Kanadevia Corporation · TSE:7004
Kanadevia — Hitachi Zosen — FY2014 Earnings Presentation
38 slides from Kanadevia's earnings presentation, June 2015
Slide 1: FY2014 Financial Results and Progress of Hitz Vision II
Hitachi Zosen Corporation FY2014 Financial Results and Progress of Hitz VisionⅡ Fujisan Eco Park Incineration Center (71.5t/day×2units) Gotemba-Oyama Regional Administrative Association(Shizuoka, Japan) June 2015 Hitachi Zosen Corporation 1
Slide 2: Contents
Contents 1. Overview of FY2014 Consolidated Financial Results and Forecast of FY2015 2. Progress of Mid term Business Plan “Hitz VisionⅡ” 3. Key Business Strategies 4. New Business And Products Copyright Hitachi Zosen Corp. 2
Slide 3: 1. Overview of FY2014 Consolidated Financial Results and Forecast of FY2015
1. Overview of FY2014 Consolidated Financial Results and Forecast of FY2015 3
Slide 4: Key Points of FY2014 Results
Key Points of FY2014 Results FY2014 exceeds the last year result Big growth of Environmental system division’s order intake Copyright Hitachi Zosen Corp. 4
Slide 5: FY2014 Results and FY2015 Forecast Overview
FY2014 Results and FY2015 Forecast Overview (Unit: Billion Yen) FY2013 FY2014 FY2015 FY2016 Hitz-V Ⅱ Actual Actual Forecast Plan Order intake 328.4 452.7 450.0 500.0 Net sales 333.4 359.3 370.0 400.0 Operating income 7.8 12.8 13.5 23.0 (ratio) 2.4% 3.6% 3.6% 5.8% Non-operating P&L -1.6 -5.3 -3.5 -3.
Slide 6: Promote flat-matrix management structure: Reorganization
Promote flat-matrix management structure： Reorganization ◆Reorganization to divided by industry from our customers’ perspective Public Sector Environment, Energy & Plant Business Headquarters Environment, Energy & Plant Headquarters ①Environmental Systems ②Industrial Plants ①Environmental Systems ②
Slide 7: Change of Business Segments
Change of Business Segments Former Segments New Segments Environmental Systems Environmental Systems & Industrial Plants & Industrial Plants Machinery Process Machinery Equipment Precision Machinery Infrastructure Infrastructure Others Others Copyright Hitachi Zosen Corp. 7
Slide 8: Order intake
Order intake Year-on-Year (Unit: Billion Yen) +124.3 500 450 452.7 450.0 Others 400 350 328.4 300 Infrastructure 250 Year-on-Year 200 +111.3 150 315.0 300.0 Machinery 100 203.7 50 0 Environmental FY2013 FY2014 FY2015 Systems and Actual Actual Forecast Industrial Plants Copyright Hitachi Zosen Corp.
Slide 9: Net sales & Operating income
Net sales & Operating income ■Net sales Year-on-Year (Unit: Billion Yen) 400 +25.9 359.3 370.0 333.4 Others 350 300 250 Infrastructure 200 150 Year-on-Year Machinery +20.8 100 205.2 226.0 225.0 50 Environmental 0 Systems and FY2013 FY2014 FY2015 Industrial ■Operating Actual Actual Forecast Plants in
Slide 10: Order intake, Net sales & Operating income by Segments
Order intake, Net sales & Operating income by Segments (unit: billion Yen) Environmental Systems & Machinery Infrastructure Others Total Industrial Plants Order intake 203.7 93.8 22.5 8.4 328.4 FY2013 Net sales 205.2 91.6 28.1 8.5 333.4 Actual Operating income 9.8 -0.5 -1.6 0.1 7.8 Order intake 315.
