Slide 1: Financial Results Presentation Slides for the Year Ended in March, 2018
Financial Results Presentation Slides for the Year Ended in March, 2018 Harada Industry Co., Ltd. June 8, 2018 This slides contains forward looking statements based on prerequisites, forecasts and plans available as of June 8, 2018. Actual results may differ materially from forward looking statement
Slide 2: Contents
Contents I. Corporate Overview 1. Corporate Profile ..................................................................................................................................................... 4 2. Global Network ..............................................................................
Slide 3: I. Corporate Overview
|. Corporate Overview HARADA
Slide 4: 1. Corporate Profile
1. Corporate Profile ◆ Established March 1958 ◆ Headquarters Omori Bellport B-4F, 26-2 Minami-Ohi, 6-Chome Shinagawa- ku, Tokyo, Japan ◆ Capital Stock 2,019 million yen ◆ Consolidated Overseas: 10 Subsidiaries (Sales Companies: U.S.A., U.K., Thailand, etc.) (Plants: China, Philippines, Vietnam and M
Slide 5: 2. Global Network
2. Global Network HARADA INDUSTRY OF AMERICA, INC. HARADA INDUSTRIES (EUROPE) LIMITED HARADA INDUSTRIES (MEXICO), HARADA EUROPE R&D CENTRE S.A. DE C.V. DALIAN HARADA INDUSTRY CO., LTD. SHANGHAI HARADA NEW HARADA INDUSTRIES VIETNAM LIMITED AUTOMOTIVE ANTENNA CO., LTD. HARADA Asia-Pacific Ltd. TAIWAN
Slide 6: 3. Major Products 1
3. Major Products 1 LPA (Low Profile Antenna) Support for multi- band antennas including: AM / FM, DAB, satellite (SDARS), telematics applications, GNSS and 3G/4G LTE. Rod Type Antenna Support for multi-band antennas including: AM / FM, DAB, satellite (SDARS), telematics applications, GNSS and 3G/4G
Slide 7: 3. Major Products 2
3. Major Products 2 Amplifier for Screen Type Antenna Film Antenna for DTV Other Integrated Type (Hidden) Antenna Can be integrated beneath plastic roof panel, into spoiler, trunk lid or bumper. Support for multi-band antennas. 7
Slide 8: 3. Major Products 3
3. Major Products 3 Coaxial Cables Connecting antennas and audio units. Routing design, design and development to in-house manu- facturing and assembly of components. STP Cables Transfer massive data at high speed. 8
Slide 9: II. Financial Results for FY2017 and Financial Plan for FY2018 (Consolidated)
II. Financial Results for FY2017 and Financial Plan for FY2018 (Consolidated) 9
Slide 10: 1. Net Sales Trend
1. Net Sales Trend (Hundred millions of yen) 500 Europe North and Central Americas 432 429 408 420 Asia 397 400 42 41 37 Japan 364 39 38 31 299 147 127 121 300 123 23 132 118 217 214 217 88 200 16 178 12 16 115 114 117 108 9 71 66 91 106 79 62 52 100 19 23 34 38 124 123 124 136 144 146 102 120 92 96
Slide 11: 2. Summary of Consolidated Statement of Income
2. Summary of Consolidated Statement of Income (Millions of yen) FY2016 FY2017 Previous Current Increase Main factors year year or in increase or decrease Composition Composition decrease ratio (%) ratio (%) - Japan: 810 40,857 42,936 2,079 - Asia: 663 (currency effect: 198) Net sales - North and ce
Slide 12: 3. Profit Attributable to Owners of Parent Trend
3. Profit Attributable to Owners of Parent Trend (Millions of yen) 2,000 1,500 1,400 1,234 1,256 977 1,000 847 768 603 500 346 0 (64) (94) (500) (766) (1,000) FY2008 09 10 11 12 13 14 15 16 17 18 Current Next year Year (forecast) 12
Slide 13: 4. Factors of Changes in Operating Income
4. Factors of Changes in Operating Income Increase in gross profit due to (Millions of yen) increase in net sales 542 (411) (656) Decrease in gross profit due to increase in cost of sales ratio - The effect of rising raw material prices 2,778 Increase in selling, general 2,253 and administrative exp
