Hanwa Co., Ltd. · TSE:8078
Hanwa — FY2019 Earnings Presentation
34 slides from Hanwa's earnings presentation, May 25, 2020
Slide 1: Financial Results for the Fiscal Year ended March 31, 2020
Financial Results for the Fiscal Year ended March 31, 2020 May 25, 2020 HANWA CO., LTD. Copyright© 2020 Hanwa Co., Ltd. All Rights Reserved
Slide 2: Operating Results (Consolidated)
Operating Results (Consolidated) Fiscal Year (ended March 31) FY2018 FY2019 Y on Y Y on Y (billions of yen) Change Rate Net Sales 2,074.6 1,907.4 (167.1) -8% Gross Profit 79.2 0.0 79.8 0.0 +0.6 +1% SG&A 50.3 52.4 +2.1 +4% Operating income 28.9 27.3 (1.5) -5% Ordinary income 23.3 (12.5) (35.9) ― Net
Slide 3: Changes in Business results (Consolidated)
Changes in Business results (Consolidated) ▸Net sales H2 ‣Net income attributable H2 （billions of yen） 2,074.6 H1 to owners of the Company H1 2,000.0 1,907.4 20.0 17.3 1,791.1 16.3 13.9 1,514.0 8.8 1,069.7 10.1 1,500.0 961.4 10.0 7.4 954.1 6.2 8.5 6.5 798.4 5.1 1,000.0 0.0 500.0 1,004.9 946.0 (10.0)
Slide 4: Effect of Profit/Loss from Market value Accounting and Temporary factors
Effect of Profit/Loss from Market value Accounting and Temporary factors （billions of yen） 35.0 30.0 34.9 23.4 25.0 20.0 15.0 10.0 5.0 2.3 1.0 0.0 -5.0 (1.2) (1.1) -10.0 0 -15.0 (12.5) 0 Accounting Inventory Delivative Exchange Samancor Others Actual ordinary ordinary Income valuation valuation conv
Slide 5: Concerning SAMANCOR
Concerning SAMANCOR ▸After becoming our equity method affiliated company in the FY2017, SAMANCOR had not contributed to consolidated results under the severe environment that based on decline in the market price of ferrochrome, and increase in cost of electric power. ▸We have verified the medium-to
Slide 6: Segment Information (consolidated)
Segment Information (consolidated) ▸Net sales FY2018 FY2019 (billions of yen) 2,074.6 2,200.0 1,907.4 1,800.0 1,400.0 1,047.9 1,005.4 1,000.0 600.0 303.8 259.8 244.2 210.4 314.7 241.0 79.9 78.8 101.3 101.7 82.5 85.0 200.0 -200.0 (100.0) (74.8) ▸Segment income 30.0 23.3 17.3 20.0 14.6 10.0 5.8 4.1 1.
Slide 7: Financial Position (consolidated)
Financial Position (consolidated) Fiscal Year (ended March 31) FY2018 FY2019 Y on Y Y on Y (billions of yen) Change Rate Total assets 933.3 0.0 798.4 (134.8) -14% Total liabilities 730.8 0.0 632.3 0.0 (98.5) -13% Interst-bearing debt 363.2 0 331.1 (32.1) -9% Net DER 161% 161% -0.2pt -0% * 131%0 * 12
Slide 8: Cash Flow Situation (consolidated)
Cash Flow Situation (consolidated) Fiscal Year (ended March 31) FY2018 FY2019 Y on Y Y on Y (billions of yen) Change Rate CF from operating activities 15.4 74.2 +58.8 +382% CF from investing activities (20.6) (24.1) 0.0 (3.5) +17% FCF (5.2) 50.1 0.0 +55.3 ― CF from financing activities 28.1 (42.3) (
Slide 9: Business Forecast FY2020 (year ending Mar 31, 2021)
Business Forecast FY2020 (year ending Mar 31, 2021) Fiscal Year (ending March 31) FY2019 FY2020 Y on Y Y on Y (billions of yen) (Acctual) (Forecast) Change Rate Net Sales 1,907.4 ― ― ー Operating income 27.3 ― ― ー Ordinary income (12.5) 0.0 ― 0 ― 0 ー 0 Net income attributable to owners of the Company
Slide 10: Dividend Policy
Dividend Policy 【Trend in dividends】 Interim dividends Year-end dividends Dividend payout ratio 50 150.0 150 Dividend payout ratio (%) 125.0 （43.8） 40 120 Dividends(yen) （29.3） 100.0 75.0 (undetermined) 30 90 75.0 25.0 20 60 75.0 75.0 10 30 50.0 0 0 FY2017 FY2018 FY2019 FY2020(estimated) 【Dividend P
