Financial results for FY2017 Financial Summary...Financial results for FY2017 Financial Summary...
Transcript of Financial results for FY2017 Financial Summary...Financial results for FY2017 Financial Summary...
Financial results for FY2017
Financial Summary
February 23, 2018
NIKKISO CO., LTD.
Securities code: 6376
Disclaimer
This material contains forward-looking statements about future business performance. These statements by definition involve risks and uncertainties and are not intended to guarantee future performance. Actual results in the future may differ from the
estimates presented in the material herein due to changes in the business environment and other factors.
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
Application of International Financial Reporting Standard (IFRS)
2
The business operations of the Group are expanding into the global market. Meanwhile, the Company started adopting IFRS instead of Japanese accounting standards, JGAAP, in this consolidated financial year (from January 1, 2017 to December 31, 2017) in order to improve the international comparability of financial information in capital markets as well as the accuracy of business management by integrating the financial report standards of the Group.
The transfer to IFRS was implemented in January 1, 2016. The figures for the previous consolidated financial period (from January 1, 2016 to December 31, 2016) were also indicated in accordance with IFRS.
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 3
Financial results for FY2017
Consolidated Performance
Millions of JPY
FY2016January 2016 -December 2016
- IFRS -
Performanceforecast
Announced in November 14, 2017
- IFRS -
FY2017January 2017 -December 2017
- IFRS -
YoY comparisonComparison with forecast
Change Change rate Change rate
Orders 129,209 142,000 140,412 + 11,202 + 8.7% - 1.1%
Net sales 130,045 140,000 140,912 + 10,867 + 8.4% + 0.7%
Operating income 8,117 6,800 8,718 + 600 + 7.4% + 28.2%
Ratio to net sales 6.2% 4.9% 6.2%
Profit before tax 6,801 - 8,310 + 1,508 + 22.2% -
Ratio to net sales 5.2% 5.9%
Net incomeattributable to owners of parent
4,883 5,300 5,182 + 299 + 6.1% - 2.2%
Ratio to net sales 3.8% 3.8% 3.7%
Average foreign exchange rateAgainst the US dollar (Yen) 108.78 112.00 112.16 + 3.38 - -
Against the euro (Yen) 120.26 132.00 126.70 + 6.44 - -
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 4
Financial results for FY2017
Breakdown of Profit/Loss
FY2016January 2016 -December 2016
- IFRS -
FY2017January 2017 -December 2017
- IFRS -Change Remarks
Gross profit 44,855 48,608 + 3,753
- Selling, general and administrative expenses
- 37,374 - 42,218 - 4,843
- Other income 939 2,554 + 1,615Proceeds from sales of NIKKISO No. 2 building, receipt of fire insurance proceeds, influence from the shift to the defined contribution pension plan
- Other expenses - 302 - 227 + 74
Operating income 8,117 8,718 + 600
- Finance income 412 493 + 81
- Finance costs - 1,903 - 1,112 + 790 Decrease in foreign exchange loss due to depreciation of yen
- Profit and loss from investment accounted for using equity method
174 210 + 36
Profit before tax 6,801 8,310 + 1,508
Exchange rate for the conversion of the performance of overseas subsidiaries
- Against the US dollar (Yen) 108.78 112.16 + 3.38
- Against the euro (Yen) 120.26 126.70 + 6.44
Millions of JPY
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Financial results for FY2017
Performance by Business Segment
FY2016January 2016 -December 2016
- IFRS -
Performance forecast
Announced in November 14, 2017
- IFRS -
FY2017January 2017 -December 2017
- IFRS -
YoY comparison
Comparison with
forecast
ChangeChange
rateChange
rate
Industrial Business
Orders 75,183 87,000 85,406 + 10,222 + 13.6% - 1.8%
Net sales 75,593 86,000 85,228 + 9,634 + 12.7% - 0.9%
Operating income of segment 5,932 - 7,539 + 1,607 + 27.1% -
Ratio to net sales 7.8% 8.8%
Medical Business
Orders 54,025 55,000 55,005 + 980 + 1.8% + 0.0%
Net sales 54,451 54,000 55,684 + 1,233 + 2.3% + 3.1%
Operating income of segment 5,209 - 3,950 - 1,259 - 24.2% -
Ratio to net sales 9.6% 7.1%
Corporate expenses, etc.
