The Fifth Medium-Term Management Plan Explanatory Meeting Maruichi - - PowerPoint PPT Presentation
The Fifth Medium-Term Management Plan Explanatory Meeting Maruichi Steel Tube Ltd. Chairman Hiroyuki Suzuki Index I Results and Reflections on the Fourth Medium-Term Management Plan P.2 II Overview of the Fifth Medium-Term Management Plan
Index I Results and Reflections on the Fourth Medium-Term Management Plan P.2 II Overview of the Fifth Medium-Term Management Plan P.15 III (Reference) Business Environment Surrounding the Group P.34
March 28, 2018
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Final year of the Third Medium-Term Management Plan
Results
Final year of the Fourth Medium-Term Management Plan
FY2014 Results FY2015 Results FY2016 Results FY2017 Projections FY2017 Targets Net sales (billion yen)
152.7 144.9 137.2 153.4 185.0
Operating income (billion yen)
17.7 17.0 24.5 19.6 22.5
Operating margin
11.6% 11.7％ 17.8% 12.8% 12%
ROE
3.9% 4.7% 7.4% 5.7％ 6.5% and over
Shareholder return ratio (3-year average)
52.2% (3-year average) 255.2% 49.6% 48.6% 70% and over (3-year average) 81.6％ (3-year average)
Return of profit to society (3-year average)
¥14 million (3-year average)
¥21 million ¥22 million ¥23.5 million
¥21 million (3-year average) ¥22.16 million (3-year average)
Targets achieved
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1) Net sales: There was a considerable target shortfall due to the less-than-planned sales volume and a considerable drop in steel price 2) Operating income: Although the target was achieved both domestically and overseas in FY2016, there was a shortfall in FY2015 and FY2017 3) Operating margin: The target was achieved in FY2016 and FY2017 due to a recovery in revenue from overseas 4) ROE: Although the target was achieved with 7.4% in FY2016, ROE for FY2017 ended at 5.7% due to a decrease in income 5) Targets for shareholder return ratio and social contribution were achieved
(billion yen)
Targets Results Targets Results Targets Results
Total net sales
174.2 145.0 180.5 137.2 185.0 153.4
Domestic
103.5 91.4 107.3 88.7 108.5 96.3
Overseas
70.7 53.6 73.2 48.5 76.5 57.1
(U.S.)
36.1 25.8 36.7 22.4 39.6 26.6
(Asia)
34.6 27.7 36.5 26.1 36.9 30.5
Total operating income
20.5 17.0 21.9 24.5 22.5 19.6
Domestic
18.0 17.3 18.6 19.7 19.1 16.6
Overseas
2.5 (0.3) 3.3 4.8 3.4 3.0
(U.S.)
1.1 (1.0) 1.7 2.2 1.7 2.0
(Asia)
1.4 0.6 1.6 2.6 1.7 1.0
Operating margin
11.8% 11.7% 11.8% 17.9% 12.2% 12.8%
Domestic
17.4% 18.8% 17.3% 22.2% 17.6% 17.2%
Overseas
3.5%
4.5% 9.9% 4.5% 5.3%
Exchange rate (yen)
115 121.05 115 108.84 115 112.37
FY2015 FY2016 FY2017
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Targets of final year of the Fourth Medium-Term Management Plan (FY2017) Average shareholder return ratio during the three years → 70% and over; FY2017 ROE → 6.5% and over
3.9% 5.0% 3.6% 5.0% 6.1% 3.9% 4.7% 7.4% 5.7% 70.3% 53.7% 130.4% 61.5% 50.5% 46.9% 255.2% 49.6% 48.6%
0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%
FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 (Projections)
ROE Shareholder return ratio
Shareholder return ratio: 3-year average of 81.6%
(Note) FY2015: A buyback of 2 million shares and a decrease in net income due to impairment of securities holdings raised the shareholder return ratio to 255% (Note)
1) Domestic Results
bases of Maruichi Kohan Ltd. (The total investment amount was ¥12.5 billion.)
2) Results and Reflections Overseas
facilities in Vietnam and was unable to keep the business in the black.
establishing additional large-diameter tube lines.
3) Capital Policy and Social Contributions
education, culture, sports, medical care, and others.
