Briefing Session Material Financial Result for Fiscal Year 2014 at End of March 31, 2015

Transcription

1 Securities Code 5631 Briefing Session Material Financial Result for Fiscal Year 2014 at End of March 31, 2015 May 20, 2015 THE JAPAN STEEL WORKS, LTD. IKUO SATO REPRESENTATIVE DIRECTOR AND PRESIDENT 0

2 Forward-Looking Statement Forecasts of result and other forward-looking statements contained in this briefing document are based on assumptions that the Company considers to be reasonable based on information currently available to it. Actual results may differ significantly from those projected in the forward-looking statements as a result of various factors. For the purposes of this briefing document, the previous forecast refers to forecast figures disclosed on November 14,

3 Table of Contents P3 Business Units and Products P4 Section 1: Earnings Result for Fiscal Year 2014 at End of March 31, 2015 P5 (1) Financial Summary P6 (2) Factors Affecting Changes in Operating Income P7 (3) Sales, Operating Income, and Orders Received by Segment P8 (4) Results of Steel and Energy Products: Sales and Orders Received by Product P9 (5) Results of Industrial Machinery Products: Sales and Orders Received by Product P10 (6) Financial Performance,Trends in Capital Investment and Depreciation Expenses P11 Section 2: Forecasts for Fiscal 2015 End of March 31, 2016 P12 (1) Business Projection for Fiscal 2015 at End of March 31, 2016 P13 (2) Factors Affecting Changes in Operating Income P14 (3) Projected Sales, Operating Income, and Orders Received by Segment P15 (4) Forecast for Steel and Energy Products: Sales and Orders Received by Product P16 (5) Forecast for Steel and Energy Products: Sales and Orders Received by Product P17 (6) Order Backlog P18 Section 3: JGP2017 New Medium-Term Plan P19 (1) Corporate Vision and Numerical Targets P20 (2) Basic Policies for JGP2017 P24 (3) Business Strategies P25 (4) Financial Strategies 2

4 Business Units and Products Business Segments Products Divisions Steel and energy products Steel Business Division Industrial machinery products Machinery Business Division Ordnance Business Headquarters Muroran Plant Hiroshima Plant Yokohama Plant Real estate and other businesses Production Facilities [Steel castings and forgings] Thermal and nuclear power plant components [Steel plates and structures] Reactors for oil refineries [Plastics machinery] Plastics manufacturing and processing machinery Pelletizers Film & sheet production systems Twin screw extruders for compound production Molding machines Plastic injection molding machines Blow molding machines Effective utilization of real-estate properties Products Others Steel rolls for steelmaking Steel for molds [Wind turbine systems] Clad steel plates and pipes [Other machinery] Light alloy injection molding machines Magnesium alloy injection molding machines Aluminum die-casting machinery IT-related equipment (laser annealing equipment, etc.) Defense equipment Compressors Rolling stock components Markets Electric Power and Steelmaking Crude Oil and Natural Gas Renewable Energy Petro- Chemicals Industry Industrial Machinery Automotive Industry IT Defense Real- Estate Leasing 3

5 Section 1: Earnings Result for Fiscal Year 2014 at End of March 31,

6 (1) Financial Summary (Unit: billion yen) FY2013 (A) previous forecast (B) Orders received (9.1) Net sales (5.4) Operating income (0.6) 0.7 (Operating margin) 4.7% 3.8% 4.2% Ordinary income Net income 5.5 (4.5) (3.7) (9.2) 0.8 actual (C) Year-on-year change (C)-(A) Change from previous forecast (C)-(B) Net income per share (yen) Divident per share (yen) (25.02) (1.0) 0.0 5

7 (2) Factors Affecting Changes in Operating Income 0.6 (Unit: billion yen) 8.8 Foreign Exchange gain 1.4 Depreciation and other expenses 1.4 Production and sales increase Price decrease and cost improvement 0.6 Raw materials and others 0.3 Energy price increase FY2013 6

