Kawasaki Heavy Industries Ltd. · TSE:7012
Kawasaki Heavy Industries — Kawasaki Heavy Industrial — Q2 2021 Earnings Presentation
44 slides from Kawasaki Heavy Industries's earnings presentation, Nov 9, 2021
Slide 1: Financial Results for Second Quarter FY2021
Financial Results for Second Quarter FY2021 For the Year ending March 31, 2022 0 November 9, 2021 © Kawasaki Heavy Industries, Ltd. All Rights Reserved
Slide 2: Table of Contents
0 Table of Contents 1 Consolidated Results for 3 Details by segment Second Quarter FY2021 Summary 3 Aerospace Systems 15 Segment 4 Rolling Stock 19 Income Statement 5 Energy Solution & Marine Engineering 23 Details of Change in Profit 7 Precision Machinery & Robot 27 Balance Sheet 9 Motorcycle & Eng
Slide 3: Consolidated Results for Second Quarter FY2021 - Summary
Consolidated Results for Second Quarter FY2021 1 –Summary- Sales and profits increased significantly YoY but profit decreased QoQ Deterioration of the shipbuilding joint ventures in China resulted in equity in losses (Billion Yen) Net Sales FY21 Q2 YoY FY20 Q2 709.7 688.1 736.5 681.0 Apr. to Jun. Ju
Slide 4: Consolidated Results - Segment
Consolidated Results for Second Quarter FY2021 1 –Segment- Aerospace Systems show great improvement as flight demand recovers, but losses still remain ① Sales and profit increased significantly in Motorcycle & Engine due to strong demand for outdoor leisure in developed countries ② (Billion Yen) Ord
Slide 5: Income Statement
1 Consolidated Results for Second Quarter FY2021 –Income Statement- (Billion Yen) Details FY20 Q2 FY21 Q2 Change % % Net Sales 657.3 100.0 681.0 100.0 + 23.7 ① Increase in sales costs in Motorcycle & Engine Cost of sales 588.9 89.6 564.5 82.9 - 24.3 Gross profit 68.3 10.4 116.5 17.1 + 48.1 ② USD/JPY
Slide 6: Income Statement (continued)
1 Consolidated Results for Second Quarter FY2021 –Income Statement- (Billion Yen) Details FY20 Q2 FY21 Q2 Change % % Recurring Profit (Loss) - 18.2 - 2.8 11.0 1.6 + 29.3 ④ Sale of land Extraordinary Income / Losses 0.9 1.4 + 0.5 ⑤ Sale of dormitory /company Gain on sales of fixed assets 5 4 housing
Slide 7: Details of change in profit
Consolidated Results for Second Quarter FY2021 1 –Details of change in profit- Massｰproduction businesses: Motorcycle & Engine and Precision Machinery & Robot, contributed to change in sales Jet engine maintenance costs, which were a major burden in Q2 FY2020, were decreased Q2 FY2020 +¥42.2 billion
Slide 8: Details of change in profit by segment
Consolidated Results for Second Quarter FY2021 1 –Details of change in profit- (Billion Yen) FY20 Q2 FY21 Q2 Operating Change in Change in Operating Profit Effects of Change Profit product mix and SG & A Total (Loss) FX rates※ in sales※ other factors※ expenses (Loss) Aerospace Systems - 23.8 0.8 - 0
Slide 9: Balance Sheet
1 Consolidated Results for Second Quarter FY2021 –Balance Sheet- (Billion Yen) End of End of Details Change Mar. 2021 % Sep. 2021 % Cash and deposits 1 ① Decrease due to repayment of 126.7 60.5 - 66.1 interest-bearing debt and other Trade receivables 460.4 405.9 2 - 54.5 factors Inventory 658.5 655.
