Horiba, Ltd. · TSE:6856

Horiba — Daiwa Investment Conference Tokyo 2018

45 slides from Horiba's conference presentation, Mar 6, 2018

  1. Slide 1: Daiwa Investment Conference Tokyo 2018

    Daiwa Investment Conference Tokyo 2018 Atsushi Horiba Chairman & Group CEO HORIBA, Ltd. March 6-7, 2018 © 2018 HORIBA, Ltd. All rights reserved. 1

  2. Slide 2: New Management of HORIBA Group started

    Since Jan. 1st, 2018 New Management of HORIBA Group started © 2018 HORIBA, Ltd. All rights reserved. 2

  3. Slide 3: Change in Representative Directors

    Change in Representative Directors Name New title from Jan.1, 2018 Previous title Atsushi Horiba Chairman & Group CEO Chairman, President & CEO Juichi Saito Executive Vice Chairman & Group COO Executive Vice President Dr. Masayuki Adachi President & COO Senior Managing Director Takashi Nagano Direct

  4. Slide 4: Contents

    Contents 2017 Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate profile © 2018 HORIBA, Ltd. All rights reserved. 4

  5. Slide 5: Contents

    Contents 2017 Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate profile © 2018 HORIBA, Ltd. All rights reserved. 5

  6. Slide 6: Review of 2017

    Review of 2017  Start of the Trump administration in US  UK’s announcement to leave EU ⇨ General election in UK External  Presidential election in France, general election in Germany Events  Booming semiconductor market ⇨ Innovation such as IoT, AI, and autonomous vehicle operation  Automotive

  7. Slide 7: Summary of 2017 Results

    Summary of 2017 Results Renewed record-highs in sales, profit and dividend; 11.5% ROE Increase in sales and profit in the Automotive Test Systems and Semiconductor P&L segments Total assets were 265.9bn yen, up 26.2bn yen from the end of 2016, due to capital spending B/S Interest-bearing debt was

  8. Slide 8: 2017 Results

    2017 Results (Billions of Yen) 2016 2017 Forecast vs. vs. Results Results ： Record-high (as of Dec. 19) 2016 Forecast Sales 170.0 192.0 195.3 +25.3 +3.3 Operating Profit 18.4 24.5 26.8 +8.3 +2.3 O. P. % 10.9% 12.8% 13.7% +2.8p +1.0p Ordinary Profit 18.2 23.5 26.6 +8.3 +3.1 Net Income attributable to

  9. Slide 9: 2017 Results by Segment

    2017 Results by Segment (Billions of Yen) Sales Operating profit 2016 2017 2016 2017 Forecast vs. vs. Forecast vs. vs. ： Record-high Results (as of Dec. Results 2016 Forecast Results (as of Dec. Results 2016 Forecast 19) 19) Auto 62.2 72.0 73.3 +11.1 +1.3 3.5 6.7 7.6 +4.1 +0.9 P&E 16.7 17.0 17.4 +0.

  10. Slide 10: Contents

    Contents 2017 Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate profile © 2018 HORIBA, Ltd. All rights reserved. 10

  11. Slide 11: Market Assumptions for 2018

    Market Assumptions for 2018 Strong willingness to invest by the global automotive sector due to tighter emission Auto regulations in Japan & Asia and innovation for electrification & autonomous driving Recovery in investment by the oil industry due to higher oil prices P&E Tighter environmental regu

  12. Slide 12: Exchange rate

    Exchange rate (Yen) 2016 2017 2018 Results Results Forecast vs 2017 USD 108.78 112.16 110 -2.16 EUR 120.26 126.70 130 +3.30 1 yen O.P. sensitivity for 2018 Forecast (Yen appreciation) USD 0.21 billion yen EUR 0.02 billion yen © 2018 HORIBA, Ltd. All rights reserved. 12

