JTEKT Corporation · TSE:6473
JTEKT — Q2 FY2018 Earnings Presentation
63 slides from JTEKT's earnings presentation, Nov 14, 2018
Slide 1: Financial Results for the Second Quarter of Fiscal Year Ending March 2019
1 Financial Results For the Second Quarter of Fiscal Year Ending March 2019 November 14, 2018 JTEKT Corporation JTEKT CORPORATION
Slide 2: Agenda: Results, Forecasts, Progress of Mid-Term Management Plan
2 1. Results for Second Quarter of Fiscal Year Ending March 2019 2. Forecasts for Second Quarter of Fiscal Year Ending March 2019 3. Progress of Mid-Term Management Plan JTEKT CORPORATION
Slide 3: 1-1) Consolidated Performance
3 1-1) Consolidated Performance Despite an increase in income due to increased product quantity and M&As, profit decreased due to a drop in selling price levels and large increase in expenses. (billions of yen) FY2017 FY2018 Increase/ Increase/ 2Q total 2Q total Decrease Decrease (%) Sales 682.2 742
Slide 4: 1-2) Operating Profit Analysis
4 1-2) Operating Profit Analysis The drop in selling price levels and large increase in expenses could not be covered by increased income and improved cost price. Operating profit: 2.6 billion yen decreased Factors of income decrease Factors of income increase (billions of yen) (18.1 billion yen) (1
Slide 5: 1-3) Results by Business Units
5 1-3) Results by Business Units Mechanical Components Increased income and M&As have had positive effects however profit has decreased due to a drop in selling price levels and large increase in expenses. Machine Tools Sales have been strong primarily in Japan and North America, resulting in increa
Slide 6: 1-4) Financial Results by Company Location [1]
6 1-4) Financial Results by Company Location [1] 売上高 Sales 営業利益率 Operating Profit Rate (OP Profit %) (billions of yen) Japan 営業利益 Profit (OP Profit) Operating FY2017 FY2018 Increase/ (billions of yen) 2Q total 2Q total Decrease 5.6% 4.7% 4.8% 4.0% 5.6% 2.7% 2.8% Sales 274.3 296.7 22.3 308.1 OP Profi
Slide 7: 1-5) Financial Results by Company Location [2]
7 1-5) Financial Results by Company Location [2] 売上高 Sales 営業利益率 Operating Profit Rate (OP Profit %) North America (billions of yen) 営業利益 Operating Profit (OP Profit) FY2017 FY2018 Increase/ (billions of yen) 5.3% 4.5% 5.0% 2Q total 2Q total Decrease 4.1% 3.3% 2.7% 1.4% Sales 145.4 154.7 9.2 169.1 1
Slide 8: 1-6) Financial Results by Company Location [3]
8 1-6) Financial Results by Company Location [3] 売上高 Sales 営業利益率 Operating Profit Rate (OP Profit %) China 営業利益 Profit (OP Profit) Operating (billions of yen) FY2017 FY2018 Increase/ (billions of yen) 2Q total 2Q total Decrease 15.2% 16.7% 15.2% 15.6% 16.1% 17.0% 13.7% Sales 70.0 76.1 6.0 76.9 76.1
Slide 9: Agenda: Forecasts
9 1. Results for Second Quarter of Fiscal Year Ending March 2019 2. Forecasts for Second Quarter of Fiscal Year Ending March 2019 3. Progress of Mid-Term Management Plan JTEKT CORPORATION
Slide 10: 2-1) Forecasts for Business Environment
10 2-1) Forecasts for Business Environment World economy Maintain gradual economic growth due to easy monetary policy and the U.S.'s tax abatement policy Unpredictability due to the U.S.'s strengthened import tariffs and protectionist policies Concern regarding the slowing Chinese economy due
Slide 11: 2-2) Forecasts for Fiscal Year 2018
11 2-2) Forecasts for Fiscal Year 2018 Despite negative effects relating to foreign exchange, plan increased income and increased profits due to the positive effects of M&A, increased product quantity, and improved cost price. (billions of yen) FY2018 (Forecast) FY2017 Increase/ Increase/ Full year
Slide 12: 2-3) Operating Profit Analysis (Last Period vs. Forecast)
12 2-3) Operating Profit Analysis (Result of last period vs. forecast of this period) Decline in selling price level and increased expenses will be covered by increased income and improved cost price. Plan increased profits due to the positive effects of M&As. Operating profit: 5.6 billion yen incre
