Sumitomo Heavy Industries, Ltd. · TSE:6302

Sumitomo Heavy Industries — Q2 2023 Earnings Presentation

50 slides from Sumitomo Heavy Industries's earnings presentation, Aug 7, 2023

Slide 1: Financial Summary for Q2 FY2023 and Projections for FY2023
Financial Summary for Q2 FY2023 and Projections for FY2023 2023/8/7 President Shinji Shimomura Copyright © Sumitomo Heavy Industries, Ltd. All Rights Reserved. 1
Slide 2: INDEX
2023/8/7 INDEX 01 Financial Summary for Q2 FY2023 02 Performance Forecast for FY2023 03 Topics 04 Sustainability 05 Direction of the next Medium-Term Management Plan Copyright © Sumitomo Heavy Industries, Ltd. All Rights Reserved. 2
Slide 4: Change in Fiscal Year End of FY2022
2023/8/7 01 Change in Fiscal Year End of FY 2022 (Financial Year End) 2023 January to March April to June July to September October to December 1Q 2Q 3Q 4Q Domestic 1H of FY2023 2H of FY2023 FY2023 Domestic 12 months 1Q 2Q 3Q 4Q Overseas 1H of FY2023 2H of FY2023 FY2023 Overseas 12 months 2022（Befor
Slide 5: Financial Summary for FY2023-2Q
2023/8/7 01 Financial Summary for FY2023-2Q Orders：JPY512.7billion / 581.0billion (68.3)billion Actual FY2023-2Q Net sales：JPY510.1billion / 478.4billion 31.7billion /Same period of previous fiscal year (after adjustment), (change) Operating profit：JPY30.7billion / 29.9billion 0.7billion - Orders: T
Slide 6: Financial Summary for FY2023-2Q
2023/8/7 01 Financial Summary for FY2023-2Q FY2022 FY2023 Change (After adjustment) (After adjustment) (1H FY2023 - Actual 1Q Actual 2Q Actual Actual Actual 1H Actual 1H 1H FY 2022) (Jan-Mar) (Apr-Jun) Unit: JPY billion 1Q (Jan-Mar) 2Q (Apr-Jun) Orders 281.6 299.4 581.0 260.0 252.7 512.7 (68.3) Net
Slide 7: Performance by Segment for FY2023-2Q
2023/8/7 01 Performance by Segment for FY2023-2Q Orders Net sales Operating profit 1H FY2022 1H FY2023 1H FY2022 1H FY2022 (After adjustment) 1H FY2023 1H FY2023 Actual Actual (After adjustment) Change (After adjustment) Change Change Actual Actual Actual Actual /Operating profit /Operating profit r
Slide 8: Analysis of Changes in Operating Profit for 2023-2Q
2023/8/7 01 Analysis of Changes in Operating Profit for 2023-2Q Unit: JPY billion Effect of sales Effect of Selling & Others increases/decreases exchange rates administrative expenses <Effect of changes in sales by segment> Unit: JPY billion <Selling & administrative expenses> - Costs related to per
Slide 9: Consolidated Balance Sheet
2023/8/7 01 Consolidated Balance Sheet ■ Inventory assets: Increased due to longer lead times ■ Net assets: Retained earnings increased by JPY17.1 billion. caused by an increase in order backlog and a delay in Foreign currency translation adjustments increased by procurement of parts. JPY25.4 billio
Slide 10: Consolidated Cash Flows Statement
2023/8/7 01 Consolidated Cash Flows Statement Unit: JPY billion Item 1H FY2023 ■Cash flows from operating activities: Operating Activities 20.9 Inventories increased although notes and accounts Profit before income taxes 32.6 receivable decreased. Depreciation & amortization 17.5 ■Cash flows from in
Slide 12: Performance Forecast for FY2023
2023/8/7 02 Performance Forecast for FY2023 Orders ：JPY1,055.0 billion /1,080.0 billion (25.0) billion Forecast FY2023 /Previous forecast (as of Net sales：JPY1,075.0 billion /1,050.0 billion 25.0 billion February 2023), (change) Operating profit：JPY64.0 billion /64.0 billion - - Orders: The North Am
Slide 13: Performance Forecast for FY2023
2023/8/7 02 Performance Forecast for FY2023 (Reference) Forecast FY2023 1H FY2022 1H FY2023 Actual FY2022 Forecast FY2023 Actual Actual (2022.1-2022.12) (As of February 2023) (As of August 2023) Unit: JPY billion (2022.1-2022.6) (2023.1-2023.6) (2023.1-2023.12) (2023.1-2023.12) Orders 581.0 512.7 1,
Slide 14: Analysis of Changes in Operating Profit for FY2022/2023
2023/8/7 02 Analysis of Changes in Operating Profit for FY2022/2023 Unit: JPY billion Actual Effect of changes Effect of Selling & Others FY2022 (12 mos.) in sales exchange rates administrative expenses <Selling & administrative expenses> <Effect of sales increases by segment> Unit: JPY billion With
Slide 15: Performance Forecast by Segment for FY2023
2023/8/7 02 Performance Forecast by Segment for FY2023 Orders Net sales Operating profit (Reference) (Reference) (Ref.) Forecast Forecast Forecast Forecast Actual Forecast Forecast FY2023 FY2023 Actual FY2023 Actual FY2023 1H FY2023 FY2023 FY2023 (As of February 2023) (As of August 2023) 1H FY2023 (
Slide 16: Mechatronics
2023/8/7 02 Mechatronics 1H FY2023: Orders decreased because demand for gear reducers and motors was sluggish due to inventory adjustment by customers in the US and Europe and a downturn in the Chinese market. Sales and operating profit increased because of a backlog of orders. FY2023 : Orders will
Slide 17: Mechatronics
