Horiba, Ltd. · TSE:6856

Horiba — Nomura Investment Forum 2018

46 slides from Horiba's conference presentation, Dec 7, 2018

  1. Slide 1: Nomura Investment Forum 2018

    Nomura Investment Forum 2018 HORIBA, Ltd. December 7, 2018 © 2018 HORIBA, Ltd. All rights reserved. 1

  2. Slide 2: Contents

    Contents 2018 Jan.-Sept. Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate Profile [Disclaimer] Plans and forecasts in this presentation that do not constitute historical facts are predictions concerning future business results. These sta

  3. Slide 3: Contents

    Contents 2018 Jan.-Sept. Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate Profile © 2018 HORIBA, Ltd. All rights reserved. 3

  4. Slide 4: Review of 2018

    Review of 2018  Escalating global trade tensions  Decline in emerging markets currencies due to tightening by the Fed in External the U.S. Events  Temporary subdued capital spending despite robust demand for semiconductors  Automotive electrification, emission regulations  Enhanced North Americ

  5. Slide 5: 2018 Jan.-Sept. Results

    2018 Jan.-Sept. Results （Billions of Yen） Made a record-high in sales and profit 2017 2018 vs 2017 Jan.-Sept. Jan.-Sept. ： Record-high Diff. % Results Results Sales 132.2 146.0 +13.7 +10% Operating Profit 14.6 17.8 +3.2 +22% O.P. % 11.0% 12.2% +1.2p ― Ordinary Profit 14.3 17.5 +3.1 +22% Net Income a

  6. Slide 6: 2018 Jan.-Sept. Results by Segments

    2018 Jan.-Sept. Results by Segments （Billions of Yen） 2017 2018 vs 2017 ＜Auto＞ Jan.-Sept. Jan.-Sept. ： Record-high Results Results Diff. %  Increased sales of EMS and ECT※1 businesses Auto  Decreased profit due to expenses associated with the 45.3 48.3 +2.9 +7% acquisition, and other factors (MCT※

  7. Slide 7: Booking Trend

    Booking Trend （Billions of Yen） Backlog exceeded 100billion yen due to booming Auto. segment, while Semi. segment showed slow down. Bookings Backlog 2017 2018 2017 2018 3Q 4Q 1Q 2Q 3Q 3Q end 4Q end 3Q end Auto 22.2 23.0 18.8 22.9 22.0 62.7 57.8 73.3 P&E 5.0 4.9 4.3 4.7 4.8 5.5 5.1 5.6 Medical 6.0 6.

  8. Slide 8: Contents

    Contents 2018 Jan.-Sept. Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate Profile © 2018 HORIBA, Ltd. All rights reserved. 8

  9. Slide 9: Market Overview for the Full Year 2018

    Market Overview for the Full Year 2018 Strong appetite for investment in the global automotive sector due to tighter Auto emission regulations in Japan & Asia and innovation for electrification & autonomous driving Increase in demand due to tighter environmental regulations in emerging P&E countries

  10. Slide 10: 2018 Forecast

    2018 Forecast （Billions of Yen） Sales and profit revised downward due to increased investments in Auto. segment and to reflected the latest semiconductor market trend. No change in dividends 2017 2018 Previous Forecast Current Forecast VS VS Previous ： Record-high Results (as of Aug. 3) (as of Nov.

  11. Slide 11: 2018 Forecast by Segments

    2018 Forecast by Segments (Billons yen) 10 2017 2018 ： Record-high Results Previous Forecast Current Forecast VS VS Previous ＜Auto＞ (as of Aug. 3) (as of Nov. 9) 2017 Forecast  Revised sales downward reflected the recent Auto 73.3 79.0 78.0 +4.6 -1.0 order trend (ECT) P&E 17.4 19.0 19.0 +1.5 -  Re

  12. Slide 12: Contents

    Contents 2018 Jan.-Sept. Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate Profile © 2018 HORIBA, Ltd. All rights reserved. 12