Slide 10: Balance Sheet (liabilities and net assets)
1 Consolidated Results for Second Quarter FY2021 –Balance Sheet- (Billion Yen) End of End of Details Change Mar. 2021 % Sep. 2021 % Trade payables 355.1 301.4 1 - 53.6 ① Decrease in Aerospace and other segments Interest-bearing debt 593.3 651.9 2+ 58.6 Contract liability (Advances received) 153.2 16
Slide 11: Cash Flows
1 Consolidated Results for Second Quarter FY2021 –Cash Flows- (Billion Yen) Details FY20 Q2 FY21 Q2 Change Income before income taxes - 17.3 12.4 + 29.8 ① Q2 FY’20 Significant outflow of funds in Depreciation and amortization 30.2 30.1 - 0.1 working capital components, Increase and decrease in worki
Slide 12: Cash Flows - operating cash flow and working capital
1 Consolidated Results for Second Quarter FY2021 –Cash Flows- Continued negative operating cash flow due to heavy working capital, mainly in Aero Engine Operating cash flow is improving due to the contribution of the mass-production businesses CF from operating acitivities CF from investing activiti
Slide 13: Earnings Forecasts for FY2021 - Summary
Earnings Forecasts for FY2021 2 -Summary- Recurring profit was revised down due to deterioration in earnings of unconsolidated subsidiaries Tax expenses are expected to improve, mitigating the impact of decrease in recurring profit on net income (Billion Yen) FY2020 FY2021 Forecast and Progress Actu
Slide 14: Forecasts for FY2021 - Segment
2 Forecasts for FY2021 -Segment- Forecasts of Aerospace Systems were revised down due to a decrease in Boeing business and other factors Forecasts of Motorcycle & Engine were revised up due to a strong demand for motorcycles and off-road four wheeler (Billion Yen) Orders Received Net Sales Operating
Slide 15: Aerospace Systems
3 Details by Segment -Aerospace systems- FY2021.Q2（vs. FY2020.Q2） Orders Increased due to an increase in component parts for Boeing and Ministry of Defense, despite decrease in component received parts for commercial aircraft jet engines caused by the application of new Accounting Standard for Reven
Slide 16: Aerospace Systems
3 Details by Segment -Aerospace systems- (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q3-4 FCST Orders Received 72.4 97.2 + 24.7 329.5 310.0 310.0 - 19.5 - 212.8 Aerospace 32.1 80.4 + 48.2 236.2 250.0 250.0 + 1
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 70.0 63.2 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2017 FY2018 FY2019 FY2020 FY2021 Operating Income (bi
Slide 18: Aerospace Systems - Market Overview and Specific Efforts
3 Details by Segment -Aerospace systems- Market Overview Specific Efforts Commercial aircraft business Securing stable revenue in core business – Global passenger demand remains weak – Cost reductions in existing orders of aircrafts for Boeing and commercial aircrafts jet engines due to the grea
Slide 19: Rolling Stock
3 Details by Segment - Rolling Stock - FY2021.Q2（vs. FY2020.Q2） Orders Decreased compared with FY2020 Q2, when major orders for Shinkansen were received. received Net Sales Decreased due to a decrease in other regions despite an increase to the U.S.. Operating Improved due to improvement in profitab
Slide 20: Rolling Stock
3 Details by Segment - Rolling Stock - (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q3-4 FCST Orders Received 30.3 23.1 - 7.2 77.0 70.0 50.0 - 27.0 - 20.0 26.9 Domestic & Asia 22.7 18.9 - 3.8 66.2 66.0 45.5 - 2
Slide 21: 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 28.7 28.8 23.3 22.0 20.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2017 FY2018 FY2019 FY2020 FY2021 9.1% 5.9% 3.1% 3.4% 7.7% 0.0
Slide 22: Rolling Stock - Market Overview and Specific Efforts
3 Details by Segment - Rolling Stock - Market Overview Specific Efforts Compliance with delivery schedules for The impact of COVID-19 overseas projects – Some domestic railway operators are Delivery of the first train to Dhaka FY2021 Q1 reviewing their railway related investment The first and se
Slide 23: Energy Solution & Marine Engineering
Details by Segment 3 - Energy Solution & Marine Engineering - FY2021.Q2（vs. FY2020.Q2） Orders Increased due to major orders for construction and operation of domestic municipal waste incineration plants, orders for LPG/LAG received carriers, and orders for other projects. Decreased due to a decrease
Slide 24: Energy Solution & Marine Engineering
3 Details by Segment - Energy Solution & Marine Engineering - (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q3-4 FCST Orders Received 118.4 164.2 + 45.8 317.1 400.0 330.0 + 12.9 - 70.0 165.8 Energy System 95.8 1
Slide 25: Energy Solution & Marine Engineering
3 Details by Segment - Energy Solution & Marine Engineering - Net Sales (billion yen) Energy System & Plant Engineering Ship & Offshore Structure 112.0 100.1 103.8 99.3 88.2 84.2 82.5 77.7 73.2 73.0 70.5 72.2 70.5 72.8 70.3 67.9 64.8 60.6 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2017
Slide 26: Energy Solution & Marine Engineering - Market Overview and Specific Efforts
3 Details by Segment - Energy Solution & Marine Engineering - Market Overview Specific Efforts Energy system & Plant Engineering Focus on sales activities Domestic Emerging Markets Consecutive orders for LPG/LAG carriers of Topic 86,700m3 class Steady demand for Steady demand for distributed power
Slide 27: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - FY2021.Q2（vs. FY2020.Q2） Orders Increased due to an increase in hydraulic components for construction machinery and various robots including robots for received semiconductor manufacturing equipment. Net Sales Same as above. Operating Increased du
