Sumitomo Heavy Industries, Ltd. · TSE:6302
Sumitomo Heavy Industries — Q2 FY2008 Earnings Presentation
23 slides from Sumitomo Heavy Industries's earnings presentation, Nov 5, 2008
Slide 1: FY2008 2nd Quarter Results Briefing Proceedings
FY2008 2nd Quarter Results Briefing Proceedings November 5, 2008 Part 1 FY2008 2nd Quarter Financial Summary and FY 2008 Projections Yukio Kinoshita, Senior Executive Vice President (15 minutes) Part 2 Management Strategy Yoshinobu Nakamura, President and CEO (15 minutes) Part 3 Question and Answer
Slide 2: Part 1 FY2008 2nd Quarter Financial Summary and FY2008 Projections
November 5, 2008 Part 1 FY2008 2nd Quarter Financial Summary and FY 2008 Projections Yukio Kinoshita Senior Executive Vice President and CFO November 2008
Slide 3: Financial Summary for 2nd Quarter FY2008
1-1 Financial Summary for 2nd Quarter FY2008 Key Points Units JPY billion (1) Orders Record orders for the third straight 1st Half 1st Half Change year. FY2008 FY2007 Total orders passed 400 billion yen for first time. Orders 422.5 343.8 78.7 Growth across all segments. (2) Net Sales Net Sales 340.8
Slide 4: Operating Income by Segment
1-2 Operating Income by Segment Mass-produced machinery Units: JPY billion Growth in profits in precision instruments offset by declining income 1st Half 1st Half from power transmission and plastics Change FY2008 FY2007 machinery sectors. Environmental protection Mass-produced machinery 9.9 12.7 (2
Slide 5: Analysis of Change in Operating Income
Analysis of Change in Operating Income 1-3 (1st Half FY2007 to 1st Half FY2008) Increased revenue effect Units: JPY billion 7.4 Other improvement 35.0 measures Increase in 8.6 34.4 cost of raw materials Effect of (5.6) Exchange valuation of rate effect inventory (4.0) (1.7) Sales and administrative
Slide 6: Consolidated Balance Sheet
1-4 Consolidated Balance Sheet Units JPY billion September March September March Change Change 2008 2008 2008 2008 Current Assets 386.6 381.9 4.6 Liabilities 431.7 432.3 (0.5) Notes and Cash and deposits 34.2 30.3 3.9 accounts payable 164.8 167.0 (2.3) Notes and 174.9 185.9 (11.0) Advance payments 6
Slide 7: Consolidated Statements of Cash Flow
1-5 Consolidated Statements of Cash Flow Units JPY billion 1st Half 1st Half Category FY2008 FY2007 Change Cash flows from operating 28.3 11.4 16.9 activities Working capital 3.2 (6.2) 9.4 Operating income before interest 42.1 39.2 2.9 and depreciation Other (17.0) (21.5) 4.5 Investing activities (1
Slide 8: FY 2008 Forecast
1-6 FY 2008 Forecast Key Points Orders: Increase expected across all segments (1) Record highs expected for both sales and orders (excepting construction machinery) (2) While increased income is expected for sixth consecutive year, Sales: Expected increase across all segments. the impact of rising c
Slide 9: FY 2008 Forecast of Net Sales and Operating Income by Segment
FY 2008 Forecast of Net Sales and Operating 1-7 Income by Segment Key Points (1) Expected increase in orders across all segments (excepting construction machinery), achieving a record total of 770 billion yen. (2) Sales also expected to increase across all segments, with increased revenue for the si
Slide 10: Present Financial Policy
1-8 Present Financial Policy In light of the present economic climate facing the Group, the financial policy in order to maintain the Group’s basic policy of “securing sound finances” for the foreseeable future is outlined below. 1. Stringent selection of capital investment projects, and reduction o
Slide 11: Part 2: Management Strategy
November 5, 2008 (Wednesday) Part 2: Management Strategy Yoshinobu Nakamura, President and CEO November 2008
Slide 12: FY2008 Order Status by Segment
2-1 FY2008 Order Status by Segment Each segment achieved year-on-year growth in the first half of FY2008, led by growth in resources, energy, and infrastructure-related sectors. Despite a slowdown, total FY2008 orders are expected to reach 770 billion yen in the second half of FY2008. Backlogged ord
