Subaru Corporation · TSE:7270
Subaru — FY2016 Earnings Presentation
52 slides from Subaru's earnings presentation, May 12, 2016
Slide 1: President & CEO, Yasuyuki Yoshinaga
President & CEO, Yasuyuki Yoshinaga Fuji Heavy Industries Ltd. May 12, 2016 http://www.fhi.co.jp/english/ir/index.html 0
Slide 2: Business Results of the FYE 2016
Business Results of the FYE 2016 FYE 2015 FYE 2016 vs. YoY plan Actual results Plan Actual results Consolidated sales 910,700 954,800 957,900 +5.2% +0.3% volume units units units Net sales (100 million yen) 28,779 32,100 32,323 +12.3% +0.7% Operating income (100 million yen) 4,230 5,500 5,656 +33.7%
Slide 3: Business Plan for the FYE 2017
Business Plan for the FYE 2017 FYE 2016 FYE 2017 YoY Actual results Plan Consolidated sales 957,900 1,049,700 +9.6% volume units units Net sales (100 million yen) 32,323 31,700 -1.9% Operating income (100 million yen) 5,656 4,200 -25.7% OPM 17.5% 13.2% -4.2pt Ordinary income (100 million yen) 5,770
Slide 4: Shareholder Returns (Repurchase of Own Shares)
Shareholder Returns (Repurchase of Own Shares) 【Details of the Repurchase】 Class of shares Common stock in FHI to be repurchased Total number of shares to be Up to 15 million repurchased Total value of shares Up to 48 billion yen to be repurchased Repurchase period May 13 – Sep 30, 2016 * All of sha
Slide 5: Shareholder Returns (Dividend)
Shareholder Returns (Dividend) 【Dividend Per Share】 FYE 2015 FYE 2016 FYE 2017 YoY (a) (b) (Plan) (b)-(a) End of 2nd quarter ¥31 ¥72 ¥72 +¥41 End of 4th quarter ¥37 ¥72 ¥72 +¥35 Year total ¥68 ¥144 ¥144 +¥76 Dividend payout ratio 20.3% 25.7% 38.4% +5.5pt Total return ratio 20.3% 36.7% 38.4% +16.5pt
Slide 6: Prominence 2020 (update)
Prominence 2020 (update) Vision for 2020 set in May 2014 remains the same Revised the product strategy, market strategy and production strategy in accordance with the progress and changes in business environment Accelerate the initiatives to enhance the Subaru brand http://www.fhi.co.jp/englis
Slide 7: Prominence 2020 - Product Strategy
Prominence 2020 - Product Strategy CY2016 CY2017 CY2018 CY2019 CY2020～ FMC FMC FMC FMC Will introduce new models year after year New Impreza Key Models Next generation platform（Subaru Global Platform） * Will be introduced with the new Impreza to be launched in late 2016, and will then be rolled out
Slide 8: Prominence 2020 - Market Strategy
Prominence 2020 - Market Strategy Sales in North America is exceeding the original forecast and is expected to keep growing Maintain the current sales level in Japan and China, and increase the volume in other countries or regions Revised the global sales forecast upward to 1.2 plus million un
Slide 9: Prominence 2020 - Production Strategy
Prominence 2020 - Production Strategy Revised the production capacity plan in accordance with the revision of sales forecast (Previous: 1.05 million units in FYE2021 New: 1.13 million units in FYE2019) Camry production at SIA to end in May 2016. Will start producing Outback utilizing the same
Slide 10: Mid-Term Three-Year Profit Plan
Mid-Term Three-Year Profit Plan Three-Year Business Operation / Profit Plan Increase both revenue and income while further enhancing the investments for the future growth (*under the same currency exchange rate) Sustain the high OPM in the industry Forecast for FYE15-17 Plan for FYE17-19 （Result
Slide 11: Change of Company Name
