JTEKT Corporation · TSE:6473
JTEKT — H1 FY2014 Earnings Presentation
67 slides from JTEKT's earnings presentation, Nov 13, 2014
Slide 1: First-Half Results for Fiscal Year Ending March 2015
1 First-Half Results for Fiscal Year Ending March 2015 November 13, 2014 JTEKT Corporation JTEKT Corporation
Slide 2: Agenda
2 １. First Half Results for Fiscal 2014 2. Forecasts for Fiscal 2014 3. Mid-Term Management Plan JTEKT Corporation
Slide 3: 1-1) Consolidated Performance
3 1-1) Consolidated Performance JTEKT Corporation
Slide 4: 1-2) Quarter Trend
4 1-2） Quarter Trend Operating income rate (100 million yen) Sales Operating income 1US$ 113yen 78yen 82yen 98yen 98yen 99yen 102yen 101yen 103yen 1EUR 160yen 107yen 105yen 128yen 130yen 136yen 139yen 139yen 136yen *1 Quarterly Average to compare with “Before Financial Crisis”. *2 Quarterly Average
Slide 5: 1-3) Operating Income Change Analysis
5 1-3） Operating Income Change Analysis Operating Income +90 (100 million yen) Negative impact △110 Positive impact +200 ＋59 ＋46 ＋52 ＋43 △60 △3 Excludes Exchange Rate Impact First- First- Income Rise in Material Price Cost Increase Sales Growth Improvement Fallin Selling Price Level Rise in Raw Exch
Slide 6: 1-4) Financial Result by Product: Mechanical Components
6 1-4） Financial Result by Product 【Mechanical Components】 Net Sales Quarter Trend Operating Income Quarter Trend JTEKT Corporation
Slide 7: 1-4) Financial Result by Product: Machine Tools
7 1-4） Financial Result by Product 【Machine Tools】 Net Sales Quarter Trend Operating Income Quarter Trend JTEKT Corporation
Slide 8: 1-5) Financial Result by Region: Japan
8 1-5） Financial Result by Region 【Japan】 (100 million yen) Quarter Trend Operating Income Rate Sales Operating Income JTEKT Corporation
Slide 9: 1-5) Financial Result by Region: Europe
9 1-5） Financial Result by Region 【Europe】 (100 million yen) Quarter Trend JTEKT Corporation
Slide 10: 1-5) Financial Result by Region: North America
10 1-5） Financial Result by Region 【North America】 (100 million yen) Quarter Trend JTEKT Corporation
Slide 11: 1-5) Financial Result by Region: Asia/Oceania
11 1-5） Financial Result by Region 【Asia・Oceania】 Quarter Trend (100 million yen) JTEKT Corporation
Slide 12: 1-5) Financial Result by Region: China
12 1-5） Financial Result by Region 【China】 (100 million yen) Quarter Trend JTEKT Corporation
Slide 13: 1-5) Financial Result by Region: Other
13 1-5） Financial Result by Region 【Other】 Quarter Trend (100 million yen) JTEKT Corporation
Slide 14: 1-6) Financial Data
14 1-6） Financial Data Inventories Interest-Bearing Dept (100 million yen) Capital Expenditure Depreciation JTEKT Corporation
Slide 15: Agenda
15 1. First half results for Fiscal 2014 2. Forecast for fiscal 2014 3. Mid-Term Management Plan JTEKT Corporation
Slide 16: 2-1) External Environment
16 2-1） External Environment Sustainable in developed countries ・US Market remains expanding at a moderate pace ・Modest recovery remaining in Europe Market Sluggishness in emerging countries ･Stable growth with uncertainty in China Market ･Weak growth in emerging countries except China Depressed
Slide 17: 2-2) Full Year Forecast
17 2-2） Full Year Forecast ～Revised on Oct. 31～ JTEKT Corporation
Slide 18: 2-3) Operating Income Change Analysis
18 2-3） Operating Income Change Analysis Operating Income +98 (100 million yen) Negative Impact △159 Positive Impact＋257 ＋52 ＋110 △110 ＋95 △46 △3 Excludes Exchange Rate Impact FY2013 FY2014 Income Rise in Cost Increase Fall in Selling Sales Growth Improvement Price Level Exchange (Expected) Foreign
Slide 19: 2-4) Net Sales by Product
19 2-4） Net Sales by Product （100 million yen） JTEKT Corporation
Slide 20: 2-5) Net Sales by Region
20 2-5） Net Sales by Region （100 million yen） JTEKT Corporation
Slide 21: Agenda
21 1. First Half Results for Fiscal 2014 2. Forecasts for Fiscal 2014 3. Mid-Term Management Plan JTEKT Corporation
Slide 22: 3-1) Outline of the Plan - Structure
22 3-1) Outline of the Plan - Structure Establish business and profit foundation robust to environmental changes by enhancing group business tie-up for the realization of JTEKT Group Vision Automotive Machine Tools & Bearings Components Mechatronics business business business 【Enhancement of the div
