Hanwa Co., Ltd. · TSE:8078
Hanwa — H1 FY2014 Earnings Presentation
28 slides from Hanwa's earnings presentation, Nov 17, 2014
Slide 1: Interim Results for the Year Ending March 2015
INTERIM RESULTS for the Year Ending March 2015 November 17, 2014 HANWA CO., LTD. Copyright 2014 Hanwa Co., Ltd. All Rights Reserved 1
Slide 2: Overview of Interim Results
Overview of Interim Results • As for the interim result for this fiscal year, net sales has reached to 861.1 billion yen, increased by 8.9%, due to increase in steel and metals/alloys businesses. • On profit side, operating income have increased by 28.4%, thanks to increase profit in steel and other
Slide 3: Operating Results (consolidated)
Operating Results ( consolidated ) （Millions of yen） Rate of ・Net sales has increased by 8.9% 2014/9 2013/9 changes for the same period of previous year, due to revenue growth in Net sales 861,116 790,724 +8.9% steel and metals/alloys Gross profit 27,369 24,345 +12.4% businesses. SG&A expenses 18,35
Slide 4: Changes in Business Results (consolidated)
Changes in Business results （ consolidated ） Net sales （billions of yen） The economy was steady in the US but stagnant in Europe. Expansion is （forecast） slowing in China due to a stable growth policy. The economies in emerging countries are stagnant due to the financial environment and geopolitical
Slide 5: Financial Position (consolidated)
Financial Position ( consolidated ) （Millions of yen） Rate of ・Total assets increased by 9.4% 2014/9 2014/6 change from the end of the previous year, due to increase in trade Total assets 649,342 593,351 +9.4% receivable and inventories. Current assets 520,763 468,325 +11.2% ・Interest-bearing debt i
Slide 6: Cash Flows Situation (consolidated)
Cash Flows Situation ( consolidated ) Net cash used in （Millions of yen） operation was 24.6 billion yen due to 2014/9 2013/9 change increase of working capital requirement with the increased sales Cash flows from volume. (24,679) 3,423 -28,102 Operating activities Net cash used in Cash flows from in
Slide 7: Segment Information (consolidated)
Segment Information ( consolidated ) Net sales Segment income （Millions of yen） Rate of Rate of 2014/9 2013/9 2014/9 2013/9 change change Steel 423,679 379,153 +11.7% Steel 6,810 6,061 +12.4% Metal & alloys 65,447 46,969 +39.3% Metal & alloys (27) 1,140 -% Non-ferrous Non-ferrous metals 41,584 37,33
Slide 8: Steel Business Segment
Steel Business Segment （Millions of yen） Net sales Segment income Profit ratio 2014/9 423,679 6,810 1.6% 2013/9 379,153 6,061 1.6% Sales to manufacturers were steady but despite a large number of building and civil engineering projects, demand in the construction sector was flat mainly because of de
Slide 9: Transaction volume in Steel Segment (unconsolidated)
Transaction volume in Steel Segment (unconsolidated) Prices of long products stopped climbing because of slow demand for construction. Shipments of flat products were strong for domestic as well as for exports. Higher volumes of slab and wire rod contributed to the increase in special steels and oth
Slide 10: Market Trend of Long Products
Market Trend of Long Products Demand reached to a peak due to the lack of growth in construction projects caused by the labor shortage and no valid bids. Although raw material prices were weaker, steelmakers were not lowering prices with various reasons like certainty of future demand and rising cos
Slide 11: Market Trend of Flat Products
Market Trend of Flat Products Despite high factory utilization rates, it was still not enough to stimulate spot market demand. As a result, open market prices remained weak. Effects of the drop in consumption after the consumption tax increase are slowly appearing in the demand in the contractual sa
Slide 12: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials The price of iron ore imported to China continued to decline from previous fiscal year. The decline has gained momentum as large iron ore producers that have more output capacity continue to offer low prices. Although inventories at ports were decreasing, there wa
Slide 13: Metallurgical coal price and contract prices
Coking coal demand was flat too, 【Metallurgical coal price】 but the price has been bearish 200 because the surplus of coking coal was not as severe as for iron ore. 150 Contract prices with mining companies have been kept falling 100 along with the price of iron ore. But High grade(US$：/FOB Australi
Slide 14: Markets Trend of Steel Scrap
Markets Trend of Steel Scrap The market price of steel scrap was unchanged, the result of the small volume of scrap in Japan and high operating rates at US EAF steelmakers. But the price was declining in Turkey and other regions because of growth of cheap billets imports from China. Although the reb
