FY nd Quarter Financial Results ended Sep 30, 2017

Transcription

1 FY nd Quarter Financial Results ended Sep 30, 2017 Ⅰ. Closing results Ⅱ. Strategies Oct. 31, 2017 DENSO CORPORATION

2 Ⅰ. Closing results 1/39

3 Overview of FY2018 2nd Quarter Financial Results 1.The revenue and operating profit have reached the highest level ever. Revenue increased due to an increase in vehicle production, as well as sales expansion. Operating profit also saw an increase due to the production volume increase and company cost reduction efforts. 2.Full-year financial result forecasts has been revised up after considering first-half financial results, and the latest movement in the foreign exchange markets. 3.Annual dividend payment will be 130 yen per one stock, a 5 yen increase from the previous forecast on each of interim and fiscal year-end payment. 2/39

4 FY nd Quarter Financial Results Revenue Operating Profit ( Excludes other income/ expenses) Other income/ expenses Operating Profit Finance income/ costs & others(*1) Profit before Income Taxes Profit (*2) (Ratio to Revenue) (Unit:Billions of Yen, %) FY18 2Q FY17 2Q Change FY18 2Q FY17 2Q 2, , % (8.0%) (6.4%) % (8.7%) (6.6%) % (9.6%) (6.9%) % (6.5%) (4.5%) % Precondition Foreign Exchange Rate JPY 111/$ JPY 105/$ +6 JPY JPY 126/Euro JPY 118/Euro +8 JPY (Unit:Millions of Units) Domestic Car Production % Overseas Car Production of Japanese % (North America) (3.01) (3.18) (-0.17) (-5.4%) 1 Finance income,finance costs, Foreign exchange gains/loss, Share of the profit of associates accounted for using the equity method 2 Profit attributable to owners of the parent company 3/39

5 FY nd Quarter Consolidated Revenue (By Customer) (Unit: Billions of Yen) OE Revenue for others ( ):Change from FY17 2Q [ ]:Change from FY17 2Q excludes FX difference (+11.7%) [+7.1%] Others (+16.6%) [+12.0%] Volvo(+30.5%) Isuzu (+13.6%) [+9.8%] VW AUDI (-1.3%) [-6.7%] Nissan (+26.6%) [+24.2%] SUBARU (+14.1%) [+12.2%] Mazda (+2.2%) Suzuki (+20.2%) Hyundai Kia (+5.1%) Ford (+4.5%) [+23.1%] [+0.8%] [+15.5%] [+0.1%] [-0.5%] GM (+12.6%) [+6.6%] FCA (+11.8%) [+5.7%] Honda (+8.6%) [+4.4%] 4/39

6 FY nd Quarter Consolidated Revenue (By Product) (Unit: Billions of Yen) ( ):Change from FY17 [ ]:Change from FY17 excludes FX difference (+8.6%) [+5.2%] FA New Business (+80.1%) [+78.9%] Other Automotive (+14.4%) [+7.6%] Small Motors (+5.2%) [+2.7%] Electronic Systems Electrification Systems (+3.0%) (+8.3%) [+0.9%] [+4.8%] Information & Safety Systems (+8.1%) [+5.9%] Powertrain Systems (+8.9%) [+5.0%] Thermal Systems (+7.2%) [+3.3%] 5/39

7 Change in FY nd Quarter Operating Profit (Unit: Billion of Yen) Operating profit Operating profit (Excludes other income/expenses) Others Currency exchange gain Labor cost Expense Raw material cost Depreciation Excludes other ( Variable cost reduction Operating profit Production volume increase Operating profit income/expenses) FY18 2Q FY17 2Q 6 /39

8 2 nd Quarter Geographical Segments by Company Location Revenue Operating Profit (Unit: Billions of Yen) [ ]: Ratio to Revenue 7/39

9 2 nd Quarter Geographical Segments by Company Location (Local currency base,excludes other income/expenses) Revenue Operating Profit (Unit: Billions of Yen) [ ]: Ratio to Revenue 8/39

