September. Cautionary Statement:

Transcription

1 Mizuho Investment Conference 2013 September Konica Minolta, Inc. Cautionary Statement: The forecasts mentioned in this material are the results of estimations based on currently available information, and accordingly, contain risks and uncertainties. The actual results of business performance may sometimes differ from those forecasts due to various factors.

2 Konica Minolta Group 1 st Quarter/March 2014 Consolidated Financial Results (April 1, 2013 June 30, 2013) - Announced on July 30,

3 Main points of 1Q/Mar2014 financial results The Business Technologies Business posted solid sales in the color units. Cost reduction plans made steady progress and earning capacity was on a recovery track. This result drove increases in sales and profit for the entire company. The effect of foreign exchange rates improved ensuring a strong start t for the Group, effectively exceeding its targets. t Net sales: billion(+15%) Net sales increased due to growth in sales volumes, M&As and the effect of foreign exchange rates, particularly in the Business Technologies Business. Operating income: 7.8 billion(+23%) Operating income increased year on year as the decline in the Industrial Business was covered by the Business Technologies Business and Healthcare Business. Net income : 9.8 billion(great increase) This result factors in tax effects related to a review of deferred tax assets in line with reorganization of the management system. 2

4 Main points of 1Q/Mar2014 (YoY Changes by segments) Net Sales Operating income [ billions] [ billions] Healthcare Industrial business Business Technologies YoY % % 24% +29% Industrial business Business Technologies 3.3% 36% 3.6% YoY % % Healthcare Eliminations and Corporate % 1Q/Mar2013 1Q/Mar2014 1Q/Mar2013 1Q/Mar2014 3

5 1Q/March 2014 financial results highlight - Overview 1Q Mar Q Mar 2013 [Billions of [ yen] billions] Net sales (a) % Operating income % Operating income ratio 3.6% 3.3% - Goodwill amortization % Operating income before amortization of Goodwill (b) YoY % (b)/(a) 4.9% 4.6% - Net income great increase Net income ratio 4.5% 0.1% - Foreign exchange rate [Yen] USD Euro

6 1Q/March 2014 financial results - Segment Net Sales Net Sales 1Q 1Q Mar 2014 Mar 2013 [ billions] Business Technologies % Industrial Business % Healthcare % Others Group total % Operating income Business Technologies % % 218% Industrial Business % % -48% Healthcare % % - Eliminations and Corporate Group total % % 23% YoY 5

7 Business Technologies Business -Overview Net sales: billion +29% (w/o forex: +9%) Net sales increased due to sales growth of main products, the effect of M&As and the effect of foreign exchange rate shift to weaker yen. Operating income: 9.7billion +218% (w/o forex: +95%) Operating income increased significantly due to an increase in gross profit in line with sales expansion and to steady progress in cost reduction plans. Net sales/operating income(yoy) Operating income analysis Left: Net sales Right: Operating income OP O Ratio [ billions] % Production % FOREX +3.7 Manufacturing cost reduction +2.4 Sales volume change, others +5.6 SG&A change [ billions] Office Price Change 1.2 1Q/Mar2013 1Q/Mar2014 1Q/Mar2013 1Q/Mar2014 1Q/Mar 年度 1Q/Mar 年度 6

8 Business Technologies Business - Sales performance A3 Color MFP unit sales, YoY 1Q/Mar 2013 = 31ppm~ +18% Office 114 Although sales in the monochrome MFP units decreased, sales of new color units drove growth and a solid showing overall. In particular, non-hardware sales were strong due to solid sales of medium- and high-segment color units. ~30ppm +12% 1Q/Mar Q 1Q/Mar Q Net sales, YoY Q/Mar Q 1Q/Mar Q [ billions] FOREX M&A Existing business 24.8 w/o FOREX,M&A Growth rates:+12% Changes in sales by region Japan U.S. Europe Others TTL (w/o FOREX) 1% +2% +9% +4% +4% Production print Both sales of equipment and non-hardware grew steadly. And there are signs of recovery in the printing market. The effect of M&As also contributed to the increase in net sales. Changes in sales by region Japan U.S. Europe Others TTL (w/o FOREX) +40% +9% +71% +34% +36% 7

