Horiba, Ltd. · TSE:6856
Horiba — CLSA Japan Forum 2017
54 slides from Horiba's conference presentation, March 2017
Slide 1: HORIBA, Ltd. Financial Information
HORIBA, Ltd. Financial Information March, 2017 © 2017 HORIBA, Ltd. All rights reserved. 1
Slide 2: Contents
Contents 2016 Results 2017 Forecast Business Segment Outline Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile [Disclaimer] Plans and forecasts in this presentation that do not constitute historical facts are predictions concerning future business resul
Slide 3: Contents
Contents 2016 Results 2017 Forecast Business Segment Outline Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile © 2017 HORIBA, Ltd. All rights reserved. 3
Slide 4: Review of 2016
Review of 2016 Earthquakes in Kumamoto External Exhaust gas and fuel economy testing problems events Appreciation of the yen Brexit Revenue recognition policy change (January): Shipment base Delivery/installation base HORIBA MIRA full-year results in HORIBA’s consolidated results inclu
Slide 5: Summary of 2016 Results
Summary of 2016 Results Paid the highest dividend amount (85 yen per share) Achieved ROE of 10% Year-on-year declines from the top line down to ordinary profit, but the absolute levels were the second highest to the record-highs in 2015 P&L Record-high net profit due to a one-time drop in tax ra
Slide 6: 2016 full year results
2016 full year results (Billions of yen) 2015 2016 Results Forecast vs. Results vs.2015 (New Policy ※) (as of Nov.2016) Forecast Sales 171.9 170.0 170.0 -1.1% +0.1% Operatign Profit 20.1 17.5 18.4 -8.2% +5.7% O.P % 11.7% 10.3% 10.9% -0.8p +0.6p Ordinary profit 19.6 17.0 18.2 -6.9% +7.5% Net Income a
Slide 7: 2016 Results by Segment
2016 Results by Segment (Billions of yen) Sales Operating profit 2015 2016 vs. 2015 2016 vs. :Record-high Results Forecast Results Forecast ※ Results 2015 ※ Results 2015 (New Policy ) (as of Nov . 2016) (New Policy ) (as of Nov . 2016) Auto 65.4 64.0 62.2 -4.9% 5.2 3.5 3.5 -32.1% P&E 16.7 16.5 16.7
Slide 8: Contents
Contents 2016 Results 2017 Forecast Business Segment Outline Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile © 2017 HORIBA, Ltd. All rights reserved. 8
Slide 9: 2017 Market outlook
2017 Market outlook ・ Expect steady R&D investments by automakers Auto ・ Closely monitor emission regulations in EU and Japan ・ Expect firm demand for stack gas analyzers and P&E water measurement equipment in Asian countries ・ Closely monitor sales trend of small-sized products in Japan Medical ・ C
Slide 10: Exchange rate forecast for 2017
Exchange rate forecast for 2017 (Yen) 2015 2016 2017 Results Results Forecast vs 2016 USD 121.10 108.78 110 +1.22 EUR 134.31 120.26 120 -0.26 GBP 185.19 147.57 130 -17.57 1 yen O.P. sensitivity for 2017 Forecast USD 155 million yen EUR 23 million yen © 2017 HORIBA, Ltd. All rights reserved. 10
Slide 11: Forecast for 2017
Forecast for 2017 (Billions of yen) 2015 2016 2017 Results Results Forecast vs 2016 :Record-high (New policy ※) Sales 171.9 170.0 177.0 +4.1% Operating profit 20.1 18.4 20.0 +8.1% O.P % 11.7% 10.9% 11.3% +0.4p Ordinary proft 19.6 18.2 19.3 +5.6% Net income attribute to Owners of Parent 13.2 12.9 13.
