Subaru Corporation · TSE:7270

Subaru — Fuji Heavy Industries — Q1 FYE March 2016 Earnings Presentation

34 slides from Subaru's earnings presentation, Jul 31, 2015

  1. Slide 1: FYE2016 First Quarter Financial Results

    FYE2016 First Quarter Financial Results Fuji Heavy Industries Ltd. July 31, 2015 http://www.fhi.co.jp/english/ir/index.html 0 0

  2. Slide 2: Summary

    Summary Financial Results for the 1st Quarter of FYE March 2016  Consolidated automobile sales posted an all-time record for the 1st quarter, mainly driven by continuous strong sales in North America.  Gain on currency exchange, unit sales growth and cost reduction brought all-time record for the

  3. Slide 3: Business Results for the First Quarter of FYE March 2016

    Business Results for the First Quarter of FYE March 2016 http://www.fhi.co.jp/english/ir/index.html 2 2

  4. Slide 4: 1st Quarter: Consolidated Automobile Sales

    1st Quarter : Consolidated Automobile Sales （Thousand Units） 1Q actual results 1Q actual results Variance FYE March 2015 FYE March 2016 Passenger car 20.4 19.9 -0.5 Minicar 6.8 8.1 +1.3 Domestic total 27.2 28.0 +0.8 US 112.4 140.4 +28.0 Canada 10.8 13.9 +3.1 Russia 4.0 1.7 -2.4 Europe 6.9 8.3 +1.4 A

  5. Slide 5: 1st Quarter: Consolidated Income Statements

    1st Quarter : Consolidated Income Statements （100 Million Yen） 1Q actual results 1Q actual results Variance FYE March 2015 FYE March 2016 Net sales 5,934 7,653 +1,719 Domestic 1,162 1,245 +83 Overseas 4,772 6,408 +1,636 Operating income 787 1,342 +555 Total non-operating income & expenses 19 -42 -60

  6. Slide 6: 1st Quarter: Analysis of Operating Income Variance

    1st Quarter : Analysis of Operating Income Variance （100 Million Yen） US$ : +469 EURO : -5 Fixed cost : -26 (FHI -9 SIA -17) CA$ : +9 Sales volume Cost SG&A : -74 (FHI -13 SOA -28 and others) CNY : +3 & mixture reduction Warranty claims : -51 Currency Gain on and others exchange adjustment : +24 cur

  7. Slide 7: Consolidated Balance Sheet

    Consolidated Balance Sheet （100 Million Yen） As of March 2015 As of June 2015 Variance Total assets 21,997 22,312 +315 Current assets 14,733 14,781 +48 Noncurrent assets 7,264 7,531 +267 Interest bearing debts 2,112 2,011 -101 Net assets 10,307 10,968 +661 Retained earnings 6,974 7,528 +553 Sharehol

  8. Slide 8: 1st Quarter: Consolidated Statement of Cash Flows

    1st Quarter : Consolidated Statement of Cash Flows （100 Million Yen） 1Q actual results 1Q actual results Variance FYE March 2015 FYE March 2016 Net cash provided by (used in) operating activities 3 1,097 +1,094 Net cash provided by (used in) investing activities -166 -328 -162 Free cash flows -163 7

  9. Slide 9: 1st Quarter: Operating Results of Subsidiaries in U.S.

    1st Quarter : Operating Results of Subsidiaries in U.S. （Million US$） 1Q actual results 1Q actual results SOA FYE March 2015 FYE March 2016 Variance Net sales 2,875 3,613 +738 Operating income 61 168 +107 Net income 37 99 +62 Retail sales (Thousand units) 125.3 140.8 +15.5 1Q actual results 1Q actua

  10. Slide 10: Outlook for the FYE March 2016

    Outlook for the FYE March 2016 http://www.fhi.co.jp/english/ir/index.html 9 9

  11. Slide 11: Full Year: Consolidated Operating Plan

    Full Year : Consolidated Operating Plan （100 Million Yen） Actual results Plan Variance FYE March 2015 FYE March 2016 Net sales 28,779 30,300 +1,521 Operating income 4,230 5,030 +800 Ordinary income 3,936 4,950 +1,014 Net income attributable to owners of parent 2,619 3,370 +751 FHI exchange rate ¥108

  12. Slide 12: Full Year: Analysis of Operating Income Variance, Original vs Revised Plan

    Full Year : Analysis of Operating Income Variance Original Plan vs Revised Plan  Full-year financial projection remains unchanged.  Gain on currency exchange occurred in 1st quarter offsets unexpected costs relating to recalls also occurred in 1st quarter. US$ : +62 （100 Million Yen） EURO : +4 War