Slide 23: 3-2) Automotive Components Business Plan (1) - Steering System
23 3-2) Automotive Components business Plan (1) – Steering System Objective Become the all-time global leading supplier with the spirit of “No.1”&“ONLY ONE”, through delivering value to customers Target of FY2018 Maintain the top global share on automotive steering (Steering System) system ・function
Slide 24: 3-2) Automotive Components (2) Efforts in Steering System
24 – Efforts in 3-2) Automotive Components(2) Steering System Actual performance until the 2nd quarter ・Maintained the market share by utilizing the global supply system (No.1 in the world) ・Looking ahead 5 years from now, reinforced product power and constructed and improved the supply system ◆Glob
Slide 25: 3-2) Automotive Components (3) Global R&D Network
25 3-2) Automotive Components(3) Global R&D Network Oobeya working activities and cooperation <Other regions/emerging countries> Sales/ BRAZIL Design Prod. tech./ South America Technical Center Prod. control Procurement/ CHINA Prototyping/Mfg. Technical Center / Technical office ECU engineering (JAS
Slide 26: 3-2) Automotive Components (4) Lower Assist EPS Development
26 3-2) Automotive Components(4) Lower Assist EPS Development Axial force (kN) 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Vehicle segment U A /A B C D E F HPS (hydraulic) HPS C-EPS P-EPS EPS system DP-EPS C-EPS RP-EPS Line-up comparison with competitors JTEKT A B C D E Corp. Corp. Corp. Corp. Corp. HPS (hyd
Slide 27: 3-2) Automotive Components (5) C-EPS
27 3-2) Automotive Components(5) FYI) C-EPS (column type) The world’s first EPS system we put to practical use in 1988 ・ An EPS system for compact cars ・ Highly appreciated by auto manufacturers around the globe because of the interior motor, which eliminates the need for heat resistance and waterpr
Slide 28: 3-2) Automotive Components (6) DP-EPS
28 3-2) Automotive Components(6) FYI) DP-EPS (dual pinion) ・An EPS system for mid-size cars ・Direct feeling due to tire-like assist 【Column: new-standard column】 【Motor/ECU combo】 ・Stable collision property 【Speed reducer】 ・Compact, lightweight ・Less noise and friction & waterproof 【Intermediate sha
Slide 29: 3-2) Automotive Components (7) RP-EPS
29 3-2) Automotive Components(7) FYI) RP-EPS (rack parallel) ・A steering system suitable for mid-size and large cars ・Large output but compactness, lightweight and excellent steering feel 【Motor/ECU combo】 【Column: new-standard ・Compact, lightweight & column】 waterproof ・Stable collision property 【S
Slide 30: 3-2) Automotive Components (8) Construction of supply system: North American market
30 3-2) Automotive Components(8) – Construction of supply system (1) Trend in the North American market EPS prediction of demand in North America market (One million) Submitting:IHS 65% with lower assist EPS ・ Shrinking demand for HPS ・ Fuel consumption regulation accelerates the shift from HPS to l
Slide 31: 3-2) Automotive Components (9) North American steering supply system
31 3-2) Automotive Components(9) – Construction of supply system (2) Construction of North American steering supply system ・Dealing with the changes in product configuration caused by the spread of lower assist EPS ＪＡＴＶ （Tennessee） ＪＡＴM （Tennessee） ●● ＪＡＴＸ （Texas） ● Mexico Gulf of Mexico ● ＪＡＭＸ （SLP
Slide 32: 3-2) Automotive Components Business Plan (10) - Driveline
32 3-2) Automotive Components business Plan (10) - driveline Objective Become the all-time global leading supplier with the spirit of “No.1”&“ONLY ONE”, through delivering value to customers Target of FY2018 (driveline) Be a leading company on torque control devices ・Downsizing/Price reduction/High
Slide 33: 3-2) Automotive Components (11) Efforts in Drive Line
33 3-2) Automotive Components(11) Efforts in Drive Line Actual performance until the 2nd quarter ・ Maintained the top market share in the big markets of ITCC / North America and Japan TORSEN ・ Sales expansion activities in the promising markets of Europe and China ・ Increased revenue of the CVJ busi
