JTEKT Corporation · TSE:6473
JTEKT — Q2 FY2023 Earnings Presentation
44 slides from JTEKT's earnings presentation, Nov 10, 2023
Slide 1: Financial results for the Second Quarter of fiscal year ending March 2024
1 Financial results for the Second Quarter of fiscal year ending March 2024 November 10 th, 2023 JTEKT CORPORATION
Slide 2: Overview of Financial results
Overview of Financial results 2 ■ Revenue increased due to easing the impact of COVID-19, recovery from shortage of semiconductors, and favorable exchange rate. Results ■ Despite continuing inflation, business profit increased with cost reduction activities, revenue increase mainly in automobiles, a
Slide 3: Contents
Contents 3 １．Results for the Second Quarter of fiscal year ending March 2024 P４ ２．Forecasts for Fiscal Year ending March 2024 P９ ３. Approach to achieve the mid-term management plan P１5 １) Activities of 1st stage of the mid-term management plan ２) For 2nd stage of the mid-term management plan ４．Appen
Slide 4: FY2023-2Q Results – Consolidated performance
1-1) FY2023-2Q Results – Consolidated performance 4 ■ Revenue increased due to easing the impact of COVID-19, recovery from shortage of semiconductors, and favorable exchange rate. ■ Despite continuing inflation(materials, energy and labor cost etc.), business profit increased with steady cost reduc
Slide 5: FY2023-2Q Results – Business profit analysis
1-2) FY2023-2Q Results – Business profit analysis 5 ■ Despite the impact of inflation and sales price down, profits increased due to sales recovery, favorable foreign exchange rate, and cost reduction activities. Unit：Billion of yen JTEKT CORPORATION
Slide 6: FY2023-2Q Results – by Region
1-3) FY2023-2Q Results – by Region 6 ■ Profit increased in Japan and North America due to sales recovery, favorable foreign exchange rate, and cost reduction activities. Profit declined in China due to severe market environment. Revenue Business profit Unit : Billion of yen FY2022 2Q FY2023 2Q Unit
Slide 7: FY2023-2Q Results – by Business unit
1-4) FY2023-2Q Results – by Business unit 7 ■Revenue and profit increased in all business units due to sales recovery, favorable foreign exchange rate, and cost reduction activities while implementing strategic investments in the growth areas. Revenue Business profit Unit : Billion of yen FY2022 2Q
Slide 8: Contents
Contents 8 １．Results for the Second Quarter of fiscal year ending March 2024 P４ ２．Forecasts for Fiscal Year ending March 2024 P９ ３. Approach to achieve the mid-term management plan P１5 １) Activities of 1st stage of the mid-term management plan ２) For 2nd stage of the mid-term management plan ４．Appen
Slide 9: FY2023 Forecast – Consolidated performance
2-1) FY2023 Forecast – Consolidated performance 9 ■ In addition to reflecting the most recent demand forecasts and the updated foreign exchange rate, we upwardly revised revenue and all profits. ■ We will ensure achievement of the target by accelerating cost reduction and appropriate sales price imp
Slide 10: FY2023 Forecast – Business profit analysis
2-2) FY2023 Forecast – Business profit analysis 10 ■ Despite the impact of inflation and sales price down, profits increased due to sales recovery, favorable foreign exchange rate, and cost reduction activities. ■ While securing increased profits, strategic investments will be made steadily in the g
Slide 11: FY2023 Forecast – by Region
2-3) FY2023 Forecast – by Region 11 ■ Profit increased in Japan due to sales recovery and accelerating cost reduction. Overseas profits declined (particularly China) due to severe market environment. Revenue Business profit Unit : Billion of yen FY2022 FY2023 Unit : Billion of yen (Ratio to revenue)
Slide 12: FY2023 Forecast – by Business unit
