Shinagawa Refra Co., Ltd · TSE:5351
Shinagawa Refra — Shinagawa Refractories — FY2016 Earnings Presentation
48 slides from Shinagawa Refra's earnings presentation, Jun 7, 2017
Slide 1: Presentation Material: Results for Fiscal Year Ended March 2017
Presentation Material Results for Fiscal Year Ended March 2017 June 7, 2017 ― Supporting the World’s Key Industries Through Technologies ― Securities Code Number: 5351 Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2017
Slide 2: Table of Contents
Table of Contents I. Overview of 1. Consolidated Financial Highlights for Fiscal Year Ended March 2017 5. Balance Sheets (Consolidated) Financial 2. Net Sales by Business Segment 6. Cash Flows (Consolidated) 3. Operating Income by Business Segment (Segment Profit) 7. Financial Targets Results 4. Fac
Slide 3: I. Overview of Financial Results for 2016
I. Overview of Financial Results for 2016 (Fiscal Year ended March 2017) Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2017 2
Slide 4: Consolidated Financial Highlights for Fiscal Year Ended March 2017
1. Consolidated Financial Highlights for Fiscal Year Ended March 2017 (Unit: million JPY) FY 2015 FY 2016 YoY Results Results Net sales 97,889 103,722 + 6.0% Operating income 5,019 6,344 + 26.4% Ordinary income 4,951 6,365 + 28.6% Profit attributable to owners of parent 2,796 3,602 + 28.8% ● 2016 Ja
Slide 5: Net Sales by Business Segment
2. Net Sales by Business Segment (Unit: million JPY) FY 2015 FY 2016 YoY Results Results Refractories and related products 73,849 75.4 75,293 72.6 + 2.0% Furnace construction and engineering 21,694 22.2 26,108 25.2 + 20.3% Real estate, Leisure business, etc. 2,345 2.4 2,320 2.2 - 1.1% Total 97,889 1
Slide 6: Operating Income by Business Segment
3. Operating Income by Business Segment (Unit: million JPY) FY 2015 FY 2016 YoY Results Results Refractories and related products 4,648 75.6 5,663 75.6 + 21.8% Furnace construction and engineering 475 7.7 707 9.4 + 48.8% Real estate, Leisure business, etc. 1,023 16.7 1,121 15.0 + 9.6% Total 6,148 10
Slide 7: Factors Behind Changes in Operating Income (Year-on-Year Comparison)
4. Factors Behind Changes in Operating Income (Year-on-Year Comparison) (Unit: 100 million JPY) Negative factors Positive factors -14 +27 Change in total +13 63 Contribution by 50 Furnace Group companies, etc. construction and +9 engineering +2 Impact from foreign exchange rates Sales expansion +6 +
Slide 8: Balance Sheets (Consolidated)
5. Balance Sheets (Consolidated) (Unit: million JPY) FY 2015 FY 2016 Change ・ Notes and accounts receivable-trade：+3,074 Current assets 62,847 64,690 +1,843 ・ Inventories：-1,170 Noncurrent assets 40,850 41,817 +967 ・ Investment securities: +1,048 Total assets 103,697 106,507 +2,809 ・ Short-term loan
Slide 9: Cash Flows (Consolidated)
6. Cash Flows (Consolidated) (Unit: million JPY) [Main contents of cash flows from operating activities] FY 2015 FY 2016 Change ・Income before income taxes and Cash flows from operating activities 4,390 5,459 + 1,069 minority interests: 6,070 ・Depreciation and amortization: 2,400 Cash flows from ・De
Slide 10: Financial Targets: Profitability and Financial Position
7. Financial Targets 1 Securing high profitability ROS (%) ROE (%) ● ROS (Return on Sales) 10 10 7.3 7.8 8 8 6.3 and 5.2 5.1 6.1 6 6 ● ROE (Return on Equity) 4 4 are set as major management 2 2 indicators with the aim of enhancing 0 0 management efficiency. FY2014 FY2015 FY2016 FY2014 FY2015 FY2016
Slide 11: Financial Targets: Shareholder Returns and Growth Investment
7. Financial Targets Dividend per share 3 Shareholder returns (JPY) 8 7 7＊ ●Maintaining constant steady dividend payouts. 6 6 6 Interim dividend: [Actual dividend payout for the fiscal year 4 3.50 yen ended March 2017] (Dividend per share) Year-end dividend: ● Interim dividend: 3.00 JPY 2 3.50 yen ＊
Slide 12: II. Future Strategies
