Toda Corporation · TSE:1860
Toda — Q2 FY2012 Earnings Presentation
67 slides from Toda's earnings presentation, Nov 14, 2012
Slide 1: Results Briefing for the Second Quarter Ended September 30, 2012
November 14, 2012 Results Briefing for the Second Quarter Ended September 30, 2012
Slide 2: Forward-looking statements
This report contains forward-looking statements regarding Toda Corporation and the Group’s corporate plans, strategies, and business forecasts. These statements include Toda Corporation’s forecasts based on information currently available as of the announcement date, which are subject to a number of
Slide 3: Agenda
1. Summary of Financial Results Executive Manager Yushi Kikutani 2. Review on Medium-Term Management Plan President Shunzo Inoue Results Briefing for the Second Quarter Ended September 30, 2012 3
Slide 4: 1. Summary of Financial Results
1. Summary of Financial Results Executive Manager Yushi Kikutani Results Briefing for the Second Quarter Ended September 30, 2012 4
Slide 5: 1-1. Summary of Financial Results for the Second Quarter
1-1. Summary of Financial Results for the Second Quarter *Six Months from April 1, 2012 to September 30, 2012 Results Briefing for the Second Quarter Ended September 30, 2012 5
Slide 6: Highlights: FY2012 2Q
Highlights: FY2012 2Q Consolidated Net Sales: ¥212.8 billion (up 17.1% year-on-year) ： Earnings were up 17.1% year on year as the net sales of completed construction contracts rose due to the progress of contracted construction. Operating Income: -¥14.4 billion ： Operating loss was recognized du
Slide 7: Summary: FY2012 2Q
Summary: FY2012 2Q (Millions of yen) Apr-Sep FY2012 Apr-Sep Forecasts FY2011 (announced on Actuals Change Difference (year on year) (vs. forecast) Aug. 9, 2012) Consolidated 181,721 229,000 212,830 +17.1% -16,169 net sales Operating income (77) (5,200) (14,415) － -9,215 Ordinary income 670 (4,700) (
Slide 8: Main Factors for Losses
Main Factors for Losses Decrease in profits in the construction business ： Due to the increased harshness of the cost management environment, a loss on purchase price adjustments reflecting a major gap between initial projections and results was recognized. →Profits in the construction business di
Slide 9: Construction Business Performance (Non-consolidated)
Construction Business Performance (Non-consolidated) Gross Profit Margin on Orders Received for Net Sales of Completed Completed Construction Construction Construction Contracts Contracts (-27.1%) (+16.4%) 205.6 5.8 193.1 31.5 5.4 Civil 4.5 Civil Engineering 165.9 35.6 Engineering 149.9 (+26.3%) 28.
Slide 10: Breakdown of the Orders Received
Breakdown of the Orders Received (Non-consolidated) Breakdown by Client By Quarter (Reference) Progress 205.7 205.6 0.2 400.0 403.3 (Initial forecast) 149.9 Overseas 149.9 0.0 108.4 320.0 (Billions of yen) (Billions of yen) (Billions of yen) 160.5 2Q 3Q Private 71.5 (-34.1%) + Sector 51.0% 103.8 (-3
Slide 11: Main Orders Received
