Sumitomo Heavy Industries, Ltd. · TSE:6302
Sumitomo Heavy Industries — FY2007 Earnings Presentation
34 slides from Sumitomo Heavy Industries's earnings presentation, May 14, 2008
Slide 1: Part 1: FY2007 Financial Summary and FY2008 Projections
Part 1: FY2007 Financial Summary and FY2008 Projections Yukio Kinoshita Executive Vice President and CFO 2008.5.14
Slide 2: Financial Summary for FY2007
1-1 Financial Summary for FY2007 Units: JPY billion Summary FY2007 FY2006 Change (1) Record highs in all reported areas New records for orders and current net income for fifth straight year Orders 716.4 707.4 9.0 New records for operating income and ordinary income for the second straight Net sales
Slide 3: Operating Income by Segment
1-2 Operating Income by Segment Units: JPY billion Mass-produced machinery Growth in plastics machinery was offset by FY2007 FY2006 Change decline in power transmission and precision instruments sectors. Mass-produced machinery 28.2 29.7 (1.5) Environmental protection facilities, plants, and others
Slide 4: Consolidated Balance Sheets
1-3 Consolidated Balance Sheets Units: JPY billion March March March March Change Change FY2008 FY2007 FY2008 FY2007 Current assets 381.9 332.5 49.4 Liabilities 432.3 394.9 37.4 Notes and accounts Cash and deposits 30.3 48.2 (17.9) payable 167.0 150.9 16.1 Notes and accounts 185.9 158.4 27.5 Advance
Slide 5: Consolidated Statements of Cash Flow
1-4 Consolidated Statements of Cash Flow Units: JPY billion Category FY2007 FY2006 Change Cash flows from operating 29.1 56.8 (27.7) activities Working capital (25.5) 10.3 (35.8) Operating income before interest payment 87.7 72.5 15.2 Other (33.0) (26.0) (7.0) Cash flows from investing (41.3) (12.5)
Slide 6: Analysis of Change in Operating Income (FY2006 to 2007)
1-5 Analysis of Change in Operating Income (FY2006 to 2007) Units: JPY billion Increased revenue Improved cost effect price 77.8 14.2 7.7 Increase in Exchange materials cost rate effect (1.0) (0.2) Sales and 64.2 administrative costs (7.1) FY2006 FY2007 2008.5.14
Slide 7: FY2008 Forecast
1-6 FY2008 Forecast Key Points Orders: Increases expected in mass-produced machinery (1) Record highs expected for both sales and orders and environmental protection facilities, plants & others segments (2) While record income is expected for sixth consecutive year, Sales: Expected increase in sales
Slide 8: FY2008 Forecast of Orders, Net Sales, and Operating Income by Segment
1-7 FY2008 Forecast of Orders, Net Sales, and Operating Income by Segment Units: JPY billion First half First half Change of of FY2008 FY2007 FY2008 FY2007 forecast actual Change forecast actual Orders 140.0 121.4 18.6 290.0 247.4 42.6 Mass- produced Sales 129.0 110.2 18.8 280.0 232.6 47.4 machinery
Slide 9: Part 2: Management Strategy
Part 2: Management Strategy Yoshinobu Nakamura President and CEO 2008.5.14
Slide 10: Summary of Leap to Excellence '07
Summary of Leap to Excellence ’07 2008.5.14
Slide 11: Results and Evaluation of Planned Goals of Leap to Excellence '07
Results and Evaluation of Planned Goals of Leap to Excellence ’07 (FY2005 to 2007) 2-1 Development and expansion of topline growth Performance Performanceand andevaluation evaluation Medium-term goals Evolving Evolving into into aa “company “company that that systematically systematically creates cr
Slide 12: Leap to Excellence '07 - Performance Transition
2-2 Leap to Excellence ’07 - Performance Transition Sales of JPY660.8 billion and operating income of JPY77.8 billion achieved in FY2007 Sales and Invested Capital Operating Income and ROIC JPY700 billion JPY660.8 billion 650 JPY77.8 billion Operating income JPY80 billion 600 5,0 Sales 60 500 40 450
Slide 13: Difference in Actual and Forecast Performance by Segment
Difference in Actual and Forecast Performance of Leap to Excellence ’07 by Segment 2-3 2007 Performance (Compared to initial plan of May 2005) Segment Sales Operating Income Reasons for Difference JPY billions JPY billions Underperforming PTC division Stagnant disk market for plastic machinery Mass-
Slide 14: Medium-Term Management Plan - Global 21 (FY2008 to FY2010)
Medium-Term Management Plan - Global 21 (FY2008 to FY2010) 2008.5.14
Slide 15: Framework of the Global 21 Medium-Term Management Plan
Framework of the Global 21 Medium-Term Management Plan 2-4 “Making the move from a Japanese-focused SHI to a global SHI” FY2010 Sales: JPY850.0 billion Financial targets Operating Income: JPY100.0 billion ROIC: 10% or more Developing a company with sales of JPY1 trillion by 2015 Long-term vision Gai
Slide 16: Investment in Global Locations
2-5 Investment in Global Locations Implementation of new construction and reinforcement of location infrastructure April April 2008 2008 (Heibei, (Heibei, China) China) March March 2008 2008 (Ohio, (Ohio, USA) USA) March March 2008 2008 (Germany) Construction Construction started started on on new P
Slide 17: Investment in First-Class Products
2-6 Investment in First-Class Products Developing world-class first-class products through enhanced competitiveness Double recognition by Energy Conservation Grand Prize and Good Design Award Differentiation and establishment of competitive edge through One-SHI Drive control synergy model Hydraulic