Change of Company Name Fuji Heavy Industries Ltd. (Fuji Jyukogyo Kabushiki Gaisha) SUBARU CORPORATION (Kabushiki Gaisha SUBARU) * Subject to approval by the 85th ordinary general meeting of shareholders scheduled for June 28th, 2016 * Effective from April 1st, 2017 http://www.fhi.co.jp/english/ir/in
Slide 12: Change of Company Name／Business Restructuring
Change of Company Name／Business Restructuring Change the company name to SUBARU Corporation from Fuji Heavy Industries Ltd. to accelerate the initiatives to enhance the Subaru brand Optimize company-wide allocation of management resources to enhance development resources in the automotive busine
Slide 13: Forward-looking statements disclaimer
Forward-looking statements including projections and future strategies mentioned in this presentation are based on currently available information and assumptions and are subject to risks and uncertainties. Actual results may vary materially as a result of various factors including, without limitati
Slide 14: http://www.fhi.co.jp/english/ir/index.html
http://www.fhi.co.jp/english/ir/index.html 13
Slide 15: Consolidated Financial Results for FYE 2016
Consolidated Financial Results for FYE 2016 Mitsuru Takahashi Executive Vice President & CFO May 12, 2016 http://www.fhi.co.jp/english/ir/index.html 0
Slide 16: Summary
Summary Consolidated Financial Results for FYE 2016 Consolidated global unit sales set an all time record for the 4th consecutive year mainly with the continuous strong sales in North American market. Net sales and all profit levels posted all-time records for the 4th consecutive year with gain
Slide 17: Consolidated financial results for FYE 2016
Consolidated financial results for FYE 2016 http://www.fhi.co.jp/english/ir/index.html 2
Slide 18: FYE 2016: Consolidated Unit Sales
FYE 2016：Consolidated Unit Sales （Thousand units） Actual Results Actual Results Variance FYE 2015 FYE 2016 Passenger car 127.9 111.6 -16.3 Minicar 34.9 33.7 -1.2 Domestic total 162.8 145.3 -17.5 US 527.6 582.7 +55.0 Canada 42.4 47.6 +5.1 Russia 11.6 5.7 -5.8 Europe 35.7 41.8 +6.0 Australia 38.9 44.6
Slide 19: FYE 2016: Consolidated Income Statements
FYE 2016：Consolidated Income Statements （100 Million Yen） Actual Results Actual Results Variance FYE 2015 FYE 2016 Net sales 28,779 32,323 +3,543 Domestic 6,529 6,054 -475 Overseas 22,250 26,269 +4,018 Operating income 4,230 5,656 +1,425 Total non-operating -294 +114 +408 income & expenses Ordinary
Slide 20: FYE 2016: Analysis of Variance in Operating Income
FYE 2016 : Analysis of Variance in Operating Income (Consolidated) （100 Million Yen） Fixed cost : -89 (FHI -13, SIA -76) Sales volume Cost SG&A : -87 (FHI +18, SOA -61, others) US$ : +1,325 & mixture reduction Warranty claims : -214 EURO : -20 Gain on and others +331 CA$ : -27 CNY : +7 currency +588
Slide 21: Consolidated Balance Sheets
Consolidated Balance Sheets （100 Million Yen） As of March 31 As of March 31 Variance 2015 2016 Total assets 21,997 25,924 +3,927 Current assets 14,733 17,841 +3,108 Noncurrent assets 7,264 8,083 +819 Interest bearing debts 2,112 1,700 -412 Net assets 10,307 13,494 +3,187 Retained earnings 6,974 10,4
Slide 22: FYE 2016: Consolidated Statement of Cash Flows
FYE 2016: Consolidated Statement of Cash Flows （100 Million Yen） Actual results Actual results Variance FYE 2015 FYE 2016 Net cash provided by (used in) operating activities 3,115 6,143 +3,027 Net cash provided by (used in) investing activities -1,728 -2,557 -829 Free cash flows 1,388 3,586 +2,198 N
Slide 23: FYE 2016: Operating Results of Subsidiaries in U.S.
