Hosokawa Micron Corporation · TSE:6277
Hosokawa Micron — FY2022 Earnings Presentation
49 slides from Hosokawa Micron's earnings presentation, Nov 29, 2022
Slide 1: Financial Results of FY2022
Financial Results of FY2022 29 th Nov. 2022 Process Technologies for Tomorrow © HOSOKAWA MICRON CORP. All rights Reserved.
Slide 2: Agenda
１．Summary of Financial Results for FY2022 ２．Forecast for FY2023 ３．Progress and Topics of the Mid-term Plan ４．Appendix © HOSOKAWA MICRON CORP. All rights Reserved. 1/47
Slide 3: 1. Summary of Financial Results for FY2022
１．Summary of Financial Results for FY2022 ２．Forecast for FY2023 ３．Progress and Topics of the Mid-term Plan ４．Appendix © HOSOKAWA MICRON CORP. All rights Reserved. 2/47
Slide 4: Financial Summary
Financial Summary Consolidated Bookings Net Sales Operating Profit 75.0 billion JPY 66.9 billion JPY 5.5 billion JPY YoY YoY YoY +7.6％ +10.1％ -13.5％ reach a record high reach a record high Powder Processing Business Blown Film Business Bookings Net Sales Bookings Net Sales 57.1billion JPY 49.4billio
Slide 5: Financial Highlights
Financial Highlights Bookings reached a record high of 75.0 billion JPY（+7.6％ YoY） ＊ No major impact due to COVID-19 pandemic or the situation in Ukraine Net Sales reached a record high of 66.9 billion JPY（+10.1% YoY） * Despite higher net sales, delivery times continue to lengthen due to supply chai
Slide 6: Focused Areas and Applications in FY2022
Focused Areas and Applications in FY2022 Japan/Asian Group American Group European Group Pharmaceuticals continued to perform well worldwide Lithium-ion batteries Insect foods, Plant meat Powder (raw materials, made of beans processing particles for electrodes) Cell culture media for business pharma
Slide 7: Business Results
Business Results FY2022 FY2021 FY2022 （100 million JPY） Results Results YoY(%) Forecast YoY(%) Net Sales 669 607 10.1 640 4.6 Operating Profit 55 63 △ 13.5 56 △ 1.5 Ordinary Profit 57 65 △ 12.2 56 3.1 Net Income 40 46 △ 14.7 42 △ 4.6 Earnings per share (JPY) 247.11 290.07 △ 14.8 259.15 △ 4.6 exchang
Slide 8: Profit/Loss
Profit/Loss （million JPY） Cost to sales ratio rose 1.7pt due to soaring raw gross profit material costs. Increase in operating and personnel expenses due to recovery from COVID-19 pandemic (+12.4％ YoY）. (Breakdown) SG&A expenses Net increase in SG&A expenses：+8.6％ Increase due to foreign exchange ef
Slide 9: Net Sales Increase/Decrease Factors
Net Sales Increase/Decrease Factors （million JPY） Foreign exchange Blown Powder film processing business business < Areas of strong < To net sales performance > Exchange Rate ・ Packaging films Sensitivity > ・ Lamination films ・ USD：105 million ・ Biodegradable film ・ EUR：264 million ・ For single mate
Slide 10: Sales Status (Sales by Group Companies' Location)
Sales Status（Sales by Group Companies’ Location） Overseas sales ratio in FY2022 is approx. 80％. Despite the trend of increased revenue as a group, profit did not increase due to the conspicuous increase in revenue in Europe, where gross profit margin is low. （million JPY） American Group European Gro
Slide 11: Bookings Status (by Application Segmentation)
Bookings Status (by Application Segmentation) （million JPY） Electronic Pharmaceuticals Foods materials (incl.LIBs) 7,476 6,591 4,527 4,778 4,273 3,269 2021 2022 2021 2022 2021 2022 Polymers (incl.Blown films) 21,470 Metals & 19,263 Chemicals Recycle Minerals 7,995 7,345 5,722 4,436 3,506 3,291 2021
Slide 12: Operating Profit Increase/Decrease Factors
Operating Profit Increase/Decrease Factors （million JPY） ＜ Effect of increased sales ＞ ＜ Impact on cost of sales ＞ ・ Powder processing ・ Increase in raw material costs ： △4.5billion JPY business：＋3.8billion JPY ・ Increase in labor costs ： △1billion JPY ・ Blown film business：＋2.3billion JPY ・ Increas
Slide 13: Trend of Bookings, Net sales & Backlog
Trend of Bookings, Net sales & Backlog In addition to strong bookings, the trend toward longer delivery times due to supply chain and logistics disruptions has resulted in a record- high Backlog (approx. 50 billion JPY) carried forward at the beginning of FY2023. （100 million JPY） 600 Bookings Net S
Slide 14: Trend of dwell time in Backlog
Trend of dwell time in Backlog Dwell time increased 1.8 times in FY2022 compared to FY2019. 273Day 223Day 186Day 151Day FY2019 2020 2021 2022 Backlog ※Backlog dwell time (day) ＝ Net Sales per day（ Net Sales ÷365） © HOSOKAWA MICRON CORP. All rights Reserved. 13/47
Slide 15: Transition of delivery time (order to acceptance inspection)
Transition of delivery time (order to acceptance inspection) *approximate Normal delivery time Current delivery time ■■■■■■ ■■■■■■ Powder ■■■■■■ 6 months processing 12 months business ■■■■■■ ■■■■■■ ■■■■■■ ■■■■■ ■■■■ Blown 11 months film 16 months business Considering the sales ratio of Powder proces
Slide 16: Example of Long-Term Procurement Materials
Example of Long-Term Procurement Materials Example: Procurement Status of Electrical Components, FY2022 (* In FY2022, a total of 39 product numbers were purchased.) kW 0.1 0.2 0.4 0.75 1.5 2.2 3.7 5.5 7.5 11 15 18.5 22 30 37 45 55 75 90 110 A型 13 1 3 2 2 2 2 13 1 1 4 3 1 B型 11 200V *Low C型 3 12 7 3
Slide 17: Measures implemented in response to longer delivery times
Measures implemented in response to longer delivery times Increased inventory or in-house production to shorten delivery time Difficult to handle in small-quantity, high-mix production Promote bookings and increase backlog End of FY2019 Theoretical values End of FY2022 ＊ Assumed normal period before
Slide 18: Balance Sheet
Balance Sheet Strong Bookings increased contract liabilities (advances received) and cash deposits. Assets and liabilities of overseas subsidiaries both increased due to JPY depreciation. （ million JPY ） （ Compared to the end of FY2021 ） Current Assets Liabilities 58,495 32,287 （＋11,306） （＋5,107） co
Slide 19: Cash Flow
Cash Flow Net cash provided by operating activities：Net income before income taxes decreased, but exceeded FY2021's level due to progress in collection of accounts receivable. Net cash provided by investing activities ： Decrease in payments was mainly due to purchase of property, factory and equipme
Slide 20: Trends of Investment, Depreciation, R&D Cost
Trends of Investment･Depreciation･R&D Cost Investment Plan for FY2022 Investment Plan for FY2023 ・USA : Transfer and Expansion of ・JAPAN : Core system update Factory for Toll Processing ・ USA : Factory Construction ・Germany : Expansion of Factory ・ Germany : Expansion of etc. 3,774 Factory etc. （mil
Slide 21: Trends of ROE & ROA
Trends of ROE & ROA 14% ROE 11.8% 12% Return On Equity 11.4% 11.3% 10.9% 9.7% 11.2% 10% 8.5% 8.6% 8.6% 10.0% 10.0% 8.6% 9.5% 8.1% 8% 7.9% 8.0% 7.5% 7.3% 6% 7.0% 5.2% 4% ROA Average total assets and average 2% Return On Asset equity for the period are used in the calculation. 0% FY 2012 2013 2014 201
Slide 22: Stock Price and Dividend
Stock Price and Dividend Trend of Stock Price and Turn Over （As of November 24, 2022） 4,500 1,800 Trading Volume (1,000 stocks) 4,000 1,600 3,500 1,400 Stock Price (JPY) 3,000 1,200 2,500 1,000 2,000 800 1,500 600 1,000 400 ※Share consolidation 1:0.2 1st Apr.2017 500 200 ※Stock splits 1:2 1st Oct.20
Slide 23: Financial Summary (Non-consolidated)
Financial Summary（Non-consolidated） Despite strong Bookings (+28.8% YoY), Net sales declined due to longer delivery times. Gross profit margin improved by 1.9pt due to the penetration of price pass-through of material cost increases. Significant decrease in income due to lower sales and higher SG&A
Slide 24: 2. Forecast for FY2023