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Major capital investments during the Fourth Medium-Term Management Plan Domestic
Relocation of Yokohama Sales Office of Maruichi Kohan: ¥1.9 billion Sakai Plant: Renovation of No. 1 Unit and terminal piers: ¥1.5 billion Shikoku Maruichi: Solar power generation equipment: ¥0.65 billion Tokyo Plant: Renewal of No. 1 Unit: ¥0.5 billion Relocation of Hokuriku Sales Office of Maruichi Kohan: ¥1.2 billion Construction of new Tokyo Plant (cutting-to-size plant): ¥0.35 billion
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Overseas MMX: No. 2 Plant: ¥0.8 billion MAC: Facilities renewal: ¥0.6 billion KUMA : 4-inch mill: ¥0.2 billion SUNSCO: 2-inch mill: ¥0.2 billion
Trends in the amount of capital investment and depreciation (hundred million yen)
Capital investment (Domestic) Capital investment (Overseas) Depreciation (Domestic) Depreciation (Overseas) 2012 2013 2014 2015 2016 2017
October 2015 Relocation of Yokohama Sales Office of Maruichi Kohan March 2016 Completion of consolidation of Osaka plants into Sakai plant April 2016 Began selling power, solar power generation equipment at the Shikoku Plant August 2016 Completion of renewal construction of No. 1 Unit at Tokyo Plant August 2017 Completion of renewal construction of galvanizing line at the Takuma Plant (Implemented in three construction phases from 2015) November 2017 Relocation of Hokuriku Sales Office of Maruichi Kohan (Added new plans to the Fourth Medium- Term Management Plan. Began operation on November 13) January 2018 Completion of renewal construction of No. 1 Unit at the Sakai Plant (Mill, cutter, chamfering machine) (Implemented in three construction phases from 2015) January 2018 Completion of renewal construction of No. 1 Slitter at the Sakai Plant
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・ Acquired structural tube division of Evraz NA
・ Expanded business in the U.S. and Canada by further enhancing “Production Where Demand Exists” in the U.S. in cooperation with MAC (Los Angeles) and Leavitt (Chicago)
MAC (Los Angeles, California) Leavitt (Chicago, Illinois) MOST (Portland, Oregon) MOST
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Trends in business performance (including HANOI) (Unit: million US$)
Net sales
Operating income
161 (3) 205 2 256 (2) 196 5
December 2016 Results
202 17
December 2017 Projections
226 (1) 277 5
Fourth Medium-Term Plan (Dec. 2017) Targets
December 2015 December 2014 December 2012 December 2013
Announced in November 2017
posted due to a recovery in steel market conditions, a deficit was posted in FY2017
to the impact of protectionism in the export markets (U.S., Indonesia, Thailand, Malaysia, etc.) and issues concerning the sales capabilities and stable operation of facilities in Vietnam ⇒ Issues for the next Medium-Term Plan
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Purchased an adjacent 10,000m2-area to build a cutting plant
Purchased area
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Bangalore Plant began
diameter tubes began
Bangalore Plant 2-inch mill 4-inch mill for large-diameter tubes
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MAC (the U.S.) Leavitt Chicago Plant (the U.S.) ISTW Semarang Plant (Indonesia) Maruichi Metal Product (Foshan) Co., Ltd. (China) ISTW Jakarta Plant (Indonesia) SUNSCO (Vietnam) KUMA (India) Manesar Plant SUNSCO (Hanoi) (Vietnam)
Asia Americas
Maruichi Metal Product (Tianjin) Co.,
J-Spiral (Vietnam) Maruichi Metal Product Wuhan Branch (China) MARUICHIMEX (Mexico) ISTW Cikarang Plant (Indonesia)
AMX (Mexico) MOST (the U.S.) KUMA (India) Bangalore Plant MPST (Philippines)
Scheduled to begin operation in 2019 : Began operation / expansion decided during the Fourth Medium-Term Plan
Overseas Production Facilities
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Major initiatives in FY2017 (●Continuing ●New)
Sponsoring the 69th Shōsōin Exhibition (from FY2012) Support for NPO Asia Prevention of Blindness Association (from FY2015) Sponsoring Osaka Philharmonic Association (from FY2015) Support for “iPS Cell Research Fund” at the Center for iPS Cell Research and Application, Kyoto University (from FY2015) Sponsoring the “Theater of the Heart” activities of Shiki Theatre Company (from FY2015) Sponsoring “Heisei Osaka Amanogawa Legend 2017” (from FY2016)
Support promotional activities for Osaka/Kansai to host the 2025 World Expo (Official Supporter)
Provide scholarships equivalent to an annual tuition at a senior secondary school in the Pilani ward in the state of Rajasthan for 200 students recommended by the school on the basis of their marks and families’ financial situation
Support activities to advance Kansai-wide initiatives to promote tourism, with the aim of revitalizing the industry in Kansai
Support for relocation of an accommodation facility in Suita City, Osaka Prefecture, for families of children hospitalized at the National Cerebral and Cardiovascular Center, to Northern Osaka Health and Biomedical Innovation Town (KENTO)
Providing approximately 0.5% of nonconsolidated net income after payment of dividends for cultural, educational, sports, environmental protection, and other activities in local communities in Japan and overseas
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is not expected to increase.