Slide 11: 2. Progress of Mid Term Business Plan Hitz Vision II
2. Progress of Mid Term Business Plan “Hitz VisionⅡ” 11
Slide 12: Positioning of medium-term management plans and Business Domains
1. Positioning of medium-term management plans and Business Domains ◆Long-term vision and medium-term management plans <FY2005-FY2010> <FY2011-FY2016> H i t z I n n o v a t i o n H i t z 2 0 1 6 V i s i o n HI Plan HI Plan - Ⅱ Hitz Vision Hitz Vision Ⅱ Build a foundation, Achieve targets sow the see
Slide 13: Hitz Vision II management targets (1)
2. Hitz Vision Ⅱ management targets (1) Hitz Vision Ⅱ: Three years to achieve targets (Unit: Billion yen) FY2013 FY2014 FY2016 Actual Actual Targets Order intake 328.4 452.7 500.0 Net sales 333.4 359.3 400.0 Operating margin 7.8 (2.4%) 12.8 (3.6%) 23.0 (5.8%) R&D expenses 6.2 (1.9%) 6.1 (1.7%) 12.0
Slide 14: Hitz Vision II management targets (2)
2. Hitz Vision Ⅱ management targets (2) ◆ Status of Well-balanced Business Portfolio (Unit: Billion yen) FY2010 FY2013 FY2014 Domestic 237.5 83% 217.4 65% 237.1 66% Overseas 49.6 17% 116.0 35% 122.2 34% Total 287.1 100% 333.4 100% 359.3 100% Incl. New Businesses/Products － － 0.9 0% 3.2 1% Incl. Stab
Slide 15: Hitz Vision II management targets (3)
2. Hitz Vision Ⅱ management targets (3) ◆ Investment (Unit: Billion Yen) Hitz Vision Hitz VisionⅡ (Actual) (Plan) 3 years total 3 years total R&D expenses 20.0 30.0 Capital investment 19.0 30.0 M&A & others 13.8 40.0 Total 52.8 100.0 Copyright Hitachi Zosen Corp. 15
Slide 16: 3. Key Business Strategies
3. Key Business Strategies 16
Slide 17: Expansion in growth areas (Overseas): Energy from Waste (1)
1. Expansion in growth areas (Overseas) : Energy from Waste (1) ◆Strategic M&A of overseas companies Hitachi Zosen Inova (Switzerland): since Dec. 2010 Consolidation of licensor Aiming global Market Steady order intake in Europe • Cleveland STV4+5: 456t/dx2 24MW (FY2011) (UK) • Vantaa: 480t/dx2 (F
Slide 18: HZI Market Shares – European EfW Market
1. Expansion in growth areas (Overseas) : Energy from Waste (2) HZI Market Shares – European EfW Market Market Shares Market Shares Market Shares 2005 – 2014 by supplier 2012 – 2014 by supplier in 2014 by supplier Total: 106’793 tpd Total: 25’923 tpd Total: 5’623 tpd Source: Vaccani European Market
Slide 19: Hitz Market Shares – Japanese EfW Market
1. Expansion in growth areas (Overseas) : Energy from Waste (3) Hitz Market Shares – Japanese EfW Market Market Shares Market Shares Market Shares 2005 – 2014 by supplier 2012 – 2014 by supplier in 2014 by supplier kobelco others 5% 5% Ebara Ebara MHI 6% others KHI 4% others 7% NSENGI 7% 4% Hitz 6%
Slide 20: Market Shares by Supplier 2008-2014 – Worldwide
1. Expansion in growth areas (Overseas) : Energy from Waste (4) Market Shares by Supplier 2008-2014 – Worldwide HITZ/HZI = Market Leader Total: 271’258 tpd Source: Vaccani Worldwide Market Share Analysis of Thermal Waste Treatment Plants, 2015 Edition Copyright Hitachi Zosen Corp. 20
Slide 21: World-class operation bases, ample reference projects
1. Expansion in growth areas (Overseas) : Energy from Waste (5) ◆World-class operation bases, ample reference projects China, Taiwan, S. Korea Hitachi Zosen [Hitz] 54 Japan Inova AG [Hitz] 202 Hitachi Zosen [SNT] 282 Inova USA LLC HZ India Pvt. Ltd. Hyderabad Branch Hitachi Zosen Europe [Inova] Nort
Slide 22: European Waste Management: Outlook
1. Expansion in growth areas (Overseas) : Energy from Waste (6) European Waste Management: Outlook Europe Remains Important Market for EfW and AD 50 Landfill 45 Composting 40 Recycling Millions t/a waste collected 35 WTE EfW 30 25 20 15 10 5 - Data: Eurostat 2011 AD : Anaerobic Digestion Copyright H
Slide 23: Global Waste Management: Outlook
1. Expansion in growth areas (Overseas) : Energy from Waste (7) Global Waste Management: Outlook Potential in Many Markets, Slow Development Outside of China 250 Landfill Composting Recycling 200 WTE EfW Millions t/a waste collected 150 100 50 - EU27 United States China Brasil Japan Mexico Korea, Re
Slide 24: Global forecast market volume in EfW 2013-2017
1. Expansion in growth areas (Overseas) : Energy from Waste (8) ◆Global forecast market volume in EfW 2013-2017 Europe 15,000- 30,000 Asia North America 30,000-50,000 5,000-10,000 Middle- East 5,000-10,000 (unit: billion tonnage) 2050 25 2025 Approx. 22.3 2010 Approx. 14.9 20 Approx. 10.5 15 North A
Slide 25: Aim to be No. 1 in global EfW market
