Kawasaki Heavy Industries Ltd. · TSE:7012

Kawasaki Heavy Industries — Kawasaki Heavy Industrial — Q2 2024 Earnings Presentation

45 slides from Kawasaki Heavy Industries's earnings presentation, Nov 8, 2024

  1. Slide 1: Financial Results for Second Quarter FY2024

    Financial Results for Second Quarter FY2024 For the Year ending March 31, 2025 0 November 8, 2024

  2. Slide 2: Table of Contents

    0 Table of Contents 1 Consolidated Results for 3 Details by segment Second Quarter FY2024 Summary 3 Aerospace Systems 15 Segment 4 Rolling Stock 19 Statement of Profit and Loss 5 Energy Solution & Marine Engineering 23 （ES&M） Details of Change in business profit 7 Precision Machinery & Robot 27 Stat

  3. Slide 3: Consolidated Results for Second Quarter FY2024 - Summary

    Consolidated Results for Second Quarter FY2024 1 –Summary- Revenue and profit increased YoY, reaching a record high for Q2 revenue Foreign exchange loss resulting from the appreciation of the yen at the end of September led to a smaller increase in profit before tax and net profit (billion yen) Rema

  4. Slide 4: Consolidated Results - Segment

    Consolidated Results for Second Quarter FY2024 1 –Segment- Profit in Aerospace Systems increased significantly YoY, due to a reaction to the loss related to PW1100G-JM engines and improved profitability in Aero Engine ① Business profit in PS&E decreased due to increase in fixed costs, increase recal

  5. Slide 5: Statement of Profit and Loss

    Consolidated Results for Second Quarter FY2024 1 –Statement of Profit and Loss- (billion yen) Details FY23 Q2 FY24 Q2 Change % % ① Cost to sales ratio deteriorated due to a loss Revenue 769.3 100.0 884.1 100.0 + 114.8 of ¥58 billion yen Cost of sales 1 (reduction in revenue) 680.9 88.5 697.5 78.9 +

  6. Slide 6: Statement of Profit and Loss (continued)

    Consolidated Results for Second Quarter FY2024 1 –Statement of Profit and Loss- (billion yen) Details FY23 Q2 FY24 Q2 Change % % ④ USD/JPY rate 151.40 Q4/E FY’23 Finance income and Finance costs - 1.6 - 24.0 - 22.4 142.82 Q2/E FY’24 Net Interest expense (incl. dividend income) - 2.4 - 4.9 - 2.5 4 We

  7. Slide 7: Details of change in business profit

    Consolidated Results for Second Quarter FY2024 1 –Details of change in business profit- Advantages of the depreciation of the yen were partially offset by an increase in “SG&A expenses” Improvement of profitability in Aero Engine contributed to “product mix and other factors” FY’23 Q2 FY’24 Q2 Busin

  8. Slide 8: Details of change in business profit by segment

    Consolidated Results for Second Quarter FY2024 1 –Details of change in business profit- (billion yen) FY23 Q2 Details of change FY24 Q2 Business Change in Change in Change in Loss Related to the Business Profit Effects of Change share of profit (loss) In-Service Issues of Profit product mix and of i

  9. Slide 9: Statement of financial position

    Consolidated Results for Second Quarter FY2024 1 –Statement of financial position- (billion yen) End of End of Change Details Mar. 2024 % Sep. 2024 % Cash and cash equivalents 84.1 127.3 + 43.2 ① Decreased in PS&E, Energy 1 business Trade receivables (Incl. contract assets) 770.3 670.5 - 99.8 2 Inve

  10. Slide 10: Statement of financial position (liabilities and equity)

    Consolidated Results for Second Quarter FY2024 1 –Statement of financial position- (billion yen) End of End of Change Details Mar. 2024 % Sep. 2024 % Trade payables 451.9 437.0 - 14.9 ③ Increase in borrowing as a 3 normal business cycle in H1 Interest-bearing debt 653.9 840.0 + 186.1 Contract liabil

  11. Slide 11: Cash Flows

    Consolidated Results for Second Quarter FY2024 1 –Cash Flows- (billion yen) FY23 Q2 FY24 Q2 Change 要因説明 Profit before tax - 34.4 23.7 + 58.2 ① FY23 Q2： Depreciation and amortization 43.5 42.8 - 0.6 Operating cash flows were Increase and decrease in working capital - 8.0 - 73.6 - 65.6 negative due to

