Hanwa Co., Ltd. · TSE:8078
Hanwa — FY2020 Earnings Presentation
31 slides from Hanwa's earnings presentation, May 24, 2021
Slide 1: Financial Results for the Fiscal Year ended March 31, 2021
Financial Results for the Fiscal Year ended March 31, 2021 May 2021 HANWA CO., LTD. Copyright© 2021 Hanwa Co., Ltd. All Rights Reserved
Slide 2: Operating Results (Consolidated)
Operating Results (Consolidated) Fiscal Year (ended March 31) FY2019 FY2020 Y on Y Y on Y (billions of yen) Change Rate Net Sales 1,907.4 1,745.5 (161.9) -8% Gross Profit 79.8 79.9 +0.0 +0% SG&A 52.4 50.6 (1.8) -3% Operating income 27.3 29.2 +1.9 +7% Ordinary income (12.5) 28.8 +41.4 - Net income at
Slide 3: Changes in Business results (Consolidated)
Changes in Business results (Consolidated) ▸Net sales H2 ‣Net income attributable (billions of yen) H2 2,074.6 to owners of the Company H1 H1 19.6 2000.0 1,907.4 20.0 17.3 1,791.1 1,745.5 13.9 8.8 12.8 1500.0 1,069.6 10.0 7.3 961.4 954.1 944.4 8.5 6.5 6.8 5.1 1000.0 0.0 (18.8) 500.0 1,004.9 946.0 (1
Slide 4: Effect of Profit/Loss from Market value Accounting and Temporary factors
Effect of Profit/Loss from Market value Accounting and Temporary factors (billions of yen) ▸Reported ordinary income was 28.8 billion yen, but can be translated into about 31.5 billion yen after excluding one-time factors such as period-end valuation gains and losses for inventories, derivatives, fo
Slide 5: Segment Information (consolidated)
Segment Information (consolidated) (billions of yen) ▸Net sales FY2019 FY2020 2,200.0 1,907.4 1,745.5 1,600.0 1,005.4 913.1 1,000.0 400.0 259.8 233.7 210.4 183.0 241.0204.8 78.8 79.5 101.7 100.4 85.0 87.8 0.0 (200.0) (74.8) (57.2) ▸Segment income 40.0 28.8 20.0 14.6 18.9 3.8 2.3 0.7 2.1 4.1 5.5 0.4
Slide 6: Financial Position (consolidated)
Financial Position (consolidated) Fiscal Year (ended March 31) FY2019 FY2020 Y on Y Y on Y (billions of yen) Change Rate Total assets 798.4 824.5 26.1 +3% Total liabilities 632.3 0.0 632.7 0.0 0.3 +0% +3% Interst-bearing debt 331.1 301.6 (29.4) -9% Net DER 161% 133% -28pt -19% * 127% * 105% - - Net
Slide 7: Cash Flow Situation (consolidated)
Cash Flow Situation (consolidated) Fiscal Year (ended March 31) FY2019 FY2020 Y on Y Y on Y (billions of yen) Change Rate CF from operating activities 74.2 19.0 (55.2) -74% CF from investing activities (24.1) 0.0 (4.1) 0.0 +19.9 -83% FCF 50.1 0.0 14.8 0.0 (35.3) -70% CF from financing activities (42
Slide 8: Forecast FY2021
Forecast FY2021 Fiscal Year (ending March 31) FY2020 FY2021 Y on Y Y on Y (billions of yen) (Actual) (forecast) Change Rate 1,930.0 Net Sales* 1,745.5 - - (2,200.0) Operating income 29.2 36.0 +6.8 +23% Ordinary income 28.8 0.0 32.5 0.0 +3.7 +0.0 +13% Net income attributable to owners of the Company
Slide 9: Forecast of Segment Information
Forecast of Segment Information ▸Net sales FY2020 FY2021(Forecast) （billions of yen） 2,200.0 1,930.0 1,745.5 1,600.0 913.1 886.0 1,000.0 231.0 348.0 233.7 108.0 204.8 400.0 186.0 79.5 98.0 100.4 183.0 87.8 95.0 0.0 (200.0) (57.2) (22.0) ▸Segment income 40.0 32.5 28.8 18.9 21.6 20.0 3.8 4.0 5.5 5.6 0
Slide 10: Dividends (yen)