  13. Slide 13: 2018 Forecast

    2018 Forecast (Billions of Yen) 2016 2017 2018 ： Record-high Results Results Forecast vs. 2017 Sales 170.0 195.3 210.0 +14.6 Operating profit 18.4 26.8 29.0 +2.1 O.P. % 10.9% 13.7% 13.8% +0.1p Ordinary profit 18.2 26.6 28.4 +1.7 Net Income attribute to Owners of Parent 12.9 16.2 19.0 +2.7 Net profit

  14. Slide 14: 2018 Forecast by Segment

    2018 Forecast by Segment (Billions of Yen) Sales O.P. 2017 2018 vs. 2017 2018 vs. ： Record-high Results Forecast 2017 Results Forecast 2017 Auto 73.3 79.0 +5.6 7.6 8.0 +0.3 P&E 17.4 19.0 +1.5 1.0 1.4 +0.3 Medical 25.1 26.0 +0.8 1.9 2.0 +0.0 Semi 53.3 58.0 +4.6 15.6 17.0 +1.3 Scientific 26.1 28.0 +1.

  15. Slide 15: Contents

    Contents 2017 Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate profile © 2018 HORIBA, Ltd. All rights reserved. 15

  16. Slide 16: Auto 2017 Results and 2018 Forecast

    Auto 2017 Results and 2018 Forecast (Billions of yen) 2017 Results ＜Auto Sales Breakdown＞ 79.0 *1 ＋ EMS Sales increase due to tighter emission regulations 73.3 10.5 ECT 65.4 62.2 8.0 1.5 ＋ MCT*2 Recovery in capital spending by automakers 1.6 4.2 7.2 1.6 18.0 ITS *4 1.6 18.3 MCT ＋ - ECT*3 Increase in

  17. Slide 17: The next-generation emission regulations; EVs generating activity

    Auto The next-generation emission regulations EVs generating activity (Billions of yen) Status of next-gen emission regulations Activity derived from EVs Test systems Regulation EU Japan Provide solutions from single systems(powertrain, motor) WLTP1 Oct. 2018(Plan) to comprehensive systems, incl. ve

  18. Slide 18: Contributing to R&D for autonomous driving vehicles

    Auto Contributing to R&D for autonomous driving vehicles Business in UK Action for business globalization Participate in the UK government project Event at the British Embassy Tokyo  Autonomous driving “UK Autodrive”  Automakers and UK government VIPs attended  Host demonstration experiment  HOR

  19. Slide 19: P&E 2017 Results and 2018 Forecast

    P&E 2017 Results and 2018 Forecast (Billions of yen) 2017 Results <Sales by Business> Japan: Replacement demand 19.0 ＋ Stack gas analyzers China: Demand increase, driven by 16.7 16.7 17.4 1.3 Other 1.1 1.4 1.9 VOC regulation 1.2 0.9 1.5 1.9 2.7 Process 2.5 2.4 2.1 Slow sales in the process measureme

  20. Slide 20: Business expansion in emerging markets

    P&E Business expansion in emerging markets Gas Water Launch new products in developing countries Sales increase by coping with local regulations (Tunable Laser Hydrogen Chloride Analyzer “TX-100”) Feature: No need of periodic replacement of parts; S. Korea Wastewater regulation change Easy calibrati

  21. Slide 21: Medical 2017 Results and 2018 Forecast

    Medical 2017 Results and 2018 Forecast (Billions of yen) 2017 Results New testing systems ＋ - Increase in expense in promoting hematology and CRP analyzers in Japan - Sales drop in South America Solution (Launch in 2017) ＋ Increase in expense for US FDA approval and - sales promotion of new products

  22. Slide 22: Medical Initiatives for business expansion

    Medical Initiatives for business expansion Long-term agreement with Siemens Healthineers New product “Yumizen H630CRP” with combined technology Contract signed: Oct. 2017 of Japan and France Contents: Supply middle-large hematology analyzer to  5 Diff. white cell diagnosis(France) Siemens, which pr

