Horiba, Ltd. · TSE:6856

Horiba — CREDIT SUISSE 2017 Japan Kyoto Conference

43 slides from Horiba's conference presentation, Sep 18, 2017

  1. Slide 1: HORIBA, Ltd. Financial Information

    HORIBA, Ltd. Financial Information August, 2017 © 2017 HORIBA, Ltd. All rights reserved. 1

  2. Slide 2: Contents

    Contents  2017 First-Half Results  2017 Full Year Forecast  Business Segment Outline  Shareholder Return  Other Topics  Financial Data  Corporate Profile [Disclaimer] Plans and forecasts in this presentation that do not constitute historical facts are predictions concerning future business re

  3. Slide 3: Contents

    Contents  2017 First-Half Results  2017 Full Year Forecast  Business Segment Outline  Shareholder Return  Other Topics  Financial Data  Corporate Profile © 2017 HORIBA, Ltd. All rights reserved. 3

  4. Slide 4: Review of the First-Half of 2017

    Review of the First-Half of 2017  Start of the Trump administration in US  UK’s announcement to leave EU -> General election in UK External  Presidential election in France Events -> Japan-EU Economic Partnership Agreement  Booming semiconductor market  Autonomous driving, EV, Emission regulati

  5. Slide 5: Summary of the First-Half Results of 2017

    Summary of the First-Half Results of 2017 Renewed record-highs in Sales, Operating profit and Net profit for the First Half  Year-on-year increase in sales and profits in the Automotive Test P&L Systems (ATS) and Semiconductor segments.  Total assets were 243.6bn yen, up 4.0bn yen from the end of

  6. Slide 6: First-Half Results of 2017

    First-Half Results of 2017 (Billions of Yen) 2016 First-Half 2017 First-Half : Record-highs Forecast vs. Forecast Results as of May 12 Results vs.2016 as of May 12 Sales 79.9 87.5 87.3 +7.3 -0.1 O.P. 7.7 10.0 9.7 +1.9 -0.2 O.P. % 9.7% 11.4% 11.1% +1.4p -0.3p Ordinary profit 7.5 9.7 9.5 +1.9 -0.1 Net

  7. Slide 7: First-Half Results of 2017 by Segment

    First-Half Results of 2017 by Segment (Billions of Yen) Sales Operating profit 2016 2017 2016 2017 First-Half First-Half First-Half First-Half vs. vs. :Record-highs Forecast Forecast Forecast Forecast Results as of Results vs.2016 as of Results as of Results vs.2016 as of May 12 May 12 May 12 May 12

  8. Slide 8: Contents

    Contents  2017 First-Half Results  2017 Full Year Forecast  Business Segment Outline  Shareholder Return  Other Topics  Financial Data  Corporate Profile © 2017 HORIBA, Ltd. All rights reserved. 8

  9. Slide 9: Market Overview for the Full-Year 2017

    Market Overview for the Full-Year 2017 - Expect steady R&D investment by auto/auto parts manufacturers Auto due to tighter emission regulations in EU and Japan. - Active investment trend in global automotive sector. - Tighter environmental regulations in China P&E - Business opportunities in water t

  10. Slide 10: Exchange rate forecast for 2017

    Exchange rate forecast for 2017 (Yen) 2016 2017 First-Half Results Second Forecast Half Results Forecast as First-Half of May 12 1Q 2Q Results Forecast USD 111.70 110 113.60 111.08 112.34 110 107 EUR 124.52 120 121.05 122.27 121.66 120 118 1 yen O.P. sensitivity for 2017 Forecast USD 162 million yen

  11. Slide 11: Forecast of 2017

    Forecast of 2017 (Billions of Yen) 2016 2017 : Record-highs Forecast Revised vs. Forecast Results as of May 12 Forecast as of May 12 Sales 170.0 183.0 187.0 +4.0 Operating profit 18.4 21.0 22.0 +1.0 O.P. % 10.9% 11.5% 11.8% +0.3p Ordinary profit 18.2 20.3 21.3 +1.0 Net Income attributable to Owners

