Furusato Earnings Presentation

Transcription

1 Furusato Earnings Presentation 2Q FY20 Ended September 0, 20 (April to September 0, 20) Friday, November, 20 Top of the Square UTAGE, Otemachi

2 Consolidated Results Summary H FY0 H FY YoY YoY(%) Net sales 0,7,88,27 2% Gross profit,20, % Gross profit margin 0% 5% +05P SG&A Expenses,2,07 () (0%) Operating income % Ordinary income 29, % Net income % Points Details Net sales Machine Tool +52%, Industrial Equipment +%, Steel Frame Building Supplies (Inhouse Product) +2% Gross profit margin Equipment and Tools +0P, Construction and Piping Products +2P SG&A Expenses Reversal of allowance for doubtful accounts (25)M Extraordinary income Gain on sales of investment securities 5M Extraordinary loss Loss on disaster M P8 P9 P0 P P 2

3 Consolidated Net Sales <Segment Breakdown> H FY0 H FY YoY YoY(%) Equipment and Tools,572 8,7,0 97% Industrial Equipment 2,5,98, 5% Machine and Tools for Automotive,920,955 8% Housing Equipment,77, % Overseas 9 8 5% Other % Machine and Facility,29,05,92 % Machine Tool 2,9,7, % Factory Automation,88, % Construction and Piping Products 9,0 0, % Steel Frame Building Supplies 7,27 8, % [Inhouse Products] [,959] [2,75] [55] [2%] [Procured Supplies] [5,8] [5,725] [57] [0%] Piping Products,77, % Other () Total 0,7,88,27 2%

4 Consolidated Net Sales <Segment Breakdown/Quarterly Base> 0,92,02 9,57 8, 7,79 8,822 8,709 9,70 8,7 9,29 7,5 7,890 7,8,72,0,77 7,002,2 5,,9 5,827,28,720,57 5,02,77,727,7,, 2,7,802 5,092 2,27 5,7 2,2,87,00,8 2,8 5,7,220 08Q 2Q Q Q 09Q 2Q Q Q 0Q 2Q Q Q Q 2Q Equipment and Tools Machine and Facility Construction and Piping Products +9% vs 2Q FY0, +78% vs Q FY Steady growth on a trend with peaks in 2Q and Q +8% vs 2Q FY0, +% vs Q FY Rapid recovery on a trend with a peak in Q +75% vs 2Q FY0, +9% vs Q FY Turn to a slight upward trend with peaks in 2Q and Q (Fiscal year)

5 Net sales Business Equipment and Tools Business <Business Environment/Net Sales and Operating Income> Industrial Equipment 2,5,98 Machine and Tools for Automotive Housing Equipment Overseas Other Operating income Business environment H FY0,572,920, H FY 8,7,955, YoY(%) 97% 5% 8% 5% 5% % 99% Industrial production Fell in Mar and Apr, recovered from May, in August, reached the level before the Great East Japan Earthquake occurred in March Motor vehicle parts Substantially declined in Mar to May, recovered rapidly in Jun, in August, reached the level before the earthquake Results by business Industrial Equipment Sales increase, reflecting early recovery in domestic manufacturing sector and favorable sale of energyand electricitysaving products Machine and Tools for Automotive Sales decreased in 2Q due to production cutback in automotive industry Housing Equipment Sales decreased in Q due mainly to delayed delivery by the earthquake (Year 2005=00 ) Indices of Industrial Production Total production Inventory ratio of total production Prelim Prelim 09Q 2Q Q Q 0Q 2Q Q Q Q 2Q Q (Year 2005=00 ) Production of Motor Vehicle Parts Production of motor vehicle parts Inventory ratio of motor vehicle parts Prelim Prelim 09Q 2Q Q Q 0Q 2Q Q Q Q 2Q Q (Year 2005=00 ) Jan Monthly Industrial Production Industrial Production Production of motor vehicle parts (Calendar year) (Calendar year) Prelim Prelim Feb Mar Apr May Jun Jul Aug Sep 5