Operating income of segment - 3,024 - - 2,771 + 252 - -
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
45%
8%
12%
7%
4%
6%
8%
9%
6
Financial results for FY2017
Industrial and Precision Equipment Division
FY2017
FY2016January 2016 -December 2016
- IFRS -
FY2017January 2017 -December 2017
- IFRS -
YoY comparison
Change Change rate
Orders 59,694 69,559(10,731)
+ 9,864 + 16.5%
Net sales 59,893 69,559(9,843)
+ 9,665 + 16.1%
1. Overview
2. Consolidated performance 3. Net Sales Composition ratio by Product
✓ While there are few upstream projects, LEWA has been focusing on the expansion of downstream projects and after-sales service business. Through the continuous reduction of expenses, profitability is maintained and business performance is somewhat improving.
✓ The cryogenics pump business has been receiving many inquiries. Costs for the quality-related issues were allocated. However, the technical issue has almost been resolved. The measures to reinforce the quality control system are underway.
✓ The business of Cryogenic Industries Group (“CI Group”) has been sluggish due to the stagnant LNG market. The global development system shall be arranged with the expansion of business domains such as LNG and hydrogen as well as regional complementarity.
✓ In the precision equipment business, sales are growing due to the sound market for smartphones and in-car devices.
Reciprocating pump
Canned motor pump
Cryogenics pump
Precision equipment
Geveke
Water conditioning system
CI Group
Others
Note: Figures in parentheses indicate those for the precision equipment business(Since part of the industrial business was separated and integrated into the precision equipment business in October 2016, year-over-year data is not listed)
Millions of JPY
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Performance trend of LEWA
135 134 136 132
195 194 204
220
236 232
51
105
151
200 211
118
145
127 129
148
189
217 217 224 219
49
107
170
236
217
20 2514 13 17
27 30 31 2821
4 918
2817
47 42
59 50
98 103 91 95
107 120 122 119
101
84
-200
-150
-100
-50
0
50
100
150
0
50
100
150
200
250
300
350
07 08 09 10 11 12 13 14 15 16 Q1 Q2 Q3 Q4 2018Plan
Orders (Left axis) Net sales (Left axis) EBITDA (Left axis) Balance of orders (Right axis)
2017 YTD
Millions of €
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 8
Transport Consumption
Gas stationGas fuel
vehicle/LNG train
Tanker
LNG fuel shipBunkering
Small liquefaction
plant
Regasification plant
Adding core technologies of the CI Group contributes to covering a wide range of the LNG value chain. Building cryogenic product lines, including the industrial gas field.
PlantHomesPower plant
Offshore gas field
Gas field
Liquefaction plant
Floating offshore natural gas
liquefaction facility
LNG conveyance
Floating LNG storage
regasification facility
LNG receiving base
C C
N Nikkiso C CI group
Peak shaving
N N C N C
Production
C
Production Liquefaction Conveyance Receipt Storage/Distribution
Power source usage
Nikkiso Group’s area of coverage
CI Group’s area of coverage
Fuel supply device for LNG fuel ship
LNG peak shaving plant
✓ Highly efficient and stable fluid control technology for ultra-low temperatures
✓ Heat exchange process in gasification and liquefaction✓ Highly efficient small and medium-scale process/plant
technology
CI Group’s core technologies
Electricityusage
Heat source usage
Group Synergies in the Cryogenic Business
Expanding Product Lines
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LNG projects are on a recovery trend. Aiming to achieve growth by pursuing new product development for growth markets, such as fuel supply devices for LNG ships, and using the channels of the Nikkiso Group.
✓Providing fuel supply devices for LNG fuel ships
✓Providing pumps that deliver high-pressure natural gas at power plants
✓Providing peak shaving equipment and plants for pipeline natural gas
✓Providing hydrogen filling pumps and vaporizers
✓The Nikkiso Group network, including LEWA, Geveke, and NCI
✓Growth of LNG exports mainly by the U.S.
✓Growth of LNG thermal power generation worldwide
✓Increase in LNG fuel ships as a result of tightening regulations on fuel oil for vessels
✓Increased activity in research and development and infrastructure development in advanced nations toward building a hydrogen-based society
Market Environment
Strengths
Group Synergies in the Cryogenic Business
Market Environment and Strengths of the Nikkiso Group
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
49%
17%
24%
8%
2%
10
Cascade
Wing parts
Others
Jet engine parts
Nacelle parts
Financial results for FY2017
Aerospace Division
FY2017
1. Overview
2. Consolidated performance 3. Net Sales Composition ratio by Product
FY2016January 2016 -December 2016
- IFRS -
FY2017January 2017 -December 2017
- IFRS -
YoY comparison
Change Change rate
Orders 15,382 15,712 + 329 + 2.1%
Net sales 15,596 15,550 - 45 - 0.3%
✓ Despite severe environment with the price revision of some aircraft parts and reduced shipments due to production adjustment, the shipment of cascade gradually recovered in the latter half of the year up to the level of those in the last period.