2023/8/7 02 Mechatronics Orders Net sales Operating profit (left scale) Unit: JPY billion Profit ratio (right scale) <Reference> Gear reducers Sales contribution ratio by model (approximate numbers) For use in Gear motor Gear box Electric precision Service Total (middle size) (large size) equipment
Slide 18: Industrial Machinery
2023/8/7 02 Industrial Machinery <Plastics machinery> 1H FY2023 : Orders decreased due to sluggish demand for electric and electronic products in China and investment cooling in Japan and Europe. Sales increased because of a backlog of orders but operating profit decreased due to a continuous increa
Slide 19: Industrial Machinery
2023/8/7 02 Industrial Machinery Orders Net sales Operating profit (left scale) Unit: JPY billion Profit ratio (right scale) <Reference> - Sales mix of injection molding machines by segment (approximate numbers) - Business performance for semiconductor production equipment (ion implanters) (approxim
Slide 20: Logistics & Construction
2023/8/7 02 Logistics & Construction <Hydraulic excavators> 1H FY2023: Orders decrease due to a reactionary drop from advanced orders in North America, but sales and operating profit increased because there was a backlog of orders. FY2023 : Orders will decrease due to a reactionary drop from advance
Slide 21: Logistics & Construction
2023/8/7 02 Logistics & Construction Orders Net sales Operating profit (left scale) Unit: JPY billion Profit ratio (right scale) <Reference> - Industrial cranes: order mix by segment (approximate numbers) - Hydraulic excavators: demand by region/changes in sales (approximate numbers) Electricity Ste
Slide 22: Energy & Lifeline
2023/8/7 02 Energy & Lifeline 1H FY2023: For the energy plant business, orders, sales and operating profit all decreased due to a reduction in large-scale projects for biomass-fueled power generation plants in Japan. For other businesses, orders, sales and operating profit decreased partly because t
Slide 23: Energy & Lifeline
2023/8/7 02 Energy & Lifeline Orders Net sales Operating profit (left scale) Unit: JPY billion Profit ratio (right scale) Copyright © Sumitomo Heavy Industries, Ltd. All Rights Reserved. 23
Slide 25: Topics [1] Automotive Body Frame Production System: STAF
2023/8/7 03 Topics [1] <Automotive Body Frame Production System: STAF> 1. Features of Steel Tube Air Forming (STAF) - This system performs forming through “electrical heating → high-pressure air injection → forming → quenching” processes with a steel pipe being set in a mold of a press machine. - Th
Slide 26: Topics [2] Acceleration of Development in the Nuclear Medicine field
2023/8/7 03 Topics [2] <Acceleration of Development in the Nuclear Medicine field> 1. Overview - Investment has been made in Alpha Fusion Inc., which works to develop radiopharmaceuticals for targeted Alpha therapy in nuclear medicine and proceeds towards the practical use of Astatine-211. - SHI has
Slide 28: Sustainability
2023/8/7 04 Sustainability Results for the first half of FY2023 Issue - Started discussion on the purpose of the Group - Continue unfettered discussion internally Overall - Selected as a constituent of the ESG investment index “FTSE Blossom Japan” adopted by - Accelerate sustainability initiatives a
Slide 29: Construction of a New Technology Research Center
2023/8/7 04 <E (Environment) & S (Social): Construction of a New Technology Research Center> 1. Features of the New Technology Research Center ■ Its concept is “space for innovation” - Promote research & development mainly in the fields of automation digitalization and environmental energy. - Establ
Slide 30: Full-fledged Implementation of Human Rights Due Diligence
2023/8/7 <S (Social): Full-fledged Implementation of Human Rights Due Diligence 04 (Overview of a Survey of Foreign Technical Intern Trainees)> 1. Survey on work environments of foreign technical intern trainees Item Details Sites 5 sites in Japan: Chiba Works, Nagoya Works (3 business units), Ehime
Slide 31: Taking into Account the Board of Directors' Effectiveness Assessment Results
2023/8/7 04 <G (Governance): Taking into Account the Board of Directors’ Effectiveness Assessment Results> Toward further enhancement of governance Issue 1: Strengthening the supervisory function of the Board of Directors → To strengthen the supervisory function of the Board of Directors, issues suc
Slide 33: Concept of long-term policy
2023/8/7 05 The Next Medium-Term Management Plan; Positioning of the Fiscal Year 2030 2021~23 2024~26 2027~29 2030 Enhance corporate value in a sustainable manner by solving social issues through products and services Build a business portfolio to solve social issues Bring the ideal Lay the foundati
Slide 34: Target Values for FY2030
2023/8/7 05 Target Values for FY2030 Financial targets Non-financial targets Material issues of Financial Operating profit: JPY130.0 billion sustainability targets for FY2030 ROIC: 10% or more Ｅ Reduce environmental Burden While strengthening the revenue bases for the existing businesses, achieve gr
Slide 35: Our ROIC Management
