JTEKT Corporation · TSE:6473
JTEKT — Q2 FY2020 Earnings Presentation
35 slides from JTEKT's earnings presentation, Nov 13, 2020
Slide 1: IR Presentation for the Second Quarter of Fiscal Year Ending March 2021
IR Presentation for the Second Quarter of Fiscal Year Ending March 2021 November 13, 2020 1 JTEKT CORPORATION
Slide 2: Financial points
Financial points １．In the second quarter (July-September), profitability was secured due to a recovery in sales in Japan and the effects of fixed cost reductions. However, in the cumulative total of the second quarter (April-September), due to the impact of COVID-19, sales decreased by about 30%, an
Slide 3: Agenda
１．Results for the Second Quarter of Fiscal Year Ending March 2021 P４ ２．Forecasts for Fiscal Year 2020, Ending March 2021 P１１ ３．Priority Initiatives P１３ ４．Appendix P１８ ４-１．Management indicators P１８ ４-２．Changes in fixed costs P２０ ４-３．Quarterly Result Trend (by region / business) P２１ ４-４．Business Profi
Slide 4: 1-1) Consolidated Performance
1-1）Consolidated Performance Sales decreased significantly in all businesses, and in regions other than China, sales decreased by 30% year-on-year. A large deficit due to the impact of sales decline, but secured a profitability in 2Q (July-September) due to cost reduction and cost improvement. (
Slide 5: 1-2) Business Profit Analysis
1-2）Business Profit Analysis Labor cost ＋6.9 (including Subsidies for employment adjustment +1.8) (billions of yen) Repair costs ＋4.0 R & D expenses ＋3.9 Travel expenses, etc ＋2.2 Earning structure 1Q ＋63 ＋20.4 2Q ＋141 1Q 11.6 2Q 11.5 1Q ▲0.3 2Q ▲0.4 ＋17 1Q ▲47.5 1Q ＋4.5 1Q ＋0.5 2Q ▲18.6 1Q ▲2.0 2Q
Slide 6: 1-3) Results by Company Location
1-3）Results by Company Location Sales revenue Business profit Unit：billions of yen [Rate of change] 19 2Q 20 2Q Unit：billions of yen (Ratio to Revenue) 19 2Q 20 2Q ▲69.3 Currency difference Increase / decrease Currency difference Increase / decrease [▲23.1%] Japan ▲1.2 ▲24.2 Japan ＋14.5 ▲83.8 ▲27.9%
Slide 7: 1-4) Result by Business
1-4）Result by Business Sales revenue Business profit Unit：billions of yen [Rate of change] 19 2Q 20 2Q Unit：billions of yen (Ratio to Revenue) 19 2Q 20 2Q ▲124.2 Currency difference Increase / decrease Currency difference Increase / decrease [▲33.6%] Steering ▲5.9 ▲118.3 ▲32.0% Steering ▲0.5 ▲24.1 3
Slide 8: 1-5) Results by Company Location (Quarterly Trend)
1-5） Results by Company Location （ Quarterly Result Trend 1Q: April-June → 2Q: July-September ） ■ Sales are on a recovery trend in each region, especially Japan's return far exceeds initial expectations ■ Achieved profitability in all regions except Europe in 2Q(July-September) Sales revenue Busines
Slide 9: 1-6) Result by Business (Quarterly Trend)
1-6）Result by Business （ Quarterly Result Trend 1Q: April-June → 2Q: July-September ） ■ Sales are on a recovery trend due to the recovery of production by automobile manufacturers, and sales in each business are increasing. ■ Steering, Drivelines, and Machine tools achieved profitability in 2Q (July
Slide 10: Agenda
１．Results for the Second Quarter of Fiscal Year Ending March 2021 P４ ２．Forecasts for Fiscal Year 2020, Ending March 2021 P１１ ３．Priority Initiatives P１３ ４．Appendix P１８ ４-１．Management indicators P１８ ４-２．Changes in fixed costs P２０ ４-３．Quarterly Result Trend (by region / business) P２１ ４-４．Business Profi
Slide 11: 2-1) Forecasts for Fiscal Year Ending March 2021
2-1）Forecasts for Fiscal Year Ending March 2021 Although sales and profits are currently on a recovery trend, the outlook is uncertain due to concerns about the re-expansion of COVID-19 in Europe and the United States, and at the moment the earnings forecast announced on July 31 remains unchanged.
