Financial Results for FY2015-Q3 › en › about_us › ir › financial › ... · -Record high in...

0© 2015 OSG Corporation

Financial Resultsfor FY2015-Q3

October, 2015OSG Corporation


OSG at glance

Tap

Rolling dies

End millDrill

Indexable tools

1. Products

・Consumable cutting tools used in machine tools

・World top market share (30%) in taps

2. Strengths

・High-value added cutting tools

・Excellent after-sales service

・Global sales & service network across 29 countries

3. Dividend policy

・Maintain over 30% payout ratio (consolidated)

Tools to cut threads

Tools to shape metalTools to make holes

Tools to shape metal

Tools to form threads

4. Growth strategies

・Development of New Customers

・Flagship Products Strategy

・M&A strategy

Note regarding forecast

This material includes forward-looking statements based on information available at the time of release. The forecasts and other forward-looking statements are not guarantees of future performance. Actual financial results may differ from the above forecasts due to known and unknown risks, uncertainties, and other factors.


Financial summary

FY14-3Q FY15-3Q(9 months) (9 months)

Net sales 74,523 83,824 9,301 +12.5% 112,800

Operating profit 12,731 16,680 3,948 +31.0% 21,500

OPM 17.1% 19.9% - - 19.1%

Ordinary profit 12,564 16,631 4,066 +32.4% 21,600

Net profit 7,076 9,941 2,864 +40.5% 12,800

EPS(yen) 74.53 104.68 30.15 +40.5% 134.80

ChangeFY15 fcst.

Annual

(Millions of yen)

Net sales Operating profit Net profitOrdinary profit

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY14 FY15

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY14 FY15 FY14 FY15 FY14 FY15

*Forecast was revised upward on July 9.

*


Review

Increase in sales and profit- Record high in sales and profits for 9 months by improved production ability and high operation rate.

- Operating profit margin for 3 months in Q3 was 20.5%, for 9 months was 19.9% and approached 20% which is long-term vision of management plan.

Stable financial condition- Equity ratio 67.2% (2.9 points increase from the previous year)

- EBITDA(9 months) 223 billion yen, 26.7%

- ROE 11.7% (As of the end of FY2014)

Review by region- Japan

Domestic demand of catalog items continued to be in good condition, special items were same level year on year.

Overseas demand kept strong. Capital investment and high operation improved lead time of production.

- The Americas

In North America, automotive, aerospace industries and catalog items continued to be in good condition.

In South America, the earnings returned to the black due to improved export business.

- Europe

Orders increased from precision parts industry, in addition to aerospace.

Sales and profit increased by expanding local areas including Eastern Europe and Turkey .

- Asia

In China, the slow down of automotive production rate resulted in the decrease of tool demand.

In South Asia, Thailand and India continued healthy growth.

In Korea, large orders from IT industry were received in Q3, too.

Results for the capital investment- CAPEX 9.0 billion yen (Revision of annual forecast of 11.0 billion yen)

- Depreciation 5.7 billion yen (Revision of annual forecast of 7.8 billion yen)


Operations by geographical segment

FY14-3Q FY15-3Q Change in local (9 months) (9 months) currency

Japan Net Sales 46,372 49,896 3,524 +7.6% -O.P 6,739 8,602 1,863 +27.6% -O.P.M 14.5% 17.2%

The Americas Net Sales 13,465 16,696 3,231 +24.0% +6.9%O.P 1,387 2,647 1,259 +90.8% +65.4%O.P.M 10.3% 15.9%

Europe Net Sales 7,509 8,392 883 +11.8% +13.0%O.P 897 959 62 +6.9% +8.4%O.P.M 12.0% 11.4%

Asia Net Sales 20,344 25,442 5,097 +25.1% +9.6%O.P 3,871 5,219 1,348 +34.8% +19.1%O.P.M 19.0% 20.5%

Total Net Sales 87,692 100,427 12,735 +14.5%O.P 12,895 17,428 4,533 +35.2%

Eliminations Net Sales -13,168 -16,603 -3,434O.P -163 -748 -584

Consolidated Net Sales 74,523 83,824 9,301 +12.5% -O.P 12,731 16,680 3,948 +31.0% -O.P.M 17.1% 19.9%

Change

(Millions of yen)


Net sales by geographical segment(Millions of yen)

