Horiba, Ltd. · TSE:6856
Horiba — Nomura Investment Forum 2016
45 slides from Horiba's conference presentation, Dec 1, 2016
Slide 1: HORIBA, Ltd. Nomura Investment Forum 2016
HORIBA, Ltd. Nomura Investment Forum 2016 December 1, 2016 Hotel Chinzanso Tokyo © 2016 HORIBA, Ltd. All rights reserved. 1
Slide 2: Contents
Contents Review of Nine Months of 2016 2016 Full Year Forecast Business Segment Outline Shareholder Return Financial Data Corporate Profile [Disclaimer] Plans and forecasts in this presentation that do not constitute historical facts are predictions concerning future business results. Th
Slide 3: Contents
Contents Review of Nine Months of 2016 2016 Full Year Forecast Business Segment Outline Shareholder Return Financial Data Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 3
Slide 4: Review of Nine Months of 2016
Review of Nine Months of 2016 Earthquakes in Kumamoto Brexit (U.K.’s decision to leave EU) External Exhaust gas and fuel economy testing Events problems Appreciation of the yen “HORIBA BIWAKO E-HARBOR,” a new R&D /production base, opened in May 2016. Internal Full year results with the f
Slide 5: The 2016 Kumamoto Earthquake
Review of Nine Months of 2016 The 2016 Kumamoto Earthquake (occurred on April 14 and 16) HORIBA STEC, Co., Ltd., Aso Factory -Location: Nishihara-mura (village), Kumamoto Prefecture -Major products: Mass flow controller in the Semiconductor segment -Damage: No damage on people but some damage to the
Slide 6: Contents
Contents Review of Nine Months of 2016 2016 Full Year Forecast Business Segment Outline Shareholder Return Financial Data Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 6
Slide 7: Sales, OP (Jan.-Sept. Results and Full year forecast)
Sales, OP (Jan.-Sept. Results and Full year forecast) (Billions of yen) 2015 2016 2015 2016 2016 Full year [Jan.-Sept. Result] Sales 2015 2015 Previous Jan.-Sept. Jan.-Sept. vs 2016 Results Forecast vs 2016 vs revised - Yen appreciation forecast Decreased sales and OP. Auto 40.7 39.4 -3.2% 65.4 64
Slide 8: Sales, OP (Quarterly Results and Forecast)
Sales, OP (Quarterly Results and Forecast) (Billions of yen) 2015 2016 [4Q forecast] Sales 4Q Full year 1Q 2Q 3Q 4Q Full year 1Q 2Q 3Q Forecast forecast Auto Auto 14.1 12.5 14.0 24.7 65.4 14.9 13.1 11.2 24.5 64.0 - Yen appreciated but P&E 4.2 3.9 3.6 4.8 16.7 4.1 3.6 4.0 4.6 16.5 volume increase - O
Slide 9: Bookings trend
Bookings trend (Billions of yen) Bookings Backlog 2015 2016 2016 2016 4Q 1Q 2Q 3Q 2Q end 3Q end Auto 16.2 12.3 14.7 18.6 42.1 49.5 P&E 4.1 3.4 4.1 3.6 4.5 4.2 Medical 7.1 7.6 6.4 5.6 3.9 3.5 Semi 6.9 9.5 9.6 10.4 4.4 5.0 Scientific 7.5 5.6 5.3 5.8 7.8 7.9 Total 42.0 38.6 40.3 44.2 63.0 70.3 3Q Booki
Slide 10: Full Year Forecast
Full Year Forecast (Billions of yen) Jan.-Sept. Jan.-Dec. Results Results 2016 Forecast Previous vs Fore. as of 2015 2016 2015 May 11 Fore. as of Forecast Fore. as of Aug. 3 Aug. 3 Sales 120.3 116.9 171.9 175.0 170.0 170.0 - O.P. 13.8 10.6 20.1 17.5 17.5 17.5 - Ordinary profit 13.4 10.3 19.6 16.5 17
Slide 11: 2017 market environment
2017 market environment Expect steady R&D investment by automotive manufacturers Auto thanks to a tightening of emission regulations in EU/Japan and RDE in EU. U.S.: Expect firm investment demand from petrochemical companies. P&E China: Closely monitor in demand is likely due to the new regulation f
Slide 12: Contents
Contents Review of Nine Months of 2016 2016 Full Year Forecast Business Segment Outline Shareholder Return Financial Data Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 12
