Kawasaki Heavy Industries Ltd. · TSE:7012

Kawasaki Heavy Industries — Kawasaki Heavy Industrial — FY2023 Earnings Presentation

50 slides from Kawasaki Heavy Industries's earnings presentation, May 9, 2024

  1. Slide 1: Financial Results for FY2023

    Financial Results for FY2023 For the Year ended March 31, 2024 0 May 9, 2024

  2. Slide 2: Table of Contents

    0 Table of Contents 1 Consolidated Results for FY2023 3 Details by segment Summary 3 Aerospace Systems 15 Segment 4 Rolling Stock 19 Statement of Comprehensive income 5 Energy Solution & Marine Engineering 23 （ES&M） Details of Change in business profit 7 Precision Machinery & Robot 27 Statement of f

  3. Slide 3: Consolidated Results for FY2023 - Summary

    Consolidated Results for FY2023 1 –Summary- Business profit landed at the upside due to the business performance in Q4, though decreased YoY Profit before tax were significantly higher than February FCST due to a reduction in foreign exchange losses as the yen weakened (Billion Yen) FY2023 Change FY

  4. Slide 4: Consolidated Results for FY2023 - Segment

    Consolidated Results for FY2023 1 –Segment- Business profit in ES&M increased due to a significant improvement in profitability of Ship & Offshore business and Energy & Marine Machinery business ① Business profit in PS&E decreased due to increase in sales promotion expenses and recall-related expens

  5. Slide 5: Statement of comprehensive income

    Consolidated Results for FY2023 1 –Statement of comprehensive income- (Billion Yen) Details FY2022 FY2023 Change % % Revenue 1,725.6 100.0 1,849.2 100.0 + 123.6 ① Cost of sales ratio 1 deteriorated due to a loss Cost of sales 1,391.7 80.7 1,537.0 83.1 + 145.2 of ¥58 billion yen Gross profit 333.8 19

  6. Slide 6: Statement of comprehensive income

    Consolidated Results for FY2023 1 –Statement of comprehensive income- (Billion Yen) Details FY2022 FY2023 Change % % Finance income and Finance costs - 12.0 - 14.2 - 2.2 ④ Foreign exchange losses due to hedge valuation losses Net Interest expense (incl. dividend income) - 3.0 - 5.4 - 2.3 (however, t

  7. Slide 7: Details of change in business profit

    Consolidated Results for FY2023 1 –Details of change in business profit- Change in product mix and other factors were affected by increased sales promotion expenses in PS&E and decrease in factory operation of Precision Machinery & Robot Appropriate price pass-through in response to various cost inc

  8. Slide 8: Details of change in business profit

    Consolidated Results for FY2023 1 –Details of change in business profit- (Billion Yen) FY2022 Details of change FY2023 Business Change in Change in Loss Related to Business Effects of Change share of profit (loss) Change in the In-Service Profit product mix and of investments SG & A Issues of Total

  9. Slide 9: Statement of financial position

    Consolidated Results for FY2023 1 –Statement of financial position- (Billion Yen) End of End of Details Change Mar. 2023 % Mar. 2024 % Cash and cash equivalents 138.4 84.1 - 54.2 ① Increase in PS&E, Aero 1 Engine and Aerospace Trade receivables (Incl. contract assets) 592.6 770.3 + 177.7 Inventories

  10. Slide 10: Statement of financial position

    Consolidated Results for FY2023 1 –Statement of financial position- (Billion Yen) End of End of Details Change Mar. 2023 % Mar. 2024 % 3 ③ Increase in Aerospace and Trade payables 395.1 451.9 + 56.8 4 Aero Engine Interest-bearing debt 589.8 653.9 + 64.0 Contract liability (Advances received) 256.2 2

  11. Slide 11: Cash Flows

    Consolidated Results for FY2023 1 –Cash Flows- (Billion Yen) 要因説明 FY2022 FY2023 Change ① FY’22： Profit before tax 70.3 31.9 - 38.3 Significant cash outflow in working capital component Depreciation and amortization 77.3 80.9 + 3.6 items, including higher Increase and decrease in working capital - 15

  12. Slide 12: Cash Flows

    Consolidated Results for FY2023 1 –Cash Flows- Although FCF was in the red for the second consecutive fiscal year due to an increase in working capital / investment CF based on the sales growth in PS&E and a strong recovery in order-based businesses, but it is expected to be normalized in FY’24 CF f

  13. Slide 13: Forecasts for FY2024 - Summary

    Forecasts for FY2023 2 -Summary- Expect significant profit growth and plan to renew record profit (orders and revenue are at record highs) Implement business operations in line with the scenario of achieving a business profit margin of over 10% by FY2030 (Billion Yen) FY’24 Details of change in busi

