1st Half of FY2024 Financial results briefing
15.Nov.2024
Shindengen Electric Mfg. Co., Ltd. Stock Code：6844
"Concealed AC charger"
PM-CS09 series
1
Contents
01
1st Half of FY2024 Financial results Forecast of FY2024
Director & Executive Officer
Osamu Ukegawa
02
Structural Reform and Growth Strategy
President
Nobuyoshi Tanaka
Atrium at Asaka Office
2
1st Half of FY2024 Financial results
3
1st Half of FY2024 Financial results
Unit: 100 billion yen
Unit：JPY/USD
Thanks to the effects of a weaker yen, both sales and profits were on a par with the same period last year.
FY2023
1st Half
FY2024
1st Half
YoY
Net sales
496
506
Impact of 21
exchange rates
＋1.9％
Operating
Profit
4
Impact of exchange rates
4
11
(9.8)％
Operating
Margin
0.8％
0.7％
(0.1)pt.
Ordinary
Profit
7
(3)
ー
Profit attributable to owners of parent
(10)
(11)
ー
Without the impact of exchange rates, there would be a decrease in both sales and profit.
The prolonged economic slump in China has led to a decline
in the devices business.
Non-Consolidated Volume Rate
139.95
154.87
＋14.92JPY
Extraordinary losses were recorded due to the implementation of the structural reform of the devices business (additional expenses are expected to be incurred in the second half of the year as well).
4
＋10.5％
Automotive
24/3
1st half
25/3
1st half
Home Appliance
(8.6)％
24/3
1st half
25/3
1st half
24/3
1st half
Unit: 100 billion yen
1st Half of FY2024 Financial results(Electronic devise)
industrial machinery
(22.3)％
FY2023
1st Half
FY2024
1st Half
YoY
Net Sales 164
154
(5.9)％
Operating (2)
Profit
(2)
ー
25/3
1st half
In addition to the fact that industrial machinery was hit hard by the prolonged economic slump in China, price competition also
progressed, leading to a decrease in sales.
Despite the impact of reduced revenue and lower production capacity utilization, we continued to optimize sales prices, and profits were on par with the same period of the previous year.
We are currently implementing business structural reforms in order to build a strong business foundation.
We aim to improve business earnings by
1.5 billion yen
in the fiscal year ending March 2026.
5
1st Half of FY2024 Financial results(Car electronics)
While India led the way
in the motorcycle market and
the four-wheeled vehicle market also grew year-on-year,
sales of inverters for generators were weak due to intensifying competition. The yen weakened against Asian currencies, and sales increased.
Despite the effect of a weaker yen, profits decreased due to factors such as the impact of rising material costs.
Unit: 100 billion yen
FY2023 1st Half | FY2024 1st Half | YoY |
Net Sales 308 | 321 | ＋4.2％ |
Operating 32 Profit | 28 | (11.5)％ |
Shindengen Affiliated companies Net sales results for 2Wheels
Indonesia
Vietnam
Thailand
India
+1％
(5)％
(9)％
+22％
24/3
1st half
25/3
1st half
24/3
1st half
25/3
1st half
24/3
1st half
25/3
1st half
24/3
1st half
25/3
1st half 6
1st Half of FY2024 Financial results(Energy solutions & systems, other)
Unit: 100 billion yen
FY2023 1st Half | FY2024 1st Half | YoY |
Net Sales 24 | 31 | ＋25.9％ |
Operating (3) Profit | 1 | ー |
Telecom
EV chargers
＋40.5％
Rectifiers for telecommunication
infrastructure are growing, and EV chargers are increasing
due to the expansion of subsidies.
Profitability was secured mainly due to growth in rectifiers for telecommunication infrastructure.
The increase in inventory of chargers has temporarily improved profits (there may be a loss in the second half of the year).
＋29.9％
24/3
1st half
25/3
1st half
24/3
1st half
25/3
1st half
7
24/3
1st half
04 |
Produ chang Labor costs |
4 |
Exchange rate fluctuations
+11
Price increases
Unit: 100 billion yen
Analysis of Change in Operating profit
+8
The yen depreciated against Asian currencies
and other currencies.
