Horiba, Ltd. · TSE:6856

Horiba — Nomura Investment Forum 2015

51 slides from Horiba's conference presentation, Dec 4, 2015

  1. Slide 1: HORIBA, Ltd. Nomura Investment Forum 2015

    HORIBA, Ltd. Nomura Investment Forum 2015 December 4, 2015 Palace Hotel, Tokyo © 2015 HORIBA, Ltd. All rights reserved. 1

  2. Slide 2: Contents

    Contents • 2015 Nine Months Results • 2015 Full Year Forecast • Acquisition of MIRA Ltd. • Business Segment Outline • Other Topics • Corporate Profile [Disclaimer] Plans and forecasts in this presentation that do not constitute historical facts are predictions concerning future business results. The

  3. Slide 3: Contents

    Contents • 2015 Nine Months Results • 2015 Full Year Forecast • Acquisition of MIRA Ltd. • Business Segment Outline • Other Topics • Corporate Profile © 2015 HORIBA, Ltd. All rights reserved. 3

  4. Slide 4: Results for the First Nine Months of 2015 (Jan. - Sep.)

    Results for the First Nine Months of 2015 (Jan. - Sep.) (Billions of Yen) 2014 2015 2014 2015 2014 2014 Sales 9 months 9 months vs 2015 Full year Full Year vs 2015 First nine months of 2015 Results Forecast Automotive Auto 32.2 37.8 +17.5% 55.0 66.5 +20.9% Sales and one-time expenses increased due t

  5. Slide 5: Quarterly Results and Forecast (2014 – 2015)

    Quarterly Results and Forecast (2014 – 2015) (Billions of Yen) 2014 2015 Sales 4Q 3Q (Jul.-Sep.) Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q Forecast Forecast Automotive Auto 9.3 11.9 10.9 22.7 55.0 11.9 11.9 13.9 28.6 66.5 Recorded expenses Medical 6.7 6.8 6.1 7.2 27.0 7.1 6.5 6.8 7.4 28.0 associated

  6. Slide 6: Temporary expenses in 3rd Quarter (Jul. – Sep.)

    Temporary expenses in 3rd Quarter (Jul. – Sep.) (Millions of Yen) Expenses associated with the acquisition of MIRA Ltd. and the relocation of development and production base to new factory 2015 Jul. - Sep. Oct. - Dec. Full Year Results Forecast Forecast Acquisition expenses 550 40 590 Acquisition of

  7. Slide 7: Contents

    Contents • 2015 Nine Months Results • 2015 Full Year Forecast • Acquisition of MIRA Ltd. • Business Segment Outline • Other Topics • Corporate Profile © 2015 HORIBA, Ltd. All rights reserved. 7

  8. Slide 8: Exchange rate forecast for 2015

    Exchange rate forecast for 2015 (Yen) 2014 2015 First-Half Results Revised Results Forecast as 1Q 2Q 3Q Forecast of Aug. 5 USD 102.46 120 119.16 121.44 122.34 120 EUR 140.42 130 134.00 134.20 136.02 135 1 yen O.P. sensitivity for 2015 Forecast USD 151 million yen EUR 22 million yen © 2015 HORIBA, Lt

  9. Slide 9: Forecast for 2015

    Forecast for 2015 (Billions of Yen) 2014 2015 Forecast as Revised vs. Forecast Results vs. 2014 as of Aug. 5 of Aug. 5 Forecast Sales 153.0 175.0 175.0 +21.9 - Operating profit 17.2 19.0 19.0 +1.7 - O.P. % 11.2% 10.9% 10.9% -0.3p - Ordinary profit 16.4 18.5 18.5 +2.0 - Net profit 10.5 12.0 12.3 +1.7

  10. Slide 10: Forecast for 2015 by segment

    Forecast for 2015 by segment (Billions of Yen) Sales O.P. 2014 2015 2015 vs. 2014 2015 2015 vs. Resuts Forecast as Revised 2014 Resuts Forecast as Revised 2014 of Aug. 5 of Aug. 5 Forecast Results Forecast Results Auto 55.0 66.5 66.5 +11.4 5.8 5.2 5.2 -0.6 Medical 27.0 28.0 28.0 +0.9 1.7 2.0 2.0 +0.

