The first fiscal year after full-integration

Transcription

1 The first fiscal year after full-integration DMG MORI CO., LTD. FY2017(Jan- Dec) Result 0/51

2 Agenda 1. Business environment 2. Topics from DMG MORI Addressing to shift to EV, Aging society and AI Enhanced production capability Connected industries ADAMOS Enhanced R&D SDGs, employee trainings 3. FY2017 financial summary 4. FY2018 Plan 1/51

3 Management messages Our strategic measures Pioneering in cutting-edge technologies, such as 5-axis machine, millturn, Additive Manufacturing Improvement in quality, such as minimization of machining variance Full Turn-key offering with CELOS, DMQP and Technology Cycles Enhanced after-sales service and faster delivery of spare parts Market share growth worldwide Upward trend in average order price and improvement in order intake gross margin Improvement of profitability Cash flow generation leading to shareholder return and net debt reduction Establishing sustainable growth via trainings, diversity and adequate compensation of employees Enhancing the ability to respond to changes in environment 2/51

4 For sustainable growth with resources suitable for market transition - Recent development of DMG MORI Customer value Resources Offering process ~ Preparation for growth 5-axis machines, mill-turn CELOS Technology Cycles, DMQP Direct sales in US and Europe Tightened relationship with distributors in Japan Enhanced application trainings August 2016 DPLTA* In-house commissioning of machines Result of the first year after full integration with AG * Domination, Profit and Loss Transfer Agreement Market share gain Record-high order intake Improved order intake margin Improved cash flow Net Debt reduction Dividend increase Nurturing foundation for sustainable growth Normalization of Lead-Time Promotion of 5-axis machines Automation solution Connected Industries Quality improvement After sales service (e.g. 3-year warranty for inhouse spindles) PDCA Est. of Mori foundation Continuing PDCA Employee trainings TQM (Total Quality Management) activity Training lectures Launch of Emerging Technology Laboratory 100% annual leave taken Total working hours approx. 2,000 TQM activity 3/51

5 Worldwide machine tool consumption (VDW/Oxford Economics) - Outlook of 2018 (EUR bn) China Relevant Market 8.9** 23.6 (+3.5%) USA 8.3 (+3.1%) Germany 6.0 (+4.3%) Japan Italy South Korea 5.6 (+3.4%) 3.6 (+4.7%) 64% 3.5 (+1.3%) Other Countries 21% CY 2018e China 12% Relevant market (EUR bn) 73.2 Mexico India 2.2 (+1.8%) 1.9 (+5.3%) Russia 2% Taiwan 2% India 3% Mexico 3% 73.2 EUR bn +3.6% China 20% Non Relevant market Taiwan Russia 1.6 (+5.7%) 1.3 (+2.8%) 79% Italy 5% South Korea 5% Japan 8% Germany 8% USA 11% -13.3% +4.6% +8.9% -2.6% +4.5% +3.6% CY e 4/51 Source: Our estimation based on VDW / Oxford Economics, Oct. 2017

6 Worldwide machine tool consumption outlook (VDW/Oxford Economics) Steady growth expected for 2018 Europe +4.1% Japan, China, other Asia +3.5% Americas +2.9% -3,1% +4.3% +2.8% +0.6% +5.2% +4.0% +4.1% +3.4% +4.2% +4.7% +2.1% +3.5% +1.3% +3.1% +5.3% +5.7% +5.2% +1.8% +4.0% CY 2018e world +3.6% +4.4% 5/51 Source: DMG MORI, VDW / Oxford Economics, Oct. 2017

7 DMG MORI consolidated order intake(by region) (100 million JPY) 4,483 (+22%) 2018 forecast 4,500 or more 3,006 3,454 4,060 3,838 3,670 S&P +6% Asia (incl. China) +34% Americas +22% Japan +43% Germany +22% EMEA +27% CY EUR/JPY 6/ e

8 DMG MORI consolidated order intake(by industry) Others +28% (100 million JPY) 3,454 4,060 Construction machinery +28% Medical +28% Energy/ Power generation +2.6 times Electricity/ Precision parts /Semiconductor +12% 3,838 3,670 4,483 (+22%) S&P +6% 2018 forecast 4,500 or more Others Construction machinery Die&Mold -7% Aerospace +28% SMEs +51% Medical Energy/Power generation Automotive +28% Electricity/Precision parts/ Semiconductor Machinery +28% CY EUR/JPY 7/ e