Slide 13: Auto Nine Months Results and Forecast for 2016
Auto Nine Months Results and Forecast for 2016 (Billions of Yen) 2016 Nine Months 2016 Nine Months Results Sales (prior year) + EMS 25.1 (25.2) EMS Steady R&D investment by auto manufacturers MCT 7.4 (12.2) MCT - Decrease in sales and profit in Japan and EU ITS 1.2 (1.2) ECT + Incremental sales due
Slide 14: Auto EMS (Emission Measurement Systems) Business
Auto EMS (Emission Measurement Systems) Business EMS Business EMS Sales (Billions of Yen) 50.0 Solid sales in Japan (automakers, parts makers) 41.5 41.5 41.4 41.4 39.7 Steady investment in Japan 40.0 37.4 37.4 39.8 WLTP*(unified emission regulations by the UN) Start in Sep. 2017 in EU and in 2018 in
Slide 15: Auto Investment in Emerging Countries
Auto Investment in Emerging Countries Opening HORIBA India Technical Center (Pune) in Nov. 30, ‘16 HORIBA India Private, Ltd. ・Establish 2006 ・Employee 281 HORIBA India Technical Center (Pune) ・9th Automotive Test Laboratory in HORIBA Gr. ・Coordination with Biwako E-HARBOR -> Providing global R&D su
Slide 16: Auto 46th Machinery Design Award's Grand Prix
Auto 46th Machinery Design Award’s Grand Prix Portable Emission Measurement Systems(OBS-ONE Series) “Machinery Design Award” Prestigeous design award given to industrial products Received the Minister of Economy, Trade and Industry Award (Grand Prix) for the first time Portable Emission Measurem
Slide 17: Auto MCT Business / ECT business
Auto MCT Business / ECT business MCT Business (Mechatronics) MCT Sales (Billions of Yen) ・Sep. 2017: WLTP/RDE regulations to start in EU 30.0 Auto manufactures investment in 2016 is sluggish 19.7 20.0 16.2 14.0 13.7 ・Strategic projects are increasing in China Aim to receive orders for market share e
Slide 18: P&E Nine Months Results and Forecast for 2016
P&E Nine Months Results and Forecast for 2016 (Billions of Yen) 2016 Nine Months Results - Weak sales of stack gas analyzers in Asia (mainly in China) - Weak sales of water measurement systems in Japan 2016 Full-Year Forecast + Expect firm investment by semiconductor manufacturer in Asia - New regul
Slide 19: P&E Shift from product sales to system sales
P&E Shift from product sales to system sales Expand business opportunity by providing business solutions Case of the process analytical measurement business in Texas, U.S. Oil refining/ Target: Oil refining and petrochemical plant companies petrochemical HORIBA: Sales of systems that combine gas or
Slide 20: P&E HORIBA's plans
China (Shanghai) environment regulations and P&E HORIBA’s plans Revised anti-pollution act: VOC regulations Details: Regulations on source of VOC (Volatile Organic Compounds) Start: 2016 Shanghai city preceded other regions in adopting the regulations. Gradually expand industries to cover by Jan. 20
Slide 21: Medical Nine Months Results and Forecast for 2016
Medical Nine Months Results and Forecast for 2016 (Billions of Yen) 2016 Nine Months Results - Sales decrease in yen terms due to appreciation of yen + Firm sales of Hematology and CRP analyzers in Japan 2016 Full year Forecast - Expect cost increase due to FDA approval expenses and new product prom
Slide 22: Medical Accelerating product development
Medical Accelerating product development Accelerating development by sharing technology of HORIBA bases in Japan and France HORIBA ABX Technology sharing HORIBA in Japan in France New brand “Yumizen” (medium-sized) “Microsemi LC-767CRP” (small-sized) Launched in July 2015 (in EU) Launched in March 2
Slide 23: Medical Expanding product line-up
Medical Expanding product line-up Alliance with JEOL Ltd. to sell clinical chemistry devices in EU and U.S. Outline: OEM sales of automatic biochemistry analyzers Target: Hospitals and diagnosis centers in EU and U.S. Release: In the EU market in 1Q of 2017 Objective: Increase products for the bioch
Slide 24: Semi Nine Months Results and Forecast for 2016
Semi Nine Months Results and Forecast for 2016 (Billions of Yen) 2016 Nine Months Results - Sales decrease in yen terms due to the weaker U.S. dollar - Aso Factory’s damage from the Kumamoto earthquake in April 2016 + Expansion in demand of investment from semiconductor manufacturers 2016 Full-Year
Slide 25: Semi Aso Factory's Investment for expansion
Aso Factory’s Investment for expansion Semi / Mass flow controller (MFC) market share Investment in the Aso Factory Outline: Expansion of HORIBA STEC’s Aso Factory Amount: 2.2bn yen Groundbreaking: December 2016 Purpose: Improve production capacity of MFC The first company which made an investment a
Slide 26: Scientific Nine Months Results and Forecast for 2016
Scientific Nine Months Results and Forecast for 2016 (Billions of Yen) 2016 Nine Months Results - Sales decrease in yen terms due to the appreciation of yen - Weak sales to universities in U.S. 2016 Full-Year Forecast - Sales decrease in yen terms due to the appreciation of yen + Seek to explore new
Slide 27: Scientific HORIBA products play an active part in space
Scientific HORIBA products play an active part in space HORIBA Gratings Business ・ Core parts of spectroscopy devices Gratings’ ・ Top market share in the world consolidated sales ・ Developed by HORIBA Jobin Yvon 3.4bn yen (France) (2015 results) Loaded on several space probes, incl. Juno which orbit
Slide 28: Water Focus on the measurement of Water
Water Focus on the measurement of “Water” Integrate water measuring resources to HORIBA Advanced Techno Ltd. (Kyoto) Jan. 2017 Target a broader market The water business of HORIBA, Ltd. will be succeeded to 20bn yen HORIBA Advanced Techno 10bn yen (by simplified absorption-type company split) Deve
Slide 29: Contents
Contents Review of Nine Months of 2016 2016 Full Year Forecast Business Segment Outline Shareholder Return Financial Data Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 29
Slide 30: Shareholder Return
Shareholder Return Basic policy - Dividend payment + Share buyback = 30% of Consolidated net profit to be targeted - Remaining earnings are retained internally for strategic investment (i.e., facilities, M&A) Dividends and Share buybacks - 2014 Results 67 yen per share - 2015 Results 70 yen per shar
Slide 31: Symbol of MLMAP2020
Symbol of MLMAP2020 ONE STEP AHEAD - To create a next stage of HORIBA - Step out of the existing business fields and pursue further expansion. Take a new perspective and overcome technological/market/organization barriers. Be flexible, think outside the box, and move up to the next stage. © 2016 HOR
Slide 32: Contents
Contents Review of Nine Months of 2016 2016 Full Year Forecast Business Segment Outline Shareholder Return Financial Data Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 32
Slide 33: Operating profit analysis (vs. 2015)
Operating profit analysis ( vs. 2015 ) (Millions of Yen) 2015 2016 Jan.-Sep. Jan.-Sep. 13,887 Increase Increase EX impact EX impact Other Sales Cost of R&D cost expenses 10,659 amount goods sales for GP for Exp. increase increase +5,970 -5,243 -4,597 +2,494 -1,037 -814 Sales impact / Exchange impact
Slide 34: Capital Investment, Depreciation, R&D
