Slide 1: Financial Results Presentation Slides for the Year Ended in March, 2017
Financial Results Presentation Slides for the Year Ended in March, 2017 Harada Industry Co., Ltd. June 7, 2017 This slides contains forward looking statements based on prerequisites, forecasts and plans available as of June 7, 2017. Actual results may differ materially from forward looking statement
Slide 2: Contents
Contents I. Corporate Overview 1. Corporate Profile ...................................................................................................................................................... 4 2. Global Network .............................................................................
Slide 3: I. Corporate Overview
I. Corporate Overview HARADA
Slide 4: 1. Corporate Profile
1. Corporate Profile ◆ Established March 1958 ◆ Headquarters Omori Bellport B-4F, 26-2 Minami-Ohi, 6-Chome Shinagawa- ku, Tokyo, Japan ◆ Capital Stock 2,019 million yen ◆ Consolidated Overseas: 10 Subsidiaries (Sales Companies: U.S.A., U.K., Thailand, etc.) (Plants: China, Philippines, Vietnam and M
Slide 5: 2. Global Network
2. Global Network HARADA INDUSTRY OF AMERICA, INC. HARADA INDUSTRIES (EUROPE) LIMITED HARADA INDUSTRIES (MEXICO), HARADA EUROPE R&D CENTRE S.A. DE C.V. DALIAN HARADA INDUSTRY CO., LTD. SHANGHAI HARADA NEW HARADA INDUSTRIES VIETNAM LIMITED AUTOMOTIVE ANTENNA CO., LTD. HARADA Asia-Pacific Ltd. TAIWAN
Slide 6: 3. Major Products 1
3. Major Products 1 LPA (Low Profile Antenna) Support all kinds of radio (analog AM+FM, digital (DAB), satellite), telematics application (GNSS, mobile phone). Support multi-band. Rod Type Antenna Support all kinds of radio (analog AM+FM, digital (DAB), satellite), digital TV (DTV) and so forth. Sup
Slide 7: 3. Major Products 2
3. Major Products 2 Coaxial Cables Connecting antennas and audio units. STP Cables Transfer massive data at high speed. In-Spoiler Type Antenna Support multi-band. 7
Slide 8: 3. Major Products 3
3. Major Products 3 Amplifier for Screen Type Antenna Film Antenna for DTV Noise Filter Other Integrated Type (Hidden) Antenna Can be integrated into roof, trunk lid or bumper. Support multi-band. 8
Slide 9: II. Financial Results for FY2016 and Financial Plan for FY2017
II. Financial Results for FY2016 and Financial Plan for FY2017 (Consolidated) 9
Slide 10: 1. Net Sales Trend
1. Net Sales Trend (Hundred millions of yen) 500 Europe North and Central Americas 432 Asia 397 408 400 400 42 Japan 364 38 39 36 31 299 147 300 277 123 124 23 132 21 118 217 214 217 88 200 101 16 178 12 16 117 108 107 9 71 66 91 106 79 62 18 52 19 23 34 38 100 135 124 123 120 124 136 131 102 92 96
Slide 11: 2. Summary of Consolidated Statement of Income
2. Summary of Consolidated Statement of Income (Millions of yen) FY2015 FY2016 Previous Current Increase Main factors year year or in increase or decrease Composition Composition decrease ratio (%) ratio (%) - Japan: 1,190 (patent income associated with a settlement of the 43,215 40,857 patent infri
Slide 12: 3. Profit Attributable to Owners of Parent Trend
3. Profit Attributable to Owners of Parent Trend (Millions of yen) 1,500 1,234 1,256 1,200 977 1,000 847 561 603 500 346 0 (64) (94) (500) (766) (1,000) FY2007 08 09 10 11 12 13 14 15 16 17 Current Next year Year (forecast) 12
Slide 13: 4. Factors of Changes in Operating Income
4. Factors of Changes in Operating Income Increase in profit due to increase in net (Millions of yen) sales associated with patent income Increase in gross profit due to 151 decrease in cost of sales ratio associated with “Cost Structure 611 Improvement Plan” - Reduction in material purchasing cost
Slide 14: 5. Summary of Consolidated Balance Sheet
5. Summary of Consolidated Balance Sheet (Millions of yen) FY2015 Component FY2016 Component Increase Previous ratio Current ratio or year (%) year (%) decrease Current assets 25,764 76.9％ 26,244 79.4% 480 Noncurrent assets 7,732 23.1％ 6,788 20.6% (943) Total assets 33,497 100.0％ 33,033 100.0% (463)
Slide 15: 6. Sales Breakdown by Reported Segments (FY2015 vs FY2016)
6. Sales Breakdown by Reported Segments (FY2015 Actual vs. FY2016 Actual) FY2015 Europe Previous year (Millions of yen) 9.9% North Japan Previous Current and 28.8% year year Central Americas Asia Increase Impact of Net 34.2% 27.1% FY2015 FY2016 or foreign change decrease exchange Japan 12,465 13,656