1. Expansion in growth areas (Overseas) : Energy from Waste (9) ◆Aim to be No. 1 in global EfW market Middle East [Inova] Japan [Hitz] • Work with Hitz by project • Develop next-generation US [Inova] • Hybridize with Hitz water treatment technologies • Module USA systems • Joint development with • S
Slide 26: AOM + long-term operation of waste incineration facilities
2. Expansion in growth areas (Stable businesses) : Environment AOM + long-term operation (1) AOM + long-term operation of waste incineration facilities Expand business based on strong track record (1) Expand AOM business • Propose added value for each facility (life extension, CO2 emissions reductio
Slide 27: Rationalization by overall operation of support systems
2. Expansion in growth areas (Stable businesses) : Environment AOM + long-term operation (2) ◆Rationalization by overall operation of support systems Central Control Room CoSMoS system (combustion control) Plant A Plant B Plant C Plant D Plant E Learns the decisions of seasoned engineers, forms a mo
Slide 28: 4. New Businesses And Products
4. New Businesses And Products 28
Slide 29: Movable Flap-Gate Type Breakwater
New businesses and products (1) 1. Movable Flap-Gate Type Breakwater (1) Land-mounted flap-gate seawall (neo RiSe) • Steady order intake (order intake in FY2014: 2.4 bil) Subway entrance • Demonstration at Sakai Works Disaster Prevention Lab (opened April 2014) Short construction time Building entra
Slide 30: Electron beam sterilization system
New businesses and products (2) 2. Electron beam sterilization system Electron beam sterilization (environment friendly and cost-effective) • Sterilizes PET bottles without heat or chemical treatment • Can also be used for paper cartons and other food containers Strategy: • Develop an aseptic fillin
Slide 31: SCR system for marine engines
New businesses and products (3) 3. SCR (Selective Catalytic Reduction) system for marine engines Compliant with IMO Tier III NOx emission standards to be enforced in 2016 Hitz is the leader in SCR system for marine engines • World’s first new vessel commissioned with certified SCR system launched in
Slide 32: Demonstration Plant for Solar Thermal Power Generation
New businesses and products (4) 4. Demonstration Plant for Solar Thermal Power Generation One-year test got successful results Saudi Arabia Thermal Power Generation ⇒Contributing to Desalination plants Using mirror reflectors to focus sunlight on a tube absorber, which acts as a heat source to gener
Slide 33: High-speed Seabed Infiltration System (HiSIS)
New businesses and products (5) 5. High-speed Seabed Infiltration System (HiSIS®) One-year operation test was started in June 2014 Abu Dhabi HiSIS® pilot plant construction is agreed between the Abu Dhabi Water and Electricity Authority (ADWEA) and Hitachi Zosen contributing to Seawater Reverse Osmo
Slide 34: Desalination Plant Experience in Middle East
New businesses and products (6) Desalination Plant Experience in Middle East Abu Dhabi ・Ruwais Refinery Expansion/ 7.4MIGD ・Umm Al Nar IWPP / 25MIGD ・Taweelah B Expansion / 23.1MIGD ・Ruwais GUP Expansion / 3.3MIGD1 CSP Plant @ Saline Water Conversion Corp. Qatar ・Ras Abu Fontas A2/ 36MIGD ・Facility-
Slide 35: Low Carbon & Fossil Fuel Free Solution
New businesses and products (7) Low Carbon & Fossil Fuel Free Solution CSP Plant + Desalination Plant + EfW Plant Desalination Plant Fossil Fuel Free (MED/MSF/RO) Electricity Water EfW Plant Steam Steam Vegetable Factory CSP Plant North CSP : Concentrated Solar Power EfW : Energy from Waste MED : Mu
Slide 36: M&A results for FY2014
New businesses and products (8) M&A results for FY2014 Cumberland joined Hitz group → Strengthening A/S network for Seawater electrolysis equipment → Utilization sales network not only water treatment but also other area HZI acquired HNP Kraftwerkstechnik(Germany) engaged in services for EfW and
Slide 37: Numerical Targets Hitz Vision II
Numerical Targets “Hitz VisionⅡ” (Unit: Billion Yen) FY2013 FY2014 FY2015 FY2016 Hitz-VⅡ Actual Actual Forecast Plan Order intake 328.4 452.7 450.0 500.0 Net sales 333.4 359.3 370.0 400.0 Operating income 7.8 12.8 13.5 23.0 (ratio) (2.4%) (3.6%) (3.6%) (5.8%) Ordinary income 6.2 7.5 10.0 20.0 (ratio
Slide 38: Cautionary Statement
Cautionary Statement Forward-looking statements are based on information currently available to Hitachi Zosen Corporation. Therefore those forward-looking statements include unknown risks and uncertainties. Accordingly, you should note that the actual results could differ materially from those forwa