FY2018/12 Results Brief ing (IFRS)

Transcription

1 Securities Code: 6268 FY2018/12 Results Brief ing (IFRS) F e b r u a r y 1 8, The forecast data presented herein reflects assumed results based on conditions that are subject to change. Nabtesco Corporation does not make representations as to, or warrant, in whole or in part, the attainment or realization of any of the forecasted results presented in this document. Numerical figures presented herein are rounded down.

2 Summary of Annual Consolidated Results for FY2018/12 & Forecast for 2019/12 JPY bn.) JPY bn.) Sales Sales increase in all Segments + 4.3% Hydraulic Equipment Automatic Door FY2017 Results FY2018 Results FY19 Forecast Operating Profit major factor Loss due to relations with Impairment of OVALO + 6.2% Hydraulic Equipment Private Aircraft etc. Precision Reduction Gear remains as the same level OVALO* 1 Impairment Impairment 21.9 ACB One time costs No affects by OVALO Increase CMP* 2 ACB* FY2017 Results FY2018 Results FY19 Forecast * 1 OVALO GmbH * 2 Component Solution Segment * 3 Accessibility Solution Segment 2

3 Agenda 1. Annual Consolidated Results for FY2018/12 2. Forecast for FY2019/12 3. Progress in Mid-Term Management Plan 3

4 Agenda 1. Annual Consolidated Results for FY2018/12 2. Forecast for FY2019/12 3. Progress in Mid-Term Management Plan 4

5 Result for FY2018/12 Sales increased 5 terms in a row Sales, O.P and Net profit exceeded the Revised Plan. (JPY million) 2017/12 Result (A) 2018/12 Revised Plan (As of Oct. 31, 2018) (B) 2018/12 Result (C) Ratio of Variation ((C-A)/A) Ratio of Variation ((C-B)/B) Sales 282, , , % 0.3% Core O.P. *1 29,155 24,700 26, % 6.9% (Core OPM) 10.3% 8.4% 9.0% -1.3pt 0.6Pt O.P. 29,468 20,000 21, % 9.4% (OPM) 10.4% 6.8% 7.4% -3.0pt +0.6pt Finance Income and Cost ,107 Equity in earnings of affiliates 4,915 8,744 9, % 5.0% Income before tax 34,907 28,500 29, % 5.1% Net profit *2 25,146 19,800 22, % 6.2% E a r n i n g s p e r s h a r e (JPY Yen) 円 DPS (JPY Yen) 72 yen 73 yen(plan) 73 yen(plan) Payout ratio 35.3% 45.7% 43.0% Remarks: Forex impact:-600m Harmonic Drive Systems share acquisition right valuation loss -260M *1 Core operating profit is net sales less cost of sales and selling, general and administrative expenses. *2 Net profit attributable to owners of the parent 5

6 Revised Plan(As of Oct. 31, 2018) vs. FY2018/12 Result by Segment Both Sales and O.P achieved the revised plan(as of Oct.31). (JPY bn.) ±0 Sales (JPY bn.) Operating Profit /12 Revised Plan (As of Oct. 31, 2018) 19 CMP TRS ACB MFR 2018/ /12 CMP TRS ACB MFR 2018/12 Revised Plan (As of Oct. 31, 2018) HQ *1 Component Solutions Segment (CMP) :Sales and O.P were in line with the revised plan. Transport Solutions Segment (TRS) :O.P increased due to achievement of MRO. Accessibility Solutions Segment (ACB) :Sales increased due to achievement of Platform Doors. O.P increased slightly due to delays of construction periods for Automatic Doors for buildings and one-time expenses for maintenances in sales offices in Europe. Manufacturing Solutions Segment (MFR) : Sales and O.P were in line with the revised plan. HQ costs : Activities of expenses reduction *1 Corporate or Elimination * *2 Maintenance, Repair and Overhaul *3 PMI(Post Merger Integration) 6

