Kawasaki Heavy Industries Ltd. · TSE:7012

Kawasaki Heavy Industries — Kawasaki Heavy Industrial — Q1 2024 Earnings Presentation

45 slides from Kawasaki Heavy Industries's earnings presentation, Aug 7, 2024

  1. Slide 1: Financial Results for First Quarter FY2024

    Financial Results for First Quarter FY2024 For the Year ending March 31, 2025 0 August 6, 2024

  2. Slide 2: Table of Contents

    0 Table of Contents 1 Consolidated Results for 3 Details by segment First Quarter FY2024 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

  3. Slide 3: Consolidated Results for First Quarter FY2024 – Summary

    Consolidated Results for First Quarter FY2024 1 –Summary- Revenue and profit increased YoY, reaching a record high for Q1 revenue Foreign exchange gains resulting from the depreciation of the yen contributed to profit before tax and net profit (Billion Yen) Quarterly revenue (Billion Yen) FY23 Q1 FY

  4. Slide 4: Consolidated Results – Segment

    Consolidated Results for First Quarter FY2024 1 –Segment- Profitability in Aerospace Systems and Precision Machinery & Robot improved significantly ① Business profit in PS&E decreased due to increase in fixed costs and recall-related expenses ② (Billion Yen) Orders Received Revenue Business Profit (

  5. Slide 5: Statement of comprehensive income

    Consolidated Results for First Quarter FY2024 1 –Statement of comprehensive income- (Billion Yen) Details FY23 Q1 FY24 Q1 Change % % Revenue 405.3 100.0 444.2 100.0 + 38.8 ① Gross profit margin improved due to a Cost of sales 339.2 83.7 358.8 80.8 + 19.5 depreciation of the yen Gross profit 1 66.0 1

  6. Slide 6: Statement of comprehensive income (continued)

    Consolidated Results for First Quarter FY2024 1 –Statement of comprehensive income- (Billion Yen) Details FY23 Q1 FY24 Q1 Change % % Finance income and Finance costs 4.7 8.9 + 4.2 ③ USD/JPY rate 151.40 Q4/E FY’23 Net Interest expense (incl. dividend income) - 1.1 - 1.9 - 0.7 161.14 Q1/E FY’24 3 Gain

  7. Slide 7: Details of change in business profit

    Consolidated Results for First Quarter FY2024 1 –Details of change in business profit- Advantages of the depreciation of the yen were partially offset by an increase in “SG&A expenses” Improvement of profitability in Aero Engine contributed to “product mix and other factors” FY’23 Q1 FY’24 Q1 Busine

  8. Slide 8: Details of change in business profit by segment

    Consolidated Results for First Quarter FY2024 1 –Details of change in business profit- (Billion Yen) FY23 Q1 Details of change FY24 Q1 Business Change in Change in Business Effects of Change share of profit (loss) Change in Profit product mix and of investments SG & A Total Profit FX rates※ 1 in sal

  9. Slide 9: Statement of financial position

    Consolidated Results for First Quarter FY2024 1 –Statement of financial position- (Billion Yen) End of End of Details Change Mar. 2024 % Jun. 2024 % Cash and cash equivalents 84.1 102.8 + 18.7 ① Decreased in PS&E, Energy business, and Plant 1 business Trade receivables (Incl. contract assets) 770.3

  10. Slide 10: Statement of financial position (liabilities and equity)

    Consolidated Results for First Quarter FY2024 1 –Statement of financial position- (Billion Yen) End of End of Details Change Mar. 2024 % Jun. 2024 % Trade payables 451.9 436.5 - 15.3 ③ Increase in borrowing as a 3 normal business cycle in Q1 Interest-bearing debt 653.9 732.6 + 78.7 Contract liabilit

  11. Slide 11: Cash Flows

    Consolidated Results for First Quarter FY2024 1 –Cash Flows- (Billion Yen) 要因説明 FY23 Q1 FY24 Q1 Change ① FY’23 Q1： Profit before tax 14.9 25.8 + 10.9 Operating cash flows were negative due to an increase Depreciation and amortization 21.3 20.8 - 0.5 in receivables, and Increase and decrease in worki

  12. Slide 12: Cash Flows trend

    Consolidated Results for First Quarter FY2024 1 –Cash Flows- Operating cash flow turned from consecutive losses to profit thanks to advances received in the aerospace business Working capital increased due to rapid recovery of order based business and expansion of PS&E sales (Billion yen) CF from op