  23. Slide 23: Semi 2017 Results and 2018 Forecast

    Semi 2017 Results and 2018 Forecast (Billions of yen) 2017 Results MFC-related topics in Semi. market ＋ Record-high sales and O.P. Increase in storage for data centers High Record-high production volume in Increase throughput of Big Data ＋ demand for Mass Flow Controllers (MFC) related to AI and IoT

  24. Slide 24: Establish a stable delivery system; Enhance sales and service capabilities

    Establish a stable delivery system Semi Enhance sales and service capabilities Completed expansion of Aso factory Enhance global sales and service bases Expansion to satisfy further increase in demand Korea: new head office of HORIBA STEC KOREA, Ltd. Timely delivery of high-quality products  Starte

  25. Slide 25: Scientific 2017 Results and 2018 Forecast

    Scientific 2017 Results and 2018 Forecast (Billions of yen) 2017 Results Diffraction gratings  Core component of - Sluggish sales to universities in Japan, US and EU optical products ⇔ ＋ Strong sales in China  Global state of the art technology ＋ Increase in R&D expenses for new products  Develop

  26. Slide 26: Initiatives taken in growth markets

    New product launch in new markets Scientific Initiatives taken in growth markets New product “DUETTA” Raman spectrometer: Expand business for the Bio-Life science market in China and apply new technology  Fluorescence and absorbance spectrometer Raman/Fluorescence Technology Symposium  For R&D of

  27. Slide 27: Contents

    Contents 2017 Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate profile © 2018 HORIBA, Ltd. All rights reserved. 27

  28. Slide 28: 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) Per-share dividend (from 2008 Dividends per share and Share buybacks to 2018 Forecast 116 12

  29. Slide 29: Contents

    Contents 2017 Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate profile © 2018 HORIBA, Ltd. All rights reserved. 29

  30. Slide 30: Initiatives for workstyle innovation matching the workfront

    Initiatives for workstyle innovation matching the workfront “Stained Glass Project” initiatives STEP １ Start from promoting women’s Reviews of activities in 2017 2014 empowerment “KAERU” Meeting 34 meetings STEP 2 Start Workstyle Innovation workshop Get off early. (340 participants) from 2015 Theme:

  31. Slide 31: HORIBA Premium Value introduction

    “HORIBA Premium Value” introduction Adopt a budget for a unique KPI to measure Approach by each division capital efficiency “Capital cost” is deducted from “Operating profit” HORIBA Premium Value Operating Profit Capital Cost Invested capital × Internal capital cost ratio  Penetrate the concept to

  32. Slide 32: Contents

    Contents 2017 Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate profile © 2018 HORIBA, Ltd. All rights reserved. 32

  33. Slide 33: Operating profit Analysis (vs 2016)

    Operating profit Analysis (vs 2016) (Billions of Yen) 2016 2017 Jan. – Dec. Jan. – Dec. Increase Cost of Exchange Exchange Increase Increase Goods Impact for Impact for Increase Other 18.49 Sales sales Gross profit Expenses R&D cost expenses 26.83 +21.13 -9.85 +2.25 -0.94 -0.80 -3.44 Increase Gross

  34. Slide 34: Impact of Fluctuation in Foreign exchange

    Impact of Fluctuation in Foreign exchange (Billions of Yen) Exchange rate impact (2017 Results) Exchange rate impact Sales +4.17bn yen O.P. +1.30bn yen for 2018 Forecast Sales Operating profit 1 yen impact of Sales and O.P. (Yen appreciation) Total USD EUR Total USD EUR Sales Auto +1.26 +0.32 +0.96

  35. Slide 35: Capital Investment, Depreciation, R&D

    Capital Investment, Depreciation, R&D (Billions of Yen) 2016 2017 2018 Forecast vs vs vs Results Results Forecast @12/19 2016 Forecast 2017 Capital Investment 13.7 15.0 11.6 -2.1 -3.4 16.0 +4.4 Depreciation 6.8 7.2 7.5 +0.7 +0.3 7.5 +0.0 R&D 12.9 14.0 13.9 +1.0 -0.1 15.5 +1.6 (To net sales) 7.6% 7.4

