Kanematsu Corporation · TSE:8020

Kanematsu — FY2017 Earnings Presentation

36 slides from Kanematsu's earnings presentation, May 16, 2017

  1. Slide 1: Overview of results for FY2017

    （Note: The forward-looking statements in this material, including plans, forecasts, and strategies of the Group, reflect judgments that the Company made based on information available at the time the material was prepared and include risks and uncertainties. May 16, 2017 Because of changes in the bu

  2. Slide 2: Overview of results for FY2017

    Overview of results for FY2017 © KANEMATSU CORPORATION All Rights Reserved 2

  3. Slide 3: 1-1. FY2017 Highlight (P/L)

    1-1. FY2017 Highlight (P/L) ✔ Operating profit increased 3.9 billion yen from the previous fiscal year. ✔ Profit for the year declined 0.9 billion yen year on year due to the posting of financial costs with the fair market valuation of investments and the share of loss of investments accounted for u

  4. Slide 4: 1-2. FY2017 Highlight (Segment margin)

    1-2. FY2017 Highlight (Segment margin) ✔ Electronics & Devices remained steady. Foods & Grain recovered from the decline in the previous fiscal year. Segment margin Electronics & Devices An increase in revenue and profit Billion yen (Operating profit) In the ICT solutions business, transactions with

  5. Slide 5: 1-3. FY2017 Highlight (B/S)

    1-3. FY2017 Highlight (B/S) ✔ Shareholders’ equity exceeded 100 billion yen thanks to an increase in retained earnings and an increase in other components of equity due to rising stock prices. ✔ The net D/E ratio remained low at 0.5 times. FY2016 FY2017 FY2016 FY2017 (Unit: Billion yen) (Unit:Billio

  6. Slide 6: 1-4. FY2017 Highlight (C/F)

    1-4. FY2017 Highlight (C/F) ✔ Net cash used in investing activities stood at 14.7 billion yen, mainly reflecting the acquisition of Diamondtelecom, Inc. on April 1. 60.0 ■CF from operating activities ■CF from investing activities (excludes change in time deposit) Amount of decrease in net interest-b

  7. Slide 7: 2. FY2018 forecast

    2. FY2018 forecast © KANEMATSU CORPORATION All Rights Reserved 7

  8. Slide 8: 2-1. FY2018 forecast

    2-1. FY2018 forecast ✔ Operating profit is expected to remain steady. ✔ Profits before tax are also expected to increase due to the absence of temporary financial costs and the share of loss of entities accounted for using the equity method, which were posted in FY2017. FY2017 FY2018 (Unit: billion

  9. Slide 9: 2-2. FY2018 forecast (Segment margin)

    2-2. FY2018 forecast (Segment margin) ✔ In Electronics & Devices, the ICT solutions business, among others, is expected to remain strong. ✔ Profit is also expected to increase in other segments. Billion yen Electronics & Devices 30.0 Segment margin The ICT solutions business, among others, is expect

  10. Slide 10: 2-3. FY2018 forecast Dividends

    2-3. FY2018 forecast Dividends ✔ Pay stable and continuous dividends, with a consolidated dividend payout ratio of 25% as the goal. ✔ Plan to pay an annual dividend of 7 yen per share in FY2018. Yen 8 7 yen per year 30 Yen 7 25 6 yen per year 6 Including a 5 yen per year 3.5 20 5 commemorative divid

  11. Slide 11: 3. Progress in VISION-130

    3.Progress in VISION-130 © KANEMATSU CORPORATION All Rights Reserved 11

  12. Slide 12: 3-1. Progress in VISION-130 (P/L)

    3-1.Progress in VISION-130 (P/L) ✔ Operating profit recovered from the decline in FY2016. ✔ The fall in profit attributable to owners of the parent was due to temporary factors, and we aim to expand business steadily from FY2018 (the fourth year). 35.0 Billion yen Operating profit Profit attributabl

  13. Slide 13: 3-2. Progress in VISION-130 (segment margin)

    3-2.Progress in VISION-130 (segment margin) ✔ We will increase profit with a focus on Electronics & Devices. Billion yen 30.0 Segment margin (Operating profit) Electronics & Devices Foods & Grain Steel, Materials & Plant Motor Vehicles & Aerospace 25.0 20.0 10.2 14.5 15.0 14.3 10.7 3.4 10.0 3.5 6.3

