Kawasaki Heavy Industries Ltd. · TSE:7012

Kawasaki Heavy Industries — Kawasaki Heavy Industrial — Q3 FY2023 Earnings Presentation

43 slides from Kawasaki Heavy Industries's earnings presentation, Feb 10, 2024

  1. Slide 1: Financial Results for Third Quarter FY2023

    Financial Results for Third Quarter FY2023 For the Year ending March 31, 2024 0 February 9, 2024

  2. Slide 2: Table of Contents

    0 Table of Contents 1 Consolidated Results for 3 Details by segment Third Quarter FY2023 Summary 3 Aerospace Systems 15 Segment 4 Rolling Stock 19 Statement of Comprehensive income 5 Energy Solution & Marine Engineering 23 （ES&M） Details of Change in business profit 7 Precision Machinery & Robot 27

  3. Slide 3: Consolidated Results for Third Quarter FY2023 - Summary

    Consolidated Results for Third Quarter FY2023 1 –Summary- V-shaped recovery QoQ, but profit decreased YoY Overall results are as expected, though it depends on the segment (vs. forecast in Nov) (Billion Yen) FY23 Q3 YoY Attention FY22 Q3 Apr. to Jun. Jul. to Sep. Oct. to Dec. Total Change Profit of

  4. Slide 4: Consolidated Results - Segment

    Consolidated Results for Third Quarter FY2023 1 –Segment- Business profit in ES&M increased due to a significant improvement in profitability of Ship & Offshore business and Energy & Marine Machinery business ① Business profit in PS&E decreased due to increase in sales promotion expenses and recall-

  5. Slide 5: Statement of comprehensive income

    Consolidated Results for Third Quarter FY2023 1 –Statement of comprehensive income- (Billion Yen) Details FY22 Q3 FY23 Q3 Change % % Revenue 1,196.3 100.0 1,229.0 100.0 + 32.7 ① Cost of sales ratio 1 deteriorated due to a loss Cost of sales 949.5 79.4 1,038.2 84.5 + 88.7 of ¥58 billion yen Gross pro

  6. Slide 6: Statement of comprehensive income (continued)

    Consolidated Results for Third Quarter FY2023 1 –Statement of comprehensive income- (Billion Yen) FY22 Q3 FY23 Q3 Change Details % % Finance income and Finance costs - 8.7 - 18.6 - 9.9 ④ Foreign exchange losses due to hedge valuation losses Net Interest expense (incl. dividend income) - 1.9 - 3.7 -

  7. Slide 7: Details of change in business profit

    Consolidated Results for Third Quarter FY2023 1 –Details of change in business profit- Change in product mix and other factors was affected by increased sales promotion expenses in PS&E and decline in operations in Precision Machinery & Robot Quarterly equalization of certain bonus provisions※1 depr

  8. Slide 8: Details of change in business profit by segment

    Consolidated Results for Third Quarter FY2023 1 –Details of change in business profit- (Billion Yen) FY22 Q3 Details of change FY23 Q3 Business Change in Change in Loss Related to Business Effects of Change share of profit (loss) Change in the In-Service Profit product mix and of investments SG & A

  9. Slide 9: Statement of financial position

    Consolidated Results for Third Quarter FY2023 1 –Statement of financial position- (Billion Yen) End of End of Details Change Mar. 2023 % Dec. 2023 % Cash and cash equivalents 138.4 102.0 - 36.4 ① Increase in Aero Engine 1 and Rolling Stock, etc Trade receivables (Incl. contract assets) 592.6 639.2 +

  10. Slide 10: Statement of financial position (continued)

    Consolidated Results for Third Quarter FY2023 1 –Statement of financial position- (Billion Yen) End of End of Details Change Mar. 2023 % Dec. 2023 % Trade payables 395.1 415.9 + 20.7 ④ Increase in borrowing from 4 the end of the previous fiscal Interest-bearing debt 589.8 831.0 + 241.1 year is norma

  11. Slide 11: Cash Flows

    Consolidated Results for Third Quarter FY2023 1 –Cash Flows- (Billion Yen) 要因説明 FY22 Q3 FY23 Q3 Change Profit before tax 72.1 - 17.9 - 90.0 ① Q3 FY’22： Significant cash outflow in Depreciation and amortization 55.9 61.0 + 5.0 working capital component Increase and decrease in working capital - 161.9