  13. Slide 13: Capex / Depreciation / R&D / Interest bearing debt

    Capex / Depreciation / R&D / Interest bearing debt （100 Million Yen） 1Q actual Actual results 1Q actual Plan results Variance FYE 2015 results FYE 2016 FYE 2015 (b) - (a) (a) FYE 2016 (b) Capex 280 1,107 171 1,300 +193 Depreciation 127 648 154 670 +22 R&D 159 835 185 970 +135 Interest bearing debt 2

  14. Slide 14: Appendix (1)

    Appendix (1) ・ Non-operating income & expenses and extraordinary ・Non-operating income & loss (1Q) ・ Segment information by Business & Geographic (1Q) ・Segment ・ Overseas net sales (1Q) ・Overseas ・ Non-consolidated automobile sales (1Q) ・Non-consolidated ・ Consolidated automobile sales & operating p

  15. Slide 15: 1st Quarter: Non-operating Income & Expenses and Extraordinary Income & Loss

    1st Quarter : Non-operating Income & Expenses and Extraordinary Income & Loss (Consolidated) （100 Million Yen） 1Q actual results 1Q actual results Variance FYE 2015 FYE 2016 Financial revenue and expenditure 0 6 +6 FOREX effects 17 -46 -64 Other 1 -1 -2 Total non-operating income & 19 -42 -60 expens

  16. Slide 16: 1st Quarter: Net Sales and Operating Income by Business Segment

    1st Quarter : Net Sales and Operating Income by Business Segment (Consolidated) （100 Million Yen） Net Sales Operating Income 1Q actual 1Q actual 1Q actual 1Q actual results results Variance results results Variance FYE 2015 FYE 2016 FYE 2015 FYE 2016 Automobile 5,551 7,188 +1,638 752 1,288 +536 Aero

  17. Slide 17: 1st Quarter: Net Sales and Operating Income by Geographic Area

    1st Quarter : Net Sales and Operating Income by Geographic Area (Consolidated) （100 Million Yen） Net Sales Operating Income 1Q actual 1Q actual 1Q actual 1Q actual results results Variance results results Variance FYE 2015 FYE 2016 FYE 2015 FYE 2016 Japan 1,898 2,140 +242 611 1,009 +398 North Americ

  18. Slide 18: 1st Quarter: Overseas Net Sales

    1st Quarter : Overseas Net Sales （100 Million Yen） 1Q actual results 1Q actual results Variance FYE March 2015 FYE March 2016 North America 3,549 5,183 +1,634 Europe 279 272 -7 Asia 646 551 -96 Other 299 403 +104 Total 4,772 6,408 +1,636 http://www.fhi.co.jp/english/ir/index.html 17 17

  19. Slide 19: 1st Quarter: Non-consolidated Automobile Sales

    1st Quarter : Non-consolidated Automobile Sales （Thousand Units） 1Q actual results 1Q actual results Variance FYE March 2015 FYE March 2016 Domestic production 169.0 171.0 +2.0 Domestic sales 30.7 31.3 +0.6 Passenger cars 23.7 21.7 -2.0 Minicars 7.0 9.6 +2.6 Number of exported vehicles 131.1 137.2 +

  20. Slide 20: Full Year: Consolidated Automobile Sales Plan

    Full Year : Consolidated Automobile Sales Plan （Thousand Units） Actual results Plan Variance FYE March 2015 FYE March 2016 Passenger car 127.9 106.7 -21.2 Minicar 34.9 37.6 +2.7 Domestic total 162.8 144.2 -18.5 US 527.6 554.0 +26.4 Canada 42.4 46.2 +3.8 Russia 11.6 12.8 +1.2 Europe 35.7 37.7 +2.0 Au

  21. Slide 21: Full Year: Consolidated Operating Plan

    Full Year : Consolidated Operating Plan （100 Million Yen） Actual results Plan Variance FYE March 2015 FYE March 2016 Net sales 28,779 30,300 +1,521 Domestic 6,529 5,655 -874 Overseas 22,250 24,645 +2,395 Operating income 4,230 5,030 +800 Ordinary income 3,936 4,950 +1,014 Income before taxes and min

  22. Slide 22: Full Year: Analysis of Operating Income Variance

    Full Year : Analysis of Operating Income Variance （100 Million Yen） US$ : +1,072 Sales volume Cost Fixed cost : -122 (FHI : -38 SIA : -84) EURO : -36 & mixture reduction SG&A : -257 (FHI : +33 SOA : -168 and others) Gain on Warranty claims : -22 CA$ : -2 and others CNY : +1 currency +133 Currency ex

  23. Slide 23: 1st Half: Consolidated Automobile Sales Plan

    1st Half : Consolidated Automobile Sales Plan （Thousand Units） 1st half actual results 1st half plan Variance FYE March 2015 FYE March 2016 Passenger car 56.5 48.5 -8.0 Minicar 15.1 18.3 +3.2 Domestic total 71.5 66.8 -4.8 US 249.9 270.9 +21.0 Canada 22.1 25.8 +3.8 Russia 8.6 6.2 -2.5 Europe 15.6 18.