Main Orders Received Ordering Parties Name of works Architectural Yakult Honsha Co., Ltd. Yakult Central Institute for Microbiological Research, construction Pharmaceutical and Cosmetics Research Building Dokkyo Group of Dokkyo Medical University faculty housing Academic Institutions Social medical
Slide 12: Main Works Completed
Main Works Completed Ordering Parties Name of works Architectural Urban Redevelopment Union Redevelopment of southern section of construction Western Tonyamachi Japanese Red Cross Society Wakayama Medical Center Cainz Co., Ltd. New headquarters building Nippon Telegraph and Training Center lodge Tel
Slide 13: 1-2. Details of Financial Results
1-2. Details of Financial Results Results Briefing for the Second Quarter Ended September 30, 2012 13
Slide 14: Toda Group
(Consolidated) Toda Group Subsidiaries in Japan: Overseas Subsidiaries: 17 Business 10 companies 7 companies Companies Toda Reform Co., Ltd. Construtora Toda do Brazil S/A Chiyoda Kenkou Co., Ltd. Toda Construction (Shanghai) Co., Ltd. Construction Architectural 10 APEC Engineering Co., Ltd. Thai To
Slide 15: (Consolidated) Summary of Group Performance
(Consolidated) Summary of Group Performance Apr-Sep 12 Toda Subsidiaries total Consolidated Ratio of Corporation consolidated results to non- Billions of yen % % % consolidated results Net sales 197.2 26.3 212.8 1.08 Gross profit (4.5) -2.3 1.6 6.4 (3.1) -1.5 0.69 Selling, general and administrative
Slide 16: Net Sales by Subsidiaries (Japan and Overseas) (1)
(Consolidated) Net Sales by Subsidiaries (Japan and Overseas) (1) * Before intercompany elimination Sales in Japan and Overseas (Billions of yen) Figures in [ ] are percentages of total net sales. 59.3 60.0 Overseas 19.5 [33％] 40.0 24.8 26.3 9.0 Domestic 7.4 20.0 39.8 [30％] [35％] [67％] 17.3 17.2 [70
Slide 17: Net Sales by Subsidiaries (Japan and Overseas) (2)
(Consolidated) Net Sales by Subsidiaries (Japan and Overseas) (2) * Before intercompany elimination Sales in Japan by Segment Overseas Sales by Region (Billions of (Billions of yen) yen) 50.0 25.0 Exchange rate (Average for Apr-Sep 12) 39.8 Other 1.2 US dollar: ¥79.78 19.5 40.0 20.0 Thailand baht: ¥
Slide 18: Gross Profit by Subsidiaries (Japan and Overseas) (1)
(Consolidated) Gross Profit by Subsidiaries (Japan and Overseas) (1) * Before intercompany elimination Gross Profit in Japan and Overseas (Billions of yen) 6.0 8.2% 7.4% 7.0% 5.0 5.9% 5.9% 3.9 4.0 5.4% (5.8%) 1.6 3.0 2.0 1.6 1.4 0.5 0.6 2.3 1.0 0.9 1.0 0.0 Apr-Sep 11 Apr-Sep 12 FY2012 (forecast) Dom
Slide 19: Gross Profit by Subsidiaries (Japan and Overseas) (2)
(Consolidated) Gross Profit by Subsidiaries (Japan and Overseas) (2) * Before intercompany elimination Gross Profit in Japan by Segment Overseas Gross Profit by Region (Billions of (Billions of yen) yen) 30 3.0 2.0 Exchange rate (Average for Apr-Sep 12) 2.36 US dollar: ¥79.78 1.60 Thailand baht: ¥2.
Slide 20: (Consolidated) Statements of Income
(Consolidated) Statements of Income Apr-Sep 11 Apr-Sep 12 FY2012 Changes (Actual) (Actual) (Forecast) Billions of yen ％ ％ ％ ％ Net sales 181.7 212.8 17.1 509.8 Gross profit 11.2 6.2 (3.1) -1.5 ― 5.0 1.0 Selling, general and administrative 11.3 11.2 24.3 expenses Operating income (0.0) -0.0 (14.4) -6.
