SUMIDA CORPORATION
Performance Briefings
<for FY2016 ending December 31, 2016>
February 7, 2017
Today’s Speakers
2 Copyright© 2016 SUMIDA CORPORATION. All rights reserved.
Representative Executive Officer & CEO Shigeyuki Yawata
Representative Executive Officer & President Tomoharu Suseki
Representative Executive Officer & CFO Yoshiyuki Honda
Today’s Program
Copyright© 2015 SUMIDA CORPORATION. All rights reserved. 3
1.Consolidated Financial Results for FY2016 CFO Yoshiyuki Honda 2.FY2016 Performance & FY2017 Outlook President Tomoharu Suseki 3. General Overview CEO Shigeyuki Yawata 4. Q & A Session
FY2016 Consolidated Financial Results (Q4 & Full Year)
CFO Yoshiyuki Honda
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Copyright© 2017 SUMIDA CORPORATION. All rights reserved.
(Million yen)
Consolidated P/L for FY2016 Q4
15.Q4 16.Q3 16.Q4 Change % Change %
(A) (B) (C) (C)/(A) (C)/(B)
S a l e s 20,537 19,876 19,651 △4.3% △1.1%
G r o s s I n c o m e 3,193 4,235 3,824
GI ratio 15.5% 21.3% 19.5%
O p e r a t i n g I n c o m e 524 1,706 1,145 118.3% △32.9%
OI ratio 2.6% 8.6% 5.8%
O r d i n a r y I n c o m e 283 1,530 935 229.7% △38.9%
Income Attributable to O w n e r s o f P a r e n t
197 779 727 268.0% △6.7%
E P S ( y e n ) 8.51 33.58 31.33
FO
REX
US$/yen 121.14 103.02 106.08
euro/yen 132.52 114.48 115.63
renminbi/yen 18.99 15.47 15.61
5
Significant profit increase in spite of decreased sales due to yen‘s appreciation
Operating Income Analysis 2015 Q4 → 2016 Q4
6
2015 Q4 Operating Income
524
(Million yen)
2016 Q4 Operating Income 1,145
Effect of foreign
exchange 30
Raw materials prices DOWN
150
China wages UP
△150
Others 71
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Productivity UP 140
R&D Costs Up
△60
Change of depreciation
methods 230
Sales increase /Product mix
300
Expenses UP △90
Operating Income Analysis
2016 Q3 → 2016 Q4
Productivity DOWN △60
7
2016 Q3 Operating Income 1,706
Sales DOWN /Product mix
△180
(Million yen)
2016 Q4 Operating Income 1,145 Effect of
foreign exchange
△20
Raw materials Prices UP
△30
Others △91
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Expenses
UP △60
R&D Costs UP
△30
China wages UP
△90
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(Million yen)
Consolidated P/L for FY2016 Full Year
2015 Full Year 2016 Full Year Change %
(A) (B) (B)/(A)
S a l e s 86,236 81,052 △6.0%
G r o s s I n c o m e 14,941 16,118
GI ratio 17.3% 19.9%
O p e r a t i n g i n c o m e 4,237 5,696 34.4%
OI ratio 4.9% 7.0%
O r d i n a r y I n c o m e 3,309 4,805 45.2%
Income Attributable to O w n e r s o f P a r e n t
2,032 3,087 51.9%
E P S ( y e n ) 87.55 133.02
FO
REX
US$/yen 120.78 109.31
euro/yen 134.81 120.75
renminbi/yen 19.24 16.51
8
Record-breaking profit in spite of decreased sales due to yen’s appreciation
Operating Income Analysis 2015 Full Year → 2016 Full Year
9
(Million yen) Effect of foreign
exchange 70
Raw materials prices DOWN
950
China wages UP
△570
Others △61
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Productivity UP 420 R&D
Costs UP △270
Change of depreciation
methods 610
Sales UP /Product mix
500
Expenses UP △190
2015 Full Year Operating
income 4,237
2016 Full Year Operating Income 5,696
Consolidated B/S
2015
Dec 31 2016
Dec 31 Change
Current assets 37,978 37,148 △829
Cash & Deposits 3,569 3,577 7
Notes & A/R 16,998 17,026 27
Inventory 14,262 13,617 △645
Others 3,146 2,927 △219
Fixed Assets 29,877 29,877 0
Tangible Assets 22,676 23,591 914
Intangible Assets 2,912 2,608 △303
Others 4,289 3,678 △610
Deferred Assets 20 8 △12
TOTAL ASSETS 67,876 67,034 △842
2015 Dec 2016 Dec
Current Ratio 1.48 1.40
DE Ratio 1.78 1.51
CCC(days) 106 100
2015
Dec 31 2016
Dec 31 Change
Current Liabilities 25,614 26,529 914
