Shinagawa Refra Co., Ltd · TSE:5351
Shinagawa Refra — Shinagawa Refractories — FY2014 Earnings Presentation
47 slides from Shinagawa Refra's earnings presentation, Jun 10, 2015
Slide 1: Presentation Material: Results for Fiscal Year Ended March 2015
Presentation Material Results for Fiscal Year Ended March 2015 June 10, 2015 ― Supporting the World’s Key Industries Through Technologies ― Securities Code Number: 5351 Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2015
Slide 2: Table of Contents
Table of Contents I. Overview of 1. Consolidated Financial Highlights for Fiscal Year Ended 4. Factors Behind Changes in Operating Financial Results March 2015 Income (Year-on-Year Comparison) (1) Management Environment and Measures 5. Consolidated Balance Sheets (2) Operating Results 6. Consolidate
Slide 3: I. Overview of Financial Results for FY2014
I. Overview of Financial Results for FY2014 Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2015 2
Slide 4: Consolidated Financial Highlights: Management Environment and Measures
1. Consolidated Financial Highlights for Fiscal Year Ended March 2015 (1) Management Environment and Measures [Management Environment] ● Steel industry Despite a year-on-year decline in crude steel production in the latter half of the year due to a delay in recovery of housing and automobile industr
Slide 5: Consolidated Financial Highlights: Operating Results
1. Consolidated Financial Highlights for Fiscal Year Ended March 2015 (2) Operating Results (Unit: million yen) FY 2013 FY 2014 YoY Results Results Net sales 96,875 100,188 ＋3.4% Operating income 3,934 4,895 ＋24.4% Ordinary income 4,160 5,215 ＋25.4% Net income 2,224 3,098 ＋39.3% ● Net sales increase
Slide 6: Net Sales by Business Segment
2. Net Sales by Business Segment (Unit: million yen) FY 2013 FY 2014 YoY Results Results Refractories and related products 72,125 74.4 74,833 74.7 ＋3.8% Furnace construction and engineering 22,251 23.0 22,885 22.8 ＋2.8% Real estate, leisure, etc. 2,498 2.6 2,470 2.5 -1.1% Total 96,875 100.0 100,188
Slide 7: Operating Income by Business Segment
3. Operating Income by Business Segment (Segment Profit) (Unit: million yen) FY 2013 FY 2014 YoY Results Results Refractories and related products 3,508 68.8 4,490 74.4 ＋28.0% Furnace construction and engineering 433 8.5 525 8.7 ＋21.0% Real estate, leisure, etc. 1,159 22.7 1,017 16.9 -12.2% Total 5,
Slide 8: Factors Behind Changes in Operating Income
4. Factors Behind Changes in Operating Income (Year-on-Year Comparison) Negative factors Positive factors (Unit: 100 million yen) -6 +16 Change in amount +10 Improvement of earnings from subsidiaries Composition differences, etc. ＋3 49 Cost reduction Effects of consolidation of ＋5 production Hike in
Slide 9: Consolidated Balance Sheets
5. Consolidated Balance Sheets (Unit: million yen) FY 2013 FY 2014 Change Current assets 61,087 62,994 ＋1,906 ・Notes and accounts receivable-trade: +1,864 Noncurrent assets 45,781 46,847 ＋1,065 ・Investment securities: +1,872 Total assets 106,869 109,841 ＋2,972 Current liabilities 42,351 41,188 - 1,1
Slide 10: Consolidated Cash Flows
6. Consolidated Cash Flows (Unit: million yen) [Main contents of cash flows from operating activities] FY 2013 FY 2014 Change ・Income before income taxes and minority interests: 5,231 Cash flows from ・Depreciation and amortization: 2,493 operating activities 6,873 4,448 -2,425 Cash flows from ・ Incr
Slide 11: Financial Strategy: Profitability and Financial Position
7. Financial Strategy 1 Securing of profitability ROS (%) ROE (%) ● ROS (Return on Sales) 10 10 7.3 8 8 5.7 and 5.2 6 6 4.3 ● ROE (Return on Equity) 4 4 will be set as major management 2 2 indicators with the aim of enhancing 0 0 management efficiency. FY2013 FY2014 FY2013 FY2014 2 Improvement of Ca
Slide 12: Financial Strategy: Shareholder Returns and Growth Investment
7. Financial Strategy 3 Shareholder returns Dividend per share (Yen) 8 ●Will aim to maintain steady dividend payouts. 6 6 6 5 [Actual dividend payout for the fiscal year ended March 2015] (Dividend per share) 4 ● Interim dividend: 2.50 yen (unchanged from the previous year) 2 ● Year-end dividend: 3.