II. Future Strategies Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2017 11
Slide 13: Overview of the Medium-Term Management Plan
1. Overview of the Medium-Term (Three Years) Management Plan Third Medium-Term Management Plan Currently Underway based on Achievements of Second Medium-Term Management Plan Fundamental Policy of the Third Medium-Term Management Plan Achieving sustainable growth for the long-term future by enhancing
Slide 14: Third Medium-Term Management Plan: Targets & Progresses
2. Third Medium-Term Management Plan: Targets & Progresses In FY2016, net sales increased as planned and ROS even hit the final target of the Third Medium-Term Management Plan (Final Target in 2017: Net sales of 110,000 million JPY and ROS of 6%) (Unit: million JPY) 110,000 110,000 14.0% 103,036 103
Slide 15: FY2017 Management Plan: Financial Targets
3. FY2017 Management Plan: Financial Targets (Unit: million JPY) FY 2016 FY 2017 YoY Results Forecast Net sales 103,722 100.0 102,000 100.0 -1.7% Operating income 6,344 6.1 5,600 5.5 -11.7% Ordinary income 6,365 6.1 5,700 5.6 -10.5% Profit attributable to 3.5 owners of parent 3,602 2,700 2.7 -25.1%
Slide 16: Business Environment for FY2017: World and Japanese Economy
4. Business environment for FY2017 Management Plan １ World economy Gradual recovery ● [US] Continued stable growth ● [Europe] Modest recovery ● [China] Recovery with the government economic stimulus package ２ Japanese economy Bottoming out Key factors expected to boost economy ● Recovery in world ec
Slide 17: Business Environment: Steelmaking Industry
4. Business environment for FY2017 Management Plan ３ Steelmaking industry Continue to face Challenges ● Ongoing issue of excess production capacity in China ● Coking coal and iron ore prices continue at the highest level Profit Improvement continues to be the most urgent managerial issue for steelma
Slide 18: Key Challenges for FY2017 Management Plan
5. Key Challenges for FY2017 Management Plan Reinforcing competitive strengths of the １ core business: Refractories 1. Completing enhancement of domestic production capabilities 2. Further improvement of cost competitiveness 3. Expansion of products offerings, technological capabilities and sales fu
Slide 19: Completing Enhancement of Domestic Production Capabilities
6. FY2017 Management Plan: Action Plans １ Reinforcing competitive strengths of the core business: Refractories ① Completing enhancement of domestic production capabilities Our goal in the current three-year medium-term management plan is to complete enhancement of our domestic manufacturing infrastr
Slide 20: Further Improvement in Cost Competitiveness
6. FY2017 Management Plan: Action Plans １ Reinforcing competitive strengths of the core business: Refractories ② Further improvement in cost competitiveness Thorough cost reduction for entire process from procurement to production [Procurement] [Production] FY2016 Centralize procurement activities t
Slide 21: Expansion of Product Offerings, Technology and Sales Functions
6. FY2017 Management Plan: Action Plans １ Reinforcing competitive strengths of the core business: Refractories ③ Expansion of products offerings, technological capabilities and sales functions & abilities: Domestic and Overseas GOAL: Insure prompt and accurate responses to fulfill customer needs Int
Slide 22: Global Strategic Products
6. FY2017 Management Plan: Action Plans １ Reinforcing competitive strengths of the core business: Refractories ③ Expansion of products offerings, technological capabilities and sales functions & abilities: Domestic and Overseas Global Strategic Products High-performance SN plates Slide-gate Mechanis
Slide 23: Domestic Business Expansion