Slide 12: Forecast for 2017 by segment
Forecast for 2017 by segment (Billions of yen) Sales O.P :Record-high 2016 2017 vs 2016 2016 2017 vs 2016 Auto 62.2 67.0 +7.7% 3.5 5.2 +47.3% P&E 16.7 18.0 +7.4% 1.5 1.6 +3.9% Medical 26.5 25.0 -5.9% 2.8 2.2 -21.6% Semi 38.8 41.0 +5.6% 9.6 10.0 +3.3% Scientific 25.7 26.0 +1.0% 0.9 1.0 +5.8% Total 17
Slide 13: Contents
Contents 2016 Results 2017 Forecast Business Segment Outline Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile © 2017 HORIBA, Ltd. All rights reserved. 13
Slide 14: Next Slide
Next Slide © 2017 HORIBA, Ltd. All rights reserved. 14
Slide 15: Auto 2016 Results and 2017 Forecast
Auto 2016 Results and 2017 Forecast (Billions of yen) 2016 Results Topics of Automotive Industries in 2016 EMS* ＋ Steady sales in Japan, increase in OBS* The autonomous-driving car age begins. Use of artificial intelligence (AI) MCT - Temporary decline in demand Accelerated EV development ECT*
Slide 16: Auto: Strategy for improving profitability - MCT
Strategy for - HORIBA BIWAKO E-HARBOR Auto improving profitability - MCT Aim at cutting the lead time to one-third MCT business improves profitability Shorten the lead time in the specification-design stage Significant recovery is expected in 2017 Pick up in automakers’ investments Inspection Coll
Slide 17: Auto: Regulatory trend in EMS and emerging markets
Regulatory trend in EMS (Emission Measurement System) Auto and Operations in an emerging Market EMS Sales and Order Backlog (Billions of yen) Regulatory trend 45 39.8 40.1 40.0 Solid sales in Japan (automakers, parts makers) 37.4 33.3 Steady investment in Japan 30 26.5 28.6 Backlog Sales WLTP*(unifi
Slide 18: Auto ECT (HORIBA MIRA) Business
Auto ECT (HORIBA MIRA) Business ECT Sales and Backlog (Billions of Yen) ECT Business (Engineering/HORIBA MIRA) 8 7.2 7.0 Sale decline caused by weaker GBP vs. the JPY 6 4.5 Investments of 3.0bn yen planned each in 2016 Backlog Sales 4 and 2017 while closely monitoring the Brexit 2 4.2 3.5 impact
Slide 19: P&E 2016 Results and 2017 Forecast
P&E 2016 Results and 2017 Forecast 2016 Results Sales by region ＋ • Steady sales of stack gas analyzers in Japan 20.0 18.0 ＋ • Robust process analytical measurement business (U.S.) 16.7 2.0 2.0 Europe •- Weak sales in EU and Asia 15.0 3.0 2.9 0.9 America 0.7 2.1 10.0 1.9 China 2017 Forecast ＋ • Expe
Slide 20: P&E Analysis technology for the environment
P&E Analysis technology for the environment Gas Water Automatic on-line analysis of PM components Project to improve water quality of wastewater Integrate HORIBA’s technology in SCI and P&E × from dyeing factories Identify sources of origin of microparticles Installing wastewater treatment sys
Slide 21: Medical 2016 Results and 2017 Forecast
Medical 2016 Results and 2017 Forecast (Billions of yen) 2016 Results Sales by region ＋ Firm sales of CBC+CRP analyzers in Japan 30.0 26.5 25.0 - Sales decrease in yen due to the yen appreciation Europe 9.2 ＋ Steady growth in India 20.0 8.7 America 2017 Forecast 6.5 5.5 China 10.0 1.2 1.3 ＋ Expect f
Slide 22: Medical Growth with New Brand and Service
Medical Growth with New Brand and Service Provide maintenance service system New brand “Yumizen” using IoT technology for reducing device downtime Brand building in the IVD market Enhance maintenance support by continuous monitoring & diagnostic reports Detect problems in advance and provide a
Slide 23: Semi 2016 Results and 2017 Forecast
Semi 2016 Results and 2017 Forecast (Billions of yen) 2016 Results Topics regarding the semiconductor • Record-high sales and operating profit due to ＋ industry and mass flow controller market increased investments by semiconductor Data centers’ shift to memory for storage manufacturers in Asia
Slide 24: Semi Aso Factory's capacity expansion and market share
Aso Factory’s capacity expansion and Semi the market share in mass flow controllers Investment for capacity expansion Current HORIBA STEC’s Aso Factory capacity expansion Amount: 2.7bn yen Completion: Nov. 2017 (Plan) Target: Increase in production capacity for mass flow controllers (1.5 times large
Slide 25: Scientific 2016 Results and 2017 Forecast
Scientific 2016 Results and 2017 Forecast (Billions of yen) 2016 Results Sales by region • ＋ Firm sales to the private sector and weak sales - 30 25.7 26.0 to academia in Japan •- Weak sales to academia in all regions 5.6 Europe 5.5 20 ＋ Increased sales of Raman Spectroscopy in China 6.5 6.7 America
