ANNUAL REPORT. Year Ended March 31, Licensed by TOKYO TOWER

Transcription

1 ANNUAL REPORT 215 Year Ended March 31, 215 Licensed by TOKYO TOWER

2 To Our Shareholders Chairman and CEO Akiji Makino Our corporate philosophy encourages every member in our group to Become a person needed by society, as those needed by society can prosper. In this spirit, Iwatani Corporation has long been deeply involved with people s lives and industry through the supply of gases and energy. We have pursued sustained growth and enhancement of corporate value by focusing on our core businesses: the Energy Business, which continuously supports the lifestyles of 3.1 million households nationwide through the supply of LPG, and the Industrial Gases & Machinery Business, which has developed and grown together with Japanese industry over the course of many years. For our hydrogen operations, in 215 the door to a hydrogen society is slated to open, marking the dawning of the hydrogen era. The Iwatani Group will contribute to popularizing and expanding the use of hydrogen by drawing fully on knowledge and experience pertaining to hydrogen accumulated over 7 years as a hydrogen pioneer. We will continue to build on the strengths in our core businesses and work to buttress the business foundation. Our management vision is clear. Corporate transformation that positions us to supply the future material needs of society is rewarded by growth. We ask your continued support in the years to come. Contents Gas & Energy Supplying Gas & Energy to meet the needs of society To Our Shareholders... 1 Business Overview... 2 Special Feature: Moving Toward Realization of a Hydrogen Society... 3 An Interview with the President... 5 Performance by Segment... 8 Financial Highlights... 9 Company Information... 1 Disclaimer Regarding Forward-looking Statements: This report contains forward-looking statements regarding the Company s plans, outlook, strategies and results for the future that are based on management s estimates, assumptions and projections at the time of publication. Certain risks and uncertainties could cause the Company s actual results to differ materially from any projections presented in this report. These risks and uncertainties include, but are not limited to, the domestic and international economic circumstances surrounding the Company s businesses, competitive activity, related laws and regulations and exchange rate fluctuations. 1

3 Business Overview Supply for living As a unique trading company with technological capabilities Industrial Gases & Machinery We support industry by supplying a wide range of high-pressure gases, including oxygen, nitrogen, argon, and other air-separation gases as well as hydrogen and helium, which offer prospects for future growth. We maintain a constant quest for solutions together with our customers through initiatives including the development of new gases. Energy Since Iwatani became Japan s first nationwide supplier of LPG for household use in 1953, we have been building an independent and stable supply structure that extends end to end from oil-producing countries to our customers kitchens. We support Japan s energy infrastructure by building a disaster-resilient supply system and diversifying our supply sources. Agri-bio & Foods We provide safe and reliable food by applying advanced gas technologies to our operations in the health food, agriculture, and livestock sectors, including the import and sale of vegetables, marine products, and other frozen food products. We also contribute to people s lives in a number of food-related fields through activities including the construction and installation of plant factories. Materials We have achieved a stable supply of mineral sand and rare earth metals and support wide-ranging industries through the supply of materials. We engage in the materials business worldwide, focusing mainly on functional materials such as films for smartphones, metal coating products for air conditioning equipment, and resin raw materials such as PET resins. 2

4 Special Feature: Moving Toward Realization of a Hydrogen Society A leading supplier into the future Hydrogen Refueling Stations of The Iwatani Group plans to construct 2 hydrogen refueling stations by the end of fiscal 215. Iwatani became involved with hydrogen in Ever since, we have worked to develop demand for hydrogen and increase sales, mainly for industrial applications. The MIRAI fuel cell vehicle became commercially available at the end of last year, and 215 has been called year one of the hydrogen era. As a leading supplier of hydrogen, the Iwatani Group will construct 2 hydrogen refueling stations in fiscal 215 to support the popularization of fuel cell vehicles. Kokura Hydrogen era birth 17 Kansai International Airport Hydrogen Refueling Station at Kansai International Airport Kansai International Airport is implementing initiatives to realize an environmentally advanced airport, including the deployment of fuel cell buses and replacement of 4 airport forklifts with fuel cell forklifts. Iwatani is participating in this project and planning to construct a large hydrogen refueling station for FCV and FC buses. In addition, we are working to supply hydrogen to the new forklifts The First Hydrogen Refueling Station in Kyushu The northern Kyushu area is the site of a number of hydrogenrelated initiatives, such as the Kitakyushu Hydrogen Town demonstration experiment. Iwatani opened a hydrogen refueling station in Kokura, the first one in the Kyushu area and we also plan to open a mobile hydrogen refueling station in the same area