  14. Slide 14: Forecasts for FY2024 - Segment

    Forecasts for FY2024 2 -Segment- Revenue and profit in Aerospace Systems increase significantly due to a reaction to the loss related to PW1100G-JM engine ① Revenue and profit in PS&E increase due to sales expanding of off-road four-wheeler based on starting operation at new plant in Mexico ② (Billi

  15. Slide 15: Aerospace Systems

    Details by Segment 3 -Aerospace systems- FY2023（vs. FY2022） FY2024 forecast（vs. FY2023） Orders Increased due to increase in orders for MOD Orders Increase due to an increase in orders for received and Boeing despite the loss (reduction in received MOD and Boeing, as well as a reaction to +¥347.0 bil

  16. Slide 16: Aerospace Systems

    Details by Segment 3 -Aerospace systems- (Billion Yen) FY2022 FY2023 FY2024 Actual FCST in Feb. Actual Chg. Vs. FY22 Chg. Vs. FCST Forecast Chg. Vs. FY23 Orders Received 345.5 590.0 692.6 + 347.0 + 102.6 750.0 + 57.4 Aerospace 253.9 500.0 556.9 + 302.9 + 56.9 600.0 + 43.1 Aero Engine 91.5 90.0 135.6

  17. Slide 17: Aerospace Systems

    Details by Segment 3 -Aerospace systems- Net Sales or Revenue (billion yen) 160.6 Aerospace Aero Engines 109.3 110.2 106.3 93.9 99.7 93.3 93.5 81.5 80.2 48.9 74.6 70.0 71.5 63.2 63.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2020 FY2021 FY2022 FY2023 （IFRS） （IFRS） （IFRS） 17.9% Operating Prof

  18. Slide 18: Aerospace Systems

    Details by Segment 3 -Aerospace systems- Market Overview Specific Efforts  Commercial business  Development of systems for business – Air passenger demand has recovered to recovery and expansion – Arranging supply chain and production pre-COVID-19 levels and aircraft rebound system to prepare for

  19. Slide 19: Rolling Stock

    Details by Segment 3 - Rolling Stock - FY2023（vs. FY2022） FY2024 forecast（vs. FY2023） Orders Decreased from the previous fiscal year Orders Increase due to an increase in orders for received when we received orders for large projects received Asia -¥224.4 bil. such as new subway cars for the NYCTA +

  20. Slide 20: Rolling Stock

    Details by Segment 3 - Rolling Stock - (Billion Yen) FY2022 FY2023 FY2024 Actual FCST in Feb. Actual Chg. Vs. FY22 Chg. Vs. FCST Forecast Chg. Vs. FY23 Orders Received 313.2 80.0 88.7 - 224.4 + 8.7 160.0 + 71.3 Domestic & Asia 58.1 76.0 87.3 + 29.2 + 11.3 140.0 + 52.7 North America 255.1 4.0 1.4 - 2

  21. Slide 21: Rolling Stock

    Details by Segment 3 - Rolling Stock - Net Sales or Revenue (billion yen) Domestic & Asia 60.1 North America 51.6 43.5 39.5 40.6 36.8 37.5 32.3 32.3 32.1 33.7 31.7 31.5 28.7 28.8 26.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2020 FY2021 FY2022 FY2023 （IFRS） （IFRS） （IFRS） Operating Profit or

  22. Slide 22: Rolling Stock

    Details by Segment 3 - Rolling Stock - Market Overview Specific Efforts  The impact of COVID-19  Compliance with delivery schedules for – Railway relate investment is resuming in both overseas projects domestic and foreign markets as the impact of COVID-19 subsides Dhaka ‣ All the 24 trains (144ca

  23. Slide 23: Energy Solution & Marine Engineering

    Details by Segment 3 - Energy Solution & Marine Engineering - FY2023（vs. FY2022） FY2024 forecast（vs. FY2023） Orders Decreased due to a decrease in orders for Orders Decrease due to a decrease in orders of received LPG/LAG carriers despite orders for naval received Plant & Marine Machinery despite in

  24. Slide 24: Energy Solution & Marine Engineering

    Details by Segment 3 - Energy Solution & Marine Engineering - (Billion Yen) FY2022 FY2023 FY2024 Actual FCST in Feb. Actual Chg. Vs. FY22 Chg. Vs. FCST Forecast Chg. Vs. FY23 Orders Received 439.0 360.0 401.6 - 37.3 + 41.6 390.0 - 11.6 Energy, Plant & Marine Machinery 292.6 320.0 358.8 + 66.2 + 38.8

