committee Crisis Management Committee Technical Patent Committee Medium-Term Management Plan Formulation Committee Medium-Term Management Plan Promotion Committee 1

12 SHAREHOLDER INFORMATION Fiscal Year Regular General Meeting of Shareholders Record Date for Shareholders Entitled to Receive Dividends Method of Notification Custodian of Shareholder Registration Handling Office Mailing Address and Telephone Referral From April 1 to March 31 of the following year To be held within three months from April 1 each year For year-end cash dividends: March 31 of each year For interim dividends: September 3 of each year Via electronic notification. (In case electronic notification is unavailable because of unavoidable circumstances, notification will be published in the Nihon Keizai Shimbun.) JAPAN SECURITIES AGENTS, LTD , Nihonbashi-Kayabacho, Chuo-ku, Tokyo , Japan JAPAN SECURITIES AGENTS, LTD. (Head Office) 1-2-4, Nihonbashi-Kayabacho, Chuo-ku, Tokyo , Japan JAPAN SECURITIES AGENTS, LTD. (Agency Department) , Shiohama, Koto-ku, Tokyo , Japan Toll Free: (In Japan only) Stock-related Inquiries and Notifications: Payment of unpaid dividends Please contact the above-mentioned custodian of shareholder registration. Contact for changes of address, requests for buyback of odd-lot shares or sales of additional lots, and the payment of dividends Please contact the securities company with which your account is held. If you set up a special account in lieu of an account with a securities company, please contact JAPAN SECURITIES AGENTS, LTD. As for shareholders of former SANYO KOGYO CO., LTD., please contact Tokyo Securities Transfer Agent Co., Ltd. (Toll Free: ) as the account managing agency for procedures associated with share recorded in special account. Requests regarding various kinds of share-related procedures can be made via the Internet. JAPAN SECURITIES AGENTS, LTD.: Tokyo Securities Transfer Agent Co., Ltd.: (Some of the forms can be printed out.) Sanyo DenKi s IR Information Section: Although this report includes estimates of the Company s financial results, actual results may differ from the estimates due to a variety of factors. Head Office: , Kita-Otsuka, Toshima-ku, Tokyo , Japan TEL: URL: