Kawasaki Heavy Industries Ltd. · TSE:7012
Kawasaki Heavy Industries — Kawasaki Heavy Industrial — Q2 2023 Earnings Presentation
43 slides from Kawasaki Heavy Industries's earnings presentation, Nov 8, 2023
Slide 1: Financial Results for Second Quarter FY2023
Financial Results for Second Quarter FY2023 For the Year ending March 31, 2024 0 November 8, 2023
Slide 2: Table of Contents
0 Table of Contents 1 Consolidated Results for 3 Details by segment Second Quarter FY2023 Summary 3 Aerospace Systems 15 Segment 4 Rolling Stock 19 Statement of Comprehensive income 5 Energy Solution & Marine Engineering 23 （ES&M） Details of Change in business profit 7 Precision Machinery & Robot 27
Slide 3: Consolidated Results for Second Quarter FY2023 - Summary
Consolidated Results for Second Quarter FY2023 1 –Summary- Profit decreased YoY due to lump-sum loss recording related PW1100G-JM engine Except for the above, the overall results are as expected, though there are differences in the degree of achievement of each business (Billion Yen) FY23 Q2 YoY FY2
Slide 4: Consolidated Results - Segment
Consolidated Results for Second Quarter FY2023 1 –Segment- Business profit in ES&M increased due to a significant improvement in Ship & Offshore ① business Aerospace Systems recorded a loss related to the PW1100G-JM engine, and Precision Machinery & Robot posted lower sales and profits due to the sl
Slide 5: Statement of comprehensive income
Consolidated Results for Second Quarter FY2023 1 –Statement of comprehensive income- (Billion Yen) Details FY22 Q2 FY23 Q2 Change % % ① Cost to sales ratio Revenue 759.7 100.0 769.3 100.0 + 9.5 deteriorated due to a loss 1 of ¥58 billion yen Cost of sales 619.6 81.6 680.9 88.5 + 61.2 (reduction in r
Slide 6: Statement of comprehensive income
Consolidated Results for Second Quarter FY2023 1 –Statement of comprehensive income- (Billion Yen) Details FY22 Q2 FY23 Q2 Change % % ③ Although there is a year-end Finance income and Finance costs 5.1 - 1.6 - 6.7 valuation gain on foreign currency-denominated Net Interest expense (incl. dividend in
Slide 7: Details of change in business profit
Consolidated Results for Second Quarter FY2023 1 –Details of change in business profit- Change in product mix and other factors was affected by increased sales promotion expenses in PS&E and reduced operation in Precision Machinery & Robot Quarterly equalization of certain bonus provisions※1 depress
Slide 8: Details of change in business profit
Consolidated Results for Second Quarter FY2023 1 –Details of change in business profit- (Billion Yen) FY22 Q2 Details of change FY23 Q2 Business Change in Change in Loss Related to Business Effects of Change share of profit (loss) Change in the In-Service Profit product mix and of investments SG & A
Slide 9: Statement of financial position
Consolidated Results for Second Quarter FY2023 1 –Statement of financial position- (Billion Yen) End of End of Details Change Mar. 2023 % Sep. 2023 % Cash and cash equivalents 138.4 85.4 - 53.0 ① Increase in ES&M, PS&E, Aerospace Systems, etc Trade receivables (Incl. contract assets) 592.6 590.8 - 1
Slide 10: Statement of financial position
Consolidated Results for Second Quarter FY2023 1 –Statement of financial position- (Billion Yen) End of End of Details Change Mar. 2023 % Sep. 2023 % Trade payables 395.1 399.6 + 4.4 ③ Increase in borrowing as a normal business cycle in H1 Interest-bearing debt 589.8 706.0 3+ 116.2 Contract liabilit
Slide 11: Cash Flows
