FY2016 Financial Results & FY2017 Forecast June, 2017 Hitachi Zosen Corporation

Transcription

1 FY2016 Financial Results & FY2017 Forecast June, 2017 Hitachi Zosen Corporation 2017 Hitachi Zosen Corp.

2 FY2016 Results and FY2017 Forecast Overview FY2015 Actual FY2016 Actual (Unit: Billion Yen) FY2017 Forecast (Ratio to net sales) (Ratio to net sales) (Ratio to net sales) Order intake Net sales Operating income (3.9%) 15.1 (3.7%) 14.9 (3.5%) 12.5 Ordinary income (3.2%) 12.2 (2.8%) 11.2 (2.8%) 1 Net income (1.5%) 5.8 (1.5%) 5.8 (1.8%) Hitachi Zosen Corp. 2

3 Environmental Systems and Industrial Plants Order intake FY2015 FY2016 FY2017 Net sales Forecast Actual (Unit: Billion Yen) Order intake FY2016 Results (vs. FY2015) (-43.1) Award of large desalination plant order in Qatar during FY2015 Net sales FY2016 Results (vs. FY2015) (+13.0) Increase in sales of desalination plant project in Qatar (Unit: Billion Yen) FY2017 Forecast (vs. FY2016) (+14.4) Increase of EPC contract for EfW plants(japan) Addition of new consolidated subsidiary(water treatment business) FY2015 FY2016 FY2017 Operating income FY2015 FY2016 FY2017 FY2017 Forecast (vs. FY2016) (-39.6) Decrease in sales of desalination plant project in Qatar Decrease in sales of AOM(upgrade of old EfW plants in Japan) Operating income FY2016 Results (vs. FY2015) 11.3 (-3.5) Decrease of profitable projects FY2017 Forecast (vs. FY2016) 8.5 (-2.8) Decrease of AOM(upgrade of old EfW plants in Japan) 2017 Hitachi Zosen Corp. 3

4 Machinery Order intake FY2015 FY2016 FY2017 Net sales Forecast Actual FY2015 FY2016 FY2017 (Unit: Billion Yen) Order intake FY2016 Results (vs. FY2015) (-3) Decrease of marine diesel engine orders(selective order) Award of large order in precision machinery business FY2017 Forecast (vs. FY2016) 10 (-6.9) Decrease of marine diesel engine orders(selective order) Net sales (Unit: Billion Yen) FY2016 Results (vs. FY2015) 103.7(-0.8) Decrease in sales of precision machinery bushiness due to delay in receipt of large order FY2017 Forecast (vs. FY2016) 10(-3.7) Decrease of marine diesel engine projects Operating income Operating income FY2015 FY2016 FY2017 FY2016 Results (vs. FY2015) 2.2(+3.0) Improvement of profitability of marine diesel engine business due to progress in restructuring the business Trouble shooting of new products in precision machinery FY2017 Forecast (vs. FY2016) 2.5(+0.3) Improvement of profitability of marine diesel engine business due to progress in restructuring the business 2017 Hitachi Zosen Corp. 4

5 Infrastructure (Unit: Billion Yen) (Unit: Billion Yen) Order intake Forecast Actual Order intake FY2015 FY2016 FY2017 Net sales FY2015 FY2016 FY2017 Operating income FY2015 FY2016 FY2017 FY2016 Results (vs. FY2015) 33.2(-1.3) Award of large marine civil engineering order during FY2015 FY2017 Forecast (vs. FY2016) 35.0(+1.8) Increase of bridges, steel stacks, marine civil engineering projects Net sales FY2016 Results (vs. FY2015) 29.2(-1.6) Decrease in sales of shield tunneling machine project FY2017 Forecast (vs. FY2016) 3(+0.8) Increase in sales of hydraulic gate projects Operating income FY2016 Results (vs. FY2015) 1.0(+0.6) Successful progress in marine civil engineering projects Improvement of profitability FY2017 Forecast (vs. FY2016) 1.0(±) 2017 Hitachi Zosen Corp. 5

6 Technology for People, the Earth, and the Future Hitachi Zosen creates links between mother nature and our future Cautionary Statement Forward-looking statements are based on information currently available to Hitachi Zosen Corporation. Therefore those forward-looking statements include unknown risks and uncertainties. Accordingly, you should note that the actual results could differ materially from those forward-looking statements. Risks and uncertainties that could influence the ultimate outcome include, but are not limited to, the economic conditions surrounding Hitachi Zosen Corporation and/or exchange rate fluctuation.