7 FY2017/12 Result vs. FY2018/12 Result by Segment Sales in all Segments increased. O.P decreased due to impairment of German subsidiary OVALO GmbH in 2Q (JPY bn.) Sales (JPY bn.) Operating Profit /12 CMP TRS ACB MFR 2018/ /12 CMP TRS ACB MFR HQ *1 2018/12 Component Solutions Segment (CMP):Sales increased due to the high growth in Hydraulic Equipment while the Precision Reduction Gears sales decreased. O.P remained as the same level due to the less sales of Precision Reduction Gears and increasing of depreciation cost. Transport Solutions Segment (TRS) : Sales increased due to a good circumstance in 4 main businesses. O.P decreased due to the impairment of OVALO GmbH(JPY 5.2B) and operating loss. Accessibility Solutions Segment (ACB): Sales increased due to the sales growth of Platform Doors. O.P decreased due to delays of construction periods for Automatic Doors for buildings and one-time expenses for maintenances in sales offices in Europe. Manufacturing Solutions Segment (MFR) :Sales and O.P increased due to the growth of the Food Packaging Machine business. HQ Costs : Costs of the consolidation of R&D fronts, IT investments and Advertis ement increased. *1 Corporate or Elimination 7

8 Analysis of Changes in Operating Profit by Company (FY2017/12 Result vs. FY2018/12 Result ) While sales increase intended to O.P growth, impairment in OVALO and increasing operating expenses resulted in decrease of O.P 40.0 (JPY bn.) Sales Increase +2.2 Productivity improvement +0.4 Forex impact Depreciation increase -1 Operating Expenses Increase -2.5 OVALO Related costs Remarks: R&D costs Ad costs IT expenses etc Forex impact (*) 17/12 Results US$1= RMB1= EUR1= CHF1= /12 Results US$1= RMB1= EUR1= CHF1= /12 Results FOREX sensitivity in O. P. (This represents the effect to be expected on operating profit if the exchange rate fluctuates by one yen): (US$): 47 million yen (RMB): 812M yen, (EUR): minimal, (CHF): minimal 2018/12 Results 8

9 Balance sheet (2017/12 Result vs. 2018/12 Result ) Balance sheet remained sound during implementation of agile investments for growth in Precision Reduction Gear and Aircraft Equipment business (JPY million) 2017/12 (A) (as of December 31, 2016) 2018/12 (B) (as of December 31, 2017) (B-A) Variation Assets 301, ,824 27,011 (Cash and cash equivalents) 44,121 54,039 9,918 (Trade receivable) 76,874 76,602-1,922 (Inventories) 40,298 43,592 3,294 (Tangible fixed assets) 70,700 80,573 9,873 Liabilities 124, ,202 14,757 (Bonds and borrowings) 27,720 42,870 17,590 Total equities 177, ,639 12,253 (Non-controlling interests) 9,465 10,557 1,088 Equity attributable to owners of parent *Ratio of equity attributable to owners of parent: 167, ,081 11, % 54.4% 9

10 Agenda 1. Annual Consolidated Results for FY2018/12 2. Forecast for FY2019/12 3. Progress in Mid-Term Management Plan 10

11 Forecast for FY2019/12(IFRS) While Precision Reduction Gear remains as the same level, sales are anticipated to increase on the back of a robust performance in Hydraulic Equipment and Aircraft Equipment in the Private sector. O.P is anticipated to increase due to the completion of OVALO's impairment loss. (JPY million) 2018/12 Result (A) 2019/12 Plan (B) Variation (B-A) Ratio of Variation ((B-A)/A) Sales 294, ,000 18, % O.P. 21,889 30,000 8, % (OPM) 7.4% 9.6% +2.2pt - Income before tax 29,962 33,600 3, % Net profit * 21,029 22,900 +1, % DPS (JPY Yen) 73 73(plan) Payout ratio 44.1% 39.5%(plan) * Net profit attributable to owners of the parent 11

12 Analysis of Changes in Operating Profit by Company (FY2018/12 Result vs. FY2019/12 Plan ) Expansion of profits by increasing sales and completion of OVALO GmbH impairment loss. (JPY bn.) Increase of sales* +6.2 Productivity Improvement, etc +1 FOREX effect -0.8 Increase of Depreciation -1.5 Increase in SG&A expenses, etc OVALO GmbH Impairment Loss FOREX effect (*) 18/12 Result US$1= RMB1= EUR1= CHF1= /12 Plan US$1= RMB1= EUR1= CHF1= /12 Result IFRS 2019/12 Plan IFRS *FOREX sensitivity in O. P. (This represents the effect to be expected on operating profit if the exchange rate fluctuates by one yen): (US$): 48 million yen, (RMB) : 863 million yen, (EUR) : minimal, (CHF) : minimal 12