Slide 14: 5. Summary of Consolidated Balance Sheet
5. Summary of Consolidated Balance Sheet (Millions of yen) FY2016 Component FY2017 Component Increase Previous ratio Current ratio or year (%) year (%) decrease Current assets 26,244 79.4% 27,839 80.8% 1,594 Non-current assets 6,788 20.6% 6,594 19.2% (194) Total assets 33,033 100.0% 34,434 100.0% 1,
Slide 15: 6. Sales Breakdown by Reported Segments
6. Sales Breakdown by Reported Segments FY2016 Europe Previous year (Millions of yen) 9.8% North Japan Previous Current and 33.4% year year Central Americas Asia Increase Impact of Net 30.1% 26.7% FY2016 FY2017 or foreign change decrease exchange Japan 13,656 14,466 810 － 810 Asia 10,898 11,562 663
Slide 16: 7. Consolidated Cash Flow Trend
7. Consolidated Cash Flow Trend (Millions of yen) 5,000 Cash flows from operating activities 4,000 Cash flows from investing activities Cash flows from financing activities 3,000 2,000 1,000 0 (1,000) (2,000) (3,000) FY2008 09 10 11 12 13 14 15 16 17 Previous Current Year year FY2008 09 10 11 12 13
Slide 17: 8. Capital Expenditure Trend / 9. Depreciation Trend
8. Capital Expenditure Trend (Millions of yen) 2,000 1,621 1,500 1,035 1,038 1,000 801 874 636 643 536 502 500 186 0 FY2008 09 10 11 12 13 14 15 16 17 9. Depreciation Trend (Millions of yen) 1,200 1,024 980 1,000 892 886 871 824 758 800 656 567 541 600 400 200 0 FY2008 09 10 11 12 13 14 15 16 17 17
Slide 18: 10. Research and Development Expense Trend
10. Research and Development Expense Trend (Millions of yen) 2,000 1,626 1,585 1,465 1,564 1,519 1,500 1,354 1,051 852 919 925 1,000 500 0 FY2008 09 10 11 12 13 14 15 16 17 18
Slide 19: 11. Dividend and Stock Price Trend
11. Dividend and Stock Price Trend (Yen) 1,600 12.0 Dividends 1,400 10.0 10.0 10.0 Stock prices (highest) 10.0 1,200 Stock prices (lowest) 7.5 7.5 7.5 7.5 7.5 7.5 8.0 1,000 800 5.0 6.0 5.0 600 4.0 400 2.0 200 0 0.0 FY2008 09 10 11 12 13 14 15 16 17 18 Current Next year year （forecast） Stock Price Tr
Slide 20: 12. Foreign Exchange Rate Trend
12. Foreign Exchange Rate Trend US$ Stg.£ RMB 300 Current Rate (Yen) 24 19.35 250 17.36 18.34 16.77 17.31 20 200 13.90 16 131.77 146.44 143.07 152.07 150 126.45 119.82 173.80 187.20 178.73 12 139.57 100 120.62 116.55 8 120.60 113.06 91.00 105.40 50 92.07 81.45 77.73 86.58 4 0 0 FY2008 09 10 11 12 13
Slide 21: III. Issues for Management and Progress of Long-term Vision, NEXSTAGE 19
III. Issues for Management and Progress of Long-term Vision, NEXSTAGE 19 21
Slide 22: 1. Operating Environment
1. Operating Environment Increase in automobile manufacturing volume Development in automobile media, communications and ITS Global expansion by Japanese automakers Many opportunities are in store for exponential growth. 22
Slide 23: 2. Long-term Vision 1
2. Long-term Vision 1 Developed a long-term vision, NEXSTAGE 19 for FY2013 to FY2018 Developed a long-term business plan Address the strengthening of the corporate foundation and profitability. 23
Slide 24: 2. Long-term Vision 2
2. Long-term Vision 2 NEXSTAGE 19 (For Fiscal Years 2013 to 2018) To be a global solution provider with strengthened product competitiveness, capability for providing services and capability for taking the lead in the competition as well as to enhance the corporate value with optimized corporate fou
Slide 25: 3. Long-term Business Plan 1
3. Long-term Business Plan 1 Two pillars that enable achieving our long-term vision Strengthen competitive advantages Establish an optimal corporate foundation 25
Slide 26: 3. Long-term Business Plan 2
3. Long-term Business Plan 2 Strengthen competitive advantages 1) Improve product competitiveness 2) Improve capability for providing services 26
Slide 27: 3. Long-term Business Plan 3
