Hanwa Co., Ltd. · TSE:8078
Hanwa — H1 FY2020 Earnings Presentation
30 slides from Hanwa's earnings presentation, Nov 20, 2020
Slide 1: Financial Results for the First Half of FY2020
Financial Results for the First Half of FY2020 November 2020 HANWA CO., LTD. Copyright© 2020 Hanwa Co., Ltd. All Rights Reserved
Slide 2: Operating Results (Consolidated)
Operating Results (Consolidated) H1 (ended September 30) FY2019 FY2020 Y on Y Y on Y (billions of yen) Change Rate Net Sales 946.0 801.0 (144.9) -15% Gross Profit 39.7 35.4 (4.2) -11% SG&A 26.0 24.3 (1.7) -7% Operating income 13.6 11.0 (2.5) -19% Ordinary income 10.8 10.2 (0.5) -5% Net income attrib
Slide 3: Changes in Business results (Consolidated)
Changes in Business results (Consolidated) ▸Net sales H2 2,074.6 ‣Net income attributable H2 （billions of yen） H1 1,907.4 to owners of the Company H1 2,000.0 1,700.0 20 17.3 15.5 1,791.1 （Forecast） 13.9 （Forecast) 8.8 1,069.6 7.3 8.7 961.4 10 954.1 899.0 8.5 6.5 6.8 5.1 1,000.0 0 1,004.9 (18.8) 836.
Slide 4: Effect of Profit/Loss from Market value Accounting and Temporary factors
Effect of Profit/Loss from Market value Accounting and Temporary factors （billions of yen） ― ▸Reported Ordinary income was 10.2 billion yen but can be translated into about 9.8 billion yen after excluding one-time factors such as period-end valuation gains and losses for inventories, derivatives, fo
Slide 5: Segment Information (consolidated)
Segment Information (consolidated) ▸Net sales H1 FY2019 H1 FY2020 (billions of yen) 946.0 1,000.0 801.0 494.7 600.0 425.6 200.0 123.0 107.1 96.8 82.4 131.6 40.5 34.1 52.3 49.7 87.4 44.4 40.4 (200.0) (37.5) (26.0) ▸Segment income 15.0 10.8 10.2 7.8 6.6 5.0 3.0 1.3 2.1 0.8 1.7 0.9 0.2 0.5 0.3 0.0 0.6
Slide 6: Financial Position (consolidated)
Financial Position (consolidated) Consolidated Financial Position Mar-2019 Sep-20 Y on Y Y on Y (billions of yen) Change Rate Total assets 798.4 773.0 (25.3) -3% Total liabilities 632.3 0.0 602.2 0.0 (30.0) -5% +3% Interst-bearing debt 331.1 311.3 (19.7) -6% Net DER 161% 137% -24pt - * 127% * 107% -
Slide 7: Cash Flow Situation (consolidated)
Cash Flow Situation (consolidated) H１ (ended September 30) FY2019 FY2020 Y on Y Y on Y (billions of yen) Change Rate CF from operating activities 14.3 31.8 +17.5 +122% CF from investing activities (5.0) 0.0 1.1 0.0 +6.2 - FCF 9.3 0.0 32.9 0.0 +23.6 +254% CF from financing activities (10.6) (22.1) (1
Slide 8: Business Forecast FY2020
Business Forecast FY2020 Fiscal Year (ending March 31) FY2019 FY2020 FY2020 Y on Y (billions of yen) (Acctual) (Previous forecast) (Revised forecast) Rate Net Sales 1,907.4 1,600.0 1,700.0 -11% Operating income 27.3 19.5 25.0 -9% Ordinary income (12.5) 0.0 16.5 0.0 23.0 0.0 - Net income attributable
Slide 9: Forecast of Segment Information
Forecast of Segment Information ▸Net sales FY2019 FY2020(Forecast) (billions of yen) 1,907.4 1,700.0 1,800.0 1,005.4 900.0 259.8 210.4 241.0 215.0 200.0 78.8 72.0 101.7 103.0 175.0 85.0 88.0 (200.0) (74.8) (53.0) ▸Segment income 23.0 25.0 14.6 14.3 3.6 2.3 0.5 4.1 5.1 5.0 1.6 0.4 1.5 1.4 1.5 (0.1) (
Slide 10: Dividend Policy
Dividend Policy 【 Trend in dividends 】 Interim dividends Year-end dividends Dividend payout ratio 50 150 150 Dividend payout ratio (%) 125 （44） 40 120 Dividends(yen) （29 ） 100 75 30 60 90 75 25 （estimated） (16) 20 60 75 30 75 10 30 50 （Dividend in 30 0 the red） 0 FY2017 FY2018 FY2019 FY2020(estimate
