Fujikura Ltd · TSE:5803
Fujikura — H1 FY2016 Earnings Presentation
44 slides from Fujikura's earnings presentation, Oct 28, 2016
Slide 1: 1st Half FY2016 Materials for Results Briefing
st. 1 Half FY2016 Materials for Results Briefing Fujikura Ltd. October 28, 2016
Slide 2: Presenters and Agenda: Financial Results and 2020 Mid-term
I. 1st. Half FY2015 Financial Results Tetsu Ito, Senior Vice President & Member of the Board II. Start of 2020 Mid-term Review of 1H FY2016 and Actions in 2H Masahiko Ito, President & CEO 2
Slide 3: 1st Half FY2016 Financial Results
st. 1 Half FY2016 Financial Results Fujikura Ltd. October 28, 2016
Slide 4: Contents
Contents 1. Review of 1H FY2016 Financial Results and FY2016 Forecasts 2. By Segment 3. Shareholder Return 1
Slide 5: 1. Review of 1H FY2016 Financial Results and FY2016 Forecasts
1. Review of 1H FY2016 Financial Results and FY2016 Forecasts 2
Slide 6: 1H FY2016 Financial Results and FY2016 Forecasts
1H FY2016 Financial Results and FY2016 Forecasts （Unit：JPY in Billion） FY2016 FY2015 FY2016 （Released on May 10) 1H 2H FY2015 1H 2H FY2016 1H FY2016 Forecasts Forecasts Net Sales 345.2 333.3 678.5 305.2 324.8 630.0 330.0 690.0 （単位：億円） Operating Income 17.0 15.6 32.6 13.8 13.2 27.0 12.0 28.0 Ratio of
Slide 7: Review of 1H FY2016 Results and FY2016 Forecasts
Review of 1H FY2016 Results and FY2016 Forecasts Net sales decreased on a YoY basis due to effects of appreciation of the yen and fall of copper price. Operating income and ordinary income decreased on a YoY basis due to effects of appreciation of the yen. Net income decreased on a YoY basis d
Slide 8: 1H FY2016 Contributing Factors to Net Sales Change
1H FY2016 Contributing Factors to Net Sales Change（year-on-year basis） Net Sales （Unit：JPY in Billion） Effects of appreciation of the yen Power & Tele‐ (30.5) communication Effects of copper price Electronics Automotive Other 345.2 (12.7) +4.3 +2.9 (0.4) (3.6) 305.2 40.0 lower than 1st. Half FY2015
Slide 9: 1H FY2016 Contributing Factors to Operating Income Change
1H FY2016 Contributing Factors to Operating Income Change （year-on-year basis） Operating Income （Unit: JPY in Billion） Effects of appreciation of the yen Other (4.1) Automotive Electronics Power & Tele‐ +0.5 communication +1.5 17.0 (3.6) +2.5 13.8 3.2 lower than 1st. Half FY2015 1H FY2015 1H FY2016
Slide 10: 1H FY2016 Extraordinary Profit and Loss
1H FY2016 Extraordinary Profit and Loss Extraordinary Profit and Loss （Unit: JPY in Billion） FY2015 1st. Half 1st. Half 2nd. Half FY2015 FY2016 Operating Income 17.0 15.6 32.6 13.8 Equity Method (0.2) (2.7) (2.9) 0.0 Income Ordinary Income 14.2 10.4 24.6 11.9 Structural reform cost Extraordinary Gai
Slide 11: Consolidated B/S (1)
Consolidated B/S (1) （Unit: JPY in Billion） Effects of foreign exchange As of March As of Sept. rate -29.9 billion yen Difference 31, 2016 30, 2016 Effects of appreciation of the yen and depreciation of the 〈Assets〉 552.6 555.4 +2.8 currencies in emerging countries Current Assets 282.4 290.4 +8.0 Ma
Slide 12: Consolidated B/S (2)
Consolidated B/S (2) （Unit: JPY in Billion） As of March As of Sept. Difference 31, 2016 30, 2016 Total 552.6 555.4 +2.8 （Treasury Stock） （(25.3)） （(4.5)） （+20.8） In addition to the increase of capital 〈Liabilities〉 334.6 362.2 +27.5 expenditure and operating capital in Electronics business, it is in
Slide 13: 2. By Segment
2. By Segment F Fujikura
Slide 14: Financial Records and Forecasts by Segment
Financial Records and Forecasts by Segment （Unit: JPY in Billion） Net Sales Operating Income and Ratio of Operating Income to Net Sales 1st. Half 1st. Half 2H FY2016 1st. Half 1st. Half 2H FY2016 Segment FY2015 FY2016 Difference Forecasts FY2015 FY2016 Difference Forecasts Results Results Results Re
Slide 15: Power & Telecommunication Systems Company
Power & Telecommunication Systems Company In 1H 2016, net sales decreased due to effects of appreciation of the yen and fall of copper price, but operating income increased owing to strong optical fibers and optical components demand and improvement of product mix. In 2H 2016, net sales of Power
Slide 16: Electronics Business Company
