Tsubakimoto Chain Co. FYE 2013Settlement of Accounts Presentation Meeting

Transcription

1 FYE 2013Settlement of Accounts May 21, 2013

2 1 FYE 2013 Full Year Settlement of Accounts Business Report Note: Full year, as referred to in this report, indicates the period from April 1 through March 31 of the next year of the applicable consolidated accounting year. (For some overseas subsidiaries, the full year indicates the period from January 1 through December 31 of the applicable year.)

3 1. FYE 2013 Review Highlights of Consolidated Settlement of Accounts 2 Automotive Parts Operations was the main impetus, achieving increases in both sales and profits. Sales growth contributed to the maintenance of a healthy financial position. FYE 2012 FYE 2013 Comparison with previous term (Yen, millions) Budgeted Amount (Nov. 9, 2012) Full year figure (actual) Full year figure (actual) Increase/decrease Budget Increase/decrease Net sales 144, , % 150, % 12,081 12, % 12, % margin 8.3% 8.4% 8.1% Ordinary income 12,140 12, % 12, % Net income 6,814 7, % 6, % Net income per share (Exchange rates 1US$) (Exchange rates 1EURO) Shareholders' equity ratio 46.9% 47.3% Equity capital/total assets Return on equity (ROE) 7.9% 7.7% Net income/average return on equity during term Net D/E ratio (Interest-bearing debt Cash equivalent)/(capital adequacy) 2013 年 3 月期決算説明会

4 2. FYE 2013 Review Trend in Quarterly Consolidated Settlement of Accounts 3 Trend in sales and operating income margin (consolidated) (Yen, 100 millions) % 20% % % 8.8% 9.0% 8.4% 9.1% 8.6% 7.7% 8.2% 10% 100 5% 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FYE 2012 FYE % Major exchange rates FYE 2012 FYE 2013 US$ yen yen Euro yen yen (Yen, 100 millions) : Net sales : margin

5 3. FYE 2013 Review Analysis of Factors Consolidated Increasing/Decreasing Operating Income 4 FYE 2012 vs. FYE 2013 Increasing factors Decreasing factors FYE 2012 Sales increase 2.3 billion Improved cost price, etc. 1.2 billion Currency exchange fluctuation 0.1 billion Other fixed cost increase 1.9 billion Labor cost increase 1.2 billion FYE 2013 Increase in operating income: 0.5 billion 12.1 billion 12.6 billion Note: values are rounded off.

6 4. FYE 2013 Review Breakdown by Segment and Operations 5 Automotive Parts Operations grew significantly; Chain and Power Transmission Units and Components Operations exceeded expectations and registered a profit. (Yen, millions) Chain Operations Power Transmission Units and Components Operations Automotive Parts Operations Materials Handling Systems Operations Other *2 FYE 2012 FYE 2013 Comparison with previous term Budgeted Amount (Nov. 9, 2012) Full year figure (actual) Full year figure (actual) Increase/decrease Increase/decrease Net sales *1 51,692 50, % 49, % 3,462 3, % 2, % margin 6.7% 7.1% 5.9% Net sales *1 21,364 19, % 20, % 2,512 1, % 1, % margin 11.8% 9.9% 9.2% Net sales *1 43,509 49, % 48, % 4,846 6, % 5, % margin 11.1% 13.1% 11.6% Net sales *1 27,977 30, % 30, % % 1, % margin 3.1% 1.8% 3.4% Net sales *1 2,911 2, % 3, % % % margin 5.8% 5.0% 5.8% *1: Sales figures include internal sales and transfers between segments. *2: "Other" is not a reportable segment.