The impact of rising material costs is covered by price increases.
Inventory write-down
Material
costs
(5)
(5)
Expenses,etc.
Decreased sales
+6
(9)
Although sales increased due to the weak yen, sales actually decreased when the impact of foreign exchange rates was excluded.
Labor costs have increased due to pay rises and
25/3
1st half
ct mix es
(3)
(3)
increased employee numbers.
8
CAPEX/Depreciation/R&D
Unit: 100 billion yen
FY2023 1st Half | FY2024 1st Half | YoY |
CAPEX 21 | 21 | ＋1.9％ |
Depreciation 27 | 26 | (2.2)％ |
R&D 23 | 27 | +17.2% |
Investment and depreciation were on par with the same period last year.
R&D for future growth is steadily underway.
9
1st Half of FY2024 Balance sheet
Unit: 100 billion yen
FY2023 | FY2024 1st Half | % change | |
Current assets | 891 | 917 | +2.9% |
Fixed assets | 556 | 525 | (5.5)% |
Total assets | 1,447 | 1,442 | (0.3)％ |
Current liabilities | 311 | 309 | (0.8)％ |
Noncurrent Liabilities | 426 | 459 | +7.6％ |
Total liabilities | 738 | 768 | +4.1％ |
Total shareholders'' equity | 540 | 516 | (4.5)％ |
Accumulated other comprehensive income | 170 | 159 | (6.3)％ |
Total liabilities and net assets | 709 | 674 | (4.9)% |
Total assets | 1,447 | 1,442 | (0.3)％ |
Current assets increased due to
the securing of cash and deposits.
Fixed assets decreased by approximately 3 billion yen due to mark-to-market revaluation of investment securities, etc.
Total assets remained largely unchanged.
Interest-bearing debt increased due to an increase in borrowings.
The recording of losses and payment of dividends in the first half of the fiscal year ending March 2025 reduced retained earnings and reduced shareholders' equity.
Per share of common stock | 49.0％ | 46.8% | (2.2)pt. |
Debt with interest | 389 | 449 | +15.5％ |
10
Forecast of FY2024
11
Forecast of FY2024
On November 1, the company announced a revision to its earnings forecast. The forecast for the second half of the year was left unchanged, and only the first half of the year was revised.
The costs involved in the structural reform of the devices business are currently under investigation. We will announce the results as soon as we have determined the future market trends and have a forecast.
The exchange rate assumption is 140 yen to the US dollar, unchanged from the beginning of the period.
Unit: 100 billion yen
FY2023 Actual | FY2024 | YoY | ||
Original F/C | Revised 1/Nov | |||
Net sales | 1,023 | 1,066 | 1,063 | ＋3.9％ |
Operating Profit | 13 | 25 | 22 | +72.0％ |
Operating Margin | 1.3％ | 2.3％ | 2.1％ | +0.8pt. |
Ordinary Profit | 17 | 26 | 17 | ＋2.4％ |
Profit attributable to owners of parent | (7) | 16 | 3 | ー |
Non-Consolidated Volume Rate | 143.95 | 140.00 | (3.95)JPY |
Unit：JPY/USD
12
Structural Reform of the Electric Device segment
13
Structural Reform of the Electric Device segment
Sales history of Electric Devise
Aims
Build a stronger business foundation that is not
affected by fluctuations in the market environment
Sales history of
Review our business in Greater China
Shindengen Hong Kong
and restructure the way we do business as a whole
Sales of Shindengen Hong Kong, which is responsible for Greater China, have fallen by about half in the last five years.
12/3 19/3 24/3
Unit：MJPY/OP mergin
12.9%12.4%
13.8%
11.3%
12.6%
9.3%
7.0%
7.6%
7.9%
-0.8% 0.3%
-3.7%
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
13/3 18/3
24/3
Measures
01
02
Production
Optimize production efficiency to reduce or eliminate
production of low-volume products
Logistics
Secure production space, and reduce logistics costs to
outsource the logistics and shipping operations
Sales
03
reorganizing the system to suit the needs of the region
04
Personnel reduction
solicit voluntary retirement at group companies in Japan and overseas in order to make the personnel structure
14
Structural Reform of the Electric Device segment
01
Production
Optimize production efficiency to reduce or
eliminate production of low-volume products
point
We will strengthen production of automotive
and power modules to build a production system that generates added value.