9 Business Technology Business: - Growth measures Synergy between sales of existing MFPs and IT service providers has started to make a contribution and there was steady progress in business expansion in growth domains mainly in European and U.S. markets. The Group is gradually transforming its business portfolio and steadily building up results in terms of sales expansion of MFPs. GMA net sales: billion (YoY +39%) OPS net sales: 9.1 billion (YoY +77%) IT service solutions net sales: 17.5 billion (YoY +82%) 8

10 Business Technology Business: - Status of manufacturing cost reductions and SG&A expenses Fixed costs decreased significantly due mainly to personnel downsizing conducted in line with enhanced production efficiency. Steady progress was made in reducing variable costs through centralized purchasing of components and advancements in unitization. SG&A expenses were controlled in line with plans, which included M&As and strengthening sales. Manufacturing cost reductions (YoY w/o FOREX) Reduction of variable cost [ billions] SG&A breakdown(yoy increase amount w/o FOREX) Strengthening sales forces 0.6 [ billions] 2.4 Reduction of fixed cost 3.9 M&A Manufacturing cost reduction amount 1 2 Break down Increased 1 2 Break down amount of SG&A (w/o FOREX) 9

11 Industrial Business - Overview Net sales: 31.0 billion -24% Operating income: 4.3billion -48% Sales of TAC film decreased due to deterioration in the market for notebook PCs and the impact of diversification in components and materials used for TVs. Tough conditions persisted itdin glass substrates bt t for HDDs as well. The sensing field fildcontributed tibtdto operating revenue, including the effect of M&As. Net sales/operating income(yoy) Operating income analysis Left: Net sales Right: Operating income OP Ratio % % 324 [ billions] FOREX 0 Price Change 1.3 Manufacturing cost reduction +1.9 [ billions] Sales volume change, others 3.6 SG&A change 年度 12 年度 1Q/Mar2013 1Q/Mar2014 1Q/Mar2013 1Q/Mar2014 1Q/Mar2013 1Q/Mar

12 Industrial Business - Sales performance (Units) TAC films Interchangeable lenses for DSLR Measuring instruments Orders decreased in line with cameras Sales declined due to the impact of Although sales volume decreased, diversification in components and inventory adjustments. Progress was in there was a shift to high-segment materials for TVs and deterioration in line with expectations, however. products, including the effect of M&As. notebook PC market conditions Q/Mar Q 1Q/Mar Q 1Q/Mar Q 1Q/Mar Q 1Q/Mar Q/Mar 2014 Optical units for mobile phones Optical pickup lenses Glass substrates for HDDs Sales of lens units for smartphones were strong. Although sales of products for both AVand IT-related DVDs decreased, increased sales of products for BDs contributed to earnings. Orders declined significantly due to the impact of market deterioration. Camera カメラ module モシ ュール 45 3 Others Lens レンス unit BD 11 ユニット Q/Mar Q 1Q/Mar Q 1Q/Mar Q/Mar Q/Mar Q 1Q/Mar Q *Base index : 1Q.Mar2013= 11

13 <Supplement> Industrial Business QoQ comparison Compared with the most recent period (4Q FY2012), sales momentum of main products improved. Coupled with the effect of enhanced earnings, operating income increased despite the slight decline in sales. Net sales/operating income(qoq) Q) TAC films Interchangeable lenses for DSLR Left: Net sales Right: Operating income OP Ratio [ billions] % % Q/Mar2013 1Q/Mar2014 4Q/Mar2013 1Q/Mar2014 4Q/Mar Q/Mar 2014 Measuring instruments 138 4Q/Mar Q/Mar 2014 Others BD 4Q/Mar Q/Mar 2014 Optical pickup lenses Q/Mar Q/Mar 2014 *Base index : 1Q.Mar2013= 12

