Hanwa Co., Ltd. · TSE:8078
Hanwa — FY2018 Earnings Presentation
34 slides from Hanwa's earnings presentation, May 21, 2019
Slide 1: Financial Results for the Fiscal Year ended March 31, 2019
Financial Results for the Fiscal Year ended March 31, 2019 May 21, 2019 HANWA CO., LTD. Copyright© 2019 Hanwa Co., Ltd. All Rights Reserved 0
Slide 2: Operating Results (Consolidated)
Operating Results (Consolidated) Fiscal Year (ended March 31) FY2017 FY2018 Y on Y Y on Y (billions of yen) Change Rate Net Sales 1,791.1 2,074.6 +283.4 +16% Gross Profit 72.1 0.0 79.2 0.0 +7.0 +10% SG&A 45.9 50.3 +4.3 +9% Operating income 26.2 28.9 +2.6 +10% Ordinary income 25.5 23.3 ▲ 2.1 ▲8% Net
Slide 3: Changes in Business results (Consolidated)
Changes in Business results (Consolidated) （billions of yen） （billions of yen） 2,074.6 30.0 Net sales (H2) Net income (H2) 2,000.0 1,791.1 25.4 Net sales (H1) Net income (H1) 1,511.8 1,514.0 1,069.7 1,500.0 20.0 17.3 954.1 16.3 13.9 723.5 798.4 19.4 1,000.0 10.1 8.8 10.0 7.4 500.0 1,004.9 788.2 715.
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） 26.1 25.0 0.1 23.4 0.7 23.0 1.3 △0.0 0.6 0.7 21.0 19.0 17.0 15.0 0 0 Accounting Inventory Derivative Exchange Loss of Others Actual ordinary ordinary valuation valuation conversion subsidiaries income income
Slide 5: Segment Information (consolidated)
Segment Information (consolidated) Net Sales Segment income （billions of yen) 2,074.6 25.5 2,200.0 23.3 82.5 32.0 0.6 0.9 1,791.1 2.1 0.9 315 28.0 1.0 1.0 1,800.0 76.5 2.0 2.1 1.5 222 244.2 24.0 0.9 4.9 240.6 101.3 6.3 1,400.0 97.0 20.0 99.4 99.0 282.9 16.0 1,000.0 203.2 12.0 20.3 8.0 17.3 600.0 1,0
Slide 6: Financial Position (consolidated)
Financial Position (consolidated) Fiscal Year (ended March 31) FY2017 FY2018 Y on Y Y on Y (billions of yen) Change Rate Total assets 860.3 933.3 +72.9 +9% +111100% Total liabilities 656.6 0.0 730.8 0.0 +74.2 +11% +3% Interst-bearing debt 325.5 363.2 +37.6 +12% Net DER 154% 161% +7pt - * 131% - - Ne
Slide 7: Cash Flow Situation (consolidated)
Cash Flow Situation (consolidated) Fiscal Year (ended March 31) FY2017 FY2018 Y on Y Y on Y (billions of yen) Change Rate CF from operating activities ▲ 19.7 15.4 +35.1 - CF from investing activities ▲ 39.9 0.0 ▲ 20.6 0.0 +19.3 ▲48% FCF ▲ 59.7 0.0 ▲ 0.0 5.2 +54.5 - CF from financing activities 66.4
Slide 8: Business Forecast FY2019
Business Forecast FY2019 (year ending Mar 31, 2019) Fiscal Year (ending March 31) FY2018 FY2019 Y on Y Y on Y (Acctual) (Forecast) Change Rate (billions of yen) Net Sales 2,074.6 2,200.0 +125.4 +6% Operating income 28.9 35.5 +6.5 +23% Ordinary income 23.3 0.0 28.0 0.0 +4.6 +0.0 +20% Net income attri
Slide 9: Forecast of Segment Information
Forecast of Segment Information Net Sales Segment incomes （billions of yen） 2,200.0 28.0 2,074.6 90.0 35.0 1.2 2,200.0 1.6 82.5 23.3 2.4 350 30.0 0.9 315 1.0 1.7 2.1 1.0 1,800.0 25.0 1.5 252.0 6.2 244.2 0.9 111.0 101.3 98.0 20.0 6.3 1,400.0 97.0 313.0 15.0 282.9 1,000.0 10.0 21.1 17.3 600.0 5.0 1,04
Slide 10: Dividend Policy
Dividend Policy 【Trend in dividends】 Interim dividends Year-end dividends Dividend payout ratio 50 150.0 150.0 150 Dividend payout ratio (%) 125.0 43.8 40 Dividends (yen) 120 31.7 29.3 75.0 95.0 30 90 75.0 23.7 50.0 75.0 20 60 75.0 75.0 10 30 45.0 50.0 0 0 FY2016 FY2017 FY2018 FY2019 (estimated) 【Di
Slide 11: Steel Business Segment
Steel Business Segment Fiscal Year (ended March 31) Net sales increased, due to strong FY2017 FY2018 Y on Y steel demands. (billions of yen) Rate Segment income decreased due to Net Sales 931.9 1,047.9 +12% +111100% pace of the market rise being slowed Segment Income 20.3 17.3 ▲14% down and taki
Slide 12: Metals & Alloys Business Segment
