Advanex Inc. · TSE:5998
Advanex — FY2021 Earnings Presentation
42 slides from Advanex's earnings presentation, May 26, 2021
Slide 1: Presentation for the Fiscal Year Ended March 31, 2021 and New Mid-term Management Plan
Presentation for the Fiscal Year Ended March 31, 2021 And New Mid-term Management Plan May 26, 2021 This datum is based on the data as of March 31, 2021. The opinion and forecast described here is based on our judgment at that time and may possibly be changed without notice.
Slide 2: Agenda
1. Operating results for FY2021 2. FY2022 earnings forecast 3. General Condition 4. New Mid-term Management Plan 5. SDGs（ESG） activity 6. Conclusion 1
Slide 3: Summary of Consolidated Financial Results for Fiscal Year Ended Mar 2021
1. Summary of Consolidated Financial Results for Fiscal Year Ended Mar 2021 （Million yen） Change FY2020 FY2021 Change Ratio Amount Net Sales 21,280 19,539 △1,740 △8.2% Operating 260 176 △84 △32.4% Income (Margin) 1.2% 0.9% - - Ordinary 187 359 171 91.6% Income Net Income Attribute to owners △593 634
Slide 4: Highlight
1. Highlight - Sales fell sharply year-on-year in April-June due to the impact of the new Corona Virus, but sales have been recovering since July. Sales for automobiles declined sharply from April to June, declined slightly from the previous fiscal year from July to September, and increased substa
Slide 5: Quarterly Transition of Sales and Income (Consolidated)
1. Quarterly Transition of Sales and Income(Consolidated) （Million yen） （Million yen） Net Sales(Left axis) Operationg Income(Right axis) 6,000 5,666 500 5,432 5,375 5,457 5,238 5,250 5,267 5,322 5,211 5,150 316 4,680 146 156 Note 122 3,736 55 52 27 32 11 -36 3,000 -52 0 -329 0 -500 1Q 2Q 3Q 4Q 1Q 2Q
Slide 6: Net Sales and Operating Income by Geographical Segment
1. Net Sales and Operating Income by Geographical Segment Net Sales（Left axis） Operating Income（Right axis） （Million yen） Japan Americas Europe Asia （Million yen） 10000 600 8,598 410 8,061 7500 242 7,915 300 179 286 7,352 115 94 5000 0 2,202 2500 1,936 -300 2,562 2,188 △360 0 △527 -600 FY20 FY21 FY2
Slide 7: Net Sales by Market
1. Net Sales by Market （Million Yen） FY2019 FY2020 Amount Ratio % % Net Sales Net Sales Change Change Automotive 10,784 50.7% 9,835 50.3% △949 △8.8% OA equipment 2,966 13.9% 2,400 12.3% △566 △19.1% Medical and Healthcare 1,859 8.7% 1,775 9.1% △84 △4.5% Precision component 924 4.3% 1,069 5.5% 145 15.
Slide 8: Capital Investment, Depreciation Expense, Interest-bearing Debt
1. Capital Investment・Depreciation Expense・ Interest-bearing Debt Capital investment 4,144 Interest-bearing Debt（include lease debts） （Million12,000 Yen） （Million Yen） D/E ratio 11,192 Depreciation expense 10,839 10,079 2.9 8,361 8,177 7,480 7,057 2,350 2.2 6,629 2,191 2,080 2,084 (Plan) 1.8 1.7 5,0
Slide 9: Agenda
1. Operating results for FY2021 2. FY2022 earnings forecast 3. General Condition 4. New Mid-term Management Plan 5. SDGs（ESG） activity 6. Conclusion 8
Slide 10: FY2022 earnings forecast
2. FY2022 earnings forecast （Million yen） FY2021 FY2022 Change Change Ratio (Result) （Forecast） Amount Net Sales 19,539 20,500 961 4.9% Operating 176 300 124 70.5% Income (Margin) 0.9% 1.5% - - Ordinary 359 200 △159 △44.3% Income Net Income Attribute to owners of 634 100 △534 △84.2% parent （Yen） Div
Slide 11: Agenda
1. Operating results for FY2021 2. FY2022 earnings forecast 3. General Condition 4. New Mid-term Management Plan 5. SDGs（ESG） activity 6. Conclusion 10
Slide 12: General Condition: Changes in Total Factory Area
3. General Condition：Changes in Total Factory Area Sifted from expansion to improvement Expanded Mexico factory Closed America 2nd factory (㎡) Expanded Saitama factory 130,000 Closed U.K. 2nd factory New factory Czech factory M&A America factory 120,000 India factory (Relocation from CA to TN) Vietn
Slide 13: Transition of Operating profit: Realized V shape recovery
3. General condition : Transition of Operating profit Realized V shape recovery. (Million yen) 600 Images of burden from starting investment Operation profit transition by half year 500 473 391 400 366 Reduce upfront investment burden 306 301 and recovery sales. 300 200 162 150 137 121 110 100 84 63
Slide 14: General condition: Compare to last year
3.General condition：Compare to last year Earnings deteriorated due to covid-19 damage in the first half, but FY2021 improvements will progress in the second half. FY2020 Establish Years － Comparison of operation profit ＋ 2002 ～18 Dongguan(China) 1988 ～32 U.K. Thai The surplus driven 2011 ～ 9 by prof