13 Component Solutions Segment (CMP) Sales for CMP segment is anticipated to grow by reflecting an increase of global demand for construction machinery. Sales for precision reduction gears are anticipated to remain in line with 2018 as demand for industrial robots will recover in the second half, although demand slowdown will continue in the first half. Result and Plan Sales (JPY bn.) Precision Reduction Gears Hydraulic Equipment Others FY2018/12 Result vs. FY2019/12 Plan / / / /12 Precision Reduction Gears:Sales is anticipated to remain in line with Hydraulic Equipment :Demand in China is strong due to infrastructure investment. Sales are anticipated to increase due to a robust demand in South- O.P. Result Result Result Plan O.P.(JPY bn.) (OPM) 13.6% 17.9% 16.9% 17.2% east Asia and North America. : Expansion of profits by increasing sales. 13

14 Transport Solutions Segment (TRS) Sales are anticipated to grow in TRS by sales growth of aircraft in the civil aviation sector. Profits are anticipated to increase for being gone of impairment losses in OVALO GmbH. Result and Plan Sales (JPY bn.) Railroad Vehicle Equipment Aircraft Equipment Commercial Vehicle Equipment Marine Vessel Equipment Others FY2018/12 Result vs. FY2019/12 Plan Railroad Vehicle Equipment : Anticipated to decreases on the back of off-season for railroad vehicle production in Japan. Aircraft Equipment : Anticipated to increases due to Capacity expansion for B737MAX and mass production for B777X. Commercial Vehicle Equipment : Anticipated to increase reflecting continued robust demand in Japan and Southeast Asia. Marine Vessel Equipment : Sales growth is anticipated reflecting the gradual recovery of the marine transport market and shipbuilding market. Others: Anticipated to increase by the start of mass production for OVALO projects. O.P. :The O.P. is anticipated to increase due to the completion of impairment losses in OVALO GmbH / / / /12 Result Result Result Plan O.P.(JPY bn.) (OPM) 16.3% 10.6% 2.5% 9.0% *Sales of Nabtesco Service is calculated until as of the result for 2017/12 14

15 Accessibility Solution Segment (ACB) Sales and profit are anticipated to grow by meeting demand for domestic and overseas building automatic doors. Result and Plan Sales (JPY bn.) Automatic Doors FY2018/12 Result vs. FY2019/12 Plan 2016/ / / /12 Result Result Result Plan O.P.(JPY bn.) (OPM) 7.9% 7.1% 6.1% 8.4% Automatic Doors :The sales are anticipated to increase due to the growth in platform doors and the delays to be improved in automatic doors for building. O.P. : Anticipated to increase by sales growth and delays of construction is to be improved. In addition, the one-time expense is anticipated to decrease. *1 PMI(Post Merger Integration) 15

16 Manufacturing Solutions Segment (MFR) Sales and profit are anticipated to increase due to robust both in domestic and overseas demand from the food industry. Result and Plan Sales (JPY bn.) Packaging Machines Others FY2018/12 Result vs. FY2019/12 Plan / / / /12 Result Result Result Plan O.P.(JPY bn.) (OPM) 9.2% 11.6% 14.0% 13.4% Packaging Machines :Sales are anticipated to increase due to demand the back of labor-saving, demand for food industry is robust. Sales are expected to increase due to the anticipation for strong growth overseas, especially in pet food. O.P. :Expansion of profits by increasing sales. 16

17 CAPEX, R&D and Depreciation Capital expenditure was implemented centering on Precision Reduction Gears for future growth. Environment-related investments will also be implemented. (JPY bn.) 2017/12 Result 2018/12 Result 2019/12 Plan Mid-term Plan CAPEX R&D Depreciation

