Optex Group Company Limited · TSE:6914
Optex — Q2 2019 Earnings Presentation
34 slides from Optex's earnings presentation, Aug 5, 2019
Slide 1: Summary of Consolidated Financial Results for the Second Quarter of F.Y. 2019
Summary of Consolidated Financial Results for the Second Quarter of F.Y. 2019 (Jan.1 to Jun.30, 2019) OPTEX GROUP CO., LTD. August 5, 2019 （Tokyo Stock Exchange Market 1st Section:#6914） <Disclaimer> The forward-looking statements, including OPTEX CO., LTD.’s operating results, strategies, and busin
Slide 2: Key Points of Financial Results from 2Q of F.Y. 2019
Key Points of Financial Results from 2Q of F.Y. 2019 ・Net sales were -5.5% year on year due to the sluggish growth of three mainstay segments (SS, FA, and MLV) ・Operating income was -49.6% year on year, mainly due to higher SG&A expenses of acquired subsidiaries, in addition to the decline in net sa
Slide 3: Summary of Consolidated Financial Results for the Second Quarter of F.Y. 2019
Summary of Consolidated Financial Results for the Second Quarter of F.Y. 2019 Operating Results F.Y.2018 2Q F.Y.2019 2Q Percent Change (Unit: million yen) (1-6) Results (1-6) Results Change Net sales 19,674 18,593 -1,081 -5.5% Operating income 2,609 1,315 -1,294 -49.6% （Operating income Ratio） （13.3
Slide 4: Quarterly performance - Consolidated Net Sales (Year-on-year)
Quarterly performance - Consolidated Net Sales (Year- on-year) 10,799 9,844 9,830 9,640 397 9,308 9,285 144 170 EMS/Other 212 2,543 236 279 Business 2,552 2,344 2,046 2,305 2,408 MVL Business 2,136 2,088 2,185 2,139 1,755 1,789 FA Business SS Business 5,243 5,723 5,060 5,131 4,989 4,832 F.Y. 2018 2Q
Slide 5: Comparison of Financial Results for the Second Quarter between Segments
Comparison of Financial Results for the Second Quarter of F.Y. 2019 between Segments Operating F.Y. 2018 2Q(1-6) Results F.Y. 2019 2Q(1-6) Results Results Operating income Operating income (Unit: Percent Percent Net sales （Operating Net sales （Operating million yen) income Ratio） Change income Ratio
Slide 6: Factors of change in Net Sales (Year-on-year)
Factors of change in Net Sales (Year- on-year) SS FA Impact of Business 19,674 -173 Business Exchange -737 MVL Other EMS Business Rate Business -221 Business +218 18,593 -148 -20 F.Y. 2018 Consolidated Net Sales F.Y. 2019 2Q(1-6) Results -¥1,081 million 2Q(1-6) Results Copyright (C) 2019 OPTEX GROUP
Slide 7: Factors of change in Operating Income (Year-on-year)
Factors of change in Operating Income (Year- on-year) Sales Decrease 2,609 -434 COS% Up Impact of Increase -266 Exchange in Rate Expenses -220 (Including SG&A expenses at new companies) -431 Impact of Exchange Rate +57 1,315 Selling, general and Gross operating income administrative Expenses F.Y. 20
Slide 8: Business by Segment - SS Business (Security Sensors)
Business by Segment - SS Business(Security Sensors) Region F.Y. 2019 2Q(1-6) Results Sales increased due to strong sales of outdoor intrusion detectors for security companies Japan and for critical, large-scale facilities. Sales fell due to stagnating sales of sensors for large-scale critical facili
Slide 9: Business by Segment - SS Business (Automatic Door Sensors)
Business by Segment - SS Business(Automatic Door Sensors) Region F.Y. 2019 2Q(1-6) Results Sales decreased, reflecting sluggish sales of automatic door sensors to major domestic Japan customers. Sales increased due to steady sales of automatic door sensors to major customers in North AMERICAs Americ
Slide 10: Business by Segment - Factory Automation Business
Business by Segment - Factory Automation Business Region F.Y. 2019 2Q(1-6) Results Sales declined due to sluggish growth of sales of products for semiconductors, secondary Japan batteries, and the electronic component industry. Sales declined significantly because sales to OEM customers grew sluggis