2023/8/7 05 Our ROIC Management - In the Medium-Term Management Plan C21 for FY1999 to FY2001, the rate of return on invested capital (ROIC) was introduced as a management indicator to promote management with a greater focus on the balance sheet. “Achieving profitability that continuously surpasses
Slide 36: ROIC and Operating Profit Targets
2023/8/7 05 ROIC and Operating Profit Targets - In and after the Medium-Term Management Plan 2016, we achieved topline growth by making active investments (equipment, M&A and R&D). However, we recognize that growth in profitability has not been sufficient taking into consideration the speed of incre
Slide 37: ROIC by Segment
2023/8/7 05 ROIC by Segment - Our goal is to ensure that by FY2030 the company-wide ROIC surpasses the WACC level desired by the market with a sufficient spread being secured and ROIC surpasses WACC in every segment. In doing so, we will strive to improve corporate value. - In the next Medium-Term M
Slide 38: Assessment of Current Situation and Improvement Measures to Increase the ROIC
2023/8/7 05 Assessment of Current Situation and Improvement Measures to Increase the ROIC Assessment of current situation Improvement measures [Key investment areas] Mechatro - Achievement of topline growth - Increase synergy within a segment - Semiconductor field - Stacking up of balance of orders
Slide 39: Business Portfolio: Roles and Direction by Segment
2023/8/7 05 Business Portfolio: Roles and Direction by Segment Operating ROIC Segment Role/Positioning profit target target Direction to pursue Key investment area for 2030 For 2030 - Active investment in the electric equipment control business in - Robotics/automation JPY35.0 to Europe Mechatronics
Slide 40: Key Investment Areas (Robotics and Automation Fields)
2023/8/7 05 Key Investment Areas and the Company’s Direction (Robotics and Automation Fields) Social issues Key investment area Core products Mechatronics Automation Electrification Control components and device Electric control equipment Improvement of customer Smart factory systems that operate va
Slide 41: Key Investment Areas (Semiconductor Field)
2023/8/7 05 Key Investment Areas and the Company’s Direction (Semiconductor Field) Social issues Key investment area Core products Mechatronics Automation Production equipment including Front-end devices and equipment for semiconductors High-speed/high- Improvement of capacity communication new mode
Slide 42: Key Investment Areas (Advanced Medical Equipment Field)
2023/8/7 05 Key Investment Areas and the Company’s Direction (Advanced Medical Equipment Field) Social issues Key investment area Core products Industrial Machinery Improvement of Positron Emission Tomography equipment Automation New rollout of advanced medical customer labor equipment, internal the
Slide 43: Key Investment Areas (Environment/Energy Fields)
2023/8/7 05 Key Investment Areas and the Company’s Direction (Environment/Energy Fields) Social issues Key investment area Core products Energy & Lifeline Improvement of Automation Commercialization of new energy Energy-related plants customer labor technologies and energy productivity and High-spee
Slide 44: Business Portfolio: Reformation Promotion
2023/8/7 05 Business Portfolio: Reformation Promotion (Positioning of Businesses) - Drive the growth of the Company as a whole by utilizing core technologies, such as Mechatronics and advanced precision equipment. - From the long-term perspective, continue investment in areas related to renewable en
Slide 46: Changes in Financial Values (Consolidated)
2023/8/7 Ref. Changes in Financial Values (Consolidated) Orders Net sales Operating profit (left scale) Profit ratio (right scale) Unit: JPY billion Copyright © Sumitomo Heavy Industries, Ltd. All Rights Reserved. 46
Slide 47: Segment Breakdown and Semiconductor-Related Sales
2023/8/7 Segment Breakdown (Plastics Machinery and Hydraulic Excavators) Ref. Sales of the Semiconductor-Related Product Business Unit: JPY billion Plastics machinery Hydraulic excavators Orders Net sales Orders Net sales Total sales from semiconductor related Products for semiconductor production t
Slide 48: Capital Investment, Depreciation, R&D, Personnel, Forex Sensitivity
2023/8/7 Ref. Capital Investment, Depreciation Cost, Research & Development Cost, Personnel, Forex Sensitivity Unit: JPY billion Capital investment* *Actuals are based on cash flow. Depreciation & amortization Research & *Actuals are based Forecast is based on budget. on P/L. Forecast is development
Slide 49: Sales by Regional Segment
2023/8/7 Ref. Sales by Regional Segment Actual 1H FY2023 (2023.1-2023.6) <Exchange rate: JPY136 per US dollar> North America Europe Asia China Others Overseas total Japan Total sales Unit: JPY billion (Excluding China) Mechatronics 21.3 27.4 9.5 8.0 8.0 74.2 32.7 106.9 (plastics machinery) 5.8 14.6
Slide 50: Forward-looking statements
2023/8/7 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