Slide 15: Agenda
1. Operating results for FY2021 2. FY2022 earnings forecast 3. General Condition 4. New Mid-term Management Plan 5. SDGs（ESG） activity 6. Conclusion 14
Slide 16: 3 years to build up power for a leap
4. New Mid-term Management Plan：Slogan “3 years to build up power for a leap” New Med-term Management Plan Theme Strengthen governance system Strengthen profit structure Strengthen financial structure 15
Slide 17: Plan: Whole image
4. New Mid-term Management Plan：Whole image Governance - Renewal subsidiaries management - Effective use of group asset - Advanex brand Filling leaping Profit structure power Financial structure - “Products, Sales, Customer” - Reduce liabilities with interest - Total optimization, Reorganization - i
Slide 18: Plan: Governance
4. New Mid-term Management Plan：Governance - Renewed management structure of overseas subsidiaries - Dispatch directors from HQ - Review capital structure - Effective utilization and sharing of group assets - Manpower, Goods, Capital - Information System(Account, Production control etc.) - Build Adv
Slide 19: Plan: Governance
4. New Mid-term Management Plan：Governance Strengthen the involvement of the head office, and enhance the “linkage” of management Past Current, Future - Office automation, Electric Main Market - Automotive, Medical, Infrastructure devices - Enhance HQ control Management - Managed by local members -
Slide 20: Plan: Governance
4. New Mid-term Management Plan：Governance Respond to changing customer needs by raising the level with a unified theme for the headquarters and functional axes Japan U.K. Czech India Indo Thai Singa Vietnam Dong Chang Dalian Shang America Mexico nesia pore Guan Zhou (China) Hai (China) (China) (Chi
Slide 21: Plan: Governance - Brand strategy
4. New Mid-term Management Plan：Governance Insert Collar - Brand strategy - Standard & Original Products - Penetration of our trademark. Selection of a trademark suitable for the site. - Tangless🄬, InstantLock🄬、Heatnex🄬, Coilthread, Lockone🄬 - Patent / trademark registration strategy - Standard…
Slide 22: Plan: Profit structure - Sales strategy
4. New Mid-term Management Plan：Profit structure - Sales strategy - Expand global sales activity - Promote the added value(1st section of the Tokyo stock exchange, a global company) Sales mix(%) FY2021 FY2024 Other Other Standard Standard Medical Medical Auto Auto OA OA 21
Slide 23: Profit structure: Long life cycle, high profitability, low volatility
4. New Mid-term Management Plan：Profit structure Focus on Long life cycle, High profitability, low volatility 13,000 11,000 12,000 CAGR （million） 10,000 9,479 Auto 11% Medical 17% Auto Standard 10% Auto 5,000 4,208 3,650 3,000 2,950 2,700 2,900 2,417 2,300 2,300 2,300 Other 1,869 2,100 1,600 1,750 O
Slide 24: Profit structure: Auto market
4. New Mid-term Management Plan：Profit structure Auto market We will leverage our strengths to build a collaborative system with Tier 1 that can be adapted to next-generation vehicles. Automaker Japanese・European・American existing automaker, Tesla, Apple, Chinese EV - Power control unit - Denso, Hit
Slide 25: Profit structure: Medical market
4. New Mid-term Management Plan：Profit structure Medical market Focus on Global Mega-Pharma and expect market expanding Number of Springs for syringe from Advanex Global population （million pcs） Images of syringe product and springs Resource: Diamond Global medical expense Number of Springs for Inha
Slide 26: Profit structure: Standard products
4. New Mid-term Management Plan：Profit structure Standard products Sharing information and know-how for new entry into unentered markets Marketing team Engineering team New entry Tangless Insert New Introduction Europe Aviation Aviation Maintenance Railway Industrial equipment Infrastructure Product
Slide 27: Development/Technology strategy and Purchasing strategy
4. New Mid-term Management Plan：Profit structure - Development/ Technology strategy - New product development - Automation, IOT, RPA, VA/CD - Construction and penetration of AQS（Advanex Quality Standard） - Purchasing strategy - Establishment of global purchasing department, consideration of utilizat
Slide 28: Overall optimization and Reorganization