18 Consolidated Cash Flow Free Cash Flow remained positive after implementing investments for growing market (JPY million) Operating Cash Flow Investment Cash Flow Free Cash Flow 40,000 30,000 20,000 10,000 12,952 27,597 19,533 19,949 12,068 8,746 27,730 12,740 23,071 24,165 30, , ,064-7,880 3,859-4,886 2,885 2,342 3,206-20,000-30,000-13,693-14,989-20,186-21,823-26,851-40, / /3 2014/3 2015/3 2015/12 *1 2016/ / /12 (Plan) JGAAP IFRS *1 Please note that the estimates for FY2015/12 (Reference) were calculated for the period of 12 months to make comparisons with the result for FY2016/12 under the same conditions. 18

19 Agenda 1. Annual Consolidated Results for FY2018/12 2. Forecast for FY2019/12 3. Progress in Mid-Term Management Plan 19

20 Our commitments in the New Medium-term Management Plan ROE : 15% Consolidated payout ratio: 35% or over Focus on solving ESG issues 20

21 Medium-term management plan ~ROE15%~ ROE15% 20.0% 15.0% 10.0% 5.0% ROE was decline due to the impairment losses in OVALO GmbH. Work on improving ROE in order to achieve ROE 15%. 12.5% 12.2% 12.6% 6.5% 6.9% +2.8bn extraordinary gains from Harmonic Drive Systems 7.4% 7.6% 4.6% Actual Value 13.0% 13.0% 7.6% 15.9% 14.3% 9.0% 12.1% 11.8% 12.3% 6.7% 6.6% ROA ROE +5.7bn extraordinary gains due to capital increase of Harmonic Drive Systems Impairment losses in OVALO GmbH -5.2bn 0.0% 2013/3 2014/3 2015/3 2015/12(9カ月間 ) 2016/ / / /12(Plan) 計画 ) (9month) JGAAP IFRS 21

22 Medium-term management plan ~Consolidated pay out ratio 35% or higher~ Consolidated payout ratio 35% or higher Profit for 2018/12 was lower than beginning plan(as of Feb. 9, 2018) Still dividends remain as the beginning plan of the term % 50.0% % 32.2% 31.4% 35.1% 35.3% 43.0% 39.5% 45.0% 40.0% 35.0% % 25.0% 20.0% 15.0% 10.0% 5.0% 0 0.0% 2013/3 2014/3 2015/3 2015/12(9カ月間 ) (9month) 2016/ / / /12(Plan) 計画 ) 22

23 Measures to Solve ESG Issues in 2018 E:Measures to Climate Change Issues *1 The FSB Task Force on Climate-related Financial Disclosures Speeding up the Execution of the PDCA Cycle for long term target of CO 2 Emissions Established TCFD * 1 sectional committee and implemented cross-functional measures Implementing Environmental investment aggressively (JPY 100M) 2,000 1,500 1, times 2.4times Major items of investments Solar Equipment High efficient Machineries Advanced corresponds for Freon regulations etc. 23

24 Measures to Solve ESG Issues in 2018 S:Measures for Society Work Style Reforms Diversity participation, advancement in work place(open recruitment, Work-from-home system, Smart work benefit) Promote to improve productivity by IT application(rpa, Paper less, Improvement activity by operational review) Human Rights Management Implemented a human right risk investigation based on the Nabtesco Group Human Rights Policy in domestic and oversea fronts and confirmed that no significant risk existed. Established Nabtesco Groups Community Investment Policy Clarified purposes of the activities and domains in order to promote proactive Community investment Major Targets Per hour labor productivity (Value added/working hour) FY2020 Target (vs FY16) +20% Overtime hours 18% Paid annual leave Promote Telework +5 days More than 150 persons 24

25 Measures to Solve ESG Issues in 2018 ~Local Community Development~ Formulation of Community Investment Policy Through our community investment activities, we will proactively engage in exchanges and cooperate with local communities in fields closely related to our business in each region where the Group conducts business as good practice of the Nabtesco Way. Aim to create value for stakeholders value for the Nabtesco Group. Concentrate on the three key fields of the environment, the education, the welfare. Environment Education Welfare 25