Slide 21: Change in Net Sales by Business
(Consolidated) Change in Net Sales by Business Construction Real Estate and Others (Billions of (Billions of yen) yen) 600.0 20.0 496.0 Subsidiaries and affiliates 32.0 15.0 13.8 Toda Subsidiaries Corporation and affiliates 300.0 464.0 10.0 5.8 176.2 205.9 6.8 Architectural 5.5 12.8 construction: Su
Slide 22: Change in Gross Profit by Business
(Consolidated) Change in Gross Profit by Business Construction Real Estate and Others (Billions of (Billions of yen) yen) 15.0 4.0 3.5 9.7 10.0 0.7 3.0 Subsidiaries and affiliates 1.5 1.5 5.0 8.9 Subsidiaries and affiliates Subsidiaries 2.0 1.6 0.9 and affiliates 1.5 2.5 Subsidiaries 0.0 and affilia
Slide 23: Change in SG&A
(Consolidated) Change in SG&A Consolidated Non-consolidated SG&A expense ratio (Billions of yen) 30.0 9.0% 24.3 20.0 21.6 6.0% 6.2% 5.3% 4.8% 10.0 11.3 11.2 3.0% 10.2 10.2 0.0 0.0% Apr-Sep 11 Apr-Sep 12 FY2012 (forecast) Results Briefing for the Second Quarter Ended September 30, 2012 23
Slide 24: Change in Operating Loss
(Consolidated) Change in Operating Loss Consolidated Non-consolidated Operating income ratio (Billions of yen) 5.0 2.0% 0.0 0.0% -0.07 -0.13 -0.0% -5.0 - 2.0% -10.0 -3.8% -14.4 -14.7 - 4.0% -15.0 -19.3 -20.6 - 6.0% -20.0 -6.8% -25.0 - 8.0% Apr-Sep 11 Apr-Sep 12 FY2012 (forecast) Results Briefing for
Slide 25: Change in Non-operating Income (Loss)
(Consolidated) Change in Non-operating Income (Loss) Account Balance 0.7 0.8 1.3 (Billions of yen) 1.5 1.2 1.2 1.3 0.1 Other income 0.1 1.0 Non-operating Dividend income 0.9 income 0.5 0.9 0.0 0.1 Interest income 0.1 Interest expenses -0.3 -0.3 Non-operating -0.1 Other expenses -0.1 expenses -0.5 -0
Slide 26: Change in Ordinary Income (Loss)
(Consolidated) Change in Ordinary Income (Loss) Consolidated Non-consolidated Ordinary income ratio (Billions of yen) 10.0 2.0% 0.4% 5.0 0.0% 0.6 0.4 0.0 - 2.0% -5.0 -3.5% - 4.0% -10.0 -13.6 -14.0 - 6.0% -15.0 -18.0 -6.4% -19.3 -20.0 - 8.0% Apr-Sep 11 Apr-Sep 12 FY2012 (forecast) Results Briefing fo
Slide 27: Change in Extraordinary Income (Loss)
(Consolidated) Change in Extraordinary Income (Loss) Account Account Balance Balance -0.6 (0.6) -3.1 (3.1) -2.9 (2.9) (Billions of yen) 1.0 0.5 Sales of investment Extraordinary 0.0 securities 0.3 income 0.0 0.0 Sales of real estate, etc. 0.2 -0.6 -0.1 -1.0 -0.6 Loss on valuation of investment secur
Slide 28: Change in Net Income (Loss)
(Consolidated) Change in Net Income (Loss) (Billions of yen) Consolidated Non-consolidated Net income ratio 10.0 5.0% 0.0 0.0% 0.0 0.0% -0.0 -10.0 -5.0% -7.6% -20.0 -33.8 -34.5 -10.0% -38.5 -39.8 -30.0 -15.0% -15.9% -40.0 -20.0% Apr-Sep 11 Apr-Sep 12 FY2012 (forecast) Net Net income income per 0.13
Slide 29: Comprehensive Income
(Consolidated) Comprehensive Income (Millions of yen) Consolidated statements of comprehensive income Apr-Sep 11 Apr-Sep 12 Income before minority interest 69 (33,734) Other comprehensive income Valuation difference on available-for-sale securities (6,139) (3,611) Deferred gains or losses on hedges
Slide 30: (Consolidated) Balance Sheets
(Consolidated) Balance Sheets (Billions of (Billions of Assets yen) Liabilities and Net Assets yen) -30.0 -30.0 487.1 487.1 457.1 457.1 Current Current Current liabilities Current assets -21.1 assets +3.8 255.7 liabilities 281.3 260.2 259.5 Noncurrent liabilities 59.8 Noncurrent +5.5 liabilities Non
Slide 31: Detailed Consolidated Balance Sheets (Assets)
(Consolidated) Detailed Consolidated Balance Sheets Mar 12 Sep 12 Remarks Billions of yen Figures in ( ) are changes from the previous year. (Assets) Notes receivable, accounts receivable from completed construction contracts Current assets 281.3 260.2 and other: 127.8 (-36.3) Costs on uncompleted c
