Toyo Denki Seizo K.k. · TSE:6505
Toyo Denki Seizo K.k — FY2023 Earnings Presentation
35 slides from Toyo Denki Seizo K.k's earnings presentation, Jul 14, 2023
Slide 1: Financial Results Briefing for the Fiscal Year Ended May 31, 2023
Financial Results Briefing for the Fiscal Year Ended May 31, 2023 July 14, 2023 Toyo Denki Seizo K.K.
Slide 2: Program
Program ◼ Briefing on Financial Results: 40 minutes 1. Overview of Financial Results for the Fiscal Year Ended May 31, 2023 2. Financial Results Forecast for the Fiscal Year Ending May 31, 2024 3. Medium-Term Management Plan ◼ Q&A: 20 minutes 1
Slide 3: 1. Overview of Financial Results for the Fiscal Year Ended May 31, 2023
1. Overview of Financial Results for the Fiscal Year Ended May 31, 2023 (From June 1, 2022 to May 31, 2023) 2
Slide 4: Overview of Consolidated Financial Results
1-1. Overview of Consolidated Financial Results Orders received increased significantly and the business is on a recovery trend. Both net sales and profit increased from a year earlier thanks to efforts to improve profitability despite ongoing difficulties in procuring parts and materials 100 millio
Slide 5: Review of the Business Environment for the Fiscal Year Ended May 31, 2023
<Reference> Review of the Business Environment for the Fiscal Year Ended May 31, 2023 • Demand for new rolling stock production and equipment upgrades, which had been suppressed, is increasing as restrictions on activities due to COVID-19 are eased and the business performance of domestic railway Tr
Slide 6: Factors for Increase and Decrease in Operating Profit (YoY change)
1-2. Factors for Increase and Decrease in Operating Profit (YoY change) Operating profit recovered due to such factors as an increase in net sales, improved profitability and reduced depreciation burden from the impairment of non-current assets in the Industry Business in the previous fiscal year *1
Slide 7: Breakdown of Non-Operating Income/Expenses and Extraordinary Income/Loss
1-3. Breakdown of Non-Operating Income/Expenses and Extraordinary Income/Loss Non-operating Extraordinary income/expenses income/loss +460 million yen +160 million yen Dividend income Gain on sale of +190 million yen investment securities Share of profit of +530 million yen entities accounted for Ga
Slide 8: Segment Performance: Transportation Business
Transpor 1-4. Segment Performance: Transportation Business tation As the business performance of domestic railway operators has been recovering, orders increased significantly. Net sales and segment profit increased from a year earlier ◼ Orders received and order backlog ◼ Net sales and segment inco
Slide 9: Transportation Business: Factors for Increase and Decrease in Segment Income
1-5. Transportation Business: Factors for Increase and Transpo Decrease in Segment Income rtation Profit increased due to efforts to improve profitability, including cost reductions Increase/decrease Change in gross Plant profit/loss in sales margin (non- SG&A expenses (non- (non- consolidated) (non
Slide 10: Segment Performance: Industry Business
1-6. Segment Performance: Industry Business Industry Orders received increased. Both net sales and segment profit remained at the same level as the previous year as prolonged difficulties in procuring parts and materials continued to impact the production processes ◼ Orders received and order backlo
Slide 11: Industry Business: Factors for Increase and Decrease in Segment Income
1-7. Industry Business: Factors for Increase and Industry Decrease in Segment Income Segment profit was unchanged from the previous fiscal year as the burden of depreciation reduced as a result of the impairment of non-current assets recorded in the previous fiscal year but gross profit margin worse
Slide 12: Segment Performance: ICT Solution Business
1-8. Segment Performance: ICT Solution Business ICT Orders received along with net sales and profit grew due to an increase in software improvements for station equipment. ◼ Orders received and order backlog ◼ Net sales and segment income (100 million yen) Net sales Segment profit 20 20 20 14.2 Net
Slide 13: Consolidated Financial Position
1-9. Consolidated Financial Position (100 million yen) May 31, 2022 May 31, 2023 Change Remarks Total assets 469.1 496.8 +27.6 Trade receivables: +11.4 billion yen Current assets 241.8 267.3 +25.4 Cash and deposits: +10.7 billion yen Non-current assets 227.2 229.4 +2.1 Total liabilities 249.0 250.9
Slide 14: Trends in Consolidated Cash Flows
1-10. Trends in Consolidated Cash Flows (100 million yen) FYE May 2019 FYE May 2020 FYE May 2021 FYE May 2022 FYE May 2023 Cash flows from operating activities 37.2 21.4 17.7 25.0 8.1 Cash flows from investing activities -10.1 0.4 -1.5 2.8 6.3 Purchases of property, plant and -22.7 -6.4 -5.4 -3.5 -3
Slide 15: 2. Financial Results Forecast for the Fiscal Year Ending May 31, 2024
2. Financial Results Forecast for the Fiscal Year Ending May 31, 2024 14
Slide 16: Outlook for Financial Results for Fiscal Year Ending May 31, 2024 (Consolidated)
2-1. Outlook for Financial Results for Fiscal Year Ending May 31, 2024 (Consolidated) Orders received of 37.2 billion yen, net sales of 34.5 billion yen, and operating profit of 600 million yen FYE May 2023 (Results) FYE May 2024 (Forecast) YoY Change (100 million yen) 2Q Full year 2Q Full year Full
Slide 17: Outlook for Financial Results (by Segment)
2-2. Outlook for Financial Results (by Segment) Transportation ICT Solution (100 million yen) Industry Business Business Business* Orders received 231.0 125.0 16.0 FYE May 2024 Net sales 218.0 116.0 11.0 (Forecast) Segment profit 24.5 9.5 2.5 Orders received ＋21.4 ＋16.5 ＋1.8 YoY Change Net sales ＋19
Slide 18: Assumptions for Outlook for Financial Results
