Nabtesco Corporation · TSE:6268
Nabtesco — FY2023 Earnings Presentation
41 slides from Nabtesco's earnings presentation, Feb 21, 2024
Slide 1: Results briefing FY2023
Securities Code：6268 February 21, 2024 Kazumasa Kimura, Representative Director and CEO The forecast data presented herein reflects assumed results based on conditions that are subject to change. Nabtesco Corporation does not make representations as to, or warrant, in whole or in part, the attainmen
Slide 2: Results for FY2023/12
Results for FY2023/12 © Nabtesco 2
Slide 3: Consolidated Financial Results for FY2023/12: Sales
Consolidated Financial Results for FY2023/12 Sales Sales in CMP decreased mainly due to the impact of decreased demand in China. However, overall sales increased year on year due to recovered demand in TRS, strong demand in ACB, the impact of JPY billion acquisitions & foreign exchange rates. 350.0
Slide 4: Consolidated Financial Results for FY2023/12: Operating Profit
Consolidated Financial Results for FY2023/12 Utilization ratio was running low mainly due to sluggish demand for precision reduction gears in 2H/2023. Procurement costs Operating profit increase, delay in passing on cost increase also push the profit down. The impact of impairment losses and other f
Slide 5: Analysis of CMP Operating Profit for FY2023
Description #2 Analysis of CMP Operating Profit for FY2023 Decreased operating profit due to lower sales, delayed price pass-on of increased procurement costs, and increased expenses due to increased production of precision reduction gears JPY billion 20.0 15.0 1.6 2.4 0.8 4.1 0.2 0.3 -5.5 2.4 10.0
Slide 6: Outlook for FY2024/12
Outlook for FY2024/12 © Nabtesco 6
Slide 7: Market Forecast for FY2024/12
Market Forecast for FY2024/12 While TRS, ACB and MFR are expected to see continued strong demand, CMP is expected to a deterioration in demand conditions. Business Market Environment Market Trends Demand for industrial robots is expected to recover from the second half of 2024 as sluggish Precision
Slide 8: FY2024/12 Forecast (P&L)
FY2024/12 Forecast (P&L) Lower sales and profits YoY due to the impact of lower sales in CMP. While “Profit Improvement Plan” is promoted toward the V-shaped recovery, full-scale contribution of profit improvement is expected from FY2025 onward. (JPY billion) FY2023/12 FY2024/12 Variation Full year
Slide 9: Forecast for FY2024/12
Forecast for FY2024/12 Sales Precision reduction gears are expected to decline due to the impact of inventory adjustment by customers. Demand for TRS and Packaging Machines will continue to be robust and overall sales are expected to be JPY billion flat excluding the forex impact. 350.0 - 11.6 21.9
Slide 10: Profit-Improvement Plan - Project 10
Profit-Improvement Plan ～ Project 10 ～ Targeting OPM of 10.0% by 2026 © Nabtesco 10
Slide 11: Reforming to Improve Consolidated Operating Margin
Reforming to Improve Consolidated Operating Margin ～ Project 10 ～ Promoting Three Measures ①Margin improvement on existing business ＋5.0pt Profit margin forecast for existing businesses 12.0% Operating Profit Margin 10.0% 10.0% 10.0% CMP TRS ACB MFR ●Focus on improving CMP margins 2.8% → 11.0% 8.0%
Slide 12: Industrial Robotics Market
Industrial Robotics Market With demand for robotics recovering and the elimination of robotics inventory, we also expect to steadily increase our Precision reduction gears production. ①Industrial Robot Demand Forecast: Worldwide Robot Introduction ③Room for Robotics Expansion in the Automotive Indus
Slide 13: Trends in Orders for Precision Reduction Gears
Trends in Orders for Precision Reduction Gears Suggestion from past trends: ①Demand has grown at CAGR of 8% with fluctuations ②100pt exceeds the previous peak in five-year increments. →Expected to reach 500pt in 2027 ③Estimated that the level of orders will reach the previous peak around 2025 to 202
Slide 14: Project 10: Improving CMP margins
Project 10 Margin Improvement on Existing Business ①Improving CMP margins Targeting OPM 11.0% in CMP by FY2026 through implementing measures of profitability improvement in Precision Reduction Gears 4.3pt 2.2pt Production volume assumptions (Precision Reduction Gears) 11.0% FY24 760K units→ FY26 920
Slide 15: Project 10: Contribution from the new businesses