Slide 13: II. Future Strategies
II. Future Strategies Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2015 12
Slide 14: Management Stage
1. Management Stage The second medium-term management plan was completed in FY2014. Based on its achievements, we commenced the third medium-term management plan in FY2015. Shinagawa Refractories Co., Ltd. was established as a result of a merger on October 1, 2009. FY2009 FY2010 FY2011 FY2012 FY2013
Slide 15: The Second Medium-Term Management Plan: Summary
2. The Second Medium-Term Management Plan: Summary Key challenges and achievements of the second medium-term management plan (FY2012-FY2014) 1. Early launch of optimal production system ● We managed to complete development of “the optimal production system” with the top priority, in accordance with
Slide 16: The Third Medium-Term Management Plan: Overview
3. The Third Medium-Term Management Plan: Overview Medium to long-term vision Vision Towards maintenance and improvement of the position as the world’s leading supplier of a full range refractory products, will aim to thoroughly secure profitability and realize further growth. Medium-term management
Slide 17: Understanding of Operating Environment
4. Understanding of Operating Environment (Third Medium-Term Management Plan) ● Reconstruction demand following the Great East Japan Earthquake ● Strong production activities, etc. for the Tokyo Olympics Japan Steady and Paralympics in 2020 ● Demand in steel, cement and nonferrous metal domains in l
Slide 18: The Third Medium-Term Management Plan: Key Challenges
5. The Third Medium-Term Management Plan: Key Challenges Key challenges 1) Renovation of core production equipment (Reinforcement of business foundation in terms of equipment) 2) Securing and development of human resources (Development of business foundation in terms of human resources) 3) Technolog
Slide 19: Renovation of Core Production Equipment: Objective
6. Key Challenges (1) Renovation of Core Production Equipment 1 Objective In the second medium-term management plan, we implemented equipment In the third medium-term management plan, investment activities with the aim of we will renew our core manufacturing restructuring into an “optimal production
Slide 20: Renovation of Core Production Equipment: Capital Expenditure Plan
6. Key Challenges (1) Renovation of Core Production Equipment 2 Capital expenditure plan Approx. 8.0 billion yen in total for three years during the period of the third medium-term management plan. Further capital investment compared to the period of the second medium-term management plan(5.6billion
Slide 21: Securing and Development of Human Resources
6. Key Challenges (2) Securing and Development of Human Resources “Human resources” are an important business foundation, along with equipment. Will achieve further development and growth to win the competition. Well diversified and Enhancement of education constant recruitment and training programs
Slide 22: Technological Reinforcement
6. Key Challenges (3) Technological Reinforcement and Enhancement of Sales Capability 1 Technological reinforcement Development of attractive products and launch of high performance products Improved customer satisfaction Product category Items to be developed Examples of Super-dense bricks (HIDEN)
Slide 23: Enhancement of Sales Capability: Five Strategic Product Categories
6. Key Challenges (3) Technological Reinforcement and Enhancement of Sales Capability 2 Enhancement of sales capability (i) Five strategic product categories Core products that account for 40% of refractory sales Magnesia-carbon Slide-gate plates bricks Basic bricks Mold powder SBX-G(CIP products) S
Slide 24: Product Category-Based Strategy Committee and Sales Plan
6. Key Challenges (3) Technological Reinforcement and Enhancement of Sales Capability 2 Enhancement of sales capability (i) Five strategic product categories With the aim of promoting sales activities through collaboration among production, sales and technology teams, the product category-based stra
Slide 25: Overseas Business Expansion: Regional Reorganization
6. Key Challenges (3) Technological Reinforcement and Enhancement of Sales Capability 2 Enhancement of sales capability (ii) Overseas business expansion Reorganization of business structure by region Consolidation of export sales function and management/support function for overseas subsidiaries [Be
Slide 26: Safety Management Activities and Reinforcement of Compliance
6. Key Challenges (4) Safety Management Activities and Reinforcement of Compliance 1 Safety activities ● Thorough promotion of KZ (Kiken Zero: Perfect Safety) activity with a focus on the “fundamental safety measures for equipment and operations” ● Implement “5S,” which contributes to safety and hea
Slide 27: The Third Medium-Term Management Plan: Quantitative Targets
7. The Third Medium-Term Management Plan: Quantitative Targets Will aim to achieve record net sales and ordinary income in 15,000 150,000 the final year of the third medium-term management plan. Merged on 101,070 103,038 101,700 October 1, 2009 99,204 100,188 100,000 96,875 10,000 84,408 5,804 5,864
Slide 28: Outlook of Consolidated Financial Results
8. Outlook of Consolidated Financial Results for the Fiscal Year Ending March 2015 (Unit: million yen) FY 2014 FY 2015 YoY Results Forecast Net sales 100,188 100.0 101,700 100.0 ＋1.5% Operating income 4,895 4.9 5,100 5.0 ＋4.2% Ordinary income 5,215 5.2 5,200 5.1 -0.3% Net income 3,098 3.1 3,100 3.0
Slide 29: Medium-Term Growth Vision
8. Medium-Term Growth Vision Toward the maintenance and improvement of our position as the world’s leading supplier of a full range refractory products, we will aim to firmly secure profitability and realize further growth ●Design Provision of comprehensive Comprehensive responsibility ●Manufacturin
