JTEKT Corporation · TSE:6473
JTEKT — Q2 FY2019 Earnings Presentation
56 slides from JTEKT's earnings presentation, Nov 8, 2019
Slide 1: IR Presentation for the Second Quarter of Fiscal Year Ending March 2020
1 IR Presentation for the Second Quarter of Fiscal Year Ending March 2020 November 8, 2019 JTEKT CORPORATION
Slide 2: 1. Results for the Second Quarter of Fiscal Year Ending March 2020
2 1. Results for the Second Quarter of Fiscal Year Ending March 2020 2. Full-year Forecasts for Fiscal Year Ending March 2020 3. Business Unit Status JTEKT CORPORATION
Slide 3: 1-1) Consolidated Performance
3 1-1) Consolidated Performance Significant declined in profit despite accumulating cost improvement under the environment of strong yen and lower demand. Restructuring costs for North American business units further decreased profit attributable to owners of parent. Unit : Billions of yen FY2018 FY
Slide 4: 1-2) Operating Profit Analysis
4 1-2) Operating Profit Analysis The decline in selling price levels could not be covered by cost improvements. Profits also declined significantly due to a decline in sales and an increase in R & D expenses for CASE. Operating profit 11.4 billion yen decrease Factors of profit decrease Factors of p
Slide 5: 1-3) Results by Business Units
5 1-3) Results by Business Units Mechanical Components Significant declined in profit due to lower demand in China with high profits, decrease in bearings sales in each region, the drop in selling price levels and increased costs. Machine Tools Despite cost improvement effect, significant declined i
Slide 6: 1-4) Results by Company Location ①
6 1-4） Results by Company Location ① FY2018 FY2019 Increase/ Japan Net sales Operating income margin(OP income %) Operating income(OP income) 2Qtotal 2Qtotal Decrease 4.8% 5.6% ( Billions of yen) Net sales 296.7 300.1 3.4 4.0% 4.1% 2.7% 2.8% 1.7% OP income 8.2 5.0 △ 3.1 322.9 OP income(% ) 2.8% 1.7%
Slide 7: 1-5) Results by Company Location ②
7 1-5) Results by Company Location ② (billions of yen) North America Net sales Operating income margin(OP income %) Operating income(OP income) FY2018 FY2019 Increase/ 2Qtotal 2Qtotal Decrease ( Billions of yen) 4.5% 5.0% 2.7% 3.3% 1.4% 1.7% 1.6% Net sales 154.7 151.5 △ 3.1 OP income 2.1 2.4 0.3 145
Slide 8: 1-6) Results by Company Location ③
8 1-6) Results by Company Location ③ (Billions of yen) FY2018 FY2019 Increase/ China Net sales Operating income margin(OP income %) Operating income(OP income) 2Qtotal 2Qtotal Decrease ( Billions of yen) Net sales 76.1 67.3 △ 8.7 16.7% 15.2% 15.6% 16.1% 17.0% 13.4% 10.6% OP income 12.9 7.1 △ 5.8 70.