Consolidated Results for Second Quarter FY2023 1 –Cash Flows- (Billion Yen) FY22 Q2 FY23 Q2 Change Details Profit before tax 35.9 - 34.4 - 70.4 ① Q2 FY’22： Cash outflow in working Depreciation and amortization 37.5 43.5 + 5.9 capital component due to Increase and decrease in working capital - 80.7 -
Slide 12: Cash Flows
Consolidated Results for Second Quarter FY2023 1 –Cash Flows- Historical data shows CF from operating activities and free cash flows are improving Working capital temporarily increased due to a strong recovery in order-based businesses and sales growth in Powersports & Engine CF from operating aciti
Slide 13: Forecasts for FY2023 - Summary
Forecasts for FY2023 2 -Summary- Profit improved and a tailwind from the yen's depreciation enabled the company to remain in the black despite losses in the aero engine business. In the second half of the year, financial expenses are expected to incur a foreign exchange loss due to the progress of f
Slide 14: Forecasts for FY2023 - Segment
Forecasts for FY2023 2 -Segment- ES&M reflected improvement in Ship & Offshore business and Marine & Machinery business to raise its forecast ① The outlook for Precision Machinery and Robot is revised down to reflect the delay in the stagnation of the Chinese construction machinery market and the re
Slide 15: Aerospace Systems
Details by Segment 3 -Aerospace systems- FY2023.Q2（vs. FY2022.Q2） FY2023 forecast（vs. Forecast in Augst） Orders Increase due to increase in sales to MOD Orders Revised up due to increase in orders to received and Boeing, despite the loss (reduction in received MOD and Boeing, despite the loss +¥67.5
Slide 16: Aerospace Systems
Details by Segment 3 -Aerospace systems- (Billion Yen) FY2022 FY2023 FY2022 FY2023 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY22 Chg. Vs. Old FCST Q3-4 FCST Orders Received 125.6 193.2 + 67.5 345.5 550.0 560.0 + 214.5 + 10.0 366.8 Aerospace 92.4 202.5 + 110.1 253.9 415.0
Slide 17: Aerospace Systems
Details by Segment 3 -Aerospace systems- Net Sales or Revenue (billion yen) 161.1 Aerospace Aero Engines 122.1 128.7 120.5 67.0 109.3 110.2 93.9 99.7 93.3 93.5 39.1 41.5 44.9 81.5 80.2 48.9 74.6 39.3 70.0 71.5 21.7 25.4 63.2 17.9 63.4 94.0 26.4 35.1 83.0 87.1 13.6 24.6 88.5 23.3 75.6 23.9 70.0 74.2
Slide 18: Aerospace Systems: Market Overview and Specific Efforts
Details by Segment 3 -Aerospace systems- Market Overview Specific Efforts ⚫ Commercial business ⚫ Securing stable revenue in core business – Air passenger demand is almost back to – Cost reductions in existing orders of aircrafts for Boeing and commercial pre-COVID-19 levels aircrafts jet engines –
Slide 19: Rolling Stock
Details by Segment 3 - Rolling Stock - FY2023.Q2（vs. FY2022.Q2） FY2023 forecast（vs. Forecast in Augst） Orders Decrease due to decrease in Japan Orders Expected to remain at the same level received received -¥9.2 bil. ±¥0.0 bil. Revenue Increased due to an increase in the U.S., Revenue Same as above
Slide 20: Rolling Stock
Details by Segment 3 - Rolling Stock - Details of change in Business Profit(Loss) Appendix (billion yen) Revenue in components, overhaul Progress of the M9 Project for Long Island Rail Change Change in product mix and after-sales service(billion yen) Road in the U.S. (End of September ‘23) in revenu
Slide 21: Rolling Stock
Details by Segment 3 - Rolling Stock - Net Sales or Revenue (billion yen) Domestic & Asia North America 43.5 39.5 40.6 38.8 38.1 39.0 36.8 37.5 28.4 33.7 26.7 32.3 32.3 31.7 31.5 32.1 10.9 14.9 8.2 8.9 8.1 28.7 28.8 11.3 26.4 9.9 6.0 4.6 6.8 7.3 8.2 29.9 30.1 10.2 5.4 20.4 28.6 27.7 28.6 26.3 26.1 8