6 Machine and Facility Business <Business Environment/Net Sales Operating Income> H FY0 H FY Net sales,29,05 Business Machine Tool 2,9,7 Factory Automation,88,582 YoY(%) % 520% 2% (Billions of yen ) Machinery Orders Governments Overseas Private sectors (Exc volatile orders) 2,25 2,50 09Q 2Q Q Q 0Q 2Q Q Q Q 2Q (Billions of yen ) Domestic orders Orders Received for Machine Tools Overseas orders (Calendar year) Operating income (8) Business environment 09Q 2Q Q Q 0Q 2Q Q Q Q 2Q Machinery orders The leading indicator of private capital investment, Private sectors (Exc Volatile orders) up vs both 2Q FY0 and Q FY Orders received for machine tools The Jan to Jun period rebounded to 85% of the volume in the same period of 2007, a peak in volume, still led by overseas orders (Domestic orders 57%, overseas orders 2%) Results by business Machine Tool Sales increased by ordertaking activities targeting at leading manufacturers Factory Automation Metalcutting machine tools, tools, consumer supplies, other facilities favorably increased respectively (Calendar year)

7 Construction and Piping Products Business <Business Environment/Net Sales and Operating Income> H FY0 H FY YoY(%) (Million ton ) Volume of Stel Frame Used in Building Net sales Steel Frame Building Supplies 9,0 7,27 0,0 8,200 80% 75% Business [Inhouse products] [Procured supplies] Piping Products Operating income (loss) Business environment [,959] [5,8],77 () [2,75] [5,725],959 [2%] [0%] 0% (Calendar year) (K yen/ton ) 0 25 FY08 Ave Steel Product Prices (Hbeam) FY09 Ave FY0 Ave FY Ave 8 Apr08 Oct Apr Oct Apr Oct Apr Volume of steel frame used in building Turned to a YoY increase in the Apr to Jun period (+05%), H (Jan to Jun 20) +% Steel market price Blast furnace steel manufacturers up due to high raw material price, but electric furnace steel manufacturers down due to declining scrap price Polarization in prices Results by business Steel Frame Building Supplies (Inhouse Products) Substantial sales increase in Q, led by demand for turnbuckle braces for temporary housing in the affected area by the earthquake Steel Frame Building Supplies (Procured Supplies YoY decrease in Q due to sluggish demand, but YoY increase in 2Q, led by sales of machines used for restoration Piping Products Doubledigit sales growth in H by purchasing reinforcement strategies 80 7

8 Construction and Piping Products Business <Volume/Average Selling Price> Turnbuckle brace Net sales +% YoY 225% 207% 97% 5% 2% 0% Volume Unit Volume +0% Unit price +0% 79% 0% 270% 78% 0% 25% 97% 25% Price H FY08 2H H FY09 2H H FY0 2H H FY High strength bolts Net sales8% YoY Volume 29% Unit price +9% 2% 9% 25% 8% 5% 22% 28% 25% 98% 7% 27% % 9% 29% Volume Unit price H FY08 2H H FY09 2H H FY0 2H H FY Welding supplies Net sales +0% YoY Volume 8% Unit price +55% 87% 9% 22% 0% 290% 97% 0% 95% 75% 295% 0% 99% 55% 8% Volume Unit price H FY08 2H H FY09 2H H FY0 2H H FY 8

9 Gross Profit <Segment Breakdown> H FY0 H FY YoY YoY(%) Equipment and Tools,9 2, % (Gross profit margin) 7% 20% +0P Machine and Facility 9 9 9% (Gross profit margin) 85% 82% 0P Construction and Piping Products,908 2,0 02 2% (Gross profit margin) 20% 227% +2P Other 8 (8) Adjustment (0) () Total Gross Profit,20, % Gross Profit Margin 0% 5% +05P Gross Profit Margin Equipment and Tools +02 P, driven by expanding product lines of private brand products together with valueadded proposals in the Industrial Equipment Business Construction and Piping Products +75 P, led by improved factory operating ratio in the Steel Frame Building Supplies Business (Inhouse Products) Construction and Piping Products +08 P by purchasing and inventory strategies and appropriate adjustment on selling prices in the Piping Products Business 9

10 SG & A Expenses <Consolidated> H FY0 H FY YoY YoY(%) Selling expenses 50 9 () (2%) Items Freightage and packing expenses Provision of allowance for doubtful accounts Other 2 8 (25) 70 2 (72) 28 % 9% General administrative expenses,0, 0% Items Personal expenses Other 2,580,029 2,58, % 00% Total,2,07 () (0%) By segment Business Equipment and Tools Machine and Facilities Construction and Piping Products Adjustment and other,8 88,99 (7),82 0,9 (55) 5 (2) 0% 0% (2%) Provision of allowance for doubtful accounts Reversal of allowance for doubtful accounts for the impact by the Great East Japan Earthquake in the previous fiscal year Selling expensesother Increase by sales commission and advertizing expenses 0