Higashine Shindengen
Before
Produced power ICs and MOSFETs for home appliances and industrial equipment.
Production down due to impact on industrial equipment market.
After
Reduction or scrapping of low-volume products.
Reduce maintenance costs by reducing the size of some clean rooms.
Akita Shindengen
Before
Sales of high value-added products, such as modules for automotive applications, were strong.
Production of diodes decreased due to the economic slowdown in China.
After
Transfer of surface-mounted product production from the Philippines.
Focus on high
value-added products
Shindengen Philippines
Before
We have a lot of experience in producing diodes
for the Greater China market. Due to the economic slowdown in
China, the utilization rate decreased.
After
Reduction or scrapping of low-volume products.
Transfer of surface-mounted products to Akita Shindengen.
From a two-building system to a one-building system
Lumphun Shindengen
Before
Responsible for the back-end processes of diodes and modules. Strengthened power module production in the 2020s.
After
Partial reduction of diodes. Strengthen in-house module production for the car electronics business.
Create business synergies
15
02
Logistics
Secure production space, and reduce logistics costs to outsource the logistics and shipping
operations
point
Utilize the space within the factory as a
production area that creates added value.
Customers
Customers
Higashine Shindengen Logistics center
Production Factory
Handled inventory storage and logistics.
Customers
Customers
Outsourcing warehouse
The finished products are sent to the warehouse in batches.
Production Factory
Eliminate logistics operations at production plants and use
them as production areas.
Change distribution costs
from fixed to variable costs.
Structural Reform of the Electric Device segment
After
Before
16
03
Sales
reorganizing the system to suit the needs of the region.
Before
Shindengen
Shanghai
Shindengen
Hong Kong Closed
Two bases in Shanghai and Hong Kong
for Greater China, a key market.
After
Changing to a single base system
in Shanghai.
Review of
the Greater China system
Shindengen UK
Headquarters
Before
Headquartered in the UK,
the continental automotive market was served by the German branch.
Two bases in UK and Germany.
Shindengen UK
Closed
German branch
After
Shindengen Europe New
Close Shindengen UK and establish
Shindengen Europe in Germany.
Changing to a single base system
in Germany.
Strengthen sales in continental Europe
Structural Reform of the Electric Device segment
17
04
Personnel reduction
solicit voluntary retirement at group companies in Japan and overseas in order
to make the personnel structure
Structural Reform of the Electric Device segment
Personnel structure of the Electric Device
2,799persons
March 2024
reduce the number of employees by
350
Reduce approx. 10%
the following measures will be implemented by the end of the fiscal year ending March 2025.
Aiming of improving business earnings by 1.5 billion yen
in the fiscal year ending March 2026
18
Company-wide promotion of India market strategy
19
Shindengen India's second plant will be operational in 2027.
Car Electronics
Expanding production capacity to meet growing demand.
Local procurement of own devices to improve price competitiveness.
Electric Devise
We are considering local production of devices with the aim of targeting automotive applications.
Building a system that allows everything from device development to unit development to be carried out in India.
Company-wide promotion of India market strategy
Keyword: Make in India
Automotive manufacturers are moving into the market, expanding the base of India's domestic industry.
Indian automotive market expected to grow significantly.
2030
20
Update Product portfolio
21
The product portfolio for 2030 announced in the Long-Term Vision 2030 is being updated and prepared for release in light of changes in the market environment and our current situation.
Update Product Portfolio
Released May.2022
◆Under review
Next generation
businesses
Expansion
businesses
Preparing products that will flourish with the
progress of electrification.
ISG ECU
Diodes
Restructuring
businesses
Foundational
businesses
Due to the delay in the development of electric vehicles, some of the products that were positioned for restructuring in 2030
are expected to remain as core businesses.
※ISG ECU・・・Idling Stop ECUs 22
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