8 (3) Sales, Operating Income, and Orders Received by Segment Steel & Energy Products FY2013 (A) previous forecast (B) actual (C) Year-on-year change (C)-(A) (Unit: billion yen) Change from previous forecast (C)-(B) Orders received (5.6) Sales (1.4) (3.5) Operating income (3.6) (3.2) (3.2) (Operating margin) -5.3% -4.6% -4.8% Industrial Machinery Products FY2013 (A) previous forecast ( B) actual ( C) Year-on-year change ( C) -( A) Change from previous forecast (C)-(B) Orders received (3.7) Sales (1.3) Operating income (0.8) 0.1 (Operating margin) 10.2% 8.8% 8.9% 7

9 (4) Results of Steel and Energy Products: Sales and Orders Received by Product (Unit: billion yen) Sales and Operating income Orders Received FY2013 (A) Previous forecast (B) Actual (C) Year-on-year change (C) (A) Change from previous forecast (C) (B) Thermal and nuclear power plant products (1.1) (7.9) (6.3) Reactors for oil refineries (0.3) (1.6) (1.5) Clad steel plates and pipes (10.5) Wind turbine systems (0.3) (2.6) (2.9) (4.6) Others (0.2) (0.4) (0.5) Consolidated subsidiaries, etc (1.6) (2.3) Total (1.4) (3.5) (5.6) Operating income (3.6) (3.2) (3.2) FY2013 (D) Previous forecast (E) Actual (F) Year-on-year change (F) (D) Change from previous forecast (F) (E) 8

10 (5) Results of Industrial Machinery Products: Sales and Orders Received by Product (Unit: billion yen) Sales and Operating income Orders Received FY2013 (A) Previous forecast (B) Actual (C) Year-on-year change (C) (A) Change from previous forecast (C) (B) Plastics manufacturing & processing machinery (3.5) (0.5) (6.6) Molding machinery (1.0) Others (6.8) (3.0) (9.5) 0.4 Consolidated subsidiaries, etc Total (1.3) (3.7) Operating income (0.8) 0.1 FY2013 (D) Previous forecast (E) Actual (F) Year-on-year change (F) (D) Change from previous forecast (F) (E) 9

11 (6) Financial Performance,Trends in Capital Investment and Depreciation Expenses Trends of Capital Investment and Depreciation Expense 30.0 Capital Investment Depreciation Expence (Unit: billion yen) FY2012 FY2013 FY2015 forecast (Unit: billion yen) Status of Cash Flow Financial Structure (Unit: billion yen) Cash flow from operating activities Free cash flow End-Mar 2014 Cash flow from investing activities 8.9 End-Mar Net assets Net interest-bearing debt End-Mar 2014 Interest-bearing debt Debt/equity ratio End-Mar

12 Section 2: Forecasts for Fiscal 2015 End of March 31,

13 (1) Business Projection for Fiscal 2015 at End of March 31, 2016 (Unit: billion yen) (A) 1st half FY2015 Forecast 2st half full year (B) Net sales Operating income (Operating margin) 4.2% 3.4% 5.9% 4.8% Year-on-year change (B) (A) Ordinary income Net income (3.7) Net income per share (yen) Divident per share (yen) (10.10)

14 (2) Factors Affecting Changes in Operating Income 1.8 (Unit: billion yen) 8.2 Production and sales 2.9 Foreign exchange gain Depreciation and other expenses 0.4 Raw materials and others 0.1 Price decrease and cost improvement FY2015 Forecast 13

15 (3) Projected Sales, Operating Income, and Orders Received by Segment Steel & Energy Products (Unit: billion yen) Actual (A) FY2015 Forecast (B) Year-on-year change (B) (A) Orders received (10.4) Sales Operating income (3.2) (Operating margin) -4.8% 0.0% Industrial Machinery Products Actual (A) FY2015 Forecast (B) Year-on-year change (B) (A) Orders received Sales Operating income (0.3) (Operating margin) 8.9% 8.4% 14

16 (4) Forecast for Steel and Energy Products: Sales and Orders Received by Product (Unit: Billion Yen) Actual (A) Sales and Operating income FY2015 Forecast (B) Year-on-year change (B) (A) Thermal and nuclear power plant products (4.4) Reactors for oil refineries (1.2) Clad steel plates and pipes (22.1) Wind turbine systems (4.7) (2.6) Others (2.0) Consolidated subsidiaries, etc (1.2) Total (10.4) Operating income (3.2) Actual (C) Orders Received FY2015 Forecast (D) Year-on-year change (C) (D) 15

