Slide 1: FY2017 Full-Year Business Performance & New Mid-term Business Plan (2018-2021)
SUMIDA CORPORATION FY2017 Full-Year Business Performance & New Mid-term Business Plan (2018-2021) February 14, 2018
Slide 2: Today's Speakers
Today’s Speakers Representative Executive Officer and CEO Shigeyuki Yawata Representative Executive Officer and President Tomoharu Suseki Representative Executive Officer and CFO Yoshiyuki Honda Copyright© 2016 SUMIDA CORPORATION. All rights reserved. 2
Slide 3: Today's Program
Today’s Program １．Summary CEO Shigeyuki Yawata ２．FY2017 Q4 and Full-Year Consolidated Financial Results ＣＦＯ Yoshiyuki Honda 3. Master Plan Stage Ⅲ (2018-2021) Mid-Term Business Plan President Tomoharu Suseki CFO Yoshiyuki Honda 4. Q & A Session Copyright© 2015 SUMIDA CORPORATION. All rights reserved
Slide 4: Summary
Summary Mid-term Business Plan StageⅡ (2015-2017）: Achievements Sales 5-billion-yen ‐Expansion of Automotive and Industry-related sales operating Income Production achieved ‐Vietnam No.2 plant & Ji’an plant in China ⇒Low cost one year ‐Europe and Mexico plants ⇒ Automation ahead of schedule R&D - Hi
Slide 5: FY2017 Q4 and Full Year Consolidated Financial Results
FY2017 Q4 and Full Year Consolidated Financial Results Yoshiyuki Honda CFO Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 5
Slide 6: FY2017 Q4 P/L based on IFRS
FY2017 Q4 P/L based on IFRS （Millions of yen） 16.Ｑ4 17.Q3 17.Q4 Change % Change % （A） （B) （C） （C)/(A) （C）/(B) S a l e s 19,651 23,164 23,621 20.2％ 2.0％ G r o s s I n c o m e 3,468 4,021 3,423 Gross margin 17.7% 17.4% 14.5% Operating Income 1,260 1,774 1,097 △12.9％ △38.2％ Operating margin 6.4% 7.7% 4
Slide 7: Breakdowns of Operating Income Change
Breakdowns of Operating Income Change FY2016 4Q → FY2017 4Q （Millions of yen） Effects of Productivity FOREX Sales up up 50 /Product mix 140 420 FY2016 4Q Operating Copper price Income up FY2017 4Q 1,260 △320 Operating China wages Income /Social welfare R&D Exp. Expenses up 1,097 up up △240 △50 Other
Slide 8: FY2017 Full Year P/L based on IFRS
FY2017 Full Year P/L based on IFRS （Millions of yen） FY2016 FY2017 Change % （A） （C） （C)/(A) S a l e s 81,052 90,153 11.2％ G r o s s I n c o m e 14.861 15,134 Gross margin 18.3% 16.8％ O p e r a t i n g I n c o m e 6,270 6,217 △0.8％ Operating margin 7.7% 6.9％ N e t I n c o m e b e f o r e Ta x e s 5,4
Slide 9: Breakdowns of Operating Income Change
Breakdowns of Operating Income Change FY2016 Full Year → ＦY2017 Full Year （Millions of yen） Effects of FOREX Sales up Productivity up 500 100 /Product mix 1,190 FY2016 FY2017 Operating Copper price up Operating Income △820 Income 6,270 China wages 6,217 /Social welfare R&D Exp. up Others up △180 △13
Slide 10: Breakdowns of Operating Income Change
Breakdowns of Operating Income Change FY2017 Full Year Plan → ＦY2017 Full Year Actual （Millions of yen） China wages /Social welfare R&D Exp. Effects of down Expenses down increased 190 down 30 Sales up production FY2017 Actual 140 /Product mix 320 Operating FY2017 Plan 420 Income Operating Income Ef
Slide 11: Forecast of FY2018 Consolidated P/L based on IFRS
Forecast of FY2018 Consolidated P/L based on IFRS （Millions of yen） Forecast of FY2017 Change（％） FY2018 S a l e s 90,153 98,000 +8.7% Operating Income 6,217 6,200 △0.3% Operating margin 6.9% 6.3% Net Income before Taxes 5,697 5,400 △5.2% Net Income Attributable to S U M I D A C O R P O R AT I O N 4,
Slide 12: Breakdowns of Operating Income Change FY2017 Actual → FY2018 Forecast
Breakdowns of Operating Income Change FY2017 Actual → FY2018 Forecast （Millions of yen） Factors to increase operating income 7,000 Sales growth 1,000 Productivity 1,180 6,000 FY2017 improvements FY2018 Actual Forecast… Costs reduction 1,020 6,217 5,000 Effects of FOREX 400 △17 Expenses reduction 140
Slide 13: Master Plan Stage III (2018-2021) Mid-Term Business Plan
Master Plan Stage Ⅲ (2018-2021) Mid-Term Business Plan Feb 14, 2018 IR Briefing Session Tomoharu Suseki, President Yoshiyuki Honda, CFO Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 13
Slide 14: Master Plan Stage I, II, III
Master Plan Stage I, II, III (100 Million yen = Oku yen) Master Plan 2012-2021 BP 2012-2014 BP 2015-2017 BP 2018 ++ Stage I Stage II Stage III Sales: 600 Sales: 1,000 Sales: ≥1,000 OP: 50 Stage I: Building a base & Operational restructuring Stage I Sales Target: 600 →776 Targets and Results 2012 – 2