Slide 11: Steel Business Segment
Steel Business Segment ▸Net sales and transaction volumes decreased due to H１（ended Sep 30） delay in recovery of production activities in FY2019 FY2020 Y on Y manufacturing industry, while revenue were secured Rate mainly in the construction contracting business in (billions of yen) construction and
Slide 12: Primary Metal Business Segment
Primary Metal Business Segment H１（ended Sep 30） ▸Net sales decreased due to decline in the market prices of ferroalloy and transaction volume of stainless FY2019 FY2020 Y on Y steel under production restraints in steel and non- (billions of yen) Rate ferrous metal manufacturers. Net Sales 123.0 107.
Slide 13: Metal Recycling Business Segment
Metal Recycling Business Segment H１（ended Sep 30） ▸Net sales and segment income decreased due FY2019 FY2020 Y on Y to decline in base metal prices compared with Rate the same period of the previous year under the (billions of yen) recession in each country as well as decrease Net Sales 40.5 34.1 -16
Slide 14: Foods Business Segment
Foods Business Segment H１（ended Sep 30） ▸Net sales and segment Income decreased due FY2019 FY2020 Y on Y to decline in market prices of salmon, as well as (billions of yen) Rate decrease in transaction volume of processed products due to self-restraint of the food- Net Sales 52.3 49.7 -5% +111100% s
Slide 15: Energy & Living Materials Business Segment
Energy & Living Materials Business Segment H１（ended Sep 30） ▸Segment Income increased due to securing profit margin of petroleum products under recovery of FY2019 FY2020 Y on Y the prices by coordinated production cuts, and (billions of yen) Rate increasing revenue of the trading of PKS (Palm Net Sa
Slide 16: Overseas Sales Subsidiaries Segment
Overseas Sales Subsidiaries Segment H１（ended Sep 30） ▸ Net sales decreased due to decline in transaction FY2019 FY2020 Y on Y volume of fuel for ships in Singapore and decline in demands for food for the food-service industry in U.S. (billions of yen) Rate ▸ Segment income increased due to improved
Slide 17: Other Segment
Other Segment H１（ended Sep 30） ▸Net sales and segment income decreased due to FY2019 FY2020 Y on Y decline in revenue in amusement facilities operated by consolidated subsidiary, as well as decrease in (billions of yen) Rate the number of completion of construction work of Net Sales 44.4 40.4 -9% +1
Slide 18: Transition of Quantitative Indicators
Transition of Quantitative indicators Transition of Quantitative Indicators FY2017 FY2018 FY2019 FY2019 FY2020 （Full-year） （H1） （H1） The transaction Total 12.51 13.10 12.51 6.21 5.60 volume of steel (millions ton) （Steel Business 11.42 11.54 10.66 5.33 4.71 Segment） （Others） 1.09 1.56 1.85 0.88 0.89
Slide 19: Profits of Group Companies
Profits of Group Companies 【Ordinary income trend of subsidiaries by business segment】 H１(ended Sep 30) FY2019 FY2020 Y on Y Change Consolidated/ Consolidated/ Consolidated/ (billions of yen) Equity method Unconsolidated Equity method Unconsolidated Equity method Unconsolidated Steel 0.8 0.1 (0.7) (
Slide 20: Investment in business