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15 Healthcare Business - Overview Net sales: 16.3 billion +3% DR/CR product sales were solid in Japan and overseas, covering the decline in sales of film products. Operating income: 0.1billion Improve+0.2billion There was a turnaround to profitability due to an increase in gross profit on the back of growth in sales of DR/CR products and to cost reductions. Net sales/operating income(yoy) Operating income analysis Left: Net sales Right: Operating income OP Ratio [ billions] Manufacturing cost reduction +1.0 [ billions] % 0.6% FOREX Price SG&A Change change Sales volume change, others 0.4 1Q/Mar2013 1Q/Mar2014 1Q/Mar2013 1Q/Mar2014 1Q/Mar2013 1Q/Mar

16 Healthcare Business - Sales performance (Units) Sales of DR/CR products continued to be strong. Large orders were secured in North America. The Group launched B2B business with customers that it has sales agreements with and accelerated sales expansion overseas. *A global sales agreement was concluded with GE Healthcare in June. Active efforts were made to roll out sales of dry films in emerging nations. AeroDR CR(strategic products) Dry films Overseas 海外 Q 13.1Q 12.1Q 13.1Q 国内 Japan Japan Q 13.1Q 1Q/Mar2013 1Q/Mar2014 1Q/Mar2013 1Q/Mar2014 1Q/Mar2013 1Q/Mar2014 *Base index : 1Q.Mar2013= 15

17 Full-year forecasts for year ending March 2014 While recognizing the future uncertainty of the management environment, initial forecasts remain unchanged from the May 10 announcement in light of steady progress in performance. Net sales: billion +11% Operating income: 55.0billion +35% Net income: 26.0billion +72% Dividend: Annual dividend 17.5(Pay out ratio:36%) The interim dividend/year end dividend: 7.5 each Commemorative dividend:2.5yen per share FOREX assumption: US$ 93yen/Euro 123yen 16

18 Main Points for accomplishing full-year forecasts Action from 2Q onward In the Business Technologies Business, efforts will be made to: (1) focus on sales of color products and high-segment products; (2) continue with initiatives to reduce costs; and (3) accelerate transformation of business portfolio by strengthening service business. In the Industrial Business, efforts will be made to: (1) secure sales for TAC film through thin-type products; (2) further cultivate customers for measuring instruments by leveraging synergy with IS that the Group acquired; and (3) enhance earnings in underperforming businesses. In the Healthcare Business, the Group will work to further expand sales of strong-selling DR/CR products. Risks to be considered Market deterioration in line with prolonged problems in Europe and stagnant growth in emerging economies. Intensifying price variation due to the yen s depreciation and sharp rebound of foreign exchange rates. 17

19 Shareholder Return - Commemorative dividend marking 10 years since integration Plan to provide a commemorative dividend of 2.5 yen per share at the time of the interim dividend marking 10 years since the management integration. (Combined with the ordinary dividend, the interim dividend will be 10 yen per share and the total annual dividend will be 17.5 yen per share.) [yen] FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 80% 70% 60% 50% 40% 30% 20% 10% 0% Ordinary dividend Commemorative dividend Payout ratio 18

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21 Growth Strategy - Genre Top Strategy -

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23 Genre Top: Color Production Print -Konica Minolta -A - B -C 80% U.S. 80% Europe 60% 40% 34% 33% 60% 40% 40% 42% 50% 42% 20% 30% 31% 20% 0% CY09 CY10 CY11 CY12 0% CY09 CY10 CY11 CY12 80% Japan 80% Rest of the World 60% 40% 20% 32% 29% 30% 19% 60% 40% 20% 41% 45% 49% 45% 0% CY09 CY10 CY11 CY12 0% CY09 CY10 CY11 CY12 *units, calendar base 22

24 Production Print: Print Volume U.S. Germany actual sales through the Company s direct sales channel Japan 250 B/W Color H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 *Base index : 1H/FY09 = 23

25 Genre Top: A3 Color Office MFPs -Konica Minolta -A 40% U.S. -B -C -D -E 40% Europe 30% 30% 20% 19% 20% 19% 20% 20% 18% 18% 19% 20% 10% 10% 0% CY09 CY10 CY11 CY12 0% CY09 CY10 CY11 CY12 40% Japan 40% 38% China 32% 33% 30% 30% 30% 20% 20% 10% 7% 7% 7% 7% 10% 0% CY09 CY10 CY11 CY12 *units, calendar base 0% CY09 CY10 CY11 CY12 24