  12. Slide 12: Cash Flows - historical trend

    Consolidated Results for Third Quarter FY2023 1 –Cash Flows- Historical data shows CF from operating activities is improving Working capital temporarily increased due to a strong recovery in order-based businesses and sales growth in PS&E CF from operating acitivities CF from investing activities (ｰ

  13. Slide 13: Forecasts for FY2023 - Summary

    Forecasts for FY2023 2 -Summary- Business profit was revised up, though net income remained unchanged due to the impact of foreign exchange hedges Revenue and profit are expected to increase further in Q4 compared to the solid Q3 (Billion Yen) FY2022 FY2023 Forecast and Progress Actual Old FCST New

  14. Slide 14: Forecasts for FY2023 - Segment

    Forecasts for FY2023 2 -Segment- Forecast for Aerospace Systems was revised up mainly due to improved Aero Engine after-sales revenue ① Forecast for Precision Machinery & Robot was revised down due to the stagnation of the Chinese market, the impact of excess inventory and the delay in the recovery

  15. Slide 15: Aerospace Systems

    Details by Segment 3 -Aerospace systems- FY2023.Q3（vs. FY2022.Q3） FY2023 forecast（vs. Forecast in November） Orders Increased due to increase in orders for MOD Orders Revised up due to increase in orders for received and Boeing, despite the loss (reduction in received MOD, etc +¥131.7 bil. orders) re

  16. Slide 16: Aerospace Systems - results and forecast

    Details by Segment 3 -Aerospace systems- (Billion Yen) FY2022 FY2023 FY2022 FY2023 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY22 Chg. Vs. Old FCST Q4 FCST Orders Received 200.7 332.5 + 131.7 345.5 560.0 590.0 + 244.5 + 30.0 257.5 Aerospace 140.5 310.5 + 170.0 253.9 475.0

  17. Slide 17: Aerospace Systems - quarterly revenue and profit

    Details by Segment 3 -Aerospace systems- Net Sales or Revenue (billion yen) 161.1 Aerospace Aero Engines 122.1 128.7 120.5 67.0 109.3 110.2 106.3 93.9 99.7 93.3 93.5 39.1 41.5 44.9 81.5 80.2 48.9 74.6 39.3 70.0 71.5 21.7 63.2 17.9 63.4 37.2 26.4 25.4 87.1 94.0 35.1 88.5 83.0 13.6 24.6 23.3 75.6 23.9

  18. Slide 18: Aerospace Systems - market overview and efforts

    Details by Segment 3 -Aerospace systems- Market Overview Specific Efforts ⚫ Commercial business ⚫ Securing stable revenue in core business – Air passenger demand is almost back to – Cost reductions in existing orders of aircrafts for Boeing and commercial pre-COVID-19 levels aircrafts jet engines –

  19. Slide 19: Rolling Stock

    Details by Segment 3 - Rolling Stock - FY2023.Q3（vs. FY2022.Q3） FY2023 forecast（vs. Forecast in November） Orders Decreased from the previous fiscal year Orders Expected to remain at the same level received when we received orders for large projects received -¥252.5 bil. such as new subway cars for t

  20. Slide 20: Rolling Stock - results and forecast

    Details by Segment 3 - Rolling Stock - (Billion Yen) FY2022 FY2023 FY2022 FY2023 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY22 Chg. Vs. Old FCST Q4 FCST Orders Received 294.3 41.8 - 252.5 313.2 80.0 80.0 - 233.2 - 38.2 Domestic & Asia 41.5 38.1 - 3.4 58.1 76.0 76.0 + 17.

  21. Slide 21: Rolling Stock - quarterly revenue and profit

    Details by Segment 3 - Rolling Stock - Net Sales or Revenue (billion yen) Domestic & Asia North America 51.6 43.5 23.2 39.5 40.6 38.8 38.1 39.0 36.8 37.5 33.7 28.4 32.3 32.3 31.7 31.5 32.1 26.7 14.9 8.2 8.9 28.7 28.8 10.9 8.1 11.3 26.4 6.0 4.6 9.9 6.8 7.3 8.2 20.4 29.9 30.1 28.6 10.2 5.4 28.6 27.7 8

  22. Slide 22: Rolling Stock - market overview and efforts

    Details by Segment 3 - Rolling Stock - Market Overview Specific Efforts ⚫ The impact of COVID-19 ⚫ Compliance with delivery schedules for – Railway relate investment is resuming in both overseas projects domestic and foreign markets as the impact of COVID-19 subsides Dhaka ‣ All the 24 trains (144ca

