NGK Insulators, Ltd. Nov. 29
Today's Speakers Name Shun Matsushita Hiroshi Wada Title President & Chief Executive Officer Director & Senior Vice President
Bil. 1st Half Result Sales Operating Income Net Income 152.3 99. 99. 11. 13.4 29. 18.8 2.5 3.5 6. 6.3.5 2. 3. 3.7 Sep.'8 Sep.'9Est. Sep.'9Est. Sep.'9Est. Sep.'9 Sep.'8 Sep'9Est. Sep'9Est. Sep'9Est. Sep.'9 Sep.'8 Sep.'9Est. Sep.'9Est. Sep.'9Est. Sep.'9 (Result) (May'9) (Jul'9) (Sep'9) (Result) (Result) (May'9) (Jul'9) (Sep'9) (Result) (Result) (May'9) (Jul'9) (Sep'9) (Result)
Points of 1stH Result (Unit: Bil.) Sales & Income decreased from the 1stH of previous year Due to worldwide economic slowdown, demand for automotive related ceramic products, ceramic components for semi-conductor production equipment and Beryllium Copper products decreased sharply. Change from the 1stH of previous year Sales 48.9 (Power +3., Ceramic 35.5, Electronics 16.4 ) Op. Income 22.7 (Power+.6, Ceramic 16.7, Electronics 6.6 ) Impact of stronger yen ( 95/$, 128/ER) Sales 5.8 Op.Income 1.4 Forecast for Fiscal year Ending March 21 Sales & Income will decrease from previous year due to weaker demand for automotive related ceramic products, ceramic components for semi-conductor production equipment, Beryllium Copper products and so on, even though the business trend for the Power business is firm.
Net Sales of NGK / Half Term Bil. After consolidation elimination 25 2 15 1 5 174 191 Engineering 32.3 11.8 152 Electronics Power Ceramic Products 4.5 37.5 37. 36.5 43.8 36.1 83.9 78.1 79.7 121 23.1 46.8 99 131 29. 21. 51. 36. 13 2.2 39.1 122 26.3 46.9 51. 42. 51. 44.2 48.3 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 3/ 8 3/ 9 3/ 1(May) 1st Half 2nd Half 3/ 1(Sep)
Income of NGK / Half Term Bil. 4 35 3 25 2 15 1 5-5 Electronics Power Ceramic Products Engineering 34.9 34.5 8.1 4. 23.6 -.9 1st Half 4.1 5.4 4.7 2.2 2nd Half 29. 6.1 3.1 19.8 1st Half 3.8 2.5 4.5 2.4 2.5 1. -3.1 2nd Half -1. 1st Half 12.5 3.5 6.3 2.5 5.5 3.7 4.3 3.5 3.1 3.9 2nd Half 3/ 8 3/ 9 3/ 1(May) -.5 1st Half 1.7 2nd Half 3/ 1(Sep)
Net Sales of NGK After consolidation elimination Bil. 35 32 3 45 365 44 78 273 25 73 6 2 15 162 126 131 1 23 225 5 47 93 93 (Engineering) Electronics Ceramic Products 5 75 81 83 87 86 3/'7 3/'8 3/'9 3/'1Est. 3/'1Est. (May 9) (Sep 9) Power
Income of NGK Bil. 7 6 5 4 3 2 1 52. 29.4 69.4 46. 32.8 24.5 Operating Income Net Income 15. 17. 11. 12.5 3/'7 3/'8 3/'9 3/'1Est. 3/'1Est. annual average (May 9) < /$> <116> <118> <14> <9> <93> < /Euro> <147> <162> <153> <12> <129> (Sep 9)
Factors of Sales Variation Bil. 3 273 FX Rate Automobile related 25-1 -27 Metal related -4 Semi-conductor related Industrial equipment -3-4 NAS +5 Others -4 225 2 3/'9 3/'1
Factors of Op. Income Variation Bil. 4 35 3 32.8 FX Rate -1.7 Automobile related 25 2 15-13.1 Industrial equipment -1.4 Power related +1. Others -.6 17. 1 3/'9 3/'1
Power Business Sales & Operating Income Bil. 1 8 6 After consolidation elimination 75 (6.4) 81 (8.7) 1.7% 8.5% Sales 83 (7.6) Op. Income Ratio 87 86 (8.) (8.) 9.1% 9.2% 9.3% ( )Op.Income 16. 11. 4 6. 2 1. 3/'7 3/'8 3/'9 3/'1Est. 3/'1Est. (May. 9) (Sep. 9) -4.
Overview Electrical Insulators : -Domestic demand for 5KV transmission line project is at peak. -Domestic power demand for industrial use is decreasing. -Demand for UHV and direct current in China is active. -Construction of transmission lines in the Middle East is active. NAS batteries : -Overseas market is active due to orders received from Abudhabi and EDF-EN. -Demand for stabilization of the power distribution system is expected to increase due to the spreading use of renewal energy. Tasks Electrical Insulators : - Reinforce and expand production base in China. - Establish stable goods supply. NAS batteries - Establish increased production. - Promote cost reduction.
