SUMIDA CORPORATION. Performance Briefings. <for FY2015 Fourth Quarter & Full Year> February 15, 2016

Transcription

1 SUMIDA CORPORATION Performance Briefings <for FY2015 Fourth Quarter & Full Year> February 15, 2016

2 Today Speakers Representative Executive Officer & CEO Shigeyuki Yawata Representative Executive Officer & President Tomoharu Suseki Representative Executive Officer & CFO Yoshiyuki Honda Copyright 2015 SUMIDA CORPORATION. All rights reserved. Today s Program Consolidated Financial Results (Q4 & Full-Year) CFO Yoshiyuki Honda Review and Future Directions CEO Shigeyuki Yawata Strategies President Tomoharu Suseki 4.Q & A Session Copyright 2015 SUMIDA CORPORATION. All rights reserved.

3 2015 Consolidated Financial Results (Q4 & Full-Year) Yoshiyuki Honda CFO

4 Consolidated P/L for FY2015 Q4 (Million yen) 14.Q4 15.Q3 15.Q4 Change % Change % (A) (B) (C) (C)/(A) (C)/(B) S a l e s 19,624 22,152 20, % 7.3% G r o s s I n c o m e 3,430 4,235 3,193 GI ratio 17.5% 19.1% 15.5% O p e r a t i n g I n c o m e 576 1, % 64.7% OI ratio 2.9% 6.7% 2.6% O r d i n a r y I n c o m e 435 1, % 74.8% Income before Taxes 780 1, N e t I n c o m e % E P S ( Y e n ) FOREX US$/yen euro/yen euro/us$ Slowing down in the second half of the year Operating Income Analysis 2015 Q3 vs Q Q3 Operating Income 1,484 (Million yen) Revenue Down 490 Production Efficiency Down 260 Raw Materials Up 30 Forex Rates 30 China Wages Up 90 Others Q4 Operating Income 524

5 Consolidated P/L for 2015 Jan-Dec Million yen S a 2015 Jan-Dec Change % A B B / A s 77,562 86,236 I n c o m e 13,8 14, % ,345 4, % 4.9 l G r o s s 2014 Jan-Dec e GI ratio Operating Income OI ratio Income 2,799 3,309 In c o m e b e f o r e Ta x e s 3,162 2,932 N e t I n c o m e 1,346 2, US$/yen euro/yen euro/us$ Ordinary E P S y e n FOREX Record-breaking annual sales for two consecutive years Operating Income Analysis 2014 Jan-Dec vs Jan-Dec Million yen Revenue Up Jan-Dec Operating Income 3,345 Production Efficiency Up 640 Raw Materials Down 1,150 Forex Rates 750 China Wages Up Jan-Dec Operating Income 4,237 Others 228

6 Sales by Market Segment (Million yen) 60,000 40,000 20,000 0 (Automotive) Consumer Electronics Industry Sales by Region (Million yen) 50,000 25,000 0 Europe China/Taiwan Asia excluding China North America

7 Consolidated B/S 2014 Dec Dec 31 Change Current Assets 38,332 37, Cash & Deposits 3,753 3, Notes & A/R 17,013 16, Inventory 14,119 14, Others 3,446 3, Fixed Assets 31,728 29,877 1,851 Tangible Fixed Assets 23,018 22, Intangible Fixed Assets 3,527 2, Others 5,182 4, Deferred Assets TOTAL ASSETS 70,110 67,876 2,234 Current Ratio DE ratio CCC(days) Dec 31 (Million yen) 2015 Change Dec 31 Current Liabilities 30,042 25,614 4,427 Notes & A/P 7,931 7, Loans 16,301 12,970 3,331 Others 5,808 5, Fixed Liabilities 22,344 23,593 1,248 Loans 18,214 20,200 1,985 Others 4,129 3, Total Liabilities 52,386 49,207 3,179 Shareholders Equity 20,294 21,862 1,567 Accumulated Other Comprehensive Income 3,770 4, Subscription Rights to Shares Non-Controlling Interests 1,200 1, Total Net Assets 17,724 18, TOTAL Liabilities & Net Assets 70,110 67,876 2,234 US$/yen euro/yen euro/us$ Consolidated Cash Flow 2014 Jan-Dec 2015 Jan- Dec (Million yen) Change Cash Flow from Operating Activities 1,512 5,515 4,002 Income before Taxes 3,162 2, Depreciation 3,430 3, Net Working Capital 4,104 2,050 2,054 Others ,778 Cash Flow from Investing Activities 6,279 4,366 1,912 Capital Investments 6,109 4,378 1,731 Others Cash Flow from Financing Activities 4,719 1,054 5,773 Net Interest-Bearing Debts 5, ,713 Dividend Payment Others Cash and cash equivalent at end of period 3,713 3, Cash flow from operating activities significantly increased