Slide 15: Stage I, II Results
Stage I, II Results (100 Million yen = Oku yen) OI% 7.7% 0.08 6.9% Target Act 1,200.00 Sales OI 250 0.06 4.3% 4.9% Sales 600 776 3.4% Stage I 0.04 Operating 2.7% 902 200 50 33 900.00 862 811 Income 0.02 776 2012 2013 2014 2015 2016 2017 Sales 1,000 902 639 150 Stage II Operating 600.00 513 50 62 Inc
Slide 16: Stage III Priority Action Plans
Stage III Priority Action Plans Stage III Growth & Diversification At the final stage of Master Plan, grow sales and operating income more and more. In addition, further expand our target market and products lineup, and reinforce business foundation. Further increase Automotive and Industry business
Slide 17: Stage III Numerical Targets
Stage III Numerical Targets 2018 - 2021 Operating Income 100 oku yen Operating income generated by Existing business 85 oku yen M&A activities 15 oku yen Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 17
Slide 18: Stage III Details of Numerical Targets
Stage III Details of Numerical Targets P/L Statement Plan Assumptions (100 Million yen = Oku yen) Existing M&A Total Exchange rates USD 110.0 Business EURO 136.0 Sales 1,180 200 1,380 CNY 16.4 Operating 85 15 100 income Copper price 6,800 USD/ton Net income 54 9 63 Note: We are not going to set a nu
Slide 19: Stage III Strategies by Market
Stage III Strategies by Market 2017 Act (100 Million yen = Oku yen) 2017 Act 2021 Plan CAGR 18.7% Automotive 581 760 6.9% Industry 151 190 5.9% 902 16.8% Consumer 169 230 8.0% Electronics 64.5% Total 902 1,180 6.9% 2021 Target Keep the level of growth rate in Stage II in Automotive and Industry rela
Slide 20: Automotive
Automotive Sales trend of 3 key products ABS HID Keyless Entry System Slightly up Down Up Total sales of these 3 products in Stage III will slow down compared with the previous stages. We will focus on the following 2 areas, so as to keep Automotive business growing more and more. EV/HEV Actuator Co
Slide 21: EV/HEV Applications
EV/HEV Applications EV （Car） Battery Management System Motor PCU Battery On-board Charger Contactless Plug in Charger Stand Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 21
Slide 22: Industry
Industry Applications on which we have been focusing FA RFID Medical, Healthcare Energy Up Up Up Down New applications to focus on in Stage III FA RFID Medical, Healthcare IoT Same as before New area to focus on Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 22
Slide 23: Industry 4.0 and IoT
Industry 4.0 and IoT Digital transformation in Manufacturing industry Industry 4.0 and Internet of Things (IoT) will expand networking of various machines and/or people. Our technologies can be applied to various business areas including power supply module, noise control and communication. Copyrigh
Slide 24: Consumer Electronics
Consumer Electronics Applications on which we have been focusing Inductor for Coils for Transformer for adapter Consumer Electronics contactless charging Up Up Up New applications to focus on in Stage III Review a lineup of metal type inductors, and expand their sales. Copyright© 2018 SUMIDA CORPORA
Slide 25: Consumer Electronics Applications
Consumer Electronics Applications Inductor Metal Inductor Transformer Air Coil Smartphone Home appliances Focus on the customers in Communication N.A., China and Japan Adaptor Server-related Smart home, AI speaker Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 25
Slide 26: Stage III Strategies on Regions
Stage III Strategies on Regions Establish a new site, and add new functions to the existing site as follows. The following 2 are our priority locations. India North America Expand our business, targeting at Further expand the current site, Automotive and Industry markets. sales office, and strengthe
Slide 27: Stage III Strategies on Manufacturing
Stage III Strategies on Manufacturing CAPEX Material Purchasing Maintain the level of CAPEX in 2017 Strengthen Centralized purchasing for the next 4 years. system more, to reduce the purchasing costs. Copper price assumption: Expansion of Major Plants 6,800USD/ton China Ji’An plant - Phase III Labor
Slide 28: Stage III Strategies on M&A Activities