26 Office: Print Volume U.S. Germany actual sales through the Company s direct sales channel Japan 150 B/W Color H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 FY09 FY10 FY11 FY12 *Base index : 1H/FY09 = 25

27 Growth Strategy: Production Print Achieve strong growth by increasing sales units and intesifying print service capabilities. Net sales growth of PP business Measures for Growth Business Technologies Total PP % (+6%) [ billions] (+14%) Further strengthen competitiveness ( ) by expanding product line up. Promote M&As such as Kinko s and Charterhouse. +28% FY11 FY12 FY13 forecast Promote sales alliance with Komori Corporation. 26

28 Production Print: Market Growth Potential Approx 5tn Digitalized Commercial print (Offset print) ex.brochures,leaflets Approx bn Digitized Approx 250bn At large enterprises ex. Bankers,insureance companies, etc. Franchised print shops ex. Kinko s, etc Approx 1tn CRD Centralized Reprographic Department e t Print for pay CY11 In 5-8years Approx tn CY16~CY19

29 Production Print: Product Lineup Monochrome 2250P (Tentative) *Scheduled for release in FY2013 Color C1 (Tentative) *Scheduled for release in FY2013 Heavy production printing 1250 New 1052 New Medium production printing Light production printing L 28

30 Production Print: Color Flagship Product High image quality, high definition, and high stability almost comparable to offset printing The Simitri HD+ (plus) toner newly developed for high productivity as well as pursuing higher image quality. S.E.A.D. II (Screen-Enhancing Active Digital Processing) An accumulation of various advanced digital image-processing technologies condensed in a single system. A group of accessories that responds to the needs of professionals and enables a range of in-line post processing options Perfect binding, saddle stitching, folding and more in a single system A widening range of orders from customers, with the leading capability in wider range of papers in the industry New potentials for the printing business for digital print professionals Maximum of 350g/ m2 thick paper compatibility Up to 500 types of paper profiles A hybrid decurling mechanism that significantly reduces paper curls Maximum 10,760-sheet paper capacity 29

31 Genre TOP: Healthcare Wireless transmit AeroDR Wireless cassette digital it X-ray detector t Informity Wireless Diagnostic system DR strengths Excellent mobility and operability. A strategy focused on national and university hospitals had ripple effects for regional and affiliated hospitals. Top share for the domestic y p pp cassette digital X-ray detectors B2B business also launched overseas. 30

32 Growth Strategy: Healthcare Improve profitability by shifting to the digital products Net Sales/OP growth Measures for Growth Net sales Healthcare 72.8 Total 73.0 (0%) Digital Operating income ( +5%) (+13%) 36.0 FY11 FY12 FY13 [ billions] 6.0 Expand sales of DR products in developed countries through enhanced product groups. Increase sales of CR products packaging with film in emerging countries. Switch the film manufacturing from in-house to outsource in order to raise ( +29%) profitability. 31

33 Genre Top: TAC Film Structure of LCD panel VA-TAC Film Function: Expansion of viewing angle Top share for VA-mode LCD TV. Thinner TAC Film Function: Protect polarizing plate from humidity Top share for small-medium size LCD Panels. Transition of thickness: 80μm 60μm 40μm 25μm 32

34 Growth Strategy:Progress in promising areas Functional films Industrial Ink-Jet In OLED lighting, the Company is currently developing barrier film and R2R production technology toward commercialization of flexible panels. Set up business in earnest for heat insulation film from fiscal For the print-on-demand textile inkjet printers, where the Company leads the market, expand sales of high-end in earnest from fiscal Joint development of high-speed inkjet printers for production printing is progressing with Komori Corporation, aiming for launch in fiscal

35 OLED Lighting: Our Technological Strengths Own Developed Blue Phosphorescent Material First step: Production Method Glass plate Evaporation = Limitation in terms of price reductions in deposition production method Evaporation method Final Goal: Film base Coating = High volume and speed film forming production enables price reductions Roll-to-roll method 34