2-4) FY2023 Forecast – by Business unit 12 ■ Revenue and profit increased in the automotive business, mainly in Japan. Revenue Business profit Unit : Billion of yen FY2022 FY2023 Unit : Billion of yen (Ratio to revenue) FY2022 FY2023 865.0 (3.6%) 806.2 31.5 (2.8%) 22.6 (10.1%) (4.8%) (4.4%) (8.9%) 1
Slide 13: Return to shareholders
2-5) Return to shareholders 13 ■ Under the policy to pay stable dividends in long-term, we will maintain the dividend payout ratio of 30% or more. ■ Due to the upward revision of the forecasts, year-end dividend forecast will increase by +4 yen. The dividend forecast for FY2023 will be 36 yen per ye
Slide 14: Contents
Contents 14 １．Results for the Second Quarter of fiscal year ending March 2024 P４ ２．Forecasts for Fiscal Year ending March 2024 P９ ３. Approach to achieve the mid-term management plan P１5 １) Activities of 1st stage of the mid-term management plan ２) For 2nd stage of the mid-term management plan ４．Appe
Slide 15: Activities of 1st stage of the mid-term management plan - Three types of treatment
3-1-1) Activities of 1st stage of the mid-term management plan 15 - Three types of treatment ■ Net profit for FY2019 was a deficit of -3.7 billion yen ■ The old company structure from before the merger continues to remain, and improvements to the corporate culture and climate have been postponed. ➔
Slide 16: Activities of 1st stage - Surgical Treatment
3-1-2) Activities of 1st stage of the mid-term management plan 16 - Surgical Treatment ■ 1st stage of the mid-term management plan is positioned as a three-year period to strengthen the company's structure, focusing on break-even point and breaking out of a deficit structure. Target for 1st stage of
Slide 17: Activities of 1st stage - Surgical Treatment, structural reforms
3-1-3) Activities of 1st stage of the mid-term management plan 17 - Surgical Treatment ■ After promote deficit measures urgently, proceed with the consolidation and elimination of subsidiary to reduce fixed costs and improve capital efficiency. ■ Continuing structural reforms to establish a surplus
Slide 18: Activities of 1st stage - Internal Medicine Treatment
3-1-4) Activities of 1st stage of the mid-term management plan 18 - Internal Medicine Treatment ■ We will review the conventional wisdom, thoroughly eliminate waste within the company, and improve work efficiency. ■ Hold regular MTGs to discuss the strengths and future strategies of each region and
Slide 19: Activities of 1st stage - Kampo Treatment
3-1-5) Activities of 1st stage of the mid-term management plan 19 - Kampo Treatment ■ In April 2023, the management philosophy system was restructured and unified into "JTEKT's Basic Philosophy" ➔ Now is automotive transformation period, both strong improvement mindset and a globally common work sys
Slide 20: Activities of 1st stage - Automotive business unit
3-1-6) Activities of 1st stage of the mid-term management plan 20 - Automotive business unit ■ Steady recovery of profitability through fixed cost reductions and cost reductions for mass production projects (Top 5 activities), etc. ■ Aim for high profitability by replacing with next-generation produ
Slide 21: Automotive business unit: Electrification-Compatible Products
3-1-7) Activities of 1st stage of the mid-term management plan 21 - Automotive business unit “Electrification-Compatible Products” ■ Promoting the Ultra-Compact Series to the expanding eAxle market in future. And Improve the electricity costs and increase cruising range by improving the flexibility
Slide 22: Automotive business unit: Autonomous driving products
3-1-8) Activities of 1st stage of the mid-term management plan 22 - Automotive business unit “Autonomous driving products” ■ Releasing Sequentially new value-added products for autonomous driving ■ Contribution to the realization of safe, secure, and comfortable autonomous driving J-EPICS*(SbW*) ：So