26 Measures to Solve ESG Issues in 2018 G:Strengthen Corporate Governance Revised Basic Policy of Corporate Governance Reduced political shareholdings, Grasped an accurate Capital cost, and clarified the relation of Board Directors with the plan of successor of CEO Implemented a proactive Quality Audit Implemented a special audit for Quality in Group companies and Confirmed no significant issue was found. Created functional synergy/ Established the governance structure to accelerate to make decision Applied Segment system(cmp Segment) and pursued synergy Conducted a subsidiarity based on the evaluation of the effectiveness of the Board in last fiscal year Sophisticated Risk Management Conducted structural risk assessment in group companies. Significant risks were specified and implemented countermeasure through the Risk management committee Strengthened Compliance structure Announced the Nabtesco Group Code of Ethics and global policy of bribe prevention 26

27 ESG Evaluating Organizations/ESG Index Awarded Three Highest Ratings from CDP. Selected as ESG index including GPIF using 4 Index. Environmental evaluation (CDP) Climate Change A List 2018 CDP Water Security A List 2018 Supplier Engagement Leader 2019 (WWF Japan) Global Warming countermeasure ranking Machinery Precisions equipment Top ESG Index DJSI World Index MSCI ESG Leader Indexes FTSE4Good Index Series STOXX Global ESG Leaders (GPIF Index) MSCI Japan ESG Select Leaders Indices MSCI Japan stock women active score index (WIN) FTSE Blossom Japan Global Environmental Stock Indices Named as World Index in CY2016 First time named in CY2018 First time named in CY

28 Progress of Medium-term management plan Established new Branch Office Nabtesco Europe GmbH(2017) TOYO JIDOKI EUROPE GmbH(2018) OVALO/ adcos M&A(2017) Reconstructed Branch Office DIAVAC LIMITED (2018) Reconstructed automatic door business in North America(2017) Market Creation Capacity expanding in overseas Hydraulic Equipment : Coping with demand increase in Chinese market Precision Reduction Gears: Acquired land of capacity expanding in further growth. Operational Excellence Production reform in cross Inventory operating Production management renewal (ICT) Optimum SCM(3P Logic) Measures for work style reforms Actively utilize RPA Tools (2018) Activate office communication Control result quantitative, manage target Technology Innovation Strengthen competitiveness of existing products developed next generation products Next generation Precision Reduction Gears (Zeta): Put on the market(2018) Next generation standard automatic door (NATRUS) Put on the market(2018) New model FCA:For 737MAX(2017) 777X(2019) Developing new products technology for expand added value Hydraulic Equipment :Cross sell with HIGHEST Packaging machines:preprocess automation equipment Electronic design using Adcos Excavating new technology business Established Corporate Venture Capital (2018) As center, Production Innovation Div. going to revise and improve business target values based on the current environment Reform organization Department of head office : Directly under of CEO (2018) Department of business :Appoint segment leader (2019) ESG Enhancement of corporate governance Continually investment in environment and safety 28

29 Appendix 29

30 Break down of CAPEX ACB 12% MFR 2% HQ 3% 15,178 JPY million TRS 39% CMP 44% HQ MFR 3% ACB 1% 5% TRS 34% 20,288 JPY million CMP 56% MFR ACB 2% 7% TRS 30% HQ 6% 30,600 JPY million CMP 55% Environment-related investments R&D-related investments Others (Environment, Renewal and Safety) 15% Productivity Improvement 32% New Products 10% 15,178 JPY million 2017/12 Result Production Increase 43% Precision reduction gears: Increase production capacity in Japan and China Aircraft equipment: - Capacity expansion at Gifu Plant Others (Environment, Renewal and Safety) 18% Productivity Improvement 26% New Products 10% 20,288 JPY million 2018/12 Result Production Increase 46% Precision reduction gears: Increase production capacity in Japan and China OVALO GmbH Mass production for new products Others (Environment, Renewal and Safety) 18% Environment -related investments Productivity Improvement 29% 30,600 JPY million Production 2019/12Plan New Products 7% Increase 46% 30

