JTEKT Corporation · TSE:6473
JTEKT — FY2019 Earnings Presentation
44 slides from JTEKT's earnings presentation, May 22, 2020
Slide 1: IR Presentation for Fiscal Year 2019, Ending March 2020
1 IR Presentation for Fiscal Year 2019, Ending March 2020 May 22, 2020 JTEKT CORPORATION
Slide 2: Agenda
2 1. Results for Fiscal Year 2019, Ending March 2020 2. Remarks 2-1. Extraordinary loss 2-2. Fiscal 2020 activities（Structural reform） 3. Status by business 3-1. Steering Systems 3-2. Drivelines 3-3. Bearings 3-4. Machine Tools & Mechatronics 3-5. New business JTEKT CORPORATION
Slide 3: Ending March 2020 Financial points
3 1-1) Ending March 2020 Financial points 1. Sales and profits decreased year on year due to the impact of COVID-19. Annual loss for the first time in 10 years due to recording extraordinary losses such as European impairment loss. 2. Dividend for the current term is down 6 yen from the previous ter
Slide 4: Consolidated Performance
4 1-2）Consolidated Performance ・ Sales and profits decreased in all regions including China due to the impact of COVID-19. ・ Net loss due to impairment loss in Europe and other regions and extraordinary losses on North American restructuring cost. (billions of yen) Increase/ Increase/ (%)：Ratio to s
Slide 5: Operating Profit Analysis
5 1-3）Operating Profit Analysis ・ Covering the decline in selling price level with cost improvements ・ Decrease in profit due to lower sales, including the impact of COVID-19, and higher fixed costs such as R&D expenses. Operating profit 31.9 billion yen decrease Factors of profit decrease Factors o
Slide 6: Trends in Profit and Loss (Management rate)
6 1-4) Trends in Profit and Loss (Management rate) • Failed to reverse in the second half due to decreased sales and increased fixed costs. • Profitability improved from 4Q due to cost improvements in Bearings and Machine tools. Management rate: ¥95/USD , ¥110/EUR Net sales Operating income Operatin
Slide 7: Financial Results by Company Location
7 1-5) Financial Results by Company Location Decrease due to lower sales in all regions. Main reasons for the decrease in income. Japan：Increase in R&D and infrastructure construction costs. Europe：Unprofitable plan for Rack Assist EPS. China：Decline in selling price level of EPS. （billions of yen）
Slide 8: Sales Impact of COVID-19
8 1-6) Sales Impact of COVID-19 Negative impact on sales rapidly expanding globally, mainly for automobiles Automobile ：Sales declined sharply in Japan, Europe and the U.S. due to customer operations stop. Sales are resuming in Europe. Customer operations system has almost recovered in China, but th
Slide 9: Agenda
9 1. Results for Fiscal Year 2019, Ending March 2020 2. Remarks 2-1. Extraordinary loss 2-2. Fiscal 2020 activities（Structural reform） 3. Status by business 3-1. Steering Systems 3-2. Drivelines 3-3. Bearings 3-4. Machine Tools & Mechatronics 3-5. New business JTEKT CORPORATION
Slide 10: Recording of extraordinary losses
10 2-1) Recording of extraordinary losses • In Europe, business performance was sluggish due to increased fixed costs such as product switching losses and R&D expenses. An impairment loss was recorded in accordance with accounting standards. • In North America, profitability was declining due to inc
Slide 11: Activities toward Structural Reform
2-2) Activities toward 「Structural Reform」 11 （selection and concentration） Return to thorough 「Customer perspective.」 Complete 『Structural reform』 to improve corporate value and lead to continuous / sustainable growth. Outline of Structural Reform (selection and concentration) • Reconfirm customer
Slide 12: Agenda
12 1. Results for Fiscal Year 2019, Ending March 2020 2. Remarks 2-1. Extraordinary loss 2-2. Fiscal 2020 activities（Structural reform） 3. Status by business 3-1. Steering Systems 3-2. Drivelines 3-3. Bearings 3-4. Machine Tools & Mechatronics 3-5. New business JTEKT CORPORATION
Slide 13: Steering Business Unit
13 1)Steering Business Unit JTEKT CORPORATION
Slide 14: Operating Profit Analysis (FY18 vs FY19)
14 3-1-1) Operating Profit Analysis (FY18 vs FY19) 【Review of FY2019】 ① Profit decrease due to slowdown of automobile market growth / intensifying market competition ② Increased investment for switching to rack assist EPS and new fields ③ R & D cost increase for advanced system development Managemen
Slide 15: Short term activities