Slide 9: 2. Full-year Forecasts for Fiscal Year Ending March 2020
9 1. Results for the Second Quarter of Fiscal Year Ending March 2020 2. Full-year Forecasts for Fiscal Year Ending March 2020 3. Business Unit Status JTEKT CORPORATION
Slide 10: 2-1) Forecasts for Business Environment
10 2-1) Forecasts for Business Environment World economy Due to the intensification of the trade friction between the United States and China, future demand is still unclear. Affected by the uncertainty about leaving EU of UK and the economic downturn in Europe, the manufacturing industry is decel
Slide 11: 2-2) Forecasts for Fiscal Year Ending March 2020
11 2-2) Forecasts for Fiscal Year Ending March 2020 Revised plan to decline sales and profits due to both the strong yen and decrease in sales due to a decline in demand. Unit : Billions of yen FY2018 FY2019 (Reviced Forecast) FY2019 Increase/ Increase/ (%) : Ratio to sales Full year Initial Decreas
Slide 12: 2-3) Operating Profit Analysis (Initial vs Revised Forecast)
2-3) Operating Profit Analysis 12 (Initial forecast vs Revised forecast) Despite efforts to increase sales prices, downward revision to operating profit 45.0 billion yen due to strong yen and significant shift to lower demand. Operating profit 25.0 billion yen decrease Factors of profit decrease Fac
Slide 13: 2-4) Operating Profit Analysis (Previous Result vs Revised Forecast)
2-4) Operating Profit Analysis 13 (Previous result vs Revised forecast) Significant declined in profit due to that a drop in selling price levels and increase expenses could not be covered by cost improvement, in addition to sales decline due to strong yen and lower demand. Operating profit 21.6 bil
Slide 14: 3. Business Unit Status
14 1. Results for the Second Quarter of Fiscal Year Ending March 2020 2. Full-year Forecasts for Fiscal Year Ending March 2020 3. Business Unit Status JTEKT CORPORATION
Slide 15: 1) Steering Business Units
15 1) Steering Business Units [Explanation of Abbreviations] SBW (Steer By Wire) RP-EPS (Rack Parallel-EPS: Rack parallel type electric power steering) DP-EPS (Dual Pinion-EPS: Dual Pinion type electric power steering) JTEKT CORPORATION
Slide 16: 3-1-1) Operating Profit Analysis (Initial Forecast vs Revised Forecast)
3-1-1) Operating Profit Analysis (Initial Forecast vs 16 Revised Forecast) Revised forecast due to sales decline due to stagnation in automobile market such as India and China, and failure to achieve cost targets for launching rack-assisted EPS which is takings Management rate: Operating profit 7.3
Slide 17: 3-1-2) Operating Profit Analysis (Previous Result vs Revised Forecast)
3-1-2) Operating Profit Analysis (Previous Result vs 17 Revised Forecast) Decreased profits due to increase in depreciation costs due to switching to rack assist EPS, and increased R&D costs for advanced system development On the other hand, cost improvement of rack assist EPS is steadily promoted M
Slide 18: 3-1-3) Factors and Countermeasures (R&D Costs)
18 3-1-3) Factors and Countermeasures (R&D Costs) Advanced development investment to continue to lead the era of autonomous driving as a top runner of advanced steering system technology C A S E Technology and product development to realize autonomous driving <Strengthening development resources> Ke
Slide 19: 3-1-4) Factors and Countermeasures (Planned Value of Rack assist EPS)
3-1-4) Factors and Countermeasures (Planned Value of Rack 19 assist EPS) The cost improvement of rack assist EPS has progressed and the planned value has almost been achieved. Factor Cost target for rack assist EPS startup not achieved Even though we received an order for rack assist EPS for a premi
Slide 20: 3-1-4) Factors and Countermeasures (Rack assist EPS availability)
3-1-4) Factors and Countermeasures (Rack assist EPS 20 availability) Proceed with further productivity improvements to improve profitability and smoothly launch future projects ◆ Japan (Hanazono Plant) ◆ North America (Vonore Plant) '18/1Q '18/2Q '18/3Q '18/4Q '19/1Q '19/2Q '18/1Q '18/2Q '18/3Q '18/
Slide 21: 2) Drivelines Business Units
21 2) Drivelines Business Units [Explanation of abbreviations] AWD (All Wheel Drive: four-wheel drivelines) CVJ (Constant Velocity Joints) EOP (Electric Oil Pump) ITCC (Intelligent Torque Controlled Coupling) MOP (Mechanical Oil Pump) Torsen (Torque Sensing Limited Slip Differential) JTEKT CORPORATI