✓ The business aims to take advantage of strong demand for aircraft by starting production at and shipment from the Miyazaki factory in 2018, full-scale production of the Higashimurayama factory, and expansion of the production site in Hanoi, Vietnam.
Millions of JPY
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15%
12%
31%
3%
12%
9%
18%
(Japan) Dialysis machines
(Overseas) Dialysis machines
(Japan) Disposable
(Overseas) Disposable
Maintenance
CRRT
Others
Financial results for FY2017
Medical Division
FY2017
2. Consolidated performance 3. Net Sales Composition ratio by Product
1. Overview
FY2016January 2016 -December 2016
- IFRS -
FY2017January 2017 -December 2017
- IFRS -
YoY comparison
Change Change rate
Orders 54,025 55,005 + 980 + 1.8%
Net sales 54,451 55,684 + 1,233 + 2.3%
✓ As for the hemodialysis business, the sales of consumables such as blood tubing lines and powder-type dialysate increased and supported the growth in domestic market. In the overseas market, sales in China and Europe grew. On the other hand, the development cost of new models increased, and profit decreased.
✓ As for the CRRT business, due to the rebuilding of the sales system and the reinforcement of sales and service functions in the main market, the Chinese market, the sales of equipment grew significantly. However, the business struggled in other markets such as in Europe. It could not compensate for the increase in expenses, and the performance deteriorated.
✓ The business aims to create a future revenue base through the development of new products such as Acrosurg, a microwave surgical energy device, which was launched last year.
Millions of JPY
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FY2017Actual record
FY2018Performance forecast
YoY comparison
- IFRS - - IFRS - Change Change rate
Orders 140,412 162,000 + 21,587 + 15.4%
Net sales 140,912 162,000 + 21,087 + 15.0%
Operating income 8,718 10,000 + 1,281 + 14.7%
Ratio to net sales 6.2% 6.2%
Profit before tax 8,310 9,000 + 689 + 8.3%
Ratio to net sales 5.9% 5.6%
Attributable to owners of parent
Net income 5,182 5,900 + 717 + 13.8%
Ratio to net sales 3.7% 3.6%
Average exchange rate/Assumed rate for financial result forecast
Against the US dollar (Yen)Against the euro (Yen)
112.00132.00
108.00132.00
- 4.16+ 5.30
Forex sensitivity for FY2018 (When yen was depreciated by 1 yen)
US dollar (Yen) Net sales +460 million yen Operating income +80 million yen
Euro (Yen) Net sales +390 million yen Operating income +50 million yen
Financial forecast for FY2018
Consolidated Performance
12
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
FY2017Actual record
FY2018Performance forecast
YoY comparison
- IFRS - - IFRS - Change Change rate
Industrial Business
Orders 85,406 101,900 + 16,493 + 19.3%
Net sales 85,228 101,800 + 16,571 + 19.4%
Operating income of segment 7,539 7,900 + 360 + 4.8%
Ratio to net sales 8.8% 7.8%
Industrial and Precision Equipment Division
Orders 69,559 83,400 + 13,840 + 19.9%
Net sales 69,559 83,300 + 13,740 + 19.8%
Aerospace DivisionOrders 15,712 17,000 + 1,287 + 8.2%
Net sales 15,550 17,000 + 1,449 + 9.3%
Medical business
Orders 55,005 60,100 + 5,094 + 9.3%
Net sales 55,684 60,200 + 4,515 + 8.1%
Operating income of segment 3,950 5,800 + 1,849 + 46.8%
Ratio to net sales 7.1% 9.6%
Corporate expenses, etc.
Operating income of segment - 2,771 - 3,700 - 928 + 33.5%
Financial forecast for FY2018
Performance by Business Segment
13
Millions of JPY
Appendix
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
Analysis (vs FY2016)
Medical Aerospace
15
Orders
Industrial and Precision Equipment
0
5,000
10,000
15,000
20,000
25,000
Year-over-year comparison B3, D3 B4, E4 B5, F5 B6, G6 B7, H7 FY2017Q2
+ 7,759
Simple increase
FY2017(January 2017 -December 2017)
Orders- IFRS -
140,412Impact of FX
Simple increase
Impact of FX
✓ Increase in cryogenics pumps
✓ Joining of CI Group
✓ Increase in the shipmentof cascade, etc.
