FY2023 Financial results briefing（1490KB）

‌FY2023

Financial results briefing

17.May.2024

Consolidated financial results

Exchange rates

Unit: 100 Million yen

JPY/USD

CAPEX/Depreciation/R&D

Unit: 100 Million yen

• Sales increased due to growth in car electronics business and yen's depreciation, despite significant decrease in demand for power semiconductors.

• Despite the effect of increased sales in the car electronics business, deterioration in the devices business pushed down overall profit and profit declined.

• Net income decreased due to reversal of deferred tax assets and loss on sales of investment securities.

Segment Net sales

（Electronic device）

Surrounding Environment

・Chinese economy slumps, distribution inventory adjustment continues

372

322

・Automobile production recovery

Business Results

・Sales in the automotive market improved, but overall business sales declined due to continued weakness in the consumer electronics and industrial equipment markets.

・Significant decrease in income due to impact of lower sales, lower production capacity utilization rate, and recording of quality assurance-related expenses.

Breakdown

Automotive

FY2022 FY2023

Home appliance

Industry equipment

Segment OP profit

29

▲ 12

＋4.6％

(28.5)％

(32.3) ％

FY2022 FY2023

Unit: 100 Million yen

FY2022

FY2023

FY2022

FY2023

FY2022

FY2023

セSグegメmンeトnt別N売e上t s高ales

（Car Electronics）

Surrounding Environment

570

633

・Motorcycle market generally steady (in spite of economic slowdown in Vietnam)

・The exchange rate of Asian currencies against the yen has weakened

Business Results

・Products for motorcycles performed well in Indonesia and India.

・DC/DC converter sales increased in products for automobiles.

Breakdown

・Both sales and income increased, partly due to the effect of yen depreciation.

FY2022

FY2023

Shindengen Affiliated companies Net sales results for 2Wheels

Segment OP profit

Shindengen Indonesia

+4％

Shindengen Vietnam

Shindengen Thailand

Shindengen India

53

70

＋33％

(6)％

(17)％

FY2022 FY2023

Unit：100 Million Yen

FY2022

FY2023

FY2022

FY2023

FY2022

FY2023

FY2022

FY2023

Segment Net sales

（Other）

Business Results

68

67

・Increase in rectifiers for telecommunication infrastructure

・Slight increase in EV chargers

・Decrease in overall sales due to the end of sales of power conditioners for solar power generation

Breakdown

▲ 1

▲ 1

Telecom

EV chargers

+3％

FY2022 FY2023

Segment OP profit

＋13％

FY2022

FY2023

FY2022

FY2023

FY2022

FY2023

Unit：100 Million Yen

（YoY）

Unit：100 Million yen

Logistics

Inventory write-down

+8

Decrease in devices

Exchange rate

+9

Price increase +10

Cost reduction +10

Increase in car

electronics +11

+12

Decreased utilization rate

▲ 35

36

▲ 16

Product mix

Material

costs Quality

▲ 15

Assurance Labor costs and

expenses other expenses

▲ 8 ▲ 5

13

▲ 4

Electric Device

Car Electronics

Adjustments

& eliminations

Other

+17

+0

+1

13

36

FY2022 FY2023

FY2022

▲ 41

FY2023

Unit：100 Million yen

• Assets: Increased inventories of parts and products in anticipation of future requirements

• Liabilities: Decrease in trade payables and liabilities for retirement benefits

• Net assets: Increased due to mark-to-market valuation of investment securities and the effect of yen depreciation 7

‌The 16th Mid-Term Management Plan Final year

‌Revision of the 16th Mid-Term Management Plan Targets

Targets for the final year of the 16th Mid-Term Management Plan (FY25/3)

Net sales

Operating profit ratio

ＲＯＥ

ＲＯＡ

Unit: 100 Millions of yen

1,180

1,066

2.3%

6.6%

2.1%

8.3%

1.9%

3.5%

At first

Revised

At first

Revised

At first

Revised

At first

Revised

• Rising costs associated with China's economic slowdown, political instability, and soaring prices

• Steady sales of mainstay products for motorcycles, but weak sales of device products and rectifiers for telecommunication infrastructure

• Some results from the creation of high-efficiency devices and EV-related products in line with the progress of a sustainable society and electrification

Difficulty in achieving initial plan, new targets set for FY25/3

‌16th Mid-Term Management Policy and Key Initiatives for FY25/3

Key Initiatives for FY25/3

Based on the 16th Mid-Term Management Policy, promote key initiatives for FY25/3

‌Key Initiatives for FY25/3 ①

For the turnaround of the device business

Expand sales to the mobility sector which is expected to grow

• Optimization of production system

Reduction or scrapping of low-volume products Relocation of production equipment

Production layout changes

• Optimization of logistics system

Revision of domestic and international logistics network

Effective use of external resources Optimization of warehouse space

• Optimization of sales structure

Concentrate and strengthen sales functions in line with the needs of Europe and Greater China