17 (5) Forecast for Steel and Energy Products: Sales and Orders Received by Product (Unit: billion yen) Sales and Operating income Orders Received Actual (A) FY2015 Forecast (B) Year-on-year change (B) (A) Plastics manufacturing & processing machinery Molding machinery Others Consolidated subsidiaries, etc Total Operating income (0.3) Actual (C) FY2015 Forecast (D) Year-on-year change (C) (D) 16

18 (6) Order Backlog Order Backlog by Segment Order Backlog regarding Thermal and Nuclear Power Plant Products (Unit: billion yen) (Unit: billion yen) Thermal and nuclear power plant products Steel & Energy Products Real Eatate & Others Industrial Machinery Products FY2012 FY2013 FY2015 Forcast 0.0 FY2012 FY2013 FY2015 Forecast 17

19 Section 3: JGP2017 New Medium-Term Plan 18

20 (1) Corporate Vision and Numerical Targets JGP2017 New Medium-Term Plan Advancing toward Top Global & Niche Corporate Group Aiming to achieve top share at key points in customer value chains Renewed challenge to achieve sales of 250 billion yen by 2020 JGP2017 JSW Group : FY2017 FY2020 (Consolidated) (Actual) (Plan) (Goal) Net sales : billion yen More than 220 billion yen More than 250 billion yen Operating income : (ratio) 8.2 billion yen (4.2%) More than 13 billion yen (6%) More than 20 billion yen (8%) ROA : - 1.2% Above 3% Above 4% ROE : - 2.7% Above 5% Above 8%* *JSW aims to achieve ROE>8% as soon as possible after completion of JGP2017 by improving profitability and asset efficiency. 19

21 (2) Basic Policies for JGP2017 JGP2017 New Medium-Term Plan Basic Policies Policy 1. Increase profitability of existing businesses Pursue product & service differentiation Strengthen total-cost competitiveness Develop service & solution businesses Reinforce initiatives in growth markets Policy 2. Foster new products & businesses and make them competitive as soon as possible Promote businesses based on core management resources Optimize timeframe and systems for promoting new products & businesses Policy 3. Reinforce group management and promote alliances Strict management control based on Action Plan (implement PDCA) 20

22 (2) Basic Policies for JGP2017 I. Increase Profitability of Existing Businesses JGP2017 New Medium-Term Plan Reinforce competitiveness Expand businesses Optimize businesses Steel and Energy Products Segment Thermal and Nuclear Power Products Develop in full scale large-size monoblock LP rotor using 670 ton steel ingot Win overseas orders by strengthening cost competitiveness and maintaining competitive advantages Clad Steel Plates and Pipes Increase capital investment and productivity Improve response to natural gas projects and extend the range of specifications Reactors for Oil Refineries Concentrate in areas of competitive advantage Expand services & maintenance business Small-Size Forged Products Strengthen localization response through alliances 風力発電機器 Wind Power Generators Optimize allocation of management resources Restructure business model Industrial Machinery Products Segment Pelletizers Expand sales of large-size pelletizers for shale gas Develop new service businesses Laser Annealing Equipment Develop differentiated technologies for HD panels Reinforce service business (China) Film and Sheet Production Systems, TEX Enhance response to full-line systems Accelerate global expansion (China plus one and others) Expand business domain through alliances Medium- and Large-Size Injection Molding Machines Reinforce and relocate production systems Introduce/market new series of models Defense Systems Reinforce production systems based on long-term plan Small-Size Injection Molding Machines Strengthen product competitiveness based on alliances Increase profitability 21

23 JGP2017 New Medium-Term Plan (2) Basic Policies for JGP2017 II. Foster New Products/Businesses and Make Them Competitive As Soon As Possible JSW Core Technologies & Capabilities Material Technologies Materials production technologies Materials processing technologies Compound materials technologies Materials assessment technologies Process design technologies Mechatronics Screw cylinder design technologies Simulation technologies Control technologies Power electronics technologies Business Scale (billion yen) Promote JSW Business Development Projects Select short-, medium-, and long-term areas of interest and manage the progress in line with future outlook for the targeted field Molding machines for carbon fiber reinforced plastics Fine foam injection molding machines Micro-nano melt transcription molding machine Marine structure Hydrogen station related equipment Elastomer rubber manufacturing equipment related Thin-film deposition equipment (CVD equipment) Large-scale ELA equipment New defense systems Laser plasma equipment technologies