6. FY2017 Management Plan: Action Plans １ Reinforcing competitive strengths of the core business: Refractories ③ Expansion of products offerings, technological capabilities and sales functions & abilities: Domestic and Overseas Domestic Business Expansion Increasing sales capabilities to capture dem
Slide 24: Domestic Expansion: New Products and Technologies
6. FY2017 Management Plan: Action Plans １ Reinforcing competitive strengths of the core business: Refractories ③ Expansion of products offerings, technological capabilities and sales functions & abilities: Domestic and Overseas Domestic Business Expansion Exploring new opportunities with New Product
Slide 25: Overseas Business Expansion
6. FY2017 Management Plan: Action Plans １ Reinforcing competitive strengths of the core business: Refractories ③ Expansion of products offerings, technological capabilities and sales functions & abilities: Domestic and Overseas Overseas Business Expansion Promote the concept of “Shinagawa Solutions”
Slide 26: Overseas Targets: China, Taiwan, South Korea, India, ASEAN
6. FY2017 Management Plan: Action Plans Overseas Business Expansion Target 1 China, Taiwan, South Korea China: Actively expand sales of mold powders for high grade steel sheets productions Shinagawa Rongyuan Refractories Co., Ltd. Shenyang Shinagawa Metallurgy Taiwan: Maintain and increase market sh
Slide 27: Overseas Target 4: Americas
6. FY2017 Management Plan: Action Plans Overseas Business Expansion Target 4 Americas North America ● Fully implement Market-In strategy by SAM, combining sales of US made mold powders with Shinagawa Advanced Materials Americas, Inc. imported refractories from Japan and other regions and countries,
Slide 28: Further Focus on HR Development
6. FY2017 Management Plan: Action Plans ２ Further focus on HR development: Effective recruitment and training Further focus on well planned, effective recruitment and training of employees to insure sustainable competitiveness for the future “Employees are the resources Main initiatives for HR devel
Slide 29: Diversifying Business Portfolio: New Engineering/Construction Opportunities
6. FY2017 Management Plan: Action Plans ３ Diversifying business portfolio: Earnings from businesses other than refractories Exploring new engineering/construction project opportunities by integration of installation and construction expertise across Shinagawa group companies Furnace Construction Eng
Slide 30: Creation of the Fourth Medium-Term Management Plan (2018-2020)
7. Creation of the Fourth Medium-Term Management Plan (2018-2020) Shinagawa will introduce our Fourth Medium-Term Management Plan by the end of 2017 GOAL: Rapid progress breakthrough for the future based on accomplishment at the Third Mid-Term Management Plan Shinagawa Refractories Co., Ltd. was est
Slide 31: III. Supplementary Notes
III. Supplementary Notes Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2017 30
Slide 32: History
1. History [Established in 1875] [Established in 1938] Shinagawa Refractories Co., Ltd. JFE Refractories Corporation (First private company in Japan to (Operated as a subsidiary of the Kawasaki Steel manufacture fire bricks) Corporation Group since 1944) Increasing market presence and establishing r
Slide 33: Mission Statement
2. Mission Statement Mission Statement of Shinagawa Refractories With our core philosophy of respecting the basics “Be BASIC,” Shinagawa Refractories is committed to contributing to the industrial development and the creation of affluent societies through providing high quality refractory products a
Slide 34: Changes in Net Sales and Ordinary Income During Past Years
3. Changes in Net Sales and Ordinary Income During Past 11 Years (Consolidated Basis) (Million yen) (Million yen) 120,000 Net sales Ordinary income 12,000 Merged on October 1, 2009 103,722 103,038 101,070 99,204 100,188 100,000 Consolidated financial results for the fiscal year ended March 2010 comb
Slide 35: What Are the Roles of the Refractory Industry?