Notes & A/P 7,042 8,221 1,178
Loans 12,970 12,759 △211
Others 5,601 5,548 △53
Fixed Liabilities 23,593 20,602 △2,990
Loans 20,200 17,256 △2,943
Others 3,392 3,345 △46
Total Liabilities 49,207 47,131 △2,076
Total Net Equity 21,862 24,276 2,414
T/A △4,525 △5,936 △1,411
Stock Acquisition Right 73 172 98
Minority Interests 1,258 1,391 133
Total Net Assets 18,669 19,903 1,233
TOTAL 67,876 67,034 △842
US$/yen 120.38 117.05
euro/yen 131.60 123.03
renminbi/yen 18.53 16.82
(Million yen)
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CCC improved
Consolidated Cash Flow
2015
Jan - Dec
2016
Jan-Dec Change
Cash Flow from Operating Activities 5,515 7,774 2,259
Income before Taxes 2,932 4,805 1,872
Depreciation 3,830 2,700 △1,130
Net Working Capital △2,050 727 2,778
Others 802 △457 △1,260
Cash Flow from Investing Activities △4,366 △4,445 △78
Capital Investments △4,448 △4,508 △60
Others 81 63 △17
Cash Flow from Financing Activities △1,054 △3,016 △1,961
Net Interest-Bearing Debts △495 △2,262 △1,766
Dividend Payment △464 △672 △208
Others △94 △80 13
Cash and cash equivalent at end of period 3,538 3,546 7
(Million yen)
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Cash flow from operating activities substantially increased
11
FY2017 Forecast of Consolidated Operations
FY2017 (IFRS basis)
FY2017 (Mid-term Plan)
S a l e s 86,700 100,000
O p e ra t i n g In c o m e 5,900 5,000
OI ratio 6.8% 5.0%
Income Before Taxes 5,100 4,100
Income Attributable to O w n e r s o f P a r e n t
3,300 2,600
E P S ( y e n ) 142.18 112.01
Exchange rates
US$ /yen 114.00 118.00
euro/yen 121.00 137.00
(Million yen)
Copyright© 2017 SUMIDA CORPORATION. All rights reserved. 12
FY2016
Actual
5,696
FY2017
Forecast
5,900
0
1,000
2,000
3,000
4,000
5,000
6,000
Up 204
Increase Factors
Sales increase 940
Productivity improvement 1,020
Costs reductions 770
Discontinuation of goodwill depreciation
350
Capitalization of R&D exp. 250
Others 173
TOTAL 3,503
Decrease Factors
Product mix change 1,210
Wages increase 700
Welfare in China increase 620
Increase of copper price 410
Increase of R&D exp. 200
Others 159
TOTAL 3,299
Net +204
13
Analysis of Operating Income Growth
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() Increase Factors
Sales increase 940
Productivity improvement 1,020
Costs reductions 770
Discontinuation of goodwill depreciation
350
Capitalization of R&D exp. 250
Others 173
TOTAL 3,503
Decrease Factors
Product mix change 1,210
Wages increase 700
Welfare in China increase 620
Increase of copper price 410
Increase of R&D exp. 200
Others 159
TOTAL 3,299
Net +204
(Million yen)
Cash Conversion Cycle (CCC)
115
106
100 100
90
100
110
120
2014年 2015年 2016年 2017年(計画)
14
(average days)
Through utilization of low-interest rate, CCC target is set at 100 days as an operational guideline
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ROE
2014(Actual)
2015 (Actual)
2016 (Actual)
2017年 (Forecast)
2017 (Mid –term
Plan)
Profit margin on sales 1.7% 2.4% 2.8% 3.8% 2.6%
Sales /Net Assets 1.2 1.3 1.2 1.3 1.2
Total Assets /Net Equity 4.2 3.9 3.7 3.2 3.7
(Net D/Eレシオ) (1.9) (1.8) (1.5) (1.3) (1.7)
Single yearROE 9% 12% 17% 16% 12%
3 year average ROE
- - 12.8% 15.1% 14.8%
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More than average 12% ROE will be achieved
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FY2016 Performance & FY2017 Outlook
President
Tomoharu Suseki
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Business Growth
Steady business expansion in the last 5 years
Sales Growth
18
*Due to effect of foreign
exchange rates, 2016 sales were down on a yen basis from 2015.
But if recalculated with the previous year’s rates, the 2016 sales would have been up from 2015.
