Takuma Co., Ltd. · TSE:6013
Takuma — Q1 2024 Earnings Presentation
59 slides from Takuma's earnings presentation, Aug 6, 2024
Slide 1: Takuma Co., Ltd. August 6, 2024
Takuma Co., Ltd. August 6, 2024 Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.
Slide 2: Business Segment
Business Segment Our business is centered on engineering, procurement, and construction (EPC) and after-sales service of waste treatment facilities, biomass power plants, etc. based on the primary themes of “environment” and “energy”. Business Segment Key Businesses Municipal Solid Waste Treatment P
Slide 3: Terminology
Terminology Term Definition EPC Engineering, procurement, and construction; one approach we use in our plant construction business. O&M Operation and maintenance; one approach we use in our plant operation business. DBO Design, build, and operate; one approach we use in our plant construction and op
Slide 4: Table of Contents
Table of Contents 1. Overview of Q1 FY2024 (Ending 3/2025) Financial Results 2. Financial Forecast for FY2024 (Ending 3/2025) 3. Appendix Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved. 3
Slide 5: Table of Contents
Table of Contents 1. Overview of Q1 FY2024 (Ending 3/2025) Financial Results 2. Financial Forecast for FY2024 (Ending 3/2025) 3. Appendix Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved. 4
Slide 6: Q1 FY2024 (Ending 3/2025) Summary
Q1 FY2024 (Ending 3/2025) Summary Q1 FY2024 Results Orders received Net sales Operating profit ¥106.9 billion ¥32.3 billion ¥1.8 billion +¥72.4 billion +¥2.5 billion +¥0.7 billion (+209.7%) YoY (+8.4%) YoY (+63.6%) YoY Orders received were up owing primarily to Sales were up for municipal solid wast
Slide 7: Q1 FY2024 Financial Highlights
Q1 FY2024 (Ending 3/2025) Financial Highlights Orders received were up owing to an order for a municipal solid waste treatment plant DBO project and primary equipment improvement project in the Domestic Environment and Energy Business. Both net sales and profit were up owing primarily to a change in
Slide 8: Q1 FY2024 Financial Highlights by Segments
Q1 FY2024 (Ending 3/2025) Financial Highlights by Segments Q1 FYE 3/2023 Q1 FYE 3/2024 Q1 FYE 3/2025 (Millions of yen) YoY change (FY2022) (FY2023) (FY2024) Orders received Total 32,855 34,548 106,979 209.7% Domestic Environment and Energy 24,293 26,166 97,406 272.3% Overseas Environment and Energy
Slide 9: Domestic Business: Orders Received / Order Backlog
Orders received / Domestic Environment and Energy Business Order backlog Orders received were up owing primarily to an order for a municipal solid waste treatment plant DBO project and primary equipment improvement project. Orders received: Up owing to orders for 1 waste treatment plant DBO projec
Slide 10: Domestic Business: Net Sales / Operating Profit
Net Sales / Domestic Environment and Energy Business Operating Profit Both sales and profit were up owing primarily to a change in the EPC project mix. Net sales Operating profit (Millions of yen) Approx. ¥1.4 billion increase (Millions of yen) Approx. ¥0.79 billion increase Q1 Q4 Q1 Q4 Q1 Operating
Slide 11: Domestic Business: Breakdown by Product / Service
Breakdown by Domestic Environment and Energy Business Product / Service Orders received were up owing to an increase in municipal solid waste treatment plants (EPC and after-sales services). Net sales were up, owing primarily to an increase in municipal solid waste treatment plants (EPC). Orders rec
Slide 12: Domestic Business Main Orders Received
Domestic Environment and Energy Business Main Orders Received In Q1 of FY3/2025, orders were received for 1 municipal solid waste treatment plant DBO project and 1 primary equipment improvement project. Year Delivered to: Notes Capacity Scheduled Completion Senboku Environmental Primary equipment Q1
Slide 13: Domestic Business Main Orders Received (Topics)
Main Orders Received Domestic Environment and Energy Business (Topics) Received order for waste treatment facility DBO project from Amagasaki City Incineration, recycling, and human waste treatment facilities integrated into one building 20 years of operations to be launched in April 2031 Will
Slide 14: Domestic Business Main Orders Received
Domestic Environment and Energy Business Main Orders Received No EPC orders for Energy Plants in Q1 FY3/2025. Scheduled Year Delivered to: Notes Capacity Completion Sanyo-Onoda Green Energy Co. EPC Power generation business (Biomass, FIT) 1,990kW 6/2024 Q1 Power generation business Winter Power Aid
Slide 15: Domestic Business: Quarterly trend in Orders received / Net sales
Quarterly trend in Domestic Environment and Energy Business Orders received / Net sales (Reference material) Orders received vary significantly depending on the timing that projects are recorded. Net sales tend to increase going into the fourth quarter. Orders received (quarterly) Net sales (quarter
Slide 16: Overseas Business: Orders received / Order backlog