Capital Investment, Depreciation, R&D (Billions of Yen) 2014 2015 2016 Previous 12months 12months Jan.-Sep. Oct.-Dec. Forecast Forecast Results Results Results Fore. (12months) (12months) PP&E 9.1 14.9 8.5 6.8 15.3 15.3 Intangibles 1.8 1.4 0.2 0.5 0.7 0.7 Capital Investment 11.0 16.3 8.7 7.3 16.0 16
Slide 35: Impact of fluctuation in foreign exchange
Impact of fluctuation in foreign exchange Exchange rate impact Exchange rate for 2016 Forecast (2016 Nine Months Results) USD/JPY:107 , EUR/JPY:120 (Millions Sales (4Q : USD/JPY:102, EUR/JPY:115) of Yen) Total USD EUR GBP Auto -3,401 -723 -928 -1,479 Exchange rate impact P&E -643 -305 -104 -22 for 2
Slide 36: Cash Balance
Cash Balance (Billions of yen) (Consolidated basis, each end of the year) Total Loan Balance 28.0 44.7 44.8 Bond 24.1 redemption in 2020 Cash * Cash * Bonds15.0 Cash * Bonds Cash * 51.1 47.8 51.5 15.0 49.2 Bonds15.0 Long 16.8 Long Bonds15.0 17.3 Borrowed Long 2.2 from JBIC Long 2.5 15.1bn yen Short1
Slide 37: Changed the accounting policy for revenue recognition
Changed the accounting policy for revenue recognition 2014 2015 2016 Not installed Not installed (Original) Not arrived Not arrived Installed Installed (New) Delivered Delivered Changed points: Original Shipment base New The date of delivery or installation based on contractual arrangements Applied
Slide 38: Contents
Contents Review of Nine Months of 2016 2016 Full Year Forecast Business Segment Outline Shareholder Return Financial Data Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 38
Slide 39: Corporate Profile
Corporate Profile Atsushi Horiba Head office Kyoto, Japan President & CEO Founded 1945 Incorporated 1953 CEO Atsushi Horiba Fiscal year end December 31 - Corporate motto - To have interest and pride in our work to enjoy our lives © 2016 HORIBA, Ltd. All rights reserved. 39
Slide 40: Business Segments
Business Segments Automotive Test Systems Emission Measurement Systems (EMS) Mechatronics Devices (MCT) Driving Control Systems (ITS) Engineering Consultancy & Testing (ECT) Process & Environmental Environmental Systems Environmental Radiation Monitor Environmental Regulation & Process Business Medi
Slide 41: Well Balanced Business Operation -Five Business Segments-
Well Balanced Business Operation -Five Business Segments- Business & Geographic Composition of Sales(2015) Sales 170.8 Billions of Yen P&E Scientific 27.016.4 Euro JPY (16%)(11%) EU Scientific Automotive 24% Japan 25.6 Semiconductor 64.2 31% (17%) (37%) 35.3 (21%) America Semi 19% Asia 28.9 Medical
Slide 42: Global Market Share
Global Market Share Automatic Blood Cell Counter Emission Measurement Systems Stack Gas Analyzers plus CRP 80% 20% 100% (Only in Japan) Mass Flow Controllers Raman Spectrophotometers Gratings 55% 30% 35% ※Market shares quoted are estimates by HORIBA. © 2016 HORIBA, Ltd. All rights reserved. 42
Slide 43: HORIBA Worldwide
HORIBA Worldwide Sales of FY2015: 170.8 BJPY The Number of Group Companies by region (As of December 31, 2015) America 9 Europe 23 Asia 17 (4 in Japan, including HORIBA, Ltd.) Total 49 © 2016 HORIBA, Ltd. All rights reserved. 43
Slide 44: Employees by Region
Employees by Region Other Americas 3% 従業員数 Total Number of Employees 2015年12月31日現在 Other Europe 2% USA 6,831 11% Total Asia: 3,545 Germany Japan 8% 52% 38% UK Total Europe: 2,356 10% 34% France Other Asia Total Americas: 930 14% 14% 14% © 2016 HORIBA, Ltd. All rights reserved. 44
Slide 45: © 2016 HORIBA, Ltd. All rights reserved.
© 2016 HORIBA, Ltd. All rights reserved. 45 45