Kawasaki Heavy Industries Ltd. · TSE:7012
Kawasaki Heavy Industries — Kawasaki Heavy Industrial — FY2020 Earnings Presentation
49 slides from Kawasaki Heavy Industries's earnings presentation, May 12, 2021
Slide 1: Financial Results for FY2020
Financial Results for FY2020 For the Year ended March 31, 2021 0 May 11, 2021 © Kawasaki Heavy Industries, Ltd. All Rights Reserved
Slide 2: Table of Contents
0 Table of Contents 1 Consolidated Results for FY2020 3 Details by segment Summary 3 Aerospace Systems 15 Segment 4 Energy System & Plant Engineering 19 Income Statement 5 Precision Machinery & Robot 23 Details of Change in Profit 7 Ship & Offshore Structure 27 Balance Sheet 9 Rolling Stock 31 Cash
Slide 3: Consolidated Results for FY2020 – Summary
Consolidated Results for FY2020 1 –Summary- Sales and income decreased significantly due to the impact of COVID-19 Net income decreased due to impairment loss and other factors (Billion Yen) Net Sales (billion yen) FY2020 Change vs. FY2019 1,574 1,595 1,641 FCST in Mar. Actual FY2019 FCST in Mar. 1,
Slide 4: Consolidated Results for FY2020 – Segment
Consolidated Results for FY2020 1 –Segment- Sales and income decreased significantly in Aerospace Systems, which used to contribute most ① Income increased significantly in Motorcycle & Engine due to an increased sales of off-road models in North America and reductions of fixed costs ② (Billion Yen)
Slide 5: Income Statement
1 Consolidated Results for FY2020 –Income Statement- (Billion Yen) Details FY2019 FY2020 Change % % Net Sales 1,641.3 100.0 1,488.4 100.0 - 152.8 ① Reduction of hydrogen related costs (¥5.8bn) Cost of sales 1,370.8 83.5 1,297.3 87.2 - 73.4 Gross profit 270.5 16.5 191.1 12.8 - 79.3 ② Reduction of sal
Slide 6: Income Statement
1 Consolidated Results for FY2020 –Income Statement- (Billion Yen) Details FY2019 FY2020 Change % % Recurring Profit (Loss) 40.4 2.5 - 2.8 - 0.2 - 43.2 ⑦ Sale of former dormitory /company housing sites Extraordinary Income / Losses - 1.1 - 11.8 - 10.7 Gain on sales of fixed assets 1.2 7 3.2 + 1.9 ⑧
Slide 7: Details of change in profit
Consolidated Results for FY2020 1 –Details of change in profit- Reduction of SG&A expenses covered some of the impact of COVID-19 The impact of COVID-19 primarily affected Aerospace System(70% of ¥54.2bn) FY2019 FY2020 Operating - ¥67.3 billion yen Operating Income Loss Impact of COVID-19※ Effects o
Slide 8: Details of change in profit
Consolidated Results for FY2020 1 –Details of change in profit- (Billion Yen) FY2019 Details of change FY2020 Operating Change in Change in Operating Income Impact of Effects of Change Income product mix and SG & A Total (Loss) COVID-19※ FX rates※ in sales※ other factors※ expenses (Loss) Aerospace S
Slide 9: Balance Sheet
1 Consolidated Results for FY2020 –Balance Sheet- (Billion Yen) End of End of Details Change Mar. 2020 % Mar. 2021 % 1 Cash and deposits 106.1 126.7 + 20.5 ① Preparation for unforeseen Trade receivables 2 events due to COVID-19 473.2 460.4 - 12.7 Inventory 3 631.6 658.5 + 26.8 Other current assets ②
Slide 10: Balance Sheet
1 Consolidated Results for FY2020 –Balance Sheet- (Billion Yen) End of End of Details Change Mar. 2020 % Mar. 2021 % 1 Trade payables 371.6 355.1 - 16.5 ① Due to a decrease in sales Interest-bearing debt 2 567.4 593.3 + 25.8 Advances received 148.6 153.2 + 4.6 ② Preparation for unforeseen events due
