Subaru Corporation · TSE:7270

Subaru — H1 FYE2018 Earnings Presentation

52 slides from Subaru's earnings presentation, Nov 6, 2017

  1. Slide 1: Consolidated Financial Results for the 1st Half of FYE 2018

    Consolidated Financial Results for the 1st Half of FYE 2018 SUBARU CORPORATION Yasuyuki Yoshinaga, President & CEO https://www.subaru.co.jp/en/ir/ subaru-global.com Confidential November 6, 2017 0 0

  2. Slide 2: FYE 2018 1st Half Financial Results

    FYE 2018 1st Half Financial Results  Consolidated unit sales posted 1st half record for the 6th consecutive year.  Net income attributable to owners of parent decreased from the same period of the previous fiscal year, mainly due to the posting of an extraordinary loss as provision for loss relate

  3. Slide 3: FYE 2018 Full Year Forecast

    FYE 2018 Full Year Forecast  Full year consolidated financial projections revised downward in consideration of factors such as an expected decrease in automobile unit sales, despite the effects of foreign exchange rate and other factors. （100 Million Yen） FYE 2017 FYE 2018 vs. YoY Previous Previous

  4. Slide 4: CY2017 Jan.-Sep. Retail Sales Results (Japan)

    CY2017 Jan.-Sep. Retail Sales Results (Japan)  Industry Total (Jan.-Sep.) : YoY +8%  SUBARU Retail Sales (Jan.-Sep.) : 140K units, YoY +19% (Passenger cars :+25%） Jan.-Sep. Retail Sales Results New SUBARU XV (1,000 units) 140 • Launched in May • Jul.-Sep. sales results : YoY +192% 117 26 Minicars

  5. Slide 5: CY2017 Jan.-Sep. Retail Sales Results (U.S.)

    CY2017 Jan.-Sep. Retail Sales Results (U.S.)  Industry Total (Jan.-Sep.) : YoY -2% (Cars: -10%, Light Trucks: +4%)  SUBARU Retail Sales (Jan.-Sep.) : 479K units, YoY +7% Jan.-Sep. Retail Sales Results (1,000 units) 479 447 27 Others 29 New Crosstrek 132 Forester • Launched in August 131 • Aug.-Sep

  6. Slide 6: CY2017 Jan.-Sep. Retail Sales Results (Canada)

    CY2017 Jan.-Sep. Retail Sales Results (Canada)  Industry Total (Jan.-Sep.) : YoY +6%  SUBARU Retail Sales (Jan.-Sep.) : 41K units, YoY +10％ Jan.-Sep. Retail Sales Results New Crosstrek (1,000 units) 41 • Launched in August 37 • Aug.-Sep. sales results : YoY +59% (Jan.-Sep. sales results: YoY +6%)

  7. Slide 7: CY2017 Jan.-Sep. Retail Sales Results (Australia)

    CY2017 Jan.-Sep. Retail Sales Results (Australia)  Industry Total (Jan.-Sep.) : YoY +0.2%  SUBARU Retail Sales (Jan.-Sep.) : 39K units, YoY +13% Jan.-Sep. Retail Sales Results New SUBARU XV (1,000 units) • Jan.-Sep. sales results : YoY +13% 39 • Jun.-Sep. sales results after launching 35 new model

  8. Slide 8: CY2017 Jan.-Sep. Retail Sales Results (China)

    CY2017 Jan.-Sep. Retail Sales Results (China)  Industry Total (Jan.-Sep.) : YoY -1%  SUBARU Retail Sales (Jan.-Sep.) : 22K units, YoY -34% Jan.-Sep. Retail Sales Results • Struggling due to tough market conditions with continuing fierce pricing/discounting 33 (1,000 units) competitions as well as

  9. Slide 9: CY2017 Global Retail Sales Plan

    CY2017 Global Retail Sales Plan Original Revised Global Retail Sales Plan 1,090K units 1,051K units (YoY +8%) (YoY +4%) CY2016 CY2017 CY2017 Results (Original) (Revised) 670 650 615 (1,000 units) 156 168 168 98 104 96 50 53 54 47 51 53 47 43 31 Japan U.S. Canada Australia China Others https://www.su