Slide 22: 3-2-1) Operating Profit Analysis (Initial Forecast vs Revised Forecast)
3-2-1) Operating Profit Analysis (Initial Forecast 22 vs Revised Forecast) Although technical research expenses was increased, operating profit is almost as planned due to cost improvement. Management rate: 95 yen / $ 110 yen / € Operating profit 0.2 billion yen decrease Factors of profit decrease 0
Slide 23: 3-2-2) Operating Profit Analysis (Previous Result vs Revised Forecast)
3-2-2) Operating Profit Analysis (Previous Result 23 vs Revised Forecast) Operating profit decreased by increasing costs for the future and selling price reduction. Profits secured by cost improvement. Management rate: 95 yen / $ 110 yen / € Operating profit 2.2 billion yen decrease Factors of profi
Slide 24: 3-2-3) Factors and Countermeasures (R&D expenses)
24 3-2-3) Factors and Countermeasures (R&D expenses) Strengthen investment in advanced development to survive the electrification era. Aiming to be a top runner in both electrification and conventional fields. C A S E Attractive product development for the electrification era For electrification Tow
Slide 25: 3-2-4) Factors and Countermeasures (Obeya Activities)
25 3-2-4) Factors and Countermeasures (Obeya Activities) Aim to achieve profit targets through cost improvement activities by related department Cost reduction activities Secure profits by cost reduction by related department Reduction rate (%) (Obeya Activity) Large room activity Current status: Pr
Slide 26: 3) Bearing Business Units
26 3) Bearing Business Units (List of abbreviations) TRB (Tapered Roller Bearing) HUB (hub unit) JTEKT CORPORATION
Slide 27: 3-3-1) Operating Profit Analysis (Initial vs Revised forecast)
3-3-1) Operating Profit Analysis 27 (Initial forecast vs Revised forecast） Revised forecasts because cost improvement could not cover sales decline due to lower demand in domestic and overseas customers Operating profit 10.6 billion yen decrease Management rate: 95 yen / $ 110 yen / € Factors of pro
Slide 28: 3-3-2) Operating Profit Analysis (Previous result vs Revised forecast)
3-3-2) Operating Profit Analysis 28 (Previous result vs Revised forecast) Profit decreased due to cost improvement being unable to cover the impact of decrease in income. Continue to improve constitution in Japan and overseas Operating profit 3.6 billion yen decrease Managemant rate: 95 yen / $ 110
Slide 29: 3-3-3) Factors and Measures (Productivity)
3-3-3) Factors and Measures (Productivity) Improve productivity by improving bekido rate and expanding unmanned operation Main factors Factor analysis Future efforts ① Production ・ Maintenance of equipment, updating ・ Improvement of bekido rate by strengthening aged equipment did not progress, and t
Slide 30: 3-3-4) Factors and Measures (Material yield)
3-3-4) Factors and Measures (Material yield) Strengthen competitiveness by improving material costs by improving material yield Main factors Factor analysis Future efforts (2) Delay in improving ・ Yield improvement is not progressing ・ Material yield improvement (change in the way of direct material
Slide 31: 4) Machine tools and Mechatronics Business Units
31 4) Machine tools and Mechatronics Business Units JTEKT CORPORATION
Slide 32: 3-4-1) Operating Profit Analysis (Initial forecast vs Revised forecast)
3-4-1) Operating Profit Analysis 32 (Initial forecast vs Revised forecast) Although effect of selling price / cost improvement and expense reduction, the forecast is revised due to the deterioration of the market conditions in ｍachine tools Operating profit 2.6 billion yen decrease managemant rate:
Slide 33: 3-4-2) Operating Profit Analysis (Actual result vs Revised forecast)
3-4-2) Operating Profit Analysis 33 (Actual result vs Revised forecast) Decrease in profit due to deterioration of market conditions in machine tools , impact of US / China tariffs, decrease in demand for semiconductors, etc. managemant rate: operating profit 1.8 billion yen decrease 95 yen / $ 110
Slide 34: 3-4-3) Factors and Measures (Structural reform)