Slide 12: Agenda
１．Results for the Second Quarter of Fiscal Year Ending March 2021 P４ ２．Forecasts for Fiscal Year 2020, Ending March 2021 P１１ ３．Priority Initiatives P１３ ４．Appendix P１８ ４-１．Management indicators P１８ ４-２．Changes in fixed costs P２０ ４-３．Quarterly Result Trend (by region / business) P２１ ４-４．Business Profi
Slide 13: 3-1) Priority Initiatives
3-1）Priority Initiatives Three approaches to improve the earnings capacity • Structural reform that leave nothing off 1. surgical the table operation • Reduction of break-even point 2. internal • Strengthening HQ function medicine-type • Enhancing governance and taking actions advantage of the syn
Slide 14: 3-1-1) Priority Initiatives – surgical operation
3-1-1）Priority Initiatives – surgical operation Stem the flow of red ink by reviewing loss-making businesses and subsidiaries, reducing fixed costs, etc. Structural reform that leave nothing off the table • To clarify the key targets for improving profitability, Analyze all businesses/group compan
Slide 15: 3-1-2) Priority Initiatives – internal medicine-type actions
3-1-2）Priority Initiatives – internal medicine-type actions Solve the problems that has not been while recognizing that “need to solve but not yet” (True Structural Reform) Strengthening HQ function • Hold weekly “Strategy meeting” with internal board members Discuss focusing on company-wide issue
Slide 16: 3-1-3) Priority Initiatives – oriental herbal medicine treatment
3-1-3）Priority Initiatives – oriental herbal medicine treatment To show to employees that “JTEKT has changed” To permeate TQM (Total Quality Management) (not yet started) Reform of employees’ awareness • Move HQ (corporate function) from Nagoya to Kariya on Dec. 2020 • Instill the mind that we a
Slide 17: Agenda
１．Results for the Second Quarter of Fiscal Year Ending March 2021 P４ ２．Forecasts for Fiscal Year 2020, Ending March 2021 P１１ ３．Priority Initiatives P１３ ４．Appendix P１８ ４-１．Management indicators P１８ ４-２．Changes in fixed costs P２０ ４-３．Quarterly Result Trend (by region / business) P２１ ４-４．Business Profi
Slide 18: 4-1) Inventories／Interest-bearing debt・Cash reserves
4-1）Inventories／Interest-bearing debt・Cash reserves Inventories Interest-bearing debt・Cash reserves Inventory Left bar Interest-bearing debt NET DE ratio Right bar Cash reserves turnover month 0.48 2.2 0.38 1.4 1.4 1.4 1.6 0.29 0.29 371.1 0.24 328.1 Unit：billions of yen 183.6 190.8 186.8 Unit：billio
Slide 19: 4-1) Cash flows／ROE・ROA
4-1）Cash flows／ROE・ROA Cash flows ROE・ROA Unit：billions of yen FreeC/F ROE ROA 31.2 27.6 0.9 10.1 9.7 Upper row Sales C/F -30.1 -33.1 Lower row Investment C/F 99.2 100 103 4.3 4.2 4.6 61.6 1.9 ▲0.3 -1.5 ▲1.9 ▲0.8 -31.6 ▲5.0 -68 -75.3 -99 -91.7 FY2016 FY2017 FY2018 FY2019 FY2020 FY2016 FY2017 FY2018
Slide 20: 4-2) Changes in fixed costs
4-2）Changes in fixed costs Depreciation and Research and Capital expenditures amortization development expenses Upper row October-March ● Ratio to Revenue Unit：billions Unit：billions Unit：billions Lower row April-September of yen of yen of yen 4.6% 4.7% 4.2% 3.7% 3.8% 75.2 75.0 66.4 66.6 66.9 64.6 6
Slide 21: 4-3) Quarterly Result Trend
4-3）Quarterly Result Trend Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 3.2%3.2% 2.6% 1.5% 2.0% 362.4 359.7 348.8 11.6 11.5 347.8 9.2 324.9 6.5 5.1 195.3 ▲15.3% ▲29.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 21 JTEKT CO
Slide 22: 4-3) Quarterly Result Trend－Japan
4-3）Quarterly Result Trend－Japan Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 161.6 3.2% 2.5% 155.4 1.9% 1.7% 1.3% 144.9 143.3 139.4 4.9 2.7 3.6 2.4 2.1 91.6 ▲22.1% ▲20.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 22 JTEK
Slide 23: 4-3) Quarterly Result Trend－Europe