Slide 28: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q3-4 FCST Orders Received 102.4 128.1 + 25.6 259.4 260.0 260.0 + 0.6 - 131.9 Hydraulic 71.3 78.4 + 7.0 172.6 165
Slide 29: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - Net Sales (billion yen) Hydraulic Components & Systems Robotics 86.6 67.8 70.3 62.6 60.6 55.2 57.6 54.1 52.1 53.6 49.3 47.9 48.3 49.8 48.8 45.1 45.4 41.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2017 FY2018 FY2019 FY2020 FY2021 11.5
Slide 30: Precision Machinery & Robot - Market Overview and Specific Efforts
3 Details by Segment - Precision Machinery & Robot - Market Overview Specific Efforts Construction machinery Developing electrification and automation – High level of demand in China continues in technology for construction machinery FY2021 – Development and supply of the latest – Demand outside
Slide 31: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - FY2021.Q2（vs. FY2020.Q2） Increased due to an increase in motorcycles for North America, Europe and Southeast Asia, and an increase in general-purpose Net Sales gasoline engines for North America. Operating Increased due to an increase in revenue, deprecia
Slide 32: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q3-4 FCST Net Sales 139.7 206.8 + 67.0 336.6 410.0 440.0 + 103.4 + 30.0 233.2 Motorcycles for developed contries 48.8 78
Slide 33: 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 1Q 2Q FY2017 FY2018 FY2019 FY2020 FY2021 Operating Income (billion yen) 13.0% 10.3% 11.0% 8.8% 6.7% 5.6% 4.0% 1.8% 2.3% 8.2% 0.9% - 0.6% - 1.3% - 1.9% - 4.9% - 4.4% - 4.1% - 10.0% © ©
Slide 34: Motorcycle & Engine - Market Overview and Specific Efforts
3 Details by Segment - Motorcycle & Engine - Market Overview Specific Efforts U.S. Supplying products as much as demanded – Demand for off-road motorcycles and four- – All efforts to achieve production plans wheelers remains strong – Changing production and sales plans promptly – Strong demand i
Slide 35: Shareholder Return
4 Shareholder Return Dividend Policy Dividend for FY2021 The forecast of operating profit was maintained 1 Future business forecasts, Financial conditions such as free cash flow and The forecast of net income attributable to owners of the parent debt-to-equity ratio, and other factors was revise
Slide 36: Project Topics - Green Innovation Fund liquefied hydrogen supply chain
4 Project Topics Japanese Government Green Innovation Fund was awarded for the establishment of a large-scale liquefied hydrogen supply chain Major step to achieve a hydrogen supply cost of 30 yen/Nm3 (FOB) in 2030. Japan Suiso Energy, a 100% subsidiary of Kawasaki, ENEOS and Iwatani will conduc
Slide 37: Project Topics - Hydrogen supply chain
4 Project Topics Production Liquefaction/Loading※1 Liquefied hydrogen Hydrogen storage Hydrogen trailer/ carriers tank※1 Pipeline Provided by Provided by Provided by Kawasaki※3 Kawasaki Kawasaki Brown Coal from Austraria※2 Renewable Energy CCS※2 Industrial Equipment Mobility Power Plants Development
Slide 38: Project Topics - Automated PCR viral testing service
4 Project Topics Strategy of automated PCR viral testing service Expanding service for passengers at airports Expanding screening testing service PCR Test Center launched at Kansai International Derestriction is expected based on the combination of Airport and started a pre-departure PCR viral t
Slide 39: Project Topics - Tunnel boring machine joint venture
4 Project Topics Joint Venture Company for Tunnel Boring Machine(TBM) “Underground Infrastructure Technologies Corporation” began operation Kawasaki integrated its TBM business with Hitachi Zosen and established Underground Infrastructure Technologies Corporation(UGITEC), as a 50-50 joint venture,
Slide 40: Project Topics - Investment in North American production
4 Project Topics Kawasaki Motors to invest in North American Production Strengthen the off-road four-wheeler business in North America, Strengthen the turf business, which is expanding due to where the market is expanding. population growth and strong housing demand in the U.S.. Off-road four-wh
Slide 41: CAPEX, Depreciation and Amortization, R&D Expenses, Number of employees
4 Appendix - CAPEX, Depreciation and Amortization, R&D Expenses, Number of employees - (Billion Yen, Persons) FY2020 FY2021 FY2020 2022年度 Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST CAPEX 29.6 23.4 - 6.2 55.6 56.0 65.0 + 9.4 + 9.0 Depreciation and amortization
Slide 42: Others - Order Backlog and net sales by region
4 Appendix - Others - Order Backlog Order Backlog in Ship & Offshore (billion yen) 191.6 (billion yen) FY20 Q2 FY21 Q2 Actual Actual Change Aerospace Systems 479.9 494.8 + 14.9 Rolling Stock 460.6 408.9 - 51.7 99.1 101.6 104.6 98.8 Energy Solution & 85.9 Marine Engineering 452.3 507.6 + 55.2 Pre
Slide 43: Others - Net Sales in Foreign Currencies
4 Appendix - Others - Net Sales in Foreign Currencies by Segment (billion USD) FY2020 FY2021 Actual Actual Q3-4 FCST Aerospace Systems 0.24 0.25 0.44 Rolling Stock 0.03 0.04 0.01 Energy Solution & Marine Engineering 0.10 0.10 0.26 Precision Machinery & Robot 0.08 0.10 0.08 Motorcycle & Engine 0.15
Slide 44: © Kawasaki Heavy Industries, Ltd. All Rights Reserved
© Kawasaki Heavy Industries, Ltd. All Rights Reserved
Kawasaki Heavy Industrial — Q2 2021 Earnings Presentation on 6ix