  10. Slide 10: Consolidated Global Unit Sales

    Consolidated Global Unit Sales  FYE2018 plan revised downward considering the actual sales situation in major markets  Revised Plan : 1,068K units (YoY +0.3%, vs. previous plan -3.4%) (1,000 units) 7 FYE 2018 Revised Plan 167 668 56 40 56 30 45 1,068 7 FYE 2018 Previous Plan 172 688 55 39 53 42 50

  11. Slide 11: Shareholder Returns

    Shareholder Returns  Dividend plan remains unchanged  Payout ratio expected to be 53.3% 【Dividend Per Share】 FYE 2017 FYE 2018 Actual Results Previous Plan Revised Plan End of 1st half ¥72 ¥72 ¥72 End of fiscal year ¥72 ¥72 ¥72 Annual total ¥144 ¥144 ¥144  Profits are returned to shareholders bas

  12. Slide 12: Forward-looking statements

    Forward-looking statements including projections and future strategies mentioned in this presentation are based on currently available information and assumptions and are subject to risks and uncertainties. Actual results may vary materially as a result of various factors including, without limitati

  13. Slide 13: https://www.subaru.co.jp/en/ir/

    https://www.subaru.co.jp/en/ir/ subaru-global.com Confidential 1212

  14. Slide 14: Consolidated Financial Results for the 1st Half of FYE 2018

    Consolidated Financial Results for the 1st Half of FYE 2018 SUBARU CORPORATION Toshiaki Okada Corporate Executive Vice President & CFO https://www.subaru.co.jp/en/ir/ November 6, 20170

  15. Slide 15: Summary

    Summary Consolidated Financial Results for the 1st Half of FYE 2018  Consolidated global unit sales, overseas unit sales and North American unit sales posted 1st half record.*1  Consolidated net sales increased year on year mainly due to foreign exchange rate fluctuations and higher automobile uni

  16. Slide 16: Consolidated Financial Results for the 1st Half of FYE 2018

    Consolidated Financial Results for the 1stst Half of FYE 2018 https://www.subaru.co.jp/en/ir/ 2

  17. Slide 17: Consolidated Unit Sales

    1st Half : Consolidated Unit Sales （Thousand Units） Actual Results Actual Results Variance 1st Half FYE 2017 1st Half FYE 2018 Passenger cars 52.5 67.3 +14.8 Minicars 15.6 15.1 -0.5 Domestic total 68.0 82.3 +14.3 US 326.9 333.2 +6.3 Canada 28.4 30.7 +2.3 Russia 3.7 3.7 -0.1 Europe 18.4 17.8 -0.7 Aus

  18. Slide 18: Consolidated Income Statements

    1st Half : Consolidated Income Statements （100 Million Yen） Actual Results Actual Results Variance 1st Half FYE 2017 1st Half FYE 2018 Net sales 15,777 16,863 +1,087 Domestic 2,860 3,286 +426 Overseas 12,916 13,577 +661 Operating income 2,085 2,121 +36 Total non-operating income & expenses +192 +6 -

  19. Slide 19: Analysis of Variance in Operating Income (Consolidated)

    1st Half : Analysis of Variance in Operating Income (Consolidated) Fixed cost : -116 (SUBARU -41, SIA -75) （100 Million Yen） Sales volume SG&A : -257 (SUBARU-44, SOA -238, others) Warranty claims : +170 Gain on & mixture currency and others SUBARU: -41 exchange +142 (material cost -89) +214 SIA : -1

  20. Slide 20: Consolidated Balance Sheets

    Consolidated Balance Sheets （100 Million Yen） As of March As of September Variance 2017 2017 Total assets 27,623 28,207 +584 Current assets 18,453 18,617 +165 Noncurrent assets 9,171 9,590 +419 Total liabilities 12,974 13,155 +180 Interest bearing debts 1,483 976 -507 Net assets 14,649 15,053 +404 R

  21. Slide 21: Consolidated Statement of Cash Flows

    1st Half : Consolidated Statement of Cash Flows （100 Million Yen） Actual Results Actual Results Variance 1st Half FYE 2017 1st Half FYE 2018 Net cash provided by (used in) operating activities 1,984 2,078 +94 Net cash provided by (used in) investing activities -1,090 -1,014 +75 Free cash flows 894 1

  22. Slide 22: Operating Results of Subsidiaries in U.S.

    1st Half : Operating Results of Subsidiaries in U.S. （Million US$） Actual Results Actual Results SOA 1st Half FYE 2017 1st Half FYE 2018 Variance Net sales 8,733 9,115 +382 Operating income 441 278 -163 Net income 272 177 -95 Retail sales 315.3 334.7 +19.4 (Thousand units) Actual Results Actual Resu