  13. Slide 13: Forecasts for FY2024 – Summary

    Forecasts for FY2024 2 -Summary- Revenue and profit forecast unchanged from May old forecast Orders received were revised up due to upward revision for Ministry of Defense (Billion Yen) FY2023 FY2024 Forecast and Progress Actual Old FCST New FCST Chg. vs. FY23 Chg. vs. Old FCST Q1 Actual Q2-4 FCST O

  14. Slide 14: Forecasts for FY2024 – Segment

    Forecasts for FY2024 2 -Segment- Progress in Q1 varies by business, but full-year profit forecast is achievable through accelerating all the initiatives from Q2 onward (Billion Yen) Orders Received Revenue Business Profit (Loss) FY2023 FY2024 Forecast FY2023 FY2024 Forecast FY2023 FY2024 Forecast Ac

  15. Slide 15: Aerospace Systems

    Details by Segment 3 -Aerospace systems- FY2024.Q1（vs. FY2023.Q1） FY2024 forecast（vs. Forecast in May） Orders Decreased compared to the last fiscal year, Orders Revised up due to an increase in MOD received when the major orders for MOD were received despite a decrease in Boeing -¥30.5 bil. received

  16. Slide 16: Aerospace Systems

    Details by Segment 3 -Aerospace systems- (Billion Yen) FY2023 FY2024 FY2023 FY2024 Forecast Q1 Actual Q1 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q2-4 FCST Orders Received 118.7 88.2 - 30.5 692.6 750.0 790.0 + 97.4 + 40.0 701.8 Aerospace 104.4 54.3 - 50.1 556.9 600.0 63

  17. Slide 17: Aerospace Systems

    Details by Segment 3 -Aerospace systems- Net Sales or Revenue (billion yen) Aerospace Aero Engines 160.6 54.5 109.3 110.2 106.3 104.9 99.7 93.9 93.3 93.5 81.5 21.7 80.2 74.6 39.3 71.5 48.9 37.2 106.1 33.6 25.4 70.0 17.9 26.4 63.2 63.4 35.1 24.6 88.5 13.6 23.3 23.9 70.0 74.2 20.3 75.3 75.3 71.3 67.5

  18. Slide 18: Aerospace Systems – Market Overview and Specific Efforts

    Details by Segment 3 -Aerospace systems- Market Overview Specific Efforts ⚫ Commercial business ⚫ Preparation for business expansion – Air passenger demand shifted from – Arranging supply chain and production system for production increase recovery to growth phase, and demand – Improving productivit

  19. Slide 19: Rolling Stock

    Details by Segment 3 - Rolling Stock - FY2024.Q1（vs. FY2023.Q1） FY2024 forecast（vs. Forecast in May） Orders Same level as the FY’23 Q1 Orders Expected to remain at the same level received received +¥0.6 bil. ±¥0.0 bil. Revenue Same level as the FY’23 Q1 due to an Revenue Same as above increase in th

  20. Slide 20: Rolling Stock

    Details by Segment 3 - Rolling Stock - (Billion Yen) FY2023 FY2024 FY2023 FY2024 Forecast Q1 Actual Q1 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q2-4 FCST Orders Received 16.4 17.0 + 0.6 88.7 160.0 160.0 + 71.3 - 143.0 Domestic & Asia 15.3 15.1 - 0.1 87.3 140.0 140.0 + 5

  21. Slide 21: Rolling Stock

    Details by Segment 3 - Rolling Stock - Net Sales or Revenue (billion yen) 60.1 Domestic & Asia North America 51.6 36.1 43.5 43.8 39.5 40.6 23.2 36.8 37.5 32.3 32.3 32.1 33.7 28.4 34.3 31.7 31.5 26.7 28.7 28.8 10.9 8.1 11.3 26.4 6.0 4.6 8.2 9.9 6.8 7.3 28.6 27.7 10.2 5.4 28.6 28.3 26.3 26.1 8.0 24.8

  22. Slide 22: Rolling Stock – Market Overview and Specific Efforts

    Details by Segment 3 - Rolling Stock - Market Overview Specific Efforts ⚫ Domestic Market ⚫ Compliance with delivery schedules for – The number of railway passengers has overseas projects recovered to approximately 90% of pre- COVID-19 levels due to the recovery of Dhaka ‣22 trains out of 24(144 car

  23. Slide 23: Energy Solution & Marine Engineering

    Details by Segment 3 - Energy Solution & Marine Engineering - FY2024.Q1（vs. FY2023.Q1） FY2024 forecast（vs. Forecast in May） Orders Increased due to orders for LPG/LAG Orders Revised up due to an increase in orders for received carriers despite a decrease in orders for received naval equipment for MO

