Financial Results for the Second Quarter Fiscal Year Ending March, 2009 Investor Relations Presentation Materials ISEKI & CO.,LTD.

Transcription

1 Financial Results for the Second Quarter Fiscal Year Ending March, 2009 Investor Relations Presentation Materials ISEKI & CO.,LTD. Seiichiro Gamo, President November 20, 2008

2 Index 1.Fiscal Year Ending March, 2009 Outline of of Financial Results for for the the Second Quarter Recent Development in indomestic and and Overseas Markets 3.Performance Forecast for for the the Fiscal Year Ending March, Topics 1

3 1.Fiscal Year Ending March, 2009 Outline of Financial Results for the Second Quarter

4 Outline of Financial Results for the Second Quarter Item Item Sales Sales 07/2Q 07/2Q Cumulative Cumulative Value Value % 08/2Q 08/2Q Cumulative Cumulative Value Value % 08/2Q 08/2Q Plan Plan Announced on Announced on Aug.13 Aug (Domestic) (Domestic) (Overseas) (Overseas) Gross Gross Profit Profit S. S. G. G. & A. A. Expenses Expenses Operating Operating Ordinary Ordinary (JPY bn, %) (0.1) (0.1) (0.3) (0.4) (0.4) (0.4) (0.5) (0.5) (2.2) (3.1) (3.1) (0.6)

5 Breakdown of Domestic Sales Cultivating & Cultivating & Mowing Machinery Mowing Machinery Planting Machinery Planting Machinery Rice Rice Transplanters Transplanters : : Harvesting & Harvesting & Processing Machinery Processing Machinery Agricultural Machinery Agricultural Machinery Total Total Parts & Farming Parts & Farming Implements Implements Construction Construction of Facilities of Facilities Agricultural Machinery Agricultural Machinery Related Business (*1) Related Business (*1) 07/2Q 07/2Q 08/2Q 08/2Q Cumulative Cumulative Cumulative Cumulative Notes Notes 08/2Q 08/2Q Plan Plan Announced on Announced on Aug.13 Aug (0.3) (0.3) OEM Construction Others (*2) OEM Construction Others (*2) (0.6) (0.6) Machinery:(0.5) 4.9 Machinery:(0.5) 4.9 (0.2) (0.2) Total Total Notes Notes Tractors: +0.6 Tractors: +0.4 Tractors: +0.6 Tractors: +0.4 Combine Harvesters : Combine Harvesters : (0.3) (0.3) (0.1) (0.1) Rice Transplanters: Rice Transplanters: Dryers: (0.2) Dryers: (0.2) *1 Repair fee, agricultural materials, etc. *2 Revenue from coin-operated rice polishing machines and other items. 4

6 Breakdown of Overseas Sales 07/2Q 07/2Q 08/2Q 08/2Q 08/2Q 08/2Q Item Notes Item Notes Plan Plan Cumulative Cumulative Cumulative Cumulative Increase in shipment of tractor Announced on Announced on Aug.13 Aug.13 North North America America 2.5 Increase in shipment of tractor to OEM partner to OEM partner Europe Europe (0.2) (0.2) Asia Asia (0.1) (0.1) (China)* (China)* Oceania Oceania (0.1) (0.1) Products Products Total Total Parts Parts & Others Others Engine: Engine: Total Total *Sales for China are actual results (Jan.-Jun.) 5

7 Operating 07/2Q 08/2Q Item Cumulative Cumulative Value % Value % 08/2Q Plan Announced on on Aug.13 (JPY bn, %) Sales Cost of G. S Gross Profit S. G. & A. Expenses (0.1) Operating (0.3) (0.4) * Compared with the same period of previous year [ Factors to decrease profit] in inventory valuation method Forex loss Raised raw material price Increased S.G.& A. expenses (distribution cost, etc.) [ Factors to increase profit] Increased gross income by increased revenue Restructuring effect Increased income by decreased inventory Others :(0.4) :(0.4) :(0.7) :(0.2) :+1.8 :+0.5 :+0.7 :+0.2 6

