Giken Ltd. · TSE:6289
Giken — FY2023 Earnings Presentation
55 slides from Giken's earnings presentation, Oct 11, 2023
Slide 1: Financial Results Overview FY2023
Construction Revolution FY2023 (September 2022 to August 2023) GIKEN LTD. Financial Results Overview October 11, 2023 <stock code: 6289>
Slide 2: Forward-looking Statements Disclaimer
Forward-looking Statements Disclaimer Except for historical facts, certain information provided in this document, such as our and our group’s current policies and management strategies, contains forward-looking statements based on currently available information, including statements about the futur
Slide 3: Content
Content I. Financial Results ◼ Financial Results Overview FY2023 P 3 ◼ FY2024 Forecast P 9 ◼ Revision of Medium-term Management Plan P 17 ◼ Shareholder Return P 19 II. Long-term Vision ◼ GIKEN GOALS 2031 P 22 III. References P 37 2
Slide 4: Financial Results Overview FY2023
Financial Results Overview FY2023 3
Slide 5: Financial Results Trend
Financial Results Trend Unit: Millions of JPY FY2021 FY2022 FY2023 Actual Actual YoY Actual YoY Net Sales 27,618 30,378 +10.0% 29,272 -3.6% Operating Profit 3,997 4,613 +15.4% 2,983 -35.3% Ordinary Profit 4,161 4,832 +16.1% 3,060 -36.7% Profit* 3,073 3,234 +5.2% 846 -73.8% Profit per Share 112.22 11
Slide 6: Financial Results Trend－Net Sales and Operating Profit
Financial Results Trend－Net Sales and Operating Profit [Factors in sales changes] Unit: Millions of JPY • Large-scale projects overseas undertaken 30,378 mainly in the previous fiscal year have been 29,272 27,618 completed. 5,965 (19.6%) 4,092 • Steady progress in construction work, with (14.0%) 5,4
Slide 7: Financial Results Trend－Net Sales by Segment
Financial Results Trend－Net Sales by Segment Construction Machinery Segment Press-in Work Segment Unit: Millions of JPY Unit: Millions of JPY 25,000 19.0% 12,000 41.8% 48.0% 47.0% 46.0% 13.2% 18.0% 17.0% 45.0% 44.0% 9.5% 9.9% 16.0% 15.0% 14.0% 43.0% 42.0% 41.0% 13.0% 12.0% 34.6% 40.0% 39.0% 38.0% 11
Slide 8: Financial Results Trend－Operating Profit by Segment
Financial Results Trend－Operating Profit by Segment Construction Machinery Segment Press-in Work Segment Unit: Millions of JPY Unit: Millions of JPY 25,000 10,000 9,656 129 8,796 21,694 21,276 8,663 20,097 842 276 20,000 523 8,000 179 963 15,000 6,000 10,000 4,000 6,068 4,775 (28.0%) 4,668 1,243 (23
Slide 9: Extraordinary Losses on Dissolution of Joint Venture with J Steel
Extraordinary Losses on Dissolution of Joint Venture with J Steel Background ◼ December 2017 • Acquisition of 50.1% of outstanding shares of J Steel Group Pty Limited to drive our global expansion. ◼ May 2023 • Agreement on dissolution of the joint venture relationship due to differences in manageme
Slide 10: FY2024 Forecast
FY2024 Forecast 9
Slide 11: Forecast
Forecast Unit: Millions of JPY FY2023 FY2024 Forecast Actual 1st Half 2nd Half Full Year YoY Net Sales 29,272 15,300 14,700 30,000 +2.5% Operating Profit 2,983 2,200 1,100 3,300 +10.6% Ordinary Profit 3,060 2,250 1,150 3,400 +11.1% Profit* 846 1,600 800 2,400 +183.4% Profit Per Share (JPY) 30.82 59.