  12. Slide 12: Forecast of 2017 by segment

    Forecast of 2017 by segment (Billions of Yen) Sales O.P. 2016 2017 2017 vs. 2016 2017 2017 vs. Resuts Forecast as Reviesd Forecast as Resuts Forecast as Reviesd Forecast as :Record-highs of May 12 Forecast of May 12 of May 12 Forecast of May 12 Auto 62.2 69.0 71.0 +2.0 3.5 5.2 5.7 +0.5 P&E 16.7 18.0

  13. Slide 13: Contents

    Contents  2017 First-Half Results  2017 Full Year Forecast  Business Segment Outline  Shareholder Return  Other Topics  Financial Data  Corporate Profile © 2017 HORIBA, Ltd. All rights reserved. 13

  14. Slide 14: Auto First-Half Results and Forecast for 2017

    Auto First-Half Results and Forecast for 2017 (Billions of Yen) 2017 First-half results 2017 First-Half Results *EMS = Emission Measurement Systems Sales (prior year) ＋ EMS Sales increase due to tighter emission regulations EMS 19.8 (18.3) MCT 6.3 (5.0) ＋ MCT Recovery in capital spending by automake

  15. Slide 15: Auto: Action for next-generation emission regulations

    Auto Action for next-generation emission regulations (Billions of Yen) EMS : Action for next-generation emission regulations ※1 [Sales/ Backlog] WLTP (unified emission regulations by the UN) Backlog Sales Forecast Start: Sep. 2017 in EU; Oct. 2018 in Japan 44.0 37.4 39.8 40.1 33.3 *2 RDE Regulation

  16. Slide 16: Contributing to R&D for EVs and autonomous driving vehicles

    Contributing to R&D for EVs and Auto autonomous driving vehicles (Billions of Yen) MCT Business: Response to the trend to promote EVs Improve sales and profitability in 2017 HORIBA’s business areas - Recovery in automakers’ capex Provide solutions, from single systems (i.e., powertrain, - The Turn K

  17. Slide 17: P&E First-Half Results and Forecast for 2017

    P&E First-Half Results and Forecast for 2017 (Billions of Yen) 2017 First-Half Results Increase in demand for stack gas analyzers: replacement demand in Japan and ＋ VOC-regulation related sales in China ＋ Firm demand for water measurement systems in Japan but less-than-expected - sales growth 2017 F

  18. Slide 18: P&E Enhancing global business

    P&E Enhancing global business Invest in the process measurement equipment business : New Houston factory Start: April 1st, 2017 Houston factory Analyzer house* Place: Huston in Texas (US) Function: Production of P&E equipment; Scientific & Medical-related sample tasting Objective: Business growth th

  19. Slide 19: Medical First-Half Results and Forecast for 2017

    Medical First-Half Results and Forecast for 2017 (Billions of Yen) 2017 First-Half Results ＋ - Increase in expense in promoting hematology and CRP analyzers in Japan ＋ - Sales drop in EU/South America; impacts of French new products in and after 2018 2017 Full-Year Forecast - Intensified competition

  20. Slide 20: Medical New product launch for business expansion

    Medical New product launch for business expansion New product and “HELO Solution” in the mid- to high-end market  Strengths “HELO Solution” - Total solutions including clinical (Launch in 2017) data management system - Flexibility in layout  Schedule Rendering of installed products in a customer’s

  21. Slide 21: Semi First-Half Results and Forecast for 2017

    Semi First-Half Results and Forecast for 2017 (Billions of Yen) 2017 First-Half Results MFC-related topics in Semi. market ＋ Record-high sales and OP - Transition of memory in data centers - Increase in capital spending in Asia -> Surge in semiconductor - High demand for etching for 3D-NAND - Change