Slide 23: Activities of 1st stage - Industrial and Bearings Business Unit
3-1-9) Activities of 1st stage of the mid-term management plan 23 - Industrial and Bearings Business Unit ■ Became Profitable through improvement of break-even point and restructuring of bases ■ Shifting business structure to BEV (eAxle) & industrial growth areas for 2030 Progress in “Strengthening
Slide 24: Activities of 1st stage - Machine Tools business unit
3-1-10) Activities of 1st stage of the mid-term management plan 24 - Machine Tools business unit ■ Demand increase of electrification, autonomation and carbon neutral makes up for decrease of products for engines. ■ Constructing a framework to contribute TOYOTA’s BEV strategy smoothly and keeping hi
Slide 25: Activities of 1st stage - One JTEKT
3-1-11) Activities of 1st stage of the mid-term management plan 25 - One JTEKT ■ Gathering and analyzing information of wide-range customers, mainly bearing customers, generating sales synergy across the business unit. ■ Making a strong showing of JTEKT group by taking advantage of high technology c
Slide 26: Value Proposition
3-2-1) For 2nd stage of the mid-term management plan 26 ■ We are committed to being the best in the world (No.1 & Only One) in order to continue to be a company where all group employees can work with smiles and peace of mind 10 or 20 years from now. ■ We are considering med-term management plan mea
Slide 27: Strengthening the financial foundation
3-2-2) For 2nd stage of the mid-term management plan 27 - Strengthening the financial foundation ■ Strengthening financial foundation to support the activities in 2nd stage of the Mid-term plan. ■ As a countermeasure for “PBR less than 1.0x” and ”ROE less than 8%”, Accelerate 4 main activities to; “
Slide 28: Contributing to capital efficiency improvement
3-2-2) For 2nd stage of the mid-term management plan 28 - Strengthening the financial foundation ■ Promote activities under disciplined financial policies for ensuring financial soundness. ■ “Divesting/Reducing the cross-shareholdings“ steadily to improve capital efficiency. ➔ Continue and accelerat
Slide 29: Contents
Contents 29 １．Results for the Second Quarter of fiscal year ending March 2024 P４ ２．Forecasts for Fiscal Year ending March 2024 P９ ３. Approach to achieve the mid-term management plan P１5 １) Activities of 1st stage of the mid-term management plan ２) For 2nd stage of the mid-term management plan ４．Appe
Slide 30: Management indicators: Cash Flow, Capital Efficiency
3-1-1) Management indicators 30 Cash Flow statement Capital Efficiency Indicators Upper row Cash flows from operating activities FCF ROE ROA ROIC (%) Lower row Cash flows from investing activities Unit : Billion of yen 6.6 39.2 41.7 26.1 41.9 5.4 5.7 -29.4 5.3 91.7 89.1 3.6 3.8 78.2 62.3 67.0 3.5 1.
Slide 31: Management indicators: Capex, Depreciation, R&D
3-1-2) Management indicators 31 Capital expenditures Depreciation & amortization R&D expenses Upper row Oct-Mar Unit : Billion of yen Unit : Billion of yen Ratio to Revenue Unit : Billion of yen Lower row Apr-Sep 4.6% 4.2% 3.3% 3.1% 3.0% 75.0 73.0 69.4 67.0 66.9 64.6 63.0 64.7 62.3 55.0 39.4 50.7 52
Slide 32: Management indicators: Inventories, Debt, Cash
3-1-3) Management indicators 32 Inventories Interest-bearing debt / Cash reserves Inventory turnover month Unit : Billion of yen Left bar Interest-bearing debt NET DE ratio Right bar Cash reserves Unit : Billion of yen 1.6 1.8 1.7 1.7 1.6 0.39 0.30 0.22 0.20 0.15 259.0 328.1 247.5 229.0 286.2 261.7
Slide 33: Financial statements: Assets, Liabilities and equity
3-2-1) Financial statements 33 Assets Liabilities and equity Unit : Billion of yen Unit : Billion of yen FY2023 Liabilities FY2023 Assets FY2022 Change FY2022 Change 2Q and equity 2Q Cash and cash Trade and other 123.8 162.9 ＋39.0 346.5 376.0 ＋29.4 equivalents payables Trade and other Interest-beari