Dividend Policy 【Trend in dividend】 Interim dividends Year-end dividends Dividend payout ratio 50 150 150 Dividend payout ratio (%) （44） 40 Dividends (yen) 120 75 100 30 90 25 60 60 (estimated) 20 60 30 30 75 75 10 30 (12.0) (11.0) (Dividend in 30 30 0 the red) 0 FY2018 FY2019 FY2020 FY2021(estimate
Slide 11: Steel Business Segment
Steel Business Segment Fiscal Year (ended March 31) ▸Although demand for steel declined, reducing transaction volume, earnings margins rose as FY2019 FY2020 Y on Y steel prices held to a rising trend. Selling (billions of yen) Rate expenses also fell. These factors pushed Net sales 1,005.4 913.1 -9%
Slide 12: Primary Metal Business Segment
Primary Metal Business Segment Fiscal Year (ended March 31) ▸A decline in activity among steel and non- ferrous-metal manufacturers in the first half of FY2019 FY2020 Y on Y the fiscal year engendered a weakening of (billions of yen) Rate transaction volume. Meanwhile, a transient loss Net sales 259
Slide 13: Metal Recycling Business Segment
Metal Recycling Business Segment Fiscal Year (ended March 31) ▸Net sales grew amid rising prices for copper FY2019 FY2020 Y on Y and e-scrap. However, the Company incurred a loss on valuation of derivatives transaction (billions of yen) Rate balance, used to hedge price-fluctuation risks in Net sale
Slide 14: Foods Business Segment
Foods Business Segment Fiscal Year (ended March 31) ▸Although product prices trended at lower levels than in the previous fiscal year, the FY2019 FY2020 Y on Y profitability of the Company’s US sales (billions of yen) Rate subsidiary improved, while the number of Net sales 101.7 100.4 -1% domestic c
Slide 15: Energy & Living Materials Business Segment
Energy & Living Materials Business Segment Fiscal Year (ended March 31) ▸Petroleum product prices followed a rising trend, while a widening price spread between FY2019 FY2020 Y on Y the Japanese and overseas markets secured a (billions of yen) Rate solid earnings margin. In addition, sales of palm N
Slide 16: Overseas Sales Subsidiaries Segment
Overseas Sales Subsidiaries Segment Fiscal Year (ended March 31) ▸With prices for steel on a rising trend, earnings margins expanded in Indonesia. FY2019 FY2020 Y on Y Profitability of transactions in non-ferrous (billions of yen) Rate metals in Thailand improved, contributing to Net sales 241.0 204
Slide 17: Other Segment
Other Segment Fiscal Year (ended March 31) ▸Both net sales and segment income increased, because the number of customers and products FY2019 FY2020 Y on Y line mainly targeting housing manufacturers (billions of yen) Rate increased in the Lumber business, and income in Net sales 85.0 87.8 +3% +11110
Slide 18: Progress of Medium-Term Business Plan
Progress of Medium-Term Business Plan Fiscal Year (ending March 31) FY2019 FY2020 FY2022 Achievement/ （Target） Progress Rate 2,100.0 Net Sales (billion yen)* 1,907.4 1,745.5 - (1,850.0) Ordinary Income (billion yen) (12.5) 28.8 30.0 96% Shareholders' equity (billion yen) 161.3 179.7 200.0 90% 161% 1
Slide 19: Profits of Group Companies
Profits of Group Companies 【Ordinary income trend of subsidiaries by business segment】 Fiscal Year (ending March 31) FY2019 FY2020 Y on Y Change Consolidated/ Consolidated/ Consolidated/ (billions of yen) Equity method Unconsolidated Equity method Unconsolidated Equity method Unconsolidated Steel 1.