Metals & Alloys Business Segment Fiscal Year (ended March 31) Net sales and Segment income FY2017 FY2018 Y on Y increased due to strong price level of (billions of yen) Rate nickel and sales expansion of stainless steel and ferro-alloy. Net Sales 203.2 282.9 +39% +111100% Segment Income 4.9 6.3 +2
Slide 13: Non-ferrous Metals Business Segment
Non-ferrous Metals Business Segment Fiscal Year (ended March 31) While international commodity markets FY2017 FY2018 Y on Y have remained on a level with the same (billions of yen) Rate period of the previous year, copper and E-scrap sales and segment income Net Sales 99.0 97.0 ▲2% +111100% decrea
Slide 14: Foods Business Segment
Foods Business Segment Fiscal Year (ended March 31) Rising price of salmon and Crab, and FY2017 FY2018 Y on Y strong sales of chicken increased net (billions of yen) Rate sales and segment income. Net Sales 99.4 101.3 +2% +111100% Segment Income 1.0 1.5 +46% 《Net Sales》 （billions of yen） 120.0 《Tr
Slide 15: Petroleum & Chemicals Business Segment
Petroleum & Chemicals Business Segment Fiscal Year (ended March 31) Despite high market of petroleum FY2017 FY2018 Y on Y products, net sales and segment (billions of yen) Rate income became nearly flat, due to the merger of Oil refiners and slowdown in Net Sales 240.6 244.2 +2% +111100% demand fo
Slide 16: Overseas Sales Subsidiaries Segment
Overseas Sales Subsidiaries Segment Fiscal Year (ended March 31) Revenue increased due to sales FY2017 FY2018 Y on Y expansion of steel products in (billions of yen) Rate Indonesia and bunker fuel and metal Net Sales 221.6 314.7 +42% scrap in Singapore. +111100% Segment Income 0.9 1.0 +8% 《Net Sal
Slide 17: Other Segment
Other Segment Fiscal Year (ended March 31) Net sales of lumber to homebuilders FY2017 FY2018 Y on Y was strong, and in machinery business (billions of yen) Rate revenue from the construction of leisure facilities and sales of industrial Net Sales 76.5 82.5 +8% +111100% equipment also contributed t
Slide 18: Progress of Medium-term Business Plan
Progress of Medium-term Business Plan （FY2018） （FY2019） Achieve （billions of yen） Ordinary income Forecast Actual Forecast ment STRATEGIC Equity in earnings of affiliates from resource investees and - 0 －% 0.5 dividends from strategic investments SPEEDY Ordinary income from 4.3 73.3% 7.0 6.0 consoli
Slide 19: Transition of Quantitative indicators
Transition of Quantitative indicators Transition of Quantitative indicators FY2015 FY2016 FY2017 FY2018 ROE 17.2% 10.1% 9.7% 7.4% ROS 1.7% 1.1% 1.0% 0.7% Total assets turnover 2.4 2.3 2.3 2.3 Financial leverage 4.2 4.0 4.3 4.8 ROIC 4.5% 6.2% 6.1% 5.3% 161% Net DER 136% 136% 154% *131% New customers
Slide 20: Profits of Group Companies
Profits of Group Companies 【Ordinary income trend of subsidiaries by business segment】 Fiscal Year (ended March 31) FY2017 FY2018 Y on Y Change (billions of yen) Consolidated Unconsolidated Consolidated Unconsolidated Consolidated Unconsolidated Steel 4.2 0.7 2.7 0.6 ▲ 1.5 ▲ 0.1 Metals & alloys 0.2
Slide 21: Progress with Japan Value Chain Extension Strategy
Progress with Japan Value Chain Extension Strategy Investments Business domain Fast delivery/small activities lot/processing activities Makers Primary Intermediate Suppliers Trading Processing Users distribution distribution Hanwa Steel Service / San Ei Metal Nakayama Steel Works Steel center Matsuo
Slide 22: Create another Hanwa in Southeast Asia Strategy
“Create another Hanwa in Southeast Asia”Strategy 【The major alliance partners】 Country Distributor Processer Manufacturer HSS Thailand Furukawa Unic Thailand PCM Processing Siam Hanwa Araya Steel Tube Indonesia Kapurindo Sentana Baja HSS Indonesia Indonesia CosmoSteel Holdings Singapore JFE Meranti
Slide 23: Outline of strategic investment