Slide 34: 3-2) Automotive Components (12) Efforts in Drive Line
34 3-2) Automotive Components(12) Efforts in Drive Line Customer Increase ◇Developed a system for approach to European and Chinese customers Market ・Started front loading to European customers Development ・Strengthened marketing and benchmark Cost reduced ◇Tadomisaki Plant revenue (Cost index) Reven
Slide 35: 3-3) Bearings Business Plan (1)
35 3-3) Bearings Business Plan (1) Objective Constitutional Improvement and Following with Global Market Growth Policy according to products Markets of focus 製品別方針 (Industrial machine field) 製品別方針 TRB Maintain top position Steel (Tapered roller bearings) Pursue even lower friction Machine tools Expa
Slide 36: 3-3) Bearings Business Plan (2) Efforts
36 3-3) Bearings Business Plan (2) Efforts Actual performance until the 2nd quarter ・Restructured the domestic production system and foreign plants (Europe and China) ・Rebuilt the domestic sales system thru merger with sales subsidiaries ◆Restructured the domestic production system (made Kokubu Plan
Slide 37: 3-3) Bearings (3) Kokubu Plant restructuring overview (1)
37 3-3) Bearings Business Plan (3) Restructuring of Domestic Prod. System “Kokubu Plant restructuring” overview (1) Production line Activities Mid-size and ・ Development of the optimal cost line based on the lot size large Establishment of a system supporting small lots ・ Greater product power thru
Slide 38: 3-3) Bearings (4) Kokubu Plant restructuring overview (2)
38 3-3) Bearings Business Plan (4) Restructuring of Domestic Prod. System “Kokubu Plant restructuring” overview (2) Production line Activities ・Focusing on mid- and large-size ＴＲＢ Expansion of sophisticated products and reduction in machining lead time ・Streamlining and cost optimization thru more Ｈ
Slide 39: 3-3) Bearings (5) Restructuring of Foreign Plants: Europe
39 3-3) Bearings Business Plan (5) Restructuring of Foreign Plants (1) European bearing plants restructuring map Cost reduced (Cost index) KBE 100 ■ 96 KBDE ■ KBVM（MAR工 KBCZ ■■ KBML場） ■ ■ KBVM（VZN factory） KRA KBES ■ ■ 2013 2014 (target) Plant (country) Restructuring/structural reform KBE To be turn
Slide 40: 3-3) Bearings (6) Restructuring of Foreign Plants: China
40 3-3) Bearings Business Plan (6) Restructuring of Foreign Plants (2) Chinese bearing plants restructuring map Cost reduced Dalian (Cost index) KDC KWA index ■ 100 ■ 98 KB ■ ■ KAW Wuxi ■ KNBW 2013 2014 KLF (target) ■ Plant (region) Restructuring Consolidation of miniature and small- KDC (Dalian) di
Slide 41: 3-3) Bearings (7) Product Power Reinforcement
41 3-3) Bearings Business Plan (7) Product Power Reinforcement (1) Examples of product development meeting customer needs Steel ・Large hyper couplings for driving steel Special ・High-corrosion, long-lived bearings (roller guard environment pro bearings) Agricultural ・Tapered roller bearings with hig
Slide 42: 3-3) Bearings (8) Product Power Reinforcement
42 3-3) Bearings Business Plan (8) Product Power Reinforcement Large Size Bearing Engineering Evaluation test machine for the Development Center steel industry Evaluation test machine for the Evaluation test machine for the wind power generation industry rail industry JTEKT Corporation
Slide 43: 3-3) Bearings (9) Product Power Reinforcement
43 3-3) Bearings Business Plan (9) Product Power Reinforcement (2) Examples of product development meeting customer needs (industrial machine bearings) Large hyper couplings for driving steel (torque limiter) ・Developed hyper couplings for large drive shafts to protect the drive system from instanta
Slide 44: 3-3) Bearings (10) Product Power Reinforcement
44 3-3) Bearings Business Plan (10) Product Power Reinforcement (3) Examples of product development meeting customer needs (industrial machine bearings) High-corrosion, long-lived bearings (roller guard pro bearings) ・ Best for transfer rolls in film manufacturing apparatus and other chemical soluti
Slide 45: 3-3) Bearings (11) Product Power Reinforcement