  12. Slide 12: Cash Flows - operating and investing trend

    Consolidated Results for Second Quarter FY2024 1 –Cash Flows- Operating cash flow in Q2 is on an improving trend, despite it resulted negative Working capital increased due to rapid recovery of order based business and expansion of PS&E sales CF from operating acitivities CF from investing activitie

  13. Slide 13: Forecasts for FY2024 - Summary

    Forecasts for FY2024 2 -Summary- Business profit forecast unchanged from previously announced in August Profit before tax and Net profit revised down due to expecting foreign exchange loss (billion yen) FY2023 FY2024 Forecast and Progress Actual Old FCST New FCST Chg. vs. FY23 Chg. vs. Old FCST Q2 A

  14. Slide 14: Forecasts for FY2024 - Segment

    Forecasts for FY2024 2 -Segment- Profit forecast in Aerospace Systems revised up due to the increase in aftersales of Aero Engine business despite effects of Boeing strike Forecast in PS&E revised down to reflect the performance in four-wheelers business of H1 (billion yen) Orders Received Revenue B

  15. Slide 15: Aerospace Systems

    Details by Segment 3 -Aerospace Systems- FY2024.Q2（vs. FY2023.Q2） FY2024 forecast（vs. Forecast in August） Orders Increased compared to the last fiscal year, Orders Revised down due to effects of Boeing received when the loss (reduction in order) related to received strike and other factors -¥16.8 bi

  16. Slide 16: Aerospace Systems - results and forecast table

    Details by Segment 3 -Aerospace Systems- (billion yen) FY2023 FY2024 FY2023 FY2024 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q3-4 FCST Orders Received 193.2 209.9 + 16.8 692.6 790.0 770.0 + 77.4 - 20.0 560.1 Aerospace 202.5 112.7 - 89.8 556.9 630.0

  17. Slide 17: Aerospace Systems - revenue and profit trend

    Details by Segment 3 -Aerospace Systems- Net Sales or Revenue (billion yen) Aerospace Aero Engine 160.6 129.1 109.3 110.2 106.3 104.9 99.7 93.9 93.3 93.5 81.5 80.2 74.6 71.5 48.9 70.0 63.2 63.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2021 FY2022 FY2023 FY2024 FY2020 （IFRS） （IFRS） 17.

  18. Slide 18: Aerospace Systems - market overview and efforts

    Details by Segment 3 -Aerospace Systems- Market Overview Specific Efforts  Commercial business  Preparation for business expansion – Air passenger demand shifted from recovery to – Arranging supply chain and production growth phase, and demand for both aircraft system for production increase and e

  19. Slide 19: Rolling Stock

    Details by Segment 3 - Rolling Stock - FY2024.Q2（vs. FY2023.Q2） FY2024 forecast（vs. Forecast in August） Orders Decreased due to a decrease in Asia Orders Expected to remain at the same level received received -¥2.2 bil. ±¥0.0 bil. Revenue Increased duo to an increase in the U.S. Revenue Same as abov

  20. Slide 20: Rolling Stock - results and forecast table

    Details by Segment 3 - Rolling Stock - (billion yen) FY2023 FY2024 FY2023 FY2024 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q3-4 FCST Orders Received 30.1 27.8 - 2.2 88.7 160.0 160.0 + 71.3 - 132.2 Domestic & Asia 27.4 24.7 - 2.6 87.3 140.0 140.0 + 5

  21. Slide 21: Rolling Stock - revenue and profit trend

    Details by Segment 3 - Rolling Stock - Net Sales or Revenue (billion yen) Domestic & Asia 60.1 North America 51.6 43.5 43.8 43.2 39.5 40.6 36.8 37.5 32.3 32.3 32.1 33.7 31.7 31.5 28.7 28.8 26.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2020 FY2021 FY2022 FY2023 FY2024 （IFRS） （IFRS） （IF

  22. Slide 22: Rolling Stock - market overview and efforts

    Details by Segment 3 - Rolling Stock - Market Overview Specific Efforts  Domestic Market  Compliance with delivery schedules for – The number of railway passengers has overseas projects recovered to approximately 90% of pre- COVID-19 levels due to the recovery of Dhaka ‣22 trains out of 24(144 car

  23. Slide 23: Energy Solution & Marine Engineering

    Details by Segment 3 - Energy Solution & Marine Engineering - FY2024.Q2（vs. FY2023.Q2） FY2024 forecast（vs. Forecast in August） Orders Decreased due to a decrease in orders for Orders Revised up due to an increase in orders for received domestic municipal waste incineration received LPG/LAG carriers

  24. Slide 24: Energy Solution & Marine Engineering - results and forecast table

    Details by Segment 3 - Energy Solution & Marine Engineering - (billion yen) FY2023 FY2024 FY2023 FY2024 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q3-4 FCST Orders Received 218.4 211.0 - 7.3 401.6 400.0 500.0 + 98.4 + 100.0 289.0 Energy, Plant & 188.