Slide 12: Forecast－Key Points
Forecast－Key Points (1) Construction Machinery Segment ◎Strong increase of customers’ capital investment • Domestic infrastructure development, including measures to strengthen national resilience and projects related to national-defense, expressways, and ports, is expected to remain strong. ◎The im
Slide 13: Forecast－Sales and Operating Profit
Forecast－Sales and Operating Profit Unit: Millions of JPY 30,000 [Factors in sales changes] 29,272 3,500 Up 2.5% • Domestic demand for replacement of 4,092 (11.7%) general machinery and increase in sales (14.0%) volume of our new F112 model with a flywheel-type pile auger as standard equipment and o
Slide 14: Forecast－Sales by Segment
Forecast－Sales by Segment Construction Machinery Segment Press-in Work Segment Unit: Millions of JPY Unit: Millions of JPY 14.0% 41.8% 25,000 9.5% 9.9% 16.0% 15.0% 14.0% 12,000 13.0% 12.0% 11.0% 40.0% 22,500 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 23.9% 20,851 3.0% 2.0% 1.0% 20,752 0.0% -1.0% -2.0% 3,15
Slide 15: Forecast－Operating Profit by Segment
Forecast－Operating Profit by Segment Construction Machinery Segment Press-in Work Segment Unit: Millions of JPY Unit: Millions of JPY 25,000 12,000 22,960 21,694 21,276 460 842 523 10,000 9,656 20,000 129 8,796 276 7,620 8,000 15,000 120 6,000 10,000 6,068 5,021 4,000 (28.0%) 4,668 (21.9%) 948 875 (
Slide 16: Forecast－Factors in Operating Profit Decrease and Actions
Forecast－Factors in Operating Profit Decrease and Actions Unit: Millions of JPY ◼ Rising purchasing costs Increase in production costs 35,000 21.0% ◼ Soaring steel prices Impact on sales of finished goods and parts 30,378 30,000 29,272 with high gross margin used in permanent 30,000 18.0% Factors st
Slide 17: Forecast－Capital Investment, Research and Development Expenses
Forecast－Capital Investment, Research and Development Expenses ◎Capital investment, Depreciation ◎Research and development expenses Unit: Millions of JPY Unit: Millions of JPY 1200 1,961 3.3% 2,000 1,930 3.1% 1,829 1,800 1,748 1000 1,706 1,601 1,600 800 1,400 2.0% 1,200 600 FY2022 FY2023 FY2024 Fore
Slide 18: Revision of Medium-term Management Plan
Revision of Medium-term Management Plan 17
Slide 19: Medium-term Management Plan－Before and After Revision
Medium-term Management Plan－Initial Plan, Comparison Before and After Revision Unit: Millions of JPY [Factors in sales changes] 35,000 • Decrease in overseas sales mainly due 5,965 30,000 to the dissolution of joint venture 10,000 (19.6%) (28.6%) 3,500 relationship with J Steel, a former (11.7%) con
Slide 20: Shareholder Return
Shareholder Return 19
Slide 21: Dividends and Purchase of Treasury Shares
Dividends and Purchase of Treasury Shares ◼ Dividends [Overview] • Annual dividend was revised down to 40 yen from 70 yen, the initial plan at the beginning of the term. [Reason] • Intensive investment in R&D was necessary to enable the electrification of core products, carbon neutrality, and automa
Slide 22: Shareholder Return
Shareholder Return FY2023 FY2024 Interim dividend: 20 yen (result) Interim dividend: 20 yen Year-end dividend: 20 yen (forecast) Year-end dividend: 20 yen Unit: yen 80 Interim Dividend Year-end Dividend 70 70 70 70 68 60 50 34 35 35 35 40 40 40 30 20 20 20 35 35 35 34 10 20 20 0 FY2019 FY2020 FY2021
Slide 23: GIKEN GOALS 2031
GIKEN GOALS 2031 22
Slide 24: GIKEN GOALS 2031 Numeric Target
◼ GIKEN GOALS 2031 Numeric Target Achieve 100 billion sales through Expanding the Size of Business and Advancing Productivity 1,000 New Business Sales per Capita Press-in Work Segment 100 million yen Construction Machinery Segment Medium-term Sales per Capita Management Plan target revision 42 milli
Slide 25: GIKEN GOALS 2031 Business Expansion
GIKEN GOALS 2031 Business Expansion Development-based business expansion into domestic and overseas markets Net Sales 100 billion yen Forming projects to meet Overseas Europe/Asia/North and regional needs South America Business expansion in each Select potential leading hub Increase cases adopted an
Slide 26: Overseas－Current Status and Future Plans
Overseas－Current Status and Future Plans Establish GIKEN’s business model overseas Stimulation of press-in markets: Develop potential market in response to the needs where we can serve through offering press-in technology based on GIKEN’s expertise. Growth of press-in industry: Expand the industry l
Slide 27: Domestic－Expansion of Press-in Work Market
Domestic－Expansion of Press-in Work Market Boost adoption in projects with potential investments in the future. Coast Road River Port Erosion control Bridge Disaster prevention measures in the private sectors Major renovation of Construction of national- Urban Infrastructure expressways defense faci
