Doosan Heavy Industries 3Q12 Financial Result October. 2012
Disclaimer This presentation contains preliminary figures which may be materially different from the final figures. While the statements in this presentation represent our current assumptions, plans and expectations, and we believe these judgments are reasonable, they are not guarantees of future performance and involve known and unknown risks, uncertainties such as FX & raw material costs, and other factors that may cause actual results to differ materially from the results, performance, achievements or financial position expressed or implied in this presentation This presentation is provided only as a reference material. Doosan Heavy Industries and Construction assumes no responsibility for investment decisions. We trust your decisions will be based on your own independent judgment. Financial data in this presentation is on a IFRS consolidated basis. 1
Contents 1. 12 Q3 Result Review 2. Key Activities 2
Q3 Business Result Summary Although 3Q business result slightly declined QoQ due to weak seasonality, quarterly and YTD sales, OP, and NP show steady growth YoY. Wbn, % item Quarterly YTD 12.2Q 12.3Q YoY QoQ 11.3Q 12.3Q YoY Order 799 1,710-61.5% +114.1% 6,516 3,239-50.3% Sales 2,456 2,196 +10.7% -10.6% 5,708 6,725 +17.8% OP (OPM, %) 170 (6.9%) 113 (5.1%) +16.2% (0.2%p) -33.6% (-1.8%p) 372 (6.5%) 426 (6.3%) +14.7% (-0.2%p) NP 117 33 turnaround -71.8% 201 234 +16.4% 3
Order/ Order Backlog New order increased over 2 times QoQ mainly thanks to power equipments. Order backlog maintains 2.5 times yearly sales excluding C/F and DPS, etc. Wbn 4,436 114% 1,710 23,135 20,366 19,622 Power Ind. 914 C/F 3,894 Cons. 15,900 DPS, etc. 799 388 27 131 14,071 13,439 93 179 17 141 65 37 204 216 304 335 2,077 1,319 1,121 588 583 577 1,896 1,674 1,810 2,675 2,720 2,675 11.3Q 12.2Q 12.3Q Order (quarter) 11.3Q 12.2Q 12.3Q Order Backlog (quarter) 4
Sales YoY sales growth shows 19% in 2Q, and 11% in 3Q. Noticeably, power related sales(including DPS, etc.) portion increased to approximately 80%, which is the core and lucrative business. Power Wbn 2,456 Ind. C/F Cons. 2,196 DPS, etc, 2,070 1,009 1,984 1,041 1,442 1,299 11.3Q Power related sales 52.5% 72% 19.1% 6.8% 13.4% 8.2% 12.2Q 58.7% 16.9% 5.6% 12.3% 6.6% 251 173 214 266 301 209 136 137 132 162 162 149 12.3Q 59.1% 76% 18.6% 6.0% 9.5% 6.8% 423 379 414 408 78% 11.2Q 11.3Q 12.2Q 12.3Q Sales (quarter) Weight in Sales by Division 5
Operating Profit Quarterly OPM shows some fluctuation based on product mix change, but overall maintains last year s level, whereas power OPM improved significantly to 11% level fueled by increased power equipment and nuclear sales Total Power Industrial 6.9% 12.2% 1.7% 4.9% (6.5%) 97 170 5.1% (6.3%) 113 7.7% (8.0%) 80 176 8.5% (11.1%) 111 5-2.0% -6 0.8% 2 C/F 11.3Q 12.2Q 12.3Q 11.3Q 12.2Q 12.3Q Construction 11.3Q 12.2Q 12.3Q DPS, etc. 10.0% 1.6% 5.0% -0.1% -0.1-6.5% -7.4% -0.1% 2.2% 1.2% 14 9 5 2 7-11 -11-1 11.3Q 12.2Q 12.3Q 11.3Q 12.2Q 12.3Q 11.3Q 12.2Q 12.3Q () : YTD OPM 6
Pre-tax Profit and Net Profit (IFRS consolidated) YTD NP increased 16% YoY backed by solid operating profit Wbn -145-15 -32 +82-83 +16% 426 317 234 201 OP (YTD) Net Interest* F/X, Derivatives** Equity Method Etc. Pre-tax Profit Tax NP (YTD) NP (YoY) * Interest income 26, interest expense 171 ** Derivative- 29, F/X -3 7
Summary of Financial Statements YTD sales, OP, and NP increased over 15% YoY, respectively. Year end net debt to decrease considerably despite of net debt increase in 3Q resulted from temporary working capital increase. I/S item 11.3Q YTD 12.3Q YTD YoY(%) Sales 5,708 6,725 Wbn +17.8 Gross Income 868 948 +9.3 B/S item 2011 12.3Q Current Assets 5,264 5,839 Cash & Cash Equivalents Wbn 914 791 Non-current Assets 8,326 8,356 SG & A 496 522 +5.3 OP 372 426 +14.7 OPM 6.5% 6.3% -0.2%p Non-OP *-75-109 - Investments 4,093 4,083 Property, Plant & Equipment 2,690 2,692 Total Assets 13,589 14,196 Total Liabilities 8,792 9,287 Total Debt 3,584 4,590 Pre-tax Profit *297 317 +6.9 Tax 96 83-13.0 Net Profit 201 234 +16.4 (Net Debt) 2,670 3,799 Total Equity 4,797 4,909 Total Equity & Liabilities *Figure adjusted the impact of Doosan E&C s de-consolidation in 2011 13,589 14,196 Debt Ratio 183.3% 189.2% 8