7 5. FYE 2013 Review Breakdown by Segment and Operations Trends in sales and operating income margin Chain Operations (Yen, 100 millions) % Power Transmission Units and Components Operations (Yen, 100 millions) % % % 50 5% 50 5% 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FYE 2012 FYE 2013 <Sales by industry> Sales of products intended for the automotive industry entered a growth phase. Sales of machine tools and sales to the steel industry declined. <Sales by region> North America and Europe registered an upturn. Japan slowed in the second half of the year. 0% 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FYE 2012 FYE 2013 <Sales by industry> Sales of machine tools and sales to the steel industry slowed in the second half of the year. Products for the liquid crystal and semiconductor industries remained in a slump. <Sales by region> China and Europe remained healthy. The territories of Japan, Asia and Oceania slowed in the second half of the year. (Yen, 100 millions) : Net sales : margin 0%

8 5. FYE 2013 Review Breakdown by Segment and Operations 7 Trends in sales and operating income margin Automotive Parts Operations Materials Handling Systems Operations (Yen, 100 millions) % (Yen, 100 millions) % % % 50 5% 50 5% 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q <Sales by region> Japan slowed in Q3 but recovered in Q4. North America, Europe, Thailand and Korea remained healthy. Although Japan-based automobile manufacturers were affected by a production decline in China, revenue increased compared with the previous quarter (because of a significant increase in revenue up to September). 0% 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FYE 2012 FYE 2013 FYE 2012 FYE 2013 <Sales by industry> -50 Sales of conveyor equipment for powdered and granular material remained stable. Sales to the steel industry were sluggish. Sales of conveyor equipment for the machine tool industry slowed suddenly in the second half of the year. Mayfran (USA) was included in our consolidated results this year (with a target period of Sept. to Dec. 2012). 0% -5% (Yen, 100 millions) : Net sales : margin

9 6. FYE 2013 Review Segment by Region 8 Sales expanded in various regions of the world as globalization accelerated. FYE 2012 FYE 2013 Year-on-year comparison Full year figure (actual) Full year figure(actual) Percentage increase/decrease Japan Net sales * 112, , % 9,165 8, % margin 8.1% 7.8% North America * Net sales 25,444 29, % 1,338 2, % margin 5.3% 7.0% Europe * Net sales 12,335 14, % % margin 2.0% 2.9% * Asia/Oceania Net sales 13,910 17, % 1,419 1, % margin 10.2% 8.3% Other areas * Net sales % margin - - *Sales figures include internal sales and transfers between segments. <Actual exchange rate> FYE 2012: US$= 79.07, EURO= , Can$= 79.72, A$= 82.72, THB= 2.62, NT$= 2.68, RMB= 12.34, WON= 0.07 FYE 2013: US$= 82.92, EURO= , Can$= 82.77, A$= 85.52, THB= 2.57, NT$= 2.81, RMB= 12.66, WON= 0.07 (Yen, millions)

10 7. FYE 2013 Review Trends in International Sales 9 The international sales ratio rose by 9.1% during the three-year period beginning FYE March 31, International sales ratio: 34.5% International sales ratio: 43.6% Asia/Oceania 11.5% Europe 4.9% North America 16.1% FYE 2010 Consolidated sales of billion Japan 65.5% Asia/Oceania 14.2% Europe 9.2% North America 17.1% FYE 2013 Consolidated sales of 150 billion Japan 56.4% Notes: 1. Sales are based on the location of the customer and classified by country or region. 2. For more detailed information see the "compiled data" appended to this document.

11 8. FYE 2013 Review Capital Investment and Depreciation 10 We undertook a capital spending program that included enhancement of production facilities outside Japan, construction of the Saitama Plant (serving Automotive Parts Operations), and construction of the Tianjin Subsidiary Plant (for Chain Operations). (Yen, 100 millions) (Yen, 100 millions) /3 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 0 Capital Investment (consolidated) Depreciation (consolidated)

12 11 Review of Results For Medium-Term Management Plan 2012

13 1. Outline of Medium-Term Management Plan A 3-year plan for strengthening our management foundation in response to the sudden upheaval in the economic environment. Without being bound to existing approaches, we will reform our earnings structure by reviewing our product strategies and local strategies from a medium- and long-term perspective. Medium-Term Management Plan 2012 Growth & expansion Emergency measures to accommodate sudden changes in the economic environment Strengthening our management foundation to achieve sustainable growth Further enhancing our earnings structure Centennial celebration

