Horiba, Ltd. · TSE:6856

Horiba — CREDIT SUISSE 2016 Japan Kyoto Conference

48 slides from Horiba's conference presentation, Sep 15, 2016

  1. Slide 1: HORIBA, Ltd. Financial Information

    HORIBA, Ltd. Financial Information September 2016 © 2016 HORIBA, Ltd. All rights reserved. 1

  2. Slide 2: Contents

    Contents  2016 First-Half Results  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. These st

  3. Slide 3: Contents

    Contents  2016 First-Half Results  2016 Full Year Forecast  Business Segment Outline  Shareholder Return  Financial Data  Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 3

  4. Slide 4: Review of the First-Half of 2016

    Review of the First-Half 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 Shiga prefecture Internal  First-half results

  5. Slide 5: Review of the First-Half of 2016

    Review of the First-Half 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

  6. Slide 6: Summary of the First-Half Results of 2016

    Summary of the First-Half Results of 2016 Decline in sales and profit.  Year-on-year declines from the top line to the bottom line. P&L  The yen appreciation had a negative impact: Revenues down 4.4bn yen; OP down 0.9bn yen  Total assets were 215.0bn yen, down 17.0bn yen from the end of B/S 2015,

  7. Slide 7: 2016 First-Half Results

    2016 First-Half Results (Billions of Yen) 2015 2016 First-Half Forecast First-Half vs. Forecast vs.2015 asof May 11 Results as of May 11 Results Sales 81.0 85.0 79.9 -1.1 -5.0 O.P. 11.0 8.5 7.7 -3.2 -0.7 O.P. % 13.6% 10.0% 9.7% -3.9p -0.3p Ordinary profit 10.7 8.1 7.5 -3.1 -0.5 Net Income attributab

  8. Slide 8: 2016 First-Half Results by Segment

    2016 First-Half Results by Segment (Billions of Yen) Sales Operating profit 2015 2016 vs. 2015 2016 vs. First-Half First-Half 2015 First-Half First-Half 2015 Auto 26.6 28.1 +1.4 2.9 0.5 -2.4 P&E 8.2 7.7 -0.4 0.9 0.8 -0.0 Medical 13.9 13.8 -0.1 1.3 1.5 +0.2 Semi 19.1 17.8 -1.2 5.1 4.4 -0.6 Scientific

  9. Slide 9: Contents

    Contents  2016 First-Half Results  2016 Full Year Forecast  Business Segment Outline  Shareholder Return  Financial Data  Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 9

  10. Slide 10: Exchange rate forecast for 2016

    Exchange rate forecast for 2016 (Yen) 2015 2016 Results Second First-Half Half First-Half Forecast Forecast Results as of May 1Q 2Q Results Forecast 11 USD 120.30 115 115.35 108.05 111.70 108 105 EUR 134.10 125 127.15 121.89 124.52 120 115 1 yen O.P. sensitivity for 2016 Forecast USD 175 million yen

  11. Slide 11: Market Overview for the Second-Half of 2016

    Market Overview for the Second-Half of 2016 Expect steady R&D investment by auto/auto parts manufacturers Auto thanks to a tightening of emission regulations in EU. U.S.: Expect firm investment demand from petrochemical companies. P&E China: Temporary drop in demand is likely due to the new regulati

  12. Slide 12: Forecast for 2016

    Forecast for 2016 (Billions of Yen) 2015 2016 Forecast Revised vs. Forecast Results as of May 11 as of May 11 Forecast Sales 171.9 175.0 170.0 -5.0 Operating profit 20.1 17.5 17.5 No change O.P. % 11.7% 10.0% 10.3% +0.3p Ordinary profit 19.6 16.5 17.0 +0.5 Net Income attributable to Owners of Parent

  13. Slide 13: Forecast for 2016 by segment

    Forecast for 2016 by segment (Billions of Yen) Sales O.P. 2015 2016 2016 vs. 2015 2016 2016 vs. Resuts Forecast as Reviesd Forecast as Resuts Forecast as Revised Forecast as of May 11 of May 11 of May 11 of May 11 Forecast Forecast Auto 65.4 70.0 65.0 -5.0 5.2 5.0 4.0 -1.0 P&E 16.7 18.0 16.5 -1.5 1.

  14. Slide 14: Contents

    Contents  2016 First-Half Results  2016 Full Year Forecast  Business Segment Outline  Shareholder Return  Financial Data  Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 14

  15. Slide 15: Auto First-Half Results and Forecast for 2016

    Auto First-Half Results and Forecast for 2016 (Billions of Yen) 2016 First-half results 2016 First-Half Results Sales(prior year) EMS + Steady R&D investment by auto manufacturers EMS 18.3 (18.2) MCT 5.0 (7.8) MCT - Decrease in sales and profit in Japan and EU ITS 0.7 (0.7) ECT + Incremental sales d

  16. Slide 16: Auto EMS Business

    Auto EMS (Emission Measurement Systems) Business EMS Business EMS Sales (100mil yen) 500 Solid sales in Japan (automakers, parts makers) 415 397 380 Steady investment in Japan 400 374 WLTP*(unified emission regulations by the UN) 300 Start in Sep. 2017 in EU and in 2018 in Japan RDE (Real Driving Em