Expansion of Power Market in China (Million of KW) 2 Power generation facilities in China Increase from 211 to 215 Increase from 216 to 22 8 million KW/Year 13 th Project 15 Increase from 26 to 21 7 million KW/Year 12 th Project 1 Increase from 21 to 25 6 million KW/Year 11 th Project Inclusive UHV transmission 5 4 million KW/Year 1 th Project 32343538 445162 72 798695 1,26 Start UHV Reinforce UHV Combination 1,65 1 2 3 4 5 6 7 8 9 1 15 2 Sales Forecast in China 8 9 1 15 8.9 1.8 15.5 2. (Unit:Billion of Yen)
Bil. 35. 3. Sales(Export) Sales(Domestic) Op.income(right axis) Sales & Income of NAS batteries business 3. 35. 25. 2. 15. 1. 5. 6.3 1.2 13.3.6 16.7 1.6 21. 2. 3. 5. 5... -5. -.7-1. -15. -2.3-2. 3/'6 3/'7 3/'8 3/'9 3/'1Est. 3/'11Est. 3/'12Est. -5.
Bil. 15 1 162 126 131 24.5% Ceramic Products Business Sales & Operating Income After consolidation elimination (31.) (43.8) 27.% Sales (22.2) Op. Income Ratio 93 93 (4.5) ( )Op.Income (7.) 4. 35. 3. 25. 2. 5 16.9% 7.6% 4.8% 3/'7 3/'8 3/'9 3/'1Est. 3/'1Est. (May 9) (Sep 9) 15. 1. 5..
Overview Due to worldwide economic slowdown, car sales have decreased sharply. Demand will tend to increase mid & long-term due to CO2 and emission regulations being tightened worldwide. Automotive catalytic converters ( Honeycomb Ceramics ) : Worldwide introduction of emissions regulations. Cd-DPF& Large-size honeycombs :Tighter regulations for truck and construction equipment. SiC-DPF : Tighter emission regulations in EU. Stiff competition with other materials. Tasks Honeycomb Ceramics & Cd-DPF & Large-size honeycomb & SiC- DPF: Establish the optimum production framework to deal with reduced demand for production. SiC-DPF :Differentiate from other materials in terms of performance and price.
Bil. 2 15 Sales Forecast of Ceramic Products Business After consolidation elimination 126 162 34 Sales of Other products Sales of Honeycomb ceramics Sales of Cd-DPF & Large size Honeycomb Sales of SiC-DPF 131 1 27 61 36 93 5 56 48 3 2 12 14 35 31 47 7 33 21 3/'7 3/'8 3/'9 3/'1Est. (Sep. 9) Diesel related products
(Million of Car) 2 18 16 14 12 1 8 Automobile Sales Forecast Broken Line:Previous Forecast / Solid Line:Current Forecast BRICs E U U S 6 4 27 28 29 21 211 212 Japan
Electronics Business Sales & Operating Income Bil. 1 8 6 4 After consolidation elimination 73 (13.1) 78 (13.5) 17.8% 17.4% Sales Op. Income Ratio 6 (3.) 5 (2.5) ( )Op.Income 47 (2.) 2 5.1% 5.% 4.3% 3/'7 3/'8 3/'9 3/'1Est. 3/'1Est. (May. 9) (Sep. 9)
Overview Beryllium Copper :Demand decreases due to economic slow down. Ceramic Components for Semi-conductor Production Equipment : Demand decreases due to decline of investments of semiconductor makers. Ceramic Actuators for Color Printer Heads : Demand decreases due to worldwide slow down in printer market. Soshin Electric Products : Demand for industrial equipment and data & communications related products tends to decrease. Tasks Review production framework to cope with declining demand. Promote development and expansion of new product sales.