14 2. Overview of Medium-Term Plan Although the business environment is changing, the results were roughly as anticipated. Automotive Parts Operations met performance targets as a stable growth engine. Results in the Japanese market have declined for Chain Operations, Power Transmission Units and Components Operations, and Materials Handling Systems Operations, as the challenges of globalization became more apparent. Results of Medium-Term Plan 2012 Net sales Operating income Operating income margin Target Results (achievement rate) 150 billion 150 billion (100%) 13.5 billion 12.5 billion (93%) 9.0 % 8.4 % Three-year Trend in Results for Medium-Term Plan 2012 (Yen, 100 millions) 2,000 1,500 1, , % 1,382 1,448 1, % 8.3% 5.0% 1,500 1, % 8.4% FYE 2010 FYE 2011 FYE 2012 FYE 2013 Sales (Target) Sales (Result) Medium-Term Management Plan 2012 Operating Income Margin (Target) Operating Income Margin (Result) * The target value for year 2 (FYE 2012) of the Medium-term Management Plan is undisclosed. 15% 10% 5% 0%

15 3. Trends in Business Performance of Medium-Term Plan Chain Operations (Yen, 100 millions) % % 8.1% 7.1% 15% 10% 5% Power Transmission Units and Components Operations 0.2% % 0% 0 FYE 2010 FYE 2011 FYE 2012 FYE 年 3 月期 FYE 2011 FYE 2012 FYE 2013 売上高 ( 目標 ) 売上高 ( 実績 ) Medium-Term Management Plan 2012 (Yen, 100 millions) % 11.8% 9.9% 6.6% 9.2% Medium-Term Management Plan % 10% 5% 0% Automotive Parts Operations Materials Handling Systems Operations (Yen, 100 millions) % % 11.1% 10.2% % 10.9% 20% 15% 10% 5% (Yen, 100 millions) % 0.8% 0.2% % 1.8% 15% 10% 5% 0 10 年 3 月期 FYE % 0 FYE 2011 FYE 2012 FYE % Medium-Term Management Plan 2012 Medium-Term Management Plan 2012

16 4. Review of Objectives Strengthen foundation as a manufacturer Main Initiatives and Achievements 15 Business Initiatives Results Chain Operations Power Transmission Units and Components Operations Construction of innovative production lines Intensive production of hypoid motors (gear reducers) in China Aim: Reduce cost of chain for specific applications. Effect: We improved productivity through technological innovation, increased speed, synchronization, in-line operations, and laborsaving. Aim: Reduce costs through intensive production in China and enhance competitiveness in Japan and China. Effect: Sales grew in China. Automotive Parts Operations Materials Handling Systems Operations Dantotsu improvement activities and manufacturing reform initiatives Aim: Improve productivity in our seven global territories and reduce costs. Improve productivity by 30% at the new Saitama Plant for assembly and 15% in the entire Saitama Plant (5 factories). Effect: We promoted cost reductions of 30% 50% through productspecification changes at customer request. * We extended the above expertise to locations outside Japan. Introduction of modular design Aim: Improve design productivity (item processing efficiency). Effect: 60% reduction in quantity of blueprints for sorting systems 50% reduction in indirect worker-hours through reduction in drawings

17 5. Review of Objectives Become a solutions provider, Always put the customer first 16 Initiative Aim Results Eco & Eco Initiative Ecology & Economy: To provide customers with solutions Number of products Sales ratio of new Eco products 18.1% 25.0% 26.8% Reorganization of Power Transmission Products Operations (Chain & Power Transmission Units and Components Operations) Improving combined sales by integrating domestic businesses Provide solutions We provided solutions to end users. Now training salespeople in all product types for further skills improvement. Construction of a General Technical Site for improving skills of Power Transmission engineers Enhance technical services to engineers (customers). (Support available in Japanese, English and Chinese languages.) [Concept] Even without a catalogue at hand, users can view our website to select a product and model number. [Results] 250,000 items have been listed (database of products and model numbers). 200 users per month have registered since the website was updated in April 2013.

18 6. Review of Objectives Hone the Global-Best strategy 17 Strengthening production centers in strategic regions Sales and manufacturing companies have been established mainly in China and along the Indian Ocean Rim. A chain plant was constructed in China (Tianjin) and manufacturing is now under way. A Materials Handling Systems manufacturing company was established in Indonesia and started operation in February. (with 4 manufacturing companies, 7 sales companies) Enhancing the global competitiveness of our major products through M&A (1) Cableveyor acquires Kabelschlepp in Germany (TKG). We integrated the sales business of TKG subsidiaries outside Japan (in North America, China, and Singapore) with the goal of achieving synergies between route sales (Tsubaki) and direct marketing (TKG). (2) Chip & scrap conveyers/acquisition of Mayfran Group Provides global services to Japanese machine tool makers. Expansion brings Tsubaki Power Transmission products to conveyors of the Mayfran Group.