  11. Slide 11: Contents

    Contents • 2015 Nine Months Results • 2015 Full Year Forecast • Acquisition of MIRA Ltd. • Business Segment Outline • Other Topics • Corporate Profile © 2015 HORIBA, Ltd. All rights reserved. 11

  12. Slide 12: Overview of MIRA Ltd.

    Overview of MIRA Ltd. Business 1. Engineering Consultancy 2. Testing Services & Consultancy 3. MIRA Technology Park (Lease R&D facilities) Results Sales:46.1MGBP(2014 Results) O.P.:1.1MGBP(2014 Results) Employees 518 (As of December 31, 2014) Established 1946 Form Company limited by guarantee: CLG H

  13. Slide 13: Core business streams

    Core business streams Engineering Consultancy Sales:20MGBP Number of employee:240  Design and development for vehicle driving performance (Brake performance, electromagnetic compatibility performance)  Development services utilizing automatic driving and remote control technology Testing Services

  14. Slide 14: 2014 Results

    2014 Results Sales by Business field Sales by Region Americas India Other Others 3% 1% Asia China MIRA Technology Park 5% 1% 3MGBP 6% Europe Korea 8% 2% Engineering Consultancy Testing Services 20MGBP & Consultancy 44% 22MGBP UK 49% 80% Total Sales:46.1MGBP © 2015 HORIBA, Ltd. All rights reserved. 1

  15. Slide 15: Engineering Consultancy

    Engineering Consultancy It could cover all domains of Vehicle R&D Vehicle Engineering Controls & Next generation EV Functional Safety Future Transport Technologies © 2015 HORIBA, Ltd. All rights reserved. 15

  16. Slide 16: MIRA Technology Park

    MIRA Technology Park Various experiments using a large test course MIRA Technology Park 1km 30 customers Proving ground Test Site • Performance(4.5km) “35” Test Site • Off road Wind Tunnels(3)/EMC(9)/Crash • Wet surface lab/NVH Chassis/Battery test • City Circuit • Noise-Generating • Ride & Durabili

  17. Slide 17: MIRA Technology Park

    MIRA Technology Park Key Aspects:  Renting space to customers who want to be on site, ranging from day rates for workshop units to long term leases for bespoke dedicated R&D facilities  Total number of tenants:30  Locations: UK Key Customers & Markets:  Major OEM’s and Tier One suppliers from ar

  18. Slide 18: Location of MIRA

    Location of MIRA  MIRA was strategically located in the Midlands, the center of the UK automotive industry This area is famous for advanced Auto maker vehicle engineering incl. F1 teams, F1 team and many skilled resource. (Mercedes, McLaren, Lotus, Williams etc.)  Independent from any automotive m

  19. Slide 19: Future vision of HORIBA, Ltd. and HORIBA MIRA Ltd.

    Future vision of HORIBA, Ltd. and HORIBA MIRA Ltd. Shared Vision: Contribute to Global Sustainable Mobility Challenges currently faced Access to latest vehicle technology Grow in the global market and R&D information Become ready for changing Maximize use of key technologies, powertrain and future m

  20. Slide 20: Expand business portfolio

    Expand business portfolio Provide comprehensive solution of Automotive R&D Ems Engine PWT* Vehicle Cert. R&D R&D R&D Tools (EMS/MCT) Ems Engine PWT Vehicle Cert. R&D R&D R&D Process (Software) Tools (EMS/MCT) Engineering Consulting Process (Software) Ems Engine PWT Vehicle Cert. R&D R&D R&D Engineer