Electronics Business Company In 1H 2016, net sales decreased mainly due to effect of foreign exchange rates and weak demand for smartphones, but operating income was secured owing to various measures including converting fixed cost into variable cost. In 2H FY2016, both net sales and net income
Slide 17: Automotive Products Company
Automotive Products Company In 1H 2016, net sales decreased due to effects of foreign exchange rate, but operating income increased owing to launching of new models and effects of reduction of fixed cost by structural reform. In 2H 2016, operating income is expected to increase owing to cost imp
Slide 18: Real Estate Business Company
Real Estate Business Company Revenues from leasing real estate properties continue to contribute to consolidated operating income. （Unit: JPY in Billion） Net Sales & Ratio of Operating Income to Net Sales Real Estates ■ In 1H 2016, real estate business continues to Ratio of Operating Income to Net
Slide 19: CAPEX and Depreciation
CAPEX and Depreciation （Unit: JPY in Billion） FY2015 FY2016 FY2016 FY2016 Forecasts Forecasts 1H FY2015 1H （Oct. 28） （May 10） CAPEX 13.2 31.9 20.5 42.0 47.0 （for manufacturing 13.1 3.13 202 33.0 38.0 business） （for real estate business） 0.0 0.6 0.2 9.0 9.0 Depreciation Cost 13.3 26.6 12.4 29.0 30.0
Slide 20: Interest-bearing Debts, Net Financial Profit and Free Cash Flow
Interest-bearing Debts, Net Financial Profit and Free Cash Flow （Unit: JPY in Billion） FY2015 FY2016 1H 2H FY2015 1H Interest-bearing Debts 197.2 199.6 199.6 229.7 Net Financial Profit/Loss (0.8) (0.5) (1.3) (0.6) Free Cash Flow 7.6 6.2 13.8 (18.5) Free Cash Flow = Cash Flow by Operating Activities
Slide 21: 3. Shareholder Return
3. Shareholder Return F Fujikura
Slide 22: Profit Return
Profit Return Basic Policy in 2020 Mid-term Total Return Ratio 20% or more FY2016 Forecasts Dividends 10.0 yen per share （Interim 5.0 yen per share, Year-end 5.0 yen per share, 2.9 billion yen） FY2015 8.0 yen per share ( Interim 4.0 yen per share , Year-end 4.0 per share) （2.0 yen of increase co
Slide 23: Special Notes / Contact
Special Notes: Statements in this presentation that relate to future results and events (including statements regarding Fujikura’s revenue and earnings guidance) are based on Fujikura’s current expectations. Actual results in future periods may differ materially from those currently expected because
Slide 24: Start of 2020 Mid-term: Review of 1H FY2016 and Actions in 2H
Start of 2020 Mid-term Review of 1H FY2016 and Actions in 2H “Let’s transform ourselves, and bridge to the future! 2020 Mid-term” Fujikura Ltd. Masahiko Ito President & CEO October 28, 2016
Slide 25: We will continue to maintain and strengthen earning power
We will continue to maintain and strengthen "earning power" Goals to be achieved in FY2020 • Ratio of operating income to net sales: 7.0% or higher • Net sales: 900 billion yen • ROE: 10% or higher • D/E ratio: 40:60 (0.66 times) 1
Slide 26: Contents
Contents 1. Review of 1H FY2016 Financial Results and FY2016 Forecasts 2. Progress of Key Measures of 2020 Business Plan 3. Actions in 2H FY2016 toward FY2017 4. Profit Return 2
Slide 27: 1. Review of 1H FY2016 Financial Results and FY2016 Forecasts
1. Review of 1H FY2016 Financial Results and FY2016 Forecasts 3
Slide 28: 1H FY2016 Financial Results and FY2016 Forecasts
1H FY2016 Financial Results and FY2016 Forecasts （Unit：JPY in Billion） FY2016 FY2015 FY2016 （Released on May 10) 1H 2H FY2015 1H 2H FY2016 1H FY2016 Forecasts Forecasts Net Sales 345.2 333.3 678.5 305.2 324.8 630.0 330.0 690.0 （単位：億円） Operating Income 17.0 15.6 32.6 13.8 13.2 27.0 12.0 28.0 Ratio of
Slide 29: (2) 1H FY2016 Financial Results and FY2016 Forecasts
(2) 1H FY2016 Financial Results and FY2016 Forecasts In 1H FY2016, the business environment was severe, but we could secure higher operating income and ordinary income than the original forecasts owing to various measures. On the other hand, net income did not achieve the target due to negative fa
Slide 30: 2. Progress of Key Measures of 2020 Mid-term Business Plan
2. Progress of Key Measures of 2020 Mid-term Business Plan 6
Slide 31: (1) Progress of Key Measures of 2020 Mid-term Business Plan