  22. Slide 22: Semi Further enhancing stable supply

    Semi Further enhancing stable supply Investment in production factory (Aso in Japan; South Korea)  Expanding Aso factory of HORIBA STEC Co., Ltd. Investment: App. 2.7bn yen / Completion: Dec. 2017 (Plan) Objective: Expand production capacity of MFC (1.5 times in floor space)  Established a new hea

  23. Slide 23: Scientific First-Half Results and Forecast for 2017

    Scientific First-Half Results and Forecast for 2017 (Billions of Yen) 2017 First-Half Results ＋ Sales increase of core components for optical products in US and EU - Sluggish sales for universities in Japan, US, and EU ⇔ ＋ Strong sales in China ＋ Increase in R&D expenses for new product launch Diffr

  24. Slide 24: Scientific Supporting to cultivate HORIBA's technologies

    Scientific Supporting to cultivate HORIBA’s technologies “Diffracting grating,” core technology of the French subsidiary  Increase in demand for customized grating for high-intensity laser  Increase in demand for optical equipment including grating increase for SPE* makers *Semiconductor Productio

  25. Slide 25: Contents

    Contents  2017 First-Half Results  2017 Full Year Forecast  Business Segment Outline  Shareholder Return  Other Topics  Financial Data  Corporate Profile © 2017 HORIBA, Ltd. All rights reserved. 25

  26. Slide 26: Shareholder return

    Shareholder return Basic policy - Dividend payment + Share buyback = 30% of Consolidated net profit to be targeted - Remaining earnings are retained internally for strategic investment (i.e., facilities, M&A) Dividends per share and Share buybacks 2015 Results 70 yen [Interim 28 yen, Year-end 42 yen

  27. Slide 27: Contents

    Contents  2017 First-Half Results  2017 Full Year Forecast  Business Segment Outline  Shareholder Return  Other Topics  Financial Data  Corporate Profile © 2017 HORIBA, Ltd. All rights reserved. 27

  28. Slide 28: Action for workstyle innovation

    Action for workstyle innovation “Stained Glass Project” initiatives “KAERU” Meeting *KAERU” =Going home STEP 1 - Start from promoting women’s (from May 2017) 2014 empowerment - 111 persons (18 teams) join - Themes: “Efficient operation” - Start “workstyle innovation” workshop “Individual skill-up” S

  29. Slide 29: HORIBA Stained Glass Project

    HORIBA Stained Glass Project When diverse human resources can shine, HORIBA can become even stronger ＜Goals＞ 1. Increase the corporate competitiveness of HORIBA through diversity Business - Turn diversity beyond gender, generation, group, nationality, form of employment, disability, etc. into power

  30. Slide 30: Contents

    Contents  2017 First-Half Results  2017 Full Year Forecast  Business Segment Outline  Shareholder Return  Other Topics  Financial Data  Corporate Profile © 2017 HORIBA, Ltd. All rights reserved. 30

  31. Slide 31: Operating profit analysis (vs. 2016)

    Operating profit analysis ( vs. 2016 ) (Millions of Yen) 2017 2016 Jan.-Jun. Jan.-Jun. Increase 7,778 Increase Cost of Exchange Exchange Other 9,701 Sales goods impact for impact for R&D cost expenses amount sales Gross profit Expenses increase increase +8,150 -4,979 -128 +266 -385 -1,000 Sales impa

  32. Slide 32: Impact of fluctuation in foreign exchange

    Impact of fluctuation in foreign exchange Exchange rate impact Exchange rate impact for 2017 Forecast (2017 First-Half Results) 1 yen impact of Sales and O.P. (Yen appreciation) (Millions of Yen) Sales Operating Profit Sales Total USD EUR GBP Total USD EUR GBP USD -448 millions of yen EUR -331 milli

  33. Slide 33: Consolidated Cash Flows

    Consolidated Cash Flows (Millions of yen) 2016 2017 Variation First-Half First-Half Cash flows from operating activities 5,987 16,274 +10,287 Cash flows from investing activities -5,071 -6,804 -1,732 Cash flows from financing activities 59 -7,104 -7,164 Cash and cash equivalents at end of year 47,71