19 7. Examples of Global Solutions 18 Chain Operations/Power Transmission Units and Components Operations Identifying local needs and providing solutions Singapore For boarding bridges We supplied sets of power cylinders, cable carriers, roller chains & sprockets. Malaysia For palm oil factories We supplied special chains and power cylinders for compression and transport of fruit flesh. USA Oil-drilling plant rig We supplied special roller chain & cable carriers. Illustration

20 7. Examples of Global Solutions 19 Materials Handling Systems Operations Automotive Parts Operations Indonesia For Japanese automakers 1. We received three orders for door-transport ceiling-run conveyors for Japanese-affiliated auto factories in Jakarta (Karawang District) in order to make use of the advantages of local production. (Numerous inquiries were also received.) Major international automakers Timing chain drive systems: Zerotech Series We contributed to engines with improved environmental performance. 2. We are gradually expanding into Southeast Asia and markets with customers other than Japanese-affiliated ones. Development concept: We are making almost limitless progress toward zero mass, abrasion stretch, friction and noise. Friction: We achieved a 20 30% reduction compared with conventional products. Temporary factory in Indonesia, in operation since February *Introduced to engines used in 23 models from 6 companies.

21 20 Future Objectives and Strategies

22 1. Our Next Medium-Term Plan 21 We are implementing radical reforms, shifting from a product orientation to a market orientation. Our Medium-Term Plan will be a three-year plan beginning April 1, Growth & expansion Emergency measures to accommodate sudden changes in the economic environment Medium-Term Management Plan 2012 Strengthening our management foundation Medium-Term Management Plan 2016 Strengthening our global competitiveness and earnings structure Toward the sustainable growth phase FYE 2014 Formulation of Medium-Term Plan 2016 FYE March 31, 2015 Medium-Term Management Plan 2016

23 2. Policies for FYE March 31, Structural reform of mainly Chain and Power Transmission Units and Components Operations Marketing Positioning Solutions Change of gear Toward sustained growth Transitioning away from a Japan-approach We will separate production and sales toward business operations with a more market-based regional strategic focus. We are drafting strategies based on positioning. For this reason, we are undertaking radical reforms such as organizational changes.

24 3.Important issues facing Chain Operations, Power Transmission Units and Components Operations, and Materials Handling Systems Operations 23 Marketing: Prioritizing regional characteristics = Transitioning away from a Japan-centric approach By utilizing locations outside Japan that strengthen through new establishments, mergers and acquisitions, we are fulfilling new demand in China, the Indian Ocean Rim, and Europe. Product Strategy Regional Strategy Industrial Strategy Europe Indian Ocean Rim China Establishment of a new global marketing division We are strengthening product development and sales activities through marketing of local origin. Chain Operations and Power Transmission Units and Components Operations: We are fulfilling strong demand by adhering tightly to local origination of new centers. Materials Handling Systems Operations: This is an important area of sales growth. We aim to expand our scale with a focus on our Indonesian Plant. Integration of sales companies Sales activities that offer large-scale advantages (also address management task efficiency) Expansion of the Tianjin Plant (Chain Operations)

25 4. Important Objectives of the Automotive Parts Operations 24 Promoting ongoing globalization and expanding market share across a global seven-region system. 1. Enhancing marketing power Expanding market share among the global big five automakers (Toyota, GM, VW, Nissan Renault, Hyundai) 2. Enhancing our manufacturing Completion of the new Saitama Plant: Rolling out manufacturing reform to all locations outside Japan Expansion of optimal locations for production (GOP): Construction of the Mexico Plant Model expansion of the Zerotech Series Trend in Quantity of Systems Shipped, by Market(Projected) (Tens of thousands of sets) New Saitama Assembly Plant Building (Mass production began in April 2013.) Outside Japan Inside Japan Illustration of Mexico Plant (Mass production Scheduled to begin in January 2014.)