Slide 32: Detailed Consolidated Balance Sheets (Liabilities)
(Consolidated) Detailed Consolidated Balance Sheets Mar 12 Sep 12 Remarks Billions of yen Figures in ( ) are changes from the previous year. (Liabilities) Notes payable, accounts payable for construction Current liabilities 255.7 259.5 contracts and other : 115.6 (-17.1) Short-term loans payable: 37
Slide 33: Change in Real Estate Holding
(Consolidated) Change in Real Estate Holding For business use (own use) For business use (rent) For sale (Billions of yen) +0.1 120.0 113.0 108.7 105.9 106.0 Decreased by sales: -1.7 Transfer to business use For sale 30.4 19.5 (-2.2) (YURAKUCHO ITOCiA): 28.6 17.4 -0.5 80.0 Acquisition of For busines
Slide 34: Capital Investments
(Consolidated) Capital Investments ( Billions of yen) Mar 13 Capital investments Mar 12 Sep 12 (forecast) Property, plant and equipment 3.4 1.4 4.2 Intangible assets 1.1 0.1 1.3 Total 4.5 1.5 5.5 ( Billions of yen) Mar 13 Mar 12 Sep 12 (forecast) Depreciation and amortization 2.1 0.9 2.1 R&D expense
Slide 35: Change in Investment Securities
(Consolidated) Change in Investment Securities Book value Valuation difference Nikkei stock average Share Price (Billions of yen) (Yen) 200.0 Earthquake 12,000 11,089 10,083 9,755 Immediately 8,870 150.0 after the earthquake 9,000 8,228 119.6 -8.9 110.2 110.7 101.8 100.0 36.0 26.4 6,000 26.3 Valuati
Slide 36: Change in Interest-Bearing Liabilities
(Consolidated) Change in Interest-Bearing Liabilities Short-term Long-term Ratio of interest-bearing liabilities Non-consolidated (Billions of yen) Figures in ( ) represent current portion of long-term loans payable. 100.0 15.0% 13.0% 11.9% 11.6% 11.8% 80.0 12.0% +1.7 59.4 58.0 57.5 59.2 60.0 9.0% 1
Slide 37: Change in Provision for Loss on Construction Contracts
(Consolidated) Change in Provision for Loss on Construction Contracts (Billions of yen) Architectural construction Civil engineering 20.0 +2.6 16.6 Civil engineering 15.0 14.0 2.6 -0.2 11.1 2.8 (Non-consolidated) Civil engineering 10.0 9.3 +2.9 1.0 1.9 Architectural 6.4 construction 1.2 14.1 Archite
Slide 38: Statement of Cash Flow
(Consolidated) Statement of Cash Flow (Billions of yen) +5.5 57.5 52.0 Profit before tax: -16.7 Loss on valuation of investment securities: +3.6 Provision for loss on construction Cash and cash contracts: +2.6 Cash and cash Construction-related funds: +12.7 equivalents at equivalents at Increase in
Slide 39: (Reference) Share Price and Other Indices
(Reference) Share Price and Other Indices (Consolidated) Mar 13 Mar 10 Mar 11 Mar 12 Sep 12 (forecast) Share price (Yen) 337 329 278 235 － Net assets per share (Yen) 617.42 602.35 537.53 411.08 － Net income(loss) per share 9.36 11.53 (64.28) (108.64) (123.66) (Yen) 36.00 ＰＥＲ: Price earning ratio (ti
Slide 40: 1-3. Performance Forecasts
1-3. Performance Forecasts Results Briefing for the Second Quarter Ended September 30, 2012 40
Slide 41: Forecasts for FY2012
Forecasts for FY2012 (Millions of yen) FY2012 FY2011 Forecasts Current (announced on Change Aug. 9, 2012) forecast (year on year) Consolidated net sales 489,385 477,800 509,800 +4.2% Operating income (7,994) 4,100 (19,300) ― Ordinary income (6,690) 5,200 (18,000) ― Net income (19,872) 1,200 (38,500)
Slide 42: Forecasts for Construction Business
Forecasts for Construction Business (Non-consolidated) Gross Profit Margin on Orders Received for Net Sales of Completed Completed Construction Construction Construction Contracts Contracts (-20.6%) (+3.4%) 4.6 464.0 4.4 448.9 4.0 403.2 Civil Civil engineering 90.0 engineering 3.8 101.5 (-11.3%) 73.