Slide 16: 7. Sales Breakdown by Reported Segments (FY2016 vs FY2017 Plan)
7. Sales Breakdown by Reported Segments (FY2016 Actual vs. FY2017 Plan) FY2016 Europe Current year 9.8% (Millions of yen) North Japan Current Next year (forecasts) and 33.4% year Central Americas Asia Increase or 30.1% FY2016 FY2017 26.7% decrease Japan 13,656 13,195 (460) Asia 10,898 10,713 (185) F
Slide 17: 8. Consolidated Cash Flow Trend
8. Consolidated Cash Flow Trend (Millions of yen) 5,000 Cash flows from operating activities 4,000 Cash flows from investing activities Cash flows from financing activities 3,000 2,000 1,000 0 (1,000) (2,000) (3,000) FY2007 08 09 10 11 12 13 14 15 16 Previous Current Year year FY2007 08 09 10 11 12
Slide 18: 9. Capital Expenditure Trend / 10. Depreciation Trend
9. Capital Expenditure Trend (Millions of yen) 2,000 1,621 1,500 979 1,035 1,000 801 874 636 643 536 502 500 186 0 FY2007 08 09 10 11 12 13 14 15 16 10. Depreciation Trend (Millions of yen) 1,200 1,024 980 1,000 892 886 807 824 758 800 656 567 541 600 400 200 0 FY2007 08 09 10 11 12 13 14 15 16 18
Slide 19: 11. R&D Expense Trend / 12. Quarterly Net Sales Trend
11. Research and Development Expense Trend 2,000 (Millions of yen) 1,626 1,585 1,465 1,564 1,500 1,250 1,354 1,051 852 919 925 1,000 500 0 FY2007 08 09 10 11 12 13 14 15 16 12. Quarterly Net Sales Trend 15,000 (Millions of yen) 11,006 11,465 12,000 10,686 10,189 10,554 10,285 10,984 9,820 10,021 10,
Slide 20: 13. Quarterly Operating Income Trend
13. Quarterly Operating Income Trend 1500 (Millions of yen) 1,017 1000 704 664 624 554 500 407 432 317 112 30 0 (36) (103) -500 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2014 FY2015 FY2016 14. Quarterly Operating Income to Net Sales Ratio Trend 10% (Millions of yen) 8% 9.3% 5.8% 7.4% 6% 6.2% 4.1% 5.3% 4
Slide 21: 15. Dividend and Stock Price Trend
15. Dividend and Stock Price Trend (Yen) 1,000 14.0 12.5 Dividends 12.0 800 Stock prices (highest) 10.0 10.0 Stock prices (lowest) 10.0 600 7.5 7.5 7.5 7.5 7.5 7.5 8.0 400 5.0 5.0 6.0 4.0 200 2.0 0 0.0 FY2007 08 09 10 11 12 13 14 15 16 17 Current Next year year （forecast） Stock Price Trend (Yen) FY2
Slide 22: 16. Foreign Exchange Rate Trend
16. Foreign Exchange Rate Trend US$ Stg.£ RMB 300 Current Rate (Yen) 24 228.01 19.35 250 18.34 20 17.36 16.77 200 13.90 16 131.77 146.44 187.20 178.73 143.07 150 126.45 173.80 12 119.82 139.57 100 120.62 120.60 8 114.15 116.55 91.00 92.07 105.40 50 81.45 77.73 86.58 4 0 0 FY2007 08 09 10 11 12 13 14
Slide 23: III. Issues for Management and Progress of Long-term Vision, NEXSTAGE 19
III. Issues for Management and Progress of Long-term Vision, NEXSTAGE 19 23
Slide 24: 1. Operating Environment
1. Operating Environment Increase in automobile manufacturing volume Development in automobile media, communications and ITS Global expansion by Japanese automakers Many opportunities are in store for exponential growth. 24
Slide 25: 2. Long-term Vision NEXSTAGE 19
2. Long-term Vision 1 Developed a long-term vision, NEXSTAGE 19 for FY2013 to FY2018 Developed a long-term business plan Address the strengthening of the corporate foundation and profitability. 25
Slide 26: 2. Long-term Vision NEXSTAGE
2. Long-term Vision 2 NEXSTAGE 19 (For Fiscal Years 2013 to 2018) To be a global solution provider with strengthened product competitiveness, capability for providing services and capability for taking the lead in the competition as well as to enhance the corporate value with optimized corporate fou
Slide 27: 3. Long-term Business Plan
3. Long-term Business Plan 1 Two pillars that enable achieving our long-term vision Strengthen competitive advantages Establish an optimal corporate foundation 27
Slide 28: 3. Long-term Business Plan: Strengthen competitive advantages
3. Long-term Business Plan 2 Strengthen competitive advantages 1) Improve product competitiveness 2) Improve capability for providing services 28
Slide 29: 3. Long-term Business Plan 3
3. Long-term Business Plan 3 Strengthen Competitive Advantages 1) Improve product competitiveness 2) Improve capability for providing services - Strengthen cost competitiveness - Develop new products and upgrade existing products - Ensure adequate quality of products - Establish optimal supply chain