10 FY2018 Financial Forecast Revenue (Ratio to Revenue) (Unit:Billions of Yen, %) As of FY18 Revised Change from March FY17 Actual June 2017 FY18 Revised ( 3) Amount Ratio FY17 Actual 4, , % 4,527.1 Operating Profit ( Excludes other income / expenses) Other income/ expenses (7.2%) (7.5% ) % (7.2%) Operating Profit Finance income/ costs & others( 1) Profit before Income Taxes Profit ( 2) (7.4%) (7.8% ) % (7.3%) (8.2%) (8.6% ) % (8.0%) (5.9%) (6.0% ) % (5.7%) Precondition (Unit:Millions of Units) Foreign Exchange JPY 110/$ JPY 111/$ +1 JPY JPY 108/$ Rate JPY 121/Euro JPY 126/Euro +5 JPY JPY 119/Euro Domestic Car Production % 9.10 Overseas Car Production of Japanese Manufacturers % (North America) (6.08) (6.10) (+0.01) (+0.2%) (6.38) 1 Finance income,finance costs, Foreign exchange gains/loss, Share of the profit of associates accounted for using the equity method 2 Profit attributable to owners of the parent company 3 Full-year financial result forecasts includes the influence of FUJITSU TEN LIMITED which will become Denso s affiliate on November /39

11 Change in FY2018 Operating Profit (Unit: Billion of Yen) Operating profit Operating profit (Excludes other income/expenses) Others Currency exchange gain Variable cost reduction Production volume increase Labor cost Expense Depreciation Raw material cost Excludes other (Operating profit income/expenses) Operating profit FY18F FY17 10 /39

12 Ⅱ. Strategies 11 /39

13 Paradigm shift We are not complacent with conventional business model, but aiming to create a new value Our goal -DENSO Group Long Term Policy 2030 Roadmap to change - DENSO Group Long Term Plan /39

14 1. DENSO Group Long Term Policy /39

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18 2. DENSO Group Long Term Plan 2025 Strategy Growth and Development Appeal values in aspect of vehicles and drive the growth in a new mobility field. Earning Capacity Increase profitability of existing business and make it as a solid foundation for the profits. Organizational Ability Accelerating our business execution and increase vitality of workplace in order to prevail in the rapidly changing business environment. (1) Target of Revenue & Profit (2) Management Reform (3) Initiatives in Focus Fields 17 /39

19 (1) Target of Revenue & Profit Achieve revenue of 7 trillion yen and operating profit ratio of 10% by FY2026 by increasing the performance in a new field of Electrification and Automated Driving [Target of Revenue & Profit Ratio] (trillion yen) 7.0 Revenue Profit Ratio (Excludes other income/expenses) A new automotive business [Revenue Breakdown] Non-Automotive Businesses Existing automotive business (%) A new automotive business Existing Automotive business FY /3 FY /3 FY /3 FY /3 Target of Target of Target of 18/3 予想 21/3 標 26/3 標 FY2018 FY2021 FY2026 [Profit Breakdown] Non-Automotive Businesses /39

20 (2) Management Reform : 5 Pillars Point of innovation : Speed of Decision Making & Vitality of Workplace By accelerating our business execution and taking action/reaction faster, we will become company who has a sense of speed and vitality of workplace. 1 Enhancement of vehicle perspective and cross-sector functions 2 Advanced R&D function to realize agile development globally Business Unit evolution and smaller but stronger headquarters Global management with optimal use of group and regional power Way of working with tremendous speed and efficiency - Motivated fighting force; streamlining & value creation - Group management and Self-reliant management in each region - People, HR systems and tools, Culture 19 /39

21 (2) Management Reform : 5 Pillars 1 Enhancement of vehicle perspective and cross-sector functions Strengthen competitiveness from both cyber and physical sides in the perspective of vehicles. Cyber Physical Integrated platform Heat management sub-systems and components Energy managemen t subsystems and components ECU Semiconductor Sensor Motor Information management sub-systems and components Appeal for value and services from vehicle perspective. (In-Car/Out-Car) Strengthen the company system Pursuit of value with subsystems and strong components. Thorough enhancement of competitiveness through cross-sector efforts. Strengthen the company system 20 /39

