Nippon Sheet Glass Company, Limited · TSE:5202
Nippon Sheet Glass — Q3 FY2020 Earnings Presentation
29 slides from Nippon Sheet Glass's earnings presentation, Jan 30, 2020
Slide 1: GROUP
GROUP
Slide 2: NSG Group FY2020 Quarter 3 Results
GROUP NSG Group FY2020 Quarter 3 Results (from 1 April 2019 to 31 December 2019) Nippon Sheet Glass Company, Limited 30 January 2020
Slide 3: Presenters
30 January 2020 | FY2020 Quarter 3 Results Presentation GROUP Kenichi Morooka Chief Financial Officer Clemens Miller Chief Operating Officer Iain Smith Finance Director — Global Finance
Slide 4: Agenda
Agenda NSG FY2020 Quarter 3 Financial Results FY2020 Quarter 3 Business Update Revision of FY2020 Full-year Forecast Key Actions Update up wy Summary 30 January 2020 | FY2020 Quarter 3 Resuks Presentation
Slide 5: FY2020 third quarter results highlights
Slide 5 is the highlights of FY2020 third quarter results. The Group experienced increasingly difficult trading conditions during the third quarter, with a further slow-down in vehicle production and increasing supplies of architectural glass, particularly in Europe. Revenues declined by seven perce
Slide 6: Consolidated income statement
Slide 6 is the Group’s consolidated income statement. Revenue, trading profit and profit attributable to owners of the parent are as explained in the previous slide. The exceptional loss at third quarter was 4.4 billion yen. In the three-month period to the end of December, the Group recognized exce
Slide 7: Trading profit variance analysis
Foreign currency movements had a negative 1.7 billion yen impact. Volume/Mix were mostly due to volume declines in architectural and automotive glass in Europe. In the third quarter, a slowdown in car registration in Japan after the consumption tax increase had an additional impact. Prices movements
Slide 8: Net debt and financial position
Net debt increased by 93.7 billion yen from 31 March 2019 to 411.4 billion yen, as result of the adoption of IFRS16 ‘Leases’, capital expenditures on strategic investments and working capital movements. The Net debt/EBITDA ratio was affected by the increase in net debt. With the translational impact
Slide 9: Sales by region
37 percent of the Group’s sales are in Europe, 36 percent in Asia including Japan and 27 percent in Americas. 9
Slide 10: Architectural Glass business results
Revenues in the Architectural Glass business decreased by 4 percent to 180.1 billion yen, due to the weakened European and South American currencies, which was exacerbated by increasingly difficult trading conditions in the third quarter. Profits decreased by 4.4 billion yen to 14.0 billion yen, mor
Slide 11: Automotive Glass business results
Revenues in the Automotive Glass business decreased by 9 percent to 214.6 billion yen and profits decreased by 3.8 billion yen to 5.3 billion yen, as the results were affected mainly by the reduction of new car production in Europe, in addition to the translational effects of foreign currency moveme
Slide 12: Technical Glass business results
While some of the businesses such as lenses and glass cord were affected by difficult market conditions, the fine glass business recorded a further improvement in profitability. Technical Glass revenues decreased by 6.5 billion yen to 30.2 billion yen and profits decreased by 1.0 billion yen to 5.4
Slide 13: Revision of full-year forecast
As presented in the previous slides, the Group’s third quarter results were affected by increasingly challenging trading conditions, which are expected to continue during the remainder of the year. Based on such assumptions, the Group has regrettably decided to make another revision to its full-year
Slide 14: Breakdown of trading profit forecast revision
This is the breakdown of the JPY 8 billion revision to the trading profit forecast. 3.0 billion out of the total of 8.0 billion yen revision to trading profit is related to the Architectural business. Volumes and prices have come under increased pressure with abundant supplies of glass, particularly
Slide 15: Turning around European businesses
With a significant decline in business performance, turning around European businesses is the Group’s priority. In Automotive Europe, the Group has been rationalizing the operations by restructuring and consolidating production lines mainly in Italy. The initiative has generated benefits but further
Slide 16: Additional profitability measures
