Kawasaki Heavy Industries Ltd. · TSE:7012
Kawasaki Heavy Industries — Kawasaki Heavy Industrial — Q3 2021 Earnings Presentation
43 slides from Kawasaki Heavy Industries's earnings presentation, Feb 2, 2022
Slide 1: Financial Results for Third Quarter FY2021
Financial Results for Third Quarter FY2021 For the Year ending March 31, 2022 0 February 2, 2022 © Kawasaki Heavy Industries, Ltd. All Rights Reserved
Slide 2: Table of Contents
0 Table of Contents 1 Consolidated Results for 3 Details by segment Third Quarter FY2021 Summary 3 Aerospace Systems 15 Segment 4 Rolling Stock 19 Income Statement 5 Energy Solution & Marine Engineering 23 Details of Change in Profit 7 Precision Machinery & Robot 27 Balance Sheet 9 Motorcycle & Engi
Slide 3: Consolidated Results for Third Quarter FY2021 - Summary
Consolidated Results for Third Quarter FY2021 1 –Summary- Profit increased significantly and sales increase slightly from Q3 FY2020 Shipbuilding joint ventures in China recorded provision for losses on construction contracts in Q3（Oct.-Dec.）as well (Billion Yen) FY21 Q3 YoY FY20 Q3 Apr. to Jun. Jul.
Slide 4: Consolidated Results - Segment
Consolidated Results for Third Quarter FY2021 1 –Segment- Aerospace Systems continue to improve as passenger demand recovers, but losses still remain ① Sales and profit increased significantly in Motorcycle & Engine due to strong demand for outdoor leisure in developed countries ② Rolling Stock / Mo
Slide 5: Income Statement
1 Consolidated Results for Third Quarter FY2021 –Income Statement- (Billion Yen) Details FY20 Q3 FY21 Q3 Change % % Net Sales 1,032.4 100.0 1,038.7 100.0 + 6.2 ① Increase in sales costs in Motorcycle & Engine and Cost of sales 899.6 87.1 851.6 82.0 - 47.9 Precision Machinery & Robot Gross profit 132
Slide 6: Income Statement (continued)
1 Consolidated Results for Third Quarter FY2021 –Income Statement- (Billion Yen) Details FY20 Q3 FY21 Q3 Change % % Recurring Profit (Loss) - 0.0 - 21.3 2.1 + 21.3 ④ Sale of land Extraordinary Income / Losses 0.8 1.3 + 0.4 ⑤ Sale of dormitory /company Gain on sales of fixed assets 5 4 housing sites
Slide 7: Details of change in profit
Consolidated Results for Third Quarter FY2021 1 –Details of change in profit- Massｰproduction businesses: Motorcycle & Engine and Precision Machinery & Robot, contributed to change in sales Jet engine maintenance costs, which were a major burden in Q2 FY2020, were decreased Q3 FY2020 +¥42.7 billion
Slide 8: Details of change in profit by segment
Consolidated Results for Third Quarter FY2021 1 –Details of change in profit- (Billion Yen) FY20 Q3 FY21 Q3 Operating Change in Change in Operating Profit Effects of Change Profit product mix and SG & A Total (Loss) FX rates※ in sales※ other factors※ expenses (Loss) Aerospace Systems - 19.2 1.1 0.0
Slide 9: Balance Sheet
1 Consolidated Results for Third Quarter FY2021 –Balance Sheet- (Billion Yen) End of End of Details Change Mar. 2021 % Dec. 2021 % Cash and deposits 126.7 75.2 1 - 51.4 ① Decrease due to repayment of interest-bearing debt and other Trade receivables 460.4 447.4 2 - 12.9 factors Inventory 658.5 696.6
Slide 10: Balance Sheet (liabilities and net assets)
1 Consolidated Results for Third Quarter FY2021 –Balance Sheet- (Billion Yen) End of End of Details Change Mar. 2021 % Dec. 2021 % Trade payables 355.1 316.5 1 - 38.6 ① Decrease in Aerospace and other segments Interest-bearing debt 593.3 730.8 2 + 137.5 Contract liability (Advances received) 153.2 1
Slide 11: Cash Flows
1 Consolidated Results for Third Quarter FY2021 –Cash Flows- (Billion Yen) Details FY20 Q3 FY21 Q3 Change Income before income taxes 0.8 22.6 + 21.8 ① Q3 FY’20 Significant outflow of funds in Depreciation and amortization 45.4 45.4 - 0.0 working capital components Increase and decrease in working ca
Slide 12: Cash Flows
1 Consolidated Results for Third Quarter FY2021 –Cash Flows- Continued negative operating cash flow due to heavy working capital, mainly in Aero Engine Operating cash flow is improving due to the contribution of the mass-production businesses (billion yen) CF from operating acitivities CF from inves
Slide 13: Earnings Forecasts for FY2021 - Summary
Earnings Forecasts for FY2021 2 -Summary- Recurring profit remains unchanged due to deterioration in earnings of unconsolidated subsidiaries despite the upward revision to operating profit Deferred tax assets are expected to be recognized in the forth quarter, which will reduce tax expenses (Billion
Slide 14: Forecasts for FY2021 - Segment