9 DMG MORI quarterly consolidated order intake JPY basis (100 mil JPY) EUR basis (million EUR) vs. Oct Dec 2016 JPY basis +25.1% EUR basis +10.8% 1,206 1,121 1, ,022 1,055 1,063 1,081 1, FX: vs. JPY USD EUR Jan-Mar CY12 Apr-Jun Jul-Sep Oct-DecJan-Mar CY13 Apr-Jun Jul-Sep Oct-DecJan-Mar CY14 Apr-Jun Jul-Sep Oct-DecJan-Mar CY15 Apr-Jun Jul-Sep Oct-DecJan-Mar CY16 Apr-Jun Jul-Sep Oct-DecJan-Mar CY17 Apr-Jun Jul-Sep Oct-DecJan-MarApr-Jun CY /51

10 Growth in market share vs Germany +2.8 point EMEA +1.7 point China Japan +0.6 point +3.4 point Asia +0.5 point 日本 +43% 米州 +22% U.S.A point Other Americas +1.8 point World +1.4 全世界 point 9/51 Source: Our calculation based on VDW / Oxford Economics, Oct statistics Our estimate based on our relevant machine markets

11 Consolidated order intake - average price (million JPY) *Consolidated order intake : machines only 6-month moving average (thousand EUR) JPY basis(left axis:million JPY) EUR basis(right axis: thousand EUR) CY USD FX (JPY) EUR CY2012 CY2014 CY2016 CY2017 2% 5% 5% 5% 32% 34% 31% 36% 38% 33% 35% 40% Advanced Technologies 5-axis Machine 16% 12% 11% 27% 29% 25% 23% 24% 26% 14% 26% 20% Horizontal Machining Center Millturn Center CMX V series Vertical Machining Center Turning Center 10/51

12 Consolidated stock and production (Units) 3,500 3,000 Production 2,500 2,000 1,500 Stock at the end of the period 1,704 1,598 1,5001,498 1,513 1,496 1,396 1,273 1,211 1,248 1,296 1,316 1,141 1,053 1,690 1,386 1,391 1,326 1,249 1, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 CY2012 CY2013 CY2014 CY2015 CY2016 CY /51

13 Order and sales composition (by region) * Value basis * Machine body only Consolidated machine order intake CY2017 Consolidated machine sales CY2017 Japan 16% 50% 19% Germany Japan 14% 53% 23% Germany USA 15% USA 16% Americas China 3% 8% 6% Asia Korea Taiwan 33% EMEA* Russia Turkey Americas China 3% 7% 6% Asia Korea Taiwan 31% EMEA* Russia Turkey *Europe, the Middle East and Africa 12/51

14 Order composition * Value basis * Machine body only CY2016 by industry 1% 4% 5% 1% 8% 11% 11% 17% 24% 18% by customers number of employees 23% 15% 2% 24% 36% by product type 5% 25% 33% 1% 25% 11% CY2017 Medical Energy/ Power generation Electricity/ Precision parts/ SPE Die & Mold Aerospace 13/51 Construction machinery 5% 1% 4% 7% 2% 8% 11% 20% SMEs* Others 24% 18% Machinery 101~500 Automotive/ Motor Cycle *Small and medium-sized enterprises 1,001 or more Vertical Machining Center Turning Center 501~1,000 17% 4% 5% 23% 1~20 16% CMX V Series 21% Existing & potential users approx. 300 thousand 35% 21~100 Millturn Center 4% 26% Advanced Technologies 14% 35% 5-axis Machine Horizontal Machining Center

15 Agenda 1. Business environment 2. Topics from DMG MORI Addressing to shift to EV, Aging society and AI Enhanced production capability Connected industries ADAMOS Enhanced R&D SDGs, employee trainings 3. FY2017 financial summary 4. FY2018 Plan 14/51

16 Addressing to market trend EV AI Aging society 15/51

17 Research and development(1) R&D Production Sales Solution Quality Software development Connected industries Elemental technologies Optimization of product portfolio 16/51

18 Research and development(2) R&D Production Sales Solution Quality Transition in product models world premieres Revised streamline target for machine models: 130 models in 2020 (previous target 150) Streamlining to 4 MASTER series e 2019e 2020e World premieres in 2017 Variety of spindle types speedmaster powermaster turnmaster compactmaster /51