  24. Slide 24: Energy Solution & Marine Engineering

    Details by Segment 3 - Energy Solution & Marine Engineering - (Billion Yen) FY2023 FY2024 FY2023 FY2024 Forecast Q1 Actual Q1 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q2-4 FCST Orders Received 102.3 121.8 + 19.5 401.6 390.0 400.0 - 1.6 + 10.0 278.2 Energy, Plant & 94.7

  25. Slide 25: Energy Solution & Marine Engineering

    Details by Segment 3 - Energy Solution & Marine Engineering - Net Sales or Revenue Energy, Plant & Marine Machinery (billion yen) Ship & Offshore Structure 118.8 103.8 102.1 95.5 23.7 86.5 23.6 77.8 22.6 77.0 80.1 72.2 70.5 72.8 70.3 70.8 15.1 70.9 70.7 95.1 60.6 63.5 24.8 80.2 80.3 19.2 79.5 21.1 2

  26. Slide 26: Energy Solution & Marine Engineering – Market Overview and Specific Efforts

    Details by Segment 3 - Energy Solution & Marine Engineering - Market Overview Specific Efforts ⚫ Energy system & Plant Engineering Solutions for decarbonized society Domestic Overseas 30% hydrogen co-firing large gas engine testing facility ₋ Strong demand for ₋ Strong demand for energy Topic was bu

  27. Slide 27: Precision Machinery & Robot

    Details by Segment 3 - Precision Machinery & Robot - FY2024.Q1（vs. FY2023.Q1） FY2024 forecast（vs. Forecast in May） Orders Increased due to an increase in robots for Orders Expected to remain at the same level received semiconductor manufacturing equipment received and automobiles ±¥0.0 bil. +¥7.6 bi

  28. Slide 28: Precision Machinery & Robot

    Details by Segment 3 - Precision Machinery & Robot - (Billion Yen) FY2023 FY2024 FY2023 FY2024 Forecast Q1 Actual Q1 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q2-4 FCST Orders Received 54.0 61.6 + 7.6 213.3 240.0 240.0 + 26.7 - 178.4 Hydraulic 36.6 36.0 - 0.5 136.1 150.0

  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 31.8 69.2 65.0 60.6 61.2 61.5 55.2 57.6 29.0 28.5 55.6 53.6 52.6 53.7 30.8 52.6 27.8 49.3 45.4 22.6 20.7 22.8 15.1 17.0 19.4 16.9 54.7 20.4 19.8 17.0 16.2 11

  30. Slide 30: Precision Machinery & Robot – Market Overview and Specific Efforts

    Details by Segment 3 - Precision Machinery & Robot - Market Overview Specific Efforts ⚫ Construction machinery ⚫ Measures for the development – Sluggish demand in China shows signs of of hydraulic business bottoming out especially in small models Development of new products and market for constructi

  31. Slide 31: Powersports & Engine

    Details by Segment 3 - Powersports & Engine - FY2024.Q1（vs. FY2023.Q1） FY2024 forecast（vs. Forecast in May） Revenue Same level as the FY’23 Q1 due to an increase Revenue Expected to remain at same level in motorcycles and the depreciation of the yen, +¥0.7 bil. despite a temporary decline in four wh

  32. Slide 32: Powersports & Engine

    Details by Segment 3 - Powersports & Engine - (Billion Yen) FY2023 FY2024 FY2023 FY2024 Forecast Q1 Actual Q1 Actual Change Actual Old FCST New FCST Chg. Vs. FY23 Chg. Vs. Old FCST Q2-4 FCST Revenue 143.9 144.7 + 0.7 592.4 720.0 720.0 + 127.6 - 575.3 Motorcycles for developed contries 50.9 61.1 + 10

  33. Slide 33: Powersports & Engine

    Details by Segment 3 - Powersports & Engine - Net Sales or Revenue (billion yen) 187.9 177.3 148.5 143.9 144.7 138.3 139.1 137.2 126.0 123.1 111.1 113.4 102.7 93.2 80.8 85.7 58.9 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY2020 FY2021 FY2022 FY2023 FY2024 （IFRS） （IFRS） （IFRS） （IFRS） Operati

  34. Slide 34: Powersports & Engine – Market Overview and Specific Efforts

    Details by Segment 3 - Powersports & Engine - Market Overview Specific Efforts ⚫ U.S. (Motorcycles) ⚫ Supplying products as much as demanded – While the street model market remained firm, – Continuous introduction of new models the off-road model market softened – Flexible change of production and s