8 Ordinary and 07/2Q 07/2Q 08/2Q Item 08/2Q Item Cumulative Cumulative Cumulative Cumulative 08/2Q 08/2Q Plan Plan Announced on Announced on Aug.13 Aug.13 Operating Operating (0.3) (0.3) Financial Financial (0.6) (0.6) (0.6) (0.6) -- (0.7) (0.7) Other Non-operating Other Non-operating Ordinary Ordinary (0.4) (0.4) Extraordinary Gains Extraordinary Gains (0.8) (0.8) Extraordinary Losses Extraordinary Losses (1.6) (1.6) (0.3) (0.3) (0.4) (0.4) before Taxes before Taxes (1.0) (1.0) (0.1) (0.1) Taxes, Deferred Taxes Taxes, Deferred Taxes (1.2) (1.2) (0.3) (0.3) (0.5) (0.5) Q 2Q (2.2) (2.2) (0.6) (0.6) * Factors of YoY change [Extraordinary Gains] Gain on sale of investment securities : (0.8) [Extraordinary Losses] Special loss for voluntary retirees: +0.9, Others: +0.4 [Taxes, Deferred Taxes] Effect of liquidation of deferred tax asset by ISEKI (Non-consolidated) last year :

9 Balance Sheet Item Item 07/ 07/ Sep. Sep. 08/Sep. 08/Sep. (Refernce) (Refernce) 08/Mar. 08/Mar. Cash/Cash Cash/Cash Equivalents Equivalents (0.5) (0.5) Accounts Accounts Receivables Receivables Inventoies Inventoies (6.6) (6.6) (Product (Product Inventory) Inventory) (5.5) (5.5) Other Other Current Current Assets Assets (0.2) (0.2) Fixed Fixed Assets Assets (1.1) (1.1) Total Total Assets Assets (7.5) (7.5) Debts/Borrowings Debts/Borrowings (6.5) (6.5) Other Other Liabilities Liabilities (1.3) (1.3) (Total (Total Liabilities) Liabilities) (7.8) (7.8) Assets Assets (Retained (Retained Earnings) Earnings) Total Total Liabilities Liabilities and and (7.5) Shareholders' (7.5) Shareholders' Equity Equity 8

10 Trend of Interest Bearing Liabilities & Equity Ratio [Trend of consolidated interest bearing liabilities and equity ratio in 2Q] Balance of interest bearing liabilities (Including discount bill) Equity Ratio(%) /Spe 03/Sep. 04/Sep. 05/Spe 05/Sep. 06/Spe 06/Sep. 07/Sep. 07/Spe 08/Spe 08/Sep. 0.0 Interest Bearing Liabilities Equity Ratio 9

11 2.Recent Development in Domestic and Overseas Markets

12 Trend of Domestic Demand for Agricultural Machinery Trend of Demand for Agricultural Machinery (Forecast) Trend in the amount of domestic demand (Total of 9 principal products, yearly cumulative base) (Initial forecast) Source:Estimated by ISEKI based on Shipping Statistics of Japan Farm Machinery Manufacturer s Association /Mar. 06/Mar. 06/Sep. 07/Mar. 07/Sep. 08/Mar. 08/Sep. 09/Mar (1) Recovery trend of the market from the start of this year. (2) Increased demand in June and July before price raise by agricultural machinery manufacturers. (3) Demand dipped in August and September by effect of the price raise, but the trend is for gradual recovery. 11

13 Trend in Domestic Agricultural Machinery Market 1. Trends in domestic agricultural machinery industry shipping and effective sales of ISEKI * Total amount of 9 products, Y o Y growth rate (%) Source: Estimated by ISEKI based on shipping statistics of Japan Farm Machinery Manufacturer s Association Shipping in the industry on yearly cumulative base is on a weak tendency, but there is a recovery trend exceeding the previous year Y 0 Y (Jan.-Sep.). ISEKI s effective sales on yearly cumulative base exceeded previous year. Because of the increased demand before price raise, Jan.-Sep. sales moved solidly for all products. 12

14 Trend of Domestic Agricultural Policy [Latest trend] October Supplementary budget of MAFF for FY2008 Total billion [Measures for fuel, feed and fertilizer in farming] 79.0 billion Relief program for hiked fertilizer and fuel Compensation approx.70% after harvesting Relief program for urgent conversion of fertilizing system Support to preparation of new cost saving system for fertilizing technology October Prime Minister Aso announced additional economic measures. Budget for measures for agriculture, forestry and fishery billion. [Full utilization of paddy field]: - Expanded crop conversion to rice powder and feed rice - Fresh wheat planting by double cropping [Budgetary request of MAFF for FY2009] 113.6% compared with FY trillion Theme for FY2009: Reinforced domestic food supply capacity [Comprehensive countermeasures for effective use and increased supplying capacity of paddy field, etc.] billion - Measures to promote effective use of paddy field, etc. - Subsidy for establishment of production centers - Subsidy for emergency countermeasures for reclamation of abandoned farm land ISEKI: Inside ridge processing machine(ubs21) Subsidy 55 thousand/10 a Overall support of efforts to improve food self sufficiency ratio -Towards 50% self-sufficiency ratio- 13