Orders received / Overseas Environment and Energy Business Order backlog Orders received were on par with the same period of the previous year due to continued acquisition of maintenance orders. We will continue going after new construction and renewal projects in addition to maintenance services. O
Slide 17: Overseas Business: Net sales / Operating profit
Net sales / Overseas Environment and Energy Business Operating profit Net sales and operating profit were on par with the same period of the previous year owing primarily to progress on new plant projects previously ordered in addition to maintenance orders. Net sales Operating profit （Millions of y
Slide 18: Package Boiler Business: Orders received / Order backlog
Package Boiler Business Orders received / Order backlog Orders received were on par with the same period of the previous year due to a continued moderate recovery in demand. Orders received Order backlog (Q1) （Millions of yen） Approx. ¥0.04 billion decrease （Millions of yen） Approx. ¥0.1 billion dec
Slide 19: Package Boiler Business: Net sales / Operating profit
Package Boiler Business Net sales / Operating profit Net sales and operating profit were up owing primarily to progress on projects for which orders were already received and completion of large-scale projects. Net sales Operating profit （Millions of yen） Approx. ¥0.23 billion increase （Millions of
Slide 20: Equipment and Systems Business: Orders Received / Order Backlog
Equipment and Systems Business Orders Received / Order Backlog Orders received increased primarily from orders in the building equipment business. Orders received Order backlog (Q1) （Millions of yen） Approx. ¥1.3 billion increase （Millions of yen） Approx. ¥0.43 billion decrease Q1 Q4 16,000 14,000 1
Slide 21: Equipment and Systems Business: Net sales / Operating profit
Equipment and Systems Business Net sales / Operating profit Net sales were up owing to progress on projects for which orders were already received. However, operating profit was down due primarily to changes in the project mix. Net sales Operating profit （Millions of yen） Approx. ¥0.75 billion incre
Slide 22: Table of Contents
Table of Contents 1. Overview of Q1 FY2024 (Ending 3/2025) Financial Results 2. Financial Forecast for FY2024 (Ending 3/2025) 3. Appendix Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved. 21
Slide 23: FY2024 (Ending 3/2025) Results Forecast
FY2024 (Ending 3/2025) Results Forecast No changes from the initial forecasts announced on May 14, 2024. Aiming for record-high orders received of ¥230.0 billion. While sales are expected to be down, profit will be up owing mainly to changes in the EPC project mix. Orders received: Demand will be
Slide 24: FY2024 Profit Variance Analysis Forecast
FY2024 (Ending 3/2025) Profit Variance Analysis Forecast Although we expect an increase in SG&A expenses such as personnel and R&D expenses, we also expect an increase in profit due to higher gross profit in the EPC Business and recurring revenue model businesses. Breakdown of ordinary profit varian
Slide 25: FY2024 Results Forecast by Segment
FY2024 (Ending 3/2025) Results Forecast by Segment FYE 3/2025(FY2024) FYE 3/2023 FYE 3/2024 (Millions of yen) Beginning of year YoY change (FY2022) (FY2023) forecast Order received Total 168,558 160,568 230,000 43.2% Domestic Environment and Energy 130,280 131,567 198,700 51.0% Overseas Environment
Slide 26: Human resources investment, Capital investment and R&D
Human resources investment, Capital investment and R&D Actively invest in further business expansion in the future. Human resources investment: Strengthen hiring and training of human resources, especially in Engineering, Construction and Maintenance divisions. Capital investment: Expected to de
Slide 27: Shareholder Return
Shareholder Return The annual dividend for FY2024 (ending 3/2025) is to be increased by 8 yen to ¥56 per share. The total return ratio is expected to be 95.7% through share repurchase of up to JPY 4 billion and cancellation of treasury shares. 1 Enhancing shareholder returns and improving capital ef
Slide 28: Table of Contents
Table of Contents 1. Overview of Q1 FY2024 (Ending 3/2025) Financial Results 2. Financial Forecast for FY2024 (Ending 3/2025) 3. Appendix Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved. 27
Slide 29: History
History In 1912, we invented the first boiler in Japan using purely Japanese technology. While improving boiler technology, the company cultivated combustion and water treatment technologies and utilized them to enter the environmental field, such as waste incineration plants. Since then, we have pr
Slide 30: Performance Trends
Performance Trends In the latter half of the 2000s, we focused on after-sales service, which would provide its earnings base. There has been steady demand for renewal and service life improvement of waste treatment plants and an increase in demand for biomass power plants, resulting in stable net sa
Slide 31: Business Model: Domestic Business