  34. Slide 34: Capital Investment, Depreciation, R&D

    Capital Investment, Depreciation, R&D (Billions of Yen) 2016 2017 Forecast 2016 2017 Forecast as Revised vs Forecast Results of May 12 as of May 12 First-Half First-Half Forecast PP&E 13.4 14.6 14.6 - 5.6 5.3 Intangibles 0.3 0.4 0.4 - 0.2 0.1 Capital Investment 13.7 15.0 15.0 - 5.8 5.5 Depreciation

  35. Slide 35: Cash Balance

    Cash Balance (Billions of yen) (Consolidated basis, each end of the year) Total Loan Balance 44.7 46.7 41.7 28.0 Bond redemption in 2020 Cash※ Cash※ Bonds 15.0 Cash※ Bonds 15.0 Cash※ 51.1 47.8 51.9 54.1 Bonds 15.0 Bonds 15.0 Long 16.8 Long 19.2 Long 19.0 Borrowed from JBIC* Long 2.2 15.1bn yen Short

  36. Slide 36: Contents

    Contents  2017 First-Half Results  2017 Full Year Forecast  Business Segment Outline  Shareholder Return  Other Topics  Financial Data  Corporate Profile © 2017 HORIBA, Ltd. All rights reserved. 36

  37. Slide 37: Corporate Profile

    Corporate Profile Atsushi Horiba  Head office Kyoto, Japan President & CEO  Founded 1945  Incorporated 1953  CEO Atsushi Horiba  Fiscal year end December 31 - Corporate motto - To have interest and pride in our work to enjoy our lives © 2017 HORIBA, Ltd. All rights reserved. 37

  38. Slide 38: Business Segments

    Business Segments ・Emission Measurement Systems ・Test Automation Systems Automotive Test Systems ・Intelligent Transport Systems ・Engineering Consultancy & Testing (HORIBA MIRA, Ltd) ・Environmental & Process Systems Process & Environmental ・Environmental Radiation Monitor ・Environmental Regulation &

  39. Slide 39: Business Segments

    Business Segments Sales Breakdown by Segment Automotive Test Systems Sales: 170.0 B.JPY (1,460 MUSD) 15% Process & Environmental Scientific 25.7 36% 23% (220) Automotive 62.2 Medical Semicon (534) 38.8 (333) P&E Medical 16.7 Semiconductor 26.5 (143) (228) 16% 10% ( ) =Segment Sales in MUSD Scientifi

  40. Slide 40: Market Shares

    Market Shares Global Domestic Automatic Blood Cell Counter Emission Measurement Systems Stack Gas Analyzers plus CRP 80% 20% 100% (As of December 31, 2015) Mass Flow Controllers Raman Spectrophotometers Gratings 57% 30% 35% ※Market shares quoted are estimates by HORIBA. © 2017 HORIBA, Ltd. All right

  41. Slide 41: HORIBA Worldwide

    HORIBA Worldwide Sales of FY2016 : 170.0 BJPY (1,460 MUSD) Sales Ratio by Region EU The Number of Group Companies by region Japan (As of December 31, 2016) 23% 33% Americas 9 Americas Europe 23 18% Asia Asia 17 (4 in Japan, including HORIBA, Ltd.) 26% Total 49 © 2017 HORIBA, Ltd. All rights reserved

  42. Slide 42: Employees by Region

    Employees by Region Americas 3% Total Number of Employees Other Europe 2% U.S.A 7,149 10% Total Asia : 3,761 Germany Japan 8% Japan 53% 38% UK 38% Total Europe： 2,442 11% France 34% Other 13% Asia Total Americas： 946 15% 14% 13% (As of December 31, 2016) © 2017 HORIBA, Ltd. All rights reserved. 42

  43. Slide 43: © 2017 HORIBA, Ltd. All rights reserved.

    © 2017 HORIBA, Ltd. All rights reserved. 43 43

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