Slide 43: 2. Review on Medium-Term Management Plan
2. Review on Medium-Term Management Plan President Shunzo Inoue Results Briefing for the Second Quarter Ended September 30, 2012 43
Slide 44: 2-1. Recognized Issues
2-1. Recognized Issues Results Briefing for the Second Quarter Ended September 30, 2012 44
Slide 45: Excessive Price Competition
Excessive Price Competition Change in orders received for construction (FY2006 = 100) Maintaining Toda Corporation business scale (100) Excessive price competition 76.8 50 leading companies 73.2 Market stagnation FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 (forecast) Source: “Current Survey on
Slide 46: Loss on Purchase Price Adjustments
Loss on Purchase Price Adjustments Changes in construction profitability and price of construction materials Orders actively 6.6 received Construction profitability 6.3 5.5 5.6 5.4 Recognition of a loss on purchase price adjustments 3.8 Construction materials *One-year-slide Rise in price of -1.3 FY
Slide 47: Effects of Unprofitable Construction Works
Effects of Unprofitable Construction Works Breakdown of net sales of completed construction (by year) Orders for large-scale and Orders received in unprofitable construction FY2013 work were concentrated in Orders received in FY2012 FY2010 and FY2011 Orders received in FY2011 Orders received in Rati
Slide 48: Review on Medium-Term Management Plan
Review on Medium-Term Management Plan Must be in the black in the next fiscal year Challenges Ensure thorough pursuit of profits Rebuild business models Review on medium-term management plan Revision Performance targets Reinforcement Priority measures Revise net sales and target period Introduce eme
Slide 49: Reference: Medium-Term Management Plan (Announced on May 14, 2012)
Reference: Medium-Term Management Plan (Announced on May 14, 2012) 1. Basic Policy (2) Growth strategies as a Group 1) Early improvement in revenues 1) Renovate Business Processes 2) Creation of new values • Shift from business model of “selling tailored items with no post-sale services” 2. Performa
Slide 50: 2-2. Emergency Measures
2-2. Emergency Measures Results Briefing for the Second Quarter Ended September 30, 2012 50
Slide 51: Make Selection of Orders More Stringent
Make Selection of Orders More Stringent Review target figures for Profitability-oriented policy orders received for architectural construction Make selection of orders more Approximately ¥250.0 billion for stringent the time being (FY2011 results: ¥329.4 billion) Improve profitability Results Briefi
Slide 52: Improvement on Management Structure of Construction Work
Improvement on Management Structure of Construction Work Establishment of a Cost Control Center Under consideration At order Establishment of a Committee for receipt Implemented Review on Judgments Taken at Order Receipt Timely identification of purchasing status, During labor shortage and other fac
Slide 53: Improvement on Management Structure of Construction Work at Order Receipt
Improvement on Management Structure of Construction Work at Order Receipt Committee for Review on Cost Control Center Judgments Taken at Order Receipt Establish a Cost Control Center In the early stages of the process of by integrating the estimation determining the working budget for department and
Slide 54: Companywide Cost Reductions
Companywide Cost Reductions Promote further rationalization of the organization and its operations Reorganize organizational structure of head office and branch • Eliminate redundancy, be front-line oriented, outsourcing • Perform operations under a new framework and with new ideas Reduce SG&A expen
Slide 55: 2-3. Medium-Term Measures