Business Model Domestic Environment and Energy Business Revenue comes primarily from engineering and construction (EPC) and after-sales service (operational management, maintenance, O&M, etc.) of plants. Completion Approx. 2-5 years Approx. 20-30 years EPC after-sales service Recurring revenue model
Slide 32: Business Model: Sales Progress / Sales Composition
Domestic Environment and Energy Business Business Model Illustration: Sales Progress / Sales Composition Illustration: Sales Composition of Illustration: Sales Progress of Project Orders Domestic Environment and Energy Business 100 Order backlog (1 years ago) Order backlog (2 years ago) 80 Order bac
Slide 33: Takuma Group Management Principles and Long-Term Vision
Takuma Group Management Principles and Long-Term Vision Management Principles Keywords for realizing Vision2030 Takuma will strive for social contribution, corporate value enhancement, long- term corporate development and the satisfaction of all stakeholders by providing goods and services that are
Slide 34: Business Portfolio: Vision2030
Business Portfolio Vision2030: Our Vision for 2030 Achieve further expansion with recurring revenue model businesses as the core driver of growth for Vision2030. Work on expanding the EPC business at the same time as recurring revenue will increase to achieve ordinary profit of JPY 20.0 billion by F
Slide 35: 14th Medium-Term Management Plan Positioning and Policies
14th Medium-Term Management Plan Positioning and Policies Challenges for achieving Vision 2030 include a lack of human resources. In the 13th Medium-Term Management Plan, we paved the way toward growth to resolve these challenges by assessing the business environment and strengthening recruitment. T
Slide 36: 14th Medium-Term Management Plan Financial Targets (Summary)
14th Medium-Term Management Plan Financial Targets (Summary) In addition to ordinary profit, new targets for orders received and return on equity (ROE) are set in the 14th Medium-Term Management Plan. :Main target 13th MTP 14th Medium-Term Management Plan Vision2030 (JPY billions) (3-year total) 3-y
Slide 37: 14th Medium-Term Plan Financial Targets Forecasts by Segment
14th Medium-Term Management Plan Financial Targets Forecasts by Segment (JPY millions) FY2024 FY2025 FY2026 3-year total Orders received Total 230,000 180,000 190,000 600,000 Domestic Environment and Energy 198,700 146,700 155,000 500,400 Overseas Environment and Energy 4,000 4,000 4,000 12,000 Pack
Slide 38: 14th Medium-Term Management Plan: Orders Received/Net Sales
Illustration: Orders Received/Net Sales 14th Medium-Term Management Plan (Reference material) 240,000 230,000 220,000 Order(EPC) Net sales target (FYE 3/25) 200,000 200,000 190,000 180,000 Order(EPC) Order 180,000 (FYE 3/27) backlog(EPC) Sales (EPC: Order on or after FYE 3/28) 売上(EPC：2027年度～受注) (on
Slide 39: 14th MTP Business Strategies Basic Policy ① and ②
14th Medium-Term Management Plan Business Strategies Basic Policy ① and ② In the Domestic Environment and Energy Business, which is a pillar supporting growth, we will increase EPC orders and link them to operation management and maintenance to achieve a virtuous cycle between the EPC Business and r
Slide 40: 14th MTP Business Strategies Basic Policy ③ and ④
14th Medium-Term Management Plan Business Strategies Basic Policy ③ and ④ We will focus on expanding our product lineup, developing overseas operations, and securing and developing human resources to maintain and expand orders in each business. ▍ Priority measures by business/field Basic policy 3 St
Slide 41: 14th MTP Basic Policy⑤ M&As and Alliances / New Businesses
14th Medium-Term Management Plan Business Strategies Basic Policy⑤ M&As and Alliances / New Businesses We will gather information with a focus on the business fields below to actively look into projects that match our business strategy. Priority field Segment Purpose/category (Business field) Functi
Slide 42: Situation by Segment: Municipal solid waste treatment plants
Domestic Environment and Energy Situation by Segment Municipal solid waste treatment plants Business Environment Demand for renewal and service life improvement will continue due to the aging of waste treatment facilities. We expect renewal demand to continue for the time being. DBO orders are on th
Slide 43: Situation by Segment: Municipal solid waste treatment plants
Domestic Environment and Energy Situation by Segment Municipal solid waste treatment plants Business Strategy Focus on winning ongoing orders through comprehensive proposals tailored to diversifying needs. Steadily landing orders for EPC/O&M. The long-term O&M (contract period of 10 years or more) r
Slide 44: Situation by Segment: Municipal solid waste treatment plants
Domestic Environment and Energy Situation by Segment Municipal solid waste treatment plants Business Strategy Aim for sustainable growth of recurring revenue model businesses by strengthening O&M proposals and proposals for regular maintenance work. The Company received orders for long-term O&M (con
Slide 45: Situation by Segment: Energy plants