and sustain a moderate growth. Emerging countries are expected to continue to achieve a high growth.
Preparations for the shift to electric vehicles need to be started.
downturn in the steel price.
human resources” are the issues facing enterprises.
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Net sales (billion yen)
Operating income (billion yen)
Operating margin
ROE
Shareholder return ratio
Social contribution (million yen)
売上高 比 率 営業利益 比 率 売上高 比 率 営業利益 比 率 日 本 96,305 62.8% 16,429 83.8% 106,000 60.6% 18,400 76.7% 北 米 26,557 17.3% 1,956 10.0% 32,000 18.3% 2,600 10.8% ア ジ ア 30,538 19.9% 1,215 6.2% 37,000 21.1% 3,000 12.5% 調整額 0.0% 0.0% 0.0% 0.0% 合 計 153,400 100.0% 19,600 100.0% 175,000 100.0% 24,000 100.0%
【単位 百万円】
2018 年 3 月 期 予 想 第 ５ 次 中 計 2021 年３ 月期 目標
18 [Unit: million yen] Projections for Year Ending March 31, 2018 Fifth Medium-Term Management Plan Targets for Year Ending March 31, 2021 Net sales Ratio Operating income Ratio Net sales Ratio Operating income Ratio Japan North America Asia
Reconciliations
Total
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Net sales: Increase net sales by expanding sales volume overseas and by recovering sales prices in Japan and overseas
Net sales/Foreign net sales ratio (¥hundred million, %)
Domestic net sales U.S. Asia Foreign net sales ratio 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
2.1-fold increase
1.8-fold increase 20
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Net sales for overseas building materials (Consolidated subsidiaries) (US$ thousand)
8.8-fold increase 6.6-fold increase
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Net sales for overseas automobiles and motorcycles (Consolidated subsidiaries) (US$ thousand)
Increase in net sales related to overseas automobiles and motorcycles from 2009
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Operating income/Foreign operating income ratio (¥hundred million, %)
Domestic operating income
U.S. Asia Foreign operating income ratio 2009
Trends in operating margin
Overseas Japan Overall
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Social contribution target： Provide approximately 0.5% of nonconsolidated net income after payment of dividends (¥30 million/year) for cultural, educational, medial care, sports, environmental protection, and other activities in local communities in Japan and overseas
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Shareholder return ratio (excluding share buybacks) and ROE (%)
Shareholder return ratio (excluding share buybacks) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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(Domestic: ¥13.0 billion; Overseas: ¥8.0 billion)
Major capital investment plans ・Japan: Sakai: Renewal of electrical substation facilities, renewal of SR; Tokyo: Renewal of slitter; Takuma: Renewal of rolling line; Nagoya: Renewal of 6-inch mill refining process/new installation
・Overseas: The three U.S. companies: Renewal/establishment of 2-inch mill lines; MAC: Construction of warehouse; MOST: Construction of additional building; MMX and SUNSCO (HNI): Construction of additional building; KUMA: Enhancement of production capabilities; MPST in Philippines: Construction of a new plant; SUNSCO (HCM): Enhancement of cold-rolling facilities, etc.