2-3. Medium-Term Measures Results Briefing for the Second Quarter Ended September 30, 2012 55
Slide 56: Direction of Business
Direction of Business Shift from “individual project-oriented” to “solution- oriented” approach Solution to aim for Long-term Start with “people” Service value relationship Face customers sincerely Ensure appropriate sizing (Narrow down targets) Accelerate actions to achieve medium- to long- term ma
Slide 57: Basic Strategies
Basic Strategies Shift management resources to medium-sized projects Reinforce the aftercare business for completed construction Establish an earnings base to complement the domestic architectural construction business Results Briefing for the Second Quarter Ended September 30, 2012 57
Slide 58: Shift to Medium-Sized Projects
Shift to Medium-Sized Projects Secure profits by thorough selection & planning Composition ratio of net sales of completed construction (image for FY2015) Focus on attracting orders from Others Medical welfare medium-size private hospitals, (25%) schools, production facilities and office buildings L
Slide 59: Earnings Structure of Medical Welfare Facilities
Earnings Structure of Medical Welfare Facilities Cumulative sales amount and profitability ratio by amount of sales for construction (Completed construction contracts from FY2006 through FY2011, excluding orders received in FY2010 and FY2011) Areas that account for half of the total and with high pr
Slide 60: Aftercare Business
Aftercare Business Establish a new organization to manage the aftercare business Currently considering a unifying Renewal management structure as a Group Toda Corporation New One-Stop construction Toda Reform Co., Ltd. APEC Engineering Co., Ltd Maintenance and Chiyoda Tochi Tatemono Co., Ltd. manage
Slide 61: Overseas Business
Overseas Business Exploit opportunities in Brazil and Southeast Asia Target for FY2015: Net sales of ¥30.0 billion Localize a Brazilian affiliate, expand business activities Exploit markets (countries Overseas net sales (consolidated) Line graph signifies net sales of orders received and regions) in
Slide 62: Real Estate Business
Real Estate Business Implement investment for securing stable earning source Target for FY2015: Gross profit of ¥4.0 billion Eliminated asset risk by posting a valuation loss in FY2011 Income from real estate, etc. (consolidated) Shorten real estate investment and purchasing ３.５ processes and expand
Slide 63: Organization & Cost, Governance
Organization & Cost, Governance Organization and cost reforms Promote further streamlining and maintain a ¥18.0 billion SG&A expenses structure (non-consolidated) Promote flexible manpower allocation including group companies Increase centralized purchasing levels by the Cost Control Center and from
Slide 64: 2-4. Revisions to Performance Targets
2-4. Revisions to Performance Targets Results Briefing for the Second Quarter Ended September 30, 2012 64
Slide 65: Revisions to Performance Targets
Revisions to Performance Targets Consolidated net sales to roughly ¥400.0 billion; extend target date by one year (Billions of yen) Before revision After revision (Reference) FY2014 FY2015 FY2012 (forecast) Consolidated 500.0 400.0 509.8 net sales more or less more or less Operating 2.0% 2.0% -3.8%
Slide 66: Promotion Structure
Promotion Structure Structural Reform Committee Implemented in October; Committee Chairman: President five meetings held *As of November 14 Sales Operation Reform Working Group (WG) Estimation and Procurement Reform WG WG is comprised of a manager and four or five Construction Cost Reduction and Con
Slide 67: Toda Corporation
OSTODA TODA CORPORATION (SINCE 1881) 67