Investment in business 【Current investment records】 Amounts Major investments (billions of yen) ・Enhancement of processing facilities at domestic and Steel 2.4 overseas subsidiaries Metal Recycling 1.1 ・Capital investment of HANWA METALS (THAILAND) Others 0.1 ・HALOS's store openning ・Building new co
Slide 21: Appendix
Appendix Copyright© 2020 Hanwa Co., Ltd. All Rights Reserved 20
Slide 22: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials 【Transaction of steel raw materials price】 (US$/t FOB) Iron ore spot price Coking coal spot price Iron ore benchmark price Coking coal benchmark price 290 240 190 140 90 40 ‣ Iron ore…The market prices were on an upward trend due to increasing demand for blast fur
Slide 23: Steel Market Trend in China
Steel Market Trend in China 【Transition of steel market in China】 100,000 5,000 Production of crude steel Market inventories Market price of Rebar Market price of Hot coil Production of crude steel, market inventories 80,000 Market price (RMB/ton) 4,000 (thousand ton) 60,000 40,000 3,000 20,000 0 2,
Slide 24: Market Trend of Steel Scrap
Market Trend of Steel Scrap 【Steel scrap and D-bar Market Price】 Steel scrap (H2) Market price of D-bar Maker's price of D-bar Composite 80 875 Steel scrap, D-bar(thousand yen/t) 70 750 composite price (US$/t) 60 625 50 500 40 375 30 20 250 10 125 ‣ Supply/Demand…The amount of steel scrap generated
Slide 25: Market Trend of Long Products
Market Trend of Long Products 【Transition of the H-Beams Markets in Japan】 Market inventories Market price 100 240 Maker's price 200 90 Volume(thousand ton) Price(thousand yen/ton) 160 120 80 80 70 40 0 60 ‣ Supply/Demand…Inventory levels remained low due to reduced production by steel manufacturers
Slide 26: Market Trend of Flat Products
Market Trend of Flat Products 【 Transition of Steel Sheets Markets in Japan 】 5,000 90 Market inventories Price of hot rolled sheet Price of hot rolled coil Price (thousand yen/ton) Volume (thousand ton) 4,000 80 3,000 70 2,000 60 ‣ Supply/Demand…Whereas production activities in the manufacturing in
Slide 27: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys 2,200 160 FeSi($/t) Nickel($10/t) 2,000 MeSi($/t) Stainless scrap($/t) (Ni, FeSi, MeSi, Stainless scrap) FeCr(￠/lb) 140 1,800 1,600 (FeCr) 120 1,400 1,200 100 1,000 800 80 ‣ Nickel…The demand for stainless steel remains steady due to active infrastructure investment i
Slide 28: Market Trend of Non-ferrous Metals
Market Trend of Non-ferrous Metals 3,400 7,000 Al Zn Pb Cu 6,500 3,000 Al, Zn, Pb（US$/ｔ） 6,000 2,600 Cu（US$/t） 5,500 2,200 5,000 1,800 4,500 1,400 4,000 ‣Aluminum …The market price has been on an upward trend as indicators of economy have improved with the gradual resumption of economic activity. At
Slide 29: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products Black-Tiger Salmon Horse mackerel Mackerel 3,300 1,000 Salmon, Horse mackerel, Mackerel Black-Tiger (yen/1.8kg） 3,100 800 （yen/kg） 2,900 600 2,700 400 2,500 200 2,300 0 ‣Salmon…The market price remained on a downward trend due to an excessive supply of Chilean
Slide 30: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products WTI DUBAI LSA(RIM） Gasoline(RIM） Bunker oil 600 130 Gasoline (thousand yen/KL） Crude oil ($/BL),LSA・ Bunker oil （$/mt) 400 90 200 50 10 0 ‣Crude oil…The market price declined significantly due to the trade friction between U.S. and China and the decline