Slide 13: Agenda: Mid-Term Management Plan
13 1. Results for Second Quarter of Fiscal Year Ending March 2019 2. Forecasts for Second Quarter of Fiscal Year Ending March 2019 3. Progress of Mid-Term Management Plan JTEKT CORPORATION
Slide 14: Contents: Progress of Mid-Term Management Plan
14 3) Progress of Mid-Term Management Plan CONTENTS 1. Strategies of Business Units 1) Summary 2) Steering Systems 3) Drivelines 4) Bearings 5) Machine Tools & Mechatronics 6) Actions for New Business 2. Actions for developing corporate value JTEKT CORPORATION
Slide 15: 1) Summary
15 1) Summary JTEKT CORPORATION
Slide 16: 3-1-1) Profit & Loss Trend (Management rate)
16 3-1-1) Profit & Loss Trend (Management rate) Business structure was improving until FY2016 except for the foreign exchange rate, but FY2017 profit is expected to decrease because of pfront investment for the future such as ADAS/IoE -> Returning to the level of FY2016 in FY2018 as a result of impr
Slide 17: 3-1-1) Management Index (Consolidated)
17 3-1-1) Management Index (Consolidated) Effect of new consolidation and WIP increased due to * Net amount of debt with increased orders of machine Inventory tools Interest-bearing debt interest and cash and deposits Goal is set at the net D/E ratio of 0.06 Inventory Inventory turnover month Net in
Slide 18: 2) Steering Systems
18 2) Steering Systems JTEKT CORPORATION
Slide 19: 3-1-2) Steering Business Growth Strategy
19 3-1-2) Steering Business Growth Strategy Continue to maintain the top share for steering, and to be the No. 1 & Only One as the top runner with advanced steering technology such as ADAS Market / Technology Changes Environmental changes · Accelerated shift to EPS · Increased automatic driving & sa
Slide 20: 3-1-2) Forecast for Mid-term Business Plan for Steering Systems
20 3-1-2) Forecast for Mid-term Business Plan for Steering Systems FY2018 Sales and Profit Forecast ¥95/US$, ¥110/€, ¥16/yuan 1st half: Profit plan has not achieved due to difficulty in launching Rack-Assist EPS. 2nd half: Profits will be recovered by increasing in number with good prospect for solv
Slide 21: 3-1-2) JTEKT's Share Status
21 3-1-2) JTEKT's Share Status Accomplished mid-term plan target of "25% share" in FY2018 * Investigated independently by JTEKT based on market data JTEKT Orders STG share received 25.3% 24.5% 24.2% 0.7% 2.6% Efforts negotiation Quantity mill units Goal 25.2％ 26.8％ achieved (Max.) (Max.) 28 25.3％ 25
Slide 22: 3-1-2) Strengthen Rack-Assist EPS
22 3-1-2）Strengthen Rack-Assist EPS Securely achieve profit increase through increasing Rack-Assist EPS orders Received orders for Rack-Assist EPS in high-end vehicles Gain our foothold Design changes occurred in parallel with · Finalize design Completed in Sep. 2018 production preparation stage due
Slide 23: 3-1-2) Next-generation Transportation Systems
23 3-1-2) Next-generation Transportation Systems Contribute to create the urban transportation society for the next generation that is people-friendly and easy-to-use through automatic driving control and precise docking control. At the 16th ITS Asia-Pacific Forum held in FUKUOKA from May 8 to 10 in
Slide 24: 3-1-2) New Systems Supporting Automatic Driving
24 3-1-2) New Systems Supporting Automatic Driving Contributing to a ZERO traffic accident society Link-less Steer By Wire Reactive force torque · Offering safety and security actuator through automatic driving and ADAS · Realizing comfortable driving Improved degree-of-freedom of vehicle response a
Slide 25: 3-1-2) Four-company Collaboration
25 3-1-2）Four-company Collaboration Contributing to the realization of automatic driving to achieve safe and secure mobility for all Turn the Safety Security Agreed on establishment vehicle well of a software Turn the wheel development company for automatic driving * Planned for establishment in Mar
Slide 26: 3) Drivelines
26 3) Drivelines JTEKT CORPORATION
Slide 27: 3-1-3) Driveline Business Growth Strategy
