Sumitomo Heavy Industries, Ltd. · TSE:6302
Sumitomo Heavy Industries — FY2006 Earnings Presentation
27 slides from Sumitomo Heavy Industries's earnings presentation, May 9, 2007
Slide 1: Part 1 FY2006 Financial Summary and FY2007 Projections
May 9th, 2007 Part 1 FY2006 Financial Summary and FY 2007 Projections Yukio Kinoshita, Senior Executive Vice President May 2007
Slide 2: Current-Term Performance Evaluation
Current-Term Performance Evaluation 1-1 Higher earnings for the fourth straight year New records for operating income, ordinary Summary income, and current net income New records for orders received and net income for the fourth straight year Orders received: JPY705.3 billion (forecasted: 660 billio
Slide 3: Financial Summary for FY2006
Financial Summary for FY2006 1-2 Units JPY billion Orders Received Increase in Construction FY FY Change Machinery, Industrial Machinery, and Ship & Steel Structure Orders received 705.3 603.0 102.4 segments Sales 600.3 551.3 49.0 Sales Operating Great increase in Construction income 64.2 47.5 16.7
Slide 4: Operating Income by Segment
Operating Income by Segment 1-3 Unit: JPY billion Mass-produced machinery Plastics machinery experienced a FY2006 FY2005 Change decline but power transmissions had favorable turn out in comparison with the previous term. All others Mass- were the same as last year. production machinery 28.8 30.0 (1.
Slide 5: Balance Sheets
Balance Sheets 1-4 Unit: JPY billion March March March March FY2007 2006/3 FY2006 Changes FY2007 FY2006 Changes Liabilities Current assets 332.5 317.8 14.7 394.9 407.7 (12.9) Notes and accounts Cash and deposits 48.2 43.9 4.2 payable 150.9 142.8 8.1 Notes and accounts receivable 158.4 158.9 (0.5) Ad
Slide 6: Statements of Cash Flow
Statements of Cash Flow 1-5 Unit: JPY billion Category FY2006 FY2005 Change Cash flows from operating 56.8 50.0 6.8 activities Working capital 10.3 7.9 2.4 Operating income before 72.5 53.9 18.5 interest payment Other (26.0) (11.8) (14.1) Cash flows from investing (12.5) (7.0) (5.4) activities Free
Slide 7: Change in Interest-Bearing Debt
Change in Interest-Bearing Debt 1-6 Unit: JPY billion 273.5 Interest-bearing debt 225.6 215.8 169.2 157.4 (Net interest-bearing debt) 125.5 119.6 88.0 81.6 67.8 Free cash flow 39.9 39.4 43.0 28.4 44.3 FY2002 FY2003 FY2004 FY2005 FY2006 May 2007
Slide 8: FY2006 Operating Results and FY2007 Forecast
FY2006 Operating Results and FY2007 Forecast 1-7 Unit: JPY billion 1st half of 1st half of FY2007 FY2006 FY2007 Forecast FY2006 Actual Forecast Actual Orders received 330.0 322.4 700.0 705.3 Sales 300.0 273.4 650.0 600.3 Operating income 30.0 26.8 74.0 64.2 Operating income ratio 10.0% 9.8% 11.4% 10
Slide 9: FY2007 Forecast of Orders Received by Segment
FY2007 Forecast of Orders Received by Segment 1-8 Unit: JPY billion Unit: JPY billion FY FY FY FY FY Forecast 705.3 700.0 Mass- Constructio n produced machinery 195.6 213.1 219.1 234.7 250.0 603.0 machinery 560.7 Environment 531.5 al protection facilities, Industrial plants & 80.4 100.3 83.6 90.0 92
Slide 10: FY2007 Forecast of Sales and Operating Income by Segment
1-9 FY2007 Forecast of Sales and Operating Income by Segment Unit: JPY billion 1st half of 1st half of FY2007 FY2006 FY2007 FY2006 Change Change Forecast Actual Forecast Actual Sales Mass- 110.0 107.4 2.6 234.0 222.9 11.1 Operating produced income 12.0 14.0 (2.0) 31.0 28.8 2.2 machinery Operating in
Slide 11: Part 2 Management Strategy
May 9th, 2007 Wednesday Part 2 Management Strategy Progress of Current Medium-Term Management Plan Yoshinobu Nakamura, President and CEO May 2007
Slide 12: Progress of the 'Leap to Excellence '07' Medium-Term Management Plan
Progress of the “Leap to Excellence ’07” 2-1 Medium-Term Management Plan in FY2006 Review of “Leap to Excellence ’07” and Results for FY2006 Evolving into a “company that systematically creates knowledge” and provides top quality products - Launching products for a leap to Medium- term targets excel
Slide 13: Performance Transition
Performance Transition 2-2 Sales of JPY650 billion and operating income of JPY74 billion targeted for FY2007 Sales & invested capital Operating income & ROIC JPY700 billion JPY650 JPY74 650 billion billion JY80 billion Operating JPY64.2 600 JPY600.3 income billion 550 Sales 60 billion 500 40 450 400
Slide 14: FY2005-2007 Sales and Operating Income
FY2005-2007 Sales and Operating Income 2-3 Significant improvement in operating income due to favorable industry infrastructure for industrial machinery and ship, steel structure & other specialized equipment segments JPY billion (JPY billion) 234.0 650.0 222.9 600.3 221.0 2 551.3 2 2 2 0 178.0 2 2