Project 10 ③Contribution from the new businesses Steadily implementing seeding for new businesses under the current medium-term plan Medium-term Plan 2022-2024 Medium-term Plan 2025-2027 Medium-term Plan 2028-2030 New Business Creation Phase Seeding Fostering Harvest ＜ Direction of technological evo
Slide 16: Examples of Field A (Existing Markets and New Products)
Examples of Field A (Existing Markets and New Products) Marine Control Systems Business: CMFS：Utilization of eologix Synergies with Deepsea Receive many inquiries from European electric power generation Acquisition of Deep Sea technologies to introduce optimum route companies and equipment manufactu
Slide 17: Examples of Field B (Existing Products and New Markets)
Examples of Field B (Existing Products and New Markets) Sales companies: Railroad Vehicles Equipment: Emerging Markets (Sales Expansion for the Won orders for 192 cars of brake and Indian Market) doors for Indonesian National Railways Sales Average sales growth rate from 2016 to 2024 via sales compa
Slide 18: Examples of Field C (New Technologies and New Markets)
Examples of Field C (New Technologies and New Markets) OVALO：Expand sales to European cobot manufacturers New business model To expand sales to the cobot market, where high growth is expected Wireless Power and Charging Systems Began sales of wireless power and charging systems as Growth of the cobo
Slide 19: Portfolio Management
Portfolio Management © Nabtesco 19
Slide 20: Utilization of Business Portfolio Management
Utilization of Business Portfolio Management Promote expansion of “Development and Selection” business and improvement of investment efficiency in all business through portfolio management ROIC Maintain and improve Growth driver profitability Hurdle rate Development and Rebuilding selection Sales gr
Slide 21: Appendix
Appendix © Nabtesco Nabtesco
Slide 22: Progress of Medium-Term Management Plan (2022-2024) Management Targets
Progress of Medium-Term Management Plan (2022-2024) Management Targets ROIC 10% Dividend payout ratio 35% or more In particular, there is a large divergence in profit margins. Nabtesco expects to maintain a consolidated dividend payout ratio of 35% or more during the period of the medium-term manage
Slide 23: Component Solutions Segment for FY2024
Component Solutions Segment for FY2024 Sales and market Operating profit and Medium-Term Priority environment improvement measures Measures and Topics Precision Reduction Gears CMP Segment Precision Reduction Gears Decrease in profit due to a decrease in Completion of Hamamatsu Plant (Sep. FY23)
Slide 24: Transport Solutions Segment for FY2024
Transport Solutions Segment for FY2024 Sales and market Operating profit and Medium-Term Priority environment improvement measures Measures and Topics Railroad Vehicle Equipment Railroad Vehicle Equipment Developing Southeast Asian market Domestic demand for new vehicles recover TRS Segment Receiv
Slide 25: Accessibility Solutions Segment for FY2024
Accessibility Solutions Segment for FY2024 Sales and market Operating profit and Medium-Term Priority environment improvement measures Measures and Topics Automatic Doors ACB Segment Automatic Doors Win orders for large commercial buildings Improve profitability by reforming Gilgen Improve pro
Slide 26: Manufacturing Solutions Segment for FY2024
Manufacturing Solutions Segment for FY2024 Sales and market Operating profit and Medium-Term Priority environment improvement measures Measures and Topics Packaging Machines MFR Segment Packaging Machines Strong demand mainly from domestic Increase in operating profit if exclude Develop overse
Slide 27: FY2023 Year-End Balance Sheet
FY2023 Year-End Balance Sheet Cash and cash equivalents decreased due to the payment for CAPEX, M&A and others. Equity ratio was exceeded 60%. FY2022/12 FY2023/12 (JPY billion) Variation As of December 31, 2022 As of December 31, 2023 Assets 459.3 422.0 -37.3 （Cash and cash equivalents） 124.4 77.8 -
Slide 28: Cash flow
Cash flow ■ In 2023 and 2024, free cash flow is negative due to growth investment JPY billion 130.0 Operating Cash Flow Investment Cash Flow Free Cash Flow 110.0 103.5 90.0 67.1 70.0 50.0 38.4 36.3 34.2 20.9 30.0 23.1 24.2 23.5 13.2 18.3 11.2 13.7 7.7 10.0 2.9 2.3 -10.0 -10.7 -24.5 -30.0 -20.2 -21.8