Japan The Americas

Europe Asia

2,855 2,799

1,607

1,9792,144 2,122

2,4062,541 2,561

2,407

2,738

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

8,5898,927

7,9257,590

7,2266,5156,6036,4446,301

5,843

5,217

0

2,000

4,000

6,000

8,000

10,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY14 FY15FY13 FY14 FY15FY13


16,288

17,776

12,207

14,44813,88015,18114,545

16,229 16,87415,83115,597

0

4,000

8,000

12,000

16,000

20,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

5,637 5,629

4,768

5,4284,934

4,5054,1914,3554,503

4,052

3,372

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4


Operating profit by geographical segment(Millions of yen)

Japan The Americas

Europe Asia

386

282

128

210241

187

254

310332

228

290

0

100

200

300

400

500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1,675

708

1,104

1,343

1,0561,145

1,250

1,4751,4431,561

1,982

0

400

800

1,200

1,600

2,000

2,400

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY15FY13 FY14 FY15FY13


2,890

3,144

1,037

2,064

1,581

2,105 2,1042,241

2,573 2,5672,393

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

878946

667

822

616

515

204

506569

357

212

0

200

400

600

800

1000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY14


Millions of yen

Overseas sales ratio

41.4%

44.3% 45.8%

49.8%

48.6%

49.7%48.0%

53.5%

54.6%

58.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

0

20,000

40,000

60,000

80,000

100,000

120,000

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15-3Q

Asia

Europe

The Americas

Japan

Japan

41.2%

AM

19.6%

Europe

10.1%

Asia

29.1%

2015-3Q (9 months)

(9 months)


-2,041

-840

+3,736+4,403

+111

-2,151

-1,096

+8,616

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

Cash and T

D

Receivables

Inventories

Fixed assets

Other current

assets

Current

liabilities

Long-term

liabilities

Net assets

Changes in B/S14/11E 15/08E Change

Cash & TD 22,547 20,506 -2,041Receivables 21,628 20,788 -840Inventories 26,721 30,457 3,736Other current assets 4,561 4,672 111Fixed assets 66,842 71,245 4,403Total assets 142,302 147,671 5,369Total current liabilities 22,236 20,084 -2,151Total long-term liabilities 19,122 18,026 -1,096Total net assets 100,943 109,560 8,616Total liabilities and net assets 142,302 147,671 5,369

Equity ratio 64.3% 67.2%Receivable turnover period 78 68 daysInventory turnover period 3.2 3.3 mounths

Cash and TD 22,547 20,506 -2,041Debt 20,009 20,955 946Net Cash 2,538 -448 -2,987

(Millions of yen)

B/S overview


-20,000

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15fcst

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000Sales

O.P.

N.P.

Sales ProfitConsolidated results

■Financial forecast for FY2015 (revision)

Interim Year-end AnnualPayout

ratioDividend per share (yen) 26.00 20.00 46.00 34.1%

■Dividend forecast

Exchange rateFY2014-Q3 result ： 1US$= 102.19yen 1Euro=139.89yenFY2015-Q3 result ： 1US$= 120.96yen 1Euro=135.70yenFY2015 forecast ： 1US$= 120.00yen 1Euro=135.00yen

Estimated sales growth (Annual, year over year)Japan +2.7% The Americas +20.0% Europe +14.0% Asia +20.0%

Amount Growth Amount GrowthNet Sales 112,800 +11.6% 53,300 +8.6%Operating profit 21,500 +23.5% 8,700 +36.4%as % of sales 19.1% 16.3%Ordinary profit 21,600 +22.9% 11,200 +36.8%as % of sales 19.1% 21.0%Net profit 12,800 +28.1% 8,000 +13.1%as % of sales 11.3% 15.0%EPS (yen) 134.77 84.23CAPEX 11,000Depreciation 7,800

Consolidated Parent company

Forecast for FY2015 (revised forecast)(Millions of yen)


Sales org.

Production and sales org.

Expansion of overseas business

The Americas1968 OSG USA (USA)1974 OSG Sulamericana de

Ferramentas (Brazil)1988 OSG Canada1994 OSG Royco (Mexico)2013 PRIMUS COATING

(Mexico)

Europe1999 OSG UK2000 OSG Scandinavia (Denmark)2002 OSG Comaher (Spain)2003 OSG GmbH (Germany)2003 OSG Italia2009 OSG Slovakia (Slovakia)2012 OSG Turkey 2012 Romsan International (Romania)2012 OSG POLAND2013 OSG PN TOOLS (UK)2014 OSG Belux (Belgium)2015 David Tools (Belgium)