  21. Slide 21: Financial impact of acquisition of MIRA Ltd.

    Financial impact of acquisition of MIRA Ltd. Acquisition cost : Approx. 15.5bn yen • Acquisition by cash (Temporary expenditure) • Borrowed from JBIC (Japan Bank for International Cooperation) in Sep 2015:75.6mil USD Goodwill : Approx. 3.5bn yen (2015 Second-Half forecast 0.3bn yen = Goodwill:5 year

  22. Slide 22: Contents

    Contents • 2015 Nine Months Results • 2015 Full Year Forecast • Acquisition of MIRA Ltd. • Business Segment Outline • Other Topics • Corporate Profile © 2015 HORIBA, Ltd. All rights reserved. 22

  23. Slide 23: Auto Forecast for 2015

    Auto Forecast for 2015 (Billions of Yen) 2015 Full-Year Forecast *E-HARBOR: HORIBA BIWAKO E-HARBOR EMS ＋ Sales to grow toward year-end - Moving expenses to E-HARBOR* MCT ＋ Sales growth - Downward revision in Europe. Expect to rebound in 2H. ECT ＋ Incremental sales due to acquisition - Profit decreas

  24. Slide 24: Two large investment of Automotive business

    Auto Two large investment of Automotive business HORIBA MIRA Ltd. Acquired in July 2015 Acquisition cost:15.5bn yen HORIBA BIWAKO E-HARBOR Start full-scale operation in spring 2016 Investment:10bn yen © 2015 HORIBA, Ltd. All rights reserved. 24

  25. Slide 25: Business strengthened by investment

    Auto Business strengthened by investment Provide HORIBA’s comprehensive solutions HORIBA BIWAKO E-HARBOR Provide MIRA’S know- how on cutting edge of Engineering Develop products and tools the vehicle technology & testing services for system solution Realize systems that respond Enhance engineering c

  26. Slide 26: Medical Forecast for 2015

    Medical Forecast for 2015 (Billions of Yen) 2015 Full-Year Forecast Overseas - Sales decrease in yen terms due to the weaker euro - Continued R&D spending for new products in Europe. Higher depreciation expenses due to a new R&D center in France Japan ＋ Expect sales increase led by new-product sales

  27. Slide 27: Medical Reinforced R&D / New product launch

    Medical Reinforced R&D / New product launch Investment for global expansion New products in Japan HORIBA ABX SAS. R&D center Hematology and CRP analyzers Country: France Launch: March 2015 Open: July 2015 Feature: The world’s smallest Investment: 0.9bn yen and lightest Compact blood Purpose: R&D for

  28. Slide 28: Semi Forecast for 2015

    Semi Forecast for 2015 (Billions of Yen) 2015 Full-Year Forecast ＋ 3Q: Robust sales due to Asian semiconductor manufacturers invest continuously ＋ 4Q: Expect semiconductor production equipment manufacturers demand - decrease. Sales and O.P. （Half-year） Sales O.P. Sales and O.P. （Full-year） Sales O.P

  29. Slide 29: Semi Sales by Region / Mass flow controller market share

    Semi Sales by Region / Mass flow controller market share (Billions of Yen) Sales by region (2014 results vs. 2015 forecast ) その他 Japan Asia China Americas Europe LED 2014 11.3 太陽電池 8.2 2.8 4.5 1.8 28.9bn yen in total シリコン 2015 12.4 9.6 3.5 7.6 1.9 35.0bn yen (Forecast) in total Sales increase to dev

  30. Slide 30: Scientific Forecast for 2015

    Scientific Forecast for 2015 (Billions of Yen) 2015 Full-Year Forecast Overseas ＋ Expect continued strong demand for Raman Spectroscopy in China ＋ Anticipate growth in demand from Asia due to the weaker yen Sales and O.P. （Half-year） Sales O.P. Sales and O.P. （Full-year） Sales O.P. Half-year Full-ye

  31. Slide 31: Scientific China market trend / New products

    Scientific China market trend / New products Sales increase (2015 Nine Months vs. 2014 Nine Months) Increased demand from China Sales increased by 35% over last year. (2014 9 months:1.8bn yen, 2015 9 months:2.5bn yen) 2014 First-Half 2014 Second-Half to 2015 Anti-corruption campaign Reaction of the

