Hanwa Co., Ltd. · TSE:8078
Hanwa — FY2016 Earnings Presentation
36 slides from Hanwa's earnings presentation, May 22, 2017
Slide 1: Financial Results for the Fiscal Year ended March 31, 2017
With Users FINANCIAL RESULTS for the Fiscal Year ended March 31, 2017 May 22, 2017 HANWA CO., LTD. Copyright© 2017 Hanwa Co., Ltd. All Rights Reserved 1
Slide 2: Operating Results (consolidated)
Operating Results ( consolidated ) With Users ・Net sales increased slightly as higher sales of ferroalloys and lumber offset the impact of low prices of petroleum and steel products. ・SG&A expenses increased by 7%, including a 2% increase resulting from newly consolidated subsidiaries. Personnel exp
Slide 3: Changes in Business Results (consolidated)
Changes in Business Results （ consolidated ） With Users Although monetary sales decreased because of low prices of commodities, the transaction volume was generally steady. Net income remained strong compared with prior years after excluding the one-time contribution to FY2015 net income from the ga
Slide 4: Effect of Profit/Loss from Market Value Accounting and Temporary Factors
Effect of Profit /Loss from Market Value Accounting and Temporary Factors With Users Reported ordinary income of 22.9 billion yen includes one-time factors such as fiscal year-end valuation gains and losses for inventories, derivatives and other items and a one-time loss at subsidiaries. After exclu
Slide 5: Segment Information (consolidated)
Segment Information ( consolidated ) With Users Lower commodity prices caused sales to decline in all segments except metals & alloys. Earnings increased mainly because of higher steel earnings and an improvement in the profitability of the food product segment. Net sales Segment income （billions of
Slide 6: Financial Position (consolidated)
Financial Position ( consolidated ) With Users ・Total assets increased by 16% from the end of the previous fiscal year primarily because of an increase in trade receivables from the gradual increase in sales. ・Interest-bearing debt increased by 9% in part due to the higher demand for funds in associ
Slide 7: Cash Flows Situation (consolidated)
Cash Flows Situation ( consolidated ) With Users ・Operating activities provided net cash of 3.9 billion yen because of an increase in revenue from business operations.. ・Investing activities used net cash of 18.4 billion yen because of cash used for short- term loans receivable. ・Financing activitie
Slide 8: Business Forecast FY2017 (year ending March 31, 2018)
Business Forecast FY2017 ( year ending March 31, 2018) With Users ・Net sales forecast Forecast a 12% increase in part because of the increase in commodity prices. ・Profit forecast Expect an improvement in earnings at subsidiaries with weak performances in the prior fiscal year and higher steel price
Slide 9: Forecast of Segment Information
Forecast of Segment Information With Users Anticipate higher sales in most segments mainly because of higher prices. Expect higher earnings in the metals & alloys segment due to an increase in earnings at subsidiaries and growth in equity-method income. Net sales Segment income （billions of yen） 35
Slide 10: Dividend Policy
Dividend Policy With Users 【Dividend Policy】 Our policy is to pay a stable dividend to shareholders. In addition, our aim is to increase the dividend based on growth in basic earnings resulting from actions to improve profitability and to reflect the level of returns from strategic investments. (Est
Slide 11: Steel Business Segment
Steel Business Segment With Users （billions of yen） ・Net sales Rate of Demand was firm but still somewhat sluggish FY2015 FY2016 and price hikes following the prior year’s change price reductions are still ongoing. The result Net sales 798.6 786.8 －2% was lower segment sales.. Segment income 14.8 18
Slide 12: Metals & Alloys Business Segment
Metals & Alloys Business Segment With Users （billions of yen） ・Net sales Rate of FY2015 FY2016 Although prices of metals were generally change flat, sales increased mainly because of Net sales 131.1 134.6 ＋3% higher sales of ferrochrome and nickel compounds.. Segment income 2.2 1.4 －36% ・Segment inc
Slide 13: Non-ferrous Metals Business Segment
Non-ferrous Metals Business Segment With Users （billions of yen） Rate of ・Net sales FY2015 FY2016 Low yen-denominated prices of non-ferrous change metals caused sales to decline. Net sales 82.0 79.2 －4% ・Segment income Segment income 0.8 1.0 ＋28% Earnings increased due to an improvement in earnings
Slide 14: Foods Business Segment
Foods Business Segment With Users （billions of yen） ・Net sales Rate of Sales in Japan remained sluggish and weak FY2015 FY2016 change demand for shrimp in the United States reduced the volume of sales. The result was a Net sales 90.6 89.0 －2% decrease in segment sales. Segment income 0.0 2.8 －% ・Seg
Slide 15: Petroleum & Chemicals Business Segment
Petroleum & Chemicals Business Segment With Users （billions of yen・ ）Net sales Rate of Prices of petroleum products were lower than in FY2015 FY2016 the previous fiscal year and weakness in the change global shipping industry reduced demand for Net sales 276.4 264.4 －4% bunker fuel. Segment sales de
Slide 16: Overseas Sales Subsidiaries Segment
Overseas Sales Subsidiaries Segment With Users （billions of yen） ・Net sales Rate of Sales were impacted by weak steel sales due FY2015 FY2016 change to U.S. anti-dumping measures and lower yen conversions of sales because of the yen’s Net sales 177.6 174.2 －2% appreciation. Segment income (0.7) 0.1
Slide 17: Other Segment
Other Segment With Users （billions of yen） Earnings growth was mainly attributable to Rate of the completion of amusement ride projects FY2015 FY2016 change in the machinery business and higher sales Net sales 67.2 73.0 ＋9% of lumber imported from Europe. 《Transaction volume in lumber business》 Segm
Slide 18: Progress of Medium-term Business Plan