19 R&D and product strategy R&D Production Sales Solution Quality Complementing other platforms Adoptable for SMEs complements these areas Field System (FANUC) Predix (GE) Lumada (Hitachi) MindSphere (Siemens) FA-IT (Mitsubishi Elc.) 18/51

20 Speeding up development process with Digital Twin R&D Production Sales Solution Quality 2018 Reduction of development time by 20% by using the Digital Twin Intelligent 3D model Parallel development of PLC software Virtual Machine Digital Twin of DMU 340 Gantry 19/51

21 Competitive supply chain management R&D Production Sales Solution Quality In-house production of major components Spindle User Interface (CELOS) Scale Direct drive motor Ball screw ATC Economies of scale = good relationship with partners Linear guide THK Schaeffler Ball screw NSK THK Pneumatic equipment SMC CKD Numerical Control FANUC Mitsubishi Elc. SIEMENS HEIDENHAIN Hydraulic equipment Fujikoshi Daikin HAWE Bearing NTN NSK SKF Schaeffler Robots FANUC Fujikoshi Yasukawa KUKA Delivery time hit rate approx.90% Delay of approx. 2-weeks 20/51

22 Global production capacity R&D Production Sales Solution Quality 14 sites worldwide, production capacity of approx. 15,000 units/year 2017 / Production 10,500 units 2018 Plan 11,500 units Capacity increase in 4 factories Pfronten : 5-axis machines Poland : Casting machining Iga : Large-sized machines Nara : System for automobile industry 21/51

23 Extension of FAMOT (Poland) R&D Production Sales Solution Quality New and existing building New building 22/51

24 Open house Pfronten Jan R&D Production Sales Solution Quality Order intake :YoY +17% (in units) +42% (amounts) Industry focused exhibit (aerospace) Vertical Machining Center Turning center MillTurn Center 12% Advanced technologies 4% Technical press conference 21% Order intake by product type (value basis) 48% 5-axis machines 15% Horizontal Machining Center Thereof, system solution 20% 23/51

25 Schedule of major exhibitions in 2018 R&D Production Sales Solution Quality January Open House Pfronten May Iga Innovation Days May Innovation Days Chicago October Grand Opening FAMOT Germany Iga U.S. Poland September IMTS Chicago September AMB Stuttgart November JIMTOF U.S. Germany Tokyo 24/51

26 5-axis machine sales promotion in Japan R&D Production Sales Solution Lending DMU50 3 rd Generation to top 50 users for 1 year (from May 2018) Organizing seminars to the users in the neighborhood Assigning our engineers as trainers twice a month Quality 25/51

27 Solutions R&D Production Sales Solution Quality Technology Cycles max. 40% reduction of programming time YoY +54% order intake (2017, JPY 4bn)) DMQP* More lineup for DMQP YoY +82% sales volume (2017, approx. JPY 30bn) *DMG MORI Qualified Products DMQP examples Tools Chucks Steady rest Tool holders Automation Measuring probes Tool presetter 26/51

28 MATRIS(Module Automation Transfer Robot Intelligence System) R&D Production Sales Solution Quality Module system Measurement Cleansing Vision Tokyo Seimitsu MARPOSS Mitsutoyo Nikon Morigo seiki Kan seisakusyo Kyoto Robotics Ricoh Reduction of installation time by 80% Services by DMG MORI 27/51 Open innovation Commissioning, after services

29 Global engineering support R&D Production Sales Solution Quality Approx. 1,000 application engineers worldwide Aerospace Davis Chicago Medical Los Angels Automotive Die & Mold Pfronten Aerospace Excellence Center Seebach Medical Excellence Center Iga, Pfronten Die & Mold Excellence Center Nara Automotive System solution 28/51

30 Quality R&D Production Sales Solution Quality 2017 / year warranty for MASTER series spindle More models with standardized Smart SCALE 29/51

31 Raising external directors/auditors ratio to 50% (After annual general meeting in March) Directors Auditors 5 Internal 1 4 External 2 Ratio of external directors 44% Ratio of external auditors 67% 30/51

32 Diversity of directors 3 non-japanese operating officers Mr. Nudo James (U.S.) DMG MORI USA/Canada CEO Mr. Ralf Riedemann (Germany) responsible for engineering and application Ms. Irene Bader responsible for marketing (Austria) 31/51