24 JGP2017 New Medium-Term Plan (2) Basic Policies for JGP2017 III. Reinforce Group Management and Promote Alliances Main alliances under JPG2014 Molding machines: Concluded capital alliance with Toyo Machinery & Metal in Japan Plastics manufacturing/processing machinery: - Acquired film business of Hitachi Plant Mechanics - Acquired SMP Company of South Korea Steel forgings: Transferred technology to LTSSHF Company of India Film deposition business: Established JSW AFTY Promoting Alliances Technology Production Market New Strengthening JSW Group manufacturing capabilities JSW Group net sales of 250 billion yen Main affiliated companies established or reorganized under JGP2014 M&A of plastics machinery service company Consolidated sales companies Established molding machine service companies (Indonesia and Philippines) Muroran Plant: Reorganized manufacturing affiliates Hiroshima Plant: Reorganized manufacturing affiliates Yokohama Plant: Reorganized manufacturing affiliates 2014 Enhance services Strengthen sales Improve productivity Increase management efficiency Strengthen Group Management

25 Pursue strategic investment Expand business domains Achieve and expand stable profits Muroran Plant Restructuring Project Reduce investment Review business domains Maintain profitability (3) Business Strategies I. Business Strategies by Segment JGP2017 New Medium-Term Plan Differentiate between defensive and offensive management initiatives to return to future profitability 械事業 Steel and Energy Products Segment Defensive management Achieve steady growth and prepare for renewed growth after JGP2017 Improve asset efficiency and productivity Review and selectively strengthen product lineup Net sales: 66.2 billion yen Operating income: billion yen FY2017 Net sales: 66 billion yen Operating income: 1 billion yen Offensive management Identify growth opportunities and Restructure production lines in Hiroshima and Yokohama Plants to improve productivity Net sales: billion yen Operating income: 11.3 billion yen accelerate business expansion Industrial Machinery Products Segment Actively promote and utilize alliances FY2017 Net sales: 152 billion yen Operating income: 13 billion yen 24

26 Improve ROE Improve ROA (4) Financial Strategies JGP2017 New Medium-Term Plan Increase shareholder value by strengthening cash generation and effective cash use Set, measure, and control KPI (key performance indicators) for each segment to improve ROA (PDCA) Strengthen cash generating capacity for systematic and steady investment in growth; regularly examine investment impact (PDCA) FY2017 ROA 3% ROE 5% Increase operating income Profit-to-sales ratio target (FY2017) 6% Improve gross profit Enhance productivity Cut costs Improve asset efficiency Improve CCC (Cash Conversion Cycle) Reduce working capital Effectively utilize assets Financial leverage control Cash flow from operating activities Procurement of other funds (Including review and disposal of assets) Returning to shareholders Implement stable dividends (30% payout ratio) * Consider total-return ratio in balance with growth investment Investment in Growth Capital investment Renewal/maintenance of existing facilities Boost of production capacity for current products New facilities for new products Alliances M&A, capital tie-up Create new revenue sources 25

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28 Reference Trends in Sales of Principal Products (Unit: Billion Yen) FY2009 FY2010 FY2011 FY2012 FY2013 FY2015 Forecast Thermal and nuclear power plant products Reactors for oil refineries Clad steel plates and pipes Wind turbine systems Others Consolidated subsidiaries, etc Total for steel and energy products Plastics manufacturing & processing machinery Molding machinery Consolidated Non-consolidated Others Consolidated subsidiaries, etc Total for industrial machinery products Total for real estate and others Total sales

29 Reference Trends in Orders Received for Principal Products (Unit: Billion Yen) FY2009 FY2010 FY2011 FY2012 FY2013 FY2015 Forecast Thermal and nuclear power plant products Reactors for oil refineries Clad steel plates and pipes Wind turbine systems 27.2 (10.9) Others Consolidated subsidiaries, etc Total for steel and energy products Plastics manufacturing & processing machinery Molding machinery Consolidated Non-consolidated Others Consolidated subsidiaries, etc Total for industrial machinery products Total for real estate and others Total sales