FYE 2016 : Operating Results of Subsidiaries in U.S. （Million US$） Actual results Actual results SOA FYE 2015 FYE 2016 Variance Net sales 13,393 15,203 +1,810 Operating income 490 770 +280 Net income 309 480 +171 Retail sales 530.5 581.4 +50.9 (Thousand units) Actual results Actual results SIA FYE 2
Slide 24: Forecasts for FYE 2017
Forecasts for FYE 2017 http://www.fhi.co.jp/english/ir/index.html 9
Slide 25: FYE 2017: Consolidated Unit Sales Plan
FYE 2017：Consolidated Unit Sales Plan （Thousand units） Actual results Plan Variance FYE 2016 FYE 2017 Passenger car 111.6 119.0 +7.5 Minicar 33.7 37.3 +3.6 Domestic total 145.3 156.3 +11.0 US 582.7 643.1 +60.4 Canada 47.6 52.6 +5.0 Russia 5.7 9.6 +3.9 Europe 41.8 40.1 -1.7 Australia 44.6 48.2 +3.6 C
Slide 26: FYE 2017: Consolidated Operating Plan
FYE 2017 : Consolidated Operating Plan （100 Million Yen） Actual results Plan Variance FYE 2016 FYE 2017 Net sales 32,323 31,700 -623 Domestic 6,054 6,103 +49 Overseas 26,269 25,597 -672 Operating income 5,656 4,200 -1,456 Ordinary income 5,770 4,200 -1,570 Income before taxes and minority interests
Slide 27: FYE 2017: Analysis of Variance in Operating Income
FYE 2017 : Analysis of Variance in Operating Income (Consolidated) US$ : -1,719 （100 Million Yen） Sales volume Cost EURO : -40 CA$ : -87 & mixture reduction CNY : -5 and others +320 Currency exchage adjustment : +5 Unrealized gain: +160 +999 Fixed cost : -383 (FHI -98, SIA -285) SG&A : -436 (FHI -54
Slide 28: FYE 2017: Operating Plan of Subsidiaries in U.S.
FYE 2017 : Operating Plan of Subsidiaries in U.S. （Million US$） Actual results Plan SOA FYE 2016 FYE 2017 Variance Net sales 15,203 16,973 +1,770 Operating income 770 789 +19 Net income 480 484 +4 Retail sales 581.4 623.6 +42.2 (Thousand units) Actual results Plan SIA FYE 2016 FYE 2017 Variance Net
Slide 29: Capex / Depreciation / R&D / Interest bearing debt
Capex / Depreciation / R&D / Interest bearing debt （100 Million Yen） Actual Results Plan Actual Results Variance FYE 2016 FYE 2017 FYE 2015 (b) - (a) (a) (b) Capex 1,107 1,357 1,600 +243 Depreciation 648 650 800 +150 R&D 835 1,024 1,200 +176 Interest 2,112 1,700 1,650 -50 bearing debt http://www.fhi
Slide 30: Appendix (1)
Appendix (1) ・ Non-operating income & expenses and extraordinary income & loss ・Non-operating ・ Segment information by Business & Geographic ・Segment ・ Overseas net sales ・Overseas ・ Non-consolidated unit sales ・Non-consolidated ・ Consolidated income statements in 4th quarter (3 months) ・ FYE 2016 p
Slide 31: FYE 2016: Non-operating Income & Expenses and Extraordinary Income & Loss
FYE 2016 : Non-operating Income & Expenses and Extraordinary Income & Loss (Consolidated) （100 Million Yen） Actual Results Actual Results Variance FYE 2015 FYE 2016 Financial revenue and expenditure 12 27 +15 FOREX effects -263 78 +341 Others -43 9 +52 Total non-operating income& expenses -294 114 +
Slide 32: FYE 2016: Net Sales and Operating Income by Business Segment
FYE 2016 : Net Sales and Operating Income by Business Segment (Consolidated) （100 Million Yen） Net Sales Operating Income Actual Actual Actual Actual Results Results Variance Results Results Variance FYE 2015 FYE 2016 FYE 2015 FYE 2016 Automobile 26,990 30,394 +3,405 4,009 5,436 +1,427 Aerospace 1,4
Slide 33: FYE 2016: Net Sales and Operating Income by Geographic Area
