Ticker Code:5943 Closing briefing material for the fiscal year ended December 31, 2012 February 12, 2013

Transcription

1 Ticker Code:5943 Closing briefing material for the fiscal year ended December 31, 2012 February 12, 2013 The outlook on our future performance provided in this document has been produced by ourselves independently based on data made available as of now and involves risks and uncertain factors. As such, no guarantee is given towards the achievement of the figures in the forecast. 1

2 FY Dec12 financial review and performance summary handout FY Dec 2012: results of operation Sales Operating Income Ordinary Income Net Income ROE ROA Renewed record high profit by actively introducing new products : : : : : : bil yen (up 1.5%) 8.8 bil yen (up 8.0%) 9.8 bil yen (up 12.7%) 5.9 bil yen (up 24.6%) 6.7% 3.8% 1, ,843 1, Sales Operating Income Ordinary Income Net Income [Unit: 100mn JPY] * Annual average exchange rate 1USD:80.11JPY / 1RMB:12.72JPY FY FY FY

3 FY Dec12 financial review and performance summary handout FY Dec 2012: results of operation / segment Domestic business records an increase both in sales and profit, while overseas business move into the black Domestic business 2,000 [Unit: 100mn JPY] 1,900 1,800 1,700 1,589 1,600 1,500 1,400 1,300 1,200 1,100 1, FY2010 1,704 1, FY2011 Sales 86 Operating Profit FY Overseas business FY FY2011 [Unit: 100mn JPY] Sales Operating Profit FY

4 FY Dec12 financial review and performance summary handout FY Dec 2012: results of operation / segment Domestic business: sales by product area [Unit: 100mn JPY] 0 Ne w e n e rgy area 1000 Ho t wate r air- c o n ditio n e rs are a K itc h e n are a Oth e r are a FY Ho u se h o ld syste m are a ,589 FY2011 1, ,704 FY2012 1, ,727 Overseas business: sales by region New energy area for 2010 are included in hot water air-conditioners area Ch in a No rth Ame ric a Oth e rs [Unit: 100mn JPY] FY FY FY

5 FY Dec12 financial review and performance summary handout FY Dec 2012: operating income / factors behind the increase in profitp Decrease due to number of units, selling price, product mix, etc 18.9 Reduction in raw material cost due to cost reduction efforts Changes in raw material cost Increase in processing cost 13.0 Increase in the cost of outsourced works 4.1 Influence of exchange rates Reduction in SG&A [Unit: 100mn JPY] FY2011 Operating income 81.8 FY2012 Operating income 88.3 * Cost of outsourced works is the cost for installation of products handled 5

6 Forecast for financial and Business performance for the fiscal year ending December 31,

7 FY Dec 2013: domestic business / external environment (1) 1100 Housing industry Economic environment expected to recover, demand for gas and kerosene appliances and renewable energy to remain strong Number of new housing starts (thousand) Number of new housing units transferred to new owners FY FY FY FY (fo re c ast) 1250 New housing improved (outlook for 2013 is in the 930 thousands) 250 Growth of the used house market and home renovation market Larger preferential treatment for energy-saving homes Concern over increase in raw material cost for materials and parts, etc Gas and kerosene appliances ECO-Jozu becoming a de facto standard Continued trend of conversion into gas appliances (water heaters, stoves) Acceleration of the spreading of gas power generation system 中国 Renewable energy Acceleration of the spreading of solar power generation and solar water heaters Continuance of the fixed price purchase system Increased demand towards long-term reliability 7

8 FY Dec 2013: domestic business / external environment (2) Trends in conversion to gas appliances to continue Outlook on demand for water heaters Gas and kerosene appliances to maintain high level [Unit: Thousand] 2, ,101 3,134 Gas Kerosene water heater Electric water heater Eco Cute ,124 (unchanged from previous year) 570 Outlook on demand for built-in stoves For gas appliances, a 4.5% increase expected for the full financial year [Unit: Thousand] 1, , ,246 Gas Built-in in Stove IH Cooking Heater 1, 303 (+4.5% yoy) FY2010 FY2011 FY2012 FY2013(forecast) Gas water heaters: excluding #8 and below. Company estimate for 2013 FY2010 FY2011 FY2012 FY2013(forecast) Excluding units with 1 burner Company estimate for