• Pursuit of design, production control, shipping, and production facilities to produce goods at reasonable costs

  
  
  

• Introduce distinctive products consistent with strategic marketing

• Improvement of product quality and stable supply

  
  
  

• Strengthen marketing activities and expand sales

• Revision of selling prices and promotion of cost reduction activities

  FY25/3 to be a year of transformation of the company's structure

  
  
  

  ‌Key Initiatives for FY25/3 ②

  Company-wide promotion of India market strategy

  
  
  

  India, a post-China country with high potential and

  growth expectations

  Population:

  Ranked No. 1 in the world, surpassing China

  Working-age population is increasing

  Nominal GDP:

  5th in the world with the highest growth rate among

  the top 5

  
  
  

  February 2024: Exhibited at trade shows

  
  
  

  May 2023:

  PCU mass production started

  
  
  

  Full-scale shift to EVs and electrification

  Shindengen India to improve productivity and strengthen sales activities

  Focus on production and sales of products that meet needs (devices and car electronics)

  
  
  

  Launch internal projects to expand business

  
  
  ‌Forecast of FY2024
  
  
  

  Capital Expenditures, Depreciation, R&D

  
  
  ‌Forecast of consolidated financial results

  Comparison with the previous period

  
  
  

  Unit: 100 Million yen

  Unit: 100 Million yen

  	FY2023 Actual	FY2024 forecast	YoY
  CAPEX	46	79	＋72.8％
  Depreciati on	55	59	＋6.6％
  R&D	56	60	＋7.0％

  Exchange rates

  Cash dividends

  
  
  

  	FY2023 Actual	FY2024			YoY
  		1st HF	2nd HF	Forecast
  Net sales	1,023	508	558	1,066	＋4.2％
  Operating Profit	13	6	19	25	+95.5％
  Ordinary Profit	17	6	20	26	+56.6％
  Profit attributable to owners of parent	(7)	2	14	16	ー

  1USD＝140JPY

  130JPY per share

  • Net sales increase from the previous period, assuming steady growth in the mobility field.

  • Overall profit increase due to improved profitability in the device business, despite expected cost increase in car electronics.

  • Capital expenditures increased mainly in the mobility sector, which is expected to grow.

（segment）

Segment Net Sales

Unit: 100 Millions of yen (rounded to the nearest 100 million)

【Electric device】

【 Car electronics 】 【 Other 】

322

2nd half

182

1st half

165

347

320

633

630

310

67

56

33

89

FY2023

FY2024

FY2023

FY2024

FY2023

FY2024

Segment Op profit

2nd half 18

1st half 10

28

▲ 12

70

23

47

24

▲ 1

1

FY2023

FY2024

FY2023

FY2024

FY2023

FY2024

[Devices] Increase due to expected sales expansion in the mobility field, and profit increase due to the effect of increased sales and

promotion of the key initiatives to turn the business around.

[Car electronics] Sales slightly decrease due to decrease in general-purpose products despite steady motorcycle and automobile markets, and profit decreases mainly due to expected soaring material costs.

[Energy systems, etc.] Slight increase in rectifiers for telecommunication infrastructure and growth in EV chargers are expected to boost sales and profits.

‌Analysis of Change in Operating profit（YoY）

Unit：100 Million yen

Quality Assuran Other

ce

expenses

Labor costs and other expenses

Cost reduction

+5

+3

Effect of

in

creased sales

+17

+5

Material costs

Price increase

+18

▲ 19

Exchange rate

▲ 13

25

▲ 4

13

Electric

Device

+40

Car Electronics

Other

+2

Adjustments

& eliminations

▲ 23

25

▲ 7

13

FY2023

FY2024

FY2023

FY2024

‌Management conscious of capital cost and stock price

Current issues

Response for FY25/3

Turnaround of device business

Drive the company-wide project of

India market strategy

PBR

1.5

1

Dialogue with shareholders

Improved efficiency of BS

Improvement of PL profitability

BS management

0.5

100

50

0

-50

0

FY2014 FY2017 FY2020 FY2023

Operating Profit

Strengthening profitability

Focus on growth areas

FY2014 FY2017 FY2020 FY2023

• Meaningful IR meetings

  • Held 51 times in FY24/3

    Set targets with capital cost in mind

    ROIC 5％

    ROE 8％

    Strategic allocation of funds for sustainable growth

    Medium- and

    long-term goals:

• Feedback on issues of interest in the dialogue

  • Report to the Board of Directors once a quarter

• Disclosure based on shareholder's feedback

  • Medium- and long-term strategies on business and products presented at financial results briefings

Connect to the next mid-term plan starting from FY26/3

‌Mission statement

"Maximizing energy conversion efficiency

for the benefit of humanity and society."