Slide 28: Key Points for Expansion: Major Renovation of Expressways
Domestic－Key Points for Expansion of Press-in Market Major Law revised to extend toll collection period for up renovation of to 50 years to cover major renovations and repairs. expressways Aiming to boost adoption in “expressway renewal” Expand track record through foundation works for the Metropoli
Slide 29: Key Points for Expansion: National-defense Facilities
Domestic－Key Points for Expansion of Press-in Market Construction of Policy of large-scale increases in national defense national-defense expenditures Aiming for more adoptions in projects for reinforcing the functions of facilities shelters and port facilities and other national defense facilities
Slide 30: Key Points for Expansion: Infrastructure Remodeling
Domestic－Key Points for Expansion of Press-in Market Infrastructure upgrading in overcrowded urban Infrastructure areas remodeling Expand market for “remodeling” existing infrastructure • Gyropress MethodTM restores and enhances the functionality of existing infrastructure by driving piles through i
Slide 31: Development－Development Policy
Development－Development Policy Growing Social Issues Decarbonization, extreme disasters due to climate change, declining workforce, and deteriorating infrastructure. Development policy to address social issues Machinery Structures and Methods Reduced environmental Disaster-resistant impacts and Sust
Slide 32: Development－Decarbonization Technology
Development－Decarbonization Technology Development for reducing greenhouse gas emissions Electrified GYRO PILERTM was already introduced in External power supply Battery Fuel cells the Netherlands in 2022 All solid-state battery Wider selections Diesel Bio fuel, Synthetic fuel, Hydrogen Image of the
Slide 33: Development－Technology Development of Implanting Structures
Development－Technology Development of Implanting Structures Development of technology for implanting structures which are disaster-resistant and allow quick construction Work to address more severe and more Quick construction of replacements for frequent floods damaged bridges ImplantTM Lock Levee I
Slide 34: Development－Automated Operation/Remote Control
Development－Automated Operation/Remote Control Development of technology for automated operation/remote control to address worksite labor shortage issue Challenges for construction in 2024 Autonomous construction PPTSTM autonomous Fully automated press-in operation Automated pile operation transport
Slide 35: Development－DX
Development－DX From products to services. Development of new businesses through digital transformation Technology proposal tools using 3D Data providing services using digital measurement, 3D modelling, and BIM/CIM platform solutions Press-in machine and geo data are available, via Point Group Measu
Slide 36: Development－Expansion into the Construction Sector
Development－Expansion into the Construction Sector Apply ImplantTM Method to the construction sector The method enables earthquake-resistant and sustainable structures with a simple process. Construction of foundation piles by Create large-scale underground spaces Gyropress MethodTM which also serve
Slide 37: GIKEN GOALS 2031 Human capital enhancement
GIKEN GOALS 2031 Human capital enhancement Talents who create Talents who the press-in market grow the press-in industry Talents who support management and development Enhance investment in people to deliver our business strategy 36
Slide 38: References
References 37
Slide 39: Content
Content ◼ Financial Results Overview FY2023 P 39 ◼ Progress in FY2023 P 43 38
Slide 40: Financial Results Overview FY2023－Operating Profit Changes
Financial Results Overview FY2023－Operating Profit Changes Unit: Millions of JPY Sales decrease in Construction Operating Profit Machinery Sales decrease Travel, 4,613 segment in Press-in Work segment Research and Transportation -99 Cost of Sales Development and Consulting Communication Rent Expense
Slide 41: Construction Machinery Segment Net Sales by Category
Financial Results Overview FY2023－Construction Machinery Segment Net Sales by Category Unit: Millions of JPY 25,000 • Decrease in sales volume of machinery products used in 20,851 20,752 the construction of permanent 19,134 structures. In contrast, steady 20,000 753 803 growth in sales of general 67
Slide 42: Construction Machinery Segment Net Sales by Category
