Hanwa Co., Ltd. · TSE:8078
Hanwa — H1 FY2018 Earnings Presentation
34 slides from Hanwa's earnings presentation, Nov 21, 2018
Slide 1: Financial Results for the First Half of FY2018
Financial Results for the First Half of FY2018 November 21, 2018 HANWA CO., LTD. Copyright© 2018 Hanwa Co., Ltd. All Rights Reserved
Slide 2: Operating Results (Consolidated)
Operating Results (Consolidated) H 1 (ended September 30) FY2017 FY2018 Y on Y Y on Y (billions of yen) Change Rate Net Sales 836.9 1,004.9 +167.9 +111100% +20% Gross Profit 33.5 0.0 37.9 0.0 +4.3 +13% +3% SG&A 22.1 24.7 +2.6 +12% Operating income 11.4 13.1 +1.6 +15% Ordinary income 13.1 10.8 ▲ 2.2
Slide 3: Changes in Business results (Consolidated)
Changes in Business results (Consolidated) （billions of yen） （billions of yen） Net Sales (H2) 2,000.0 2,000.0 30.0 Net Sales (H1) 1,791.1（Forecast） Net Income (H2) 25.4 1,511.8 1,514.0 Net Income (H1) 1,500.0 995.1 954.1 20.0 17.3 16.3 16.8 723.5 798.4 （Forecast） 1,000.0 19.4 8.8 10.1 10.2 10.0 500.
Slide 4: Effect of Profit/Loss from Market value Accounting and Temporary factors
Effect of Profit/Loss from Market value Accounting and Temporary factors （billions of yen） 14.9 15.0 0.1 13.0 10.8 11.0 0.2 0.1 3.6 0.0 9.0 7.0 5.0 3.0 0 Accounting Inventry Derivative Exchange Loss of Others Actual ordinary valuation valuation conversion subsidiaries ordinary income income Report
Slide 5: Segment Information (consolidated)
Segment Information (consolidated) Net Sales Segment income （billions of yen） 1,200.0 13.1 15.0 0.2 0.4 1,004.9 0.6 0.8 10.8 39.3 13.0 0.4 1,000.0 836.9 151 2.3 0.4 36.9 11.0 0.6 800.0 111 126.6 0.8 52.7 9.0 1.0 106.3 49.9 0.4 0.6 600.0 50.9 45.9 144.7 7.0 88.9 400.0 5.0 10.4 7.7 492.9 3.0 200.0 437
Slide 6: Financial Position (consolidated)
Financial Position (consolidated) Consolidated Financial Position Mar. 2018 Sep. 2018 Y on Y Y on Y (billions of yen) Change Rate Total assets 860.3 954.8 +94.4 +111100% +11% Total liabilities 656.6 0.0 747.6 0.0 +91.0 +14% +3% Interst-bearing debt 325.5 379.8 +54.2 +17% Net DER 154% 180% +26pt - Ne
Slide 7: Cash Flow Situation (consolidated)
Cash Flow Situation (consolidated) H 1 (ended September 30) FY2017 FY2018 Y on Y Y on Y (billions of yen) Change Rate CF from operating activities ▲ 7.2 ▲ 39.2 ▲ 31.9 +111100% +440% CF from investing activities ▲ 33.5 0.0 ▲ 0.0 7.3 +26.1 ▲78% +3% FCF ▲ 40.8 0.0 ▲ 46.6 0.0 ▲ 5.8 +14% +3% CF from fina
Slide 8: Business Forecast FY2018
Business Forecast FY2018 (year ending Mar 31, 2018) Full-year FY2017 FY2018 FY2018 Y on Y Acctual Original Forecast Modified Forecast (billions of yen) Rate Net Sales 1,791.1 2,000.0 2,000.0 +111100% +12% Operating income 26.2 31.0 0.0 31.0 +18% +3% Ordinary income 25.5 0.0 30.0 0.0 26.0 0.0 +2% +3%
Slide 9: Forecast of Segment Information
Forecast of Segment Information Net Sales Segment incomes （billions of yen） 2,000.0 25.5 26.0 80.0 0.6 1,791.1 30.0 0.9 2.1 280 1.0 0.8 1,800.0 76.5 2.0 1.2 25.0 1.7 222 250.0 4.9 2.0 1.5 240.6 105.0 20.0 3.2 1,300.0 100.0 99.4 99.0 281.0 15.0 203.2 10.0 20.3 17.4 800.0 5.0 931.9 1,020.0 0.0 300.0 -
Slide 10: Dividend Policy
Dividend Policy 【Trend in dividends】 Interim dividends Year-end dividends 160 150.0 Dividends payout ratio（％） 140 40 125.0 dividends（yen） 120 36.3 100 95.0 30 90.0 75.0 29.3 80 75.0 23.7 20 50.0 60 50.0 40 14.6 75.0 10 45.0 50.0 20 40.0 0 0 FY2015 FY2016 FY2017 FY2018(E) 【Dividend Policy】 Our poli
Slide 11: Steel Business Segment
Steel Business Segment H 1 (ended September 30) Net sales increased, due to strong FY2017 FY2018 Y on Y steel demands. (billions of yen) Rate Segment income decreased, due to Net Sales 437.2 492.9 +13% ###### the pace of the market rise being slowed down. Segment Income 10.4 7.7 ▲26% 《Net Sales》