31 Sales by Geographic Segment 2017/12 Q4 Result 2018/12 Q4 Result North America 6.8% (JPY 19.3 billion) Others 0.2% (JPY 0.5 billion) North America 6.7% (JPY 19.7 billion) Others 0.5% (JPY 1.4 billion) Europe 16.2% (JPY 45.8billion) Other Asia 7.0% (JPY 19.8billion) JPY billion Japan 55.5% (JPY billion) Europe 14.9% (JPY 43.9billion) Other Asia 6.9% (JPY 20.5 billion) JPY billion Japan 54.8% (JPY billion) China 14.3% (JPY 40.3 billion) China 16.2% (JPY 47.6 billion) Overseas Sales JPY billion Overseas Sales JPY billion Ratio 44.5% Ratio 45.2% 31

32 Main Products: Component Solutions Segment (CMP) Precision Reduction Gears Joints of Industrial Robots Others Nabtesco 60% No.1 Approx. 60% world market share Hydraulic Equipment Traveling Unit for Hydraulic Excavators Others Nabtesco 25% Approx.25% world market share Drive Units for Wind Turbines Main Customers Precision Reduction Gears Industrial Robots: Fanuc, Yaskawa Electric, KHI, KUKA Roboter (Germany), ABB Robotics (Sweden) Machine Tools: Okuma, Yamazaki Mazak, Makino Milling Machine Co.,Ltd., DMG Mori Seiki Hydraulic Equipment Traveling Units: Komatsu, Kobelco Construction Machinery, Sumitomo Contruction Machinery, Sany, XCMG, Liu Gong Drive Units for Wind Turbines: MHI, Hitachi, Ltd., Others 32

33 Main Products: Transport Solutions Segment (TRS) Railroad Vehicle Equipment Brake Systems Others Nabtesco 50% No.1 Approx. 50% Domestic Market Share Door Operating Systems Others Nabtesco 70% No.1 Approx. 70% Domestic Market Share Aircraft Equipment Flight Control Actuation Systems (FCA) One of the four major world players for FCA systems (major FCA supplier to Boeing Company) Expanding business into engine accessories and power supply systems No.1 Nabtesco Approx. 100% 100% market share for domestically-produced aircrafts Main Customers Railroad Vehicle Equipment JR Companies, Private railway companies, KHI, Bullet train and subway projects in China Aircraft Equipment Boeing, KHI, MHI, IHI, Japanese Ministry of Defense, Airlines 33

34 Main Products: Transport Solutions Segment (TRS) Commercial Vehicle Equipment Wedge Chambers Others Nabtesco 70% No.1 Approx. 70% Domestic Market Share Air Dryers Others Nabtesco 75% No.1 Approx. 75% Domestic Market Share Marine Vessel Equipment Others 2ST Main Engine Control Systems Nabtesco 50% No.1 Approx. 50% Domestic Market Share (Approx. 40% World Market Share) Main Customers Commercial Vehicle Equipment Hino, Isuzu, Mitsubishi Fuso Truck & Bus, UD Trucks Marine Vessel Equipment KHI, Makita Corporation, Hitachi Zosen, Mitsui Engineering & Shipbuilding, MHI, Hyundai Heavy Industries(Korea), Doosan Engine (Korea), Hudong Heavy Machinery (China), MAN Diesel (Denmark) 34

35 Main Products: Accessibility Solution Segment (ACB) Automatic Doors Automatic Doors Platform Screen Doors Others No.1 Nabtesco Approx. 50% 50% market share for building automatic doors (top share in the world) Main Customers Automatic Doors Others Nabtesco No.1 95% Approx. 95% domestic market share (accumulated total) Automatic Doors for buildings: Major general contractors, sash manufacturers, hospitals, banks, public insititutions, etc. Platform Doors: Subway projects in France and China, others Main Products: Manufacturing Solutions Segment (MFR) Packaging Machines Packaging Machines for Retort Pouch Foods Others Main Customers Nabtesco 85% Packaging Machines No.1 Approx. 85% domestic market share Mitsui Sugar, Ajinomoto, Marudai Food Co., Ltd., ARIAKE Japan, KENKO Mayonnaise, P&G, Kao, Lion, beverage companies in North America, food companies in China 35

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