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Page 1: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

SUMIDA CORPORATION

Performance Briefings

<for FY2016 ending December 31, 2016>

February 7, 2017

Page 2: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  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

Page 3: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

Today’s Program

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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

Page 4: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

FY2016 Consolidated Financial Results (Q4 & Full Year)

CFO Yoshiyuki Honda

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Page 5: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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

Page 6: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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

Page 7: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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

Page 8: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

Copyright© 2017 SUMIDA CORPORATION. All rights reserved.

(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

Page 9: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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

Page 10: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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

Page 11: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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

Page 12: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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)

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Page 13: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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)

Page 14: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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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Page 15: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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

Page 16: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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FY2016 Performance & FY2017 Outlook

President

Tomoharu Suseki

Page 17: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

Copyright© 2016 SUMIDA CORPORATION. All rights reserved. 17

Business Growth

Page 18: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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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Page 19: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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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Page 20: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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Major Achievements in 2016

Page 21: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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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Page 22: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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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Page 23: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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FY2017 Business Plan & Challenges

Page 24: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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

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Page 25: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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

Page 26: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

Summing-Up

CEO

Shigeyuki Yawata

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Page 27: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

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Celebrating the 60th anniversary of our foundation

Page 28: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

‘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

Page 29: Sumida Presentation Template · 2017-02-28 · SUMIDA CORPORATION Performance Briefings  February 7, 2017

Disclaimer Regarding Forward Looking Statements

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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.