  17. Slide 17: 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

  18. Slide 18: Auto MCT Business / ECT business

    Auto MCT Business / ECT business MCT Business (Mechatronics) MCT Sales (100mil yen) ・Sep. 2017: WLTP/RDE regulations to start in EU 300 Auto manufactures investment in 2016 is sluggish 197 200 200 162 ・Strategic projects are increasing in China 140 Aim to receive orders for market share expansion 10

  19. Slide 19: P&E First-Half Results and Forecast for 2016

    P&E First-Half Results and Forecast for 2016 (Billions of Yen) 2016 First-Half 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 regulat

  20. Slide 20: 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

  21. Slide 21: China (Shanghai) environment regulations and 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

  22. Slide 22: Medical First-Half Results and Forecast for 2016

    Medical First-Half Results and Forecast for 2016 (Billions of Yen) 2016 First-Half 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 promot

  23. Slide 23: 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

  24. Slide 24: 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 2016 Objective: Increase products for the biochemical

  25. Slide 25: Semi First-Half Results and Forecast for 2016

    Semi First-Half Results and Forecast for 2016 (Billions of Yen) 2016 First-Half 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 For

  26. Slide 26: 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

  27. Slide 27: Scientific First-Half Results and Forecast for 2016

    Scientific First-Half Results and Forecast for 2016 (Billions of Yen) 2016 First-Half 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 m

  28. Slide 28: 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

  29. Slide 29: 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 (by simplified absorption-type company split) 10bn yen  Deve

  30. Slide 30: Contents

    Contents  2016 First-Half Results  2016 Full Year Forecast  Business Segment Outline  Shareholder Return  Financial Data  Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 30

  31. Slide 31: 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

  32. Slide 32: 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

  33. Slide 33: © 2016 HORIBA, Ltd. All rights reserved.

    © 2016 HORIBA, Ltd. All rights reserved. 33 33

  34. Slide 34: Contents

    Contents  2016 First-Half Results  2016 Full Year Forecast  Business Segment Outline  Shareholder Return  Financial Data  Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 34

  35. Slide 35: 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

  36. Slide 36: Operating profit analysis (vs. 2015)

    Operating profit analysis ( vs. 2015 ) (Millions of Yen) 2015 2016 Jan.-Jun. Jan.-Jun. 11,018 Exchange Increase Increase impact Exchange Other Sales Cost of for Gross impact for R&D cost amount goods sales profit Expenses increase expenses 7,778 increase +3,370 -3,477 -2,147 +1,202 -612 -1,574 Sales

  37. Slide 37: Capital Investment, Depreciation, R&D

    Capital Investment, Depreciation, R&D (Billions of Yen) 2015 2016 Forecast 2015 2016 Previous Revised vsPrevious Results Forecast Forecast First-Half First-Half Forecast PP&E 14.9 16.3 15.3 -1.0 6.8 5.6 No Intangibles 1.4 0.7 0.7 change 0.6 0.2 Capital Investment 16.3 17.0 16.0 -1.0 7.4 5.8 Deprecia

  38. Slide 38: Consolidated Cash Flows

    Consolidated Cash Flows (Millions of yen) 2015 2016 Variation First-Half First-Half Cash flows from operating activities 10,103 5,987 -4,116 Cash flows from investing activities -7,974 -5,071 2,902 Cash flows from financing activities -2,313 59 2,373 Cash and cash equivalents at end of year 51,047 4

  39. Slide 39: Impact of fluctuation in foreign exchange

    Impact of fluctuation in foreign exchange Exchange rate impact Exchange rate impact for 2016 Forecast (2016 First-Half Results) 1 yen impact of Sales and O.P. (Yen appreciation) (Millions of Yen) Sales Operating Profit Sales Total USD Total USD EUR EUR USD -412 millions of yen EUR -334 millions of y

  40. Slide 40: Cash Balance

    Cash Balance (Billions of yen) (Consolidated basis, each end of the year) Total Loan Balance 44.7 44.4 24.1 28.0 Bond redemption in 2020 Cash * Cash * Bonds15.0 Cash * Bonds Cash * 51.1 47.8 47.7 15.0 49.2 Bonds15.0 Long 16.8 Long Bonds15.0 17.4 Borrowed Long 2.2 from JBIC Long 2.5 15.1bn yen Short1

  41. Slide 41: Contents

    Contents  2016 First-Half Results  2016 Full Year Forecast  Business Segment Outline  Shareholder Return  Financial Data  Corporate Profile © 2016 HORIBA, Ltd. All rights reserved. 41

  42. Slide 42: 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. 42

  43. Slide 43: 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

  44. Slide 44: 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

  45. Slide 45: 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. 45

  46. Slide 46: 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. 46

  47. Slide 47: 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. 47

  48. Slide 48: © 2016 HORIBA, Ltd. All rights reserved.

    © 2016 HORIBA, Ltd. All rights reserved. 48 48

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