8 ROE & Other Financial Ratio (Plan) Net Income/Sales 1.7% 2.4% 2.6% Sales/Total Assets Total Assets/Net Equity (D/E ratio) (1.9) (1.8) (1.7) ROE 9% 12% 12% FY2016 Consolidated P/L Forecast (Million yen) FY2015 FY2016 Forecast Mid-Term Plan 2017 S a l e s 86,236 88, ,000 Ope rating Income 4,237 4,800 5,000 OI ratio 4.9% 5.5% 5.0% O r d i n a r y I n c o m e 3,309 4,200 4,100 N e t I n c o m e 2,032 2,500 2,600 E P S ( y e n ) Forex Rates US$/yen euro/yen

9 Operating Income Analysis (Million yen) 5,000 (Million yen) Plus Factors Revenue increase 410 FY2016 Production efficiency up 1,430 4,000 3,000 FY2015 4,237 Forecast 4, Costs reduction 1,780 Others 60 TOTAL 3,680 Minus Factors Products mix 1,130 2,000 Wages increase 1,430 Social insurance up 330 1,000 Production transfer cost Others TOTAL 3,117 0 Net Increase 563 Effects by Foreign Exchange rates (Million yen) Currency Rates used for 2016 Plan Drop of yen s value 2016 年 (Forecast) Sales Operating Income 1 US ドル 120 yen with every 1-yen drop euro 137 yen with every 1-yen drop Renminbi 18.7 yen with every 0.1-yen drop

10 2015 Review and Future Strategies CEO Shigeyuki Yawata

11 Master Plan Master Plan & beyond Mid-term Plan Mid-term Plan 18~Mid-term Plan Stage I Sales : 60.0 billion Stage II Sales: 100 billion Stage III Sales: 100 billion ~ Stage I: Building a base & Operational restructuring Sales : 77.5 billion Operating income: 3.3 billion *Figures in Stage Ⅰis actual. Stage II: Market development & Growth Sales : 100 billion Operating income : 5 billion Stage Ⅲ: Growth & Diversification Sales: billion~ Operating income : 10 billion~ 18~ To Aim for 100 billion sales & 5 billion operating income in Stage II Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential. Since CFO Honda already explained the financial results, I m going to review overall performance in fiscal year As the first year of Mid-Term Business Plan Stage II ( ), 2015 has been a very successful year for Sumida. Total sales in 2015 were up 11% from the sales in the previous year. Linking the profit increase to dividend, total dividend payout for 2015 has been decided to be 26 yen per share, an increase of 6 yen per share from the previous year. This chart shows our Master Plan which started from With market development and growth as main objectives, we are aiming for 100 billion yen sales and 5 billion yen operating income in Stage II, which got off to a very good start in We recognize that 2016 will be a very important year to ensure an attainment of the targets set in Stage II.

12 2015 Expansion of Production Sites Germany Lehesten Neumarkt/OPf. Obernzell Radeberg Romania expanded in m2 (30%) Slovenia expanded in m2 (65%) Thailand China Taiping Panyu Nanning Shanghai Changde Ji an expanded in m2 SuQian Japan Aomori Nagano Vietnam No. factory No.2 factory build in 2015 Mexico Expanded in m2 (44%) Completed expansion of production capability for a 100 billion-yen sales company Copyright 2015 SUMIDA CORPORATION. All rights reserved. As one of the key measures implemented in 2015, we expanded our production capability to accommodate 100 a billion yen sales in the near future. Plants to produce automotive-related products in Romania, Slovenia and Mexico were expanded and new plants in China and Vietnam were built. At the same time, we have completed expansion of distributor networks in the U.S. and China.

13 2016 Business Environments Customers Car makers expected to grow3% per annum -Benefited from falling gasoline price, also from last-minute demand for cars before consumption tax increase in Japan & before expiration of termination of automobile acquisition tax reduction in China Costs Decrease of law materials prices Depreciation of renminbi -Decrease of prices of copper, oil and iron ore Favorable for costs reduction of coils (wires, cores & plastics) -Depreciation of renminbi Favorable for Sumida s costs reduction on yen basis Concerns China economy s slow down & Extreme decline of oil prices Sumida will continue growing in 2016 despite of some concerns The world s car market is expected to grow 3% in 2016 with the aid of low-priced gasoline in the U.S. and in Europe as well as of last-minute demand for cars before increase of consumption tax in Japan and termination of automobile acquisition tax reduction in China. In terms of costs, a decline in raw materials prices and depreciation of renminbi will serve as costs reduction factors for Sumida. Coils are made of three main components, ferrite core made largely of iron ore, wires made of copper and plastic. Prices of the raw materials for those components have been declining lately. depreciation of renminbi, production costs for Sumida products produced in China are expected to virtually decline. On the other hand, there are concerns about an adverse effect on the world s economy from China economy slowdown and a substantial decline of oil prices. However, I think that Sumida will be able to continue growing in 2016 following a growing market trend in 2015.