(1) Progress of Key Measures of 2020 Mid-term Business Plan As a customer value creating company, we will become a promising company with a future through both "strong earning power" and "power of strong metabolism"! Developing deeper ties with strategic Developing deeper ties i) Strengthen EPC/ se
Slide 32: (2) Developing deeper ties with strategic customers (i)
(2) Developing deeper ties with strategic customers (i) Strengthen EPC/ service business for overseas major telecommunication companies ○ Beyond conventional business models such as manufacturing and sales of telecommunication infrastructure materials and components. Material Initial Survey Final
Slide 33: (3) Developing deeper ties with strategic customers (ii)
(3) Developing deeper ties with strategic customers (ii) Approach to overseas key customers by providing strategic products (Spider Web Ribbon/Wrapping Tube Cable) ○ overseas, especially in North America, the technology is gradually recognized and the market penetration is in progress. Comparison
Slide 34: (4) Speed up new business creation
(4) Speed up new business creation Actions in Fiber laser business - Introduction of new competitive products - Expansion of marketing activities and assignment of human resources in China/ Europe Will accomplish positive figure in early next year Can irradiate from right over the brass materials
Slide 35: (5) Open Innovation
(5) Open Innovation Joint research with NTT and Hokkaido University -Development of optical fibers with the world highest density- －Multi-core optical fiber having 100 times transmission capacity compared with conventional one Possible to transmit thousands of high-definition films in one second.
Slide 36: (6) Management reform & business structural reform (i)
(6) Management reform & business structural reform (i) Structural reform for domestic cables & wire business －Viscas Corporation reorganization Transferring power distribution lines/overhead power transmission lines to Fujikura Ltd. by reorganization －FDC business integration In April, 2016, FDC r
Slide 37: (7) Management reform & business structural reform (ii)
(7) Management reform & business structural reform (ii) Management reform - Governance reform ・Speed up decision making by transferring authority to managing directors ・Establishment of a new organization to support management decision-making by strengthening supervisory function of the Board of Di
Slide 38: 3. Actions in 2H FY2016 toward FY2017
3. Actions in 2H FY2016 toward FY2017 14
Slide 39: (1) Actions in 2H FY2016 toward FY2017
(1) Actions in 2H FY2016 toward FY2017 Power & Telecommunication Systems Company – Optical fibers: Quick response to strong world demand – Power systems business： • Strengthen EPC business • Enhancing further structural reform of domestic wire & cable business Electronics Business Company - Secure
Slide 40: 4. Profit Return
4. Profit Return F Fujikura
Slide 41: (1) Profit Return Basic Policy
(1) Profit Return Basic Policy Executing profit allocation considering balance Concentrated investment to growing businesses (next growth) Improvement of financial strength (capital ratio, D/E ratio） Flexible repurchase of own shares Improvement of per-share profit Executing stable dividend I
Slide 42: Customer value creating company: strong earning power
As a customer value creating company, we will become a promising company with a future through both "strong earning power" and "power of strong metabolism"! 18
Slide 43: Special Notes / Contact
Special Notes: Statements in this presentation that relate to future results and events (including statements regarding Fujikura’s revenue and earnings guidance) are based on Fujikura’s current expectations. Actual results in future periods may differ materially from those currently expected because
Slide 44: 1H FY2016 Financial Results Appendix
【 1H FY2016 Financial Results Appendix】 Net Sales and Operating Income by Segment Unit: Billion in Net Sales Records and Forecasts by Segment JPY FY2016 FY2015 FY2016 Forecast on May 10 Full 2H Full Year 1Q 2Q 3Q 4Q 1H 2H 1Q Results 2Q Results 1H Results 1H Forecasts Year Forecasts Forecasts Power S