Slide 30: 3. Long-term Business Plan 4
3. Long-term Business Plan 4 Strengthen Competitive Advantages 1) Improve product competitiveness 2) Improve capability for providing services - Improve capabilities in collecting and analyzing information - Strengthen capabilities in research and planning - Enhance capabilities in proposing product
Slide 31: 3. Long-term Business Plan: Optimal corporate foundation
3. Long-term Business Plan 5 Establish an optimal corporate foundation 1) Reinforce organizational strength 2) Fortify the brand 3) Pursue group synergy by applying group management 31
Slide 32: 3. Long-term Business Plan 6
3. Long-term Business Plan 6 Establish an optimal corporate foundation 1) Reinforce organizational strength 2) Fortify the brand 3) Pursue group synergy by applying group management - Reinforce collaboration among the Group - Improve and streamline working environment and operations - Enhance develo
Slide 33: 3. Long-term Business Plan 7
3. Long-term Business Plan 7 Establish an optimal corporate foundation 1) Reinforce organizational strength 2) Fortify the brand 3) Pursue group synergy by applying group management - Establish a highly reliable brand as “the one and only automotive antenna supplier in the world with a global networ
Slide 34: 3. Long-term Business Plan 8
3. Long-term Business Plan 8 Establish an optimal corporate foundation 1) Reinforce organizational strength 2) Fortify the brand 3) Pursue group synergy by applying group management - Enhance headquarters functions - Maximize synergy within the Group by explicitly dividing work among each Group Comp
Slide 35: 4. Achievement 1
4. Achievement 1 Reinforced engagements with clients; clarified roles and responsibilities of respective divisions/departments 1 July 2013: Restructured divisions/departments • Dissolved the vertical group-centric structure and shifted to a divisional structure – Established the Automotive Devic
Slide 36: 4. Achievement 1 (continued)
4. Achievement 1 Reinforced engagements with clients; clarified roles and responsibilities of respective divisions/departments 2 June 2015: Abolished Automotive Devices Business and Corporate Management • Streamlined the organization April 2016: Reorganized indirect departments • Separated R&D
Slide 37: 4. Achievement 2
4. Achievement 2 Established “ brand” as a pillar for gaining competitive advantage Developed a brand statement to promote recognition of HARADA as “the one and only specialist automotive antenna manufacturer in the world with a global network” • Registered as a trademark • Plans to use this tra
Slide 38: 4. Achievement 3
4. Achievement 3 Formulated and implemented “Cost Structure Improvement Plan,” a plan to catch-up on performance results to achieve the long-term business plan We target becoming the top automotive antenna company standing out with our high profitability, quality and productivity. Our core focus
Slide 39: 4. Achievement 4
4. Achievement 4 Implemented contents of “Cost Structure Improvement Plan” Cost Structure Improvement Plan Reduction of material costs Improvement of production efficiency - To restructure purchasing methods - Changes in materials, assemblies, and - Standardization of working processes constructio
Slide 40: 5. Quantitative Targets for FY2018 (Consolidated)
5. Quantitative Targets for FY2018 (Consolidated) Net sales Over 45 billion yen Operating income margin Over 10.0％ 40
Slide 41: Reference. Automobile Manufacturing Trend
Reference. Automobile Manufacturing Trend 41
Slide 42: Automobile Manufacturing Trend (Results and Forecasts)
Automobile Manufacturing Trend (Results and Forecasts) Japan (Thousands) Asia (Thousands) 9,500 50,000 44,558 45,000 9,000 8,911 39,302 40,000 8,719 35,000 8,500 30,000 8,000 25,000 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 North and Central Americas Europe (Thous
Slide 43: Forward-looking statements notice
This slides contains forward looking statements based on prerequisites, forecasts and plans available as of June 7, 2017. Actual results may differ materially from forward looking statements described here due to risks and variable factors associated to global economic conditions, a competitive envi