Slide 29: Capital Expenditures, R&D Expenses, Depreciation
Capital Expenditures, R&D Expenses, Depreciation 2017/12 2018/12 2019/12 2020/12 2021/12 2022/12 2023/12 2024/12 2022～24 (JPY billion) Result Result Result Result Result Result Result Plan Accumulation CAPEX 18.8 20.3 16.4 15.1 9.6 18.8 29.7 27.5 76.0 R&D 8.7 10.2 9.9 9.0 9.6 10.9 11.0 14.0 35.9 Dep
Slide 30: Breakdown of capital investment
Breakdown of capital investment 2022/12 Result 2023/12 Result 2024/12 Plan HQ MFR HQ By segment HQ 8% MFR2% 5% 2% 5% MFR 1% ACB ACB 7% 9% ACB 7% TRS 9% 29.7 TRS 27.5 18.8 15% TRS 10% JPY JPY JPY billion CMP billion CMP billion CMP 69% 77% 74% By usage Others New products New products Others New prod
Slide 31: Sales by geographic segment
Sales by geographic segment 2022/12 Results 2023/12 Results Others 0.6% Others1.1% (2.1 billion) (3.4 billion) Europe 15.1% Europe 18.0% (46.6 billion) (59.9 billion) North America7.0% (21.5 billion) North America 7.8% (26.0 billion) 333.6 308.7 Rest of Asia 7.0% JPY Rest of Asia 6.4% JPY (21.5 bill
Slide 32: Impact of exchange rate
Impact of exchange rate ■Exchange rate 2022/12 2023/12 2024/12 (JPY） Result Result Plan USD 132.08 141.20 135.00 RMB 19.50 19.91 18.50 EUR 138.52 153.17 150.00 CHF 138.43 157.75 155.00 ■FOREX sensitivity（This represents the effect to be expected on operating profit if the exchange rate fluctuates by
Slide 33: Operating Profit Analysis
Operating Profit Analysis FY2022→FY2023 JPY billion 35.0 30.0 0.6 1.1 0.9 25.0 2.8 4.7 1.0 7.5 20.0 6.8 1.9 0.8 15.0 10.0 18.1 17.4 5.0 0.0 2022/12 Increase in sales Price pass through Cost reduction and Forex Investment for Increase in Depreciation Cost increase Platform door Special factors 2023/1
Slide 34: Examples of New Business Fields
Examples of New Business Fields Utilization of CVC Trends in Investment Results (numbers of organization) Number of invested Number of Exit Aiming to evolve into “Leaders in Innovation,” our Vision for 2030, Achieve the following through co-creation with startups ①Strengthen existing-business portfo
Slide 35: Component and Transport Solutions Segments
Component Solutions Segment （CMP） 138.1 140.6 138.1 Sales (JPY billion) 119.3 113.9 116.2 107.1 109.9 82.5 77.5 89.7 Precision Reduction Gears 91.6 65.8 55.8 72.6 54.9 74.0 Hydraulic Equipment 53.0 53.4 52.2 54.0 60.6 51.0 41.3 46.5 42.2 27.5 2016/12 2017/12 2018/12 2019/12 2020/12 2021/12 2022/12 2
Slide 36: Accessibility and Manufacturing Solutions Segments
Accessibility Solution Segment （ACB） 96.3 96.0 Sales（JPY billion） Automatic Doors 80.0 78.6 76.0 75.1 72.4 73.7 64.6 96.3 96.0 76.0 80.0 78.6 72.4 73.7 75.1 64.6 2016/12 2017/12 2018/12 2019/12 2020/12 2021/12 2022/12 2023/12 2024/12 Result Result Result Result Result Result Result Result Plan O.P.(
Slide 37: Main Products: Component Solutions Segment (CMP)
Main Products: Component Solutions Segment (CMP) The market share is estimated by Nabtesco Precision Reduction Gears Others No.1 Joints of Medium and Large Size Nabtesco Industrial Robots 60％ Approx. 60％ world market share Hydraulic Equipment Nabtesco ■ Traveling Units for Hydraulic Excavators 25％
Slide 38: Main Products: Transport Solutions Segment (TRS)
Main Products: Transport Solutions Segment (TRS) The market share is estimated by Nabtesco Railroad Vehicle Equipment Others No.1 Approx. 50％ Domestic Market Share Brake Systems Nabtesco 50％ ■Door Operating Systems Others No.1 Nabtesco 60％ Approx. 60％ Domestic Market Share Aircraft Equipment No.1 ■
Slide 39: Main Products: Transport Solutions Segment (TRS)
Main Products: Transport Solutions Segment (TRS) The market share is estimated by Nabtesco Commercial Vehicle Equipment Others ■ Wedge Chambers Nabtesco 75％ No.1 Approx. 75％ Domestic Market Share Others ■ Air Dryers Nabtesco 70％ No.1 Approx. 65％ Domestic Market Share Marine Vessel Equipment ■2ST Mai
Slide 40: Main Products: Accessibility and Manufacturing Solutions Segments
Main Products: Accessibility Solution Segment (ACB) The market share is estimated by Nabtesco Automatic Doors No.1 ■Platform Screen Doors ■Automatic Doors Others Nabtesco Approx. 55％ Others No.1 55％market share for building Nabtesco Approx. 95％ domestic market share automatic doors in Japan 95％ (top
Slide 41: Nabtesco - moving it. stopping it.
Nabtesco moving it. stopping it.