Slide 11: Cash Flows
1 Consolidated Results for FY2020 –Cash Flows- (Billion Yen) Details FY2019 FY2020 Change Income before income taxes 39.3 - 14.6 - 54.0 ① FY’19 Depreciation and amortization 61.2 61.2 - 0.0 Deteriorated after the liquidation of receivables Increase and decrease in working capital - 120.9 - 15.8 + 10
Slide 12: Cash Flows
1 Consolidated Results for FY2020 –Cash Flows- Cash flow from operating activities deteriorated due to increase of working capital (Business expansion did not sufficiently contribute to net income) One of the reasons is expansion of jet engine business, which requires a long payback period CF from o
Slide 13: Earnings Forecasts for FY2021 – Summary
Earnings Forecasts for FY2021 2 -Summary- Significant increase in orders, sales and profits are expected due to mitigating of the impact of COVID-19 Impairment loss on fixed assets to be acquired in Sakaide Works is recorded under extraordinary profit and loss (Billion Yen) Negative impact of approx
Slide 14: Forecasts for FY2021 – Segment
2 Forecasts for FY2021 -Segment- Aerospace Systems will improve profitability, but the situation will remain difficult ① Motorcycle & Engine will enjoy increase of both sales and profits due to the recovery in demand for motorcycles and the continued demand for off-road models in the North America ②
Slide 15: Aerospace Systems
3 Details by Segment -Aerospace systems- FY2020（vs. FY2019） Orders Decreased due to a decrease in component parts for commercial aircrafts and component parts for commercial received aircraft jet engines, despite an increase in aircrafts for MOD Net Sales Decreased due to a decrease in aircrafts for
Slide 16: Aerospace Systems
3 Details by Segment -Aerospace systems- (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. Vs. FY19 Chg. Vs. FCST Forecast Chg. Vs. FY20 Orders Received 414.9 330.0 329.5 - 85.4 - 0.5 310.0 - 19.5 Aerospace 244.5 230.0 236.2 - 8.3 + 6.2 240.0 + 3.8 Aero Engine 170.4 100.0 93.3 - 77.
Slide 17: Aerospace Systems
3 Details by Segment -Aerospace systems- Net Sales (billion yen) 161.1 Aerospace Aero Engines 135.8 126.6 128.7 122.2 117.9 122.1 120.5 114.7 105.9 104.9 105.2 109.3 99.7 93.9 74.6 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 Operating Income (billion yen) 13.8% 9.5% 1
Slide 18: Aerospace Systems
3 Details by Segment -Aerospace systems- Market Overview Specific Efforts Commercial aircraft business Securing stable revenue in core business – Global passenger demand remained weak – Cost reductions in existing orders of aircrafts for Boeing and commercial aircrafts jet engines due to the imp
Slide 19: Energy System & Plant Engineering
3 Details by Segment - Energy System & Plant Engineering - FY2020（vs. FY2019） Orders Decreased compared with FY2019, when orders were received for major repair work on domestic municipal received waste incineration plants Net Sales Decreased compared with FY2019, when overseas sales of chemical plan
Slide 20: Energy System & Plant Engineering
3 Details by Segment - Energy System & Plant Engineering - (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. vs FY19 Chg. vs FCST Forecast Chg. vs FY20 Orders Received 252.3 220.0 219.0 - 33.3 - 1.0 - - Net Sales 242.9 240.0 240.1 - 2.8 + 0.1 - - Operating Income 17.5 13.0 13.4 - 4.