FYE 2016 : Net Sales and Operating Income by Geographic Area (Consolidated) （100 Million Yen） Net Sales Operating Income Actual Actual Actual Actual Results Results Variance Results Results Variance FYE 2015 FYE 2016 FYE 2015 FYE 2016 Japan 9,722 9,621 -101 3,518 4,457 +938 North America 16,250 19,8
Slide 34: FYE 2016: Overseas Net Sales
FYE 2016 : Overseas Net Sales (Consolidated) （100 Million Yen） Actual Results Actual Results FYE 2015 FYE 2016 Variance North America 17,309 21,045 +3,736 Europe 1,233 1,262 +30 Asia 2,387 2,373 -15 Other 1,321 1,589 +268 Total 22,250 26,269 +4,018 http://www.fhi.co.jp/english/ir/index.html 19
Slide 35: FYE 2016: Non-consolidated Unit Sales
FYE 2016 : Non-consolidated Unit Sales （Thousand units） Actual Results Actual Results FYE 2015 FYE 2016 Variance Domestic production 707.7 714.9 +7.2 Domestic sales 167.1 150.0 -17.1 Passenger cars 131.6 114.4 -17.2 Minicars 35.6 35.6 +0.1 Number of exported vehicles 545.6 576.5 +30.9 Components for
Slide 36: 4th Quarter: Consolidated Unit Sales
4th Quarter (3 months) : Consolidated Unit Sales （Thousand units） Actual results Actual results Variance 4Q FYE 2015 4Q FYE 2016 Passenger cars 44.4 35.7 -8.7 Minicars 12.5 9.7 -2.8 Domestic total 56.9 45.4 -11.5 U.S. 128.9 136.4 +7.4 Canada 10.5 10.9 +0.4 Russia 0.7 1.0 +0.2 Europe 12.8 13.2 +0.3 A
Slide 37: 4th Quarter: Consolidated Income Statements
4th Quarter (3 months) : Consolidated Income Statements （100 Million Yen） Actual results Actual results Variance 4Q FYE 2015 4Q FYE 2016 Net sales 8,172 8,136 -36 Domestic 2,110 1,772 -338 Overseas 6,062 6,364 +303 Operating income 1,129 1,298 +170 Ordinary income 1,053 1,430 +377 Income before taxe
Slide 38: 4th Quarter: Analysis of Variance in Operating Income
4th Quarter (3 months) : Analysis of Variance in Operating Income (Consolidated) US$ : -22 （100 Million Yen） SG&A EURO : -10 Cost CA$ : -25 expenses Sales volume reduction CNY : +1 and others Currency exchange & mixture and Others +113 +7 adjustment : -92 +217 Loss on FHI : +83 currency R&D (materia
Slide 39: FYE 2016 Plan vs. Actual Results: Consolidated Unit Sales
FYE 2016 Plan vs. Actual Results： Consolidated Unit Sales （Thousand units） Plan Actual results Variance FYE 2016 FYE 2016 Passenger cars 109.8 111.6 +1.8 Minicars 33.5 33.7 +0.2 Domestic total 143.3 145.3 +2.0 U.S. 583.0 582.7 -0.3 Canada 47.1 47.6 +0.5 Russia 6.1 5.7 -0.4 Europe 41.3 41.8 +0.4 Aust
Slide 40: FYE 2016 Plan vs. Actual Results: Consolidated Income Statements
FYE 2016 Plan vs. Actual Results : Consolidated Income Statements （100 Million Yen） Plan Actual results Variance FYE 2016 FYE 2016 Net sales 32,100 32,323 +223 Domestic 5,962 6,054 +92 Overseas 26,138 26,269 +130 Operating income 5,500 5,656 +156 Ordinary income 5,470 5,770 +300 Income before taxes
Slide 41: FYE 2016 Plan vs. Actual Results: Analysis of Variance in Operating Income
FYE 2016 Plan vs. Actual Results : Analysis of Variance in Operating Income (consolidated) Domestic : +14 Gain on （100 Million Yen） (volume increase, currency FHI : -15 (material cost -23) mixture deterioration) SIA : -7 (material cost -7) Overseas : +116 SG&A exchange (volume increase, expenses +44
Slide 42: Plan for 1st Half of FYE 2017: Consolidated Unit Sales
Plan for 1st Half of FYE 2017 : Consolidated Unit Sales （Thousand units） Actual results Plan Variance 1st half FYE 2016 1st half FYE 2017 Passenger cars 49.8 50.5 +0.7 Minicars 16.7 14.6 -2.1 Domestic total 66.5 65.1 -1.4 U.S. 290.6 315.1 +24.5 Canada 26.1 28.2 +2.1 Russia 3.5 5.3 +1.9 Europe 19.6 1