5 Prepare for tomorrow Shiba Koen Licensed by TOKYO TOWER First Commercial Hydrogen Refueling Station in Central Tokyo This hydrogen refueling station, symbol of a new era, is combined with a showroom that displays fuel cell vehicles and a pure hydrogen fuel cell. It will serve as a flagship site for disseminating information and promoting the advantages of a hydrogen society. Stations 4 1 Shiba Koen 2 Ikegami, Tokyo 3 Ikegami Tokyo 3 Ariake, Tokyo 4 Kudan (mobile station) 5 Shin Yokohama 6 Toda, Saitama 7 Kofu 8 Toyota Ecoful Town Kariya, Aichi 1 Nagoya (mobile station) 11 Inazawa (mobile station) 2 12 Otsu 13 Amagasaki 14 Osaka Hommachi (mobile station) 9 8 Hydrogen Refueling Station Combined with a Convenience Store Iwatani will partner with Seven-Eleven Japan to operate hydrogen refueling stations alongside convenience stores for the purpose of fostering a sense of familiarity with hydrogen energy. We will support eco-friendly store planning and design by demonstrating environmental load reduction through using a pure hydrogen fuel cell. 15 Morinomiya, Osaka 16 Osaka Suminoe 17 Kansai International Airport 18 Shunan, Yamaguchi 19 Kokura 2 Fukuoka City (mobile station) 21 Fukuoka City Opened (As of August, 31, 215) Planned 4

6 An Interview with the President During the year ended March 31, 215 (fiscal 214), Iwatani undertook continuous enhancement of earning power and strengthened its financial standing in accordance with the PLAN15 medium-term management plan. We will continue to enhance corporate value by moving steadily to strengthen infrastructure with 2 hydrogen refueling stations being constructed across Japan in preparation for a hydrogen society and other initiatives. President Masao Nomura Question 1 What is the outlook for fiscal 215, the final year of the PLAN15 medium-term management plan? Answer 1 We set quantitative management targets of net sales of 724. billion, ordinary income of 22. billion, and net income of 11. billion in the PLAN15 medium-term management plan. However, as a result of a review of all of our businesses in light of a sharp decline in LPG import prices and the current business environment, we have revised our forecasts and reduced the fiscal 215 targets for net sales and ordinary income. The revised forecast is for net sales of 7. billion, ordinary income of 21. billion, and net income of 11. billion. In addition, in PLAN15 we set fiscal 215 targets of interest-bearing debt of 145. billion and a ratio of interest-bearing debt to total assets of 35.%, which we have achieved. As of March 31, 215, interest bearing debt was billion, and the ratio of interest-bearing debt to total assets was 34.7%. To secure a good foundation for the next medium-term management plan, we will steadily and determinedly bring PLAN15 to a successful completion in fiscal 215. Quantitive Management Targets Fiscal 214 Fiscal 215 plan result (PLAN15) Ordinary income billion 22. billion* Net income 61.9 billion 11. billion Interest-bearing debt billion 145. billion or less Ratio of interest-bearing debt to total assets 34.7% 35.% or less ROA 3.1% 5.3% * Iwatani has changed the full-year forecast to 21. billion, as announced at the beginning of the fiscal year. 5

7 Question 2 What challenges must be addressed to realize a hydrogen society? Answer 2 We consider the reduction of the manufacturing cost of hydrogen to be one challenge. The Iwatani Group will proceed with cost reduction by importing inexpensive hydrogen manufactured overseas and working to increase demand for hydrogen. To develop hydrogen demand, in addition to development targeting fuel cell vehicles (with a view to future use of hydrogen in homes) we are developing a purehydrogen fuel cell to generate electricity, for which we will directly supply hydrogen. At Kitakyushu Hydrogen Town, we have conducted Pure hydrogen fuel cells a demonstration test involving the supply of hydrogen directly to commercial facilities and homes through a network of pipes in an urban setting. We will utilize the knowledge gained through such initiatives to further develop demand for hydrogen. A Supply Chain Connecting Hydrogen Sources with Hydrogen Demand Corporation s Business Area A liquid hydrogen supply chain Hydrogen source Manufacturing Transport Storage Supply Hydrogen demand Liquid hydrogen is the key to popularization High purity % Liquid hydrogen Transport efficiency Approx. 1 times 6