7 Summary of New Medium-Term Management Plan Change & Growth (FY2017-FY2019) June, 2017 Hitachi Zosen Corporation 2017 Hitachi Zosen Corp.

8 Contents 1. Review of former Medium-Term Management Plan Hitz VisionⅡ 2. New Long-Term Vision Hitz 2030 Vision 3. New Medium-Term Management Plan Change & Growth 2017 Hitachi Zosen Corp. 8

9 1. Review of former Medium-Term Management Plan Hitz Vision Ⅱ 2017 Hitachi Zosen Corp. 9

10 Achievement of Hitz Vision Ⅱ Order intake Net sales Operating income Ordinary income Net income Interestbearing debt Shareholder s equity ratio Original plan of Hitz VisionⅡ FY2014 FY2015 FY , (113%) , (112%) (128%) (93%) (127%) Results of Hitz VisionⅡ(Achievement Rate) 3 years total FY2014 FY2015 FY (96%) (110%) 15.1 (88%) 12.2 (87%) 5.8 (72%) (Unit: Billion Yen) (80%) (99%) 14.9 (65%) 11.2 (56%) 5.8 (45%) 3 years total 1,287.0 (95%) 1,145.6 (107%) 42.8 (86%) 30.9 (74%) 16.7 (67%) % 28.6% 30.6% % 28.4% 29.4% - We have achieved the target toward business scale, but have to continue to improve earning capacity 2017 Hitachi Zosen Corp. 10

11 Numerical Result Environmental Systems & Industrial Plants Order Intake Machinery Infrastructure Others Environmental Systems & Industrial Plants Net Sales Machinery Infrastructure Others FY2014 FY2015 FY2016 FY2014 FY2015 FY Environmental Systems & Industrial Plants 0.5 Total Operating Income Machinery Infrastructure Others Total Total 15.1 Total FY2014 FY2015 FY Hitachi Zosen Corp. 11

12 Numerical Result (Environmental Systems & Industrial Plants) Order Intake EPC Stable Business Net Sales EPC Stable Business FY2014 FY2015 FY2016 FY2014 FY2015 FY Total 13.6 Operating Income EPC Stable Business Total Total 14.8 Total FY2014 FY2015 FY Hitachi Zosen Corp. 12

13 Numerical Result(Machinery) Marine Diesel Engine Process Equipment Others Order Intake Press Machine Systematic Machinery FY2014 FY2015 FY Marine Diesel Engine Process Equipment Others Net Sales Press Machine Systematic Machinery FY2014 FY2015 FY Operating Income Marine Diesel Engine Press Machine Process Equipment Systematic Machinery Othres Total Total 0.8 Total Total FY2014 FY2015 FY Hitachi Zosen Corp. 13

14 Evaluation of Management Targets and Actions No. Management Targets Evaluation 1 2 Strengthen profitability Each business and product to achieve No. 1 profitability in its area Expand business scale Expand to Yen 500 billion company with public recognition Engineering:AOM leads growth of engineering Manufacturing : Continuing slump Troubles of marine diesel engines and systematic machinery. Projects troubles and technical problem related to overseas INOVA, NAC and large-scale desalination project contribute increasing of overseas net sales. The total net sales reached Yen 400 billion. 3 Fortify financial structure Achieve and maintain at least 30% shareholders equity ratio, and secure a stable financial position Shareholder s equity ratio is 29% Increase endurance to financial risk by subordinated loan AOM: After service, Operation and Maintenance 2017 Hitachi Zosen Corp. 14

15 Expand Business Scale Hitz Gloup EfW Market Shares Worldwide( ) Others 16.7% HITZ/HZI = Market Leader HZI: Hitachi Zosen Inova Ebara 4.2% Keppel Sghers 5.8% HITZ/HZI(incl. licensees) 30.2% MHIEC 0.9% MHIEC(martin) 5.1% Grantop(B&W Volund licensee) 6.2% Everbright 13.1% CIS(Martin grate) 17.8% Total: 198,918 tpd Source: Vaccani European Market Share Analysis of Thermal Waste Treatment Plants, 2017 Edition 2017 Hitachi Zosen Corp. 15

