Mid-term Business Plan 2016 FY2014 ~ FY2016

Transcription

1 Mid-term Business Plan 2016 FY2014 ~ FY2016 November 12, 2013 Oki Electric Industry Co., Ltd. The projections and plans in this material are subject to change depending upon the changes of business environments and other conditions. Copyright 2013 Oki Electric Industry Co., Ltd.

2 Contents Copyright 2013 Oki Electric Industry Co., Ltd. 2

3 1. Mid-term Business Plan 2013 Summary FY2011 ~ FY Summary of the whole group 2. Summary of program for the enhancement of management base 3. Summary of program for growth Copyright 2013 Oki Electric Industry Co., Ltd.

4 1. Summary of the whole group OKI projects achieving the business targets, excluding net sales. Resumption of dividend (3 yen) in FY2013 is planned. < Program for the enhancement of management base > Achieved reducing costs drastically as planned - Revised retirement benefit scheme - Reduced procurement costs - Implemented assignment of appropriate personnel at the right places, etc. < Program for growth > Net sales unreached its target by about 8% though OKI achieved some positive results. - Grew exceeding the plan in Mechatronics systems and Social infrastructure systems. - Unaccomplished growth target in S&S and Printers FY10(Results) FY13(Proj.) FY13(Biz.target) Net sales B yen B yen B yen Operating income 6.3 B yen 24.0 B yen 22.0 B yen Shareholders equity ratio 10% 20% More than 20% Net debt equity ratio 1.9 times 1.0 times Less than 1.0 times Dividend - 3 yen Early resumption S&S:Solutions and Services biz. unit Copyright 2013 Oki Electric Industry Co., Ltd. 4

5 2.Summary of program for the enhancement of management base Planned measures were accomplished. Cost reduction Compared to FY09 (billion yen) FY13(Proj.) FY13(Biz.target) Expect to reduce more than 20.0 B yen (planned value) from the cost level in FY09. Revised retirement benefit scheme Assignment of appropriate personnel, etc Expect to achieve more than 6.0 B yen by manufacturing renovation and effects of integrating procurement functions, etc. Compared to FY09 (billion yen) Manufacturing renovation, etc. Effects of integrating procurement functions FY13(Proj.) More than 6.0 FY13(Biz.target) 5.0 FCF and strategic investment FCF of 2.6 B yen expected Amount of strategic investment *1 of about 26.0 B yen is expected, as planned. Cumulative total value for 3 years (billion yen) FCF Strategic investment FY13(Proj.) FY13(Biz.target) *1 Amount of investment is based on cash flow. CF:Cash flow FCF:Free cash flow Copyright 2013 Oki Electric Industry Co., Ltd. 5

6 3. Summary of program for growth Growth of ATM in China exceeded our plan. Main results Sales FY10 FY13(Proj.) Grew ATM in China as our core biz. Acquired demands for systems for fire fighting and disaster prevention as planned. EMS biz. grew as planned B yen 88.0 B yen Mechatronics sys. (Annual shipments of ATM in China 11,800 units 32,000units Social infrastructure sys. EMS 32.0 B yen 50.0 B yen 31.0 B yen 39.0 B yen Reflection points Services biz.: Failed to utilize its strength in creating products and sales activity Printer biz.: Revised business strategies to respond to environmental changes. Recover its profitability as structural reform proceeds robustly. EMS: EMS segment, EMS business unit ATM:Automated Teller Machine Copyright 2013 Oki Electric Industry Co., Ltd. 6

7 2. Overview of Mid-term Business Plan 2016 FY2014 ~ FY OKI s goal 2. Business environment 3. Corporate policy 4. Financial targets 5. Management strategies Copyright 2013 Oki Electric Industry Co., Ltd.

8 1. OKI s goal and positioning of Mid-term Business Plan 2016 OKI s goal To be a high-value added creation business group, contributing to the realization of safe and comfortable society. Mid-term Business Plan 2016 Group s business plan with milestones to reach the goal in FY2016. Corporate policy Financial targets Management strategy Biz./Finance/focus points Copyright 2013 Oki Electric Industry Co., Ltd. 8