１．Summary of Financial Results for FY2022 ２．Forecast for FY2023 ３．Progress and Topics of the Mid-term Plan ４．Appendix © HOSOKAWA MICRON CORP. All rights Reserved. 23/47
Slide 25: Forecast for FY2023
Forecast for FY2023 The following three points are taken into account in setting the earnings forecast. １） Delivery time: Gradual improvement in the first half of FY2023, shortening to the same level as the beginning of FY2022 in the second half of FY2023. ２） Prices: Slight increase with rising labo
Slide 26: Dividend Forecast
Dividend Forecast Dividend (shareholder return) increased in FY2022 (payout ratio 30.4%) Policy of total return ratio of 30% or more FY 2016 2017 2018 2019 2020 2021 2022 2023 Dividend Interim 37.5 18.75 18.75 25.0 27.5 27.5 27.5 35.0 per share Dividend （Forecast） （JPY） Year-end 37.5 ※The 25.0 25.0
Slide 27: 3. Progress and Topics of the Mid-term Plan
１．Summary of Financial Results for FY2022 ２．Forecast for FY2023 ３．Progress and Topics of the Mid-term Plan ４．Appendix © HOSOKAWA MICRON CORP. All rights Reserved. 26/47
Slide 28: Outline of the Mid-Term Plan
Outline of the Mid-Term Plan Challenge to be Global Standard Group Basic Guidelines ： ～ Hosokawa Micron Group continues to develop superior products and provide technical services to achieve a dominant position by market acceptance. ～ Consolidated Targets（FY2024） ： Operating Ordinary Net Total （100
Slide 29: Improving Performance (Consolidation)
Improving Performance (Consolidation) 14th Mid-term 15th Mid-term 16th Mid-term 17th Mid-term Plan for 3 years Plan for 3 years Plan for 3 years Plan for 3 years Challenge to be Global Standard Further development of Hosokawa Micron Group Hosokawa Micron Group Hosokawa Micron Group Mountain Range of
Slide 30: Delivery time and cost projections
Delivery time and cost projections Operating profit ratio is expected to increase as delivery time and cost return to normal periods. Large Long delivery time and high cost ・ Bookings increase ・ Net Sales decrease cost, transportation costs, etc.) Cost increases (raw material FY2022 Operating decrea
Slide 31: Review of the First Year of the Mid-Term Plan
Review of the First Year of the Mid-Term Plan Major Measures progress evaluation ・ Selected and implemented goals and measures with a focus on Asia Reinforcement of Group Corporation ・ Expand sales channels in the South American market (also established a sales company in Chile) △ ・ IT grand design
Slide 32: Cash Allocation
Cash Allocation Currently, working capital is increasing due to longer delivery times and JPY depreciation. ⇒ Optimize working capital by assuming normalization of delivery schedule after 3 years. For Interest-Bearing Liability 9 Acquiring For Interest-Bearing for the next 3 Acquired Liability 9 yea
Slide 33: Measures in mid-term management, future initiatives
Measures in mid-term management, future initiatives FY2022 FY2023 FY2024 Global Network April: Switzerland Expansion Sales company established USA: Polymer Systems Office Integrated in New Jersey Hosokawa Solids sales Established a sales company companies are established in for laboratory equipment
Slide 34: ESG Management Initiatives
ESG Management Initiatives Establishment of CO2 emission Integrated Reporting Formation of Hosokawa Determination calculation Web Publication TCFD Scenario Sustainability of Materiality (scheduled for Dec.) Committee (domestic) Analysis Team Technical contribution to a Introduced RS Trust for domest
Slide 35: 4. Appendix
１．Summary of Financial Results for FY2022 ２．Forecast for FY2023 ３．Progress and Topics of the Mid-term Plan ４．Appendix © HOSOKAWA MICRON CORP. All rights Reserved. 34/47
Slide 36: Company Profile
Company Profile Representative Kohei HOSOKAWA Foundation Apr. 1916 capital 144.96 Million JPY Fiscal Establishment Aug.1949 year end Sep. stock Prime Market of Tokyo stock exchange. market （from Apr. 4 th, 2022） Head Office 1-9, Shodaitajika, Hirakata City, Osaka Location Consolidated 1,870 Employee