Slide 22: Rolling Stock: Market Overview and Specific Efforts
Details by Segment 3 - Rolling Stock - Market Overview Specific Efforts ⚫ The impact of COVID-19 ⚫ Compliance with delivery schedules for – Railway relate investment is resuming in both overseas projects domestic and foreign markets as the impact of COVID-19 subsides Dhaka ‣ All the 24 trains(144car
Slide 23: Energy Solution & Marine Engineering
Details by Segment 3 - Energy Solution & Marine Engineering - FY2023.Q2（vs. FY2022.Q2） FY2023 forecast（vs. Forecast in Augst） Orders Decreased due to a decrease in orders for Orders Revised up mainly due to increase in for received domestic municipal waste incineration received naval equipment for M
Slide 24: Energy Solution & Marine Engineering
Details by Segment 3 - Energy Solution & Marine Engineering - (Billion Yen) FY2022 FY2023 FY2022 FY2023 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY22 Chg. Vs. Old FCST Q3-4 FCST Orders Received 238.4 218.4 - 20.0 439.0 330.0 340.0 - 99.0 + 10.0 121.6 Energy, Plant & Mari
Slide 25: Energy Solution & Marine Engineering
Details by Segment 3 - Energy Solution & Marine Engineering - Net Sales or Revenue (billion yen) (Note) The prior results of previous segment have been reclassified to current segment Energy, Plant & Marine Machinery Ship & Offshore Structure 103.8 102.1 99.3 95.5 82.5 23.6 18.6 77.8 22.6 77.0 72.2
Slide 26: Energy Solution & Marine Engineering: Market Overview and Efforts
Details by Segment 3 - Energy Solution & Marine Engineering - Market Overview Specific Efforts ⚫ Energy system & Plant Engineering Providing products and services that enable Domestic Emerging Markets a seamless transition from low carbon to decarbonization Steady demand for Steady demand for – Expa
Slide 27: Precision Machinery & Robot
Details by Segment 3 - Precision Machinery & Robot - FY2023.Q2（vs. FY2022.Q2） FY2023 forecast（vs. Forecast in Augst） Orders Decreased due to a decrease in hydraulic Orders Revised down due to decrease in hydraulic received components for construction machinery received equipment for the construction
Slide 28: Precision Machinery & Robot
Details by Segment 3 - Precision Machinery & Robot - Details of change in Business Profit(Loss) Appendix (billion yen) Revenue of hydraulic components to China Revenue of robots by segment※ (billion yen) Effects of Change (billion yen) FX rates in revenue above： Q2 FY’22 FY’23 Change 88 above：Q3-4 b
Slide 29: Precision Machinery & Robot
Details by Segment 3 - Precision Machinery & Robot - Net Sales or Revenue (billion yen) Hydraulic Components & Systems 86.6 Robotics 73.1 73.5 70.3 31.8 65.0 60.6 61.2 61.5 55.2 57.6 29.0 28.5 30.5 53.6 52.6 53.7 48.3 49.8 48.8 27.8 49.3 45.4 22.6 20.7 22.8 15.1 17.0 16.9 54.7 20.4 19.8 9.9 14.3 14.
Slide 30: Precision Machinery & Robot: Market Overview and Efforts
Details by Segment 3 - Precision Machinery & Robot - Market Overview Specific Efforts ⚫ Construction machinery ⚫ Developing electrification and automation – Weak demand due to prolonged real estate technology for construction machinery recession, etc – Support customer development of – Demand outsid
Slide 31: Powersports & Engine
Details by Segment 3 - Powersports & Engine - FY2023.Q2（vs. FY2022.Q2） FY2023 forecast（vs. Forecast in Augst） Revenue Increased due to an increase in motorcycles Revenue Expected to remain at the same level due for Europe and four-wheelers for North to decrease in motorcycles in emerging +¥1.9 bil.