Slide 21: Energy System & Plant Engineering
3 Details by Segment - Energy System & Plant Engineering - Net Sales (billion yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 Operating Income 11.9% (billion yen) 8.4% 8.3% 7.7% 5.9% 5.6% 5.8% 5.1% 3.9% 3.7% 3.5% 3.1% 1.8% 1.3% 0.4% - 0.9% © © Kawasaki Kawasaki Heavy
Slide 22: Energy System & Plant Engineering
3 Details by Segment - Energy System & Plant Engineering - Market Overview Specific Efforts Domestic See page 42 for the new segment – Demand for major repair work on “Energy solutions and Marine Engineering” municipal waste incineration plants is expected to continue Emerging countries – Demand
Slide 23: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - FY2020（vs. FY2019） Orders Increased due to an increase in hydraulic components for construction machinery, robots for semiconductor received manufacturing equipment, and robots for automobile body assembly Net Sales Same as above Operating Increas
Slide 24: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. vs FY19 Chg. vs FCST Forecast Chg. vs FY20 Orders Received 218.8 230.0 259.4 + 40.5 + 29.4 260.0 + 0.6 Hydraulic 145.9 155.0 172.6 + 26.7 + 17.6 165.0 - 7.6 Components & Systems Ro
Slide 25: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - Net Sales (billion yen) Hydraulic Components & Systems 86.6 Robotics 67.8 70.3 62.6 54.1 53.6 55.2 52.1 49.8 49.3 47.9 48.3 48.8 45.1 45.4 41.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 11.5% 10.9% 10.9% 9.9% 10.1
Slide 26: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - Market Overview Specific Efforts Construction machinery Developing electrification and automation – Demand is increasing in Chinese market, technology for construction machinery which has recovered rapidly from the impact – Development and sup
Slide 27: Ship & Offshore Structure
3 Details by Segment - Ship & Offshore Structure - FY2020（vs. FY2019） Orders Increased due to orders received for a submarine for MOD and other factors（orders for 4 LPG carriers in ‘FY19 and 4 in FY’20) received Net Sales Increased due to an increase in a construction works of submarine for MOD and
Slide 28: Ship & Offshore Structure
3 Details by Segment - Ship & Offshore Structure - (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. vs FY19 Chg. vs FCST Forecast Chg. vs FY20 Orders Received 56.2 100.0 98.1 + 41.8 - 1.9 - - Net Sales 71.6 80.0 79.4 + 7.7 - 0.6 - - Operating Income (Loss) - 0.6 - 3.5 - 3.0 - 2.4 +
Slide 29: Ship & Offshore Structure
3 Details by Segment - Ship & Offshore Structure - Net Sales (billion yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 Operating Income 6.4% 6.1% 4.3% (billion yen) 3.3% 2.1% 0.8% - 0.3% - 1.7% - 1.9% - 0.0% - 9.2% - 7.5% - 6.1% - 9.3% - 10.7% - 14.5% © © Kawasaki Kaw
Slide 30: Ship & Offshore Structure
3 Details by Segment - Ship & Offshore Structure - Market Overview Specific Efforts Submarines & governmental ships See page 42 for the new segment – Stable orders are expected “Energy solutions and Marine Engineering” – Regular repairs will increase due to the extension of the lifespan Commerci
Slide 31: Rolling Stock
3 Details by Segment - Rolling Stock - FY2020（vs. FY2019） Orders received Decreased compared with FY2019, when major orders in domestic were received Net Sales Decreased due to a decrease in passenger cars for U.S. Operating income Deteriorated due to a decrease in profit from overseas projects by t
Slide 32: Rolling Stock
3 Details by Segment - Rolling Stock - (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. Vs. FY19 Chg. Vs. FCST Forecast Chg. Vs. FY20 Orders Received 125.7 70.0 77.0 - 48.7 + 7.0 70.0 - 7.0 Domestic & Asia 119.9 61.5 66.2 - 53.7 + 4.7 67.0 + 0.8 North America 5.8 8.5 10.8 + 5.0 + 2
Slide 33: Rolling Stock
3 Details by Segment - Rolling Stock - Net Sales (billion yen) Domestic & Asia North America 41.9 40.6 38.6 38.8 38.1 39.0 36.1 36.8 34.5 32.3 32.3 31.7 29.1 23.3 22.0 20.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 9.1% 5.9% 3.1% 3.4% 0.0% - 1.7% - 2.1% - 3.2% - 3.5
Slide 34: Rolling Stock
3 Details by Segment - Rolling Stock - Market Overview Specific Efforts Compliance with delivery schedules for The impact of COVID-19 overseas projects – Review of railway related investment in – Milestones of major projects domestic, delaying project schedule and Delivery of the first train to
Slide 35: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - FY2020（vs. FY2019） Net Sales Remained at the same level due to a decrease in motorcycles for the Southeast Asia, the impact of strong yen and other factors, despite an increase in off-road vehicles for North America Operating Increased due to reductions o