  23. Slide 23: Forecasts for FYE 2018

    Forecasts for FYE 2018 https://www.subaru.co.jp/en/ir/ 9

  24. Slide 24: Consolidated Unit Sales

    Revised Plan FYE 2018 : Consolidated Unit Sales （Thousand Units） Actual Results Previous Plan Revised Plan Variance Variance FYE 2017 (a) FYE 2018 (b) FYE 2018 (c) (c)-(a) (c)-(b) Passenger cars 126.4 134.2 135.0 +8.6 +0.7 Minicars 32.5 37.8 31.6 -1.0 -6.3 Domestic total 158.9 172.1 166.5 +7.6 -5.5

  25. Slide 25: Consolidated Income Statements

    Revised Plan FYE 2018 : Consolidated Income Statements （100 Million Yen） Actual Results Previous Plan Revised Plan Variance Variance FYE 2017 (a) FYE 2018 (b) FYE 2018 (c) (c)-(a) (c)-(b) Net sales 33,260 34,200 33,800 +540 -400 Domestic 6,503 6,680 6,717 +213 +37 Overseas 26,756 27,520 27,083 +327

  26. Slide 26: Revised Plan FYE 2018: Analysis of Variance in Operating Income

    Revised Plan FYE 2018: Analysis of Variance in Operating Income (Consolidated) Fixed cost : -181 (SUBARU-58, SIA -123) （100 Million Yen） SG&A : -405 (SUBARU-135, SOA -279, others) Warranty claims : +335 SUBARU: -108 (material cost -201) Gain on SIA : -16 (material cost -58) currency exchange Domesti

  27. Slide 27: Operating Plan of Subsidiaries in U.S.

    Revised Plan FYE 2018: Operating Plan of Subsidiaries in U.S. （Million US$） Actual Results Revised Plan SOA FYE 2017 FYE 2018 Variance Net sales 17,947 18,271 +324 Operating income 671 462 -209 Net income 421 298 -123 Retail sales 625.0 657.1 +32.1 (Thousand units) Actual Results Revised Plan SIA FY

  28. Slide 28: Capex / Depreciation / R&D / Interest bearing debt

    Capex / Depreciation / R&D / Interest bearing debt （100 Million Yen） Actual Results Actual Results Actual Results Revised Plan 1st Half Variance FYE 2017 1st Half FYE 2018 (b) - (a) FYE 2017 (a) FYE 2018 (b) Capex 637 1,585 545 1,500 -85 Depreciation 335 770 421 920 +150 R&D 534 1,142 609 1,300 +158

  29. Slide 29: Appendix(1)

    Appendix(1) ・Non-operating income & expenses and extraordinary income & loss (1H) ・Segment information by business & geographic (1H) ・Overseas net sales (1H) ・Non-consolidated unit sales (1H) https://www.subaru.co.jp/en/ir/ 15

  30. Slide 30: Non-Operating Income & Expenses and Extraordinary Income & Loss

    1st Half : Non-operating Income & Expenses and Extraordinary Income & Loss (Consolidated) （100 Million Yen） Actual Results Actual Results 1st Half 1st Half Variance FYE 2017 FYE 2018 Financial revenue and expenditure 10 24 +15 FOREX effects 205 -20 -225 Other -22 2 +23 Total non-operating income & e

  31. Slide 31: Net Sales and Operating Income by Business Segment

    1st Half : Net Sales and Operating Income by Business Segment (Consolidated) （100 Million Yen） Net Sales Operating Income Actual Actual Actual Actual Results Results Results Results 1st Half Variance Variance 1st Half 1st Half 1st Half FYE 2017 FYE 2018 FYE 2017 FYE 2018 Automobile 14,924 16,000 +1,

  32. Slide 32: Net Sales and Operating Income by Geographic Area

    1st Half : Net Sales and Operating Income by Geographic Area (Consolidated) （100 Million Yen） Net Sales Operating Income Actual Actual Actual Actual Results Results Results Results Variance Variance 1st Half 1st Half 1st Half 1st Half FYE 2017 FYE 2018 FYE 2017 FYE 2018 Japan 4,481 4,979 +498 1,327