  13. Slide 13: Auto Jan.-Sept. Results and 2018 Forecast

    Auto Jan.-Sept. Results and 2018 Forecast (Billions of yen) Sales 2018 Jan.-Sept. Results 【Half year】 Sales and O.P. O.P. ＋EMS※1 Europe - Solid demand after new regulations 42.7 45.2 38.7 China, India - Demand increase for compliance 28.1 34.0 30.6 32.7 26.6 5.5 with new regulations 4.0 ＋ MCT※2 Lowe

  14. Slide 14: Auto Effect of enhanced emission regulations

    Auto Effect of enhanced emission regulations Status of the next-gen. emission regulations HORIBA BIWAKO E-HARBOR achieved record-high output  Sales of EMS business Production at HORIBA BIWAKO E-HARBOR 2015 2018 (Before the start of E-HARBOR) Up 25% (forecast) ¥39.8bn ¥49.0bn  Emission regulations

  15. Slide 15: Auto Enhanced engineering capability

    Auto Enhanced engineering capability Increase in solution provision for the HORIBA MIRA in the U.K. opened automotive development process es MIRA Technology Institute  Vehicle testing system (Subaru Corp.) Jointly invested with the LLEP* in the U.K. ・Provide the powertrain testing system that repro

  16. Slide 16: Auto Investment plan for a battery evaluation testing facility

    Auto Investment plan for a battery evaluation testing facility Introducing an advanced evaluation concept to connect the real and the virtual Battery evaluation testing facility for electric vehicles(HORIBA BIWAKO E-HARBOR)  Assessment of the combination of a battery, powertrain, and a vehicle  Te

  17. Slide 17: Auto Expanding Business Domains (FuelCon Acquisition)

    Auto Expanding Business Domains (FuelCon Acquisition) Acquisition of FuelCon AG Established 2001 Sales Breakdown  A leading German developer of fuel cell Sales 11,504k EUR (2017) and battery test systems for electric Fuel cell Lithium ion Operating profit 199k EUR (2017) vehicles test battery test

  18. Slide 18: Auto Expanding Business Domains (Support to the UCI)

    Auto Expanding Business Domains (Support to the UCI) Support to the UCI for a new institute  Committed support to the University of California, Irvine (UCI) to establish the Horiba Institute for Mobility and Connectivity (HIMAC)  Enhance industry and academia partnering in the energy sector of the

  19. Slide 19: P&E Jan.-Sept. Results and 2018 Forecast

    P&E Jan.-Sept. Results and 2018 Forecast (Billions of yen) Sales 【Half year】 Sales and O.P. 2018 Jan.-Sept. Results O.P. ＋ Stack gas analyzers: Sales increase in North America due to 8.9 9.3 9.2 9.7 - 8.2 8.4 7.7 8.0 enforced marketing; flattish demand in Japan ＋ Air quality monitoring: Demand growt

  20. Slide 20: P&E Initiatives for expansion into new markets

    P&E Initiatives for expansion into new markets Business growth in Asia Launch of “HAKARU※ EXpress” Expand the environmental regulation and monitoring business From a hardware sales business to a data sales  Delivery to and continued orders received from Ho Chi business using cloud computing  Insta

  21. Slide 21: Medical Jan.-Sept. Results and 2018 Forecast

    Medical Jan.-Sept. Results and 2018 Forecast (Billions of yen) Sales 【Half year】 Sales and O.P. 2018 Jan.-Sept. Results O.P. 13.9 13.7 13.8 12.7 ＋ Strong sales of new products in Japan 12.3 12.8 13.1 12.8 ＋ Sales increase in Europe in yen terms due to the weaker 1.3 1.2 1.5 1.2 yen 0.8 1.0 1.0 0.9 ＋

  22. Slide 22: Medical Initiatives for business expansion

    Medical Initiatives for business expansion Opened the application center (biochemical) New products to be launched globally to accelerate the U.S. business Mid and large-sized  To start full operation in August 2018 new product in Irvine, California “HELO Solution”  For application development in

  23. Slide 23: Semi Jan.-Sept. Results and 2018 Forecast

    Semi Jan.-Sept. Results and 2018 Forecast (Billions of yen) Sales 2018 Jan.-Sept. Results 【Half year】 Sales and O.P. O.P. ＋ Record-high sales and O.P. 32.3 28.5 ＋ Record-high production volume in Mass Flow Controllers 24.7 23.6 19.1 16.2 17.8 20.9 (MFC) 10.2 8.8 ＋ The Aso factory expansion boosted s