Bil. Sales Forecast of Electronics Products Business Metal related products 1 5 73 27 78 28 Ceramic components for semi-conductor manufacturing Electronic related products Soshin Electric Co. 22 2 21 11 18 12 14 7 15 13 15 15 11 9 '7/3 '8/3 '9/3 '1/3Est 6 47 (Sep. 9)
($Bil.) 3 Forecast of Market Scale of Semiconductor and Production Equipment ( 単位 :$B) 6 ($Bil.) 25 Semiconductor Market 5 Shipping amount of semiconductor 2 15 1 5 Semiconductor Production Equipment Market 4 3 2 1 Shipping amount of production equipment ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 From WSTS & Gartner
9 Medium Term Estimates / Sales After consolidation elimination Bil. 4 3 2 1 Engineering Electronics Power Ceramic Products 365 44 78 81 162 Market expansion due to tighter emission regulations. Demand for electrical insulators due to the expansion of overseas market. Demand for NAS batteries in overseas market is increasing. 273 6 83 131 23 5 87 93 225 47 86 93 31 7 11 13 3/'8 3/'9 3/'1Est. 3/'1Est. 3/'12Est. (May 9) (Sep 9) (May 9)
9 Medium Term Estimates / Operating Income Bil. 8 6 4 2 Engineering Electronics Power Ceramic Products 69.4 3.2 13.5 8.7 43.8 32.8 3. 7.6 22.2 OP/Sales 19.% 12.% 15. 2.5 8. 4.5 2. 8. 7. 45. 12. 13. 2. 3/'8 3/'9 3/'1Est. 3/'1Est. 3/'12Est. (May 9) 17. (Sep 9) (May 9) 6.5% 7.6% 14.5% ROE 15.3% 8.1% 3.9% 4.3% 1.%
R&D Input Consolidated R&D Consolidated R&D/Sales Ratio ( Bil.) Parent R&D Parent R&D/Sales Ratio 6.3% 6.3% 4.7% 4.7% 4.9% 4.7% 4.9% 4.% 11.3 9.6 3.8% 3.6% 13.2 12.2 12.9 1.6 1.6 11.1 11. 1. 3/'6 3/'7 3/'8 3/'9 3/'1Est. (Sep 9)
45 4 35 3 25 2 Capital Expenditures Bil. 41 2 5 19 31 15 Power Bus. Ceramic Prod.Bus. Engineering Bus. Electronics Bus. Corporate Depreciation and amortization 26 3 3 1 24 26 2 4 1 3 2 4 21 23 26 2 2 19 6 19 1 17 9 5 12 6 6 3 3 3/'6 3/'7 3/'8 3/'9 3/'1Est. (Sep 9)
Summary of Cash Flow ( Bil.) Income before taxes 78.2 Income taxes paid Depreciation Increase in Acct. Rec. Increase / Decrease in inventories Other changes Operating Activities 3/ 8 3/ 9 3/ 1Est. -21.6 26.3 3.4-7.1-12.5 66.7 21. -23. 26.2 12.4-21.3 17.4 32.7 16. 1.8 18.5-18.4 5.6-1.5 22. Property, plant & equip. -21. -3. -22.5 Disposal, investment securities 1.1 1.4 4.5 Other investments 3.2 7. -2. Investing Activities -16.7-21.6-2.
Acquisition of treasury stock -.6 3/ 8 3/ 9 3/ 1Est. -13.7 Cash dividends -6.7-7.4-6.2 Redemption of bonds -2.2-15.2-25.8 Proceeds from new borrowings - - - Other -.6.2 - - Financing Activities -1.1-36.1-32. Effect of exchange rate change 1.6-14.1 - Net Changes in Cash & eq. 41.5-39.1-3. Change in consolidated subsidiaries - -4.2 - Cash & eq. at End of Year 119.8 76.5 46.5
Total Asset & ROE Bil. % 8 Net Asset ROE 3. 7 6 5 489 515 557 444 434 25. 2. 4 3 2 1 276 34 338 15.3 31 312 1.8 6.7 8.1 4.3 3/'6 3/'7 3/'8 3/'9 3/'1EST 15. 1. 5..
EPS & Payout Ratio 16 15 14 13 12 11 1 9 8 7 6 5 4 3 2 1 EPS Dividents Payout Ratio 26.5% 48.99 87.23 18.3% 13 16 136.36 (Unit: ) 73.66 41.8% 29.9% 16.1% 38.26 22 22 16 '6/3 '7/3 '8/3 '9/3 '1/3Est Number of Stocks Issued 357Mil 357Mil 338Mil 338Mil 338Mil Number of utstanding Stocks 337Mil 337Mil 337Mil 327Mil 327Mil 12 14 16 18 2 22 24 26 28 3 32 34 36 38 4 42 44 46 48 5 52 54 56 58 6 62 64 66 68 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 1 12 14 16 18 11 112 114 116 118 12-4 -38-36 -34-32 -3-28 -26-24 -22-2 -18-16 -14-12 -1-8 -6-4 -2 24681
Semi-annual Sales and Operating Income by Segment (1) After consolidation elimination ( Bil.) Total 1st H 3/ 9Actual 2nd H Total 1st H 3/ 1 Est. 2nd H Total Sales 152.3 12.9 273.2 13.4 121.6 225. Operating Income 29. 3.8 32.8 6.3 1.7 17. OI Margin 19% 3% 12% 6% 9% 8% Power Business Sales 36.1 46.8 82.9 39.1 46.9 86. Operating Income 3.1 4.5 7.6 3.7 4.3 8. OI Margin 9% 1% 9% 9% 9% 9%
Semi-annual Sales and Operating Income by Segment (2) After consolidation elimination ( Bil.) Ceramic Products Business 1st H 3/ 9 Actual 2nd H Total 1st H 3/ 1 Est. 2nd H Total Sales 79.7 51. 13.7 44.2 48.3 92.5 Operating Income 19.8 2.4 22.2 3.1 3.9 7. OI Margin 25% 5% 17% 7% 8% 8% Electronics Business Sales 36.5 23.1 59.6 2.2 26.3 46.5 Operating Income 6.1-3.1 3. -5. 2.5 2. OI Margin 17% - 5% - 9% 4%
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NGK Insulators, Ltd. 2-56, Suda-cho, Mizuho-ku, Nagoya 467-853, Japan Finance & Accounting Department Tel. : + 81-52-872-7186 Fax. : + 81-52-872-716 E-mail : ir-office@ngk.co.jp NGK Homepage Address (English Version) : http://www.ngk.co.jp/english/ir/index.html