45 3-3) Bearings Business Plan (11) Product Power Reinforcement (4) Examples of product development meeting customer needs (industrial machine bearings) Tapered roller bearings with higher wear resistance (Super Dura bearings) ・ Special surface treatment applied to the roller surface significantly i
Slide 46: 3-3) Bearings (12) Product Power Reinforcement
46 3-3) Bearings Business Plan (12) Product Power Reinforcement (5) Examples of product development meeting customer needs (automotive bearings) For pickup trucks and large SUVs 3rd generation tapered roller hub unit ・ Integration of the inner ring with the axis (the 3rd generation unit) achieves th
Slide 47: 3-3) Bearings (13) Product Power Reinforcement
47 3-3) Bearings Business Plan (13) Product Power Reinforcement (6) Examples of product development meeting customer needs (automotive bearings) For automatic transmission Needle roller bearings for fast-rotating planetaries ・ Multi-stage automatic transmission helps speed up and downsize planetary
Slide 48: 3-3) Bearings (14) Product Power Reinforcement
48 3-3) Bearings Business Plan (14) Product Power Reinforcement (7) Examples of product development meeting customer needs (automotive bearings) For automatic transmission Ultrathin thrust needle roller bearings ・ Rolling of the part usually being the slipping sliding part of automatic transmission
Slide 49: 3-3) Bearings (15) Domestic sales system review
49 3-3) Bearings Business Plan (15) Product Power Reinforcement Reviewing of the domestic sales system (merger with sales subsidiaries) Sales reinforcement in the area (Customer of insufficient sales activities Industrial axis) Dealer machine Target area of JTEKT Industrial Automobile machines Sales
Slide 50: 3-4) Machine Tools & Mechatronics Business Plan (1)
50 3-4) Machine Tools & Mechatronics Business Plan (1) Objective True total production system supplier full of customer reliance 製品別方針 Policy according to products grinder No.1 share in the world by superior precision Precision & processing technology for resistant material cutting/MC developing hig
Slide 51: 3-4) Machine Tools & Mechatronics (2) Efforts
51 3-4) Machine Tools & Mechatronics(2) Efforts Actual performance until the 2nd quarter ◆Remodeling to a new-type machine and sales expansion (A new CNC cylindrical grinding machine and a new function of horizontal type machining centers) ◆Entry into the gear machining market ・Packaging of general-
Slide 52: 3-4) Machine Tools & Mechatronics (3) More sales strength
52 3-4) Machine Tools & Mechatronics(3) More sales strength (1) Independence from specific customers and workpieces ・Launch of new models Machining ・Launch of new models ・Price revision of 4 machining center models ・Rebuilding of the (Giving customers the advantage from the sales network Kariya ReBO
Slide 53: 3-4) Machine Tools & Mechatronics (4) After-sale service
53 3-4) Machine Tools & Mechatronics(4) More sales strength (2) Establishment of an after-sale service business model Collaboration in the Providing the comprehensive after-sale service needed by customers in group collaboration with companies in the group Service technicians in prioritized regions
Slide 54: 3-4) Machine Tools & Mechatronics (5) Expansion of mechatronics sales
54 3-4) Machine Tools & Mechatronics(5) More sales strength (3) Expansion of mechatronics sales Target of sales expansion ①Higher visualization (Andon and movable monitors) <Automobiles> Sales expansion from vehicle to ②Motion development/PLC add-on unit factories technology <Auto parts> ・TOYOPUC-Pl
Slide 55: 3-4) Machine Tools & Mechatronics (7) Launch of new products
55 3-4) Machine Tools & Mechatronics(7) Product Power Reinforcement ・CBN camshaft grinding machine GC20Mi (1) Launch of new products ・Horizontal type machining center FH630SX-i ・Gear skiving machine e500H-GS ・CNC cylindrical grinding machine GL4S III Premium ・CNC cylindrical grinding machine GE4i 【P
Slide 56: 3-4) Machine Tools & Mechatronics (8) Entry into gear machining market
56 3-4) Machine Tools & Mechatronics(8) Product Power Reinforcement (2) Entry into the gear machining market ・ Development of a new gear machining method (skiving technology) ・ Packaging of general-purpose machines and machining technologies (jigs and tools) Features of e500H-GS Integration of gear