26z 49 51 51 30 30
49 51 30
Trends in the amount of capital investment and depreciation (hundred million yen)
Capital investment (Domestic) Capital investment (Overseas) Depreciation (Domestic) Depreciation (Overseas)
2015 2016 2017 2018 2019 2020
and by further strengthening marketing capabilities Leavitt/MAC: Enhancing quality and productivity of small-diameter pipes MOST: Begin production and sales of small-diameter pipes; Expand product lineup
Reviewing unprofitable businesses; Strengthening domestic sales capabilities mainly for pipes that are unaffected by trade policies of export destinations; Reducing costs by improving facility operating rates and yield, and streamlining personnel in back-office divisions ⇒ keeping in the black
capabilities in line with the expanded production in each country
Facilitating the replacement of employees dispatched from the head office with local human resources
royalty, or the like
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in March 2018) Renewal of 2-inch mill line (to be completed in December 2018)
(3,250m2) (to be completed in April 2018) and construction of additional 2-inch mill line (operation scheduled to start in October 2018)
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Front: No. 1: 4-inch mill; Back: No. 2: 2-inch mill
Mexico, Vietnam (Hanoi), Philippines: Capital investments and construction of a new plant in line with the expanded production of automobiles and motorcycles
Construction of an additional cutting plant by acquiring an adjacent area: approx. 3,150m2
Construction of additional plant: approx. 2,700m2
(MPST) in Philippines: operation scheduled to start in Spring 2019 Site area of the new plant：approx. 30,000m2; Building: approx. 8,000m2
SUNSCO (HNI) MPST/planned site MMX MPST Conceptual drawing
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1404 2062 2284 2287 3071 4399 4908 6000 6867 4241 3518 4185 6130 7008 7725 9000 2000 4000 6000 8000 10000 12000 14000 16000 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2020
Dividends from overseas/Royalty/SV Fee
Royalty/SVFee Dividend
(US$ thousand)
・Domestic plants: Renewal of old facilities; Labor saving by automatic
and maintenance ・Domestic administrative division: Efficient clerical work and labor saving by introducing new systems incorporating AI technology to accounting/personnel/administrative operations ・Overseas: Increasing productivity by enhancing the level of local human resources
efficiency, and strengthening safety measures (Reducing electricity consumption through a shift to LED lights; Chrome-free production, etc.)
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⇒Continuing dividend policy of “nonconsolidated ordinary income x (1- effective corporate tax rate) x 50%”
Returning the effect of the decrease in the effective corporate tax rate as dividends Maintain minimum dividend of 50 yen per share
nonconsolidated net income after payment of dividends as social contribution ・Japan: Continuing contribution to the fields of culture, art, sports promotion, medical care, education, and natural environment protection ・Overseas/Emerging countries: Increasing contributions to poverty eradication, health care, medical care, and education promotion (Vietnam: Supporting the Asia Prevention of Blindness Association India: Offering scholarships to high school students in poor neighborhoods and creating jobs by expanding business)
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The U.S. and emerging countries will maintain comparatively high growth rates. The Japanese economy will recover moderately. (However, the impact of a consumption tax
hike is expected in 2020)
(Source: Prepared based on projections by IMF and others)
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Japan U.S. China India Mexico Vietnam Indonesia Philippines
Projections of economic growth rate
Demand for steel in Japan is gradually decreasing over the long term
(Source: Prepared based on a report by The Japan Iron and Steel Federation, etc. Projections for 2021: Documents published by Mizuho Bank, Ltd.) 35
2017
(projections)
2021
(projections)
Demand for steel Production volume of crude steel
Domestic production volume of crude steel / Demand for steel (10 thousand tons)
The steel price will rise globally in line with the steel price hike in China
(Source: Prepared based on CRU Index report)
US$/mt
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(Source: Prepared based on a report by the Japan Automobile Manufacturers Association, Inc., etc.)
Overseas production volume has nearly doubled from 2009
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Overseas ratio Overseas production Domestic production
Automobile overseas production volume (10 thousand units)
Plans and forward-looking statements herein are based on the Company’s judgment drawn from currently available information. Please note that actual results may differ significantly from such plans and forward-looking statements due to various important factors.
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