Progress of Medium-term Business Plan With Users The return on invested capital (ROIC) improved due to the increase in ordinary income. The net debt-equity ratio was unchanged despite an increase in debt because demand for working capital changed stronger. The number of new customers has reached abo
Slide 19: Progress of Medium-term Business Plan
Progress of Medium-term Business Plan With Users The “Three S” Commitment - Steady, Speedy, Strategic - build our sustainable growth. STRATEGIC Dividend and equity in earnings of affiliates from strategic investments 0.7 billion yen (+0.5 billion yen from the previous year) SPEEDY Ordinary income fr
Slide 20: Profits of Group Companies
Profits of Group Companies With Users Overall, consolidated and non-consolidated earnings were higher despite an inventory disposal loss at Showa Metal in the metals & alloys segment. 【Ordinary income trend of subsidiaries by business segments】 (millions of yen) FY2015 FY2016 Increase - Decrease Con
Slide 21: Outline of strategic investment
Outline of strategic investment With Users We will continue making small natural resource investments targeting niche sectors that are vital for various industries. Another goal is building an overseas network for the collection of metal scrap. AFARAK Finland (South Africa, Turkey, Germany） FeCr, Si
Slide 22: Progress of QSP Business Strategy in Western Japan
Progress of QSP Business Strategy in Western Japan With Users We will continue executing the SOKOKA (fast delivery, small lot, Hokuriku Column Co., Ltd. (column processor/wholesaler) processing) strategy that targets regional demand and small-scale Matsuoka Kozai Co., Ltd. (Steel products wholesaler
Slide 23: Progress of QSP Business Strategy in Eastern Japan
Progress of QSP Business Strategy in Eastern Japan With Users Smaller number of business successions in Hokkaido Branch Office (Sapporo City) eastern Japan led us to strengthen ties with regional steel distributors and capture orders involving redevelopment and other regional Tomakomai Logistics Cen
Slide 24: Create another Hanwa in Southeast Asia Strategy
“Create another Hanwa in Southeast Asia” Strategy With Users We want to make the growing demand in the ASEAN region a key component of our business model. To accomplish this, we will form more alliances with companies in this region and conduct more joint activities with Japanese companies. 【The maj
Slide 25: Investment in Business
Investment in Business With Users We made business investments totaling about 11.2 billion yen in FY2016 to expand our base for earnings in the future. Investments are aimed at activities that can quickly contribute to earnings. We disposed about 3.2 billion yen of assets in FY2016. 【Current investm
Slide 26: Appendix
With Users Appendix Copyright© 2017 Hanwa Co., Ltd. All Rights Reserved 26
Slide 27: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials With Users Iron ore…The price increased along with rising steel prices in China but is currently weakening. Coking coal…The price increased rapidly mainly in response to restrictions on coal mines and transportation disruptions caused by flooding in China and to a
Slide 28: Steel Market Trend in China
Steel Market Trend in China With Users Supply/Demand…Output remains high because of firm domestic demand and a positive outlook. Currently, demand is changing and the pace of selling inventories of steel products is declining. Market price…Although prices were moving up mainly because of the futures
Slide 29: Markets Trend of Steel Scrap
Markets Trend of Steel Scrap With Users Supply/Demand…The volume of cheap billets from China decreased and overseas demand for scrap rose. Mainly due to scrap exports from China, supplies of scrap are no longer as tight as before. Market price…Scrap prices in international markets are strong and scr
Slide 30: Market Trend of Long Products
Market Trend of Long Products With Users Supply/Demand…The supply of long products was tight for a while because of growth in construction projects, declining inventories and restrictions on orders to manufacturers. But shipments are not recovering and inventories are increasing. Market price…In the
Slide 31: Market Trend of Flat Products
Market Trend of Flat Products With Users Supply/Demand…Demand was solid despite the lack of significant growth in demand in Japan. Supplies of some products were tight because of plant shutdowns, furnace maintenance and other reasons. Market price…Steelmakers raised prices as the cost of raw materia
Slide 32: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys With Users Nickel…The price was flat because of falling demand and consistently high inventories but prices started rising in response to mining restrictions in the Philippines. Currently, the price is moving down due to the resumption of nickel exports by Indonesia.
Slide 33: Markets Trend of Non-ferrous Metals
Markets Trend of Non-ferrous Metals With Users Aluminum…The LME price was flat in the fiscal year’s first half but began to slowly increase in the second half because of declining inventories and expectations about policies of the Trump administration. Copper…The price was flat in the fiscal year’s
Slide 34: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products With Users Shrimp…Prices are high in Southeast Asia because of low shrimp production in this region. Low shrimp inventory level kept prices high in Japan, too. Salmon…Prices are moving up in response to limited inventories caused primarily by the farmed salmon
Slide 35: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products With Users Crude oil…The price of crude oil slowly increased as the fiscal year began but then briefly dropped in response to Brexit. The price started moving up again following the September OPEC agreement to cut production. Petroleum products…Price mo
Slide 36: For Users, With Users
With Users For Users, With Users HANWA CO., LTD. This material contains statements (including figures) regarding Hanwa Co., Ltd.(“Hanwa”)’s corporate strategies, objectives, and views of future developments that are forward-looking in nature and are not simply reiterations of historical facts. These