Slide 11: Steel Business Segment
Steel Business Segment Fiscal Year (ended March 31) ▶Net sales and volumes decreased due to FY2018 FY2019 Y on Y sluggish demand by the trade friction between Rate U.S. and China and decrease in Olympic-related (billions of yen) constructions, Net Sales 1,047.9 1,005.4 +111100% -4% ▶ Segment income
Slide 12: Primary Metal Business Segment
Primary Metal Business Segment Fiscal Year (ended March 31) ▶Net sales decreased due to decline in the FY2018 FY2019 Y on Y market price of ferroalloy. (billions of yen) Rate ▶Segment income was a loss mainly due to Net Sales 303.8 259.8 +111100% -14% expansion of equity in losses of affiliates for
Slide 13: Metal Recycling Business Segment
Metal Recycling Business Segment Fiscal Year (ended March 31) ▸Net sales decreased due to decline in base FY2018 FY2019 Y on Y metal prices and decrease in transaction volume. (billions of yen) Rate ▸ Segment income increased due to improved profitability by procuring low price in the Net Sales 79.9
Slide 14: Foods Business Segment
Foods Business Segment Fiscal Year (ended March 31) ▸ Net sales and transaction volume remained FY2018 FY2019 Y on Y flat. (billions of yen) Rate ▸ Segment income was a loss mainly due to Net Sales 101.3 101.7 +111100% +0% decline in market prices of salmon, increase in valuation losses on inventori
Slide 15: Petroleum & Chemicals Business Segment
Petroleum & Chemicals Business Segment Fiscal Year (ended March 31) ▸ Despite decreased volume by weak FY2018 FY2019 Y on Y market of petroleum products, segment (billions of yen) Rate income increased mainly due to the Net Sales 244.2 210.4 +111100% -14% expansion of profit margins of bunker fuel o
Slide 16: Overseas Sales Subsidiaries Segment
Overseas Sales Subsidiaries Segment Fiscal Year (ended March 31) ▸Net sales and segment income decreased FY2018 FY2019 Y on Y mainly due to decline in transaction volumes (billions of yen) Rate in the US and ASEAN region and increase in Net Sales 314.7 241.0 -23% local currency procurement costs due
Slide 17: Other Segment
Other Segment Fiscal Year (ended March 31) ▸In lumber business, net sales and segment FY2018 FY2019 Y on Y income increased due to increase in (billions of yen) Rate transaction volume to housing manufacturers. Net Sales 82.5 85.0 +111100% +3% ▸In machinery business, revenue from the construction of
Slide 18: Progress of Medium-term Business Plan
Progress of Medium-term Business Plan FY2016 FY2017 FY2018 FY2019 (billions of yen) (Acctual) (Acctual) (Acctual) (Acctual) (Forecast) (Target) Ordinry income 40.0 35.0 STEADY 22.919.1 20.1 23.318.8 18.7 20.0 20.0 30.0 25.5 18.5 5.0 9.0 SPEEDY 0.7 3.1 5.8 0.0 4.3 2.8 6.0 3.1 0.7 5.8 4.3 0.0 5.0-6.5
Slide 19: Transition of Quantitative indicators
Transition of Quantitative indicators Transition of Quantitative indicators FY2016 FY2017 FY2018 FY2019 ROE 10.1% 9.7% 7.4% -7.8% ROS 1.1% 1.0% 0.7% -0.7% Total assets turnover 2.3 2.3 2.3 2.2 Financial leverage 4.0 4.3 4.8 4.9 Total investment (billions of yen) 11.2 29.1 17.0 19.5 161% 161% Net DER
Slide 20: Profits of Group Companies
Profits of Group Companies 【Ordinary income trend of subsidiaries by business segment】 Fiscal Year (ended March 31) FY2018 FY2019 Y on Y Change (billions of yen) Consolidated Unconsolidated Consolidated Unconsolidated Consolidated Unconsolidated Steel 3.0 (0.0) 1.4 0.1 (1.6) 0.2 Primary Metal 0.4 0.