22 (2) Management Reform : 5 Pillars 2 Advanced R&D function to realize agile development globally Arrange satellite facilities globally which are able to react agilely in the rapidly changing business environment, and execute advanced R&D more speedy with global partners. - Promote development at the center of innovation Promote forecasting, verification and development from both cyber and physical sides. - Strengthen the satellite facilities for global R&D Now In future DENSO Japan will be the control tower Munich SOKEN Shibuya Michigan DENSO Japan Silicon Valley Research Laboratories Munich Helsinki Israel Bangalore Shibuya SOKEN Seattle DENSO Japan Michigan Silicon Valley California Research Laboratories Singapore 21 /39

23 (3) Initiatives in Focus Fields ⅰ Electrification ⅲ Connected Cars ⅱ Automated Driving ⅳ Non-Automotive Businesses (Factory Automation / Agriculture) 22 /39

24 ⅰ Electrification - Initiative in Focus Fields - Value Reduction of environmental loading and realization of high efficiency transportation (Economical Driving) 1. Lead of electrification by technology acquired over the years and supply achievement Technological evolution (High-power, SiC etc.) Standardization (MG, Inverter) Global supply capability (Supply in Japan, US and China) 2. Development of internal combustion engine technology corresponding to the electrification Heating efficiency improvement (Lean burn, low cooling loss, optimization with electric system) Exhaust gas purification system (catalyst base material, system simplification) 3. Development of total energy management technology for vehicles Thermal management (air conditioning, waste heat utilization) Power management (charging, regeneration) 23/39

25 ⅰ Electrification - Initiative in Focus Fields - Use Create Thermal Systems Stock Battery ECU Total energy management of vehicles 24 /39

26 ⅰ Electrification - Initiative in Focus Fields - Comparison of the quality (dislocation density) Less defect (high density) 3,000 27,000 (Unit: pcs/cm 2 ) Made by DENSO Made by other companies close-up SiC MOSFET DENSO have achieved to grow high density crystals, which increase the quality of device. 25 DENSO CORPORATION All Rights Reserved. /39

27 We will pursue advances not only in electric vehicle systems, but also in gasoline and diesel vehicle systems in support of eco driving. lce HV PHV EV FCV 26 /39

28 ⅱ Automated Driving - Initiative in Focus Fields - Value Realize a move in a safe and secure manner without traffic accidents 1. Initiative at the system, strengthening of proposal capability Advanced Driver Assistance Systems and Automated Driving Cockpit system 2. Development by open innovation Strengthen alliances of industry, government and academia Sensors and Algorithm development for recognition and judgment High performance semiconductor development 3. Enhancement of AI research Algorithm development for onboard Quality assurance 27 /39

29 ⅱ Automated Driving - Initiative in Focus Fields - DENSO will provide safe and reassuring recognition across 360 degrees around a vehicle by deploying a full range of sensors and on refining the functionality of each of those sensors. 28 DENSO CORPORATION All Rights Reserved. /39

30 ⅱ Automated Driving - Initiative in Focus Fields - Future advances at DENSO in refining recognition functionality will incorporate deep-learning artificial intelligence. That will carry us beyond recognition in static space and into the realm of anticipating movement in time. 29 DENSO CORPORATION All Rights Reserved. /39

31 ⅱ Automated Driving - Initiative in Focus Fields - DENSO developed a high-performance semiconductor. Large-scale processing GPU Complex processing CPU DFP Simple processing DFP analyses information at once and be able to determine on the spot Human-like reflexive decision-making 30 DENSO CORPORATION All Rights Reserved. /39

32 ⅱ Automated Driving - Initiative in Focus Fields - DFP IP Suitable task Quantity of task Suitable task Quantity of task Boundaries can be dynamically altered At this moment Variable calculation length Capable of performing discrete calculations by the preset areas Flow of time Even if there are various tasks Flow of time DFP will carries our a set of various tasks 31 DENSO CORPORATION All Rights Reserved. /39