9 2. Business environment Business environment is brisk for OKI. Key is to create business opportunities in growth areas. Policy Economy Society Technology Emerging countries Population growth Breakthrough and change Decelerating risk in China Rapid demand expansion of infrastructure development Rapid demand expansion of natural resources Continuing downturn in Europe Developed countries Japan Low birth rate and longevity Break down trade barriers by accelerating TPP and FTA Restoration of USA Promote national growth strategy Renewal of equipment in enterprises, expansion of demand for biz. efficiency Spread of Smart device/cloud/ /Outsourcing Effects of sales tax increase Real GDP Instability of financial systems growth rate In 2015 IMF 5.3% 2.5% 1.1% Demand expansion of renewal of dilapidated infrastructure Rising price of natural resources Demand expansion of energy management Resolve nuclear issue Export by public and private cooperation Reconstruction demand Demand for defense islands Demand for hearth and longevity Demand for tourism-oriented country Demand related Olympic/Paralympics Biz. environment Expand customers ICT investment and utilization of BPO for biz. efficiency (Japan, Developed countries) Stable demand for social infrastructure continues (Japan) Keep the high level of demand for infrastructure development in emerging countries Chances for new biz. Promote national growth strategy and accelerate demand related to the Olympics/Paralympics (Japan) Proceed ICT utilization as a measure against aging social infrastructure (Japan, Developed countries) Spread smart device/cloud BPO:Business Process Outsourcing Copyright 2013 Oki Electric Industry Co., Ltd. 9

10 3. Corporate policy Corporate policy Realize sustainable growth through continuous investment by securing stable profitability Secure stable profitability Support future sustainable growth by holding a lean business structure which generates stable profitability without relying on expansion of sales, and expanding profitability in areas of specialty. Realize sustainable growth To be a company that grows sustainably by concentrating biz. resources with the group s superiority as a core, promoting strategic alliances, and maximizing business chances in growth areas. Copyright 2013 Oki Electric Industry Co., Ltd. 10

11 4. Financial targets Financial targets Operating profit margin Shareholders equity ratio Debt equity ratio 6% More than 30% Less than 1.0 times Original plan Premise of currency exchange rate 95/$ 125/ FY13(Proj.) FY16(biz.target) Net sales B yen B yen overseas sales Operating income B yen 24.0 B yen Expand profitability in areas of specialty B yen 34.0 B yen Operating profit margin 5% 6% Shareholders equity ratio Debt equity ratio 20% 1.5 times Realize sustainable growth More than 30% Less than 1.0 times Dividend 3 yen Stable dividend Copyright 2013 Oki Electric Industry Co., Ltd. 11

12 4. Financial targets (Plan of each segment) Net sales is expected to increase by 80.0 B yen mainly in overseas. Operating income is expected to increase by 10.0 B yen mainly in Infotelecom systems and Printers. Others EMS Printers Info-telecom systems Net sales Develop new markets Redefine products strategies --Expand ATM biz. abroad --Acquire renewal demand in in Japan Operating income (billion yen) --Effects of of structural reform --Redefine sales strategies --Effect of of increasing sales --Reduce costs FY13(projection) FY16(plan) FY13(projection) FY16(plan) Eliminates & Corp. Copyright 2013 Oki Electric Industry Co., Ltd. 12

13 5. Management strategy (Business strategies) Increase share in brisk biz. environment / Secure renewal demand and maximize profitability Strengthen biz. overseas and enter domain of next- generation social infrastructure Mechatronics Printers Secure stable profitability Expand domestic financial systems and ATM market in China Obtain renewal demand for social/telecom infrastructure Expand Expand Expand biz. biz. biz. In In In global global global markets markets markets S&S Mechatronics Support Support asset-free asset-free mgmt mgmt Fundamental biz. Solid mgmt base Printers Realize safe and comfortable society Telecom system, Social systems EXaaS EMS Effects of Printers biz. structural reform EMS Enter field of next generation infrastructure Domestic financial systems: ATM for banks, ATM for convenience stores, financial systems, monitoring/operation/maintenance, etc. Realize sustainable growth Expand biz. in global markets Develop new ATM markets and launch subsidiary in Brazil Launch high value-add printers Support customers asset-free management Enforce EXaaS services leveraging ATM, information terminals, Printers, and develop markets Open up medical and new energy areas with maintenance and high-end EMS Enter fields of next- generation social infrastructure (ICT realizing safe and comfortable society) Measures for disaster prevention and reduction, aging social infrastructure leveraging sensing and network, etc. ExaaS: brand name of OKI s cloud service Copyright 2013 Oki Electric Industry Co., Ltd. 13

14 5. Management strategy (Changing factors of operating income) Billion yen Secure stable profitability Realize sustainable growth Effects of Printer +5.0 biz. structure reform Effects of increasing sales in areas of specialty - Expand domestic financial systems and ATM market in China - Obtain renewal demand for social/telecom infrastructure (10.0) Price decline, changing market conditions, etc. Reform manufacturing and design, reduce procurement costs, etc. Effects of increasing sales in areas of specialty -New markets for ATM - New printer products, etc FY13 (projection) FY16 (Plan) Copyright 2013 Oki Electric Industry Co., Ltd. 14