2008 Fudian (China)2008 Kunshan Dabao (China)2008 OSG Vietnam2008 OSG Philippines2011 Taiho Coating Service

(Taiwan)

Asia1970 Taiho Tool (Taiwan)1985 OSG Korea1990 OSG Asia (Singapore)1996 OSG Thailand1997 Da-Bao (Dongguan) Tool (China)2001 OSG Shanghai (China)2001 Carbide Cutting Tool (India)2004 OSG Shanghai plant (China)2005 OSG India2007 OSG Trading (China)2007 OSG Indonesia2007 Ningbo Dabao (China)2008 QINGDAO HAOTAI (China)

Europe1997 OSG Europe Logistics

(Belgium)1997 OSG France1997 OSG Nederland (Netherlands)


(Millions of yen)

Appx.1 Consolidated balance sheet

14/11E 15/08E Change 14/11E 15/08E ChangeCurrent Assets 75,459 76,425 966 Current Liabilities 22,236 20,084 -2,151

Cash & time deposits 22,547 20,506 -2,041 Payables 4,159 4,390 231Receivables 21,628 20,788 -840 Short-term borrowings 3,934 4,711 776Inventories 26,721 30,457 3,736 LT borrowings, current portion 523 470 -53Other 4,771 4,856 85 Income taxes payable 3,751 2,654 -1,097Allowance for -209 -183 25 Accured expenses 6,486 3,684 -2,802doubtful accounts Other 3,380 4,173 793

Fixed Assets 66,842 71,245 4,403 Long-term Liabilities 19,122 18,026 -1,096PP&E 56,190 60,536 4,346 Convertible bonds 15,000 14,850 -150Intangible assets 1,302 1,477 174 Borrowings 551 923 372Investments & other 9,349 9,231 -117 Liabilities for employees' 261 360 98

retirement benefitsOther 3,309 1,892 -1,416

Total Liabilities 41,358 38,111 -3,247Total Equity 100,943 109,560 8,616

Common stock 10,404 10,404 0Current ratio 339% 381% +42pt Capital surplus 12,051 12,090 38Quick ratio 199% 206% +7pt Retained earnings 66,837 73,143 6,305Equity capital 91,458 99,165 +7,706 Treasuary stock -1,209 -1,104 105Equity ratio 64.3% 67.2% 2.9pt Unrealzed gain on 2,044 2,278 233Equity per share(yen) 963.15 1,043.33 +80.18 availabe-for-sale securitiesInterest-beating debt 20,009 20,955 +946 Foreign currency 1,328 2,352 1,023Net Cash 2,538 -448 -2,987 translation adjustments

Minority interests 9,485 10,395 910Total 142,302 147,671 5,369 Total 142,302 147,671 5,369


Q1 Q2 Q3 Q4

% % % % % %

Net sales 23,660 25,575 25,286 26,508 26,665 100.0 29,521 100.0 27,637 100.0 83,824 100.0 74,523 100.0 9,301 +12.5

Cost of sales 14,253 14,862 14,129 14,816 14,899 55.9 16,424 55.6 14,840 53.7 46,164 55.1 43,245 58.0 2,919 +6.8

Gross profit 9,407 10,713 11,157 11,692 11,765 44.1 13,097 44.4 12,797 46.3 37,660 44.9 31,278 42.0 6,382 +20.4

SG&A expenses 6,087 6,214 6,243 7,008 6,911 25.9 6,935 23.5 7,133 25.8 20,980 25.0 18,546 24.9 2,433 +13.1

Operating profit 3,319 4,498 4,913 4,683 4,854 18.2 6,161 20.9 5,663 20.5 16,680 19.9 12,731 17.1 3,948 +31.0

Non-operating profit 386 183 271 869 334 245 317 897 841 56

Non-operating expenses 299 301 405 549 420 205 320 946 1,008 -62

Ordinary profit 3,406 4,380 4,777 5,003 4,769 17.9 6,201 21.0 5,660 20.5 16,631 19.8 12,564 16.9 4,066 +32.4

Extraordinary gain 0 0 0 0 0 0 0 0 0 0

Extraordinary loss 3 99 31 14 0 0 0 0 133 -133

Profit before taxes 3,403 4,281 4,746 4,988 4,769 17.9 6,201 21.0 5,660 20.5 16,631 19.8 12,430 16.7 4,200 +33.8