Domestic Environment and Energy Situation by Segment Energy plants We contribute to stabilizing our customers’ businesses and maximizing their revenues through biomass power plants and large-scale plants that supply electricity and heat to their factories. Demand for small- and medium-sized biomass
Slide 46: Situation by Segment: Water Treatment Plants
Domestic Environment and Energy Situation by Segment Water Treatment Plants Contribute to the effective use of energy and decarbonization of sewage treatment facilities through greenhouse gas-reducing and highly energy-saving products. In addition to renewal and service life improvement demand due t
Slide 47: Situation by Segment: Power Retail Business
Domestic Environment and Energy Situation by Segment Power Retail Business Contribute to stabilizing customers’ electricity rates and reducing greenhouse gas emissions through the procurement and supply of electricity generated from renewable energy and non-fossil fuels. Business Demand is increasin
Slide 48: Situation by Segment: Overseas Business
Situation by Segment Business Overseas Environment and Energy Environment In addition to population and economic growth, the trend toward decarbonization in Southeast Asia has increased demand for biomass power generation and Energy from Waste plants. In Thailand, demand for Energy from Waste an
Slide 49: Situation by Segment: Overseas Strategy
Situation by Segment Business Overseas Environment and Energy Strategy Focus on securing continuous orders for biomass power generation plants and Energy from Waste plants and improving the system. Results Promoted the development of a system to win orders via local subsidiaries in Thailand and Taiw
Slide 50: Situation by Segment: Package Boiler / Equipment and Systems
Package Boiler Business / Situation by Segment Equipment and Systems Package Boiler Business Equipment and Systems Domestic market has matured, but we expect a certain level of demand for Building equipment business Semiconductor industrial equipment renewal and other work to continue for the time b
Slide 51: Securing and Development of Human Resources
Strengthening the Management Foundation Securing and Development of Human Resources We will promote various human resources measures to expand resources in recurring revenue model businesses and the EPC Business. Challenges Human resources measures linked to management strategy Elimination of huma
Slide 52: Human Resources Investment
Strengthening the Management Foundation Human Resources Investment Strengthen hiring and training of human resources to pass on our greatest strength, our technological capabilities, and expand our resources. Continue hiring and training efforts in the Engineering Division, as well as the Constructi
Slide 53: Strengthening the Management Foundation: R&D
Strengthening the Management Foundation R&D In addition to fine tuning existing technologies, we will strengthen R&D focusing on CCUS and carbon recycling technologies to realize a decarbonized society. R&D roadmap for decarbonization technologies Examples of our technology/R&D Agricultural use of C
Slide 54: Knowledge Management: Digital Transformation
Strengthening the Management Foundation Knowledge Management “Offensive” digital transformation (DX) has had some success in areas such as automated plant operation (AI development). We will continue efforts to create new value for further strengthening our competitiveness. Regarding “defensive” DX,
Slide 55: Knowledge Management: Data Assets
Strengthening the Management Foundation Knowledge Management We are systematizing (visualizing) technical data, plant data, problem information, etc. as data assets to promote knowledge management. Harima Factory EPC O&M Technical information Operational data Inspection history Production control In
Slide 56: Capital Policy
Capital Policy We will establish a quantitative policy based on an analysis of the current situation related to cost of capital and stock price. We will enhance corporate value by balancing business growth and shareholder returns that meet market expectations with a solid financial foundation. 1 2 3
Slide 57: Capital Policy: Cash Allocation
Capital Policy Cash Allocation Focus on growth investments and shareholder returns and execute appropriate cash allocation to increase corporate value. 13th Medium-Term Management Plan period 14th Medium-Term Management Plan period Growth (JPY billions) Sale of cross- investments Sale of cross- shar
Slide 58: Capital Policy: Shareholder Return
Capital Policy Shareholder Return 1 Enhancing shareholder returns and improving capital efficiency through stable dividends and share repurchase Shareholder return 2 Establish as a target amount whichever is higher calculated based on dividend payout ratio of 50% or dividend on equity (DOE) ratio of
Slide 59: Disclaimer
Disclaimer Information related to performance forecasts, business plans, and related topics included in this document is based on data currently available to the Company and on certain assumptions that are deemed to be reasonable. This information includes elements of risk and uncertainty. Please no