  25. Slide 25: Energy Solution & Marine Engineering - revenue and profit trend

    Details by Segment 3 - Energy Solution & Marine Engineering - Net Sales or Revenue (billion yen) Energy, Plant & Marine Machinery Ship & Offshore Structure 118.8 103.8 102.1 95.5 86.5 77.8 77.0 80.1 79.8 72.2 70.5 72.8 70.3 70.8 70.9 70.7 60.6 63.5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

  26. Slide 26: Energy Solution & Marine Engineering - market overview and efforts

    Details by Segment 3 - Energy Solution & Marine Engineering - Market Overview Specific Efforts  Energy system & Plant Engineering Products and services for low-carbon and Domestic Overseas decarbonized society First Order in Taiwan for 30MW Class L30A High-efficiency ₋ Strong demand for ₋ Strong de

  27. Slide 27: Precision Machinery & Robot

    Details by Segment 3 - Precision Machinery & Robot - FY2024.Q2（vs. FY2023.Q2） FY2024 forecast（vs. Forecast in August） Orders Increased due to an increase in hydraulic Orders Expected to remain at the same level received machinery for Chinese construction received machinery market and robots for +¥21

  28. Slide 28: Precision Machinery & Robot - results and forecast table

    Details by Segment 3 - Precision Machinery & Robot - (billion yen) FY2023 FY2024 FY2023 FY2024 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q3-4 FCST Orders Received 103.0 124.6 + 21.6 213.3 240.0 240.0 + 26.7 - 115.4 Hydraulic Components & Systems 67.

  29. Slide 29: Precision Machinery & Robot - revenue and profit trend

    Details by Segment 3 - Precision Machinery & Robot - Net Sales or Revenue (billion yen) Hydraulic Components & Systems Robotics 86.6 73.1 73.5 69.2 65.0 60.6 61.2 61.5 55.2 57.6 55.6 56.8 53.6 52.6 53.7 52.6 49.3 45.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2020 FY2021 FY2022 FY2023

  30. Slide 30: Precision Machinery & Robot - market overview and efforts

    Details by Segment 3 - Precision Machinery & Robot - Market Overview Specific Efforts  Construction machinery  Measures for the development – Sluggish demand in China shows signs of of hydraulic business bottoming out especially in small models Development of new products and market for constructi

  31. Slide 31: Powersports & Engine

    Details by Segment 3 - Powersports & Engine - FY2024.Q2（vs. FY2023.Q2） FY2024 forecast（vs. Forecast in August） Revenue Decreased due to a temporary decline in four- Revenue Revised down due to a decrease in four- wheelers oriented from recall※ and production wheelers affected by recall and delay in

  32. Slide 32: Powersports & Engine - results and forecast table

    Details by Segment 3 - Powersports & Engine - (billion yen) FY2023 FY2024 FY2023 FY2024 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q3-4 FCST Revenue 267.1 253.3 - 13.8 592.4 720.0 660.0 + 67.6 - 60.0 406.7 Motorcycles for developed contries 93.4 99.1

  33. Slide 33: Powersports & Engine - revenue and profit trend

    Details by Segment 3 - Powersports & Engine - Net Sales or Revenue (billion yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2020 FY2021 FY2022 FY2023 FY2024 （IFRS） （IFRS） （IFRS） （IFRS） Operating Profit or Business Profit (billion yen) 17.3% 13.1% 10.7% 10.2% 10.9% 10.0% 9.9% 8.2% 8.9% 8

  34. Slide 34: Powersports & Engine - market overview and efforts

    Details by Segment 3 - Powersports & Engine - Market Overview Specific Efforts  U.S. (Motorcycles)  Supplying products as much as demanded – While the street model market remained firm, – Continuous introduction of new models the off-road model market softened – Flexible change of production and s