  23. Slide 23: Energy Solution & Marine Engineering

    Details by Segment 3 - Energy Solution & Marine Engineering - FY2023.Q3（vs. FY2022.Q3） FY2023 forecast（vs. Forecast in November） Orders Decreased due to a decrease in orders for Orders Revised up mainly due to increase in received domestic municipal waste incineration received domestic waste inciner

  24. Slide 24: Energy Solution & Marine Engineering - results and forecast

    Details by Segment 3 - Energy Solution & Marine Engineering - (Billion Yen) FY2022 FY2023 FY2022 FY2023 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY22 Chg. Vs. Old FCST Q4 FCST Orders Received 301.8 281.2 - 20.6 439.0 340.0 360.0 - 79.0 + 20.0 78.8 Energy, Plant & 236.0 2

  25. Slide 25: Energy Solution & Marine Engineering - quarterly revenue and profit

    Details by Segment 3 - Energy Solution & Marine Engineering - Net Sales or Revenue (billion yen) (Note) The prior results of previous segment have been reclassified to current segment Energy, Plant & Marine Machinery Ship & Offshore Structure 103.8 102.1 99.3 95.5 86.5 82.5 23.6 18.6 77.8 22.6 77.0

  26. Slide 26: Energy Solution & Marine Engineering - market overview and efforts

    Details by Segment 3 - Energy Solution & Marine Engineering - Market Overview Specific Efforts ⚫ Energy system & Plant Engineering Providing products and services that enable a Domestic Overseas seamless transition from low carbon to decarbonization Strong demand for distributed ₋ Strong demand for

  27. Slide 27: Precision Machinery & Robot

    Details by Segment 3 - Precision Machinery & Robot - FY2023.Q3（vs. FY2022.Q3） FY2023 forecast（vs. Forecast in November） Orders Decreased mainly due to decline in Orders Revised down due to decrease in various received hydraulic equipment for Chinese received types of robots construction machinery ma

  28. Slide 28: Precision Machinery & Robot - results and forecast

    Details by Segment 3 - Precision Machinery & Robot - (Billion Yen) FY2022 FY2023 FY2022 FY2023 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY22 Chg. Vs. Old FCST Q4 FCST Orders Received 197.6 157.6 - 39.9 262.0 240.0 230.0 - 32.0 - 10.0 72.4 Hydraulic 118.1 101.8 - 16.3 154

  29. Slide 29: Precision Machinery & Robot - quarterly revenue and profit

    Details by Segment 3 - Precision Machinery & Robot - Net Sales or Revenue (billion yen) Hydraulic Components & Systems 86.6 Robotics 73.1 73.5 70.3 31.8 65.0 60.6 61.2 61.5 55.2 57.6 29.0 28.5 55.6 30.5 53.6 52.6 53.7 48.3 49.8 48.8 27.8 49.3 45.4 22.6 20.7 22.8 15.1 17.0 19.4 16.9 54.7 20.4 19.8 9.

  30. Slide 30: Precision Machinery & Robot - market overview and efforts

    Details by Segment 3 - Precision Machinery & Robot - Market Overview Specific Efforts ⚫ Construction machinery ⚫ Developing electrification and automation – Weak demand in China due to prolonged real technology for construction machinery estate recession, etc – Support customer development of future

  31. Slide 31: Powersports & Engine

    Details by Segment 3 - Powersports & Engine - FY2023.Q3（vs. FY2022.Q3） FY2023 forecast（vs. Forecast in November） Revenue Decrease due to decrease in motorcycles Revenue Expected to remain at the same level due for emerging countries and general-purpose to decrease in general-purpose engines -¥9.3 bi

  32. Slide 32: Powersports & Engine - results and forecast

    Details by Segment 3 - Powersports & Engine - (Billion Yen) FY2022 FY2023 FY2022 FY2023 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY22 Chg. Vs. Old FCST Q4 FCST Revenue 413.7 404.4 - 9.3 591.1 590.0 590.0 - 1.1 - 185.6 Motorcycles for developed contries 139.5 135.9 - 3.5

  33. Slide 33: Powersports & Engine - quarterly revenue and profit

    Details by Segment 3 - Powersports & Engine - Net Sales or Revenue (billion yen) 177.3 148.5 143.9 138.3 139.1 137.2 126.0 123.1 107.5 111.1 113.4 102.7 93.2 82.9 80.8 85.7 78.8 68.3 58.9 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY2019 FY2020 FY2021 FY2022 FY2023 （IFRS） （IFRS） （IFRS）