Slide 21: Progress with Japan Value Chain Extension Strategy
Progress with Japan Value Chain Extension Strategy Investments Business domain activities Fast delivery/small lot/processing activities Makers Primary Intermediate Suppliers Trading Processing Users distribution distribution Hanwa Steel Service / Nakayama Steel Works Steel center San Ei Metal Hirouc
Slide 22: "Create another Hanwa in Southeast Asia" Strategy
“Create another Hanwa in Southeast Asia”Strategy 【The major alliance partners 】 Country Distributor Processer Manufacturer HSS Thailand Furukawa Unic Thailand PCM Processing Siam Hanwa PT DEXIN STEEL INDONESIA Indonesia Kapurindo Sentana Baja HSS Indonesia Araya Steel Tube Indonesia CosmoSteel Holdi
Slide 23: Outline of strategic investment in metal resources
Outline of strategic investment in metal resources AFARAK FeCr, SiMn OM Holdings Bacanora Lithium (Sales amount FeSi, SiMn, MeMn lithium carbonate 80 kt / FY2019） (Sales amount (2022 Production 460 kt / FY2019） commencement 35 kt / Year) SAMANCOR Tsingshan Holding Cr Ore, FeCr NPI & Stainless hot co
Slide 24: Investment in business
Investment in business 【Current investment records】 Amounts Major investments (billions of yen) ・Acquired stocks of SMC HA NOI ONE MEMBER CO., LTD. Steel 1.8 ・Recapitalized to subsidiary Primary metal / ・Invested in field of compound, production for 1.0 Metal Recycling rechargeable batteries Food 0.
Slide 25: Appendix
Appendix Copyright© 2020 Hanwa Co., Ltd. All Rights Reserved 24
Slide 26: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials 【Transaction of steel raw materials price】 (US$/t FOB) Iron ore spot price Coking coal spot price Iron ore benchmark price Coking coal benchmark price 290 240 190 140 90 40 ‣Iron ore…The prices were on a weakening trend due to decline in demand in China, despite r
Slide 27: Steel Market Trend in China
Steel Market Trend in China 【Transition of steel market in China 】 100,000 5,000 Production of crude steel Market inventories Market price of Rebar Market price of Hot coil Production of crude steel, market inventories 80,000 Market price (RMB/ton) 4,000 60,000 (thousand ton) 40,000 3,000 20,000 0 2
Slide 28: Market Trend of Steel Scrap
Market Trend of Steel Scrap 【Steel scrap and D-bar Market Price】 Steel scrap (H2) Market price of D-bar Maker's price of D-bar Composite 80 875 Steel scrap, D-bar(thousand yen/t) 70 750 composite price (US$/t) 60 625 50 500 40 375 30 20 250 10 125 ‣Supply/Demand…Supply and demand remained sluggish g
Slide 29: Market Trend of Long Products
Market Trend of Long Products 【Transition of the H-Beams Markets in Japan】 Market inventories Market price 100 240 Maker's price 200 90 Price(thousand yen/ton) Volume(thousand ton) 160 120 80 80 70 40 0 60 ‣Supply/Demand…Demand have been remained weak since Olympic construction was completed and con
Slide 30: Market Trend of Flat Products
Market Trend of Flat Products 【Transition of Steel Sheets Markets in Japan】 5,000 90 Market inventories Price of hot rolled sheet Price of hot rolled coil Price (thousand yen/ton) Volume (thousand ton) 4,000 80 3,000 70 2,000 60 ‣Supply/Demand…Demand remained weak, as exports of steel declined due t
Slide 31: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys 2,200 160 FeSi($/t) Nickel($10/t) 2,000 MeSi($/t) Stainless scrap($/t) (Ni, FeSi, MeSi, Stainless scrap) FeCr(￠/lb) 140 1,800 1,600 (FeCr) 120 1,400 1,200 100 1,000 800 80 ‣Nickel…Market prices rose temporarily, partly due to concerns over restrictions on export of or
Slide 32: Market Trend of Non-ferrous Metals
Market Trend of Non-ferrous Metals 3,400 7,500 Al Zn Pb Cu 7,000 3,000 Al, Zn, Pb（US$/㌧） 6,500 2,600 Cu（US$/t） 6,000 5,500 2,200 5,000 1,800 4,500 1,400 4,000 ‣Aluminum… In addition to trade friction between U.S. and China and concerns over economic slowdown in various countries, the spread of novel
Slide 33: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products 3,400 Black-Tiger Salmon Horse mackerel Mackerel 1,000 Black-Tiger (yen/1.8kg） 3,200 Salmon, Horse mackerel, Mackerel 800 3,000 600 （yen/kg） 2,800 400 2,600 200 2,400 0 ‣Salmon…The market price was generally on a downward trend due to excessive supply of Chilea
Slide 34: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products WTI DUBAI LSA(RIM） Gasoline(RIM） Bunker oil 600 140 Gasoline (thousand yen/KL） Crude oil ($/BL),LSA・ Bunker oil （$/mt) 400 100 60 200 20 0 ‣Crude oil…Market prices have declined significantly recently, reflecting a decline in demand due to the trade fri