11 Net Sales <Consolidated> H FY0 H FY YoY YoY(%) Ordinary income 29, % Extraordinary income Items Items Reversal of allowance for doubtful accounts Insurance premiums refunded cancellation Gain on sales of investment securities Extraordinary loss Loss on disaster Loss on adjustment for changes of accounting standard for asset retirement obligations (70) (2) (7) 5 (0) () (822%) (9%) Income before income taxes 8, % Total income taxes % Net income % [Extraordinary income] Gain on sales of shares of electric power companies 5M [Extraordinary loss] Special payment for disaster M [Net sales per share] 70

12 FY20 Forecast 2

13 FY Forecast <Revised on Oct 27> FY H Actual result AprSep YoY (%) 2H Forecast OctMar2 YoY (%) Fullyear Forecast Apr ~Mar 2 YoY (%) Net sales,88 2%,02 (09%) 8,00 % Gross profit,988 87%,72 (7%) 9,750 78% SG&A expenses,07 (0%), 0% 8,29 (0%) Operating income % 00 (2%),80 929% Nonoperating income 2 2% 25 (5%) 57 (0%) Nonoperating expenses % 8 0% 28 % Ordinary income,05 28% 75 (20%),750 28% Net income 55 29% 287 (29%) 80 75% 2H Forecast Almost the same as the previous forecast from net sales to ordinary income due to uncertainty in business environment Fullyear net income 80M Net income per share forecast 5

14 Forecast by Segment <Equipment and Tools Business> 2H Forecast YoY(%) Fullyear Forecast YoY(%) Net sales 8,29 08%,92 50%,0 Industrial Equipment % 27, % Business Machine and Tools for Automotive Housing Equipment Overseas 2,075, % (%) (8%),00,757 09% 00% 7% Other 0 2% 7 5% Operating income 9 % 78 52% Business environment forecast Moderate pace of recovery to meet demand after the completion of supply chain restoration The reconstruction demand is expected while the risk in export is heightened mainly by the strong yen There are risk factors, such as decelerating overseas economy and the strong yen in the transport equipment sector Business plan by segment Industrial Equipment Respond to reconstruction demand, sales increase by intensive sales promotion on energyand electricitysaving related products Machine and Tools for Automotive Dispersing risks by expanding the domain to fields other than the automotive sector under concerns about decreasing exports Housing Equipment Further development of remodel market by ecolife products in sluggish demand for new housing

15 Forecast by Segment <Machines and Facility Business> 2H Forecast YoY(%) Fullyear Forecast YoY(%) Net sales 5,80 (2%),855 79% Business,5 Machine Tool (7%) 8,8 Factory Automation,5 (%),08 98% 27% Operating income 7 (2%) 5 98% Business environment forecast Orders received for machine tools in the period from Jan to Sep 990B, Fullyear estimated,00b Favorable sales of high performance machines to North America and China Domestic demand is expected to continue on the upward trend, supported by resuming longterm capital investment The favorable demand for machine tools mainly to emerging countries prolongs the lead time Business plan by business Machine Tool Acquiring demand by shortening lead time, holding sales exhibitions and fairs of CAD/CAM and machines, and reinforcing sales dealers network Factory Automation Focusing on sales base expansion through intensive approach to excellent leading users by utilizing strength of direct sales 5

16 Forecast by Segment <Construction and Piping Products Business> 2H Forecast YoY(%) Fullyear Forecast YoY(%) Net sales 9,992 (2%) 20,52 22% Steel Frame Building Supplies 7,798 (%) 5,998 0% Business [Inhouse Products] [Procured Supplies] [2,8] [5,2] [(05%)] [(8%)] [,] [,7] [2%] [(9%)] Piping Products 2,9 98%,5 0% Operating income 2 (%) % Business environment forecast The steel frame used in building 00K t/month after June, estimated 5M t/year, up approx 7% YoY Steel product price flat, the price of construction orders received is expected to improve According to the Tankan, production facility investment indicated positive in current and future conditions in all manufacturing sectors, but dropped from the previous survey Business plan by business Steel Frame Building Supplies Business Securing sales volume and raising and adjusting prices in the timing of improving demand Steel Frame Building Supplies Business (Inhouse Products) Improving utilization of quakeresistant standard products, responding to high awareness of earthquakeproof structure after the Great East Japan Earthquake Piping Products Business Increasing market share by improving in price competitiveness of main piping products, such as pipe joints and reinforcement of sales force by introducing new supplies