2 Forecasts for FY2021 -Segment- Operating profit of Energy Solution & Marine Engineering was revised down due to cost deterioration in Ship & Offshore Structure Operating profit of Motorcycle & Engine was revised up due to reduction in material procurement risk (Billion Yen) Orders Received Net Sal
Slide 15: Aerospace Systems
3 Details by Segment -Aerospace systems- FY2021.Q3（vs. FY2020.Q3） Orders Decreased due to a decrease in component parts for commercial aircraft jet engines caused by the application of new received Accounting Standard for Revenue Recognition, despite an increase in component parts for Boeing. Decrea
Slide 16: Aerospace Systems
3 Details by Segment -Aerospace systems- (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q4 FCST Orders Received 224.7 160.8 - 63.8 329.5 310.0 370.0 + 40.5 + 60.0 209.2 Aerospace 157.4 134.3 - 23.0 236.2 250.0 31
Slide 17: Aerospace Systems
3 Details by Segment -Aerospace systems- Net Sales (billion yen) 161.1 Aerospace Aero Engines 135.8 126.6 128.7 122.2 117.9 122.1 120.5 114.7 105.9 104.9 105.2 109.3 99.7 93.9 74.6 70.0 71.5 63.2 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY2017 FY2018 FY2019 FY2020 FY2021 Operating In
Slide 18: Aerospace Systems
3 Details by Segment -Aerospace systems- Market Overview Specific Efforts Commercial aircraft business Securing stable revenue in core business – Global passenger demand remains weak – Cost reductions in existing orders of aircrafts for Boeing and commercial aircrafts jet engines due to the grea
Slide 19: Rolling Stock
3 Details by Segment - Rolling Stock - FY2021.Q3（vs. FY2020.Q3） Orders Decreased compared with FY2020 Q3, when major orders for Shinkansen were received. received Net Sales Decreased due to a decrease in other regions despite an increase to the U.S.. Operating Improved due to improvement in profitab
Slide 20: Rolling Stock
3 Details by Segment - Rolling Stock - (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q4 FCST Orders Received 49.2 42.2 - 7.0 77.0 50.0 50.0 - 27.0 - 7.8 Domestic & Asia 38.7 36.2 - 2.5 66.2 45.5 44.0 - 22.2 - 1.
Slide 21: Rolling Stock
3 Details by Segment - Rolling Stock - Net Sales (billion yen) Domestic & Asia North America 41.9 40.6 38.6 38.8 38.1 39.0 36.1 36.8 34.5 32.3 32.3 31.7 31.5 29.1 28.7 28.8 23.3 22.0 20.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY2017 FY2018 FY2019 FY2020 FY2021 9.1% 5.9% 7.7% 3.1%
Slide 22: Rolling Stock
3 Details by Segment - Rolling Stock - Market Overview Specific Efforts The impact of COVID-19 Compliance with delivery schedules for – Some domestic railway operators are overseas projects reviewing their railway related investment Delivery of the first train to Dhaka FY2021 Q1 – Delays in over
Slide 23: Energy Solution & Marine Engineering
Details by Segment 3 - Energy Solution & Marine Engineering - FY2021.Q3（vs. FY2020.Q3） Orders Increased due to major orders for construction and operation of domestic municipal waste incineration plants, LPG carriers, received and other projects. Decreased due to a decrease in repair work for submar
Slide 24: Energy Solution & Marine Engineering
3 Details by Segment - Energy Solution & Marine Engineering - (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q4 FCST Orders Received 187.3 253.2 + 65.8 317.1 330.0 330.0 + 12.9 - 76.8 Energy System 154.6 193.0 +
Slide 25: Energy Solution & Marine Engineering
3 Details by Segment - Energy Solution & Marine Engineering - Net Sales (billion yen) Energy System & Plant Engineering Ship & Offshore Structure 112.0 100.1 103.8 99.3 88.2 84.2 82.5 77.7 73.2 73.0 70.5 72.2 70.5 72.8 70.3 70.8 67.9 64.8 60.6 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Slide 26: Energy Solution & Marine Engineering
3 Details by Segment - Energy Solution & Marine Engineering - Market Overview Specific Efforts Energy system & Plant Engineering Securing orders to improve profitability Domestic Emerging Markets ①Renewal and ②Life extension work for Cases domestic municipal waste incineration plants Steady demand
Slide 27: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - FY2021.Q3（vs. FY2020.Q3） Orders Increased due to an increase in hydraulic components for construction machinery and various robots including robots for received semiconductor manufacturing equipment. Net Sales Same as above. Operating Increased du
Slide 28: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q4 FCST Orders Received 170.2 197.4 + 27.1 259.4 260.0 260.0 + 0.6 - 62.6 Hydraulic 113.9 124.5 + 10.6 172.6 165
Slide 29: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - Net Sales (billion yen) Hydraulic Components & Systems 86.6 Robotics 67.8 70.3 62.6 60.6 61.2 55.2 57.6 54.1 52.1 53.6 49.3 47.9 48.3 49.8 48.8 45.1 45.4 41.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY2017 FY2018 FY2019 FY2020 FY2