  14. Slide 14: 3-3. Progress in VISION-130 (B/S)

    3-3.Progress in VISION-130 (B/S) FY2015 FY2016 FY2017 FY2019 (results of 1st year) (results of 2nd year) (results of 3rd year) （VISION-130 target ） Shareholders' equity* (billion yen) 90.1 91.6 100.4 120.0 Net debt-equity ratio (times) 0.75 0.53 0.55 Under 1.0 ROE 14.2% 9.9% 8.4% 12.0% *Shareholder’

  15. Slide 15: 3-4. Progress in VISION-130 (investment results)

    3-4.Progress in VISION-130 (investment results) ✔ Made active business investments, predominantly in the six key strategic business areas and for innovation. Electronics & Devices （Unit: Billion yen） VISION-130 <ICT Solutions> FY2015: Nippon Office Systems Ltd. (which became a consolidated subsidiar

  16. Slide 16: 3-5. Initiatives for key business areas

    ３-5. Progress in VISION-130（ Initiatives for key business areas ） ✔ Promote the horizontal development and deepening of businesses, with a focus on specialty areas with strengths. Key strategic 6 business area + Major 4 segments Innovation Electronics & ICT Solutions Mobile Device Food market in Asi

  17. Slide 17: 3-6. Initiatives for key business areas: ICT solutions

    ３-6. Progress in VISION-130（ Initiatives for key business areas ） ICT solutions ✔ Promoted more efficient management through organizational restructuring within the KEL Group.  Kanematsu Electronics Ltd. (KEL), a major subsidiary of the Company, made Nippon Office Systems Ltd. a wholly- owned subsi

  18. Slide 18: 3-7. Initiatives for key business areas: Mobile

    ３-7. Progress in VISION-130（ Initiatives for key business areas ） Mobile ✔ Kanematsu Communications Limited (KCS) was integrated with Diamondtelecom, Inc. (DT) on April 1, 2017 with the aim of achieving increased profit by using economies of scale.  KCS conducted an absorption-type merger with DT o

  19. Slide 19: 3-8. North American shale market

    ３-8. Progress in VISION-130（ Initiatives for key business areas ） North American shale market ✔ Resurgence is anticipated associated with the recovery of market conditions.  The oilfield tubing business for shale companies in North America continued to face a tough battle due to a significant fall

  20. Slide 20: 3-9. Aerospace

    ３-9. Progress in VISION-130（ Initiatives for key business areas ） Aerospace ✔ Entered the micro launch vehicle services area based on a business collaboration with Vector in the United States.  We agreed to enter into a business collaboration with Vector in the United States, which engages in the d

  21. Slide 21: 3-10. Overseas expansion of Japanese manufacturers

    ３-10. Progress in VISION-130（ Initiatives for key business areas ） Overseas expansion of Japanese manufacturers ✔ AZ-Star implemented the second project.  The Company acquired all the shares of G-Printec, Inc., a subsidiary of JVC KENWOOD Corporation, jointly with AZ-Star Co., Ltd., and took over t

  22. Slide 22: 3-11. Technological support

    ３-11. Progress in VISION-130（ Initiatives for key business areas ） Technological support ✔ Kanematsu-NNK Corporation changed its corporate name to Kanematsu Sustech Corporation with the aim of further expanding business, mainly in its mainstay security cameras business.  We have incorporated demand

  23. Slide 23: 3-12. Advancement into overseas food market

    ３-12. Progress in VISION-130（ Initiatives for key business areas ） Advancement into overseas food market ✔ Launched the sake export business through an E-commerce Website.  We launched the sake export business in March 2017 by establishing “SAKE NETWORK,” a cross-border e- commerce website, jointly

  24. Slide 24: Appendix

    Appendix © KANEMATSU CORPORATION All Rights Reserved 24

  25. Slide 25: Appendix 1-1. Consolidated Ordinary income (from FY1978)

    Appendix 1-1. Consolidated Ordinary income (from FY1978） Billion yen 35.0 VISION-130 30.0 Bankruptcy of Lehman Brothers 25.0 The best gain 20.0 The Gulf War 15.0 Structural reform plan 10.0 Reporting on a consolidated basis started. 5.0 0.0 FY1978 FY1979 FY1980 FY1981 FY1982 FY1983 FY1984 FY1985 FY1

  26. Slide 26: Appendix 1-2. Consolidated Net income (from FY2000)

    Appendix１-2. Consolidated Net income（from FY2000) Billion yen Sold the last interests 25.0 owned VISION-130 Recorded deferred 20.0 tax assets 15.0 15.0 11.5 12.0 9.4 10.0 8.0 5.0 0.0 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY201

  27. Slide 27: Appendix 1-3. Shareholders' Equity & Equity Ratio

    Appendix１-３．Shareholders’ Equity & Equity Ratio Billion yen 120.0 120.0 30.0% Shareholders' Equity Equity ratio (right-axis) 100.4 100.0 25.0% *Shareholder’s equity is Total equity attribute to owners of the parent 93.3 90.1 80.0 21.2% 20.0% 71.7 20.9% 19.6% 16.7% 60.0 54.5 15.0% 45.6 13.7% 39.0 40.