15 Recent Trend of Overseas Sales '08/3 08/Mar. 期実績 '09/3 09/Mar.Plan 期計画 '09/3 09/Mar.Forecast 期見通し 09/Mar.Plan (22.0 billion yen) 08/Mar. (20.4billion yen) Apr. 4 月 May. 5 月 Jun. 6 月 Jul. 7 月 Aug. 8 月 Sep. 9 月 Oct. 10 月 Nor. 11 月 Dec. 12 月 Jan. 1 月 Feb. 2 月 Mar. 3 月 09/Mar.Forecast:Jan.-Apr. is based on orders received 14

16 Trend in Overseas Markets(North America) 1.Compact Tractor Market in North America USA Canada N.America Total 07/Jan.~Oct. 08/Jan~Oct. (%) (14) (12) 90 Source:AEM statistics(association of Equipment Manufacturers) 2.Trends in ISEKI s Sales (North America) Effective sales in Jan.-Oct. by OEM partner exceeded market average. Aggressive sales promotion continued to be rewarded Tractors with 50PS engines(pto40ps)or less and lawn mowers are not included Y o Y change (Unit:1,000) ISEKI s shipping has exceeded level of the previous year to date (0.5) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2008/Mar. 2009/Mar. (Forecast on orders received) 15

17 Trend in Overseas Markets (Europe) 1.Trends in European Market Sales in landscaping market Sales in market for professionals stayed relatively stable in general, but tend to slow down. 2.Trends in ISEKI s Sales (Europe) Effective winter sales of European distributors were unfavorable due to warm climate in some areas. But there is recovery trend after season. ISEKI s shipping delayed the plan until 2Q, but Apr.-Dec. shipping will be in line with the previous year (2.8) (28) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2008/Mar. 2009/Mar.(Forecast on orders received) 16

18 Trend in Overseas Market (Asia) 1. Trends in Asian Market China: Market expansion by promotion of farming mechanization policy by the government. Sales of rice transplanters fared well. South East Asia: Market expanded by policy to increase rice culture 2.Trend in ISEKI s Sales (Asia) China Sales of rice transplanters and combine harvesters fared will in line with market expansion. Korea Effective sales of tractors shipped last year were favorable. Prospect up to 3Q is solid, but need to watch trend afterward. South East Asia Introduced 38hp tractors with a good start China Asia (0.3) (0.8) Q 2Q 3Q 4Q 1Q 2Q 3Q 2008/Mar. 2009/Mar.(Forecasted orders received) 17

19 3.Performance Forecast for the Fiscal Year Ending March 31, 2009

20 Revised Performance Forecast for the Fiscal Year Ending March 2009 Item Item Previous Previous Forecast Forecast 09/Mar. 09/Mar. Current Current Forecast Forecast 08/Mar. 08/Mar. Full Full Year Year Announced on May 15 Announced on May 15 Sales Sales (2.0) (2.0) (Domestic) (Domestic) (2.0) (2.0) (Overseas) (Overseas) Operating Operating (0.4) (0.4) Ordinary Ordinary (1.5) (1.5) Company forex rate in latter half year: $1= 100; 1Euro= 135 Previous performance forecast was announced on May 15. [Special Note]. As of October 1: Shares of a consolidated subsidiary, SUM Electro Mechanic Co., LTD. were transferred (Main business: R&D, manufacturing and sales of testing equipment, measuring equipment, etc.) 19

21 Revised Performance Forecast (Breakdown of Domestic Sales) 09/Mar. 09/Mar. Previous Forecast Previous Forecast Current Forecast Current Forecast 08/Mar. 08/Mar. *Cultivating & Mowing *Cultivating & Mowing Announced on May 15 Announced on May Machinery 2.1 Machinery Planting Machinery Planting Machinery Harvesting and Processing Harvesting and Processing Machinery 1.5 Machinery Agricultural Machinery Total Agricultural Machinery Total Parts & Farming Implements Parts & Farming Implements (0.3) (0.3) Construction of Facilities Construction of Facilities (1.8) (1.8) Agricultural Machinery Related Agricultural Machinery Related (0.3) (0.3) Business 0.3 Business Others Others (1.6) (1.6) (1.2) (1.2) Total Total (2.0) (2.0) *Cultivating Machinery :Tractors, tillers *Planting Machinery :Rice transplanters, Vegetable transplanters *Harvesting & Processing Machinery :Combine harvesters, Dryers, Rice huller, etc. *Agricultural Machinery Related Business :Repair fees, Agricultural materials, etc *Others :Revenue from coin-operated rice polishing machines, and others (Incl. SUM Electro Mechanic Co., LTD.) 20