  34. Slide 34: Powersports & Engine - market overview and efforts

    Details by Segment 3 - Powersports & Engine - Market Overview Specific Efforts ⚫ U.S. (Motorcycles) ⚫ Supplying products as much as demanded – Our share of the retail market is growing, – Flexibly change production and sales plans according to sales conditions and the market remains strong – Continu

  35. Slide 35: Shareholder Return

    4 Shareholder Return Dividend Policy Dividend for FY2023 30% The medium- to long-term consolidated dividend payout ratio ⚫ Full-year net income attributable to owners of the parent company unchanged from the November forecast of ¥12 billion (revised downward by ¥35 billion yen from the Comprehensive

  36. Slide 36: Project Topics - HySE hydrogen engine vehicle at Dakar 2024

    4 Project Topics HySE※1 hydrogen engine vehicle participated in “Dakar 2024” ⚫ 4 th ※2 in the “Dakar 2024” (Misson 1000) held in Saudi Arabia in January 2024 ⚫ Identify issues through driving the harshest environmental conditions, and accelerate the establishment of baseline hydrogen engine technolo

  37. Slide 37: Project Topics - Hydrogen-fueled gas turbine award

    4 Project Topics Ten Great New Products Awards KHI Hydrogen-fueled Gas Turbine won the “Masuda Award” at the Nikkan Kogyo Nikkan Kogyo Shimbun hosts this award, which recognizes products developed and Shimbun Ten Great New Products Awards put into practical use during the year that ⚫ GPB17MMX, 1.8MW

  38. Slide 38: Appendix - Details of change (FY'23 FCST)

    Appendix 4 - Details of change (FY’23 FCST)- Change in product mix, SG & A expenses Change in Effects of Change and other factors product mix, FX rates in sales SG & A expenses Change and other factors Effects of FX in sales Loss Related to the rates In-Service issues of Change in PW1100G-JM Engine

  39. Slide 39: Appendix - CAPEX, D&A, R&D Expenses, Employees

    Appendix 4 - CAPEX, Depreciation and Amortization, R&D Expenses, Number of employees - (Billion Yen, Persons) FY2022 FY2023 FY2022 FY2023 Q3 Actual Q3 Actual Change Actual FCST Chg. Vs. FY22 CAPEX 61.3 91.7 + 30.3 96.3 115.0 + 18.7 Depreciation and amortization 55.8 61.0 + 5.2 77.3 79.5 + 2.2 R & D

  40. Slide 40: Appendix - Orders received by quarter

    Appendix 4 - Others - ⚫ Order received by quarter（billion yen) FY2021 FY2022 FY2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Aerospace Systems 37 59 63 222 60 65 75 144 118 74 139 Aerospace 27 52 53 195 45 46 48 113 104 98 108 Aero Engine 9 6 9 27 14 18 27 31 14 -23 31 Rolling Stock 9 13 19 29 11 27 255 18

  41. Slide 41: Appendix - Order backlog and revenue by region

    Appendix 4 - Others - ⚫ Order Backlog （billion yen) ⚫ Order Backlog in Ship & Offshore (billion yen) FY22 Q3 FY23 Q3 211.6 Q3/E Q4/E Actual Actual Change 191.6 179.4 Aerospace Systems 600.5 846.3 + 245.7 150.8 Rolling Stock 590.2 490.0 - 100.1 118.5 101.6 115.0 118.8 101.6 104.6 110.5 Energy Solutio

  42. Slide 42: Appendix - Foreign currency revenue and exchange rates

    Appendix 4 - Others - ⚫ Revenue in Foreign Currencies by Segment※ (USD) ⚫ Weighted-average Exchange Rates (billion USD) (EUR/JPY) FY2022 FY2023 FY2021 actual 130.47 Actual Actual Q4 FCST FY2022 actual 141.38 Aerospace Systems 0.39 0.35 0.04 FY2023 Q3 actual 155.76 Rolling Stock 0.05 0.17 - 0.05 Ener

  43. Slide 43: © Kawasaki Heavy Industries, Ltd. All Rights Reserved

    © Kawasaki Heavy Industries, Ltd. All Rights Reserved

Kawasaki Heavy Industrial — Q3 FY2023 Earnings Presentation on 6ix