Slide 26: Scientific Exploit new markets using HORIBA technology
Scientific Exploit new markets using HORIBA technology Cutting-edge technology of HORIBA and HORIBA Jobin Yvon Close relationship with academia HORIBA New product by integrating HORIBA Jobin Yvon HORIBA Group’s technologies Electron beam technology of Topcon Imaging CL* device (released in Aug. 2016
Slide 27: Contents
Contents 2016 Results 2017 Forecast Business Segment Outline Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile © 2017 HORIBA, Ltd. All rights reserved. 27
Slide 28: Shareholder Return
Shareholder Return Dividends and Share buybacks ● 2015 Results 70 yen per share + 2015 Share buyback ● 2016 Results 85 yen per share 218,400 shares, about 1.0 billion yen ● 2017 Forecast 90 yen per share 60% 57% Per-share dividend (from 2002 to 2017 Forecast) (Yen) 100 90 50% 44% An Average total r
Slide 29: Contents
Contents 2016 Results 2017 Forecast Business Segment Outline Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile © 2017 HORIBA, Ltd. All rights reserved. 29
Slide 30: 20-year business results
20-year business results (Billions of yen) Continual growth in Sales and in all profits Doubled in 10 years from 2010 Sales O.P. Net profit 250.0 30.0 171.9 170.0 177.0 153.0 144.2 138.1 20.1 20.0 134.2 18.4 116.0 16.5 118.5 123.4 117.6 17.2 105.6 104.5 14.9 13.7 92.4 12.2 20.0 74.4 78.5 85.0 11.2 1
Slide 31: MLMAP2020 "ONE STEP AHEAD"
Major policies MLMAP2020 “ONE STEP AHEAD” ●Applying HORIBA Technology in new business fields and new markets and becoming a true partner in analysis and measurement ●Accelerating corporate growth by its Super Dream Team based on balanced management, matrix organization, and HORIBA Stained Glass Proj
Slide 32: Actions for achieving MLMAP2020 targets
Actions for achieving MLMAP2020 targets 1. Re-organize the water measuring business to accelerate growth 2. “Stained Glass Project” activities 3. Improvement in asset efficiency and maximizing corporate value Introduction of original KPIs to measure asset efficiency Establishment of financial su
Slide 33: Water: Accelerate growth in water measuring business
Water Accelerate growth in water measuring business Integrate water measuring resources to HORIBA Advanced Techno Ltd. (Kyoto) Integrate products and technology from all HORIBA affiliates and 3 segments(Scientific/P&E/Semi) in all function including R&D, production, sales Create the value only HOR
Slide 34: Water measuring and analysis business domain
Water measuring and analysis Water business domain Water measuring/analysis business domain: Life Cycle of Water Water supply Industrial Industrial Sewage infrastructure water Industrial processes sewage infrastructure Products Tap water R&D Production Quality Regulations on Semiconductor discharged
Slide 35: Water measuring and analysis business domain
Water measuring and analysis Water business domain Scientific (University/pH) Semi (Chemical Concentration Monitor) Water supply Industrial Industrial Sewage infrastructure water Industrial processes sewage infrastructure P&E (Regulation & Process) Products Tap water R&D Production Quality Drainage
Slide 36: Selected as New Diversity Management Selection 100
Selected as one of New Diversity Management Selection 100 (by the Ministry of Economy, Trade and Industry of Japan) Mr. Saito, executive vice president, and Ms. Moriguchi, leader of Stained Glass Project at the award-receiving ceremony. Reasons for the award: Corporate motto “Joy and Fun” and the St
Slide 37: Enhance asset efficiency and maximize corporate value
Enhance asset efficiency and maximize corporate value Decided to introduce a new KPI to measure asset efficiency Indicator composed of “Operating profit” and “WACC” Applying unit: Business segments and Group companies Strengthen PDCA cycle: Efficient use of business assets and increase profit
Slide 38: Symbol of MLMAP2020
Symbol of MLMAP2020 ONE STEP AHEAD - To create a next stage of HORIBA - Step out of the existing business fields and pursue further expansion. Take a new perspective and overcome technological/market/organization barriers. Be flexible, think outside the box, and move up to the next stage. © 2017 HOR
Slide 39: Contents
Contents 2016 Results 2017 Forecast Business Segment Outline Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile © 2017 HORIBA, Ltd. All rights reserved. 39