4. New Mid-term Management Plan：Profit structure - Overall optimization - Review production allocation - Review unprofitable businesses - Reorganization - Japan：Improve profitability at deficit factories - Americas：Relocation of factory and transfer to Mexico - China：Strengthen cooperation 4 factori
Slide 29: Profit structure: Reorganization by region
4. New Mid-term Management Plan：Profit structure ③China reorganization April, 2021～ - Strengthen cooperation 4 factories U.K. Czech ②Japan reorganization ⑤Europe reorganization Jan, 2021～ Oct, 2021～ Dalian Shanghai - Improve profitability America Mexico（Queretaro, Nogales） Changzhou at Aomori and Ch
Slide 30: Aim to eradicate deficit companies
4. New Mid-term Management Plan：Profit structure Aim to eradicate deficit companies. FY2024 ー operation profit ＋ FY2021 Establish Years 1988 ～33 U.K. 2016 ～ 5 Mexico 2011 ～ 9 Thailand 2002 ～19 Dongguan 1946 ～75 Japan 2006 ～15 Vietnam 1983 ～38 America 2018 ～ 3 India 2013 ～ 8 Changzhou 2003 ～18 Dalian
Slide 31: Financial structure: Reduce debt, improve capital adequacy ratio
4. New Mid-term Management Plan：Financial structure - Reduce debt, improve capital adequacy ratio - Investment restraint, effective use of group cash - Formulation of repayment plan, follow up （million yen） 4,000 Cash and deposit balance transition Consolidated non-consolidated 2,000 0 30
Slide 32: Improvement of consolidated settlement accuracy
4. New Mid-term Management Plan：Financial structure - Improvement of consolidated settlement accuracy - Strengthen budget management system, improving budget accuracy - Review accounting system, integrated financial data Several companies system New account system HQ Consolidated Account system A Ac
Slide 33: KPI: FY2024 Target
4. New Mid-term Management Plan：KPI - FY2024 Target - Net sales ：２３ bn. JPY - OP profit ： １ bn. JPY - Debt with interest ： less than６ bn. yen - Capital adequacy ratio ： more than ３０% 32
Slide 34: Net sales & OP margin
4. New Mid-term Management Plan：Net sales & OP margin （Net sales: million yen） （OP profit: million yen） 30,000 Net sales OP profit 23,000 20,967 21,280 20,500 21,500 20,294 19,539 20,000 17,858 2,000 1,000 10,000 1,000 600 247 259 260 300 176 66 0 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 33
Slide 35: Debt with interest & capital adequacy ratio
4. New Mid-term Management Plan：Debt with interest & capital adequacy ratio Capital adequacy ratio Debt with interest （Capital adequacy ratio：%） 9,621 30% （Debt: million） 10,000 Capital adequacy ratio Debt with interest Debt with interest 6,000 Capital adequacy ratio 26.5% 25% 5,000 FY2021 FY2022 FY
Slide 36: Agenda
1. Operating results for FY2021 2. FY2022 earnings forecast 3. General Condition 4. New Mid-term Management Plan 5. SDGs（ESG） activity 6. Conclusion 35
Slide 37: SDGs(ESG): Automotive
5. SDGs(ESG)：Automotive Contributes to decarbonization of automobile(electric and lightweight) and safety for accidents. Electric Lightweight 100% 100% - Power control unit - Insert collar - Invertor, Convertor (Compression limiter, Bush) - Battery - Motor - Sift by wire 50% 30% 50% 25% 15% 5% 0% 0%
Slide 38: SDGs(ESG): Medical
5. SDGs(ESG)：Medical Contribute for healthcare and quality of life of people around the world Asthma inhaler kit - 334 million asthma patients worldwide - The number of deaths is 250 thousand per year - Increased number of patients due to increased pollen due to global warming ‐ In the future, it wi
Slide 39: SDGs(ESG): Standard products
5. SDGs(ESG)：Standard products Contribute to the spread of new energy infrastructure and people’s safety Wind power generation Solar panel Ceiling board that fell due to the earthquake Tangless insert LockOne Instant Lock - For wind power generation - Locking bolt-nut for solar - Locking for ceiling
Slide 40: Agenda
1. Operating results for FY2021 2. FY2022 earnings forecast 3. General Condition 4. New Mid-term Management Plan 5. SDGs（ESG） activity 6. Conclusion 39
Slide 41: Conclusion
6. Conclusion - By strengthening both governance and cooperation with group companies, we will efficiently allocate the management resources(people, goods, money, knowledge) of the entire group and establish a system that can effectively demonstrate the power of the group. - Formulated a reorganizat
Slide 42: Contact
（Contact） Advanex Inc. General Affairs Department. Corporate Communication Section TEL : 03 - 3822 – 5865 Email : tsutomu_kumaki@advanex.co.jp URL : http//www.advanex.co.jp