16 Expand Business Scale EfW:Expand and strengthen business in Europe(HZI) and SE Asia (Hitz) HZI:Expand business areas in European markets and strengthen O&M business (M&A) 1 2 Hitz:Develop markets of developing countries centered around SE Asia HZIBM(GER) ~ Biogas Purification System HZIE(GER) ~/Power to Gas (Synthesis Methane Production) Expand business areas HZI(Asset Purchase for Kompogas) ~ (Dry Biogas) Expand business areas Expand business areas HZIK(GER) ~ Maintenance for EfW HZIS(SVK) ~ Design for EfW Strengthen AOM Strengthen engineering Strengthen AOM HZIKRB(CHE) ~ Boiler Parts and Maintenance for EfW India/Under operation (600t/d 11,500kW) Thailand/First Order (460t/d 7,900kW) Thailand/Offer (370t/d 6,000kW) Vietnam/Under demonstrated operation (75t/d 1,930kW) Malaysia/First Order (600t/d 18,000kW) 2017 Hitachi Zosen Corp. 16

17 Expand Business Scale Desalination Business:Expand and enhance business by achieve RO method and the delivery records(acquisition of OSMOFLO) Advantages of Hitz MSF/MED method Large-scale installations in the Middle East Cover for each other Advantage of OSMOFLO RO method AOM Rentals LH Light House Base for Remote Monitoring System (Light House) LH EU LH JAPAN Remote Monitoring System Network LH USA Territory UAE IND Territory Remote Monitoring System AUS Plant Connect* LH(OSMOFLO) AUSTRALIA Territory CHL Design Sales Manufacture Operation of Desalination and Industrial Wastewater Treatment System *Plant Connect: Remote Monitoring System by OSMOFLO 2017 Hitachi Zosen Corp. 17

18 Expand Business Scale Marine SCR system : Receive orders consecutively. First Order Client: Dalian Marine Diesel Co., Ltd. System: High-pressure marine SCR system x 2units Delivery: 1st unit October nd unit November 2017 Client: Sumitomo Heavy Industries Marine & Engineering Co., Ltd. System: Marine diesel engine(6g60me-c9.5) and High-pressure SCR system x 1 set Delivery: July 2018 Reducing Agent dosing System Engine Control Room Urea Pellets Storage Box (Option) Urea Solution Service Tank (Option) Urea Dilution Unit (Option) Vaporizer SCR Operation Panel MOP Client: STX Heavy Industries Co., Ltd. System: High-pressure marine SCR system x 2units Delivery: 1st unit October nd unit November 2017 Urea Solution Storage Tank ME-ECS ERCS Reactor Soot blower Reactor By-pass Valve General Service Air System Starting Air System Heating System Reactor Sealing Valve Cylinder Bypass Valve Main Engine Reactor Throttle Valve 2017 Hitachi Zosen Corp. 18

19 Enhance Corporate Governance Enhance corporate governance by revitalize our Board of Directors meetings Review of Board composition Independent Outside Director Independent Outside Corporate Auditors Mr. Chiaki Ito Ms. Kazuko Takamatsu Mr. Richard R. Lury Mr. Kenichi Takashima Mr. Yoshihiro Doi Reinforce the structure of risk management Risk assessment for M&A Risk assessment for order intakes Decrease Technical Problems Management Approaches: (1)Design review meeting (2)Top Management Review (3)Risk review meeting 2017 Hitachi Zosen Corp. 19

20 2. Hitz 2030 Vision 2017 Hitachi Zosen Corp. 20

21 Direction of Businesses -Core Business Areas Transformation to Global Solution Provider for Establishment of Recycling Society Social Challenges Increasing Environmental Pollution Food, Water and Energy Shortage Abnormal Weather, Natural Hazard Core Business Areas Energy Energy from Waste(EfW) Renewable Energy Methanation Marine engines, process equipment etc. Core Competences of Hitz Group Environment Water Desalination, Water Supply Sewage Treatment, Excreta Treatment Water Control(Hydraulic gates, Wave Meters, Flap-Gates) Bridges Shield tunneling machines etc. (1)Abundant delivery record (Expansive knowledge based on experience) (2)Technological competences (Engineering+Manufacturing) (3)Deep connections with customers 2017 Hitachi Zosen Corp. 21