Slide 37: About Us
About Us Message “Powder Technology contributes to the Society” Corporate Vision The Hosokawa Micron Group will always be the leading global company covering the mountain range of Powder Technologies. The Group will achieve peaks of excellence in the development and commercialization of advanced mat
Slide 38: About Us: Our Business
About Us Our Business We provide providing machinery, equipment, and system engineering Business Areas Powder Processing Business and Blown Film Business © HOSOKAWA MICRON CORP. All rights Reserved. 37/47
Slide 39: Powder Technologies
Powder Technologies Drying Milling Various operations Separation Granulation Blending Measurement Recovery of powders, Filtration © HOSOKAWA MICRON CORP. All rights Reserved. 38/47
Slide 40: Powder Processing Equipment
Powder Processing Equipment Example of a product that contributes to the manufacture of rechargeable batteries, electronic components, etc. Dry for Material of Fine milling of raw materials of secondary Lithium-Ion Battery batteries (e.g., LIB including all solid battery) Fine milling of electronics
Slide 41: Blown Film and Related Technology
Blown Film and Related Technology Film manufacturing equipment The melted polymer is inflated with using the inflation method air and molded into a bag shape. The translucent part is the film Offering the system (including Winder, Orientation, etc.) © HOSOKAWA MICRON CORP. All rights Reserved. 40/47
Slide 42: Where powders are used?
Where powders are used ? Lithium ion battery Synthetic resin Water pipe : Poly Vinyl Chloride (PVC) Cathode：Cobalt Based, Phosphate based Fluorine coating : Fluorocarbon resin (PTFE) Precursors of Cobalt Based Manganese PET bottle, Synthetic fiber, Industrial plastic : Anode : Graphite, Silicon Poly
Slide 43: Global Synergic Effect
Global Synergic Effect © HOSOKAWA MICRON CORP. All rights Reserved. 42/47
Slide 44: Corporate History
Corporate History Foundation of the Osaka Turbine Water Mill Asian subsidiaries, Malaysia (1995), Korea 1916 Company (1996), France (1999), China (2005), India Company name changed to the Hosokawa 1995 (2007), Russia (2012), Thailand (2019), 1949 Iron Works Poland (2020), Switzerland, Mexico, Chile(
Slide 45: Geographical Segmentation
Geographical Segmentation Expanding business globally in a well-balanced manner in Japan (Asia), Europe, and the Americas ※Size of squares shows sales amount. Sales by Group Companies’ Location 22.9％ 18.1% 59.0% Sales by 10.8% Customers’ Location (Destination) 1.9% 39.5% 21.3％ 19.5% 7.0% India © HOS
Slide 46: Major Group Companies (Net Sales)
Major Group Companies（Net Sales） ※Size of squares shows sales amount. Powder Processing Business Blown Film Business 49.4 billion JPY 17.4 billion JPY © HOSOKAWA MICRON CORP. All rights Reserved. 45/47
Slide 47: Trends of Bookings by Application Segmentation
Trends of Bookings by Application Segmentation ※Excluding After Sales and Toll Processing 600 500 Blown Film Bookings（100 million JPY） 400 179 Business 300 Blown Film 73 14 Chemical 200 66 Powder Plastics Processing 57 Business Electronic Materials（incl. Secondary Battery） 100 Mineral・Metal 75 Medic
Slide 48: Trends of Bookings by business
Trends of Bookings by business 800 53 700 27 600 Bookings（100 million JPY） 126 Others 500 Toll processing Aftersales 179 400 Blown film 300 200 Powder processing 365 100 0 FY2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 © HOSOKAWA MICRON CORP. All rights Reserved. 47/47
Slide 49: No part of this document must be reprinted or reproduced
No part of this document must be reprinted or reproduced by any means without permission from our company. © HOSOKAWA MICRON CORP. All rights Reserved.