  36. Slide 36: Consolidated Cash Flows

    Consolidated Cash Flows (Billions of Yen) 2017 2016 Variation Cash flows from operating activities +28.28 +15.87 +12.41 Cash flows from investing activities -13.16 -10.42 -2.73 Cash flows from financing activities -9.04 -0.45 -8.59 Cash and cash equivalents at end of year +58.33 +51.94 +6.39 Free ca

  37. Slide 37: Cash Balance

    Cash Balance (Billions of Yen) Total Loan Balance 46.7 (Consolidated basis, each end of year) 44.7 42.0 28.0 Bond Bonds Bonds redemption 15.0 Bonds In 2020 15.0 15.0 Cash※ Cash※ Cash※ Cash※ Borrowed Bonds Long Long 51.1 47.8 51.9 58.3 15.0 16,8 19,2 Long from JBIC 18,7 Long 2.2 15.1 bn yen Short Sho

  38. Slide 38: Contents

    Contents 2017 Results 2018 Forecast Business Segments Outline Shareholder Return Other Topics Financial Data Corporate profile © 2018 HORIBA, Ltd. All rights reserved. 38

  39. Slide 39: Corporate Profile

    Corporate Profile Head Office Kyoto, Japan - Corporate motto - Foundation 1945 Incorporation 1953 Fiscal Year End December 31 Atsushi Horiba Chairman & Group CEO To have interest and pride in our work to enjoy our lives © 2018 HORIBA, Ltd. All rights reserved. 39

  40. Slide 40: Business Segments

    Business Segments ・Emission Measurement Systems ・Test Automation Systems Automotive Test Systems ・Intelligent Transport Systems ・Engineering Consultancy & Testing(HORIBA MIRA, Ltd) ・Environmental & Process Systems ・Environmental Radiation Monitor Process & Environmental ・Environmental Regulation & P

  41. Slide 41: Business Segments

    Business Segments Sales Breakdown by Segment Automotive Test Systems Sales: 195.3 B.JPY 13% Scientific Process & Environmental 26.1 38% （231） Automotive 73.3 Semicon （649） Medical 27% 53.3 （471） Medical P&E 25.1 17.4 （222） （154） Semiconductor 9% 13% Scientific ( ) =Segment Sales in MUSD % = Segment

  42. Slide 42: Market share

    Market share Global Domestic Automatic Blood Cell Counter Emission Measurement Systems Stack Gas Analyzers plus CRP 80% 20% 100% (As of December 31, 2015) Mass Flow Controllers Raman Spectrophotometers Gratings 57% 30% 35% ※Market shares quoted are estimates by HORIBA. © 2018 HORIBA, Ltd. All rights

  43. Slide 43: HORIBA Worldwide

    HORIBA Worldwide Sales of FY2017 : 195.3 BJPY (1,729 MUSD) Sales Ratio by Region The Number of Group Companies by region EU Japan (As of December 31, 2017) 21% 33% Americas Americas 9 17% Asia Europe 22 29% Asia 17 (4 in Japan, including HORIBA, Ltd.) Total 48 © 2018 HORIBA, Ltd. All rights reserved

  44. Slide 44: Employees by Region

    Employees by Region Americas Other Europe 2% Total Number of Employees 2% U.S.A 7,399 11% Germany Japan Total Asia : 4,041 8% Japan 54% 38% UK 38% Total Europe： 2,414 11% France 33% Other 12% Asia Total Americas： 944 14%16% 13% (As of December 31, 2017) © 2018 HORIBA, Ltd. All rights reserved. 44

  45. Slide 45: © 2018 HORIBA, Ltd. All rights reserved.

    © 2018 HORIBA, Ltd. All rights reserved. 45

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