Slide 18: FY2008 Priority Measures by Segment
FY2008 Priority Measures by Segment 2008.5.14
Slide 19: FY2008 Investment Planning
2-7 FY2008 Investment Planning Total investment budget for period FY2008 to 2010: JPY150 billion Purchase cost of Demag JPY12.8 billion Research and FY2008 total: development costs JPY13.0 billion JPY51.8 billion Investment in facilities JPY26.0 billion and equipment Other Mass-produced machinery 15
Slide 20: Overview of Specific Measures by Segment for FY2008
2-8 Overview of Specific Measures by Segment for FY2008 Units: JPY billion FY2007 Performance Market FY2008 Forecast Forecast Segment Operating Measures Operating Sales Sales Income Income Power Sales expansion in Asian, North American, and transmission 96.8 European sectors 105.0 Mass-produced & co
Slide 21: Mass-Produced Machinery
2-9 Mass-Produced Machinery Power Transmission Equipment Units: JPY billion We look to expand sales of our power transmission equipment Orders 290.0 in Asia, Europe, and North and South America. We will also 234.7 247.4 Precision Instruments. continue to develop the self-manufacturing in our China a
Slide 22: Environmental Protection Facilities, Plants and Others
Environmental Protection Facilities, Plants and Others 2-10 Units: JPY billion Energy Plants Orders Our plans for this segment include further penetration of the 110.0 90.0 91.8 IT, Services etc. domestic paper, pulp, and chemical markets. We also seek to accelerate development of overseas markets,
Slide 23: Ship, Steel Structure and Other Specialized Equipment
Ship, Steel Structure and Other Specialized Equipment 2-11 Units: JPY billion Ships Orders We aim on maintaining orders through our focus on mid-sized 121.0 oil tankers. We continue with our cost reduction efforts through 90.7 improved productivity of TPS. 80.0 Steel Structures and Other Specialized
Slide 24: Industrial Machinery
2-12 Industrial Machinery Units: JPY billion Material Handling Systems Orders We look to deepen our involvement in the domestic steel industry. This is in addition to Improving our production Material Handling capacity to further ensure a stable supply of products and Systems, reduction of costs. Lo
Slide 25: Construction Machinery
2-13 Construction Machinery Units: JPY billion Hydraulic Excavators Orders We look to continue the company’s sales expansion in Asian 200.0 markets such as in China and India. The completion ahead of 187.7 168.1 Mobile Cranes schedule of the Tangshang plant in China, together with the establishment
Slide 26: Global Sales Plan
2-14 Global Sales Plan Focus on expansion of mass-produced machinery and construction machinery Units: JPY billion in all regions *Bar graphs do not include 100 Europe 100 China figures for ships 150 North America Construction machinery 50 50 100 Steel structure 0 0 and other specialized 04 05 06 07
Slide 27: M&A
M&A 2008.5.14 © Sumitomo Heavy Industries, Ltd.
Slide 28: Basis for Acquisition of Demag Plastics Group
2-15 Basis for Acquisition of Demag Plastics Group 9 9 Enhance Enhance brand brand strength strength and and sales sales Model development status by region capability capability in in global global market market Sumitomo Heavy Industries Demag Electric machine Electric machine Hydraulic 9 9 Expand E
Slide 29: Bid for Axcelis: Basic, Content, and Overview
2-16 Bid for Axcelis: Basic, Content, and Overview Basis Due to the increasing size and intensification of semiconductor manufacturers, a dramatic increase in the amounts required for facilities investment, and response to the increasing speed of development, the company made the decision to integra
Slide 30: What is Ion Implantation Equipment?
2-17 What is Ion Implantation Equipment? As part of the process of transistors and other solid-state devices, a thin board made from silicon monocrystal known as a wafer is required to be accurately dose the required kind and quantity of element at a stipulated depth. Ion implantation devices are ca
Slide 31: Investment in First-Class Products
2-18 Investment in First-Class Products Developing world-class first-class products through enhanced competitiveness Double recognition by Energy Conservation Grand Prize and Good Design Award Differentiation and establishment of competitive edge through One-SHI Drive control synergy model Hydraulic
Slide 32: Defense from Hostile Takeovers
Defense from Hostile Takeovers 2008.5.14
Slide 33: Overview of the Company's Measures for Defense from Hostile Takeovers
Overview of the Company’s Measures for Defense from Hostile 2-19 Takeovers The SHI board of directors meeting on May 13 resolved the implementation of the following defensive measures to protect the company from hostile takeovers To be used as a measure to protect and improve corporate value and Aim
Slide 34: Forward-looking statements notice
All forward looking statements regarding the company’s future performance are based on information currently available to Sumitomo Heavy Industries and determined subjectively. Future performance is not guaranteed and all information related to future performance contained herein is subject to chang
Sumitomo Heavy Industries — FY2007 Earnings Presentation on 6ix