Slide 30: III. Supplementary Notes
III. Supplementary Notes Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2015 29
Slide 31: History
1. History [Established in 1875] [Established in 1938] Shinagawa Refractories Co., Ltd. JFE Refractories Corporation (First private company in Japan to (Operated as a subsidiary of the Kawasaki Steel manufacture fire bricks) Corporation Group since 1944) Aiming to solidify operational base and estab
Slide 32: Basic Management Goals
2. Basic Management Goals (Formulated on October 1, 2009) Following the merger to create the new “Shinagawa Refractories,” five basic goals were formulated. Basic Goals of Shinagawa Refractories (i) To be the world’s leading supplier of a full range of refractory products (ii) To be responsive to th
Slide 33: Changes in Net Sales and Ordinary Income Over Past Years
3. Changes in Net Sales and Ordinary Income During Past 11 Years (Consolidated Basis) (Million yen) (Million yen) 150,000 Net sales Ordinary income 12,000 Merged on October 1, 2009 10,000 120,000 Consolidated financial results for the fiscal year ended March 2010 combine the consolidated financial r
Slide 34: Roles of the Refractory Industry
4. What are the Roles of the "Refractory Industry"? ● Many varieties of materials used in public infrastructure such as iron and steel, nonferrous metals, cement, glass, etc. are manufactured in furnaces with refractory lining. ● The refractory industry provides foundational support to key industrie
Slide 35: Major Products 1/2
5. Major Products 1/2 Refractories are industrial materials that can resist ultra-high temperatures in Refractories excess of 1,500 degrees Celsius. Approximately 80% of refractory production is consumed by the steel industry. Shaped refractories Monolithic refractories Mold powder Shaped refractori
Slide 36: Major Products 2/2
5. Major Products 2/2 Ceramic fiber Advanced ceramics Lightweight Ceramic material with a broad range of characteristics material featuring including excellent electrical insulation properties, abrasion low thermal resistance, corrosion resistance, chemical stability, conductivity and mechanical str
Slide 37: Key Features and Strengths
6. Key Features and Strengths Leading company in terms of ultra-high 1 temperature technologies Solid customer base thanks to technological 2 capabilities 3 Aggressive global business expansion Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2015 36
Slide 38: Ultra-High Temperature Technology: Two Technologies
7. Key Features and Strengths (1) Ultra-High Temperature Technology (i) Two Technologies Leading company in terms of ultra-high temperature technology Solid technology development and commercialization capabilities underpinned by two technologies ●Furnace design ●Refractories Advanced ●Engineering s
Slide 39: Customer-Oriented Technological Response
7. Key Features and Strengths (1) Ultra-High Temperature Technology (ii) Customer-Oriented Technological Response Work closely with customers at all times backed up by technologies and long track records of four divisions covering design, manufacturing, furnace construction, and development. Technic
Slide 40: Development Capability to Meet Customer Needs
7. Key Features and Strengths (1) Ultra-High Temperature Technology (iii) Development Capability to Meet Customer Needs With world-class research facilities, the Research Center focuses on the development of products to meet the needs of customers EDS analysis data (color map) Elements present in th
Slide 41: Solid Customer Base
8. Key Features and Strengths (2) Solid Customer Base Solid customer base thanks to technological capabilities Meeting the needs of customers in various industries including the Japanese steelmaking industry, which boasts the best technology in the world Ultra-high temperature technologies are Steel
Slide 42: Global Business Expansion
9. Key Features and Strengths (3) Global Business Expansion Aggressive global business expansion Starting from our launch into China in 1997, the Company has continued to expand overseas, establishing production bases in Australia and the U.S. [China] Entered market in 1997 ■ Overseas net sales an
Slide 43: Current Status of Overseas Business Locations
10. Current Status of the Expansion of Overseas Business Locations Expanding overseas business locations in China, Oceania, and the Americas with a focus on areas close to the production sites of our customers Liaoning Shinagawa Hefeng Shenyang Shinagawa Metallurgy Materials Co., Ltd. Metallurgical
Slide 44: Domestic and Overseas Production System
11. Domestic and Overseas Production System [Overseas] [Japan] Developing a stable supply system by After a review of the production system establishing the Group’s manufacturing sites subsequent to the merger, promoting the closer to customers in order to respond redevelopment of a steady supply sy
Slide 45: Global Procurement System
12. Global Procurement System Amid such circumstances, the Company The Company depends on foreign sources for developed a balanced procurement system to approximately 60% of refractory materials, 80% source materials from production centers in five or more of which (approximately 50% of the total ge
Slide 46: Disclaimer
Disclaimer This document is intended to provide information on the results for the fiscal year ended March 2015 (April 2014 – March 2015) and is not intended to solicit investment in securities issued by the Company. The document was prepared based on data available as of June 10, 2015. Opinions, fo
Slide 47: Presentation Material
Presentation Material Results for Fiscal Year Ended March 2015 June 10, 2015 ― Supporting the World’s Key Industries Through Technologies ― Securities Code Number: 5351 Shinagawa Refractories Presentation of Results for Fiscal Year Ended March 2015
Shinagawa Refractories — FY2014 Earnings Presentation on 6ix