  28. Slide 28: Appendix 1-4. Interest-bearing debt & Net debt-equity ratio

    Appendix１-4. Interest-bearing debt & Net debt-equity ratio Billion yen Times 300.0 10.00 270.7 9.00 Gross interest-bearing debt 250.0 Net interest-bearing debt 8.00 223.7 213.6 Net debt-equity ratio (right-axis) 7.00 200.0 193.1 6.20 173.6 6.00 160.8 5.40 146.9 150.0 141.9 5.00 136.1 135.2 133.8 204

  29. Slide 29: Appendix 2. Outline of Kanematsu Group

    Appendix 2. Outline of Kanematsu Group Segment Main business Main products Major subsidiaries Electronics & Semiconductor Parts & Equipment Semiconductor / electronics parts, Electronic modules / materials, Devices Semiconductor Industrial electronics & Printer equipment, Electronic modules Kanemats

  30. Slide 30: Appendix 3. Subsidiaries and Affiliates

    Appendix３．Subsidiaries and Affiliates（Net sales and Ordinary income） Ownership FY2016 FY2017 (Unit: billion yen) Business ratio Revenue Operating profit Revenue Operating profit Kanematsu Electronics Ltd ICT solution 58.28% 60.0 6.7 62.6 8.3 Kanematsu Communications Ltd. Mobile 100% 115.7 3.7 103.2

  31. Slide 31: Appendix 4. Subsidiaries

    Appendix４．Subsidiaries Number of Profitable and Non-Profitable Consolidated Subsidiaries and Affiliates FY2016 FY2017 Year on （Companies） Subsidiaries Affiliates Subsidiaries Affiliates Total Total year Domestic Overseas Domestic Overseas Domestic Overseas Domestic Overseas Number of profitable 37 3

  32. Slide 32: Appendix 5. Consolidated segment margin break down

    Appendix５．Consolidated segment margin break down Forecast for segment operating profit Unit: billion yen FY2018 FY2017 Change (Forecast) Profit is expected to remain ICT solutions 8.3 8.7 0.3 nearly flat year on year, despite expenses arising from Mobile 4.5 4.5 0.0 the merger between KCS and Others

  33. Slide 33: Appendix 6-1. Segments (Electronics & Devices)

    Appendix 6-1. Segments（Electronics & Devices） FY2018 Year on (Unit: billion yen)) FY2016 FY2017 Change Forecast year Revenue 235.0 254.3 260.0 5.7 2.2% Operating profit 10.7 14.3 14.5 0.2 1.4% Operating profit FY2017 results Billion yen In the ICT solutions business, transactions with 14.0 manufactu

  34. Slide 34: Appendix 6-2. Segments (Foods & Grain)

    Appendix 6-２. Segments（Foods & Grain） FY2018 Year on (Unit: billion yen)) FY2016 FY2017 Change Forecast year Revenue 222.6 227.8 230.0 2.2 1.0% Operating profit 1.4 2.5 3.5 1.0 40.0% Billion yen Operating profit FY2017 results 6.0 The food business remained solid. The meat products 5.0 business reco

  35. Slide 35: Appendix 6-3. Segments (Steel, Materials & Plant)

    Appendix 6-３. Segments (Steel, Materials & Plant) FY2018 Year on (Unit: billion yen)) FY2016 FY2017 Change Forecast year Revenue 135.3 131.2 150.0 18.8 14.3% Operating profit 3.4 2.8 4.0 1.2 42.9% Billion yen Billion yen Operating profit FY2017 results 8.0 In the plant business, transactions involvi

  36. Slide 36: Appendix 6-4. Segments (Motor Vehicles & Aerospace)

    Appendix 6-4. Segments (Motor Vehicles & Aerospace) FY2018 Year on (Unit: billion yen)) FY2016 FY2017 Change Forecast year Revenue 63.8 50.4 50.0 (0.4) (0.8%) Operating profit 3.0 2.2 2.5 0.3 13.6% Billion yen Operating profit 3.0 FY2017 results The motor vehicles and parts business performed 2.5 we

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