Slide 34: Financial statements: Profit or Loss, Cash Flows
3-2-2) Financial statements 34 Consolidated Statement of Profit or Loss Consolidated Statement of Cash Flows Unit : Billion of yen Unit : Billion of yen FY2022 FY2023 FY2022 FY2023 Change Change 2Q 2Q 2Q 2Q Cash flows from Revenue 804.5 922.2 ＋117.6 operationg activities 27.0 89.1 ＋62.0 Cash flows f
Slide 35: Performance comparison – FY2023-2Q Results by Region
3-3-1) Performance comparison – FY2023-2Q Results 35 (by Region) Unit:Billion of yen FY2022 FY2023 Foreign FY2023 Change excluding Region change 2Q 2Q exchange 2Q foreign exchange Japan 302.1 368.5 ＋66.3 +22.0% - 368.5 ＋66.3 +22.0% North America 190.6 224.8 ＋34.2 +17.9% ＋13.0 211.8 ＋21.1 +11.1% Euro
Slide 36: Performance comparison – FY2023-2Q Results by Business unit
3-3-2) Performance comparison – FY2023-2Q Results 36 (by Business unit) Unit:Billion of yen FY2022 FY2023 Foreign FY2023 Change excluding Business unit change 2Q 2Q exchange 2Q foreign exchange Steering 382.9 438.2 ＋55.2 +14.4% ＋14.6 423.6 ＋40.6 +10.6% Drivelines 161.0 211.5 ＋50.5 +31.4% ＋3.4 208.0
Slide 37: Quarterly result trend – by Region
3-4-1) Quarterly result trend – by Region 37 Unit : Billion of yen 1Q 2Q 3Q 4Q FY2022 Revenue Business profit Revenue Business profit Revenue Business profit Revenue Business profit Japan 138.1 1.2 0.9% 164.0 9.8 6.0% 159.8 7.0 4.4% 176.3 10.3 5.9% North America 89.3 -1.0 -1.2% 101.3 -0.8 -0.9% 96.1
Slide 38: Quarterly result trend – by Business unit
3-4-2) Quarterly result trend – by Business unit 38 Unit : Billion of yen 1Q 2Q 3Q 4Q FY2022 Revenue Business profit Revenue Business profit Revenue Business profit Revenue Business profit Steering Systems 177.0 -3.4 -0.2% 205.9 4.8 0.2% 202.5 5.6 0.3% 220.7 15.5 0.7% Drivelines 81.9 0.8 0.1% 79.0 1
Slide 39: Business profit analysis – Steering Systems / Drivelines
3-5-1) Business profit analysis – Steering Systems / Drivelines 39 Unit : Billion of yen Steering Systems Unit : Billion of yen Drivelines JTEKT CORPORATION
Slide 40: Business profit analysis – Industrial & Bearings / Machine tools
3-5-2) Business profit analysis – Industrial & Bearings / Machine tools 40 Unit : Billion of yen Industrial & Bearings Unit : Billion of yen Machine tools *Others excluded JTEKT CORPORATION
Slide 41: Performance comparison – FY2023 Forecasts by Region
3-6-1) Performance comparison – FY2023 Forecasts 41 (by Region) Unit:Billion of yen Foreign Change excluding Region FY2022 FY2023 Change FY2023 exchange foreign exchange Japan 638.4 740.0 ＋101.5 +15.9% - 740.0 ＋101.5 +15.9% North America 400.1 445.0 ＋44.8 +11.2% ＋18.0 427.0 ＋26.8 +6.7% Europe 196.2
Slide 42: Performance comparison – FY2023 Forecasts by Business unit
3-6-2) Performance comparison – FY2023 Forecasts 42 (by Business unit) Unit:Billion of yen Foreign Change excluding Business unit FY2022 FY2023 Change FY2023 exchange foreign exchange Steering 806.2 865.0 ＋58.7 +7.3% ＋15.0 850.0 ＋43.7 +5.4% Drivelines 336.3 410.0 ＋73.6 +21.9% ＋5.0 405.0 ＋68.6 +20.4%
Slide 43: Profit trends
3-7) Profit trends 43 Equity ratio (%) 42.0 43.6 45.0 46.3 47.3 42.3 42.0 42.4 42.7 40.1 Left bar Business profit Unit : Billion of yen Right bar Profit attributable to owners of parent company 81.9 81.3 80.0 77.4 74.1 71.7 62.6 48.6 47.5 49.6 42.5 42.3 37.5 40.0 34.2 27.2 20.6 15.9 0.8 -3.7 FY2014
Slide 44: Thank You
44 Thank You J-Nyan TEK-NYAN 【Note on forward-looking statements】 This report contains forward-looking statements pertaining to future plans and strategies. These forward-looking statements include risks, uncertainties and other factors, and actual results and business results may differ from those