Stage III Strategies on M&A Activities Category I Category II Category III Upstream Material Supplier Coil add Non-Coil Company Coil Business Passive Components Company Customers, Distributors & EMS Downstream Continue to search for, select, and negotiate with the company(ies) to merge and acquire o
Slide 29: For Further Growth
For Further Growth Sumida Business Principle：Global, Speed, Focus Global Act as a Global One in all aspects, including markets, customers, management staff, organization (e.g. manufacturing) Speed Work to become a leaner organization so as to quickly handle a need and make a decision Focus Keep focu
Slide 30: Stage III Finance Strategies
Stage Ⅲ Finance Strategies Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 30
Slide 31: FY2017 --- the Final Year of Mid-term Business Plan Stage II
FY2017 --- the Final Year of Mid-term Business Plan Stage Ⅱ （Millions of yen） FY2017 Achievement FY2017 Stage Ⅱ Plan % S a l e s 90,153 100,000 90.2％ Operating Income 6,217 5,000 124.3％ Operating margin 6.9% 5.0% N e t I n c o m e attributable to S U M I D A 4,504 2,600 173.2％ CO R P O R AT IO N US
Slide 32: Breakdowns of Operating Income Change FY2014 → FY2017
Breakdowns of Operating Income Change FY2014 → FY2017 Change of （Millions of yen） depreciation methods Effects of 600 IFRS Costs down 580 1,250 Effects of Forex Productivity up △580 1,500 FY2017 Sales up China wages Operating /Product mix /Social welfare Income 2,500 up R&D Exp. Others △2,140 up 6,2
Slide 33: Monitoring Targets/Components of ROE FY2017 (Actual)
Monitoring Targets/Components of ROE FY2017 FY2017 （Actual） （Plan） CCC 100 days 100 days ＲＯＥ (3 year 15.5％ more than 12％ average） Sales Profit Ratio 3.5% 2.6% Sales/Total Assets 1.2 1.2 Total Assets/Net Equity 3.6 3.7 （Net D/E Rtio） （1.0） （1.5） Copyright© 2018 SUMIDA CORPORATION. All rights reserved
Slide 34: Stage III Targets vs. FY2017
Stage Ⅲ Targets vs. FY2017 （Hundreds of Millions of yen） FY2017 FY2021 Targets CAGR Sales 902億円 902 1,380億円 1,380 11.2％ Operating Operating Income Income 62 62億円 100 100億円 12.6％ 12.6％ Net Income Net Income attributable attributabletoto SUMIDA 45 63 8.7％ CORPORATION 45億円 63億円 8.7％ SUMIDA CORPORATION
Slide 35: Breakdowns of Operating Income Change FY2017 → FY2021
Breakdowns of Operating Income Change FY2017 → FY2021 Factors increasing operating income （Hundreds of Millions of yen） Sales growth 40 Costs reductions 22 100 Productivity FY2021 30 improvements Forecast M&A and others 15 +38 100 TOTAL 107 Factors decreasing operating income Wages increase △24 50 F
Slide 36: Monitoring Targets/Components of ROE FY2017 FY2021 (Plan)
Monitoring Targets/Components of ROE FY2017 FY2021（Plan） CCC 100 days Less than 100 days ＲＯＥ （3 year 15.5％ 12.6％ average） Sales Profit Ratio 3.5% 4.3% Sales/Total Assets 1.2 1.1 Total Assets/Net Equity 3.6 2.5 （Net D/E Ratio） （1.0） （1.0） Targets are set in consideration of financial health 36 Copyri
Slide 37: Total CAPEX in Stage III (2018-2021)
Total CAPEX in Stage Ⅲ (2018-2021) （Hundreds of Millions of yen) TOTAL CAPEX For the coming 4 years For the past 4 years Growth 2017 （2018-2021） (2014-2017） % 350 〜 390 238 +50％ 88 〜 +60％ 【Estimated CAPEX Plan】 2018 2019 2020 2021 100 80〜95 80〜95 80〜95 37 Copyright© 2018 SUMIDA CORPORATION. All righ
Slide 38: Construction of a mechanism for internal control
Construction of a mechanism for internal control completed to support Mid-term Plan Stage Ⅲ １. Central control of foreign exchange risks (a) Natural hedge : same currency-based production and sales (b) Foreign exchange exposures of all Sumida group companies are centrally controlled at a Hong Kong s
Slide 39: Dividend Policy
Dividend Policy ◎ As returning profit to our shareholders is our top priority, we pay dividend based on payout ratio of 25%-30%. ◎ Dividend is paid for each quarter. ◎ From Q1 to Q3, we pay dividend that is determined at the end of each quarter. For Q4, the dividend is determined so that total annua
Slide 40: Disclaimer Regarding Forward Looking Statements
Disclaimer Regarding Forward Looking Statements Sumida Corporation (referred to as "Sumida") makes this document available for informational purposes only. This document contains certain “forward-looking statements” which reflect management’s current views and the assumptions made with respect to sp