Ihi Corporation · TSE:7013
Ihi — Investor Day (October 2024)
24 slides from Ihi's investor day presentation, Oct 23, 2024
Slide 1: Aero-Engine, Space & Defense Business Area Briefing
Aero-Engine, Space & Defense Business Area Briefing October 23, 2024 Atsushi Sato Managing Executive Officer and President of Aero-Engine, Space & Defense Business Area © IHI Corporation All Rights Reserved.
Slide 2: Today's Key Messages
1. Today’s Key Messages Generate revenue of ¥800 billion by FY2030 and ¥1,000 billion by FY2040 Sustainably increase civil aero-engine sales and earnings over the medium and long terms Bolster defense business sales and earnings on higher defense budgets and institutional reforms In the space busine
Slide 3: Business Area Operating Results
2. Business Area Operating Results Revenue and earnings growth far exceeded pre-pandemic levels Revenue EBITDA 450 20.0% 100 25.0% 400 15.0% 80 20.0% Revenue (billions of yen) EBITDA (billions of yen) 350 10.0% Operating margin EBITDA margin 300 5.0% 60 15.0% 250 0.0% 40 10.0% 200 -5.0% 150 -10.0% 2
Slide 4: Business Area Goals
3. Business Area Goals Boost revenue to ¥800 billion by FY2030 and ¥1,000 billion by FY2040 Deliver sustainable growth by leveraging core propulsion technologies to maximize business synergies (Billions of yen) Defense 1,100 11,000 Operating margin around 15% Earned recognition for long and extensiv
Slide 5: Civil Aero-Engine Business
Civil Aero-Engine Business © IHI Corporation All Rights Reserved. 5
Slide 6: Civil Aero-Engine Business: Market Trends
4. Civil Aero-Engine Business: (1) Market Trends Demand expanding particularly for medium narrowbody aircraft employing key offerings ✓ Passenger aircraft demand growth to match that of global passenger demand (3.5% annual growth rate for 2020~2043) Number of aircraft Passenger aircraft demand forec
Slide 7: Civil Aero-Engine Business: Business Scale Expansion
4. Civil Aero-Engine Business: (2) Business Scale Expansion Total engine shipments have steadily increased, with aftermarket revenue growth being even faster Cumulative engine shipments Civil aero-engine business revenue Units Billions of yen 40,000 500 5,000 20% operating margin 400 4,000 30,000 30
Slide 8: Civil Aero-Engine Business: Envisioned Earnings Model
4. Civil Aero-Engine Business: (3) Envisioned Earnings Model Invest earnings from existing engines in next-generation models to establish solid revenue streams for the medium through long terms Original Equipment Manufacturing business: (1) Engines and (2) Spare parts Sales Maintenance, Repair, and
Slide 9: Leverage Manufacturing Prowess to Boost Competitiveness
4. Civil Aero-Engine Business: (4) Leverage Manufacturing Prowess to Boost Competitiveness Endeavor to add even more value to next-generation engine program ✓ Enhance added value by expanding the value chain beyond existing core businesses ✓ Generate unparalleled added value through synergies by exp
Slide 10: Toward Next-Gen Propulsion Systems
4. Civil Aero-Engine Business: (5) Toward Next-Gen Propulsion Systems Undertake R&D to achieve carbon neutrality by 2050 ✓ Tap in-house technological seeds to spearhead the development of new propulsion systems and electric power and thermal management systems Keys to cutting carbon dioxide emission
Slide 11: Defense Business
Defense Business © IHI Corporation All Rights Reserved. 11
Slide 12: Help Overhaul Nation's Defense Capabilities
5. Defense Business: (1) Help Overhaul Nation’s Defense Capabilities IHI offers products and services for all seven major programs to “Fundamental reinforcement of Japan’s defense capabilities” ✓ Japanese government aims to increase defense budget to 2% of GDP by FY2027 The expenses based on contrac
Slide 13: Defense Business: Medium-Term Goals
5. Defense Business: (2) Medium-Term Goals FY2030 targets: Sales of ¥250 billion and operating margin of 10% 3,000 IHI’s defense business sales Enhance profit margins as part of (Billions of yen) defense industry policy ¥250 billion in sales and operating margin of 10% 2,500 250 Cost fluctuation Set
Slide 14: Expand Solid-Fuel Rocket Motor Business
5. Defense Business: (3) Expand Solid-Fuel Rocket Motor Business Provide propulsion systems for numerous medium- to-large-diameter missiles ✓ Solid rocket motors for missile propulsion systems contribute to standoff defense and integrated air defense missile defense capabilities Standoff defense cap
Slide 15: Strengthen Defense Equipment Transfers
5. Defense Business: (4) Strengthen Defense Equipment Transfers Leveraging long experience in developing and manufacturing defense engines to strengthen global deployment of defense business Export licensed domestic engine parts to U.S. original equipment manufacturer Help strengthen alliance betwee
Slide 16: Space Business
Space Business © IHI Corporation All Rights Reserved. 16
Slide 17: Expand Business through Public-Private Collaboration
6. Space Business: (1) Expand Business through Public-Private Collaboration Expand contributions to nation’s space development and commercialize launch services IHI’s rocket technologies ©JAXA ©JAXA Participate in resupply missions to lunar orbiting Help transport materials crewed station to Interna
Slide 18: Satellite Utilization Services
6. Space Business: (2) Satellite Utilization Services Foster new industries and boost national security by expanding satellite utilization services Tropical forest and peatland Securing maritime safety, including through Collaborating with management combining satellite and IHI Ocean Monitoring Serv
Slide 19: Toward Tomorrow
Toward Tomorrow © IHI Corporation All Rights Reserved. 19
Slide 20: Toward Tomorrow: Propulsion
7. Toward Tomorrow IHI will harness its technological expertise based on its propulsion capabilities to: ➢ Support global air transportation ➢ Contribute to Japan’s security ➢ Pioneer new space frontiers Defense business Source:*1 (Computer-generated image) Source:*2 Propulsion Civil Aero- Space Eng
Slide 21: Appendix
Appendix © IHI Corporation All Rights Reserved. 21
Slide 22: Appendix 1: Civil Aero-Engine Program Portfolio
Appendix 1: Civil Aero-Engine Program Portfolio Product portfolio balanced across generations and sizes Cumulative Engine program* Aircraft (Type) Main Partners Status Unit Sales As of end-March 31, 2024 (Source: IHI 80’ 90’ 00’ 10’ 20’ results briefing) Started development in 1984 P&W Medium- A320,
Slide 23: Appendix 2: Links for Sources
Appendix 2: Links for Sources (some in Japanese only) P. 12 *1 Air Self-Defense Force website https://www.mod.go.jp/asdf/equipment/other/Patriot/index.html *2 Maritime Self-Defense Force website https://www.mod.go.jp/msdf/release/202211/20221121-1.pdf *3 Northrop Grumman https://news.northropgrumman
Slide 24: Forward-looking figures disclaimer
Forward-looking figures shown in this material with respect to IHI’s performance outlooks and other matters are based on management’s assumptions and beliefs in light of the information currently available to it, and therefore contain risks and uncertainties. Consequently, you should not place undue