Slide 11: Business by Segment - Machine Vision Lighting (MVL) Business
Business by Segment - Machine Vision Lighting (MVL) Business Region F.Y. 2019 2Q(1-6) Results Sales fell, reflecting the slowdown in investments in the semiconductor and smartphone Japan industries. Sales decreased in the absence of large projects for existing customers, despite an AMERICAs increase
Slide 12: Full-year Consolidated Earnings Projection
Full-year Consolidated Earnings Projection Copyright (C) 2019 OPTEX GROUP CO., LTD. 12
Slide 13: F.Y. 2019 Consolidated Earnings Projection
F.Y. 2019 Consolidated Earnings Projection F.Y. 2019 Revised F.Y. 2018 Operating Results F.Y. 2019 Projections Changes Full-year (Unit: million yen) Initial Projections （Announced on Jul. 11) Results -3,000 Net sales 43,000 40,000 -7.0% 40,113 Operating income 5,300 3,400 -1,900 4,989 （Operating inc
Slide 14: F.Y. 2019 Consolidated Earnings Projection Revised downward
F.Y. 2019 Consolidated Earnings Projection Revised downward from the initial projection 40,000 21,407 20,439 19,674 18,514 18,990 18,593 18,024 13,928 13,865 2,776 13,003 2,609 2,724 2,260 2,465 2,163 1,965 2,573 1,675 2,161 2,380 1,547 1,518 2,085 1,632 1,497 1,315 1,529 1,121 1,237 1,854 1,950 1,8
Slide 15: Acquisition of treasury shares
Acquisition of treasury shares Set a limit on the acquisition of treasury shares to facilitate flexible capital policies in response to a changing operating environment and to provide shareholder returns. Amount 1billion yen (upper limit) No. of shares 800,000 shares (upper limit) (Ratio to the tota
Slide 16: Business Strategy - SS Business Security Sensors
Business Strategy _ SS Business Security Sensors Visual Verification with Sensor and Camera Working in Conjunction with Each Other Copyright (C) 2019 OPTEX GROUP CO., LTD. 16
Slide 17: Market Size
Market Size Number of contracts for alarm monitoring services worldwide: Over 90 million Current situation of the industry EMEA North 20 million America 95% of security alarms are false alarms. contracts （including 3.0 40 million Causes of false alarms million contracts in the UK) contracts User err
Slide 18: Our Targets
Our Targets Provide a new video verification system in North America and EMEA by targeting commercial facilities, offices, and luxury homes Number of contracts for alarm monitoring services Number of contracts for alarm monitoring services (North America) (EMEA) (Million (Million contracts) contract
Slide 19: Strategic Partnership with CHeKT (US)
Strategic Partnership with CHeKT (US) Forming a Medium- to Long-term Partnership to Promote the Spread of the System About CHeKT Company name: CHeKT Business: Development and sales of Location: Louisiana, the United States a visual verification solution Established: 2014 Strengths: ➢ A solution deve
Slide 20: Current Situation of Alarm Monitoring Systems and Security Camera Systems
Current Situation of Alarm Monitoring Systems and Security Camera Systems Monitoring company Alarm monitoring system 17:30 ALARM : Sensor #1 Outdoor security Control panel sensors Alarm signals (2) Call for Police service (1) Confirmation Security camera system by phone, e-mail, etc. A false alarm r
Slide 21: Offering a Video Verification System That Can Be Used Simply by Adding it to an Existing System
Offering a Video Verification System That Can Be Used Simply by Adding it to an Existing System Monitoring company Alarm monitoring system 17:30 ALARM : Sensor #1 Outdoor security Control panel sensor with camera Working in conjunction with each other Power supply Operation Warning/non-warning signa