Outline of strategic investment AFARAK FeCr, SiMn OM Holdings Bacanora Lithium (Sales amount FeSi, SiMn, MeMn lithium carbonate 100 kt / FY2018） (Sales amount (2021 Production 510 kt / FY2018） commencement 35 kt / Year) SAMANCOR Tsingshan Holding Cr Ore, FeCr NPI & Stainless hot coil （FeCr Productio
Slide 24: Investment in business
Investment in business 【Current investment records】 Amounts Major investments (billions of yen) ・Invested in Jiaxing Processing Center constructed by Daming International Holdings ・Built an extension of Kita-Kanto Steel Center Steel 7.4 ・Acquired stocks of JFE Meranti Myanmar Holding ・Acquired addit
Slide 25: Appendix
Appendix Copyright© 2019 Hanwa Co., Ltd. All Rights Reserved 24
Slide 26: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials 【Transaction of steel raw materials price】 Iron ore…Price of Iron ore remains stable, reflecting the steel market in China. The price is on an uptrend due to the impact of collapse of mining dam in Brazil and Australian cyclone. Coking coal…The price has been
Slide 27: Steel Market Trend in China
Steel Market Trend in China 【Transition of steel market in China 】 Supply/ Demand…The supply-demand balance of steel has remained tight on the supply side, partly due to the impact of environmental regulations. On the other hand, demand has been weak due to decline in such as capital investment an
Slide 28: Market Trend of Steel Scrap
Market Trend of Steel Scrap 【Steel scrap and D-bar Market Price】 Supply/Demand…Domestically, EAF steel mills continue to be active in buying steel scrap, reflecting firm construction demand. However tightness seems to be eased, due to decline in demand in China and ASEAN and strengthening regulati
Slide 29: Market Trend of Long Products
Market Trend of Long Products 【Transition of the H-Beams Markets in Japan】 Supply/Demand…Although demand for large-scale buildings and civil engineering projects remained firm, construction schedules were delayed due to labor shortages in fabricators and logistics, as well as shortage of high stre
Slide 30: Market Trend of Flat Products
Market Trend of Flat Products 【Transition of Steel Sheets Markets in Japan】 Supply/Demand…Demand for steel sheets remained firm due to production activities and capital investment in manufacturing industry being generally firm. And there was a sense of tightness in the supply side due to the repai
Slide 31: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys Nickel…Prices have continued to rise due to expectations of demand for stainless steel and secondary batteries, entering an adjustment phase due to trade frictions between U.S. and China and uncertainty about the Chinese economy. Alloys…Prices have continued to ri
Slide 32: Market Trend of Non-ferrous Metals
Market Trend of Non-ferrous Metals Aluminum…Prices generally remained high despite rising and falling due to the sanctions imposed by U.S. on Russian companies and concerns about trade frictions between U.S. and China. Copper…Prices were in part on an upward trend due to labor disputes at copper
Slide 33: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products Salmon…In addition to the decrease in the amount of Sockeye salmon caught in Russia and Alaska, Chilean Coho salmon have been in short supply, domestic market has been on an upward trend. Shrimp…Prices declined due to an increase in harvest volume in each p
Slide 34: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products Crude oil…Prices have remained at high levels on the whole, mainly due to the effect of the coordinated reduction of production by oil-producing countries and heightened expectations of a decline in oil production in regions with geopolitical risks.