33 Governance of AG General meeting Supervisory Board 12 members Executive Board 3 members Representatives of DMG MORI CO. Dr. Mori (President) Ms. Bader Mr. Christian Thönes (CEO of AG) Mr. Björn Biermann Dr. Maurice Eschweiler (Mr. Michael Horn May 2018) 32/51

34 Contributing to SDGs(Sustainable Development Goals) Related goals Social issues Reducing CO2 emission from use of our products Reducing CO2 emission during our production process Our action Saving energy consumption by our technology (GREEN mode) Monitoring of emission at our production sites Preventing the production of mass destruction weapon Ensuring intended use of our products by strict export control process * Source: United Nations Promoting active roles of women in workplace More employment in our business region Preventing long hour working and improving productivity Access to qualified technology education Promoting innovation and increasing material usage efficiency Offering better working condition for women Diversity of employee nationality Enhancing productivity with better work-life balance DMG MORI scholarship Support to Universities and technical colleges R&D in collaboration with academic organizations 33/51

35 Identifying and addressing high risk issues - Risk management Our risk assessment map Preventing our machines from being used for unintended purposes with GPS information Low Impact High Natural disaster IT system failiure Cyber attack Claim from customers Breach of law Breach of safety or environmental regulations Bankruptcy of customer Information leakage Quality issue Export control GPS の図 Image of our Export Control Low Probability High 34/51

36 Supporting technological and skill development through Mori Manufacturing and Technology foundation 2017 Plan 2018 Skill development Scholarship for technical More scholarship college students Doctor program at Kyoto Univ. Donation to Nagoya Univ. Support for Post-graduate students (Kyoto Univ. Keio Univ.) Research and development Local society and culture Support of annual meeting of CIRP CIRP: College International pour la Recherce en Productique Support for international conference (CIRP) Search and support for innovative organization Renovation of Yamato-koriyama hall etc. Planting 140 cherry trees in Yamato-Koriyama, etc. 35/51

37 Our actions for energy savings GREEN mode Energy savings with 4 functionality Improved production efficiency with less energy consumption Steel packing Logistics Reuse of the company packaging Reduction of CO2 emission by collective transportation Reuse of exhibited machines or facility machines Material recycling Used machine business Packing with our own sheet 36/51

38 Supporting child-care for employees Outlook of day-care center (April 2018) Inside image of day-care center Iga, Nara 2018 Plan Child-care leave First child up to 10 days/year Second child or more up to 20 days/year (Pictures: our staff) Day-care for child (in-house) 37/51

39 Promoting work-life balance - Play, Study Paid holiday taken (average per employee in Japan) (days) working days/week 48 week per year CY2015 CY2016 CY2017 CY2018 Target *employees in Japan only Total working hours (average per employee) (hours) Long vacation Golden Week (May) 9 days Summer vacation 9 days Year-end 13 days 2,206 1,989 2,026 Less than 2, days paidholiday for all 38/51 CY2015 CY2016 CY2017 CY2018 Target

40 Employee skills development - Play, Study Annual working hours per employee 1,952hours (244 days 8 hours/day) TQM activities *Total Quality Management 50hours Paid-holiday (20days) 160hours min.150hours Lecture Working hours 1,642 hours = approx.10%* of total working hours *(denominator) Excluding paid-holidays (numerator) Including other trainings than mentioned right-hand 50hours On-the-Job Training 50hours 39/51

41 Employee skills development -Training of application engineers DMG MORI Academy (Iga) 2018 Train more than 100 application engineers Mastering operation of all types of machines in 3-year training courses 40/51

42 Agenda 1. Business environment 2. Topics from DMG MORI Addressing to shift to EV, Aging society and AI Enhanced production capability Connected industries ADAMOS Enhanced R&D SDGs, employee trainings 3. FY2017 financial summary 4. FY2018 Plan 41/51

43 Financial results actual and 2018 forecast Jan to Dec FY2016 FY2017 Changes FY2018 Changes (JPY bn) Actual (%) Forecast (%) Sales revenue % % Operating profit (excluding one-off items) % % % to sales revenue 3.5% 6.5% 7.8% One-off gain/ losses Operating profit x % % to sales revenue 0.5% 6.8% 7.8% Net financial costs (thereof, economic compensation associated with DA) (-0.7) (-2.1) (-2.1) Profit before taxes Net profit Net profit attributable to owners Earnings per share (JPY) Dividend per share (JPY) Depreciation & amortization Capital expenditure (forex) USD/JPY EUR/JPY /51