Slide 12: Metals & Alloys Business Segment
Metals & Alloys Business Segment H 1 (ended September 30) Net sales increased, due to rising FY2017 FY2018 Y on Y price level and sales expansion of stainless steel and ferroalloy. (billions of yen) Rate Net Sales 88.9 144.7 +63% Segment income decreased, due to ###### impacts of foreign exchang
Slide 13: Non-ferrous Metals Business Segment
Non-ferrous Metals Business Segment H 1 (ended September 30) Due to rise in international FY2017 FY2018 Y on Y commodity markets and increase in copper and aluminum sales volume, (billions of yen) Rate Net Sales increased. Net Sales 45.9 49.9 ###### +9% Segment income decreased , due to Segment
Slide 14: Foods Business Segment
Foods Business Segment H 1 (ended September 30) Rising price of salmon and strong FY2017 FY2018 Y on Y sales of chicken increased net sales and segment income. (billions of yen) Rate Net Sales 50.9 52.7 +4% ###### Segment Income 0.8 1.0 +20% 《Net Salse》 （billions of yen） 120.0 Net Salse(H2) 《Trans
Slide 15: Petroleum & Chemicals Business Segment
Petroleum & Chemicals Business Segment H 1 (ended September 30) Due to high market of petroleum FY2017 FY2018 Y on Y products, net sales and segment income increased. (billions of yen) Rate Net Sales 106.3 126.6 +19% ###### Segment Income 0.6 0.8 +26% 《Net salse》 （billions of yen） 300.0 276.4 Net
Slide 16: Overseas Sales Subsidiaries Segment
Overseas Sales Subsidiaries Segment H 1 (ended September 30) Net Sales increased, due to rising FY2017 FY2018 Y on Y level of bunker fuel price and increased sales of metal scrap in (billions of yen) Rate Singapore and steel in Indonesia. Net Sales 110.8 150.6 +36% ###### Improvement of the profit
Slide 17: Other Segment
Other Segment H 1 (ended September 30) Net Sales of lumber to homebuilders FY2017 FY2018 Y on Y was strong, and revenue from investment in affiliates contributed (billions of yen) Rate to segment income. Net Sales 36.9 39.3 +6% ###### Segment Income 0.4 0.4 +10% 《Net Salse》 （billions of yen） 90.0
Slide 18: Progress of Medium-term Business Plan
Progress of Medium-term Business Plan Transition of Quantitative indicators FY2015 FY2016 FY2017 FY2018 （H1） 4.8% ROIC 4.5% 6.2% 6.1% (2.4%) Net DER 136% 136% 154% 180% New customers (number) 705 697 601 392 7.0% ROE 17.2% 10.1% 9.7% (3.5%) Net profit margin 1.7% 1.1% 1.0% 0.7% 220% Total assets tur
Slide 19: Progress of Medium-term Business Plan
Progress of Medium-term Business Plan H1 Annual Progress （billions of yen） FY2018 Actual forecast rate STRATEGIC Equity in earnings of affiliates from resource investees and ▲0.6 0.0 －% dividends from strategic investments SPEEDY Ordinary income from consolidated subsidiaries & 2.8 6.0 46.8% dividen
Slide 20: Profits of Group Companies
Profits of Group Companies 【Ordinary income trend of subsidiaries by business segment】 H 1 (ended September 30) FY2017 FY2018 Y on Y Change (billions of yen) Consolidated Unconsolidated Consolidated Unconsolidated Consolidated Unconsolidated Steel 2.3 0.5 1.3 0.4 ▲ 1.0 ▲ 0.1 Metals & alloys 0.1 0.0
Slide 21: Progress with Japan Value Chain Extension Strategy
Progress with Japan Value Chain Extension Strategy Investments Business domain Fast delivery/small activities lot/processing activities Makers Primary Intermediate Suppliers Trading Processing Users distribution distribution Hanwa Steel Service San Ei Metal Nakayama Steel Works Logistics center Hiro
Slide 22: Create another Hanwa in Southeast Asia Strategy
“Create another Hanwa in Southeast Asia”Strategy 【The major alliance partners】 Country Distributor Processer Manufacturer HSS Thailand Furukawa Unic Thailand PCM Processing Siam Hanwa Araya Steel Tube Indonesia Kapurindo Sentana Baja HSS Indonesia Indonesia CosmoSteel Holdings Singapore JFE Meranti