  25. Slide 25: Energy Solution & Marine Engineering

    Details by Segment 3 - Energy Solution & Marine Engineering - Net Sales or Revenue (billion yen) (Note) The prior results of previous segment have been reclassified to current segment Energy, Plant & Marine Machinery Ship & Offshore Structure 118.8 103.8 102.1 95.5 86.5 77.8 77.0 72.2 70.5 72.8 70.3

  26. Slide 26: Energy Solution & Marine Engineering

    Details by Segment 3 - Energy Solution & Marine Engineering - Market Overview Specific Efforts  Energy system & Plant Engineering Providing products and services that Domestic Overseas contribute to the realization of a low-carbon and decarbonized society Strong demand for distributed ₋ Strong dema

  27. Slide 27: Precision Machinery & Robot

    Details by Segment 3 - Precision Machinery & Robot - FY2023（vs. FY2022） FY2024 forecast（vs. FY2023） Orders Decreased mainly due to decline in Orders Increase due to an increase in orders of received hydraulic equipment for Chinese received hydraulic equipment and various robots for construction mach

  28. Slide 28: Precision Machinery & Robot

    Details by Segment 3 - Precision Machinery & Robot - (Billion Yen) FY2022 FY2023 FY2024 Actual FCST in Feb. Actual Chg. Vs. FY22 Chg. Vs. FCST Forecast Chg. Vs. FY23 Orders Received 262.0 230.0 213.3 - 48.6 - 16.7 240.0 + 26.7 Hydraulic Components & Systems 154.6 140.0 136.1 - 18.5 - 3.9 150.0 + 13.

  29. Slide 29: Precision Machinery & Robot

    Details by Segment 3 - Precision Machinery & Robot - Net Sales or Revenue (billion yen) Hydraulic Components & Systems 86.6 Robotics 73.1 73.5 69.2 65.0 60.6 61.2 61.5 55.2 57.6 55.6 53.6 52.6 53.7 49.3 45.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2020 FY2021 FY2022 FY2023 （IFRS） （IFRS） （I

  30. Slide 30: Precision Machinery & Robot

    Details by Segment 3 - Precision Machinery & Robot - Market Overview Specific Efforts  Construction machinery  Measures for the development – Weak demand in China due to prolonged real of hydraulic business estate recession, etc Development of new products and market for construction machinery – D

  31. Slide 31: Powersports & Engine

    Details by Segment 3 - Powersports & Engine - FY2023（vs. FY2022） FY2024 forecast（vs. FY2023） Revenue Same as the FY’22 due to decrease in Revenue Increase due to an increase in four- motorcycles for emerging countries and wheeler for North America and +¥1.2 bil. general-purpose engines, despite incr

  32. Slide 32: Powersports & Engine

    Details by Segment 3 - Powersports & Engine - (Billion Yen) FY2022 FY2023 FY2024 Actual FCST in Feb. Actual Chg. Vs. FY22 Chg. Vs. FCST Forecast Chg. Vs. FY23 Revenue 591.1 590.0 592.4 + 1.2 + 2.4 720.0 + 127.6 Motorcycles for developed contries 211.2 221.0 217.9 + 6.7 - 3.1 238.0 + 20.1 Motorcycles

  33. Slide 33: Powersports & Engine

    Details by Segment 3 - Powersports & Engine - Net Sales or Revenue (billion yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2020 FY2021 FY2022 FY2023 （IFRS） （IFRS） （IFRS） Operating Profit or Business Profit (billion yen) 17.3% 13.1% 10.2% 10.9% 10.0% 9.9% 8.2% 8.9% 10.7% 8.5% 4.5% 7.2% 6.5% 5

  34. Slide 34: Powersports & Engine

    Details by Segment 3 - Powersports & Engine - Market Overview Specific Efforts  U.S. (Motorcycles)  Supplying products as much as demanded – Our share of the retail market is growing – Flexibly change production and sales plans according to sales conditions because of the introduction of new model

  35. Slide 35: Shareholder Return

    4 Shareholder Return Dividend Policy Dividend for FY2023 Full-year net income attributable to owners of the parent 30% The medium- to long-term company revised up to ¥13.3 billion yen from the February consolidated dividend payout ratio forecast Year-end dividend will be increased (from 20 yen to 30

  36. Slide 36: Project Topics: Growth expectation in Aerospace Systems

    Patrol Aircraft P-1 4 Project Topics Source: Maritime Self-Defense Force website (Photo background transmission processing in our company) Growth expectation in Aerospace Systems (billions of yen) 800  Civil aviation market returns to growth track Aerospace System Revenue after COVID-19 slump 600 C

  37. Slide 37: Project Topics: Mass production of four-wheelers in Mexico

    4 Project Topics Mass production of off-road four-wheelers started at the plant in Mexico ― Aiming for further business expansion  Started mass production of “MULE” series in April 2024  Promote automation of production lines and stable quality  Realize flexible production in response to demand b