Sumitomo Heavy Industries — Q2 2023 Earnings Presentation on 6ix

Sumitomo Heavy Industries — Q2 2023 Earnings Presentation

Slide 1: Financial Summary for Q2 FY2023 and Projections for FY2023

Slide 2: INDEX

Slide 3: Financial Summary for Q2 FY2023

Slide 4: Change in Fiscal Year End of FY2022

Slide 5: Financial Summary for FY2023-2Q

Slide 6: Financial Summary for FY2023-2Q

Slide 7: Performance by Segment for FY2023-2Q

Slide 8: Analysis of Changes in Operating Profit for 2023-2Q

Slide 9: Consolidated Balance Sheet

Slide 10: Consolidated Cash Flows Statement

Slide 11: Performance Forecast for FY2023

Slide 12: Performance Forecast for FY2023

Slide 13: Performance Forecast for FY2023

Slide 14: Analysis of Changes in Operating Profit for FY2022/2023

Slide 15: Performance Forecast by Segment for FY2023

Slide 16: Mechatronics

Slide 17: Mechatronics

Slide 18: Industrial Machinery

Slide 19: Industrial Machinery

Slide 20: Logistics & Construction

Slide 21: Logistics & Construction

Slide 22: Energy & Lifeline

Slide 23: Energy & Lifeline

Slide 24: Topics

Slide 25: Topics [1] Automotive Body Frame Production System: STAF

Slide 26: Topics [2] Acceleration of Development in the Nuclear Medicine field

Slide 27: Sustainability

Slide 28: Sustainability

Slide 29: Construction of a New Technology Research Center

Slide 30: Full-fledged Implementation of Human Rights Due Diligence

Slide 31: Taking into Account the Board of Directors' Effectiveness Assessment Results

Slide 32: Direction of the next Medium-Term Management Plan

Slide 33: Concept of long-term policy

Slide 34: Target Values for FY2030

Slide 35: Our ROIC Management

Slide 36: ROIC and Operating Profit Targets

Slide 37: ROIC by Segment

Slide 38: Assessment of Current Situation and Improvement Measures to Increase the ROIC

Slide 39: Business Portfolio: Roles and Direction by Segment

Slide 40: Key Investment Areas (Robotics and Automation Fields)

Slide 41: Key Investment Areas (Semiconductor Field)

Slide 42: Key Investment Areas (Advanced Medical Equipment Field)

Slide 43: Key Investment Areas (Environment/Energy Fields)

Slide 44: Business Portfolio: Reformation Promotion

Slide 45: Reference Materials

Slide 46: Changes in Financial Values (Consolidated)

Slide 47: Segment Breakdown and Semiconductor-Related Sales

Slide 48: Capital Investment, Depreciation, R&D, Personnel, Forex Sensitivity

Slide 49: Sales by Regional Segment

Slide 50: Forward-looking statements