Hanwa Co., Ltd. · TSE:8078
Hanwa — FY2015 Earnings Presentation
29 slides from Hanwa's earnings presentation, May 23, 2016
Slide 1: Financial Results for the Fiscal Year ended March 31, 2016
FINANCIAL RESULTS for the Fiscal Year ended March 31, 2016 May 23, 2016 HANWA CO., LTD. Copyright 2016 Hanwa Co., Ltd. All Rights Reserved 1
Slide 2: Overviews of Financial Results
Overviews of Financial Results • As for the result for this fiscal year, net sales has reached to 1,511.8 billion yen, decreased by 13.0%, due to decrease in Petroleum/chemicals and steel businesses. • On profit side, operating income have decreased by 4.9%, due to decrease profit in metals/alloys a
Slide 3: Operating Results (consolidated)
Operating Results ( consolidated ) （Millions of yen） Rate of ・Net sales has decreased by FY2015 FY2014 changes 13.0% from the previous year, Net sales 1,511,800 1,737,397 -13.0% due to a downfall of price of petroleum and steel products. Gross profit 56,559 55,729 +1.5% ・SG & A expenses increased by
Slide 4: Changes in Business results (consolidated)
Changes in Business results （ consolidated ） Net sales （100 millions of yen） The U.S. economy recovered slowly but 20,000 Year ended Interim period 16,825 17,373 economies in other regions were 16,000 15,118 lackluster: concerns about political 15,000 instability in Europe, slowing economic （forecas
Slide 5: Financial Position (consolidated)
Financial Position ( consolidated ) （Millions of yen） Rate of ・Total assets decreased by 7.9% FY2015 FY2014 from the end of the previous change year, due to decrease of trade Total assets 599,694 651,456 -7.9% receivables and inventories correlated with decrease of sales. Current assets 451,253 510,
Slide 6: Cash Flows Situation (consolidated)
Cash Flows Situation ( consolidated ) （Millions of yen） ・Net cash provided by operation was 53.1billion yen due to collection of FY2015 FY2014 change working capital progressed with decrease in net sales Cash flows from ・Net cash used in 53,098 1,790 +51,308 Operating activities investment was 10.4
Slide 7: Segment Information (consolidated)
Segment Information ( consolidated ) Net sales Segment income （Millions of yen） Rate of Rate of FY2015 FY2014 FY2015 FY2014 change change Steel 798,691 878,715 -9.1% Steel 14,829 14,735 +0.6% Metal & alloys 131,188 131,171 +0.0% Metal & alloys 2,217 343 +546.4% Non-ferrous Non-ferrous metals 82,081
Slide 8: Steel Business Segment
Steel Business Segment （Millions of yen） Net sales Segment income Profit ratio FY2015 798,691 14,829 1.9% FY2014 878,715 14,735 1.7% Low level of factory utilization rates, delay and slow progress of construction projects made movement of steel products stagnant. Although the profitability of constr
Slide 9: Transaction volume in Steel Segment (unconsolidated)
Transaction volume in Steel Segment (unconsolidated) Long product sales volume was almost no change even though dull demand involving construction in Japan. Flat product sales volume fell almost 10% due to low factory utilization rates, lower exports, no change in demand for construction materials s
Slide 10: Market Trend of Long Products
Market Trend of Long Products Movement of long products was slow because of construction project delays and slow progress. Along with lower prices of steel raw materials, the result was a slow decline in steel prices. Steel mills have started raising prices in response to the upturn in the price of
Slide 11: Market Trend of Flat Products
Market Trend of Flat Products Demand for flat products was low because of declining demand in Japan and sluggish exports caused by the lack of overseas economic growth. The pace of price declines increased in the fiscal year’s second half as market inventories remained high. Currently, steel mills a
Slide 12: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials Despite declining steel demand in China, major mining companies that have increased capacity continued to offer iron ore at low price. Imported iron ore price plunged as a result. The price of iron ore rebounded in March in response to China’s announcement of econ
Slide 13: Coking coal price and contract prices
Demand and price of coking coal 【Coking coal price】 have been weak just as with iron ore. 100 Coking coal(US$：/FOB Australia) Although expectation for higher steel demand pushed up the price, it is once again moving down. 80 Contract prices between mining companies and Japanese steel mills decreased
Slide 14: Markets Trend of Steel Scrap
Markets Trend of Steel Scrap The market price of steel scrap declined due to pressure from cheap exports of Chinese billets as the cost of raw materials fell. The sharp drop in the price of steel scrap and sluggish construction activity in Japan brought down the price of D-bar. The price of steel sc
Slide 15: Steel Market Trend in China