Slide 40: Trend of Market capitalization
Trend of Market capitalization (Billions of yen) 216BJPY 262BJPY in Oct. 2007 in Feb. 2017 52BJPY in Dec. 2008 Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012 Jan-2013 Jan-2014 Jan-2015 Jan-2016 Jan-2017 © 2017 HORIBA, Ltd. All rights reserved. 40
Slide 41: Changed the accounting policy for revenue recognition
Changed the accounting policy for revenue recognition 2014 2015 2016 Not installed Not installed (Original) Not arrived Not arrived Installed Installed (New) Delivered Delivered Changed points: Original Shipment base New The date of delivery or installation based on contractual arrangements Applied
Slide 42: Operating profit analysis (vs. 2015)
Operating profit analysis ( vs. 2015 ) (Millions of Yen) 2015 2016 Results※ Results Exchange 20,142 Increase Increase impact Exchange 18,499 Other Sales Cost of for Gross impact for R&D cost expenses amount goods sales profit Expenses increase increase +12,426 -8,071 -6,675 +3,484 -1,231 -1,574 Sale
Slide 43: Consolidated Cash Flows
Consolidated Cash Flows (Millions of Yen) 2015 2016 Variation Cash flows from operating activities 14,770 15,871 1,101 Cash flows from investing activities -30,642 -10,427 20,214 Cash flows from financing activities 12,843 -451 -13,294 Cash and cash equivalents at end 47,859 51,940 4,081 of year Fre
Slide 44: Capital Investment, Depreciation, R&D
Capital Investment, Depreciation, R&D (Billions of yen) 2015 2016 2017 Forecast vs Results Results vs 2015 Forecast vs 2016 ＠11/7 Forecast PP&E 14.8 15.3 13.4 -10% -12% 14.6 +9% Intangibles 1.4 0.7 0.3 -75% -49% 0.4 +11% Capital Investment 16.3 16.0 13.7 -15% -14% 15.0 +9% Depreciation 6.1 6.5 6.8 +
Slide 45: Cash Balance
Cash Balance (Billions of yen) (Consolidated basis, each end of the year) Total Loan Balance 44.7 46.7 24.1 28.0 Bond Bonds redemption Bonds Cash*1 Cash*1 Cash *1 Cash*1 15.0 in 2020 15.0 49.2 51.1 47.8 51.9 Long Borrowed Bonds Long Bonds 19.2 from JBIC*2 15.0 16.8 15.0 15.1bn yen Long 2.2 (2015) Lo
Slide 46: Contents
Contents 2016 Results 2017 Forecast Business Segment Outline Shareholder Return MLMAP2020 [2016-2020]Progress Financial Data Corporate profile © 2017 HORIBA, Ltd. All rights reserved. 46
Slide 47: Corporate Profile
Corporate Profile Atsushi Horiba Head office Kyoto, Japan Chairman, 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. 47
Slide 48: Business Segments
Business Segments Automotive Test Systems Emission Measurement Systems (EMS) Mechatronics Devices (MCT) Driving Control Systems (ITS) Engineering Consultancy & Testing (ECT) Process & Environmental Environmental Systems Environmental Radiation Monitor Environmental Regulation & Process Business Medi
Slide 49: Well Balanced Business Operation - Five Business Segments
Well Balanced Business Operation -Five Business Segments- Automotive Test Systems Sales 170.0 Billions of Yen (FY2016) Process & Environmental Scientific 25.7 Automotive (15%) 62.2 (36%) Medical Semiconductor 38.8 (23%) Semiconductor Medical P&E 26.5 16.7 (10%) (16%) Scientific Business Composition
Slide 50: Market Shares
Market Shares Global Domestic Automatic Blood Cell Emission Measurement Systems Stack Gas Analyzers Counter plus CRP 80% 20% 100% Mass Flow Controllers Raman Spectrophotometers Gratings 57% 30% 35% ※Market shares quoted are estimates by HORIBA. © 2017 HORIBA, Ltd. All rights reserved. 50
Slide 51: HORIBA Worldwide
HORIBA Worldwide Sales of FY2016: 170.0 BJPY Geographic Composition of Sales(2016) The Number of Group Companies by region EU Japan (As of December 31, 2016) 23% 33% America 9 Americas Europe 23 18% Asia Asia 17 (4 in Japan, including HORIBA, Ltd.) 26% Total 49 © 2017 HORIBA, Ltd. All rights reserve
Slide 52: Employees by Region
Employees by Region Other Americas 3% 従業員数 Total Number of Employees (As2015年12月31日現在 of December 31, 2016) Other Europe 2% USA 7,149 10% Total Asia: 53% Germany Japan 8% 3,761 38% UK Total Europe: 34% 11% 2,442 France Other Asia Total Americas: 13% 13% 15% 946 © 2017 HORIBA, Ltd. All rights reserve
Slide 53: © 2017 HORIBA, Ltd. All rights reserved.
© 2017 HORIBA, Ltd. All rights reserved. 53
Slide 54: Thank you
Thank you 감사합니다 Cảm ơn ありがとうございました Dziękuję धन्यवाद Grazie Merci 谢谢 நன்ற ขอบคุณครับ Obrigado Σας ευχαριστούμε Tack ska ni ha Большое спасибо Danke Gracias © 2017 HORIBA, Ltd. All rights reserved. 54