  32. Slide 32: P&E Forecast for 2015

    P&E Forecast for 2015 (Billions of Yen) 2015 Full-Year Forecast Overseas ＋- Expect Asian demand recovery (i.e., stack gas analyzers in China) Anticipate investment by U.S. petrochemical makers in the process measurement Japan ＋ - Expect higher sales of water quality measurement devices Sales and O.P

  33. Slide 33: P&E Broadened penetration of HORIBA's products in regulated markets

    Broadened penetration of HORIBA’s products P&E in regulated markets Regulated markets business Broaden HORIBA’s presence HORIBA’s products used at a thermal power plant from the semi market to the Process and Environmental market HORIBA brands established in the semiconductor market Increase in meas

  34. Slide 34: 2016 Market Overview

    2016 Market Overview Expect steady R&D investment by auto manufacturers’. Auto Expect synergy between the ECT business and HORIBA’s other Automotive businesses. Expect continued favorable sales of the new product. Medical Expect weak equipment sales in the EU market. Expect a recovery in demand from

  35. Slide 35: Contents

    Contents • 2015 Nine Months Results • 2015 Full Year Forecast • Acquisition of MIRA Ltd. • Business Segment Outline • Other Topics • Corporate Profile © 2015 HORIBA, Ltd. All rights reserved. 35

  36. Slide 36: Shareholder return

    Shareholder return Basic policy - Dividend payment + Share buyback = 30% of Consolidated net profit to be targeted - Remaining earnings are retained internally for strategic investment (i.e., facilities, M&A) Dividends and Share buybacks - 2013 Results 60 yen per share Share buybacks in 2015 - 218,4

  37. Slide 37: Progress of Mid-Long Term Management Plan

    Progress of Mid-Long Term Management Plan (Billions of Yen) Mid-Long term Management plan target (Announced in Feb. 2011) 66.5  Target achieved 55.0 49.5 Sales 46.0 43.2 35.0 38.6 28.034.0 28.0 Mid-Long term plan 28.9 30.0 27.0 25.6 2015 Forecast 26.8 24.6 24.1 24.0 2011 Results 2012 Results 2013 R

  38. Slide 38: Investment for the next growth ～ Automotive / P&E ～

    Investment for the next growth ～ Automotive / P&E～ Automotive M&A MIRA Ltd. (Acquired July 2015) ●Engineering, Testing Service Consultancy and MIRA Technology Park ●Acquisition cost:15.5bn yen ●Depreciation expense:0.6bn yen (Include goodwill / 2015 forecast) Automotive P&E HORIBA BIWAKO E-HARBOR (S

  39. Slide 39: Investment for the next growth ～ Medical / Semi ～

    Investment for the next growth ～ Medical / Semi ～ Medical HORIBA ABX SAS. R&D center (Opened July 2015) ●R&D for the next generation product ●Investment:0.9bn yen ●Depreciation expense:0.04bn yen (2015 forecast) Semi HORIBA STEC Fukuchiyama Technology Center (Opened Feb. 2013) ●Developing new mass f

  40. Slide 40: Investment for the next growth ～ Semi ～

    Investment for the next growth ～ Semi ～ Semi Common R&D HORIBA Advanced Technology Center (Opened April 2015) ●R&D of semiconductor sensor manufacturing for HORIBA product ●Investment:3.0bn yen ●Depreciation expense:0.2bn yen (2015 forecast) © 2015 HORIBA, Ltd. All rights reserved. 40

  41. Slide 41: Impact of fluctuation in foreign exchange rates

    Impact of fluctuation in foreign exchange rates (Millions of Yen) Exchange rate impact Exchange rate impact (2015 Nine Months Results) for 2015 Full Year Forecast 1 yen positive impact of Sales and O.P. (Millions of Yen) Sales Operating Profit (Yen depreciation) Total USD EUR Total USD EUR Sales Aut

  42. Slide 42: Cash Balance

    Cash Balance (Billions of Yen) (Consolidated basis, each end of the year) Bond Total Loan Balance 28.0 43.6 redemption 24.1 in 2020 17.6 Cash & Bonds15.0 bank Cash & Cash & deposit Cash & bank bank 45.6 bank deposit deposit Long16.9 deposit 42.2 Bonds15.0 43.2 Bonds15.0 34.6 Bonds10.0 Long2.2 Long2.