Income taxes 1,186 1,602 1,491 1,772 1,630 1,893 1,929 5,452 4,280 1,171

Minority interests 330 342 399 303 336 496 404 1,237 1,072 164

Net profit 1,885 2,335 2,855 2,912 2,803 10.5 3,811 12.9 3,327 12.0 9,941 11.9 7,076 9.5 2,864 +40.5

FY2014

Q1 Q2

FY2015Change

9 monthsQ3 9 months

FY2014

(millions of yen)

Appx.2 Consolidated income statement


2006 2007 2008 2009 2010 2011 2012 2013 2014 2015-3QNet sales (mill.yen) 88,862 94,164 97,024 53,325 69,513 80,959 84,083 88,378 101,031 83,824

Sales growth （％） 14% 6% 3% -45% 30% 16% 4% 5% 14% 13%

Cost of sales (mill.yen) 54,376 58,159 60,449 39,203 44,605 48,439 49,381 52,777 58,061 46,164Gross profit (mill.yen) 34,485 36,004 36,574 14,122 24,907 32,519 34,702 35,601 42,970 37,660SG&A expenses (mill.yen) 19,030 20,647 22,158 16,857 17,383 20,214 20,747 22,774 25,554 20,980Operating income (mill.yen) 15,455 15,356 14,416 -2,735 7,524 12,305 13,954 12,827 17,415 16,680Ordinary income (mill.yen) 14,940 14,570 13,505 -2,703 6,699 11,374 13,695 13,910 17,568 16,631Net income (mill.yen) 7,917 8,013 7,376 -3,769 3,772 5,904 7,138 8,619 9,989 9,941Margins:Gross profit margin （％） 38.8% 38.2% 37.7% 26.5% 35.8% 40.2% 41.3% 40.3% 42.5% 44.9%SG&A as % of sales （％） 21.4% 21.9% 22.8% 31.6% 25.0% 25.0% 24.7% 25.8% 25.3% 25.0%Operating income （％） 17.4% 16.3% 14.9% -5.1% 10.8% 15.2% 16.6% 14.5% 17.2% 19.9%Ordinary income （％） 16.8% 15.5% 13.9% -5.1% 9.6% 14.0% 16.3% 15.7% 17.4% 19.8%Net income （％） 8.9% 8.5% 7.6% -7.1% 5.4% 7.3% 8.5% 9.8% 9.9% 11.9%

Average FX rate: 1USD (yen) 116.41 118.89 107.32 94.94 89.29 80.71 78.89 93.16 102.98 120.96Average FX rate: 1Euro (yen) 143.63 159.00 161.90 128.83 120.65 112.80 102.63 122.62 139.37 135.70

Total assets (mill.yen) 122,451 127,044 122,383 113,382 105,635 104,373 121,689 134,503 142,302 147,671Total shareholders' equity (mill.yen) 60,081 64,295 64,251 55,931 57,117 59,367 64,482 80,024 91,458 99,164Per share:Net income (yen) 81.00 82.42 76.53 -39.22 39.34 62.18 75.16 90.76 105.20 104.68Cash diviends (interim) (yen) 12.00 12.00 12.00 0.00 4.00 6.00 10.00 10.00 14.00 26.00 (year end) (yen) 14.00 14.00 12.00 3.00 8.00 12.00 13.00 20.00 20.00 20.00(fcst)Total shareholders' equity (yen) 615.07 667.01 666.71 582.19 601.44 625.14 679.01 842.71 963.15 1,043.33

Numbers of shares issued (ths) 97,681 96,393 96,371 96,071 94,969 94,967 94,966 94,963 94,959 94,974Key financial ratios:ROE （％） 13.8% 12.9% 11.5% -6.3% 6.7% 10.1% 11.5% 11.9% 11.7% -Equity ratio （％） 49.1% 50.6% 52.5% 49.3% 54.1% 56.9% 53.0% 59.5% 64.3% 67.2%Cash flow:Operating CF (mill.yen) 9,546 16,733 10,653 6,049 14,095 11,344 12,286 16,171 19,688 -Investing CF (mill.yen) -30,616 -9,019 1,678 -4,633 -5,522 -8,195 -19,746 -2,972 -3,119 -Financing CF (mill.yen) 20,699 -6,821 -4,500 5,470 -15,562 -5,855 8,643 -9,423 -12,813 -Cash flow margin （％） 10.7% 17.8% 11.0% 11.3% 20.3% 14.0% 14.6% 18.3% 19.5% -

Appx.3 Selected financial data (consolidated)

Financial Results for FY2015-Q3 › en › about_us › ir › financial › ... · -Record high in...

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