44 Quarterly financial results - FY (JPY bn) Q1 Q2 Q3 Q4 FY Total Sales revenue Operating profit % to sales revenue 4.1% 5.0% 5.6% 11.5% 6.8% Net profit attributable to owners % to sales revenue 1.6% 2.0% 3.1% 6.7% 3.6% (forex) USD/JPY EUR/JPY Sales revenue Operating profit (excluding one-off effects) (JPY bn) 150 (JPY bn) % % 5.0% 5.6% 11.5% 12.0% 9.0% 6.0% 3.0% 0 Q1 Q2 Q3 Q4 0 Q1 Q2 Q3 Q4 0.0% 43/51

45 Cash flows - Free cash flow for the year reached JPY 30bn FY2017 actual FY2018 forecast (JPY bn) (JPY bn) Depreciation & amortization in WC +4.1 Capex -9.4 Taxes Depreciation & amortization in WC +2.5 Capex Taxes EBT Others +1.9 EBT FCF 30.0 FCF /51

46 Net debt reduced, progressing towards stronger balance sheet - summary of financial position Short-term financial assets Trade receivables Inventories Other assets (short-term) JPY 558.2bn 76.0 Assets JPY 567.4bn Liabilities & equity JPY 558.2bn JPY 567.4bn Payables Advance payment Other liabilities (short-term) Debt Net Debt (interest-bearing debt - short-term financial assets) (JPY bn) Dec Dec Fixed assets Goodwill Intangibles Other assets (long-term) Obligation of AG share purchase Other liabilities (long-term) Shareholders equity Hybrid equity Dec 2018 Less than 90.0 Dec 2016 Dec 2017 Dec 2016 Dec 2017 Total assets of AG (mn EUR) 2,339 2,234 45/51 EUR/JPY closing rate

47 Increased dividend with 70 th -anniversary commemorative dividend (JPY/ share) 50 Total shareholder return for FY2017 approx. JPY10bn Share buyback 5.25bn Dividend payout ratio 34.4% commemorative dividend Year end Interim 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018e 46/51

48 2020 Vision - Progress review 2020 Target 2017 Actual 2018 Plan Progress evaluation Sales revenue bn Expected to achieve 2 years in advance EBIT % On track RoE % > Dividend payout ratio Target achieved, continued % Continued Net Debt bn > On track Equity ratio % >20 Aiming for over 30% Product line models /51 Expected to achieve 2 years in advance

49 Supplementary information to financial performance 48/51

50 FY2017 Operating profit bridge (Y-o-Y) Forex: USD/JPY EUR/JPY FY Sales Forex Volume Others +2.0 Volume Clean-up of non-core businesses -6.2 Personnel cost Cost increase increase in US US headcount Mar Mar Jun Sep Dec Gain from sale of financial assets Others Material cost -0.8 reduction R&D Forex -2.7 Others (JPY bn) One-off expenses Thereof US company +5.5 Logistics cost increase -0.5 Unrealized profit /51 Gain from sale of financial assets Net improvement in US +4.0 (Initial plan +3.5) FY2016 FY2016 FY2017 FY2017 (Normal) (Normal)

51 FY2018 forecast operating profit bridge FY Sales Forex +5.5 Volume Others Gain from sale of financial assets Volume etc Forex : USD/JPY EUR/JPY Forex +0.4 Cost reduction Personnel cost increase Others -1.0 (JPY bn) /51 FY2017 FY2017 FY2018 (Normal) (Normal)

52 Disclaimer This material contains targets, plans, etc. concerning the future of DMG MORI CO., LTD. and the DMG MORI Group. All predictions concerning the future are judgments and assumptions based on information available to DMG MORI at the time of writing. There is a possibility that the actual future results may differ significantly from these forecasts, due to changes in management policy or changes in external factors. There are many factors which contain elements of uncertainty or the possibility of fluctuation including, but not limited to, the following: Fluctuations in exchange rates Changes to the laws, regulations and government policies in the markets where DMG MORI CO., LTD. conducts its business DMG MORI CO., LTD. s ability to develop and sell new products in a timely fashion Instability of governments in the markets where DMG MORI CO., LTD. conducts its business Operational changes by the competent authorities or regulations related to anti-trust, etc. 51/51