9 FY Dec 2013: overseas business / external environment China: Growing market through urbanization and expansion of domestic demand Maintaining of stable economic growth Expansion of domestic demand through the Government s income-doubling plan (2020) Increase in housing for low-income earners Continuation of additional stringent policy for the acquisition of properties Increase in minimum wage North America: Increase in demand through recovery of the housing market Economic environment heading for recovery Clear recovery of the housing market Restart of Government subsidy for tankless products (from Jan 2013) Expansion of low NOx 20ppm regulatory region (South CA4 county, North CA9 county) 9

10 Performance plan for the fiscal year ending December 31,

11 FY Dec 2013: management plan A year of turning point for moving on to a new stage [Unit: 100mn JPY] Sales Operating Income Ordinary Income Net Income ROE ROA * Assumption on annual average exchange rate 1USD : 81JPY / 1RMB:12.78JPY : : : : : : bil JPY (up 2.6%) 9.5 bil yen (up 7.5%) 10.1 bil yen (up 2.9%) 6.2 bil yen (up 3.7%) 6.5% 3.8% 1,843 1, FY FY , Sales Operating Income Ordinary Income Net Income FY ( f o re c ast) 11

12 FY Dec 2013: management plan / segment Aim for an increase in sales and profit both for domestic and overseas businesses Domestic business 2,000 [Unit: 100mn JPY] 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1, , Sales 400 Operating Income ,704 1,727 1, FY 2011 FY 2012 FY 2013 (forecas t ) Overseas business Sales Operating Income [Unit: 100mn JPY] FY 2011 FY 2012 FY (for e ca s t ) -8 12

13 [Changes to disclosure of sales by area] Changes have been made to include the sales from installation and after-sales service (AS) for the products we handle under each area from the current term. These were originally disclosed under other areas. Disclosure will be in line with our operation that leverages our collective strength in products, installation and AS. (Former disclosure) Hot water air conditioning area Domestic business Hot water air-conditioners New energy area New energy appliances Household equipment area Kitchen area Other areas Household equipments Kitchen instruments Installation, AS, externally sold parts, etc (New disclosure) Hot water air conditioning area New energy area Household equipment area Kitchen area Other areas Domestic business Hot water air-conditioners, installation, AS New energy appliances, installation, AS Household equipment, installation, AS Kitchen instrument, installation, AS Externally sold parts, etc * AS=after-sales service 13

14 FY Dec 2013: management plan / segment FY2011 Domestic business: sales by product area 0 Ne w e n e rgy 1000 are a Ho t wate r air- c o n ditio n in g are a K itc h e n are a 1,121 Oth e r are a Ho u se h o ld syste m are a [Unit: 100mn JPY] 1,704 FY2012 1, ,727 FY2013 (forecast) 1, Overseas business: sales by region 1,767 * Sales from installation and after-sales service for 2011 new energy area are included in the hot water air conditioning area Ch in a No rth Ame ric a Oth e rs [Unit: 100mn 100M yen] JPY] FY FY FY2013 (forecast)

15 FY Dec 2013: operating income / profit increase plan Increase in processing cost 3.3 [Unit: 100mn JPY] Increase due to number of units, selling price, product mix, etc FY2012 Operating income Change in raw material cost 3.2 Reduction in raw material cost due to cost reduction efforts Increase in the cost of outsourced works 4.6 Increase in SG&A 8.8 Influence of exchange rates 0.3 FY2013 Operating income 95.0 * Cost of outsourced works is the cost for installation of products handled 15

16 FY Dec 13: Major domestic product groups / plan *Reference 1300 Hot water air conditioning area Kerosene water heater Gas water heater Gas bath boiler ,214 1,214 1,210 1, Household equipment system area Bathroom vanity System Kitchen System Bath Kitchen area Tabletop stove Built-in stove [Unit: Thousand] FY FY FY (fo re cast) FY FY FY (fo re c ast) FY FY FY (fo re c ast) * Gas water heaters: excluding #8 and below * Excluding units with 1 burner 16

17 FY Dec 13: Major domestic product groups / demand outlook *Reference Hot water air conditioning area Kerosene water heater Gas water heater Gas bath boiler 3,101 3, , Household equipment system area 2,915 Bathroom vanity System Kitchen System bath 3,101 Kitchen area Tabletop stove Built-in stove [Unit: Thousand] 3,262 3,824 3,696 3,630 3,630 2,000 1,086 1, ,574 1,641 1,717 2,685 2,450 2,327 2,000 1,622 1,722 1, ,139 1,246 1,246 1,303 0 FY FY FY (fo re c ast) 0 FY FY FY (fo re cast) 0 FY FY FY (fo re cast) * Gas water heaters: excluding #8 and below * Excluding units with 1 burner 17