15 3-1-2) Short term activities Creating a strong constitution that can withstand changes in the market / environment ～Improvements based on rack assist EPS experience～ ① Cost Reduction ③ Building the best business structure ・ Cost improvement (Include direct material) ～Collaboration and improvement
Slide 16: Mid and Long term activities ①
16 3-1-3) Mid and Long term activities① In addition to strengthening competitiveness, Step up business to offer value (KOTO), not only Product (MONO) Reaction force unit Realizing safety, security, comfort and convenience at a high level by fusing human Steering unit and vehicles JTEKT CORPORATION
Slide 17: Mid and Long term activities ②
17 3-1-4) Mid and Long term activities ② ＜Activities to realize autonomous driving＞～Kesennuma*BRT Autonomous bus demonstration test～ Participated in East Japan Railway Company's automated bus demonstration test *BRT：Bus Rapid Transit Demonstration experiment content 気仙沼線BRT 陸前横山 Automatic control
Slide 18: Drivelines Business Unit
18 2) Drivelines Business Unit JTEKT CORPORATION
Slide 19: Operating Profit Analysis (FY18 vs FY19)
19 3-2-1) Operating Profit Analysis (FY18 vs FY19) 【Review of FY2019】 ①Profit decrease due to sales decrease mainly due to slowdown in car market ②Cost increase for next-generation product development Management rate: (Billions of yen) Operating profit 3.3 billion yen decrease 95 yen / $ 110 yen / €
Slide 20: Activities in FY2020
20 3-2-2) Activities in FY2020 Strengthen competitiveness by thoroughly reducing costs and by strengthening Gr collaboration Raising competitiveness with group comprehensive strength Strengthen Deepening competitiveness cooperation Toyota Motor Corporation PMI Current Future activity C company Syste
Slide 21: Mid and Long term activities
21 3-2-3) Mid and Long term activities Strengthen business for leap forward to driveline system supplier Providing the solutions for safe, secure, and comfortable automobiles and expanding sales through optimal proposals for the total system, including cooperation with vehicles JTEKT CORPORATION
Slide 22: Bearing Business Units
22 3) Bearing Business Units JTEKT CORPORATION
Slide 23: Operating Profit Analysis (FY18 vs FY19)
23 3-3-1) Operating Profit Analysis (FY18 vs FY19) Cost reduction activities and structural reforms cannot cover sales decrease due to reduced demand (Particularly in Japan, North America, and Europe) Management rate: 95 yen / $ 110 yen / € (Billions of yen) Operating profit 8.0 billion yen decrease
Slide 24: Major structural reforms
24 3-3-2） Major structural reforms ～FY2017 FY2018 FY2019 FY2020～ Kokubu plant reorganization Strategically strengthen bearings for industrial machinery, Selection and concentration (appropriate resource allocation) Domes ⇒ Strengthen high value-added products for such as semiconductors, robots, and
Slide 25: Vision for 2030 (future) status
25 3-3-3）Vision for 2030 (future) status 2030 Ideal Figure: Koyo keeps the World’s Best Brands in Motion 2020 2022 2024 2030 TOP Survive in commodity market Brand Cost competitiveness strengthening 〔New product/application〕 ●Improve productivity :Improve PPH/PPLH Auto : EV / Energy saving →Yosedome→
Slide 26: Machine tools and Mechatronics Business Units
26 4) Machine tools and Mechatronics Business Units JTEKT CORPORATION
Slide 27: Operating Profit Analysis (FY18 vs FY19)
3-4-1) Operating Profit Analysis (FY18 vs FY19) 27 Decrease in profit due to slowdown of machine tools market conditions, impact of US / China tariffs and decrease in demand for semiconductors. Management rate: (Billions of yen) Operating profit 2.6 billion yen decrease 95 yen / $ 110 yen / € Factor
Slide 28: Recent Initiatives
28 3-4-2) Recent Initiatives ・ Capture customer needs accurately and launch products to the market timely using technical strength ・ Monozukuri reform focused on production lead time Monozukuri reform Speed up sales expansion in Equip in Kariya plant ment response to needs Serving / Spindle Carbide
Slide 29: Strategy for MT&M BU's growth
29 3-4-3) Strategy for MT&M BU’s growth Shift to growth fields by strengthening JTEKT group collaboration Growth fields Creating new value JTEKT Inspection Machine in the progress of Equipment Koyo tool CASE and 5G x Electronics Consolidated Motor shaft EV unit Semi Support sales conductor KOYO KOYO
Slide 30: New Business
30 5)New Business JTEKT CORPORATION
Slide 31: Cloud Matching Service