34 3-4-3) Factors and Measures (Structural reform) Timely market introduction Manufacturing innovation through module development focused on production lead time Wheelhead Grinder Rectifying the flow of things Outer Inner grinding gringing Workhead Table Cylinder Taper Complex Cylindrical Polygon gr
Slide 35: 3-4-4) Factors and Countermeasures
35 3-4-4) Factors and Countermeasures (Building a structure that is not affected by the economy) Strengthen profit foundation Accelerate shifts to by strengthening lifecycle support growing markets and fields Strengthen lineup Reduction gear corresponding EV Used machines Motor shafts Overhaul Propo
Slide 36: 5) Topics
36 5) Topics JTEKT CORPORATION
Slide 37: 5-1) Lithium-Ion capacitor
37 5-1) Lithium-Ion capacitor Sample supply through mass production line started ・ Sample order status (as of the end of September 19) ・Results prediction (cell only) 3 Industry Number of Orders Implied (Billions of yen) customers received and number Sales delivered (cell) (cell) 2 Industrial 19 280
Slide 38: 5-2) Acquisition of YUTAKA SEIMITSU KOGYO.LTD shares
5-2) Acquisition of YUTAKA SEIMITSU 38 KOGYO.LTD shares Create synergies and aim to strengthen the foundation of drivelines business units ● ITCC integrated differential unit Differential and gear technology Small size, light weight, cost reduction Differential assembly / gear Gear Torque control de
Slide 39: 5-3) Reorganization of North American business
39 5-3) Reorganization of North American business Establishing an optimal supply system globally through reorganization of production bases Steering plant Bearing plant Washington plant Vonore plant Dahlonega plant Orangeburg plant Kagawa plant Texas plant Mexico plant JTEKT CORPORATION
Slide 40: 5-3-1) Tasks and measures for North American steering business
5-3-1) Tasks and measures for North American steering 40 business Establishing an optimal supply structure in North America by reorganizing bases Current status After reorganization Electric Electric Plant Hydraulic Plant Hydraulic (Rack assist) (Rack assist) Bonoa 〇 〇 Bonoa 〇 〇 Production of the sa
Slide 41: 5-3-2) Issues and countermeasures for North America bearing business
5-3-2) Issues and countermeasures for North America 41 bearing business Established global optimum supply system for tapered roller bearings Current status After reorganization Plant TRB TRB roller Plant TRB TRB roller Kagawa 〇 Kagawa 〇 Washington 〇 Washington ○ Orangeburg 〇 ○ Orangeburg Used in war
Slide 42: 5-4) Trends in Profit and Loss (Management rate)
42 5-4) Trends in Profit and Loss (Management rate) Profits continue to decline due to increased fixed costs and lower profitability. Suppress earnings deterioration in the first half and reverse from the second half. Net sales Operating profit Managemant rate: ( Billions of yen) Operating profit ra
Slide 43: 5-5) Status of fixed costs
43 5-5) Status of fixed costs Continued investment in R & D expenses and business units base for sustainable growth, but restrained in view of recent results Trends in R&D costs 68.0 Business infrastructure-related expenses* ↓ △2.0 R&D costs Sales (%) 66.0 (%) (Billions of yen) (Billions of yen) 63.
Slide 44: 5-6) Status of purchasing improvement
44 5-6) Status of purchasing improvement Improvement trend in 1ST half FY2019 <Changes in material prices (year-on-year)> (Billions of yen) decreasing 2016 1H 2016 2H 2017 1H 2017 2H 2018 1H 2018 2H 2019 1H <Trend of purchasing price improvement ratio (year-on-year)> (%) increasing 2016 1H 2016 2H 2
Slide 45: Thank you for your attention
45 Thank you for your attention JTEKT CORPORATION
Slide 46: (Reference) Quarterly Result Trend
46 （Reference） Quarterly Result Trend Net Sales OP income OP income(%) 5.9% （Billions of yen ） 5.6% 5.1% 3.6% 4.2% 4.5% 2.8% 3.0% 395.2 376.3 382.7 360.2 366.5 362.2 359.7 329.5 19.3 20.3 19.3 17.7 16.2 13.2 10.2 10.9 FY2016※ FY2017※ FY2018 FY2019 1Q 2Q 3Q 4Q 1Q 2Q USD ¥108 ¥111 ¥109 ¥111 ¥113 ¥110
Slide 47: (Reference) Sales Forecast by Business
47 (Reference) Sales Forecast by Business (Billions of yen) FY2019 (Forecast) Fy2018 Increase/ Increase/ Full year (Actual Full year Decrease Decrease (%) 1H (Actual) 2H (Forecast) (Forecast) ステ アsystems Steering リ ング 770.7 369.6 370.3 740.0 △ 30.7 △ 4.0% Mechanical components ベア リング Drivelines 157.