  24. Slide 24: 1st Half: Consolidated Operating Plan

    1st Half : Consolidated Operating Plan （100 Million Yen） 1st half actual results 1st half plan Variance FYE March 2015 FYE March 2016 Net sales 13,102 14,750 +1,648 Domestic 2,928 2,650 -278 Overseas 10,174 12,100 +1,925 Operating income 1,857 2,440 +583 Ordinary income 1,760 2,400 +640 Income befor

  25. Slide 25: 1st Half: Analysis of Operating Income Variance, Original vs Revised Plan

    1st Half : Analysis of Operating Income Variance Original Plan vs Revised Plan  1st half financial projection remains unchanged.  Gain on currency exchange occurred in 1st quarter offsets unexpected costs relating to recalls also occurred in 1st quarter. （100 Million Yen） US$ : +62 EURO : +4 CA$ :

  26. Slide 26: 1st Half: Analysis of Operating Income Variance

    1st Half : Analysis of Operating Income Variance （100 Million Yen） Sales volume Cost Gain on & mixture Fixed cost：-70 currency reduction US$ : +861 and others (FHI：-36 SIA：-34) EURO : -12 exchange +75 SG&A：-214 CA$ : +9 +127 (FHI：-15 SOA：-96, and others) CNY : ±0 +831 Warranty claims：-59 Currency ex

  27. Slide 27: Appendix (2) – Historical Performance

    Appendix (2) – Historical Performance ・ Net sales / Operating income ・Net ・ Consolidated automobile sales units / OPM ・Consolidated ・ Complete cars production / Retail sales units ・Complete ・ FCF / Ratio of shareholders ・FCF shareholders’’ equity to total assets ・ Interest bearing debt / D/E ratio ・

  28. Slide 28: Net Sales & Operating Income

    Net Sales & Operating Income Operating ¥81/$ ¥79/$ ¥79/$ ¥89/$ ¥98/$ ¥98/$ ¥99/$ ¥103/$ ¥102/$ ¥102/$ ¥110/$ ¥118/$ ¥120/$ income Net sales （100M yen） （100M yen） 8,172 1,500 8000 Net sales 7,505 7,653 6,996 7,168 Operating income 1,342 7000 1,200 1,245 5,787 5,829 5,934 6000 5,422 5,469 1,069 1,129

  29. Slide 29: Consolidated Automobile Sales & Operating Income Margin

    Consolidated Automobile Sales & Operating Income Margin Consolidated sales （1,000 units） OPM 247 250 238 20% Automobile sales 232 232 225 OPM 202 201 17% 198 194 17.5% 200 191 183 178 16.6% 166 14.9% 14% 14.0% 14.2% 13.3% 13.3% 13.8% 150 12.7% 11% 8.7% 8% 100 6.4% 5% 5.5% 50 4.0% 2% 0 -1% 1Q 2Q 3Q 4

  30. Slide 30: Complete Cars Production & Retail Sales Units

    Complete Cars Production & Retail Sales Units （1,000 units） 250 237 241 244 233 Production Retail units 234 237 229 228 225 213 212 211 214 207 211 210 211 197 195 197 200 193 182 178 172 177 167 150 100 50 0 Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jun Sep Dec Mar Jun Sep De

  31. Slide 31: Free Cash Flows & Ratio of Shareholders' Equity to Total Assets

    Free Cash Flows & Ratio of Shareholders’ Equity to Total Assets FCF Ratio of shareholders’ （100M yen） equity to total assets FCF 48.8% 50% 2,791 2,800 Shareholders' equity ratio 46.0% 2,300 46.5% 2,094 44.0% 45% 42.6% 42.9% 1,800 41.2% 40.5% 39.9% 1,388 40% 1,300 1,198 37.7% 778 769 800 35.2% 953 71

  32. Slide 32: Interest Bearing Debt & D/E Ratio

    Interest Bearing Debt & D/E Ratio Interest bearing debt （100M yen） D/E ratio 4000 1.0 Interest bearing debt D/E ratio 3,381 3,301 0.9 3500 3,236 0.74 3,072 0.8 2,967 2,918 3000 0.69 2,760 2,697 0.64 2,574 0.7 2500 2,322 2,268 0.6 0.52 2,112 2,011 2000 0.46 0.5 0.41 0.36 0.35 0.4 1500 0.32 0.27 0.24

  33. Slide 33: Forward-looking statements

    Forward-looking statements including projections and future strategies mentioned in this presentation are based on currently available information and assumptions and are subject to risks and uncertainties. Actual results may vary materially as a result of various factors including, without limitati

  34. Slide 34: http://www.fhi.co.jp/english/ir/index.html

    http://www.fhi.co.jp/english/ir/index.html 33 33

Fuji Heavy Industries — Q1 FYE March 2016 Earnings Presentation on 6ix