Financial Results Overview FY2023－Construction Machinery Segment Net Sales by Category Shipment Value Trend by Product Category Unit: Millions of JPY Specialized Machinery Press-in machine for ultra-low-headroom 16,000 Press-in machine for zero-sheet piles 13,867 13,809 GRBTM system and others 12,48
Slide 43: Financial Results Overview FY2023－Capital Investment Trend
Financial Results Overview FY2023－Capital Investment Trend Unit: Millions of JPY 10,000 New Kochi Head Office 8,000 building 138 Kochi Third Factory 263 Kochi Third Factory 384 Kansai Factory RED HILL 309 Press-in Training Center 38 company dormitory 153 Factory and office building RED HILL 508 6,00
Slide 44: Progress in FY2023－Overseas Business
Progress in FY2023－Overseas Business Pilot project to repair the banks of the World Heritage canal in the Netherlands has been completed. Electrified GYRO PILERTM and GRBTM System demonstrated the advantages of press-in technology. E l e c t r i f i e d C l a m p C r a n e TM i n operation under tre
Slide 45: Progress in FY2023－Overseas Business: World Heritage canal project recognition
Progress in FY2023－Overseas Business Project to repair the banks of the World Heritage canal in the Netherlands was well recognized nationally. Selected for “the Action Plan for the Overseas Received “the Japan Construction Development of Infrastructure System as a major International Award” project
Slide 46: Progress in FY2023－Overseas Business: Pa Sak river, Thailand
Progress in FY2023－Overseas Business ImplantTM Method was adopted for the Pa Sak river bank protection project in Thailand Sales of F301-900 to a local company. We expect this will lead to its continued adoption with them, further promoting our business among countries around the world for their See
Slide 47: Progress in FY2023－Overseas Business: India project
Progress in FY2023－Overseas Business Major project in India is on track Appeal to market with great potential. ImplantTM Method will be a clue to full entry into the untapped market. Seed of Success Two “SILENT PILERTM F301-700″ delivered in 2022. A water drainage facility development project in GRB
Slide 48: Joint Plan with Mitsui & Co. for Brazil
Progress in FY2023－Overseas Business GIKEN, along with Mitsui & Co., will formulate a Joint Plan to develop business in Brazil with JICA support Joint Plan with partners with strong networks and know-how in global bushiness. Aim to jointly develop a sustainable market and create business structures
Slide 49: Launch of promotion in Europe with Seika Sangyo GmbH
Progress in FY2023－Overseas Business Launch of promotion in Europe with the cooperation of Seika Sangyo GmbH (Head office: Germany), a group company of the general machinery trading company Seika Corporation Seika Sangyo GmbH has a strong track record and is highly competitive in the European market
Slide 50: Progress in FY2023－Development: SILENT PILER F112
Progress in FY2023－Development Launch of SILENT PILERTM F112, a machine specialized for hard ground construction with a flywheel pile auger as standard equipment The weight increases torque through use of the rotational moment of inertia. This model delivers torque that is roughlythree times greater
Slide 51: Progress in FY2023－Development: Ultra-Low-headroom GYRO PILER
Progress in FY2023－Development GIKEN develops Ultra-Low-headroom GYRO PILER™ – enabling Hard Ground Press-in Piling of 1-m-Diameter Tubular Piles with only 2.5 m overhead clearance Feeding piles from the side enables pitching longer piles, reducing the number of joints. Reduced construction period e
Slide 52: Progress in FY2023－Customer Development
Progress in FY2023－Customer Development Customer development undertaken with external partners AKTIO:Partnership agreement for rental business was concluded in February 2022 ITOCHU TC Construction Machinery Co.: Partnership agreement for sales was concluded in March 2021 Leveraging the two companies
Slide 53: Progress in FY2023－Promotion of Construction Methods
Progress in FY2023－Promotion of Construction Methods “RED HILL 1967,” an information center for Press-in Technologies, opens The facility showcases actual ImplantTM Method, promoting press-in technology worldwide through the opportunity to see and experience it. Sozokan Akaoka cho, Konan City, (The
Slide 54: Progress in FY2023－Investing in People
Progress in FY2023－Investing in People Enhanced “Parental Leave Assistance Grant” Eligibility: Those who took paternal leave for three months or more *Grant is provided regardless of gender *Eligible also for a second and subsequent children Amount: Maximum 50,000 yen monthly for maximum 12 months ◼
Slide 55: Construction Revolution
Construction Revolution Implant method change the Worldwide Construction