Slide 13: Year-on-Year Changes in Order Status by Segment
Year-on-Year Changes in Order Status by 2-2 Segment for FY2007 to FY2008 Each segment expected to see year-on-year growth for first half of FY2008, with expected record high based on second quarter figures. Backlog of orders also at record high level. Despite a slowdown, total FY2008 orders are expe
Slide 14: Specific Measures by Segment for FY2008
2-3 Specific Measures by Segment for FY2008 Units: JPY billion 1st Half FY2008 FY2008 Forecast Performance Segment Measures Operatin Operatin Sales Sales g income g income Power Start operations at China’s Tangshan gearbox plant Mass-produced machinery transmission ahead of schedule. & control 50.3
Slide 15: Mass-Produced Machinery
2-4 Mass-Produced Machinery Power Transmission & Controls: 400 Units: JPY billion We will look to actively expand sales particularly in high- Orders 300 demand areas such as Asia, Europe, and North and South 265.0 234.7 247.4 America, in fields relating to resources, energy, and Precision 84.0 Instr
Slide 16: Environmental Protection Facilities, Plants and Others
Environmental Protection Facilities, 2-5 Plants and Others Energy Plants: 150 Units: JPY billion Our plans for this segment include further penetration of the Orders 118.0 8.0 IT, Services etc. domestic market through small-scale machinery. We will also 100 90.0 91.8 seek to accelerate development o
Slide 17: Ship, Steel Structure and Other Specialized Equipment
Ship, Steel Structure and Other Specialized 2-6 Equipment Units: JPY billion Ships: 150 Orders By adopting the Toyota manufacturing process we aim to 121.0 further improve and maintain this segment’s productivity 25.3 100 90.7 93.0 Steel Structures and and further promote efforts to reduce costs. Ot
Slide 18: Industrial Machinery
2-7 Industrial Machinery 150 Units: JPY billion Material Handling Systems: Orders We will look to deepen our involvement in the domestic steel 100 Material Handling industry. This is in addition to Improving our production Systems, Logistics & capacity to further ensure a stable supply of products a
Slide 19: Construction Machinery
2-8 Construction Machinery 300 Units: JPY billion Hydraulic Excavators: Orders We will look to promote expanded sales in Asian markets such as in China. Together with the completion of the Tangshan 200 187.7 186.0 168.1 plant in China ahead of schedule, and the plan to increase the 60.6 60.0 Cranes
Slide 20: Global Sales
2-9 Global Sales Units: JPY billion 700 600 124.4 44.5 500 42.5 Other Asian Countries 400 120.4 China 300 68.4 28.7 54.4 24.4 Europe 329.0 32.2 200 57.3 22.9 58.1 North America Japan 100 146.2 153.4 0 2004 2005 2006 2007 1st Half 1st Half 2007 2008 Global Sales 38% 42% 46% 50% 52% 55% Ratio ¾Asia: I
Slide 21: Strong Business Portfolio for Changes in Economic Climate
Strong Business Portfolio for Changes 2-10 in Economic Climate Social/Industrial Lifestyle infrastructure Market value chain consumption Transport/ Healthcare/ Environment/ Automobiles Liquid Crystal/ IT/Digital Resources Material Chemistry Iron and Steel Biomedical/ Energy FA Semiconductors Applian
Slide 22: Future Management Policy
2-11 Future Management Policy Future environmental awareness Slump in U.S. and European markets Sharp hike in cost of raw materials Exchange rate fluctuations Intensifying competition for orders Further Improve SHI’s Independent Business Model Careful handling of ROIC management Strong portfolio for
Slide 23: Forward-looking statements notice
All forward looking statements regarding the company’s future performance are based on information currently available to Sumitomo Heavy Industries and determined subjectively. Future performance is not guaranteed and all information related to future performance contained herein is subject to chang
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