17 Furusato Group Basic Policy <Steel Frame Building Supplies Business> Turnbuckle braces for buildings Structural products to give elasticity to steel frame building Preventing buildings from corruption by extending themselves without fracturing in huge earthquakes Playing an essential role to protect human life in case of emergency cases Defined manufacturing methods and specifications by JIS standard The picture showed turnbuckle braces not to meet qualifications of the JIS standard They did not have necessary performance, which resulted in fracturing before the corruption of buildings All of them were not manufactured by a method to extend the entirety, so that they fractured around bolts Mission as a top brace manufacturer Manufacturing and providing only JIS standard products (excluding those for certain clients) Taking actions to explain to building designers in order to improve utilization of JIS products Pursuing a good balance between realization of buildings in which people can live without fear and expansion of demand for JIS products 7

18 Furusato Group Basic Policy <Industrial Equipment Business> Potential problems Problems of which users are not aware =Demand For example Unable to improve energysaving efficiency after high efficient compressors installed if the air is leaking from compressed air piping Proposal of energysaving diagnosis with air leak test Air leak test Mission as a machine and tool trading company =Clarifying potential demand Selecting appropriate products from broad product lines from various manufacturers Creating marketing tools to introduce solutions and effective models for every theme Realizing marketing activities not to involve price competitiveness by problemsolving proposals Enhancing presence by satisfying users and sales dealers 8

19 Furusato Group Basic Policy <Piping Products Business> Midterm target=fiscal 20 (The year ending March, 207) Net sales 0B Focusing as a growth business Rapid growth, achieving B for 5 years after launch of the business in 200, but stagnant due to the impact by the Lehman s s fall and the Great East Japan Earthquake Again, work hard to get back to the growth track, targeting at 0 B after 5 years 8 5, 5 0 0, , 8 2 7, 5, 9, 7,7 5, \0B FY0 FY0 FY05 FY0 FY07 FY08 FY09 FY0 FY FY 0 Mission as a supply retailer =What customers need Not only piping products but various supplies including processing machinery, fastening products and welding materials Pursuing convenience for customers by utilizing nationwide local sales and logistic networks Reinforcing competitiveness by making the most of purchasing routes including Gnet Differentiating from competitors by investment in systems to improve customers satisfaction 9

20 Dividends Per Share Dividend payout ratio; Consolidated net income 25% In case that the annual dividend per share based on the above dividend payout ratio is less than 0; Annual dividend per share 0 (Yen) Stable payment Dividend payout ratio 20% Dividend Payout ratio 25% EPS Dividend per share FY02 FY0 FY0 FY05 FY0 FY07 FY08 FY09 FY0 FY (Forecast) 20

21 Reference <Nonconsolidate P/L/Furusato> H FY0 H FY YoY YoY(%) Net sales 9, 0, % Gross profit margin,908 2,0 02 2% SG&A expenses,99,9 (2) (2%) Operating income (loss) () 25 Nonoperating income 5 2 () (7%) Nonoperating expenses % Ordinary income % Extraordinary income ー 5 5 Extraordinary loss (2) (22%) Net sales before income taxes % Total income taxes % Net income (7)

22 Reference <Nonconsolidate P/L/Gnet> H FY0 H FY YoY YoY(%) Net sales 9, 22,75,579 87% Gross profit margin 2,002 2,8 82 9% SG&A expenses,9,977 9% Operating income (loss) % Nonoperating income % Nonoperating expenses 9 7 8% Ordinary income % Extraordinary income ー Extraordinary loss Net sales before income taxes 88 28% Total income taxes % Net income % 22

23 Reference <Nonconsolidate P/L/Gifu Shoji> H FY0 H FY YoY YoY(%) Net sales,922,95 8% Gross profit margin % SG&A expenses (8) (7%) Operating income (loss) % Nonoperating income % Nonoperating expenses % Ordinary income % Extraordinary income 8 (8) Extraordinary loss Net sales before income taxes 2 77 (55) (9%) Total income taxes 9 (7) (92%) Net income 9 5 (8) (55%) 2

24 ForwardLooking Statements This material is solely for information purposes and should not be construed as a solicitation Although this material (including the financial forecasts ) has been prepared based on information currently available, Furusato does not take responsibilities for any errors and omissions pertaining to the inherent risks and uncertainties of the material presented We ask that you exercise your own judgment in assessing this material Furusato is not responsible for any losses that may arise from investment decisions based on the forecasts and other numerical targets contained herein This presentation material is copyrighted by Furusato Industries, Ltd FURUSATO INDUSTRIES, LTD Contact:Corporate Planning Division 20, Minamishinmachi, Chuoku, Osaka 50002, Japan TEL : (Direct) FAX : 年 月期決算 wwwfurusatocojp/ir/ 2