27 3-1-3）Driveline Business Growth Strategy As a distinctive system supplier that takes advantage of strengths such as AWD and hydraulics, aim to become the No. 1 & Only One for the driveline business. Market changes Evolution of technology Environmental changes · Growth in emerging market · Electri
Slide 28: 3-1-3) Forecast for Mid-term Business Plan for Drivelines
28 3-1-3) Forecast for FY2018 Mid-term Business Plan for Drivelines FY2018 Sales and Profit Forecast ¥95/US$, ¥110/€, ¥16/yuan 1st half: Sales plan achieved due to good sales 2nd half: Aim to raise performance further (billions of yen) Sales Profit (%) 200 15% 175.0 145.4 145.0 150.0 150 10% 100 5%
Slide 29: 3-1-3) Deepen Driveline Field
29 3-1-3) Deepen Driveline Field After an intentional plateau, rapid climb in orders. Set for further growth taking in demand for electric products. Drive shaft order status • Win more orders than our Mid-term plan Order received Negotiation continued for 2022 mid-term plan target • Strengthen our f
Slide 30: 3-1-3) Strengthen Hydraulic System
30 3-1-3) Strengthen Hydraulic System Aim to expand applications in electrification and energy-saving by leveraging strengths. Plan on winning new orders of electric pumps for EVs handled with local (in-country) production. Order status of mechanical and electric pumps MOP order receoved EOP order r
Slide 31: 3-1-3) Strengthen AWD System
31 3-1-3) Strengthen AWD System Set a goal for practical application of E-AWD systems considering electrification. Also support both aspects through modification of conventional systems for which ongoing demand exists. Order status for ITCC and TORSEN • There is a downward trend compared to mid-term
Slide 32: 4) Bearings
32 4) Bearings JTEKT CORPORATION
Slide 33: 3-1-4) Bearing Business Growth Strategy
33 3-1-4) Bearing Business Growth Strategy Continue creating value, impress customers, and praised by customers — Lift the "Koyo" to be the leader brand in the world — Environmental changes Intense market Change of market Technology Evolution competition competitiveness Strengthen fundamental matter
Slide 34: 3-1-4) Forecast for Mid-term Business Plan for Bearing
34 3-1-4) Forecast for FY2018 Mid-term Business Plan for Bearing FY2018 Sales and Profit Forecast ¥95/US$, ¥110/€, ¥16/yuan 1st half: Not achieved plan by: worth of productivity, increase of direct material and plant reorganization cost 2nd half: Should catch up with the reviewed profit plan: improv
Slide 35: 3-1-4) Issues by region
35 3-1-4) Issues by region Profit issues in Japan/U.S./Europe Europe Profit weakness ◆ Kokubu Plant North (bearings for industrial America machines） Japan Profit issues: Worsening profits in U.S. ◆ U.K. Plant (HUB) ◆ Plant in SC (HUB) ◆ Plant in Romania (TRB, SBB) ◆ Three other plants (TRB) ◆ Plant
Slide 36: 3-1-4) Issues by region: countermeasures
36 3-1-4) Issues by region Subject to solve / countermeasures for issues in Japan/U.S./Europe Region Major issues Response to issues ◆ Promotion of measures to increase earnings • Aim to turn over a profit by Mar. 2020 through improved Kokubu Plant manufacturing and production systems Japan (industr
Slide 37: 3-1-4) Strengthen production capacity
37 3-1-4) Strengthen production capacity Kaizen activities for improve production and profit through all locations Region ASEAN Europe Item Kaizen activities Model Japan China India NA Fundamental matters ◇ Floor management ー ○ ○ ○ ○ ○ ○ Improve (re-train TQM, Total Quality Management) shop floor ー
Slide 38: 3-1-4) New product development (1)
38 3-1-4) New product development (1) Development of new product for Industrial machine bearings: >>> responding to diversification of environments ◆ Sales for industrial machine ◆ Steel ◆ Special environments applications Preparation for new business · High sealing · High durability in Industrial p
Slide 39: 3-1-4) New product development (2)