8 An Interview with the President Question 3 What future developments can we expect in the helium business? Answer 3 The Iwatani Group began handling helium produced in Qatar in July 213 and has become a helium major that handles approximately 8% of the helium produced worldwide. In addition to expanding sales in Japan, We will increase sales in growth markets such as China and Southeast Asia. As a distribution system initiative to help manage logistics, we have added a GPS function to the containers used to import helium. In this way, we will pursue greater business efficiency and profit growth. As a long-term initiative, we will also work to secure new supply sources for helium and bolster long-term supply capabilities. Qatar The U.S. Volume handled: Approximately 8% of world supply capabilities l Bases for helium distribution Question 4 What is Iwatani s dividend policy? Answer 4 The Iwatani Group has a basic policy of continuously paying stable dividends and provides shareholder returns observing careful consideration to business results and the business environment. We maintained the annual dividend of 7 per share in fiscal 214, despite a substantial year-on-year decrease in earnings resulting from a special factor: an unprecedented decline in LPG import prices. We plan to pay a dividend of 7 per share for fiscal 215 as well. We consider increasing the level of the Company s earnings by achieving the targets in the current medium-term management plan to be our responsibility to our shareholders. 7

9 Performance by Segment (Years ended March 31) 18.5% 3.9% 1.3% Percentage of Net Sales n Energy n Industrial Gases & Machinery n Materials n Agri-bio & Foods n Others 23.5% 52.8% Segment Performance Review Energy LPG for household, commercial and industrial use LPG-supply equipment and facilities LNG Petroleum products Household kitchen appliances Home energy components Daily necessities Portable cooking stoves Gas canisters Mineral water, etc. Net Sales Operating Income ( million) ( million) 4, 365,592 15, 3, 12, 9, 2, 6, 1, 3, 2,347 (FY) (FY) A downtrend in LPG import prices throughout the year led to an extremely difficult business environment, with prices continuing to decline even during the winter peak demand season. In this environment, in the mainstay residential and commercial LPG business, sales volume to residential customers increased due to expansion of the number of LPG consumer households, and sales volume to commercial customers increased as a result of conversion of fuel from heavy oil to LPG. The impact of falling LPG import prices was that we held LPG inventory that was purchased at contract prices comparatively higher than market prices, which contributed to a substantial income decrease. As a result, operating income fell by approximately 9,7 million. Industrial Gases & Machinery Net Sales Operating Income Air-separation gases Hydrogen ( million) ( million) Helium Other specialty gases 2, 1, Gas-supply facilities Welding materials 162,275 Welding and cutting equipment Industrial machinery and facilities 15, 7,5 6,324 Industrial robots Pumps and compressors Disaster prevention equipment High-pressure gas containers Semiconductor manufacturing equipment Electronic-component manufacturing equipment Factory automation systems 1, 5, 5, 2,5 Medicine and food packing machinery Environmental equipment, etc. (FY) (FY) Hydrogen refueling station facilities Sales of air-separation gases increased as a result of higher sales volume to the domestic and overseas electronic component and automotive industries and progress in the response to increases in electricity charges in Japan. Sales of helium increased, especially in overseas markets, thanks to strengthening of the supply structure from Qatar. Sales of liquid hydrogen increased as a result of new customer acquisition and other factors. In the machinery and facilities business, sales of hydrogenrelated facilities, welding-related facilities, and welding materials were strong. As a result, operating income rose by approximately 1,4 million. Materials Stainless steel Non-ferrous metals Functional plastic products Electronic display materials Mineral sand Rare earth metals, etc. Net Sales Operating Income ( million) ( million) 15, 3, 128,34 2,647 1, 2, 5, 1, (FY) (FY) Sales of products for smartphones were strong, mainly in overseas markets. In addition, sales of metal coating products for air conditioning equipment and interior construction contracting for the construction industry increased. On the other hand, a slump in sales of PET resin raw material caused by a decline in demand, lower sales of titanium raw material and other factors led to a substantial decrease in income in the mineral resource raw materials business in Western Australia. As a result, operating income was nearly unchanged from fiscal 214. Agri-bio & Foods Frozen vegetables and fruits Health foods Livestock-related products Agri-bio related goods Food plant sanitation management, etc. Net Sales Operating Income ( million) ( million) 3, 27, , 4 1, 2 In the foods business, sales of frozen vegetables increased, mainly for use in processed side dishes. Profitability improved in the agriculture and livestock business as a result of solid sales of large-scale projects for agricultural facilities and livestock facilities and high hog prices. As a result, operating income rose by approximately 1 million. (FY) (FY)