  33. Slide 33: Overseas Net Sales (Consolidated)

    1st Half : Overseas Net Sales (Consolidated) （100 Million Yen） Actual Results Actual Results Variance 1st Half FYE 2017 1st Half FYE 2018 North America 10,489 11,492 +1,003 Europe 549 541 -7 Asia 1,098 698 -400 Others 781 846 +65 Total 12,916 13,577 +661 https://www.subaru.co.jp/en/ir/ 19

  34. Slide 34: Non-consolidated Unit Sales

    1st Half : Non-consolidated Unit Sales （Thousand Units） Actual Results Actual Results Variance 1st Half FYE 2017 1st Half FYE 2018 Domestic production 354.6 346.2 -8.5 Domestic sales 69.9 85.6 +15.8 Passenger cars 53.5 70.0 +16.4 Minicars 16.3 15.7 -0.7 Number of exported 287.7 271.3 -16.4 vehicles

  35. Slide 35: Appendix (2)

    Appendix (2) nd quarter (3months) consolidated income statements ・2nd ・ 1stst half consolidated income statement (Plan vs. Actual results) ・Full year consolidated income statements (Previous plan vs. Revised plan) https://www.subaru.co.jp/en/ir/ 21

  36. Slide 36: Consolidated Unit Sales (2Q)

    2Q (3 months) : Consolidated Unit Sales （Thousand Units） Actual Results Actual Results 2Q (3 months) 2Q (3 months) Variance FYE 2017 FYE 2018 Passenger cars 27.9 34.0 +6.1 Minicars 8.9 7.9 -1.1 Domestic total 36.9 41.9 +5.0 US 171.9 159.3 -12.6 Canada 13.0 15.3 +2.3 Russia 1.8 1.8 +0.0 Europe 9.8 9.

  37. Slide 37: Consolidated Income Statements (2Q)

    2Q (3 months) : Consolidated Income Statements （100 Million Yen） Actual Results Actual Results 2Q (3 months) 2Q (3 months) Variance FYE 2017 FYE 2018 Net sales 8,083 8,315 +233 Domestic 1,557 1,681 +124 Overseas 6,526 6,634 +109 Operating income 1,070 928 -142 Ordinary income 1,090 935 -155 Income b

  38. Slide 38: Analysis of Variance in Operating Income (2Q)

    2Q (3 months) : Analysis of Variance in Operating Income (Consolidated) Fixed cost : -52 (SUBARU-21, SIA-31) （100 Million Yen） SG&A : -37 (SUBARU-19, SOA -55, others) Warranty claims : -76 Gain on currency Domestic : +73 (volume increase, exchange mixture improvement） Overseas : -187 (volume decreas

  39. Slide 39: Consolidated Unit Sales (Plan vs. Actual)

    （Plan vs. Actual Results）1st Half : Consolidated Unit Sales （Thousand Units） Plan Actual Results Variance 1st Half FYE 2018 1st Half FYE 2018 Passenger cars 65.2 67.3 +2.1 Minicars 17.4 15.1 -2.3 Domestic total 82.6 82.3 -0.2 US 335.0 333.2 -1.7 Canada 30.1 30.7 +0.6 Russia 3.7 3.7 -0.0 Europe 19.6

  40. Slide 40: Consolidated Income Statements (Plan vs. Actual)

    （Plan vs. Actual Results）1st Half : Consolidated Income Statements （100 Million Yen） Plan Actual Results Variance 1st Half FYE 2018 1st Half FYE 2018 Net sales 16,890 16,863 -27 Domestic 3,286 3,286 +0 Overseas 13,604 13,577 -27 Operating income 2,100 2,121 +21 Ordinary income 2,100 2,127 +27 Income

  41. Slide 41: Analysis of Variance in Operating Income (Plan vs. Actual)

    （Plan vs. Actual Results）1st Half : Analysis of Variance in Operating Income (Consolidated) （100 Million Yen） Domestic : +12 (volume increase, mixture deterioration） Overseas : -100 (volume decrease, SG&A mixture improvement) Gain on Cost expenses Others : -74 currency reduction and others R&D excha

  42. Slide 42: Consolidated Unit Sales (Previous vs. Revised Plan)

    （Previous Plan vs. Revised Plan）FYE 2018 : Consolidated Unit Sales （Thousand Units） Previous Plan Revised Plan Variance FYE 2018 FYE 2018 Passenger cars 134.2 135.0 +0.7 Minicars 37.8 31.6 -6.3 Domestic total 172.1 166.5 -5.5 US 687.7 668.0 -19.7 Canada 54.6 55.6 +1.0 Russia 6.6 7.3 +0.7 Europe 39.2