Slide 15: Steel Market Trend in China
Steel Market Trend in China There has been no progress with reducing steel output as crude steel production remained high despite lackluster demand. Market inventories are decreasing and exports are growing.. Market prices continue to move down because of soft demand.. 【Transition of steel market in
Slide 16: Metals & Alloys Business Segment
Metals & Alloys Business Segment （Millions of yen） Net sales Segment income Profit ratio 2014/9 65,447 (27) -0.0% 2013/9 46,969 1,140 2.4% Operating rates at stainless steel makers have improved and demand increased, including for other types of stainless steel materials. Although proceeds were high
Slide 17: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys Indonesia’s embargo on nickel ore has sparked a surge in the price of nickel. The resulting shift to stainless steel scrap has pushed up the price of this scrap, too. The price of nickel has started to fall, due partly to changes in the financial environment, but pric
Slide 18: Non-ferrous Metals Business Segment
Non-ferrous Metals Business Segment （Millions of yen） Net sales Segment income Profit ratio 2014/9 41,584 175 0.4% 2013/9 37,330 682 1.8% LME prices were on upward trend, although there was swinging movement along with the change of financial environment. Demand was strong for aluminum and precious
Slide 19: Markets Trend of Non-ferrous Metals
Markets Trend of Non-ferrous Metals Although LME prices were moving up and down along with individual economic news, the aluminum market was consistently firm due to strong actual demand. However, the price of copper was weak overall mainly because of sluggish demand in China, the copper collateral
Slide 20: Foods Business Segment
Foods Business Segment （Millions of yen） Net sales Segment income Profit ratio 2014/9 43,920 593 1.4% 2013/9 39,361 793 2.0% Demand in Japan remained at low level because of higher prices of shrimp, salmon and other products. However, sales increased as prices overall were higher than one year earli
Slide 21: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products The price of farmed salmon fell as high prices brought down demand but the price started recovering after Russia began buying Chilean Coho salmon. The price of shrimp decreased as buyers tired of high prices but then started increasing again because of bad harv
Slide 22: Petroleum & Chemicals Business Segment
Petroleum & Chemicals Business Segment （Millions of yen） Net sales Segment income Profit ratio 2014/9 231,193 1,204 0.5% 2013/9 230,911 811 0.4% Earning profit was difficult because of intense competition among sellers as demand for industrial fuel remained sluggish. Higher gasoline sales offset wea
Slide 23: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products The price of crude oil was firm because of incidents in the Middle East and Ukraine but the price has started falling due to declining concerns about supply and the lack of global economy growth. Prices of refined products were declining too along with
Slide 24: Other Segment
Other Segment （Millions of yen） Net sales Segment income Profit ratio 2014/9 115,930 355 0.3% 2013/9 98,826 (188) -0.2% Sales were higher partly because of an increase in the bunker fuel sales volume at Hanwa Singapore. The completion of installations of leisure facilities in the machinery category
Slide 25: Progress of QSP Business Strategy in Japan
Progress of QSP Business Strategy in Japan The goal is capturing regional and small-lot demand with “SOKOKA” strategy; SOkuno ( JIT deliveries), KOguchi (small lot orders) and KAko (processing). To accomplish this, Hanwa is establishing more sales bases operated with regional agents and purchasing s
Slide 26: Progress of "Create another Hanwa in Southeast Asia" Strategy
Progress of “Create another Hanwa in Southeast Asia” Strategy To include growing future demand in the ASEAN region into our business model, Hanwa plans to establish more alliances with prominent companies in this region and expand jointly with Japanese companies into this region. Thailand 【The major
Slide 27: Business Forecast FY2014 (year ending March 31, 2015)
Business Forecast FY2014 ( year ending March 31, 2015) In the first half ordinary income and net income made slow progress because of the foreign exchange loss. But there is no change in the fiscal year forecast since this was a one-time entry caused by the revision of the market exchange rate at th
Slide 28: A Cautionary Note on Forward-looking Statement
A Cautionary Note on Forward-looking Statement This material contains statements (including figures) regarding Hanwa Co.,Ltd.(“Hanwa”)’s corporate strategies, objectives, and views of future developments that are forward-looking in nature and are not simply reiterations of historical facts. These st