10 Financial Highlights For the year million US$ thousand Net sales 618, , ,6 73, ,92 $ 5,757,693 Gross profit 138,68 144, , , ,34 1,173,62 Operating income 14,868 19,171 16,79 18,518 11,174 92,984 Ordinary income 15,59 19,528 17,46 19,258 12,761 16,191 Income before income taxes and minority interests 12,85 19,535 15,465 18,32 12,468 13,753 Net income 6,193 1,543 8,26 1,466 6,199 51,585 Comprehensive income 4,888 1,58 13,691 16,384 16,1 133,976 R&D expenses ,368 1,25 1,41 Ratios % % Net income to net sales ROE (net income to net assets) ROA (ordinary income to total assets) Equity ratio Per share data Yen U.S. dollars Net income Shareholders equity Cash dividend applicable to the period At year-end million US$ thousand Total assets 373,94 386, ,32 416,219 48,824 3,42,47 Fixed assets 197,811 2,354 27, , ,15 1,889,115 Interest-bearing debt 166,18 159, , ,99 141,793 1,179,936 Net assets 71,249 79,551 9,93 15,58 117, ,459 * The U.S. dollar amounts have been translated at the prevailing exchange rate as of March 31, 215, which was to US$1.. Net Sales ( million) Operating Income ( million) Net Income ( million) 8, 2, 12, 6, 15, 1, 8, 4, 1, 6, 2, 5, 4, 2, Total Assets ( million) Net Assets ( million) 5, 4, 3, 2, 1, 12, 9, 6, 3,

11 Company Information (As of March 31, 215) Company Information Name Formal establishment February 2, 1945 Osaka Head Office 6-4, Hommachi 3-chome, Chuo-ku, Osaka , Japan Tel: Headquarters Tokyo Head Office 21-8, Nishi-Shimbashi 3-chome, Minato-ku, Tokyo , Japan Tel: Company directors and auditors Chairman and CEO* 1 Akiji Makino Vice Chairman* 1 Toshio Watanabe President* 1 Masao Nomura Executive Vice President* 1 Kazuhiko Minamimoto Executive Vice President* 1 Hisato Ueha Senior Executive Director* 1 Mitsuhiro Tanimoto Senior Executive Director* 1 Hirozumi Hirota Executive Director* 1 Masanori Watanabe Executive Director* 1 Takashi Funaki Executive Director* 1 Hiroshi Majima Executive Director* 1 Naoki Iwatani Director* 1 Akira Ohta Director* 1 Katsuya Takemoto Director* 1 Satoshi Watanabe Director* 2 Mitsuaki Naitou Corporate Auditor Toyofumi Ohama Corporate Auditor Yoshiaki Fukuzawa Corporate Auditor* 3 Masahiro Horii Corporate Auditor* 3 Yoshinori Shinohara * 1 Director and executive officer 2 Outside director 3 Outside auditor (As of June 26, 215) Paid-in capital 2,96 million yen Number of employees 8,688 (consolidated) Website Share Information Share listing Agent to manage shareholders registry Distribution of shares by type* 4 Major shareholders* 5 Tokyo, Nagoya Shares of common stock issued and outstanding Mitsubishi UFJ Trust and Banking Corporation Individuals and others 4.8% Financial institutions 25.76% Other institutions 25.28% Foreign institutions and others 6.17% Securities companies 2.72% Name 251,365,28 (5,15,621 shares of treasury stock included) Shares of common stock issued and outstanding (Treasury stock included) 251,365,28 Number of shares held (Thousands of shares) Shareholding ratio (%) The Iwatani Naoji Foundation 2, Tetsu Iwatani Co. Ltd. 6, The Bank of Tokyo-Mitsubishi UFJ, Ltd. 6, Resona Bank, Ltd. 5, Japan Trustee Services Bank, Ltd. (Trust Account) 5, Iwatani Enyukai 4, Nippon Life Insurance Company 4, The Master Trust Bank of Japan, Ltd. (Trust Account) 4, Iwatanisangyou Senyukai 4, Sompo Japan Nipponkoa Insurance Inc. 3, * 5 In addition to the above, the Company holds 5,15,621 shares of treasury stock. * 4 Treasury stock is included in Individuals and others Share Price (Yen) 1, Trading Volume (Thousand shares) 3, Change in share price 5 25, 2, 15, 1, 5, May Apr. Mar. Feb. Jan. Dec. Nov. Oct. Sept. Aug. Jul. Jun. May Apr. Mar. Feb. Jan. Dec. Nov. Oct. Sept. Aug. Jul. Jun. Jun. May Apr. Mar. Feb. Jan. Dec. Nov. Oct. Sept. Aug. Jul. Jun. May Apr. Mar. Feb. Jan. [212] [213] [214] [215] 1

12 Osaka Head Office 6-4, Hommachi 3-chome, Chuo-ku, Osaka , Japan Tel: Fax: Tokyo Head Office 21-8, Nishi-Shimbashi 3-chome, Minato-ku, Tokyo , Japan Tel: Fax: Corporate Website FSC LOGO Printed in Japan