<Reference> Assumptions for Outlook for Financial Results The business environment assumed in the outlook for the financial results for the fiscal year ending May 31, 2024 • Domestic railway operators plan to invest in sustainability initiatives. Introduction of new rolling stock and equipment repla
Slide 19: 3. Medium-Term Management Plan 2026
3. Medium-Term Management Plan 2026 (From June 1, 2022 to May 31, 2026) 18
Slide 20: Announcement of Management Targets under Medium-Term Management Plan 2026
Announcement of Management Targets under Medium-Term Management Plan 2026 Previous Medium-Term ◼ Significant failure to meet sales targets Management Plan Initial plan (Announced in July Over 47 FYE May 2022 (final year) Revitalize 2018) 2020/2022 billion yen Actual results: 30.1 Revised plan (Annou
Slide 21: Achievements of a year to thoroughly take initiatives in structural reforms
Achievements of “a year to thoroughly take initiatives in structural reforms to increase profitability” Achievements of the “three basic policies” set for structural reform ◼ Expansion of new businesses and products Delivery of real-time state monitoring system for railways Added an “IORemorter” in
Slide 22: Business Environment
Business Environment ◼ There remain concerns about factors such as a slowdown in economic recovery overseas, supply constraints for parts and materials, and unclear monetary and foreign exchange trends ◼ Expects increased demand for social and industrial infrastructure products to reduce environment
Slide 23: Medium-Term Management Plan 2026
Medium-Term Management Plan 2026 Core Value and Strengths Medium-Term Management Plan 2026 [Group Business Principles] ● Prioritize ethics and contribute to the prosperity of [Slogan] customers and society as a whole ● Encourage creativity and an enterprising spirit to meet the challenges of the fut
Slide 24: Medium-Term Management Plan 2026
Medium-Term Management Plan 2026 ◼ Consolidated financial targets for FYE May 2026 Net sales 40 billion yen Operating margin 5% ROE 8% (FYE May 2023: 31 billion yen) (FYE May 2023: 1.7%) (FYE May 2023: 3.5%) ◼ Three basic policies Strengthen and expedite development of new business areas Expansion o
Slide 25: Consolidated financial targets
Consolidated financial targets ⚫ Return sales to the pre-COVID level of 40 billion yen through “expansion of new businesses and products” ⚫ Improve operating profit and ROE significantly by “thorough improvement in earnings structure of existing businesses” and “improvement in asset efficiency with
Slide 26: Segment Initiatives: Transportation Business
Segment Initiatives Transportation Business Net sales (100 million yen) Main products 300 ● Transportation system products 250 ● Railway power storage systems 218 198 ● Door operating equipment for buses 200 Pantograph Transportation system 100 products Door operating equipment 0 23.5 24.5 26.5 Drov
Slide 27: Segment Initiatives: Industry Business
Segment Initiatives Industry Business Net sales (100 million yen) Main products 150 Testing system for automobiles 130 ● 116 ● Production and processing equipment system 99 ● Power generation and social infrastructure system 100 ● Automotive electrical equipment ● Other (cableway electrical products
Slide 28: Segment Initiatives: ICT Solution Business
Segment Initiatives ICT Solution Business Net sales (100 million yen) Main products ● System for station operating equipment 20 ● IoT solutions (cloud-type remote monitoring control systems) 20 12 11 IoT solutions 10 System for station operating equipment 0 23.5 24.5 26.5 Result Plan Target Major in
Slide 29: Initiatives to expand new businesses and products
Initiatives to “expand new businesses and products” New business development Promote development of company-wide new business areas with a development center as its core Case example Transportation Business × ICT Solution Business × Development center Image installed in VVVF inverter Real-time state
Slide 30: Initiatives to expand new businesses and products
Initiatives to “expand new businesses and products” New business development Promote development of company-wide new business areas with a development center as its core. Case example Industry Business × Development center Evaluation facility compliant with automated driving assistance systems (ADAS
Slide 31: Initiatives for Sustainability
Initiatives for Sustainability Implement initiatives to achieve the numerical targets released in February 2023 ◆ Sustainability policy Three Initiative in Products and Initiatives to Value People and Initiative in Production Activities perspectives Services Local Communities We will provide product
Slide 32: Initiatives for Sustainability
Initiatives for Sustainability Expression of Support for TCFD Recommendations and Information Disclosure Recognizing that responding to climate change is an important management issue, the Company expressed its support for the TCFD recommendations and disclosed information. TCFD (Task Force on Clima
Slide 33: Our company profile and business overview
<Reference> Our company profile and business overview (1) Establishment : June 20, 1918 (104 years since establishment) (2) Capital stock ：4.9 billion yen (consolidated: fiscal year ended May 31, 2023) (3) Net Sales ：310 billion yen (ditto) (4) Number of employees ：1,149 (ditto) (5) Business lines :
Slide 34: Our company profile and business overview
<Reference> Our company profile and business overview We are contributing to the development of the railway and industrial fields as a heavy electric machinery manufacturer with three businesses: Transportation Business, Industry Business, and ICT Solution Business. Transportation Business: products
Slide 35: Disclaimer
Disclaimer • Statements concerning financial results forecasts are based on data available as of the date of publication of this material and assumptions concerning the elements of uncertainty that will affect future business performance as of the date of publication of this material. Actual financi