In response to a significant change in the business, the Group is also reviewing additional measures which could improve profitability in the coming years. Going forward, should there be any material impact such as incurring exceptional cost, we will disclose it in a timely manner. 15
Slide 17: Strategic investment projects update
The two strategic investment projects to expand capacities in the areas of solar energy glass, and also an emerging market project in South America, are progressing steadily. The second solar energy glass float line in Vietnam had been lit up recently on 19 January and is planned to begin operation
Slide 18: Summary
The Group’s third quarter results reflected increasingly difficult trading conditions. Anticipating these conditions to continue, the Group revised its full-year forecast further. While capital expenditure related to the two strategic investment projects is to increase in the remainder of the year,
Slide 19: Notice
Notice NSG GROUP The projections contained in this document are based on information currently available to us and certain assumptions that we consider to be reasonable. Hence the actual results may differ. The major factors that may affect the results are the economic and competitive environment in
Slide 20: Appendices
Appendices >» Revenue — by Business & Regions > Trading Profit - by Business & Regions > Revenue & Trading Profit — Quarterly Trend >» Consolidated Balance Sheet > Consolidated Cash Flow > Exceptional items >» Foreign exchange rates > Depreciation & Amortization, CAPEX, R&D Expenses 30 January 2020
Slide 21: Revenue by Business & Regions
Revenue - by Business & Regions JPY bn FyY2019 Fy2020 Change Ey2019 EY2020 Change Architectural 65.0 60.4 (4.6) 186.7 180.1 (6.6) Europe BA 21.0 (2.1) 727 66.3 (6.4) Asia 26.3 24.7 (1.6) 698 77, 1.9 Americas 15.6 147 (0.9) 442 42.1 (2.1) Automotive 74.2 66.4 (7.8) 235.0 214.6 (20.4) Europe 30.7 278
Slide 22: Trading Profit by Business & Regions
Trading Profit - by Business & Regions NSG GROUP JPY bn FyY2019 EY2020 Change FY2019 FY2020 Change Architectural 6.5 42 (2.3) 18.4 14.0 (4.4) Automotive 17 O01 (1.6) 91 53 (3.8) Technical Glass 2.0 19 (0.1) 6.4 54 (1.0) Other (1.8) (2.6) (0.8) (6.7) (5.3) 14 Total 8.4 3.6 (4.8) 27.2 19.4 (7.8) Europ
Slide 23: Revenue & Trading Profit Quarterly Trend
Revenue & Trading Profit — Quarterly Trend NS Architectural mmm Europe mm Asia mmm Americas —=Trading profit Automotive fmm Europe mmm Asi mmm Americas Trading profit Technical Glass mmm Revenue Trading profit 30 January 2020 | FY2020 Quarter 3 Resus Presentation 65.0 FYIBQl = FYI8Q2 = FY18Q3.—s FY1
Slide 24: Consolidated Balance Sheet
Consolidated Balance Sheet NS GROUP 31. March 31 December aRvinn 2019 2019 Shange Assets 761.9 809.2 47.3 Non-current assets 516.3 562.2 45.9 Goodwill & intangible assets 161.1 156.7 (4.4) Property, plant and equipment 241.5 295.5 54.0 Other 113.7 110.0 (3.7) Current assets 245.6 247.0 1.4 Cash & ca
Slide 25: Consolidated Cash Flow Summary
Consolidated Cash Flow Summary JPY bn 3rd Quarter 3rd Quarter Change Profit for the period 114 1.9 (9.5) Depreciation and amortization 21.0 25.8 48 Gain on sale of a subsidiary - (1.0) (1.0) Share of profit from JVs and associates (4.9) (1.2) 3.7 Tax paid (44) (4.4) - Others (17) (2.6) (09) Net oper
Slide 26: Exceptional items
Exceptional items JPY bn Gain on disposal of a subsidiary Exchange gain on business closure Restructuring costs, including employee termination payments Suspension of facilities Net impairment of non-current assets Retirement benefit obligations - past service cost Other 30 January 2020 | FY2020 Qua
Slide 27: Foreign exchange rates
Foreign exchange rates Average rates used FY2018 FY2019 FY2020 Qi Q2_Q3 Q4 Qi Q2 Q3 Q4 | Qi Q2 Q3__ Foreast GBP 142 «(144146 147: | 149° 147,146 146 | 141 137 «138137 EUR 122 126 128 130 131 130 129 129 124 121. 121 122 USD 111 112 111 111 | 110 111 11 111 | 109 109 109 109 BRR 34.6 350 348 344 |304
Slide 28: Depreciation & Amortization, CAPEX, R&D Expenditures
Depreciation & Amortization, CAPEX, R&D Expenditures (JPY bn) FY2019 FY2020 3rd Quarter 3rd Quarter Depreciation and amortization 21.0 25.8 Capital expenditures (including intangibles) Ordinary 17.6 17.2 Strategic projects and other - 28.9 Total 17.6 46.1 R&D expenditures Architectural 2.0 2.0 Autom
Slide 29: GROUP
GROUP 28
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