Slide 30: Precision Machinery & Robot
3 Details by Segment - Precision Machinery & Robot - Market Overview Specific Efforts Construction machinery Developing electrification and automation – High level of demand in China continues in technology for construction machinery FY2021 despite the risk of declining demand – Development and
Slide 31: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - FY2021.Q3（vs. FY2020.Q3） Increased due to an increase in motorcycles for North America, Europe and Southeast Asia, and an increase in general-purpose Net Sales gasoline engines for North America. Operating Increased due to an increase in revenue, deprecia
Slide 32: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - (Billion Yen) FY2020 FY2021 FY2020 FY2021 Forecast Q3 Actual Q3 Actual Change Actual Old FCST New FCST Chg. Vs. FY20 Chg. Vs. Old FCST Q4 FCST Net Sales 225.5 309.5 + 84.0 336.6 440.0 440.0 + 103.4 - 130.5 Motorcycles for developed contries 73.6 111.9 + 3
Slide 33: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - Net Sales (billion yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY2017 FY2018 FY2019 FY2020 FY2021 Operating Income (billion yen) 13.0% 10.3% 11.0% 10.8% 8.2% 8.8% 6.7% 5.6% 4.0% 1.8% 2.3% 0.9% - 0.6% - 1.9% - 1.3% - 4.1% - 10.0% - 4.9% -
Slide 34: Motorcycle & Engine
3 Details by Segment - Motorcycle & Engine - Market Overview Specific Efforts U.S. Supplying products as much as demanded – Demand for off-road motorcycles and four- – All efforts to achieve production plans wheelers remains strong – Changing production and sales plans promptly – Strong demand i
Slide 35: Shareholder Return
4 Shareholder Return Dividend Policy Dividend for FY2021 The forecast of operating profit was revised upward by 16 billion 1 Future business forecasts, Financial yen from the beginning of the FY2021 conditions such as free cash flow and debt-to-equity ratio, and other factors The forecast of net
Slide 36: Project Topics: Growing Kawasaki brand and business
4 Project Topics Growing Kawasaki brand and business Japan’s Top Market Share in cumulative units for 4 years（251cc or more） Wholesale in Japan for 4 years（251cc or more） Ninja ZX-25R won the "Japan Motorcycle of the Year 2021" . In March, Bimota launches a new model “KB4” equipped with Kawasa
Slide 37: Project Topics: Wafer transfer robot
4 Project Topics Wafer transfer robot “today” ~Full production to support global semiconductor supply~ We continue to produce wafer transfer robots for semiconductor manufacturing equipment at full capacity, in response to growing demand for semiconductors worldwide. The semiconductor manufactur
Slide 38: Project Topics: SUISO FRONTIER liquefied hydrogen carrier
4 Project Topics Arrival of the world’s first liquefied hydrogen carrier “SUISO FRONTIER” from Japan to Australia Successfully demonstrated the transportation of large amount of liquefied hydrogen across open waters Learnings from the Pilot project • Viability of loading and maritime transport of
Slide 39: Project Topics: Launch of PCR viral testing service
4 Project Topics Launch of PCR viral testing service as a part of free PCR testing projects by local governments In Tokyo, starting with Daita Kumin Center (Residents' Testing services in airports also expanding Center) in Setagaya-ward, we plan to set up sample Kawasaki links up with Medical Corp
Slide 40: CAPEX, Depreciation and Amortization, R&D Expenses, Number of employees
4 Appendix - CAPEX, Depreciation and Amortization, R&D Expenses, Number of employees - (Billion Yen, Persons) FY2020 FY2021 FY2020 FY2021 Q3 Actual Q3 Actual Change Actual FCST Chg. Vs. FY20 CAPEX 41.9 35.2 - 6.7 55.6 65.0 + 9.4 Depreciation and amortization 45.2 45.0 - 0.1 61.2 62.0 + 0.8 R & D exp
Slide 41: Others: Order backlog, sales by region
4 Appendix - Others - Order Backlog (billion yen) Order Backlog in Ship & Offshore (billion yen) End of Q3 End of Q4 FY20 Q3 FY21 Q3 211.6 Actual Actual Change 191.6 Aerospace Systems 522.7 486.9 - 35.7 Rolling Stock 447.2 396.4 - 50.7 118.5 101.6 115.0 Energy Solution & Marine Engineering 448.4
Slide 42: Others: Net sales in foreign currencies
4 Appendix - Others - Net Sales in Foreign Currencies by Segment (billion USD) FY2020 FY2021 Actual Actual Q4 FCST Aerospace Systems 0.32 0.23 0.01 Rolling Stock 0.05 0.05 0.06 Energy Solution & Marine Engineering 0.21 0.20 0.34 Precision Machinery & Robot 0.12 0.17 0.06 Motorcycle & Engine 0.27 0
Slide 43: © Kawasaki Heavy Industries, Ltd. All Rights Reserved
© Kawasaki Heavy Industries, Ltd. All Rights Reserved
Kawasaki Heavy Industrial — Q3 2021 Earnings Presentation on 6ix