Slide 15: Implementation Strategies for 'Leap to Excellence '07' in FY2006
Implementation Strategies for “Leap to Excellence ’07” in FY2006 2-4 Increased investments for growth from 2006 Transition of sales for “Products for Leap to Promoting the creation of “Products Excellence” for Leap to Excellence” Proceed from developmental to market JPY76.0 billion implementation st
Slide 16: FY2007 Outlook by Segment
FY2007 Outlook by Segment 2-5 Unit: JPY billion Segment FY2006 actual Market Strategy FY2007 forecast Sales Operating Operating income Sales income Power Sales expansion to China and Europe. transmission 91.1 Enhance precision power transmission 95.0 Mass-produced & control products. machinery Incre
Slide 17: Topics: Mass-produced Machinery (PTC)
Topics: Mass-produced Machinery (PTC) 2-6 Favorable number of orders for medium to large MCD business implementation: Expand sales of power transmissions being taken precision power transmission products Products for Leap to Excellence Seisa: Large power transmission unit Cyclo reduction gear for pr
Slide 18: Topics: Mass-produced Machinery (Plastic Machinery)
Topics: Mass-produced Machinery (Plastic Machinery) 2-7 Shaping up injection molding machines Products for Leap to Excellence Transition of market shares 30 % for injection molding machines Top Top Top 25 Top 20 Runner-up 15 SE-HD series 10 for automotive industry 5 SE-HP series 0 for IT industry 20
Slide 19: Topics: Mass-produced Machinery (Precision Control Machinery)
Topics: Mass-produced Machinery (Precision Control Machinery) 2-8 Increasing demand of cyclotron for PET Expanding business in semiconductor overseas manufacturing related fields Products for Leap to Excellence Products for Leap to Excellence CYPRIS HM-7 Cryo-pump “SICERA” Moving into business expan
Slide 20: Topics: Environmental Protection Facilities, Plants and Others
Topics: Environmental Protection Facilities, Plants and Others 2-9 Expanding demand for CFB boilers that accommodate new energies CFB boiler Increasing demand by responding to needs of converting fuels from coal to new energies ¾ Differentiation through highly advanced technologies to provide ease o
Slide 21: Topics: Ship, Steel Structure and Other Specialized Equipment
Topics: Ship, Steel Structure and Other Specialized Equipment2-10 Specializing in standardized ships for serial Orders for reactor vessels stacking up favorably shipbuilding Aframax oil tanker Coke drums Responding to increasing volumes through Steady growth of petroleum refinery market efficient pr
Slide 22: Topics: Industrial Machinery
Topics: Industrial Machinery 2-11 Global implementation of industrial steam Orders for large cranes stacking up favorably turbines Products for Leap to Excellence Goliath crane Steam turbine for power generation Orders stacking up favorably in ship building and Orders stacking up favorably for indus
Slide 23: Topics: Construction Machinery
Topics: Construction Machinery 2-12 Mobile cranes performing well in North Sales of superior LEGEST starts American market Products for Leap to Excellence LEGEST Mobile crane Implementation of equipment that comply with Further enhancement of strategies for models third gas emissions regulations and
Slide 24: Increasing Volume through Aggressive Capital Expenditure
Increasing Volume through Aggressive Capital Expenditure 2-13 Proactive distribution of sound cash flow for capital expenditure. Work to increase volume, reduce costs and improve quality through enhancement of production capabilities. Capital expenditure Mass-produced machinery: 30.0 JPY30.0 billion
Slide 25: Next Medium-Term Management Plan
Next Medium-Term Management Plan 2-14 Aiming for growth through utilization of highly improved earning capacity for investments. Targeted figures (for FY2010) To become “Global SHI” Sales amount: • Aggressively undertaking action in global market. JPY800.0 billion • Establishing sustained competitiv
Slide 26: Overseas Sales
Overseas Sales 2-15 Sales growing primarily in North America with concentrated efforts being made in China and BRICs since FY2007 - Aggressive expansion for global growth North America 100.0 Europe 40.0 China (JPY billion) 40.0 (JPY billion) 80.0 20.0 20.0 60.0 0 0 40.0 2004 2005 2006 2004 2005 2006
Slide 27: Strategies of Overseas Operations
Strategies of Overseas Operations 2-16 Establishing organization for design, manufacturing, sales and service by utilizing the SHI-Group network Design location Manufacturing plant Manufacturing Major sales and plant in Vietnam service location May 2006 (Vietnam) May 2006 (Tianjin, Started operation
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