3-5-1） Cloud Matching Service 31 in Manufacturing Industry “Factory Agent Corporation” started in April 2020 Rebuild Manufacturing Industry Network in JAPAN Co-operation with Differentiated Original Processing Technologies Expansion of processing area for service (Grinding, Cutting, …) Social
Slide 32: New business (Lithium-ion capacitor)
32 3-5-2） New business（Lithium-ion capacitor） Approaches to next-generation and growth fields - Nominated for automotive as mass production - Improve recognition by our promotion Accelerate sales activity in a variety of industries Plant facility ● Maintenance-free Vehicle ● High heat-resistant Infr
Slide 33: Appendix
33 Appendix JTEKT CORPORATION
Slide 34: (Reference) Financial Conditions
34 （Reference）Financial Conditions Liabilities with interest Inventory /Cash reserves （billions of yen） Inventory (billions of yen) Liabilities with interest Cash reserves NET D/E ratio Inventory turnover month 1.6 0.39 1.4 1.4 1.4 1.4 0.29 0.24 0.29 0.29 328.1 189.3 183.6 274.6 273.5 175.0 195.3 18
Slide 35: (Reference) Changes in fixed costs
35 （Reference）Changes in fixed costs • Strategically allocate fixed costs to respond to CASE and to build infrastructure. • As a result of IT investments, the switch to telecommuting has gone smoothly, even in a COVID-19 environment. • Reduce the unit cost of investments and receive the benefits of
Slide 36: (Reference) Quarterly Result Trend
36 （Reference）Quarterly Result Trend Net sales OP income OP income (%) （billions of yen） 5.9% 5.6% 5.1% 3.6% 4.2% 4.5% 2.8% 3.0% 2.3% 1.6% 382.7 395.2 376.3 366.5 360.2 362.2 359.7 349.0 347.5 329.5 19.3 20.3 19.3 17.7 16.2 13.2 10.2 10.9 7.9 5.5 FY2016 FY2017 FY2018 FY2019 ※ ※ 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Slide 37: Financial Results by Business (Mechanical Components)
（Reference）Financial Results by Business 37 (Mechanical Components) (billions of yen) Increase/ Increase/ Mechanical components FY2018 FY2019 Decrease Decrease(%) ステ アリ Steering ング 売Net上 systems 高 sales 770.7 716.1 △ 54.5 △ 7.1% ベDrivelines ア リ ン グ 売Net上 高 sales 157.2 160.3 ＋ 3.1 ＋ 2.0% 駆 Bearings 動
Slide 38: Financial Results by Business (Machine Tools & Others)
（Reference）Financial Results by Business 38 (Machine Tools & Others) (billions of yen) Increase/ Increase/ Machine tools and others FY2018 FY2019 Decrease Decrease(%) ステ アリtools Machine ング 売Net上 高 sales 173.1 160.2 △ 12.8 △ 7.4% 駆 Others 動 売Net上 高 sales 1.9 1.2 △ 0.6 △ 36.2% 売Net上 高 sales 175.0 161.
Slide 39: Financial Results by Region: Japan
39 （Reference）Financial Results by Region 【Japan】 (billions of yen) 2011年度 Increase/ Increase/ Japan FY2018 FY2019 増 減 額 増 減 額 第2四半期 Decrease Decrease(%) 売 Net上 sales 高 619.6 605.0 △ 14.5 △ 2.4% 営 OP業income 利 益 21.3 9.1 △ 12.1 △ 57.0% OP income(%) 3.4% 1.5% Quarterly Trend (billions of yen) 3.8% 4.9
Slide 40: Financial Results by Region: Europe
40 （Reference）Financial Results by Region 【Europe】 (billions of yen) 2011年度 Increase/ Increase/ Europe FY2018 FY2019 増 減 額 増 減 額 第2四半期 Decrease Decrease(%) 売Net上sales 高 231.2 197.4 △ 33.7 △ 14.6% 営 OP業income 利 益 △ 3.4 △ 4.8 △ 1.3 - OP income(%) △ 1.5% △ 2.4% Quarterly Trend (billions of yen) 3.5% 1.
Slide 41: Financial Results by Region: North America
（Reference）Financial Results by Region 41 【North America】 (billions of yen) North 2011年度 Increase/ Increase/ FY2018 FY2019 増 Decrease 減 額 増Decrease(%) 減 額 America 第2四半期 売 Net上 sales 高 314.7 293.0 △ 21.7 △ 6.9% 営 OP業income 利 益 4.8 4.0 △ 0.8 △ 17.5% OP income(%) 1.5% 1.4% Quarterly Trend (billions of
Slide 42: Financial Results by Region: Asia/Oceania
（Reference）Financial Results by Region 42 【Asia/Oceania (Including India)】 (billions of yen) Asia/Oceania 2011年度 Increase/ Increase/ (including FY2018 FY2019 増 Decrease 減 額 増Decrease(%) 減 額 India) 第2四半期 売 Net上 sales 高 178.6 168.4 △ 10.2 △ 5.7% 営 OP業income 利 益 17.8 14.0 △ 3.8 △ 21.6% OP income(%) 10.
Slide 43: Financial Results by Region: China
43 （Reference）Financial Results by Region 【China】 (billions of yen) 2011年度 Increase/ Increase/ China FY2018 FY2019 増 減 額 増 減 額 第2四半期 Decrease Decrease(%) 売 Net上 sales 高 149.7 130.4 △ 19.3 △ 12.9% 営 OP業income 利 益 22.8 10.5 △ 12.2 △ 53.6% OP income(%) 15.3% 8.1% Quarterly Trend (billions of yen) 15.9%
Slide 44: Financial Results by Region: South America and Others
（Reference）Financial Results by Region 44 【South America and Others】 (billions of yen) South America 2011年度 Increase/ Increase/ FY2018 FY2019 増 減 額 増 減 額 & Others 第2四半期 Decrease Decrease(%) 売 Net上 sales 高 26.8 24.2 △ 26.0 △ 9.9% 営 OP業income 利 益 1.6 0.6 △ 9.0 △ 58.1% OP income(%) 6.2% 2.9% Quarterly