4. What are the roles of the "Refractory Industry"? ● Many varieties of materials used in public infrastructure such as iron and steel, nonferrous metals, cement, glass are manufactured in furnaces at extremely high temperature with refractory lining. ● The refractory industry provides foundational
Slide 36: Major Products 1/2
5. Major Products 1/2 Refractories are industrial materials that can resist ultra-high temperatures in Refractories excess of 1,500 degrees Celsius. Approximately 80% of refractory production is consumed by the steel industry. Shaped refractories Monolithic refractories Mold powder Shaped refractori
Slide 37: Major Products 2/2
5. Major Products 2/2 Ceramic fiber Advanced ceramics Lightweight Ceramic material with a broad range of characteristics material featuring including excellent electrical insulation properties, abrasion low thermal resistance, corrosion resistance, chemical stability, conductivity and mechanical str
Slide 38: Key Features and Strengths
6. Key Features and Strengths Leading company of ultra-high 1 temperature technologies Solid customer base with highly-advanced 2 capabilities 3 Global business expansion Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2017 37
Slide 39: Key Features: Ultra-High Temperature Technology
7. Key Features and Strengths (1) Ultra-High Temperature Technology (i) Two Technologies Leading company of ultra-high temperature technology Solid technology development and commercialization capabilities supported by two technologies ●Furnace design ●Refractories Advanced ●Engineering services ●Ce
Slide 40: Customer-Oriented Technological Response
7. Key Features and Strengths (1) Ultra-High Temperature Technology (ii) Customer-Oriented Technological Response Work closely with customers at all times backed up by technologies and long track records of four divisions covering design, manufacturing, furnace construction, and development. Technic
Slide 41: Development Capability to Meet Customer Needs
7. Key Features and Strengths (1) Ultra-High Temperature Technology (iii) Development Capability to Meet Customer Needs With world-class research facilities, the Research Center focuses on the development of products to meet the exact needs of customers EDS analysis data (color map) Elements present
Slide 42: Key Features and Strengths: Solid Customer Base
8. Key Features and Strengths (2) Solid Customer Base Solid customer base with highly-advanced technological capabilities Meeting the exact needs of customers in various industries including the Japanese steelmaking industry, known for their best steelmaking technology in the world Ultra-high temper
Slide 43: Global Business Expansion
9. Key Features and Strengths (3) Global Business Expansion Global business expansion Starting from our launch into China in 1997, the Company has continued to expand overseas, establishing production bases in Australia and the U.S. [China] Entered market in 1997 ■ Overseas net sales and market shar
Slide 44: Current Status of Overseas Business Locations
10. Current Status of the Expansion of Overseas Business Locations Expanding overseas business locations in China, Oceania, and the Americas with a focus on areas close to the production sites of our customers Liaoning Shinagawa Hefeng Shenyang Shinagawa Metallurgy Materials Co., Ltd. Metallurgical
Slide 45: Domestic and Overseas Production System
11. Domestic and Overseas Production System [Overseas] [Japan] Developing a stable supply system Promoting the redevelopment of a reliable by establishing the Group’s supply system with enhanced efficiency manufacturing sites closer to and effectiveness customers in order to customer needs responsiv
Slide 46: Global Procurement System
12. Global Procurement System Amid such circumstances, the Company The Company depends on foreign sources for developed a balanced procurement system to approximately 60% of refractory materials, 80% source materials from production centers in five or more of which (approximately 50% of the total ge
Slide 47: Disclaimer
Disclaimer This document is intended to provide information on the results for the fiscal year ended March 2017 (April 2016 – March 2017) and is not intended to solicit investment in securities issued by the Company. The document was prepared based on data available as of June 7, 2017. Opinions, for
Slide 48: Presentation Material
Presentation Material Results for Fiscal Year Ended March 2017 June 7, 2017 ― Supporting the World’s Key Industries Through Technologies ― Securities Code Number: 5351 Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2017
Shinagawa Refractories — FY2016 Earnings Presentation on 6ix