Slide 22: Aiming to Disseminate a Win-Win Business Model
Aiming to Disseminate a Win-Win Business Model Installation service provider/agent Monitoring company OPTEX ・Spreading and promoting outdoor crime prevention ・Entering a business with regular fixed income ・Easy installation and setting ・ No need to call users for confirmation (Fees for using cloud s
Slide 23: Sales Targets
Sales Targets 2023 (Targets) 2028 (Targets) North 2 North 8 America billion yen America billion yen UK 0.5 UK 2 billion yen billion yen 2.5 Total billion yen 10 Total billion yen Copyright (C) 2019 OPTEX GROUP CO., LTD. 23
Slide 24: https://www.optexgroup.co.jp/en
https://www.optexgroup.co.jp /en
Slide 25: Supporting documentation
Supporting documentation Copyright (C) 2019 OPTEX GROUP CO., LTD. 25
Slide 26: Estimated Exchange Rate and Exchange Sensitivity
Estimated Exchange Rate and Exchange Sensitivity Exchange rate F.Y. 2018 F.Y. 2019 F.Y. 2019 (Unit: Yen) （Results） (Initial Projections) (Revised Projections) JPY/USD 110.43 110.00 110.03 JPY/GBP 147.48 140.00 141.21 JPY/EUR 130.42 125.00 124.66 Impact on our full- F.Y. 2018 (Results) F.Y. 2019 F.Y.
Slide 27: Quarterly performance - Consolidated Profit (Year-on-year)
Quarterly performance - Consolidated Profit (Year- on-year) Operating income Ordinary income Profit attributable to owners of parent 1,461 1,252 1,312 1,261 1,212 1,253 1,148 1,128 1,138 981 812 844 732 704 583 533 499 424 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 2018 2019 2018 2019 201
Slide 28: Quarterly performance - Consolidated Selling, general and administrative expenses
Quarterly performance - Consolidated Selling, general and administrative expenses (Year- on-year) Others R&D Expense Year-on-year Selling, 3,938 general and administrative 3,547 3,672 3,395 3,552 3,630 expenses +4.5% Personnel cost +10.6% Expense -1.2% R&D expense +1.0% 663 746 725 750 691 732 1Q 2Q
Slide 29: Company Overview
Company Overview Copyright (C) 2019 OPTEX GROUP CO., LTD. 29
Slide 30: Company Overview
Company Overview Company Name OPTEX GROUP CO., LTD. Location Shiga Otsu, Japan Established May 25, 1979 The OPTEX Group Capital 2,798 million JPY Sales 40,113 million JPY is an integrated Operating Profit 4,989 million JPY Fiscal Year-End December manufacturer of sensors. Stock Code Tokyo Stock Exch
Slide 31: Company Overview - Holding Company Structure
Company Overview _ Holding Company Structure Holding Company OPTEX GROUP CO., LTD （Tokyo Stock Exchange Market 1st Section：#6914） OPTEX CO.,LTD. OPTEX FA CO., LTD. CCS Inc. Three Ace Co., Ltd. OPTEX MFG Co., Ltd. Sales, Development & Development of Manufacture of the Sales & Development Sales & Deve
Slide 32: Company Overview - Data
Company Overview _ Data Sales by Product Category Sales by Region Others AMERICAs 8% 12% Asia/ LED Lighting for Security Oceania 40.1 40.1 Image Inspection Sensors 13% Japan 24% 36% billion yen billion yen 43% (2018) (2018) Factory Automatic EMEA Automation Door Sensors 32% 21% 11% EMEA : Europe, th
Slide 33: Company Overview - Global Market Share
Company Overview _ Global Market Share Global niche No.1 Security Automatic door Machine vision sensors sensors lighting 40% 30% 30% Intrusion detector Automatic door LED lighting for outdoor sensor for inspection Sensors for large-scale Infrared sensor Push plate critical facilities Camera sensors
Slide 34: ESG's Efforts
ESG’s Efforts _ We have been making efforts to improve our corporate value by responding positively to ESG tasks. Environment Social Governance Experience and Learning at Outside directors with diverse, Biwako Lake varied histories and skills SS Business（Automatic Door Sensors) Release of e-Smooth "