36 Business Portfolio Other businesses Industrial Inkjet Business Business Technologies Business 1% Planetarium Business 9% 18% FY12 Net sales 813.0bn. 72% color MFPs (Multi-functional peripherals) color laser printers Healthcare Business production print systems Industrial Business medical imaging filing systems digital X-ray diagnostic imaging systems TAC film for LCD polarizers Interchangeable lenses for digital SLR pickup lenses for optical disks glass substrates for HDDs micro-camera module Sensing Business 35

37 Corporate Governance: Company-with-Committees System General Meeting of Shareholders Board of Directors (total of 11 people) Konica Minolta Holdings, g, Inc. (Holding Company) Business Companies and Common Function Companies 7 Non Executive Officers Nominating Committee Audit Committee Compensation Committee Board of Directors President and CEO Directors (Chairman of the Board) Nominating Committee *1 Audit Committee *2 Compensation Committee *3 Executive Officers *1 Nominates director candidates *2 Performs management audits *3 Decides on board members and executive officers compensation Delegation of authority Accountability President Board of Directors Outside Director Outside Director Outside Director Outside Director Director Director 4 Executive Officers : Chairman * Director (President & CEO) * 3 Directors (Managing Executive Officers) Boarding of Directors and Three Committees (as of June 22, 2011) We have adopted a company-with-committees system, which enables the management supervisory function of the directors to be separated from the business-execution function of the executive officers. Four outside directors are highly independent and have no major business relations with us. A majority of directors do not serve as executive officers. Moreover, the Chairman of the Board of Directors has no executive officer position, which reinforces the supervisory function of the Board of Directors. 36

38 Supplementary Information 1Q/March 2014 Financial Results 37

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40 1Q/March 2014 financial results - Group 1Q 1Q [Billions [ of billions] yen] Mar 2014 Mar 2013 YoY Net sales(a) % Gross income % Gross income ratio 46.8% 45.6% Operating income % Operating income ratio 3.6% 3.3% Goodwill amortization % Operating income before amortization of Goodwill (b) % (b)/(a) 4.9% 4.6% Ordinary income % Pre-tax Profit % Net income great increase Net income ratio 4.5% 0.1% EPS [Yen] CAPEX Depreciation R&D expenses FCF CF from operating activities+capex* *Purchase of tangible/intangible assets FOREX [Yen] USD Euro

41 Full-year forecasts for year ending March Group highlights Forecast Results [Billions[ of billions] yen] Mar 2014 Mar 2013 YoY Net sales(a) % Operating income % Operating income ratio 6.1% 5.0% Ordinary income % Net income % Net income ratio 2.9% 1.9% EPS [Yen] CAPEX Depreciation R&D expenses FCF CF from operating activities+capex* *Purchase of tangible/intangible assets FOREX [Yen] USD Euro FOREX impact per 1yen movement (Full year) Net sales Operating income

42 Full-year forecasts for year ending March Segments Net Sales [Billions[ of billions] yen] Forecast Results Mar 2014 Mar 2013 YoY Business Technologies % Industrial Business % Healthcare % Eliminations and Corporate Group total % Operating income Business Technologies % % 74% Industrial Business % % 1% -20% Healthcare % % 79% Eliminations and Corporate Group total % % 35% 41

43 Business Technologies Business Sales A3 Office MFPs (Units) <Growth rate of units by regions (YoY)> Japan U.S. Europe Others Total Color +16% +15% +22% 1% +14% B/W % Mono 26% 28% 15% 0% 9% Color % Total 2% 9% +7% 0% 0% 1Q/Mar Q/Mar 2014 Production printing systems (Units) <Growth rate of units by regions (YoY)> 98 Japan U.S. Europe Others Total B/W % Color +102% +12% +1% 2% +6% Mono +62% 17% 10% 14% 13% Color % Total +89% 5% 2% 7% 2% 1Q/Mar Q/Mar 2014 Non-hardware (local currency-based, w/o FOREX) (Value) <Growth rate of non-hard sales by regions (YoY)> 114 Japan U.S. Europe Others Total Office 1% +4% +13% +23% +5% 86 +3% Office 82 PP +45% +7% +143% +% +56% Production % Total +7% +5% +32% +37% +14% 1Q/Mar Q/Mar 2014 *Base index : 1Q.Mar2013= 42