Slide 57: 3-4) Machine Tools & Mechatronics (9) Kariya ReBORN effect
57 3-4) Machine Tools & Mechatronics(9) Manufacturing reforms Thorough reaping of the “Kariya ReBORN” effect” 1) Completed by Sep. 2014 ◆Reduction in assembly lead time by subassembly/streamlining ・Mid-size and small machining centers ：▲67% ・Large machining centers ：▲45% ・TOP centers ：▲50% ・Mid-size
Slide 58: 3-5) Strengthening of Fundamentals (1) Equipment/Process Improvement
58 3-5) Strengthening of Fundamentals (1) Equipment/Process Improvement Main Activities 1) Development of a production line that keeps pace with sales performance → Inventory reduction by product-type- and size-specific optimal production TRB line production output (in lots) Equipment reduction to 1
Slide 59: 3-5) Strengthening of Fundamentals (2) Equipment/Process Improvement
59 3-5) Strengthening of Fundamentals (2) Equipment/Process Improvement 2) Faster setup and small-volume production support ・Reduction in setup time: Now working to reduce from 90 min. (max., 2013) to 10 min. or less ・Equipment reduction to 1/N - Tadomisaki: CVJ small-scale forging line (capacity of
Slide 60: 3-5) Strengthening of Fundamentals (3) Fostering of human resources
60 3-5) Strengthening of Fundamentals (3) Fostering of human resources Objective Global operation of human resource foundations based on the JTEKT WAY Goals for fiscal 2018 製品別方針 ①Recruiting and fostering of global ②Optimal global/local deployment of management human resources human resources Main A
Slide 61: 3-5) Strengthening of Fundamentals (4) Fostering of human resources
61 3-5) Strengthening of Fundamentals (4) Fostering of human resources Main Activities Higher skills of individuals and the organization <Ensuring essential understanding> ・ Providing problem-solving training for all the major career path employees by the end of fiscal 2014 ・ Planning to provide pro
Slide 62: 3-5) Strengthening of Fundamentals (5) Operational Reforms
62 3-5) Strengthening of Fundamentals (5) Operational Reforms Objective Thorough improvement of operational efficiency in back-office departments through operational reform activities ①Standardization of operations Storing in a filing system visible to and usable by anyone and shared throughout the
Slide 63: 3-5) Strengthening of Fundamentals (6) Finance and accounting
Finance and 63 3-5) Strengthening of Fundamentals (6) accounting Actual performance so far (- 2014, a hop and a step) Reduction in wasted funds and assets - Surplus (earned) - - Assets - Proper management of consolidated fixed costs Effective use of consolidated funds and Reinforced tax risk managem
Slide 64: 3-5) Strengthening of Fundamentals (7) Finance and accounting
64 Finance and 3-5) Strengthening of Fundamentals (7) accounting Introduction of division-specific BS management Background ◆Worsening financial health since 2011 due to an increase in investment Basic principle ◆ To reduce wasted assets and funds and achieve a good balance between investment, debt
Slide 65: 3-5) Strengthening of Fundamentals (8) Finance and accounting
65 Finance and 3-5) Strengthening of Fundamentals (8) accounting Inventory asset Interest-bearing debt Inventory asset Turnover period in months Interest-bearing debt DE ratio 1.8 0.79 1.6 1.6 0.73 1.5 0.62 0.55 1,693 2,652 1,620 2,551 2,457 1,640 2,350 1,546 3E, 2012 3E, 2013 3E, 2014 3E, 2015 3E,
Slide 66: 3-5) Strengthening of Fundamentals (8) Efforts to slim the BS
66 Finance and 3-5) Strengthening of Fundamentals (8) accounting Efforts to slim the BS Fund in hand ◆ More financing within the group (the CMS in the region and financing between regions) Inventory reduction ◆ Straightening out the inventory in branch offices and sales subsidiaries ◆ Reduction in t
Slide 67: 3-5) Forecasts for The Management Index
67 3-5) Forecasts for The Management Index Forecasts for FY2013 Result FY2018 Target FY2014 Operating 4.6% 5.2% 7.5% Income Ratio Capital Expenditure 76.4 billion yen 70 billion yen 75 billion yen Depreciation 53 billion yen 55 billion yen 60 billion yen R&D 3.2% 3.3% 4.0% percentage ROA 2.2% 3.7% 4