Slide 43: Plan for 1st Half of FYE 2017: Consolidated Income Statements
Plan for 1st Half of FYE 2017 : Consolidated Income Statements （100 Million Yen） Actual results Plan Variance 1st half FYE 2016 1st half FYE 2017 Net sales 16,015 15,335 -680 Domestic 2,852 2,796 -56 Overseas 13,163 12,539 -624 Operating income 2,851 2,100 -751 Ordinary income 2,850 2,140 -710 Incom
Slide 44: 1st Half FYE 2016 Results vs. FYE 2017 Plan: Variance in Operating Income
1st Half of FYE 2016 Results vs. FYE 2017 Plan： Analysis of Variance in Operating Income (consolidated) US$ : -935 （100 Million Yen） EURO : -23 CA$ : -66 CNY : -2 Sales volume Cost Currency exchange & mixture reduction adjustment : -43 and Others +207 Unrealized gain：+227 +474 Fixed cost：-172 (FHI -
Slide 45: Appendix (2)
Appendix (2) ・Net sales / Operating income ・Net ・ Consolidated unit sales / OPM ・Consolidated ・ Complete cars production / Retail sales units ・Complete ・ FCF / Shareholder ・FCF ’s equity to total assets Shareholder’s ・ Interest-bearing debt / D/E ratio ・Interest-bearing http://www.fhi.co.jp/english/
Slide 46: Net Sales / Operating Income
Net Sales / Operating Income Operating Net Sales ¥89/$ ¥98/$ ¥98/$ ¥99/$ ¥103/ ¥102/ ¥102/ ¥110/ ¥118/ ¥120/ ¥123/ ¥121/ ¥118/ Income （100M yen） $ $ $ $ $ $ $ $ $ （100 million yen） 9000 1,800 8,172 8,362 8,172 Net sales Operating income 8,136 8000 7,505 7,653 6,996 7,168 1,500 7000 1,509 1,506 5,829
Slide 47: Consolidate Unit Sales & Operating Income Margin
Consolidate Unit Sales & Operating Income Margin Unit sales OPM （1,000 units） Consolidated unit sales OPM 247 247 246 250 238 240 232 232 225 20% 198 202 201 200 191 194 18.4% 18% 18.1% 17.5% 16.6% 16.0% 15% 150 13.8% 14.9% 14.0% 14.2% 12.7% 13.3% 13.3% 13% 100 10% 50 8.7% 8% 0 5% 4Q 1Q 2Q 3Q 4Q 1Q
Slide 48: Complete Cars Production / Retail Sales Units
Complete Cars Production / Retail Sales Units （1,000 units） 253 248 249 250 Production Retail Sales 241 244 242 237 234 237 229 233 231 237 228 225 207 211 213 212 210 211 211 214 195 197 193 200 150 100 50 0 Jan.- Apr.-Jun. Jul.-Sep. Oct.- Jan.- Apr.-Jun. Jul.-Sep. Oct.- Jan.- Apr.-Jun. Jul.-Sep. O
Slide 49: Free Cash Flows & Ratio of Shareholders' Equity to Total Assets
Free Cash Flows & Ratio of Shareholders’ Equity to Total Assets FCF Ration of shareholders’ （100M yen） Equity to total assets 3,586 55% FCF Shareholders' equity ratio 3,800 52.5% 51.8% 50.2% 3,300 48.8% 50% 2,791 2,800 46.5% 46.0% 2,535 44.0% 2,300 2,094 42.9% 45% 41.2% 1,860 1,800 39.9% 42.6% 40.5%
Slide 50: Interest Bearing Debt & D/E Ratio
Interest Bearing Debt & D/E Ratio Interest bearing debt D/E ratio （100M yen） 3500 1.0 Interest bearing debt D/E ratio 3,072 0.9 2,967 2,918 3000 2,760 2,697 2,574 0.8 2500 2,322 2,268 0.7 2,112 2,011 2,014 0.6 0.52 1,865 2000 0.46 1,700 0.5 0.41 1500 0.36 0.35 0.32 0.4 0.27 1000 0.24 0.3 0.21 0.18 0
Slide 51: Forward-looking statements disclaimer
Forward-looking statements including projections and future strategies mentioned in this presentation are based on currently available information and assumptions and are subject to risks and uncertainties. Actual results may vary materially as a result of various factors including, without limitati
Slide 52: http://www.fhi.co.jp/english/ir/index.html
http://www.fhi.co.jp/english/ir/index.html 37
Fuji Heavy Industries Ltd. (Subaru Corporation) — FY2016 Earnings Presentation on 6ix