  43. Slide 43: Capital Investment, Depreciation, R&D

    Capital Investment, Depreciation, R&D (Billions of Yen) 2014 2015 Forecast Original Forecast Revised Results Forecast as of Aug. 5 Forecast PP&E 9.1 16.0 18.2 17.2 Intangibles 1.8 1.0 1.3 1.3 Capital Investment 11.0 17.0 19.5 18.5 Depreciation 4.9 5.2 6.2 6.2 R&D 11.9 13.0 13.0 13.0 (To net sales) 7

  44. Slide 44: Contents

    Contents • 2015 Nine Months Results • 2015 Full Year Forecast • Acquisition of MIRA Ltd. • Business Segment Outline • Other Topics • Corporate Profile © 2015 HORIBA, Ltd. All rights reserved. 44

  45. Slide 45: Corporate Profile

    Corporate Profile Atsushi Horiba  Head office Kyoto, Japan President & CEO  Founded 1945  Incorporated 1953  CEO Atsushi Horiba  Fiscal year end December 31 Dr. Masao Horiba Founder - Corporate motto - To have interest and pride in our work to enjoy our lives © 2015 HORIBA, Ltd. All rights rese

  46. Slide 46: Business Segments

    Business Segments Automotive Test Systems Emission Measurement Systems (EMS) Mechatronics Devices (MCT) Driving Control Systems (ITS) Engineering Consultancy & Testing (ECT) Process & Environmental Environmental Systems Environmental Radiation Monitor Environmental Regulation & Process Business Medi

  47. Slide 47: Well Balanced Business Operation -Five Business Segments-

    Well Balanced Business Operation -Five Business Segments- Business & Geographic Composition of Sales(2014) Sales 153.0 Billions of Yen P&E 16.4 Euro JPY (11%) EU Scientific Automotive 25% Japan 25.6 55.0 31% (17%) (36%) America Semi Asia 18% 28.9 Medical 26% (19%) 27.0 (17%) USD (Billions of Yen) Re

  48. Slide 48: Global Market Share

    Global Market Share Automatic Blood Cell Counter Emission Measurement Systems Stack Gas Analyzers plus CRP 80% 20% 100% Mass Flow Controllers Raman Spectrophotometers Gratings 52% 30% 35% ※Market shares quoted are estimates by HORIBA. © 2015 HORIBA, Ltd. All rights reserved. 48

  49. Slide 49: HORIBA Worldwide

    HORIBA Worldwide Sales of FY2014: 153.0 BJPY Sales Ratio by Region The Number of Group Companies by region EU (As of September 30, 2015) 25% Japan 31% America 9 America Europe 23 18% Asia Asia 17 (4 in Japan, including HORIBA, Ltd.) 26% Total 49 © 2015 HORIBA, Ltd. All rights reserved. 49

  50. Slide 50: Employees by Region

    Employees by Region Americas 3% Total Number of Employees Other Europe 2% U.S.A. 6,800 11% Total Asia: 3,537 U.K. Japan 52％ 10% 38% Total Europe: 2,335 Germany 8% 34％ France Other 14% Asia Total Americas: 928 14% 14％ © 2015 HORIBA, Ltd. All rights reserved. 50

  51. Slide 51: © 2015 HORIBA, Ltd. All rights reserved.

    © 2015 HORIBA, Ltd. All rights reserved. 51

HORIBA — Nomura Investment Forum 2015 on 6ix