15 5. Management strategy (Overseas strategies) Expand mainly in ATMs and Printers. Target 73.0 billion yen overseas net sales. Overseas net sales plan (40%) Net sales (billion yen) (overseas sales ratio) Profit model Office print market (printers) 3.0 trillion yen Office solution market (copiers) 4.0 trillion yen Professional market 1.5 trillion yen (31%) Launch high- valueadded printer products to to new business areas Existing field Existing business fields New business fields Expand areas Direction of biz. domain FY13 projection 95.0 FY16 plan --Expand Chinese ATM market --Expand ATM areas --Expand cashprocessing machine, maintenance service South East Asian market 22k units Chinese market 108k units Russia, Indian markets 97k units Recycling ATM Expand market Expand * Source: OKI. (Based on marketing data by external research agencies. products Copyright 2013 Oki Electric Industry Co., Ltd. 15 Replace Latin America markets etc 52k units RGB 2016 unit shipments forecast Brazilian ATM units including CDs subsidiary Cash handling equip. Maintenance service

16 5. Management strategy (Enter the field of next generation social infrastructure) Enter business that provides establishment of ICT system/operation/monitoring/maintenance service leveraging OKI s strengths for the field of next generation social infrastructure which is becoming more important Realize safe and comfortable society Important fields of utilizing ICT Disaster prevention/ reduction Social infrastructure maintenance & management Next generation traffic Data collection, storage, analysis and delivery to project and prevent disaster Power-saving, measurement accuracy enhancement, efficient operation to maintain and manage social infrastructure Ease traffic, reduce environmental burden and detect existence to protect safety of pedestrians Remote operation/fulltime monitoring technology Forecast and information collection/delivery technology based on statistical data Evolution and union of strong technologies Network technology Mechatronics technology Data analysis/processing technology Sensing technology Customer basis Sensing technology under special environments Audio technology Maintenance service Manufacturing technology OKI Group strengths Copyright 2013 Oki Electric Industry Co., Ltd. 16

17 5. Management strategy (Focus points) Invest proactively in growth areas and reassign human resource Reinforce cash-generating capability Secure stable profits Respond to price fall/market changes 3 yr cumulative cost reduction [10.0 B yen] Enhance monozukuri (manufacturing) by engineering/production reform Enforce procurement cost reduction Enhance SI/service quality management Reinforce cash-generating capability 3 yr cumulative working capital reduction [15.0 B yen] Start activities with CCC as KPI CCC: Cash conversion cycle Realize continuous growth Enforce R&D Develop service products 3.4% Sensor, network technology 3.0% Enhance cost competitiveness FY11-13 FY14-16 Strategic capital investment Expand overseas business Next generation social infrastructure Alliance (billion yen) Strategic investment FY11-13 FY14-16 Net sales ratio Replacement investment Enhance human resource (scale of 200 people) Reassign human resource to growth areas Hire global resource and train personnel Promote career opportunities for women Copyright 2013 Oki Electric Industry Co., Ltd. 17

18 5. Management strategy (Financial strategy) Enhance financial foundation by securing profits and reducing working capital Promote conversion of preferred stock to common stock Cash flows plan (FY yrs cumulative) Net income 50.0 billion yen Non-cash cost (depreciation cost) 45.0 B yen Reduce working capital 15.0 B yen Capital Investment/ Investment 65.0 B yen Repay interestbearing debt 30.0 B yen Dividend resource/ cash and cash equivalents Financial foundation 1.5 times 20% Debt Capital FY13 end projection DE ratio Less than 1.0 times Approx Approx Approx.97.0 Approx.82.0 Shareholders equity ratio Debt/capital (billion yen) Debt Capital More than 30% FY16 end target Copyright 2013 Oki Electric Industry Co., Ltd. 18

19 Conclusion Change mode to stable profitability/continuous growth to become a high-value added creation group, contributing to the realization of safe and comfortable society Mid-term business plan 2016 [Stable profitability/sustainable growth] Maximize profitability with fundamental business/maximize business chances in growth areas Mid-term business plan 2013 [Reconstruct management] Program for the enhancement of management base/program for growth [Profitability] Operating profit margin [Stability] Shareholders equity ratio/de ratio 2% 10%, 4 times 2010 results 5% 20%, 1.5 times 2013 projections 6% More than 30%, less than 1.0 times 2016 targets Copyright 2013 Oki Electric Industry Co., Ltd. 19

20 Copyright 2013 Oki Electric Industry Co., Ltd. 20