39 3-1-4) New product development (2) New business cases: aim to 10% sales in year 2030 ◆ Magnetic bearing units Product: Support for cooling devices of Radial/axial sensors Rear radial Axial magnetic BRG magnetic BRG ◆ New rotating portions for subterranean Touch-down Preparation for new business B
Slide 40: 5) Machine Tools & Mechatronics
40 5) Machine Tools & Mechatronics JTEKT CORPORATION
Slide 41: 3-1-5) Machine Tools & Mechatronics Business Growth Strategy
41 3-1-5) Machine Tools & Mechatronics Business Growth Strategy Offering value in all monozukuri phases Evolution of market/technology Environmental changes · Mobility changes · Evolution of machining technology · Decline in the workforce (AM, ultra-accuracy turning, etc.) · Intense cost competition
Slide 42: 3-1-5) Forecast for Mid-term Business Plan for Machine Tools & Mechatronics
42 3-1-5) Forecast for FY2018 Mid-term Business Plan for Machine Tools & Mechatronics ¥95/US$, ¥110/€, ¥16/yuan FY2018 Sales and Profit Forecast 1st half: Sales and profit increased due to growth in grinders and semiconductor processing devices 2nd half: Although trade conflict is a concern, increas
Slide 43: 3-1-5) Strengthen support for changes in automotive power train trends
43 3-1-5) Strengthen support for changes in automotive power train trends Support downsizing and high-mix production of gears Supports downsized engines Lathe Hobbing Shaper Chamfering Machining machine machine center ■ GC20M Generalization of production processes ■GF16S Downsizing High-accuracy sup
Slide 44: 3-1-5) Strengthen support for a falling worker population
44 3-1-5) Strengthen support for a falling worker population Smartification of machines Smart Factory Partners JTEKT SMART Cutting Tool deformation Tool Cutting force Tool life management Workpiece Hawkeye AAA Real-time thermal displacement Data collection/accumulation 社内でユースケースを蓄積 Accumulate use ca
Slide 45: 3-1-5) Promote business structure reform
45 3-1-5) Promote business structure reform Build a foundation through Develop new fields by after-sales service anticipating needs Used 5-axis machining center machines Overhaul Aircraft Proposal components Delivering value throughout the Sale lifecycle Drying furnace We are happy Rebuilds we went
Slide 46: 6) Initiatives for New Business
46 6) Initiatives for New Business JTEKT CORPORATION
Slide 47: 3-1-6) New Business Initiatives (Capacitor, J-PAS)
47 3-1-6) New Business Initiatives (Capacitor, J-PAS) Production preparation for Power-assist suit lithium-ion capacitors ISO13482 certified Safety standards for service 2019/4 to 8 robots and lifestyle-support robots Higashi Kariya Office : 2,000 cells/month Prove that internationally- recognized s
Slide 48: Actions for Developing Corporate Value
48 3-2) Actions for Developing Corporate Value Actions for Developing Corporate Value - Enhancement of Fundamental Basis JTEKT CORPORATION
Slide 49: 3-2) Initiatives for enhancing business infrastructures
49 3-2) Initiatives for enhancing business infrastructures Proactive investment to strengthen business infrastructures and ultimately achieve sustainable growth R&D costs Expenses relating to business infrastructures [Unit: billion yen] Business task reform/IT shift [Unit: billion yen] 9.3 研究開発費 売上⾼
Slide 50: 3-2) Management concepts to achieve sustainable growth
50 3-2) Management concepts to achieve sustainable growth Public interest capitalism Tree-ring management The values created through JTEKT converts various JTEKT's business activities are investments into nutrition to distributed with consideration to contribute to the ongoing the benefit of all sta
Slide 51: 3-2) Initiatives to promote ESG activities
51 3-2) Initiatives to promote ESG activities Promote ESG activities and concrete outputs Council for Enhancement of Corporate Value* Promotion/ *consisting mainly of progress monitoring board members (Allocate resources to ESG activities on top- Management down approach) Special W/G activity meetin
Slide 52: Thank you!