14 2016 Strategies to Achieve MTBP in 2017 Sales Growth in 2017 Sales 1, Operating Income (100 million yen) 1000 To achieve 100 billion sales From organic growth 93 billion New businesses including M&A 7 billion Actual 2016 Plan 2017 Plan Improvement of Profitability Launching new products Costs reductions Production transfer Rationalization investments Correction of currency mix M&A Launching new products and M&A will be indispensable for achieving Mid-Term Business Plan Stage Ⅱ and for laying the ground work for Stage Ⅲ Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential. Under these circumstances, we aim for total sales of 88 billion yen and operating income of 4.8 billion yen in There are some items that should be done during 2016 to ensure an attainment of the Mid-Term Business Plan Stage II and to lay the ground work for the Stage III. This chart was made when the Stage II was announced a year ago. Revenues of 93 billion yen from the existing businesses have come into sight at this moment. However, additional revenues of 7 billion yen expected from new businesses including M&A still remain an issue. Later, President Suseki will explain about this. Also, we have to launch new products from a perspective of profitability improvement, which will also be explained by President Suseki. This is the end of my presentation. Thank you very much for listening.

15 2016 Strategies Tomoharu Suseki Representative Executive Officer & President

16 Sales by Market Segment Stage I Stage II Plan 75% 77.6 billion yen 79% 86.2 billion yen 80% Industry Consumer Electronics 100 billion yen Automotive 2015 sales exceeded its plan and almost achieved the target for Stage Ⅱ to cover 80% of total sales with Automotive and Industry combined. In 2016, we will make efforts toward achieving goals in 2017 (final year of Stage Ⅱ), especially focusing on strengthening Industry business. Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential. Prospects for Automotive Business in HID Further expansion of core products Smart Entry ABS HID : High Density Discharge (Xenon Lamp) Smart Entry : Progressed type of Keyless Entry ABS : Anti Breaking system Demand for Smart Entry will significantly expand on a global basis. Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential.

17 Prospects for Automotive Business in Launching new products for new applications Products for EV/HEV New Products Metal Inductor adaptable up to 150 Reactor Control Trans for HEV Rapid Charger for EV Rotor Position Sensor Mechatronics Products New Charging System Injector Suspension To ensure a sustainable growth in the future with various new products Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential. Prospects for Industry Business in Developing new products to prepare for 2017 Existing Products For China communication infrastructure New Products Power Module for security & server Inductor &Trans for industrial equipments RFID Products Inductor Energy Power Module with high reliability Plastics RFID Starting commercial production from 2015 Q4 Power Inductor with high functionality and reliability Reactor for Power Conditioner Starting commercial production from 2015 Q4 Starting commercial production from 2016 Q1 To launch new products onto the markets to prepare for 2017 while expanding sales of existing products Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential.

18 Prospects for Industry Business in Solid progress in making specifications of products for medical/healthcare markets Progress in 2015 Making sure to inherit customers from Nihon Kohden s trans business Outlook in 2016 Many ongoing development projects in Japan and the U.S. Insulated trans for medical equipments (Endoscope & etc.) Acquired ISO13485 (Medical ISO) Large power trans for medical X-ray apparatus Acquired new projects in the U.S. Bladder stimulating antenna Actuator for measuring equipments Ultra miniature antenna for hearing aids To increase sales in medical market several folds in 3-5 years Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential. Prospects for Consumer Electronics Business in 2016 Expanding market shares of existing product groups Past TV AV Game Digital Camera HDD Note PC Mobile Phone Market Trends Now Smart Phone & Tablet PC Distributor networks in China was thoroughly reviewed. From now on, we will do more business with the local Chinese makers. In 2016, we will put a special emphasis on LED TV, Network-related Household Appliances Aiming for market share increase by expanding lineups of the existing products To select businesses by focusing on profitability and added value without pursuing sales volume Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential.

19 Measures for improving profitability Production transfer from high-cost areas to low-cost areas High-cost areas (Guangzhou)Panyu (Dongguan)Taiping Newly-built in2015 in low-cost areas Ji an factory in China Second factory in Vietnam Continuation of capital investments in automated production facilities Reduction of raw materials purchase costs Prices of oil-related and copper-related materials decreasing due to market trends Further strengthening purchasing power by promoting global procurement system Plan Increase capital investments to the level of 4-6 billion yen a year from 3 billion yen level in the past Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential. M&A (Billion yen) M&A M&A Targets Consumer Electronics Modules Coils Coil Automotive Technology Industry Sensors Mechatronics Technology We have been developing additional new technologies utilizing our coil technology as a base. We are looking for M&A to help us speed up this direction Plan Plan Expansion of new market We have been expanding our business in the medical /healthcare markets. We are looking for M&A to help us accelerating this trend. Expansion of existing business We are looking for M&A to help us expand our coils shares in the global market To clarify the directions for M&A by end of 2016 Copyright 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential. 9

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