  24. Slide 24: Semi Strengthen supply capacity and global R&D

    Semi Strengthen supply capacity and global R&D Full-fledged production after the Aso expansion Opening of HORIBA Reno Technology Center Combined output at Aso and Kyoto Enhance a N. America development base in the focus area 350,000 MFCs per year Establish a global R&D capability Production status:

  25. Slide 25: Scientific Jan.-Sept. Results and 2018 Forecast

    Scientific Jan.-Sept. Results and 2018 Forecast (Billions of yen) Sales 2018 Jan.-Sept. Results 【Half year】 Sales and O.P. O.P. ＋ Sales increase in Japan, Americas and Europe on the back of 14.6 15.4 robust corporate R&D spending 13.1 13.6 12.3 13.3 12.5 11.5 - Expense incurred to strengthen bases i

  26. Slide 26: Scientific Strengthen global bases and expand core business

    Scientific Strengthen global bases and expand core business Opening of HORIBA New Jersey Hosting of the RamanFest 2018 International Optical Spectroscopy Center Symposium on Raman technologies Start: Aug. 2018 Investment: App. ¥2.1bn Held on June 25 and 26, 2018 Place: Piscataway, New Jersey, the U

  27. Slide 27: Contents

    Contents 2018 Jan.-Sept. Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate Profile © 2018 HORIBA, Ltd. All rights reserved. 27

  28. Slide 28: Shareholder Return

    Shareholder Return Basic policy -Dividend payment + Share buyback = 30% of Consolidated net profit to be targeted -Remaining earnings are retained internally for strategic investment (i.e. facilities, M&A) (yen) Per-share dividend (from 2008 to 2018 Forecast) 116 120 Dividends per share and Share bu

  29. Slide 29: Contents

    Contents 2018 Jan.-Sept. Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate Profile © 2018 HORIBA, Ltd. All rights reserved. 29

  30. Slide 30: HORIBA's perspectives on ESG investment

    HORIBA’s perspectives on ESG investment Contribution to the environment and society via its business; 【Examples】 Building of an open & fair governance structure Outside Directors with diverse Emission gas Innovation for electrification measurement system & autonomous driving experiences and skills C

  31. Slide 31: HORIBA Premium Value to improve asset efficiency

    HORIBA Premium Value to improve asset efficiency Case of an improved asset efficiency in the MCT business  Improvement at Olomouc Factory (Czech) with a focus on production of standard Chassis dynamometers  Full review of production processes and supply chain and adoption of the Kanban pull system

  32. Slide 32: Contents

    Contents 2018 Jan.-Sept. Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate Profile © 2018 HORIBA, Ltd. All rights reserved. 32

  33. Slide 33: Trend of Market capitalization

    Trend of Market capitalization ¥407bn on May 14, 2018 ¥132bn (Record-high) in Jan. 2008 ¥52bn in Dec. 2008 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012 Jan-2013 Jan-2014 Jan-2015 Jan-2016 Jan-2017 Jan-2018 © 2018 HORIBA, Ltd. All rights reserved. 33

  34. Slide 34: Operating Profit Analysis (vs 2017)

    Operating Profit Analysis (vs 2017) (Billions of yen) 2017 2018 Jan.-Sept. Jan.-Sept. Increase Exchange Cost of Impact for Exchange Increase Increase Goods Gross Impact for Increase Other 14.61 Sales Sales Profit Expenses R&D Cost Expenses 17.87 +12.75 -5.26 +0.09 -0.32 -0.75 -3.24 Increase Gross Pr

  35. Slide 35: Impact of Fluctuation in Foreign exchange

    Impact of Fluctuation in Foreign exchange (Millions of Yen) Exchange rate impact (2018 Jan.-Sept. Results vs 2017) Exchange rate impact Sales +¥980mil O.P. -¥220mil for 2018 Forecast 1 yen impact of Sales and O.P. Sales Operating Profit (Yen appreciation) Total USD EUR Total USD EUR Sales Auto +660