Slide 20: Investment in business
Investment in business 【Current investment records】 Amounts Major investments (billions of yen) ・Enhancement of processing facilities at domestic and overseas Steel 4.3 subsidiaries ・Acquisition of 100% ownership of target companies through M&A Metal Recycling 1.1 ・Capital investment by overseas sub
Slide 21: Monetization of Investment
Monetization of Investment Generating steady earnings from strategic investments WATERBERG JV（Platinum group metals） ― Operations from 2024 BACANORA LITHIUM（Lithium carbonate) ― Operations from 2023/ production 18kt/year QMB NEW ENERGY（JV with CATL, Tsingshan Holdings, etc.） （Ni and Co compoun
Slide 22: Appendix
Appendix Copyright© 2021 Hanwa Co., Ltd. All Rights Reserved 21
Slide 23: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials 【Transaction of steel raw materials price】 (US$/t FOB) iron ore spot price Coking coal spot price 250 iron ore benchmark price Coking coal benchmark price 200 150 100 50 0 ‣ Iron ore…In China, prices of steel products are on an upward trend supported by strong dom
Slide 24: Steel Market Trend in China
Steel Market Trend in China 【Transition of steel market in China】 10,000 Production of crude steel Market inventories 6,000 Market price of Rebar Market price of Hot coil 9,000 Production of crude steel, market inventories 8,000 5,000 7,000 Market price (RMB/ton) 6,000 (thousand ton) 5,000 4,000 4,0
Slide 25: Market Trend of Steel Scrap
Market Trend of Steel Scrap 【Steel scrap and D-bar Market Price】 Steel scrap (H2) Market price of D-bar Maker's price of D-bar Composite 90 900 Steel scrap, D-bar(thousand yen/t) 80 800 composite price (US$/t) 70 700 60 600 50 500 40 400 30 20 300 10 200 0 100 ‣ Supply/Demand…Amid the outbreak of CO
Slide 26: Market Trend of Long Products
Market Trend of Long Products 【Transition of the H-Beams Markets in Japan】 Market inventories Market price Maker's price 100 240 200 90 Price (thousand yen/ton) Volume (thousand ton) 160 120 80 80 70 40 0 60 ‣ Supply/Demand…Inventory levels lowered in the first half of the last year, because of prod
Slide 27: Market Trend of Flat Products
Market Trend of Flat Products 【 Transition of Steel Sheets Markets in Japan 】 5,000 90 Market inventories Price if hot rolled sheet Price of hot rolled coil Price (thousand yen/ton) Volume (thousand ton) 4,000 80 3,000 70 2,000 60 ‣ Supply/Demand…While production activities in the manufacturing indu
Slide 28: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys 2,200 180 FeSi($/t) Nickel($10/t) 2,000 MeSi($/t) Stainless scrap($/t) 160 (Ni, FeSi, MeSi, Stainless scrap) FeCr(￠/lb) 1,800 140 1,600 (FeCr) 1,400 120 1,200 100 1,000 800 80 ‣ Nickel…Market prices have risen because the economy in China, the largest consuming countr
Slide 29: Market Trend of Non-ferrous Metals
Market Trend of Non-ferrous Metals 3,400 10,000 Al Zn Pb Cu 9,000 3,000 Al, Zn, Pb (（US$/t) 8,000 2,600 Cu （US$/t) 7,000 2,200 6,000 1,800 5,000 1,400 4,000 ‣Aluminum …Demand is growing, being driven by economic recovery in China. In addition, as an increase in the vaccination rate in Europe and the
Slide 30: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products Black-Tiger Salmon Horse mackerel Mackerel 3,300 1,000 Black-Tiger （yen/1.8kg） Salmon, Hose mackerel, Mackerel 3,100 800 2,900 600 (yen/kg) 2,700 400 2,500 200 2,300 0 ‣Salmon…Market prices once declined due to the outbreak of COVID-19, but demand is currently
Slide 31: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products WTI DUBAI LSA(RIM) Gasoline(RIM) Bunker oil 140 500 450 120 Gasoline (thousand yen/KL） 400 Crude oil ($/BL),LSA・ Bunker oil （$/mt) 100 350 80 300 250 60 200 40 150 100 20 50 0 0 ‣Crude oil…The prices once significantly declined due to anticipation that