Steel Market Trend in China Chinese steel products export volume increased as crude steel production remained high even though steel demand has been lackluster. Market prices in China plunged because of depressed demand but started recovering after the Chinese new year of 2016 and then rose rapidly
Slide 16: Metals & Alloys Business Segment
Metals & Alloys Business Segment （Millions of yen） Net sales Segment income Profit ratio FY2015 131,188 2,217 1.7% FY2014 131,171 343 0.3% Indonesia’s embargo on nickel ore exports created higher demand for alternative metals. Sales of stainless steel base materials and ferroalloys increased but sal
Slide 17: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys Soft demand for stainless steel and weakness in global markets for crude oil and other commodities led prices of stainless steel raw materials weaken. There have been indications of a price upturn since start of the new fiscal year. 2,500 140 (Ni, FeSi, MeSi, Stainles
Slide 18: Non-ferrous Metals Business Segment
Non-ferrous Metals Business Segment （Millions of yen） Net sales Segment income Profit ratio FY2015 82,081 848 1.0% FY2014 83,365 1,146 1.4% Net sales benefited from newly consolidated subsidiary Seiki Metal and a higher sales volume of copper, zinc and precious metal scrap. But a decline in non-ferr
Slide 19: Markets Trend of Non-ferrous Metals
Markets Trend of Non-ferrous Metals LME prices continued to decline because of concerns about slowing economic growth and an oversupply of these metals in China. Prices recovered after the Chinese new year but are now showing signs of weakness again. 2,400 7,500 7,000 2,200 6,500 Al,An,Pb(US$/t) 2,0
Slide 20: Foods Business Segment
Foods Business Segment （Millions of yen） Net sales Segment income Profit ratio FY2015 90,671 75 0.1% FY2014 87,645 583 0.7% Demand in Japan was weak and prices in major fish species were lower than in the previous fiscal year. Newly consolidated subsidiary Seattle Shrimp Seafood contributed to sales
Slide 21: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products The yen’s weakness has kept prices almost unchanged in Japan even though demand has been sluggish. Offer prices for salmon from packers were weak because of the large catch of wild salmon. But prices are rising due to the farmed salmon seaweed crisis in Chile.
Slide 22: Petroleum & Chemicals Business Segment
Petroleum & Chemicals Business Segment （Millions of yen） Net sales Segment income Profit ratio FY2015 276,450 1,974 0.7% FY2014 429,919 2,481 0.6% Net sales and earnings were down as prices of refined products fell along with the cost of crude oil. Lower bunker fuel demand caused by the weak shippin
Slide 23: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products Although price of crude oil initially recovered somewhat from last year’s big drop, the price has been falling again due to slowing economic growth in China, increasing U.S. inventories, the inability of oil-producing countries to agree on production cu
Slide 24: Overseas Sales Subsidiaries Segment
Overseas Sales Subsidiaries Segment （Millions of yen） Net sales Segment income Profit ratio FY2015 177,617 (708) -0.4% FY2014 179,564 (59) -0.0% Although weaker yen increased conversions of overseas sales, the downturn in prices of bunker fuel, non-ferrous metals and other commodities brought down t
Slide 25: Other Segment
Other Segment （Millions of yen） Net sales Segment income Profit ratio FY2015 67,254 1,375 2.0% FY2014 62,826 743 1.2% Net sales were higher mainly because of installations of leisure facilities and an increase in industrial machinery sales in the machinery category. Higher lumber prices associated w
Slide 26: Progress of Business Strategy
Progress of Business Strategy 【Strengthening of Domestic Business】 M&A for strengthening of function Acquisition ownership of Fukuoka Kogyo Co., Ltd.(Apr-2015) Acquisition ownership of Daiko Sangyo Co., Ltd.(Apr-2015) Acquisition ownership of Daisun Co., Ltd. (Jul-2015) Acquisition ownership of Nikk
Slide 27: Business Forecast FY2016 (year ending March 31, 2017)
Business Forecast FY2016 ( year ending March 31, 2017) We forecast better net sales and earnings in FY2016, expecting benefit from higher demand in the construction and other market sectors and a small recovery in commodity prices. In addition, we do not foresee a repeat of the one-time factors that
Slide 28: Forecast of Segment Information
Forecast of Segment Information Net sales Segment income （Millions of yen） Rate of Rate of FY2016 FY2015 FY2016 FY2015 change change Steel 875,000 798,691 +9.6% Steel 16,400 14,829 +10.6% Metal & alloys 132,000 131,188 +0.6% Metal & alloys 2,200 2,217 -0.8% Non-ferrous Non-ferrous metals 75,000 82,0
Slide 29: A Cautionary Note on Forward-looking Statement
A Cautionary Note on Forward-looking Statement 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