  36. Slide 36: Capital Investment, Depreciation, R&D

    Capital Investment, Depreciation, R&D (Billions of Yen) Capital investment; expected to exceed the last year results while revised downward considering the recent progress 2017 2018 Previous Current vs 2017 2018 Results Forecast Forecast Previous Jan.-Sept. Jan.-Sept. （As of Aug. 3） （As of Nov. 9） F

  37. Slide 37: Consolidated Cash Flows

    Consolidated Cash Flows (Billions of Yen) 2018 2017 Variation First Half First Half Cash flows from operating activities +12.40 +16.27 -3.86 Cash flows from investing activities -4.43 -6.80 +2.37 Cash flows from financing activities -4.31 -7.10 +2.79 Cash and cash equivalents at end of year 61.47 54

  38. Slide 38: Cash Balance

    Cash Balance (Billions of Yen) Total Loan Balance (Consolidated basis, each end of year) 46.7 44.7 42.0 40.5 Bond redemption Bonds Bonds In 2020 15.0 Bonds Cash※1 Bonds ※1 15.0 ※1 Cash※1 15.0 Cash Cash 47.8 51.9 58.3 61.4 15.0 Borrowed Long Long 19.2 Long Long from JBIC※2 16.8 18.7 18.3 ¥15.1bn Shor

  39. Slide 39: Contents

    Contents 2018 Jan.-Sept. Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate Profile © 2018 HORIBA, Ltd. All rights reserved. 39

  40. Slide 40: Corporate Profile

    Corporate Profile Head Office Kyoto, Japan - Corporate motto - Foundation 1945 Incorporation 1953 Fiscal Year End December 31 Atsushi Horiba Chairman & Group CEO To have interest and pride in our work to enjoy our lives © 2018 HORIBA, Ltd. All rights reserved. 40

  41. Slide 41: Business Segments

    Business Segments ・Emission Measurement Systems ・Test Automation Systems Automotive Test Systems ・Intelligent Transport Systems ・Engineering Consultancy & Testing(HORIBA MIRA, Ltd) ・Environmental & Process Systems ・Environmental Radiation Monitor Process & Environmental ・Environmental Regulation & P

  42. Slide 42: Business Segments

    Business Segments Sales Breakdown by Segment Automotive Test Systems Sales: ¥195.3bn 13% Scientific Process & Environmental 26.1 38% （231） Automotive 73.3 Semicon （649） Medical 27% 53.3 （471） Medical P&E 25.1 17.4 （222） （154） Semiconductor 9% 13% Scientific ( ) =Segment Sales in MUSD % = Segment Sal

  43. Slide 43: Market Share

    Market Share Global Domestic Automatic Blood Cell Counter Emission Measurement Systems Stack Gas Analyzers plus CRP 80% 20% 100% (As of December 31, 2015) Mass Flow Controllers Raman Spectrophotometers Gratings 60% 30% 35% ※Market shares quoted are estimates by HORIBA. © 2018 HORIBA, Ltd. All rights

  44. Slide 44: HORIBA Worldwide

    HORIBA Worldwide Sales of FY2017 : ¥195.3bn (1,729 MUSD) Sales Ratio by Region The Number of Group Companies by region EU Japan (As of December 31, 2017) 21% 33% Americas Americas 9 17% Asia Europe 22 29% Asia 17 (4 in Japan, including HORIBA, Ltd.) Total 48 © 2018 HORIBA, Ltd. All rights reserved.

  45. Slide 45: Employees by Region

    Employees by Region Americas Other Europe 2% Total Number of Employees 2% The U.S. 7,399 11% Germany Japan Total Asia : 4,041 8% Japan 54% 38% The U.K. 38% Total Europe： 2,414 11% France 33% Other 12% Asia Total Americas： 944 14%16% 13% (As of December 31, 2017) © 2018 HORIBA, Ltd. All rights reserv

  46. Slide 46: © 2018 HORIBA, Ltd. All rights reserved.

    © 2018 HORIBA, Ltd. All rights reserved. 46

HORIBA — Nomura Investment Forum 2018 on 6ix