Slide 36: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. Vs. FY19 Chg. Vs. FCST Forecast Chg. Vs. FY20 Net Sales 337.7 330.0 336.6 - 1.0 + 6.6 380.0 + 43.4 Motorcycles for developed contries 123.0 - 114.2 - 8.7 - 137.0 + 22.8 Motorcycles for eme
Slide 37: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - Net Sales (billion yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 Operating Income (billion yen) 10.3% 11.0% 8.8% 6.7% 8.2% 5.6% 1.8% 2.3% 0.9% - 4.9% - 0.6% - 1.3% - 4.4% - 1.9% - 4.1% - 10.0% © © Kawasaki Kawasaki Heavy
Slide 38: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - Market Overview Specific Efforts U.S. Strict control of fixed costs to slimming down – Retail market exceeds the level of the – Maintaining the level of fixed cost ratio reduced in previous year due to rising demand for off- FY 2020 while considering
Slide 39: Energy Solution & Marine Engineering
Details by Segment 3 - Energy Solution & Marine Engineering - FY2020（vs. FY2019） See page 19 for the former segment “Energy System & Plant Engineering ” and page 27 for “Ship & Offshore Structure” FY2021（vs.FY2020） Orders received Increased due to an increase in domestic municipal waste incineration
Slide 40: Energy Solution & Marine Engineering
3 Details by Segment - Energy Solution & Marine Engineering - (Billion Yen) FY2019 FY2020 FY2021 Actual FCST in Feb. Actual Chg. Vs. FY19 Chg. Vs. FCST Forecast Chg. Vs. FY20 Orders Received 308.6 320.0 317.1 + 8.5 - 2.9 400.0 + 82.9 Energy System 252.3 220.0 219.0 - 33.3 - 1.0 335.0 + 116.0 & Plant
Slide 41: Energy Solution & Marine Engineering
3 Details by Segment - Energy Solution & Marine Engineering - Net Sales (billion yen) Energy System & Plant Engineering 112.0 100.1 103.8 99.3 84.2 88.2 82.5 77.7 73.2 73.0 70.5 72.2 70.5 72.8 67.9 64.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2017 FY2018 FY2019 FY2020 Operating Income 10.4
Slide 42: Energy Solution & Marine Engineering
3 Details by Segment - Energy Solution & Marine Engineering - Market Overview Specific Efforts Focus on sales activities to recover orders See page 22 for the former segment “Energy System & Plant Engineering ” – Aiming to steadily take in new projects that have been temporarily frozen due to the
Slide 43: Shareholder Return
4 Shareholder Return Dividend Policy Dividend for FY2020 The medium- to long-term consolidated dividend No year-end dividend for the FY2020 is decided in sight of the severe business conditions, in which net income attributable to payout ratio for net income attributable to owners owners of the pare
Slide 44: Project Topics
4 Project Topics Progress of the hydrogen related projects January, 2021 Conducted berthing test at the pier of the liquefied hydrogen carrier "SUISO FRONTIER“ Commenced operations of a brown coal gasification and hydrogen refining facility and a hydrogen liquefaction and loading station in Victoria
Slide 45: Project Topics
4 Project Topics Automated PCR viral testing service Started nation’s first automated PCR viral testing service using a robot system at Fujita Health University (in Aichi prefecture) in March, 2021 Started joint research project together with Kyoto University Hospital and Sysmex Corporation, to
Slide 46: ESG Topics
4 ESG Topics To create Social Value through our Businesses March, 2021 The Swappable Battery Consortium for Electric Motorcycles, established by 4 major motorcycle manufactures (including Kawasaki), has reached an agreement to standardize swappable batteries and replacement systems, allowing battery
Slide 47: CAPEX, Depreciation and Amortization
Appendix 4 - CAPEX, Depreciation and Amortization - (Billion Yen, Persons) FY2019 FY2020 FY2021 Actual Actual Chg. Vs. FY19 Actual Chg. Vs. FY20 CAPEX 70.4 55.6 - 14.8 56.0 + 0.4 Depreciation and amortization 61.2 61.2 - 0.0 63.5 + 2.3 R & D expenses 52.6 44.9 - 7.6 49.5 + 4.6 Number of Employees 36
Slide 48: Appendix - Others
Appendix 4 - Others - Order Backlog Net Sales in Foreign Currencies by Segment (USD) (billion yen) (billion USD) FY2019 FY2020 FY2019 FY2020 FY2021 Actual Actual Change Actual Actual Forecast Aerospace Systems 576.0 527.8 - 48.1 Aerospace Systems 1.01 0.68 0.83 Energy System & Plant Engineering
Slide 49: © Kawasaki Heavy Industries, Ltd. All Rights Reserved
© Kawasaki Heavy Industries, Ltd. All Rights Reserved
Kawasaki Heavy Industrial — FY2020 Earnings Presentation on 6ix