18 Developing growth business Overseas business- Acquisition of shares in Sakura (Cayman) Co., Ltd 18

19 Outline of the Transaction Description Acquisition of 55% shares in Sakura (Cayman) Co., Ltd Acquisition of 6.11% shares from minority shareholders of Sakura China Co., Ltd Jointly manage Sakura (Cayman) Co., Ltd and its subsidiaries with Taiwan Sakura Corporation which is the other major shareholder Subject companies Sakura (Cayman) Co., Ltd and its subsidiaries Sakura China Holdings (Hong Kong) Company Limited Sakura China Co., Ltd Foshan Yingshun Bath & Kitchen Co., Ltd (Guangdong Province) Acquisition price Schedule Total of approximately USD 100 million Share purchase is expected to take place at the end of August 2013 after necessary procedures for the transaction are taken, including the review to be conducted by the Chinese authorities under the Antitrust Law 19

20 Transaction Scheme <Reference > Taiwan Sakura Corporation (Taiwan) 100% Sakura Enterprises (B.V.I.) Ltd. (Virgin Islands) NORITZ Corp. 45% 55% 2.78% Sakura (Cayman) Co., Ltd (Cayman) 100% Sakura China Holdings (Hong Kong) Company Limited (Hong Kong) 90% Sakura China Co., Ltd (China, Jiangsu) Our actual share holding 55.61% 6.11% Minority Shareholders 1.11% 20

21 Overview of Sakura China Co., Ltd Housing equipment manufacturer with nationwide business in China 経済成長の減速が鮮明 不動産取得の追加引締め策継続 最低賃金の上昇 Company 低所得者向け住宅の増加 name Sakura China Co., Ltd 環境省エネ商品補助金制度開始 HQ location Jiangsu province, Kunshan city ( 江蘇省昆山市青陽南路 1 号 ) No. of employees Approximately 3,000 Outline of business Production and sales of gas water heaters, gas stoves, range hoods, electric water heaters, sterilizers, sinks, taps, bath heating units, ventilating fan, etc Established April 1994 Production base Sales base Kunshan city, Jiangsu province/foshan city, Guangdong Province Provinces and autonomous regions in China nationwide as of end

22 Overview of Sakura China Co., Ltd Water heaters, range hoods and cooking stoves are the main products Main products: Sales breakdown Main channels: Distribution breakdown Others Cooking stove FY Dec 2011 Water heater Others Department store FY Dec 2011 Electronics retail store Range hood Exclusive shop Water heater Range hood Cooking stove 22

23 Current status of Sakura China Co., Ltd Distribution reform is ongoing, from electronics retail stores to exclusive shops Status Reforming management structure to expand the exclusive shop route Increase number of exclusive shops Increase product for exclusive shops 231,910 (21.7bn JPY) 259,279 (22.8bn JPY) 236,961 (18.9bn JPY) [Unit: thousand USD] Performance 23,448 (2.1bn JPY) 18,865 (1.6bn JPY) 5,596 (0.44bn JPY) Sales Operating Income FY2009 FY2010 Sakura(Cayman)Co.,Ltd Consolidated result Annual average rate:1usd 09:93.69JPY 10:88.22JPY 11:79.94JPY FY

24 Current status of Notitz (China) Co., Ltd 1993: Entered the Chinese market by establishing a JV with a local company 2004: Established a 100% owned subsidiary Status 2007: Constructed New Shanghai plant in Fengxian District, Shanghai City Acquired top share in the Shanghai area Enhanced recognition as a high-class brand Produce major high-function parts for gas water heaters at the New Shanghai Plant [Unit: 100 mn JPY] Performance Sales FY2010 FY2011 FY

25 Synergy between Noritz and Sakura China Co., Ltd Characteristics of Noritz and Sakura China Sakura China Co., Ltd Extensive product line-up of housing facilities (water heater, kitchen instrument) Operating nationwide in China (47 branches, 20 master distributors) Operates ca 4,000 exclusive shops Outstanding press technology and ability to procure molds Complement each other Noritz (China) Co., Ltd Product line-up of high-class gas water heaters (capacity for technological development for environment, energy saving) Top share in the Shanghai area Sales mainly through electronics retail stores Knowhow on high-quality, highly-efficient production Enhance business performance by mutually supplying products Aim Develop attractive products through joint development Improve production efficiency by extending production technology Reduce procurement cost by leveraging advantage over volume 25