Contents 1. 12 Q3 Result Review 2. Key Activities 9
Power and Water Market Outlook ( 13~ 17) DHIC s accessible market is estimated yearly 90GW in power, and 350MIGD in water for the next 5 years, providing sustainable and rich business opportunities. Power (Unit : GW) Water (Unit: MIGD) TPP CCPP Wind Nuclear Total Thermal RO Total India 60 6 26 7 99 MENA 693 529 1,222 MENA 34 14 4 10 62 N. Africa 93 93 E. Asia 31 14 4 3 52 Domestic 12 4 2 13 31 Central/ S. America 299 299 US/Europe 17 78 89 25 209 E. Asia 140 140 Total 154 116 125 58 453 Total 693 1,061 1,754 10
DHIC s Competitiveness (fundamental technologies and track record) Based on proposals for 6 th long term power development plan, large scale and high efficiency coal-fired power demand is to increase in domestic power market, benefiting DHIC the most backed by strong track record and fundamental technologies Item Note Competitors Sub-Critical Super-Critical Rich domestic track record Fundamental technology from Babcock Successful overseas market penetration since 2007 Pre-qualified vendor of SEC (2012) TPP (coal/oil) Boiler Ultra Super-Critical CFB (Circulating Fluidized Bed) IGCC (Integrated Gasification CC) Shin-Boryung USC (1GW*2) (on-going) - the only domestic company Fundamental technology from DPS Multiple track record including Yeosu CFB Taean IGCC (on-going) ㅏ Alstom, MHI, Hitachi, Foster Wheeler, etc. Steam Turbine Fundamental technology from SKODA Power Manufacture up to 1.4GW massive size Alstom, MHI, Hitachi, GE, Siemens, etc. Generator Strong track record Alstom, MHI, Hitachi, GE, Siemens, F/W, etc. Gas Turbine Manufacture MHI type, won 9 units GE, Siemens, etc. CCPP (gas) Generator Strong track record Alstom, MHI, Hitachi, GE, Siemens, F/W, etc. HRSG World M/S top 3, original model Nooter, BHI, Vogt Power etc. 11
Key Activities 270MW Class Gas Turbine Manufacturer Successfully manufactured 270MW class gas turbine, the largest in S.Korea (Sep. 25 th ) Manufacturing took 1.5 years in collaboration with MHI for Pocheon CCTP Production of 270MW class GT demonstrates top-tier level manufacturing ability. Stand-alone engineering capability is under development, concurrently. Gas Turbine order: 9 units Yeong-wol CCPP - 183MW 3 - HRSG, STG(300MW), BOP, etc. Pocheon CCPP - 270MW 1 - STG(270MW 2) Yangju CHP - 185MW 2 - HRSG, STG(194MW), BOP, etc. Sejong CHP - 185MW 2 - HRSG, STG(196MW), BOP, etc. Hanam CHP - 267MW 1 - HRSG, STG(130MW) 12
Key Activities Yeosu CFB PJT Won main equipments, including 350MW class CFB boiler, turbine, and generator, for Yeosu power #1 PJT from KOSEP (July 27 th ), followed by GLOW PJT, Thailand To be engineered and manufactured by DHIC, securing preemptive opportunities for increasing low quality coal use and CFB market expansion On-shore Wind Farm PJT of 24MW Awarded wind farm pjt in Yeongheung, Incheon, including 8 units of 3MW wind turbine (Oct. 17 th ) WinDS3000 TM is the only 3MW wind turbine with international classification in domestic market To lead domestic renewable market with fundamental technology and original model 13
50 th Anniversary of DHIC Thermal Power Nuclear Power Water Green Energy Fundamental technology World No. 1 nuclear core Top in water desalination The only original wind secured through M&A equipment supplier Global M/S 24% turbine model in S. Korea 06 Babcock(BLR), UK Total supply 20.7GW Total supply 5.8M ton/day (WinDS3000 TM ) 09 Skoda Power(ST), Czech 5 units of capacity per Completed 27 PJTs in M. E. 3MW original model with 11 Lentjes, Germany annum (world s largest) Possess major technologies international off-shore Global manufacturing centers Sole provider of APR1400 (MSF, MED, RO) and track classification 09 Doosan Vina, Vietnam and AP1000 records Taean IGCC pilot plant 11 DCW, India 95 Uljin #3, first in Korea 08 Desalination Company 11 Won the first IGCC Annual production capa. 09 UAE nuclear export of the Year by GWI PJT in Korea Boiler 9.7GW / ST 5.5GW / 10 MMIS developed 10 Awarded world s largest Obtained fundamental Generator 5.5GW (2011 end) 12 first delivery of AP1000 Ras Al Khair PJT technology of CFB, FGD* (China) (228MIGD) * CFB : Circulating Fluidized Bed FGD : Flue Gas Desulfurization 14
Q & A