  38. Slide 38: Project Topics: Suiso Platform for hydrogen distribution

    4 Project Topics What’s the need to VISUALIZE hydrogen distribution Problem Since hydrogen distribution is developing in terms of diversity of soucese and distribution channel, the “Suiso Platform” that visualizes hydrogen Ugh… management of on attributes information, such as CO2 distribution and su

  39. Slide 39: ESG Topics: Our role in disasters

    4 ESG Topics Our role in disasters ― Providing our original disaster packages to affected areas  Formulated a framework to provide a package of assistance according to the phases of disasters in cooperation with the national and local governments  Provided support for the Noto Earthquake in Januar

  40. Slide 40: ESG Topics: Revision of executive compensation system

    4 ESG Topics Revision of the executive compensation system （Application in FY’24, start of payment in FY’25) Policy Placing stronger emphasis on aiming the “Group Vision 2030”,  To share the value with stakeholders including shareholders  To promote the contributions to medium- to long-term improv

  41. Slide 41: ESG Topics: DJSI and CDP recognition

    4 ESG Topics Selected for “DJSI Asia Pacific Index” for the 11th consecutive year DJSI Asia Pacific annually selects the top 20% among Recognized as the Highest Rated “A List about the 600 companies in the region, and our ESG Company” on CDP Climate Change for the performance and public information

  42. Slide 42: Appendix - CAPEX, D&A, R&D Expenses, Employees

    Appendix 4 - CAPEX, Depreciation and Amortization, R&D Expenses, Number of employees - (Billion Yen, Persons) FY2022 FY2023 FY2024 Forcast Actual Actual Chg. Vs. FY22 JGAAP Chg. Vs. FY23(JGAAP) CAPEX 96.3 133.7 + 37.4 125.0 - 8.7 Depreciation and amortization 77.3 80.9 + 3.6 102.0 + 21.1 R & D expen

  43. Slide 43: Appendix - Others: Orders received by quarter

    Appendix 4 - Others -  Order received by quarter（billion yen) FY2021 FY2022 FY2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Aerospace Systems 37 59 63 222 60 65 75 144 118 74 139 360 Aerospace 27 52 53 195 45 46 48 113 104 98 108 246 Aero Engine 9 6 9 27 14 18 27 31 14 -23 31 113 Rolling Stock 9 13 19 2

  44. Slide 44: Appendix - Others: Ministry of Defense orders and revenue

    Appendix 4 - Others -  Orders received for Ministry of Defense（Billion Yen） FY22 FY23 FY24 Actual Actual Change Forecast Change Aircrafts and others 149.6 396.6 + 247.0 450.5 + 53.9 Aero Engines 15.9 52.4 + 36.5 16.5 - 35.9 Submarine & Naval propulsion 97.3 104.0 + 6.7 122.0 + 18.0 Total 262.8 553.

  45. Slide 45: Appendix - Others: Order backlog

    Appendix 4 - Others -  Order Backlog （billion yen)  Order Backlog in Ship & Offshore (billion yen) FY2022 FY2023 Actual Actual Change 191.6 179.4 Aerospace Systems 670.6 1,024.9 + 354.2 Rolling Stock 570.5 490.0 - 80.4 101.6 136.4 Energy Solution & 104.6 110.5 Marine Engineering 629.0 685.4 + 56.4

  46. Slide 46: Appendix - Others: Foreign currency and exchange rates

    Appendix 4 - Others -  Amount of foreign currency  Weighted-average Exchange Rates that affects business profit and loss ※1 (EUR / JPY) (billion USD / EUR) FY2022 actual 141.38 FY2022 FY2023 FY2024 FY2023 actual 157.09 Actual Actual Forecast Aerospace Systems 0.69 0.59 0.73 FY2024 forecast 150.00

  47. Slide 47: © Kawasaki Heavy Industries, Ltd. All Rights Reserved

    © Kawasaki Heavy Industries, Ltd. All Rights Reserved

  48. Slide 48: Business growth image

    Business growth image May 9, 2024

  49. Slide 49: Business growth image

    Business growth image In fiscal 2024, our business returned to a growth path. Achieve a business profit margin of 8% by 2027 and over 10% by 2030 Revenue OP / business profit margin [billion yen] ［％］ 3,000 15 Revenue Over 10% OP / business profit margin businesse profit margin 2,000 8% business prof

  50. Slide 50: © Kawasaki Heavy Industries, Ltd. All Rights Reserved

    © Kawasaki Heavy Industries, Ltd. All Rights Reserved

Kawasaki Heavy Industrial — FY2023 Earnings Presentation on 6ix