✓ Growth ofoverseas hemodialysis business
✓ Growth ofdomestic consumable business
FY2016(January 2016 -December 2016)
Orders- IFRS -
129,209
+ 2,133 + 86 + 243 + 521 + 459Impact of FX
Simple increase
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
MedicalAerospace
16
Analysis (vs FY2016)
Industrial and Precision Equipment
0
5,000
10,000
15,000
20,000
25,000
30,000
+ 2,253Simple
increase
Impact of FX
FY2017(January 2017 -December 2017)
Net sales- IFRS -
140,912
FY2016(January 2016 -December 2016)
Net sales- IFRS -
130,045
Simple decrease
Impact of FX
-380 + 334
Simple increase
Impact of FX
+ 467+ 765
Net sales
+ 7,426✓ Growth of overseas
hemodialysis business✓ Growth of domestic
consumable business
✓ Influence from production adjustment of aircraft manufacturers, etc.
✓ Joining of CI Group
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
MedicalAerospace Industrial and Precision Equipment
17
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Analysis (vs FY2016)Operating
income
FY2016(January 2016 -December 2016)
Operating income- IFRS -
8,117
Increase in corporate expenses,
etc.
FY2017(January 2017 -December 2017)
Operating income- IFRS -
8,718
+183
✓ Recovery of LEWA’s performance
✓ Joining of CI Group
✓ Launch of factories in Higashimurayama and Miyazaki
✓ Worsened performance ofthe CRRT business
✓ Expense to acquire CI Group, etc.
+1,307+205 -13
-1,106
-157-1,509
+1,690
Increase in other
income
✓ Sales of NIKKISO No. 2 building, etc.
Simple increase
Impact of FX
Simple decrease
Impact of FX
Simple decrease
Impact of FX
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 18
As of end of December 2016 As of end of December 2017
AmountComposition
ratio AmountComposition
ratio Change
Total assets 177,717 100.0% 244,692 100.0% + 66,974
Current assets 97,591 54.9% 119,103 48.7% + 21,512
Cash and cash equivalents 25,919 14.6% 34,095 13.9% + 8,175
Trade and other receivables 41,498 23.4% 50,434 20.6% + 8,935
Inventories 27,181 15.3% 30,363 12.4% + 3,181
Non-current assets 80,126 45.1% 125,588 51.3% + 45,462
Property, plant and equipment 35,679 20.1% 38,454 15.7% + 2,775
Intangible assets and goodwill 28,098 15.8% 67,792 27.7% + 39,694
Total assets 110,053 61.9% 167,905 68.6% + 57,851
Trade and other payables 21,606 12.2% 22,624 9.2% + 1,017
Corporate bond and non-current borrowings
69,884 39.3% 122,528 50.1% + 52,644
Total assets 67,664 38.1% 76,787 31.4% + 9,123
Consolidated Statement of Financial Position
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 19
FY2016 FY2017 Change
Cash flows from (used in) operating activities 13,400 4,915 - 8,484
Profit before tax 6,801 8,310 + 1,508
Depreciation expense 4,766 5,246 + 480
Increase (decrease) in working capital (trade receivables/payables and inventories) 670 - 5,202 - 5,873
Cash flows from investing activities - 7,993 - 48,058 - 40,065
Payment from purchase of property, plant and equipment - 6,719 - 5,604 + 1,114
Balance of the transfer/acquisition of business - - -
Free cash flow 5,407 - 43,142 - 48,550
Cash flows from financing activities - 6,251 51,015 + 57,267
Increase (decrease) in borrowings 73 52,310 + 52,237
Cash dividends paid - 1,210 - 1,138 + 71
Cash and cash equivalents at end of period 25,919 34,095 + 8,175
Consolidated Statement of Cash Flows
Millions of JPY
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Japan
39%
Asia24%
North America
15%
Europe20%
Other2%
MedicalAerospaceIndustrial and Precision
Equipment
22%
31%15%
28%
4% JPN
Asia
North America
Europe
Others
12%
5%
81%
2%
71%
13%
1% 12%
3%
20
20%
30%
40%
50%
60%
70%
0
20,000
40,000
60,000
80,000
100,000
08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 15/12 16/12 17/12
Asia North America
Europe Other
Overseas net sales ratio (right axis)
FY2017
NIKKISO Group total Net sales trend by overseas resion
FY2017 FY2017
FY2017
Overseas ratio
61%
(9 months)
Net Sales Composition Ratio by Region
Millions of JPY
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FY2016- IFRS -
FY2017- IFRS -
Basic earnings per share 66.08 yen 71.82 yen
Return on equity (ROE) 7.2% 7.3%
Return on asset (ROA) 3.8% 3.9%
Revenue operating margin 6.2% 6.2%
Equity ratio 37.4% 30.7%
DE ratio 1.05 times 1.63 times
FY2016- IFRS -
FY20172017
- IFRS -
Capital investments 7,635 7,508
Research and development expenses 1,679 2,435
Depreciation expenses 4,766 5,246
Financial data IFRS
21
Millions of JPY