52 Thank you! JTEKT CORPORATION
Slide 53: (Reference) Quarterly Result Trend
53 (Reference) Quarterly Result Trend (Billions of yen) Operating profit rate 5.8% 5.6% 6.6% 5.5% 5.6% 5.1% 4.8% 3.6% 392.3 376.3 366.5 366.6 349.9 335.7 346.5 329.5 Sales 25.7 20.4 20.3 19.3 19.0 19.3 16.1 13.2 Operating profit FY2015* FY2016* FY2017 1Q 2Q 3Q 4Q FY2018 1Q 2Q USD JPY120 JPY108 JPY11
Slide 54: (Reference) Sales Forecast by Business Units
54 (Reference) Sales Forecast by Business Units JTEKT CORPORATION
Slide 55: (Reference) Sales Forecast by Company Locations
55 (Reference) Sales Forecast by Company Locations JTEKT CORPORATION
Slide 56: (Reference) Financial Results by Business (Mechanical Components)
56 (Reference) Financial Results by Business (Mechanical Components) Sales Quarterly Trend OP Quarterly Trend STG DL BRG OP Profit OP Profit (billions of yen) (billions of yen) 345.3 335.7 326.7 322.2 308.7 300.6 306.8 5.8% 5.8% 6.0% 294.0 5.1% 5.3% 4.8% 4.6% 110.2 107.3 107.1 103.9 2.8% 102.1 96.9
Slide 57: (Reference) Financial Results by Business (Machine Tools & Others)
57 (Reference) Financial Results by Business (Machine Tools & Others) Sales Quarterly Trend OP Quarterly Trend (billions of yen) MT & M Others (billions of yen) OP Profit OP Profit 46.9 44.3 41.2 39.7 39.8 0.3 40.5 10.6% 0.4 9.6% 3.0 35.5 35.0 0.3 0.3 0.4 8.2% 8.7% 7.6% 0.5 0.3 6.6% 6.5% 4.6% 46.5 3
Slide 58: (Reference) Financial Results by Region (Japan)
58 (Reference) Financial Results by Region (Japan) Quarterly Trend (billions of yen) 5.2% 5.2% 6.0% 5.3% 3.8% 2.7% 3.3% 2.3% Operating profit rate 161.1 147.6 142.5 146.9 149.1 139.9 137.3 131.8 Sales 8.7 8.5 7.2 7.3 5.1 4.8 3.5 3.4 Operating profit FY2015 FY2016 FY2017 1Q 2Q 3Q 4Q FY2018 1Q 2Q JTEK
Slide 59: (Reference) Financial Results by Region (Europe)
59 (Reference) Financial Results by Region (Europe) Quarterly Trend (billions of yen) 3.5% 2.5% 2.0% 2.3% 1.3% 0.6% (0.3%) (2.4%) Operating profit rate 61.2 65.2 52.7 52.1 54.7 51.9 48.3 48.5 1.6 1.6 Sales 1.0 1.1 0.6 0.3 Operating (0.1) profit (1.2) FY2015 FY2016 FY2017 1Q 2Q 3Q 4Q FY2018 1Q 2Q JTE
Slide 60: (Reference) Financial Results by Region (North America)
60 (Reference) Financial Results by Region (North America) Quarterly Trend (billions of yen) 4.7% 4.7% 3.7% 4.3% 2.3% 2.8% 1.5% (0.2%) Operating profit rate 82.1 78.2 79.6 72.4 76.3 74.5 75.1 69.1 3.8 Sales 3.4 3.3 2.8 2.2 1.6 1.0 Operating profit (0.1) FY2015 FY2016 FY2017 1Q 2Q 3Q 4Q FY2018 1Q 2Q
Slide 61: (Reference) Financial Results by Region (Asia/Oceania)
61 (Reference) Financial Results by Region [Asia/Oceania (Including India)] Quarterly Trend (billions of yen) Operating 10.7% profit rate 9.6% 9.8% 9.7% 9.7% 8.7% 9.0% 8.4% 45.3 46.6 43.7 41.7 41.4 37.3 33.8 33.8 Sales 4.8 4.3 4.5 4.0 3.7 3.1 3.2 2.9 Operating profit FY2015 FY2016 FY2017 1Q 2Q 3Q 4Q
Slide 62: (Reference) Financial Results by Region (China)
62 (Reference) Financial Results by Region (China) Quarterly Trend (billions of yen) 17.0% 17.1% 17.0% 15.9% 15.3% 15.9% 15.3% 14.4% 41.6 Operating profit rate 39.5 34.8 35.2 35.2 36.5 32.5 31.9 6.3 6.7 5.9 6.1 5.3 5.5 Sales 4.6 5.0 Operating profit FY2015 FY2016 FY2017 1Q 2Q 3Q 4Q FY2018 1Q 2Q JTEK
Slide 63: (Reference) Financial Results by Region (South America and Others)
63 (Reference) Financial Results by Region [South America and Others] (billions of yen) Quarterly Trend 9.0% 8.5% Operating 7.2% 6.4% 6.6% 6.3% profit rate 4.5% (5.0%) 7.3 7.1 7.0 6.6 7.0 6.8 5.7 5.2 0.6 0.6 Sales 0.5 0.4 0.4 0.4 Operating 0.2 profit (0.2) FY2015 FY2016 FY2017 1Q 2Q 3Q 4Q FY2018 1Q