  35. Slide 35: Shareholder Return

    4 Shareholder Return Dividend Policy Dividend for FY2024 30% The medium- to long-term Annual dividend per share is not changed from the consolidated dividend payout ratio previous forecast of 140 yen (dividend payout ratio 30.1%) Comprehensively considering the 1 following points - future business f

  36. Slide 36: Project Topics: Daimler Truck and Kawasaki MoU on liquefied hydrogen

    4 Project Topics Our Press Release URL https://global.kawasaki.com/news_240612-1e.pdf Daimler Truck and Kawasaki signed MoU to jointly study the optimization of liquefied hydrogen supply chains ⚫ In June 2024, Daimler Truck, one of the world’s ⚫ The MoU aims to expand the use of liquefied leading co

  37. Slide 37: Project Topics: World's first public run of a hydrogen engine motorcycle

    4 Project Topics World’s first public run of a hydrogen engine motorcycle ⚫ On 20 th July 2024, Kawasaki Motors conducted the world‘s first*1 public run of a hydrogen engine motorcycle developed by a mass-production motorcycle manufacturer at Suzuka Circuit in Japan ⚫ A step forward toward a future

  38. Slide 38: Project Topics: Kajima and Kawasaki joint research on CO2 absorption

    4 Project Topics Kajima and Kawasaki participated in What is our advanced DAC technologies? joint research into absorbing CO2 from the air and trapping it in concrete Technology to absorb CO2 in the atmosphere using a solid ⚫ Launched joint research operations for absorbent consisting of porous mate

  39. Slide 39: Project Topics: Indoor Delivery Robot FORRO

    4 Project Topics Won the Japan Robot Association Award at the 54th Innovative & Inventive Design Excellence Award (IDEA) Indoor Delivery Robot "FORRO" Launched Official Movie (Only in Japanese) https://www.youtube.com/watch?v=ziMds-eM4rU ― Realizing a Safe and Secure Remotely- Connected Society ⚫ FO

  40. Slide 40: Appendix – CAPEX, Depreciation and Amortization, R&D Expenses, Employees

    Appendix 4 - CAPEX, Depreciation and Amortization, R&D Expenses, Number of employees - (Billion Yen, Persons) FY2023 FY2024 FY2023 FY2024 Q1 Actual Q1 Actual Change Actual FCST Chg. Vs. FY23 CAPEX 25.9 33.9 + 8.0 133.7 125.0 - 8.7 Depreciation and amortization 19.7 21.1 + 1.3 80.9 102.0 + 21.1 R & D

  41. Slide 41: Appendix – Orders received by quarter

    Appendix 4 - Others - ⚫ Order received by quarter（billion yen) FY2022 FY2023 FY2 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Aerospace Systems 60.4 65.1 75.1 144.7 118.7 74.4 139.2 360.0 88.2 Aerospace 45.9 46.4 48.0 113.4 104.4 98.0 108.0 246.3 54.3 Aero Engine 14.4 18.7 27.0 31.3 14.2 -23.6 31.2 113.7 33.9 Rolling

  42. Slide 42: Appendix – Orders received and Revenue for Ministry of Defense

    Appendix 4 - Others - ⚫ Orders received and Revenue for Ministry of Defense（Billion Yen） FY2023 FY2024 FY2023 FY2024 Forecast Q1Actual Q1Actual Change Actual Old FCST New FCST Chg.Vs. FY'23 Chg.Vs. Old FCST Orders Received 89.3 24.8 - 64.5 553.0 589.0 651.5 + 98.5 + 62.5 Aircrafts and others 61.4 13

  43. Slide 43: Appendix – Order Backlog and Revenue by Region

    Appendix 4 - Others - ⚫ Order Backlog （billion yen) ⚫ Order Backlog in Ship & Offshore (billion yen) FY23 Q1 FY24 Q1 220.4 End of Q1 End of Q4 Actual Actual Change 191.6 184.5 Aerospace Systems 709.2 1,027.7 + 318.5 179.4 174.6 164.1 Rolling Stock 543.4 476.2 - 67.1 101.6 136.4 120.7 Energy Solution

  44. Slide 44: Appendix – Foreign currency amounts, exchange rates, ROIC

    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 FY2023 FY2024 Q1Actual Q1Actual Q2-4 FCST FY2023 actual 157.09 Aerospace Systems 0.15 ※2 0.16 0.52 FY2024 Q1 actual 166.8

  45. Slide 45: © Kawasaki Heavy Industries, Ltd. All Rights Reserved

    © Kawasaki Heavy Industries, Ltd. All Rights Reserved

Kawasaki Heavy Industrial — Q1 2024 Earnings Presentation on 6ix