33 ⅱ Automated Driving - Initiative in Focus Fields - We re adopting multilayer protection against cyber threats in all of our electronic control units and vehicle networking. 32 /39

34 ⅲ Connected Cars - An Example of Efforts - Value Contribute mobility society connected automobiles, human and things. 1. Development of integrated system with cloud Development of integrated electronic platform Development of automotive big data use technology 2. Value to connected car to provide App delivery OTA Cloud Mobility service (MaaS) ADAS Database Operational management Trouble forecast Big data analysis Development of secured OTA system Provide next generation automotive communication system Provide fleet operational management system 3. Value creation by strengthen alliance Investment to third parties Development of efficient mobility use Taxi, Rental car, Sharing car New mobility Automotiv e system Truck Bus Train 33 /39

35 ⅲ Connected Cars - An Example of Efforts - Building a partnership with MaaS GLOBAL in Finland. Opening branch institute for research in Helsinki and Munich in Jan Traffic Control Matching Platform (MaaS) Taxi-cab Commuter System Mass Transportation Small amount Large amount 34 DENSO CORPORATION All Rights Reserved. /39

36 For the new mobility society in the future 35 /39

37 Monozukuri + Technology 36 /39

38 In DENSO, human possibilities and equipment possibilities come together in raising our manufacturing possibilities around the world. Big Data Buildup a knowledge Feed back Realization 37 /39

39 ⅳ Non-Automotive Businesses -Factory Automation / Agriculture- Value Contribute to Improved Social and Industrial Productivity [ Strengths of DENSO s Monozukuri ] Speedy and High operating ratio of production lines space-saving (1/N) and unique facility development slim down the logistics & inspection sufficient results of various product lines 1. Develop optimal solutions for the FA systems Develop next generation robots Provide FA systems Monozukuri at a DANTOTSU* price which has enabled us to offer high competitiveness developing toward 130 of our plants globally Process design capability Implementation finishing capability Factory-IoT human and equipment come together in raising our manufacturing possibilities *DANTOTSU : A DANTOTSU plant is one that undertakes Monozukuri at a DANTOTSU (outstanding) cost. A DANTOTSU plant is at such a high level that it cannot be compared to other plants. Maintenance capability On-site Improvement ability 2. Agro-Industrialization Responding to large scale production Transformation into market-in type agricultural food industry Efficiency & Quality [foundation] -Layout -Quality Control -Manufacturing Control [Total system solution] [Efficiency] -Sensing robots -Automated transport mechanism Integrated data of producer & logistics 38 /39

40 For mobility society full of smiles, DENSO will keep providing solutions that will provides people everywhere with something to smile about. 39 /39

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42 Appendix Non-Consolidated Financial Results Pre-Conditions (Foreign Exchange Rate/Car Production) Consolidated Revenue by Customer Consolidated Revenue by Product Trend of Capital Expenditures, Depreciation and R&D Expenditures Capital Expenditures, Depreciation, and R&D Expenditures Return to Stockholders Target of Revenue & Profit in FY2026 (By Product) 40 /39

43 FY18 2 nd Quarter Non-Consolidated Financial Results Income Statements (Japanese accounting standards) (Ratio to Sales) FY18 2Q FY17 Account FY2018 2Q FY2017 2Q 2Q (Unit: Billions of Yen,%) Change Amount % Net Sales ( ) 1,268.4 ( ) 1, Operating Income ( 4.1 ) 51.4 ( 1.4 ) Incom e Before Incom e Taxes ( 9.1 ) ( 6.6 ) Net Income ( 7.6 ) 95.9 ( 5.7 ) /39