4-3）Quarterly Result Trend－Europe Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue ▲1.0% ▲1.6% ▲3.5% ▲4.0% ▲4.0% 57.2 46 47.9 46.1 ▲0.5 ▲0.7 39.4 ▲1.6 ▲1.8 ▲1.5 18.9 ▲5.1 ▲27.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 23 J
Slide 24: 4-3) Quarterly Result Trend－North America
4-3）Quarterly Result Trend－North America Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 2.9% 78.8 1.4% 1.1% 0.4% 0.8% 72.7 68.7 72.7 68.4 2.2 1.0 0 0.2 0.5 32.1 ▲20.2% ▲6.5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 24 JTEK
Slide 25: 4-3) Quarterly Result Trend－China
4-3）Quarterly Result Trend－China Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 11.2% 10.0% 9.3% 9.5% 8.3% 3.7 3.7 3.5 42.3 39.6 3.3 3.4 37.2 33.8 33.4 20.7 ▲0.0 ▲0.3% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 25 JTEKT COR
Slide 26: 4-3) Quarterly Result Trend－Asia & Others
4-3）Quarterly Result Trend－Asia & Others Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 7.6% 8.2%6.5% 8.1% 5.8% 4.2 3.7 3.6 3.0 2 52.0 47.5 46.4 46.4 37.9 ▲3.4 15.2 ▲22.9% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 26 JTEKT
Slide 27: 4-3) Quarterly Result Trend－Mechanical components
4-3）Quarterly Result Trend－Mechanical components Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 2.6% 2.1% 1.6% 2.3% 0.7% 325.0 8.3 7.2 315.1 6.6 311.9 4.6 305.3 289.6 1.9 ▲17.0% 169.2 ▲28.7 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY20
Slide 28: 4-3) Quarterly Result Trend－Machine tools and others
4-3）Quarterly Result Trend－Machine tools and others Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 9.1% 8.1% 7.0% 5.9% 4.7% 44.5 42.4 4.0 37.4 36.9 35.2 3.0 2.9 ▲5.6% 2.1 26.0 1.6 ▲1.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY
Slide 29: 4-3) Quarterly Result Trend－Steering
4-3）Quarterly Result Trend－Steering Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 3.9% 3.6%3.7% 1.5% 2.2% 190.1 179.9 182.9 164 157.6 7.3 6.5 6.7 3.4 2.4 ▲16.1% 88.1 ▲14.2 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 29 JTEK
Slide 30: 4-3) Quarterly Result Trend－Drivelines
4-3）Quarterly Result Trend－Drivelines Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 3.9% 2.3% 0.4% 1.5% 1.2% 47.5 45.6 38 38.5 36.3 1.7 0.8 0.1 0.5 0.5 25.2 ▲23.1% ▲5.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 30 JTEKT C
Slide 31: 4-3) Quarterly Result Trend－Bearing
4-3）Quarterly Result Trend－Bearing Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 0.1% 0.6% ▲0.7% ▲0.6% ▲1.1% 0.5 0 96.8 96.7 92.6 93.7 86.3 ▲0.6 ▲0.5 ▲0.9 55.8 ▲15.6% ▲8.7 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 31 JTEK
Slide 32: 4-3) Quarterly Result Trend－Machine tools
4-3）Quarterly Result Trend－Machine tools Sales revenue Business profit Unit：billions of yen Unit：billions of yen ● Ratio to Revenue 10.6% 9.2% 7.1% 8.4% 5.5% 44.1 42.3 4.6 ▲4.1% 36.8 36.8 3.5 34.7 3.3 2.6 25.6 1.9 ▲1.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 FY2019 FY2020 32 JT
Slide 33: 4-4) Business profit Analysis－Steering／Drivelines
4-4） Business profit Analysis －Steering／Drivelines Unit：billions of yen Earning structure ＋3.6 Steering Unit：billions of yen Earning structure ＋1.9 Drivelines 33 JTEKT CORPORATION
Slide 34: 4-4) Business profit Analysis－Bearing／Machine tools
4-4） Business profit Analysis － Bearing／Machine tools Mechatronics Business Units Unit：billions of yen Earning structure ＋10.6 Bearing Unit：billions of yen Mechatronics Business Units Earning structure ＋4.2 Machine tools 34 JTEKT CORPORATION
Slide 35: 4-5) Return to Shareholders
4-5）Return to Shareholders Dividend payout ratio (%) 61.2 30% 41.1 39.5 26.9 26.3 27.4 29.6 30.3 29.7 13.50 17.7 - - - - Dividends 42 42 43 44 Upper row Year-end dividend 38 Unit：yen per share Lower row Interim dividend 34 24 21 21 22 22 16 19 17 18 20 16 16 16 Undecided 13 11 10 6 9 9 9 11 21 21 21