  43. Slide 43: Consolidated Income Statements (Previous vs. Revised Plan)

    （Previous Plan vs. Revised Plan）FYE 2018 : Consolidated Income Statements （100 Million Yen） Previous Plan Revised Plan Variance FYE 2018 FYE 2018 Net sales 34,200 33,800 -400 Domestic 6,680 6,717 +37 Overseas 27,520 27,083 -437 Operating income 4,100 3,800 -300 Ordinary income 4,100 3,820 -280 Incom

  44. Slide 44: Analysis of Variance in Operating Income (Previous vs. Revised Plan)

    （Previous Plan vs. Revised Plan）FYE 2018 : Analysis of Variance in Operating Income (Consolidated) （100 Million Yen） Domestic : +20 (volume increase, mixture deterioration) Overseas : -409 (volume decrease, mixture improvement) Gain on SG&A Others : -31 currency R&D expenses exchange expenses and ot

  45. Slide 45: Appendix (3)

    Appendix (3) ・ Net sales / Operating income ・ Consolidated unit sales / OPM ・Complete cars production / Retail sales units ・FCF / Shareholders’ equity to total assets ・Interest-bearing debt / D/E ratio https://www.subaru.co.jp/en/ir/ 31

  46. Slide 46: Net Sales / Operating Income

    Net Sales / Operating Income ¥102/ ¥102/ ¥110/ ¥118/ ¥120/ ¥123/ ¥121/ ¥118/ ¥111/ ¥104/ ¥105/ ¥114/ ¥112/ ¥111/ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Operating Net Sales Income (100M yen) (100M yen) 1,800 Sales Operating income 8,981 9,000 8,502 8,548 8,362 8,315 1,600 8,172 8,172 8,136 8,083 8,000 7,505 7,6

  47. Slide 47: Complete Unit Sales / Operating Income Margin

    Complete Unit Sales / Operating Income Margin Unit Sales (1,000 units) OPM 300 Consolidated unit sales OPM 274 279 267 271 260 247 20% 238 247 246 245 250 232 240 225 18.4% 18% 18.1% 194 17.5% 200 16.6% 16.0% 15% 14.9% 150 14.0% 13.8% 13.3% 13.2% 13.2% 13% 100 11.6% 11.6% 11.2% 10% 50 8% 0 5% 1Q 2Q

  48. Slide 48: Complete Cars Production / Retail Sales Units

    Complete Cars Production / Retail Sales Units (1,000 units) 300 Production Retail Sales 273 280 276 276 264 269 258 253 261 253 249 250 244 242 248 245 242 249 237 241234 237 233 231 237 228 229 225 211 211214 200 150 100 50 0 Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul

  49. Slide 49: Free Cash Flows / Ratio of Shareholders' Equity to Total Assets

    Free Cash Flows / Ratio of Shareholders’ Equity to Total Assets Ratio of FCF shareholders’ (100M yen) Equity to total assets FCF Shareholders' equity ratio 3,800 3,586 53.5% 52.5% 51.8% 52.8% 53.0% 52.8% 52.8% 53.1% 55% 3,300 50.2% 48.8% 2,800 2,535 50% 46.5% 46.2% 2,300 44.0% 42.9% 1,860 45% 1,800

  50. Slide 50: Interest Bearing Debt / D/E Ratio

    Interest Bearing Debt / D/E Ratio Interest bearing debt D/E Ratio （100M yen） 3,000 Interest bearing debt 1.0 D/E ratio 2,574 0.9 2,500 2,322 2,268 0.8 2,112 2,011 2,014 0.7 2,000 1,865 1,700 1,654 1,614 0.6 1,455 1,483 1,500 0.5 0.32 1,107 0.4 0.27 976 1,000 0.24 0.3 0.21 0.18 0.17 0.15 0.13 0.2 500

  51. Slide 51: Forward-looking statements

    Forward-looking statements including projections and future strategies mentioned in this presentation are based on currently available information and assumptions and are subject to risks and uncertainties. Actual results may vary materially as a result of various factors including, without limitati

  52. Slide 52: https://www.subaru.co.jp/en/ir/

    https://www.subaru.co.jp/en/ir/ 38

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