513
639
776
862
0
500
1000
2012 2013 2014 2015 2016
* (’00 million yen)
810
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Operating Income also steadily grew in the last 5 years
Biggest ever operating income in 2016
Operating income
ratio improved as well
Operating Income Growth
19
17.5 17.0
33.5
42.4
57.0
2.7%
4.3% 4.9%
7.0%
-0.09 0
40
80
2012 2013 2014 2015 2016
Operating Income ratio
(’00 million yen)
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Major Achievements in 2016
Sales of Automotive & Industry combined account for 83% of the total, exceeding 80% target set in mid-term business plan.
Top 3 items in Automotive sales (ABS, HID,
Keyless) dropped below 50% with sales of other items growing.
Industry sales by application
saw significant changes. • Solar energy-related
• RFID for livestock
• Medical/Healthcare
Sales / R&D
21
2016 Sales by market segment
2016 Automotive sales
Top 3 items
Inductor Trans EV Actuator and etc.
Down
Up
Up
Automotive
Consumer Electronics
Industry
83%
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Established production system to reduce impact on profit by fluctuations of foreign exchange rates through further promotion of local production for local consumption
Further improved productivity at China factories with automated production
Started operations at Vietnam No.2 factory (outskirts of Da-Nang)
Production / Admin.
22
Completed IFRS implementation to start disclosures on IFRS basis from FY2017
Hired more R&D-related personnel (14% increase)
Promoted centralization of finance-related information system
Production
Admin.
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FY2017 Business Plan & Challenges
Sales
To aim for record-breaking
sales on a yen basis
Operating Income To aim for highest ever operating income with
• Sales growth & • Productivity improvement
in spite of rising raw materials prices
Sales & Operating Income Plan in 2017
24
(’00 million yen)
810
Sales
867
57
OP
59
0
50
100
150
200
0
500
1000
2016 2017 2017 Plan 2016
Copyright© 2016 SUMIDA CORPORATION. All rights reserved.
Challenges to enhance profitability in 2017
25
Biggest ever capital investments in 2017
To expand factories to prepare for Master Plan Stage III(2018~2021)
To continue making capital investments in factory expansions and automated production
To reduce procurement costs through further promotion of global purchasing & development of new suppliers in emerging countries
Ji’an in China Phase 2 Vietnam Phase 2 Romania Phase 2
44.5 45.1
71.6
0
30
60
90
2012 2013 2014 2015 2016 2017
(’00 million yen)
New
Current
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To expand R&D facilities in North America
Summing-Up
CEO
Shigeyuki Yawata
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Copyright© 2015 SUMIDA CORPORATION. All rights reserved. 27
Celebrating the 60th anniversary of our foundation
‘12-’14 Mid-term Plan
Stage II Stage III
‘15-’17 Mid-term Plan ‘18~’21Mid-term Plan
Stage I
Sales: ¥100 billion Sales: ¥100 billion↑ Sales : ¥60.0 billion
Stage I: Groundwork & Operational Restructurings
Sales : ¥77.5 billion (actual)
Operating income: ¥3.3 billion (actual)
‘12 – ‘14
Stage II: Market Development & Growth
Sales : ¥100 billion
Operating income : ¥5 billion
‘15 – ‘17
Stage Ⅲ: Growth & Diversification
Sales: ¥100 billion ↑
Operating income : ¥10 billion ↑
’18~’21
Master Plan for 2012-2021
Aiming for ¥100 billion sales & ¥5 billion operating income in Stage II
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Master Plan
Disclaimer Regarding Forward Looking Statements
Copyright© 2012 SUMIDA CORPORATION. All rights reserved. 29
SUMIDA CORPORATION (referred to as "Sumida") makes this document available for
informational purposes only. This document contains certain “forward-looking statements” which
reflect management’s current views and the assumptions made with respect to specific future
events and financial performance. Such statements are based on currently available
information, and by their nature are subject to various risks and uncertainties that could cause
actual results to differ materially from those projected or implied in “forward-looking statements”
and from historical trends. These risks include but are not limited to domestic and global
economic business conditions, successful execution of our strategy and our ability to realise the
resulting benefits, our ability to develop and market new products, changes in legislation, legal
claims, changes in exchange and interest rates, changes in tax rates, actuarial assumptions,
raw materials and employee costs, our ability to restructure our operations, the rate of
technological changes, political, economic and other developments in countries where Sumida
operates, industry consolidation and competition. As a result, Sumida’s actual future results
may differ materially from the plans, goals and expectations set forth in such forward-looking
statements. Sumida is under no obligation to, and expressly disclaims any obligations to,
update or alter its forward-looking statements, whether as a result of new information,
subsequent or otherwise. Sumida is under no liability of any person in respect of any loss and
damage which may be suffered or incurred or which may arise directly or indirectly in respect of
information contained.
All rights, including, but not limited to the copyright, reserved. No part of this document may be
reproduced in any means without the prior written permission of Sumida.
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