3. Long-term Business Plan 3 Strengthen Competitive Advantages 1) Improve product competitiveness 2) Improve capability for providing services - Strengthen cost competitiveness - Develop new products and upgrade existing products - Ensure adequate quality of products - Establish optimal supply chain
Slide 28: 3. Long-term Business Plan 4
3. Long-term Business Plan 4 Strengthen Competitive Advantages 1) Improve product competitiveness 2) Improve capability for providing services - Improve capabilities in collecting and analyzing information - Strengthen capabilities in research and planning - Enhance capabilities in proposing product
Slide 29: 3. Long-term Business Plan 5
3. Long-term Business Plan 5 Establish an optimal corporate foundation 1) Reinforce organizational strength 2) Fortify the brand 3) Pursue group synergy by applying group management 29
Slide 30: 3. Long-term Business Plan 6
3. Long-term Business Plan 6 Establish an optimal corporate foundation 1) Reinforce organizational strength 2) Fortify the brand 3) Pursue group synergy by applying group management - Reinforce collaboration among the Group - Improve and streamline working environment and operations - Enhance develo
Slide 31: 3. Long-term Business Plan 7
3. Long-term Business Plan 7 Establish an optimal corporate foundation 1) Reinforce organizational strength 2) Fortify the brand 3) Pursue group synergy by applying group management - Establish a highly reliable brand as “the one and only automotive antenna supplier in the world with a global networ
Slide 32: 3. Long-term Business Plan 8
3. Long-term Business Plan 8 Establish an optimal corporate foundation 1) Reinforce organizational strength 2) Fortify the brand 3) Pursue group synergy by applying group management - Enhance headquarters functions - Maximize synergy within the Group by explicitly dividing work among each Group Comp
Slide 33: 4. Achievement: Established brand as a pillar for competitive advantage
4. Achievement 1 Established “ brand” as a pillar for gaining competitive advantage Developed a brand statement to promote recognition of HARADA as “the one and only specialist automotive antenna manufacturer in the world with a global network” • Registered as a trademark • Plans to use this tra
Slide 34: 4. Achievement: Formulated and implemented Cost Structure Improvement Plan
4. Achievement 2 Formulated and implemented “Cost Structure Improvement Plan,” a plan to catch-up on performance results to achieve the long-term business plan We target becoming the top automotive antenna company standing out with our high profitability, quality and productivity. Our core focus
Slide 35: 4. Achievement: Implemented contents of Cost Structure Improvement Plan
4. Achievement 3 Implemented contents of “Cost Structure Improvement Plan” Cost Structure Improvement Plan Reduction of material costs Improvement of production efficiency - To restructure purchasing methods - Changes in materials, assemblies, and - Standardization of working processes constructio
Slide 36: Reference. Automobile Manufacturing Trend
Reference. Automobile Manufacturing Trend 36
Slide 37: Automobile Manufacturing Trend (Results and Forecasts)
Automobile Manufacturing Trend (Results and Forecasts) Japan Asia (Thousands) (Thousands) 9,500 50,000 9,215 45,576 45,000 40,135 9,000 8,733 40,000 35,000 8,500 30,000 8,000 25,000 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021 North and Central Americas Europe (Thous
Slide 38: Forward-looking statements notice
This slides contains forward looking statements based on prerequisites, forecasts and plans available as of June 8, 2018. Actual results may differ materially from forward looking statements described here due to risks and variable factors associated to global economic conditions, a competitive envi