26 25 Settlement of Accounts Forecasts for FYE 2014

27 1. FYE 2014 Consolidated Settlement of Accounts Forecast Expected to increase by 13.3% through economic expansion focused outside Japan. is expected to increase by 8.9% as a result of profit pressures from increased raw materials prices and related factors. Net sales FYE 2013 Year-on-year comparison Full year figure (actual) First half figure Second half forecast Full year forecast Increase/decrease 150,002 82,400 87, , % 12,579 5,700 8,000 13, % margin FYE % 6.9% 9.1% 8.1% Ordinary income 12,813 6,000 7,800 13, % Net income 7,428 3,600 4,500 8, % Net income per share yen yen (Exchange rates 1US$) yen yen (Exchange rates 1EURO) yen yen (Yen, millions) 26

28 2. FYE 2014 Settlement of Accounts Forecasts by Business Segment 27 Expected to increase sales and profits for Automotive Parts Operations and Materials Handling Systems Operations. A decline in profits is expected for Chain Operations and Power Transmission Units and Components Operations despite an increase in income. Chain Operations Power Transmission Units and Components Operations Automotive Parts Operations Materials Handling Systems Operations Other *2 FYE 2013 Full year figure(actual) First half figure Second half forecast Full year forecast Increase/decrease Net sales *1 50,250 26,600 28,200 54, % 3,586 1,330 1,930 3, % margin 7.1% 5.0% 6.8% 6.0% Net sales *1 19,664 9,800 10,600 20, % 1, ,090 1, % margin 9.9% 7.8% 10.3% 9.1% Net sales *1 49,397 27,700 29,100 56, % 6,494 3,100 4,120 7, % margin 13.1% 11.2% 14.2% 12.7% Net sales *1 30,246 18,200 19,400 37, % % margin 1.8% 1.2% 3.9% 2.6% Net sales *1 2,846 1,400 1,700 3, % % margin 5.0% 3.6% 4.7% 4.3% *1: Sales figures include internal sales and transfers between segments. *2: "Other" is not a reportable segment. FYE 2014 (Yen, millions) Year-on-year comparison

29 3. FYE 2014 Analysis of Factors Consolidated Increasing/Decreasing Operating Income 28 FYE 2013 (actual figures) vs. FYE 2014 (forecasts) Increasing factors Decreasing factors Sales increase Currency exchange fluctuation 0.8 billion Other fixed cost increase 2.9 billion Labor cost increase FYE billion 1.8 billion FYE 2014 Increase in operating income: 12.6 billion 1.1 billion 13.7 billion Note: values are rounded off.

30 4. FYE 2014 Capital Investment 29 Major capital investments 1. Enhancement of the global production system (in Japan, U.S.A. and elsewhere) for Automotive Parts Operations 2. Related production facilities for Chain Operations (Kyotanabe Plant, Tianjin Plant) Capital investment and depreciation transitions (Yen, 100 millions) / 3 12/3 13/3 14/3 Plan Power Transmission Units and Components Operations Automotive Parts Operations Materials Handling Systems Operations Headquarters and others Chain チェーン事業 Operations 精機事業マテハン事業他減価償却費 Depreciation Capital investment Depreciation 5.8 billion 9.5 billion 11.8 billion 10.9 billion 7.5 billion 7.4 billion 7.3 billion 7.7 billion

31 5. Reference Data 30 Trends in sales and operating income margin (consolidated) (Yen, 100 millions) 2,000 1,500 1,295 1, % 500 1,477 1, % 10.3% 1, % 1, % 1, % 1,700 1,382 1,448 1, % 8.3% 8.4% 8.1% 20% 15% 10% 5% 0 0% 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 Forecast Trend in dividend per share Yen/Share/Year % % % 24.8% 30.7% 15.4% 14.4% 17.6% 18.5% 35.1% 25% 25.9% 21.4% 19.1% 0% 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 Forecast

32 This reference document describes our business plans and our earnings outlook. The content of this document is based on current information available to our company and on certain assumptions determined as reasonable. It is not intended to represent a performance commitment. Note that actual results may differ from the earnings outlook described herein, as the results are dependent upon a variety of variables.