22 Performance Forecast (Breakdown of Overseas Sales) 09/Mar. 09/Mar. Previous Forecast Previous Forecast Current Forecast Current Forecast 08/Mar. 08/Mar. Announced on May 15 Announced on May 15 North America North America (0.1) (0.1) Europe Europe (0.9) (0.9) (0.7) (0.7) Asia Asia (China) (China) Australia, etc. Australia, etc Overseas Products Overseas Products Total Total (0.1) (0.1) Parts & Others Parts & Others Total Total Company forex rate in latter half year: $1= 100; 1Euro=

23 Performance Forecast ( Breakdown of Operating ) Item Item Sales Sales (Domestic) (Domestic) (Overseas) (Overseas) Cost Cost of of G. G. S. S. Gross Gross Profit Profit S. S. G.&.& A. A. Expenses Expenses Operating Operating Previous Previous Forecast Forecast 09/Mar. 09/Mar. Current Current Forecast Forecast 08/Mar. 08/Mar. Announced on May 15 Announced on May (2.0) (2.0) (2.0) (2.0) (1.3) (1.3) (0.7) (0.7) (0.3) (0.3) (0.4) (0.4) Factors to increase profit Factors to decrease profit Increased gross income by increased revenue Added price raise of raw materials : (0.4) from domestic agricultural machinery : +0.6 Review of forex rate : (0.4) Reduced SG&A expenses (personnel costs) : +0.3 Others (Facilities, SUM Electro Mechanic Co., LTD.) : (0.5) 22

24 Performance Forecast (Ordinary, ) Item Item Previous Previous Forecast Forecast 09/Mar. 09/Mar. Current Current Forecast Forecast 08/Mar. 08/Mar. Announced on May 15 Announced on May 15 Operating Operating (0.4) (0.4) Financial Financial (1.3) (1.3) (1.3) (1.3) -- (1.2) (1.2) (0.1) (0.1) Other Nonoperating Other Nonoperating (0.4) (0.4) (0.3) (0.3) Other Non-operating Other Non-operating Expences (0.8) Expences (0.8) (0.8) (0.8) -- (0.9) (0.9) Ordinary Ordinary Extraordinary Gains Extraordinary Gains (0.9) (0.9) Extraordinary Extraordinary Losses (0.6) Losses (0.6) (0.7) (0.7) (0.1) (0.1) (2.0) (2.0) Taxes, Deferred Taxes, Deferred Taxes (0.8) Taxes (0.8) (1.0) (1.0) (0.2) (0.2) (1.0) (1.0) (1.5) (1.5) Factors to increase or decrease profits [Non-operating ] Increased revenue from the disposal of waste products, etc. : +0.4 [ Extraordinary Gains] Gain on sale of investment securities, etc. :

25 4.Topics Increase food self sufficiency ratio 1% campaign which leads to relief in the future

26 FOOD ACTION NIPPON Promotion Partner What we can do now as a Japanese corporate group of agricultural machinery production Yum-Yum NIPPON Increase food self sufficiency ratio 1% campaign which leads to relief in the future FOOD ACTION NIPPON Hints of food self sufficiency ratio 1% up campaign which you can act on now. 1. Select seasonal foods. 2. Use locally-produced foods 3. Eat mostly rice with plenty of vegetables 4. Reduce leftovers 5. Know about, try and support the 1% campaign ==Basic message of national campaign== We wish the children of our children, and children of the remote future may all be able to feed themselves As of October 10, 2008, ISEKI & CO.,LTD. was registered as a promotion partner of FOOD ACTION NIPPON. While we promote use of domestic foodstuff at the mess room of our group companies, we endeavor to improve food self-sufficiency ratio by way of awareness campaign to our group employees, their family and local community. Liveliness of customers means liveliness of ISEKI, and of children in future. 25

27 Notes on the Future Forecast The objective of this presentation document is to provide information, and it is not intended to invite any action. The document has been prepared by ISEKI based on currently available information and it involves potential risks and uncertainties. The forecast may not be consistent with actual results depending on fluctuation of the economic situation and market trends. In using this information, investors are expected to depend on their own judgment. ISEKI is not liable for any losses incurred by investment decisions made utilizing the business forecast or targets given in this document. Yum-Yum NIPPON Increase food self sufficiency ratio 1% campaign which leads to relief in the future FOOD ACTION NIPPON ISEKI group is partner of FOOD ACTION NIPPON. 26