26 Strategic significance of the Transaction Achieve Mid-term Business Plan goals (V plan 16) by expanding overseas business Sales Domestic Overseas Operating income Domestic Overseas Ordinary Income Net income (FY Dec2012) 187.0bil 172.7bil 14.3bil 8.8bil 8.6bil 0.18bil 9.8bil 5.9bil (FY Dec2016) 250bil 210bil 40bil 15bil 12.5bil 2.5bil 15.7bil 8.5bil 26

27 Major initiatives for the fiscal year ending December 31,

28 FY Dec 2013: domestic business / hot water air conditioning area Increase revenue through expanding sales of ECO-Jozu and standardizing parts Transition in the ratio of ECO-Jozu [Unit: Thousand] % 21.5% % 25.3% % FY FY FY % Demand of ECO-Jozu Ratio of ECO-Jozu(Our company) Ratio of ECO-Jozu(Industry) % 37.0% FY2 013(forec ast) % 0.0 % Expand sales of major products Launch of ECO-Jozu GQ and GT series Launch in January of the GQ-C2434 series Launch in March of the GT-C2452-SFF series (for cold regions) Improve profitability Standardization of parts for domestic/overseas GQ series GQ-C2434 series New product for North America New product for Japan Consolidation of Taisei Industrial s production base 28

29 FY Dec 2013: domestic business / kitchen area Aim for further improvement in sales efficiency and cost reduction Transition in the share of built-in in stoves [Unit: Thousand] 1,246 1,139 1, % 34.0% 32.6% Demand of Gas built-in stove Gas built-in stove share(our company) 1, % % FY FY FY FY20 13(forecast) Expand sales of major products Expand sales of mid/high-class products Grasp opportunity to respond to replacement demand Proposal on safe and user-friendly stoves -Safe, easy to cook and clean- Proposal on energy-saving -Cook rice, boil water, reheat- Improve profitability Improve production efficiency Increase number of production lines for mid/high-class products Further improve sales efficiency through consolidation of Harman and Noritz sales divisions 29

30 FY Dec 2013: domestic business / new energy area Expand by leveraging our strength and through minimum investment Expand sales of solar power generation systems Areas involved in the solar power generation system Our Business areas Profit ratio Cell Module Power conditioner Material Sales, installation, after-sales service Produced internally Designed internally (cost reduction by securing volume) Assets accumulated in other areas utilized (propose best energy mix) Investment size Solar power generation system plan Residential Commercial Plan: 25MW (2012: 9.4MW) Plan: 7.6MW (2012: 2.2MW) Expand sales with single-family houses Win opportunities with condos Win opportunities with small-sized commercial properties Enhance installation(prime contract) capability 30

31 FY Dec 2013: overseas business / China, North America Overseas business remain stable in the black China Expand sales of major products Expand sales area Launch new large-capacity, high-grade grade products Develop new channels Improve Improve profitability Reduce cost through internal production of parts Hold down personnel cost by promoting automation North America Expand sales of major products Expand sales of next-generation eco-friendly products Develop opportunities in the condensing market Sales activities in line with the characteristics of the area Seek new OEM partner Improve profitability Strengthen technology and service capabilities Consolidate sales bases 31

32 FY Dec 2013: Capital expenditure, depreciation and R&D plan Capital Expenditure Depreciation and Amortization R&D Expenditure [Unit: 100mn JPY] FY2010 FY2011 FY2012 FY2013 (forecast) FY2010 FY2011 FY2012 FY2013 (forecast) FY2010 FY2011 FY2012 FY2013 (forecast) 32

33 FY Dec 2013: scheduled dividend Dividend increase of 2 yen, resulting in 30 yen, is expected for year-end end of FY Dec Co mme morative divide n d Divide n d pe r sh are Ne t in c o me pe r sh are FY FY FY FY FY FY FY FY FY FY FY In principle, we intend to pay dividend continuously and stably, and our basic policy is to take into consideration our consolidated business performance and dividend payout ratio on a consolidated basis, based on the business environment, while maintaining the financial standing of the company. 33

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