Slide 23: Outline of strategic investment
Outline of strategic investment AFARAK FeCr, SiMn OM Holdings Bacanora Lithium (Sales amount FeSi, SiMn, MeMn lithium carbonate 100 kt / FY2017 (Sales amount （2020 Production ） 380 kt / FY2017） commencement kt / year ） SAMANCOR Cr Tsingshan Holding Ore, FeCr NPI & Stainless hot coil （FeCr Production
Slide 24: Investment in business
Investment in business 【Current investment records】 Amounts Major investments (billions of yen) ・Invested in Jiaxing Processing Center constructed by Daming International Holdings Steel 4.5 ・Built an extension of Kita-Kanto Steel Center ・Acquired additional stocks of and made our subsidiary Tatt Gia
Slide 25: Appendix
Appendix Copyright© 2018 Hanwa Co., Ltd. All Rights Reserved 24
Slide 26: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials 【Transaction of steel raw materials price】 Iron ore…Steel prices remain stable, partly due to the impact of environmental regulations by the Chinese authorities. Iron ore also performed strongly. Coking coal…The price gradually increased, due to tightness of d
Slide 27: Steel Market Trend in China
Steel Market Trend in China 【Transition of steel market in China 】 Supply/Demand…Demand for legitimate steel products has increased since the termination of production of induction furnace steel, called ditiaogang. While mills tended to increase production, domestic supply and demand have been bal
Slide 28: Markets Trend of Steel Scrap
Markets Trend of Steel Scrap 【Steel scrap and D-bar Market Price】 Supply/Demand …The supply/demand balance for steel scrap in Asia tightened due to an increase in the compositions of scrap and the shift to electric furnaces in China in response to environmental regulations, and the balance tighten
Slide 29: Market Trend of Long Products
Market Trend of Long Products 【Transition of the H-Beams Markets in Japan】 Supply/Demand…Although demands for large-scale building construction and civil engineering works were firm, the construction period has been delayed and inventories tended to increase due to the impact of labor shortages in
Slide 30: Market Trend of Flat Products
Market Trend of Flat Products 【Transition of Steel Sheets Markets in Japan】 Supply/Demand…Operations in the manufacturing industry were generally firm, and demand for steel sheets remained firm. There was a tightness in supply/demand balance of steel, partly due to the furnace repair of the steel
Slide 31: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys Nickel…Market conditions continued to increase due to demand for stainless steel and expectations of demand for rechargeable batteries, but the currently adjustment phase has come due to concerns over U.S.-China trade disputes and other factors. Copyright© 2018 Hanw
Slide 32: Markets Trend of Non-ferrous Metals
Markets Trend of Non-ferrous Metals Aluminum…Prices has been generally high, although there were price fluctuations due to the sanctions imposed by the U.S. on Russian companies and concerns over the impacts of U.S.-China trade disputes. Copper…Prices were generally on an upward trend due to exp
Slide 33: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products Salmon…In addition to the decrease in the amount of Sockeye salmon caught in Russia and Alaska, Chilean Coho salmon have been in short supply due to the transition period, and the domestic market has been on an upward trend. Shrimp…Prices declined due to an
Slide 34: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products Crude oil…Price has been on an upward trend due to the effects of the coordinated reduction of production by oil-producing countries and the U.S. withdrawal from the Iranian Nuclear Accord. Petroleum products…Prices have been high level on the whole