  35. Slide 35: Shareholder Return

    4 Shareholder Return Dividend Policy Dividend for FY2024 30% The medium- to long-term  Business profit forecast is unchanged consolidated dividend payout ratio  Net profit is revised down due to an expecting exchange loss. However, it may rise depending on Comprehensively considering the the excha

  36. Slide 36: Project Topics: Collaboration with CB&I on Liquefied Hydrogen

    4 Project Topics Strategic Collaborative Agreement with CB&I for Promoting Commercial-Use Liquefied Hydrogen Supply Chain (September 2024) CB&I is a global leader in the design and  By taking advantage of both companies’ strengths and construction of storage facilities, tanks specialized know-how,

  37. Slide 37: Project Topics: Precision machinery joint venture in China

    4 Project Topics Establishment of precision machinery joint Outline of the joint venture venture in China  In September 2024, Kawasaki established Eddie KPM Precision Products Machinery (Suzhou) Ltd., a joint venture for the hydraulic Control valves / equipment business together with a Chinese hydr

  38. Slide 38: Project Topics: 5,000th Railcar in U.S. Market

    4 Project Topics Major Milestone as 5,000 th Railcar in U.S. Market  Kawasaki Rail Car, Inc., a U.S. subsidiary of Japan based Kawasaki Railcar Manufacturing Co., Ltd. Held a major milestone event celebrating its 5,000th railcar in the U.S. market in October 2024.  Kawasaki has delivered 3,783 rai

  39. Slide 39: Appendix - Details of change in business profit (FY2024 forecast)

    Appendix 4 - Details of change in business profit (FY2024 forecast) - Effects of FX rates Change in share of （between assumed rate Change in profit(loss) of and actual rate） revenue investments Reversing buffer in Change in accounted for using eliminations and equity method product mix and SG&A, cor

  40. Slide 40: Appendix - CAPEX, Depreciation and Amortization, R&D, Employees

    Appendix 4 - CAPEX, Depreciation and Amortization, R&D Expenses, Number of employees - (billion yen, persons) FY2023 FY2024 FY2023 FY2024 Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST CAPEX 55.8 65.6 + 9.8 133.7 125.0 120.0 - 13.7 - 5.0 Depreciation and amortiza

  41. Slide 41: Appendix - Orders received by quarter

    Appendix 4 - Others -  Order received by quarter（billion yen) FY2022 FY2023 FY2024 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Aerospace Systems 60.4 65.1 75.1 144.7 118.7 74.4 139.2 360.0 88.2 121.7 Aerospace 45.9 46.4 48.0 113.4 104.4 98.0 108.0 246.3 54.3 58.4 Aero Engine 14.4 18.7 27.0 31.3 14.2 -23.6 31.2 1

  42. Slide 42: Appendix - Orders and Revenue for Ministry of Defense

    Appendix 4 - Others -  Orders received and Revenue for Ministry of Defense（billion yen） Same as previously announced in August FY2023 FY2024 FY2023 FY2024 Forecast Q2 Actual Q2 Actual Change Actual FCST Chg. Vs. FY23 Orders Received 188.7 144.2 - 44.5 553.0 651.5 + 98.5 Aircrafts and others 118.5 6

  43. Slide 43: Appendix - Order backlog, revenue by region, ship orders

    Appendix 4 - Others -  Order Backlog （billion yen)  Order Backlog in Ship & Offshore (billion yen) FY23 Q2 FY24 Q2 End of Q2 End of Q4 Actual Actual Change 206.5 191.6 Aerospace Systems 832.7 966.0 + 133.3 179.4 174.8 162.7 156.0 Rolling Stock 541.1 421.5 - 119.5 101.6 136.4 119.6 Energy Solution

  44. Slide 44: Appendix - Foreign currency amounts, exchange rates, ROIC formula

    Appendix 4 - Others -  Amount of foreign currency  Weighted-average Exchange Rates (EUR / JPY) that affects business profit and loss ※1 FY2022 actual 141.38 (billion USD / EUR) FY2023 actual 157.09 FY2023 FY2024 FY2024 Q2 actual 165.91 Q2Actual Q2Actual Q3-4 FCST Aerospace Systems 0.20 ※2 0.34 0.1

  45. Slide 45: © Kawasaki Heavy Industries, Ltd. All Rights Reserved

    © Kawasaki Heavy Industries, Ltd. All Rights Reserved

Kawasaki Heavy Industrial — Q2 2024 Earnings Presentation on 6ix