44 Operating profit analysis [Billions of yen] [ billions] 1Q/Mar 2014 vs. 1Q/Mar 2013 Business Technologies Industrial Business Healthcare Other Total [Factors] Forex impact Prince change Sales volume change, and other, net Cost down SG&A change, net [Operating income] Change, YoY

45 SGA, non-operating and extraordinary income/loss SG&A: 1Q Mar Q Mar 2013 [Billions[ of billions] yen] Selling expenses - variable R&D expenses Labor costs Other SGA total* * Forex impact: \ 8.6 bn. (Actual: \ 6.0 bn.) Non-operating income/loss: Interest and dividend income/loss, net Foreign exchange gain, net Other Non-operating income/loss, net Extraordinary income/loss: Sales of noncurrent assets, net Sales of investment securities Business structure improvement expenses Other Extraordinary income/loss, net YoY 44

46 Cash flows Income before income taxes and minority interests 1Q Mar Q Mar 2013 YoY Depreciation and amortization Income taxes paid Change in working capital [Billions [ billions] of yen] I. Net cash provided by operating activities II. Net cash used in investing activities I.+ II. Free cash flow Change in debts and bonds Cash dividends paid Other III. Net cash used in financing activities

47 B/S [Billions [ of billions] yen] Assets: Jun 2013 Mar 2013 Change Cash and short-term investment securities Notes and A/R-trade Inventories Other Total current assets Tangible assets Intangible assets Investments and other assets Total noncurrent assets Total assets Liabilities and Net Assets: Notes and A/P-trade Interest bearing debts Other liabilities T otal liabilities Total shareholders' equity* Other Total net assets Total liabilities and net assets *Equity = Shareholders equity + Accumulated other comprehensive income [yen] Jun 2013 Mar 2013 YoY US$ Euro

48 B/S Main indicators Equity & Equity ratio Interest-bearing debts & D/E ratio Inventories & Inventory turnover [ billions] 500 Shareholders' equity Equity ratio [%] Debts [ billions] 300 D/E ratio [Times] 1.0 Inventories [ billions] 150 Turnover [Days] Mar 2013 Jun Mar 2013 Jun Mar 2013 Jun Equity ratio = Equity / Total assets D/E ratio = Interest-bearing debts at year-end / Shareholders equity at year-end end Inventory turnover (days) = Inventories at period-end / Average sales per day *Equity = Shareholders equity + Accumulated other comprehensive income 47

49 Unit sales trend: Business Technologies A3 color MFP Units* A3 mono MFP Units* Office Non-hardware * (w/o forex effects) YoY: +14% YoY: 9% YoY: +5% Q 2Q 0 3Q 0 4Q 0 1Q 2Q 0 3Q 4Q 1Q 2Q 3Q 4Q Mar 2013 Mar 2014 Mar 2013 Mar 2014 Color Production Print Units* Mono Production Print Units* Mar 2013 Mar 2014 Production Non-hardware* (w/o forex effects) YoY: +6% YoY: 13% YoY: +56% Q 2Q 3Q 4Q Mar 2013 Mar Q 2Q 3Q 4Q0 Mar 2013 Mar Q 2Q 3Q 4Q Mar 2013 Mar 2014 * Base index : 1Q Mar2013 = 48

50 Unit sales trend - Industrial Business TAC film Volumes Interchangeable lenses for DSLR Units Measuring instruments Units YoY: 14% YoY: 13% YoY: 9% Q 2Q0 3Q0 4Q0 0 1Q 2Q 3Q0 4Q0 1Q 2Q0 3Q 0 4Q0 Mar 2013 Mar 2014 Glass substrates for HDDs Units YoY: 89% Mar 2013 Mar 2014 Optical pickup lenses Units YoY: 19% Mar 2013 Mar 2014 Mobile phone components Units YoY: 31% Q 2Q0 3Q0 4Q0 Mar 2013 Mar Q 2Q 3Q 4Q Mar 2013 Mar Q 2Q 3Q 4Q Mar 2013 Mar 2014 * Base index : 1Q Mar2013 = 49