Slide 48: (Reference) Sales Forecast by Region
48 (Reference) Sales Forecast by Region (Billions of yen) FY2019 (Forecast) FY2018 Increase/ Increase/ Full year (Actual) Full uear Decrease Decrease (%) 1H (Actual) 2H (Forecast) (Forecast)) ステア リング Japan 619.6 300.1 295.8 596.0 △ 23.6 △ 3.8% ベ アEurope リ ン グ 231.2 103.2 101.5 204.8 △ 26.4 △ 11.4% 駆
Slide 49: (Reference) Financial Results by Business (Mechanical Components)
(Reference) Financial Results by Business 49 (Mechanical Components) (Billions of yen) FY2018 FY2019 Increase/ Increase/ Mechanical components 2Q total 2Q total Decrease Decrease (%) ステ アsystems Steering リ ング 売Net上 sales高 369.8 369.6 △ 0.2 △ 0.1% ベア リング 売 上 高 Drivelines 76.9 76.5 △ 0.4 △ 0.6% 駆 Bear
Slide 50: (Reference) Financial Results by Business (Machine Tools & Others)
(Reference) Financial Results by Business 50 (Machine Tools & Others) (Billions of yen) FY2018 FY2019 Increase/ Increase/ Machine tools and others 2Q total 2Q total Decrease Decrease (%) ステ アリtools Machine ング 売Net上 sales高 84.0 80.9 △ 3.0 △ 3.6% 駆 Others 動 売Net上 sales高 0.8 0.8 △ 0.0 △ 4.9% 売Net上 sale
Slide 51: (Reference) Financial Results by Region (Japan)
51 (Reference) Financial Results by Region (Japan) (Billions of yen) FY2018 FY2019 2011年度 Increase/ Increase/ Japan 2Q total 2Q total 第2四半期 増 減 Decrease 額 増 減 Decrease (%) 額 売 Net上 sales 高 296.7 300.1 3.4 ＋ 1.2% 営OP業income 利 益 8.2 5.0 △ 3.1 △ 38.7% OP income (%) 2.8% 1.7% Quarterly Trend (Billions o
Slide 52: (Reference) Financial Results by Region (Europe)
52 (Reference) Financial Results by Region (Europe) (Billions of yen) FY2018 FY2019 2011年度 Increase/ Increase/ Europe 2Q total 2Q total 第2四半期 増 減 Decrease 額 増 減 Decrease (%) 額 売 Net上 sales 高 113.2 103.2 △ 9.9 △ 8.8% - - - 営OP業income 利 益 △ 1.4 △ 2.2 △ 0.8 - OP income (%) △ 1.2% △ 2.1% Quarterly Trend
Slide 53: (Reference) Financial Results by Region (North America)
(Reference) Financial Results by Region 53 (North America) (Billions of yen) North FY2018 FY2019 2011年度 Increase/ Increase/ 2Q total 2Q total 増 減 額 増 減 額 America 第2四半期 Decrease Decrease (%) 売 Net上 sales 高 154.7 151.5 △ 3.1 △ 2.1% - - - 営OP業income 利 益 2.1 2.4 0.3 ＋ 16.8% OP income (%) 1.4% 1.6% Quart
Slide 54: (Reference) Financial Results by Region [Asia/Oceania (Including India)]
(Reference) Financial Results by Region 54 [Asia/Oceania (Including India)] (Billions of yen) Asia/Oceania FY2018 FY2019 2011年度 Increase/ Increase/ 2Q total 2Q total 増 減 額 増 減 額 (including India) 第2四半期 Decrease Decrease (%) 売 Net上 sales 高 88.3 87.1 △ 1.2 △ 1.4% - - - 営OP業income 利 益 8.2 7.4 △ 0.8 △ 1
Slide 55: (Reference) Financial Results by Region (China)
55 (Reference) Financial Results by Region (China) (Billions of yen) FY2018 FY2019 2011年度 Increase/ Increase/ China 2Q total 2Q total 第2四半期 増 減 Decrease 額 増 減 額 Decrease (%) 売Net上 sales高 76.1 67.3 △ 8.7 △ 11.5% 営OP業income 利 益 12.9 7.1 △ 5.8 △ 45.0% OP income (%) 17.0% 10.6% (Billions of yen) Quarter
Slide 56: (Reference) Financial Results by Region [South America and Others]
(Reference) Financial Results by Region 56 [South America and Others] (Billions of yen) South America FY2018 FY2019 2011年度 Increase/ Increase/ 2Q total 2Q total 増 減 額 増 減 額 & Others 第2四半期 Decrease Decrease (%) 売 Net上 sales 高 13.7 12.5 △ 1.2 △ 8.8% - - - 営OP業income 利 益 0.8 0.4 △ 0.4 △ 48.2% OP income