44 Pre-Conditions (Foreign Exchange Rate/Car Production) FY2018 First-Half FY2017 Second-Half FY2018 Full Year Prior Year Forecast (Original) Forecast as of July 28 Actual Change Prior Year Forecast (Original) Forecast as of July 28 Forecast (Revised) Change Prior Year Forecast (Original) Forecast as of July 28 Forecast (Revised) Change Foreign Exchange Rate (Yen) Forex Impact on Operating Income per Yen (Billions of Yen) Car Production of Japanese Manufacturers (Millions of Units) USD EUR USD EUR Domestic North America Overseas % % % % % % % % % 42/39

45 Consolidated Revenue (By Customer) (Unit: Billions of Yen) FY18 2Q FY17 2Q Change Change excludes FX difference Amount % to Total Amount % to Total Amount % % Toyota Daihatsu Hino Toyota Group 1, , Honda FCA GM Ford Hyundai/Kia Suzuki Mazda SUBARU Nissan VW/AUDI Isuzu Mitsubishi BMW Volvo Benz PSA OE Sales for others OEM Total 2, , After-market, New business & Others(*) Total 2, , * OES (through OEM for aftermarket), Sales for After Market, Sales of industrial and consumer products, Sales of property/equipment and dies lease are included. 43/39

46 Consolidated Revenue (By Product) (Unit: Billions of Yen,%) FY2018 2Q FY2017 2Q Change Change excludes FX difference Amount % to Total Amount % to Total Amount % % Thermal Systems Powertrain Systems Information & Safety Systems Electrification Systems Electronic Systems Small Motors Others(*) Automotive Total 2, , New Business Total Total 2, , * Revenue of equipment,repair parts, original brand products of subsidiaries 44/39

47 Trend of Capital Expenditures, Depreciation and R&D Expenditures (Billions of yen) <45.1%> Q 1 2Q <49.0%> < >Ratio to FY18F (9.0%)(9.2%)(8.8%)(9.0%)(9.0%) CAPEX Depreciation R&D ( )Ratio to Revenue <44.8%> FY14 FY15 FY16 FY17 FY18F FY14 FY15 FY16 FY17 FY18F FY14 FY15 FY16 FY17 FY18F Full-year financial result forecasts includes the influence of FUJITSU TEN LIMITED which will become Denso s affiliate on November /39

48 Capital Expenditures, Depreciation and R&D Expenditures (Unit: Billions of Yen) FY18 Forecast 2Q YTD Change from PY Progress to FY18 Forecast FY17 2Q 2Q Japan % 49.8% North America % 28.2% Europe % 65.7% Asia % 37.4% Others % 40.0% Capital Exp % 45.1% Japan % 48.2% North America % 52.1% Europe % 48.4% Asia % 49.4% Others % 60.0% Depreciation % 49.0% R&D Expenditure (Ratio to Revenue) (9.2%) (9.0%) (8.5%) (9.0%) 1.0% 44.8% 46/39

49 Return to Stockholders 1. We will continue to pay dividends sustainably with taking into accounts our consolidated results, consolidated dividend payout ratio, and dividend amount. 2. We continue to repurchase our own shares adapting flexibly to environmental changes and considering finance status. Cash Dividends per Share and Dividend Payout Ratio (yen) full year first-half Dividend Payout Ratio (%) Total Dividend Amount and Total Return Ratio (Billions of yen) 1,500 1, Amount of Treasury Stock Acquired Total Dividend Amount , ,246 1, Total Return Ratio (%) FY2015 FY2016 FY2017 FY2018 Est. 0 0 FY2015 FY2016 FY2017 FY2018 Est DENSO CORPORATION All Rights Reserved. /39

50 Target of Revenue & Profit in FY2026 (By Product) (Unit: Trillions of Yen) 7 6 (3.0 times) New Business (FUJITSU TEN LIMITED, etc.) Non-Automotive (FA / Agriculture, etc.) (2.0 times) Small Motors (1.9 times) (2.1 times) (1.6 times) Electronic Systems Electrification Systems Information & Safety Systems 2 (1.2 times) Powertrain Systems 1 (1.3 times) Thermal Systems 0 FY2017 Results Target in FY 実績 2025 標 48 /39