Slide 32: Powersports & Engine
Details by Segment 3 - Powersports & Engine - (Billion Yen) FY2022 FY2023 FY2022 FY2023 Forecast Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY22 Chg. Vs. Old FCST Q3-4 FCST Revenue 265.1 267.1 + 1.9 591.1 590.0 590.0 - 1.1 - 322.9 Motorcycles for developed contries 90.0 93.4 + 3.3
Slide 33: Powersports & Engine
Details by Segment 3 - Powersports & Engine - Net Sales or Revenue (billion yen) 177.3 148.5 143.9 138.3 139.1 126.0 123.1 111.1 113.4 107.5 102.7 93.2 82.9 80.8 85.7 78.8 68.3 58.9 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY2019 FY2020 FY2021 FY2022 FY2023 （IFRS） （IFRS） （IFRS） 25.6 Ope
Slide 34: Powersports & Engine: Market Overview and Efforts
Details by Segment 3 - Powersports & Engine - Market Overview Specific Efforts ⚫ U.S. ⚫ Supplying products as much as demanded – Our company's share of the retail – Flexibly change production and sales plans according to market is growing while the market sales conditions remains strong – Continuous
Slide 35: Shareholder Return
4 Shareholder Return Dividend Policy Dividend for FY2023 30% The medium- to long-term ⚫ Due to the loss recorded in the second quarter results consolidated dividend payout ratio related to the In-Service issues of PW1100G-JM Engine, full-year net income attributable to owners of the parent company h
Slide 36: Project Topics: SUISO Frontier Voyage
4 Project Topics International Voyage and Diplomacy of “SUISO Frontier” Madeleine King, Minister for Resources of Australia, Nishimura, Minister of Economy, Trade and Industry of Japan Kanehana, Chairman of the Board of KHI giving an explanation of the ship and others smile on board the ship Saudi A
Slide 37: Project Topics: GI Fund Projects and Hydrogen
Scope of the NEDO Green Innovation Fund Projects 4 Project Topics (GI Fund Projects) Marine Utilization Shipment Receiving Transport Expanding Circle of Hydrogen "Utilization" from Kawasaki City ― Role models for Hydrogen power generation ― Waterfront area of Kawasaki City Concluded a cooperative ag
Slide 38: Project Topics: Ninja e-1 and Z e-1
4 Project Topics Now “Ninja e-1” and “Z e-1” Introducing two types of BEVs in 2023 GO WITH GREEN Next Kawasaki's first EV motorcycles Introducing HEV start of sales in 2024 ⚫ Realization of Kawasaki "fun to ride" style even in EV motorcycles Expected to introduce hydrogen motorcycle in early 2030s P
Slide 39: Appendix - Details of change (FY'23 FCST)
Appendix 4 - Details of change (FY’23 FCST)- Change in Change in product mix, Change SG & A expenses product mix, SG & A expenses Effects of in sales and other factors and other factors FX rates Change Effects of in sales FX rates Loss Related to the In- Service issues of PW1100G-JM Engine Change in
Slide 40: Appendix - CAPEX, Depreciation and Amortization, R&D Expenses, Employees
Appendix 4 - CAPEX, Depreciation and Amortization, R&D Expenses, Number of employees - (Billion Yen, Persons) FY2022 FY2023 FY2022 2024年度 Q2 Actual Q2 Actual Change Actual Old FCST New FCST Chg. Vs. FY22 Chg. Vs. Old FCST CAPEX 41.9 55.8 + 13.8 96.3 125.0 115.0 + 18.7 - 10.0 Depreciation and amortiz
Slide 41: Appendix - Others
Appendix 4 - Others - ⚫ Order Backlog （billion yen) ⚫ Order Backlog in Ship & Offshore (billion yen) FY22 Q2 FY23 Q2 220.4 Q2/E Q4/E Actual Actual Change 191.6 184.5 179.4 174.8 Aerospace Systems 619.0 832.7 + 213.6 101.6 Rolling Stock 368.9 541.1 + 172.1 110.5 120.7 99.1 100.1 104.6 Energy Solution
Slide 42: Appendix - Others
Appendix 4 - Others - ⚫ Revenue in Foreign Currencies by Segment (USD) ⚫ Weighted-average Exchange Rates (billion USD) (EUR/JPY) FY2021 actual 130.47 FY2022 actual 141.38 FY2023 Q2 actual 152.98 FY2023 Q3-4 forecast 150.00 ⚫ Revenue in Foreign Currencies(EUR) (billion EUR) ※ Impact on business profi
Slide 43: Kawasaki, working as one for the good of the planet
Kawasaki, working as one for the good of the planet © Kawasaki Heavy Industries, Ltd. All Rights Reserved
Kawasaki Heavy Industrial — Q2 2023 Earnings Presentation on 6ix