22 Numerical Targets In FY2030, net sales will be JPY 1 trillion and operating income to net sales will be more than 10% FY2016 FY2030 Approaches Net Sales 400bn. JPY 300~400 bn. JPY 600~700 bn. JPY New Business (by M&A) Existing Business New Products and Businesses Globalization Expansion of Value Chain Operating Income to Net sales 4% 10% Expansion of Value Chain Overseas Net Sales to Net Sales 33% 50% Globalization Shareholders Equity Ratio 29% 40% 2017 Hitachi Zosen Corp. 22

23 Advanced Technology <Added value and productivity improvement> Preventive maintenance Automation Labor-saving Give the best performance <Software > < Hardware > Advanced Technology Control Technology(Big Data, AI, IoT) Automation Technology Advanced Simulation Technology Engineering EfW, Woody Biomass Power Generation, Desalination, Water Treatment etc. Manufacturing Marine Diesel Engines, Process Equipment, Precision Machinery, Infrastructure Development, etc Hitachi Zosen Corp. 23

24 3. New Medium-Term Management Plan Change & Growth 2017 Hitachi Zosen Corp. 24

25 Net sales (bn. JPY) Operating income to sale(%) Position of New Mid-Term Management Plan Change & Growth The first step to grow for achieving 2030Vision (maintenance of business foundations) 1, Consolidated net sales FY2013 Actual FY2016 Actual FY2019 Targets Order intake 328.4bn. JPY 398.9bn. JPY 46bn. JPY Net sales 333.4bn. JPY 399.3bn. JPY 43bn. JPY Operating income 7.8bn. JPY (2.4%) Operating income to sale(%) 14.9bn. JPY (3.7%) 20.5bn. JPY (4.8%) ROE 3.7% 5.1% 7.7% Number of employees 9,693 10,131 11,300 Basic strategies for New Mid-Term Management Plan Change & Growth 1. To restructure business foundation and improve productivity 2. To maximize Hitz Group comprehensive strengths 3. Promote Portfolio Management Guideline of business scale and profitability toward FY2030 FY2030 Targets Business Scale 1 trillion JPY More than 10% FY2013(Actual) FY2016(Actual) FY2019(Plan) FY2022 FY2025 FY2028 FY2030Target 2017 Hitachi Zosen Corp. 25

26 Numerical Forecast ( Unit: Billion Yen ) Hitz VisionⅡ (Actual) Change & Growth (Plan) FY2014 FY2015 FY years total FY2017 FY2018 FY years total Order intake , ,29 Net sales , ,19 Operating income (Ratio) 12.8 (3.6%) 15.1 (3.9%) 14.9 (3.7%) 42.8 (3.8%) 12.5 (3.5%) 16.5 (4.1%) 20.5 (4.8%) 49.5 (4.2%) Ordinary income (Ratio) 7.5 (2.1%) 12.2 (3.2%) 11.2 (2.8%) 30.9 (2.7%) 1 (2.8%) 14.0 (3.5%) 18.0 (4.2%) 42.0 (3.5%) Net income Interestbearing debt Shareholder s equity ratio (incl. subordinated loan) 26.6% 28.4% 29.4% - 3% (32.4%) 30.5% (32.7%) 31.0% (33.3%) - ROE 4.9% 5.2% 5.1% - 5.5% 6.5% 7.7% Hitachi Zosen Corp. 26

27 Numerical Forecast Environmental Systems & Industrial Plants Order Intake 12.0 Machinery Infrastructure Others Environmental Systems & Industrial Plants Net Sales Machinery Infrastructure Others FY2017 FY2018 FY2019 FY2017 FY2018 FY Operating Income Environmental Systems & Machinery Industrial Plants Infrastructure Others Total Total 12.5 Total 16.5 Total FY2017 FY2018 FY Hitachi Zosen Corp. 27

28 Numerical Forecast (Environmental Systems & Industrial Plants) 40 Order Intake EPC Stable Business 40 Net Sales EPC Stable Business FY2017 FY2018 FY2019 FY2017 FY2018 FY Total 8.5 Operating Income EPC Stable Business Total Total 11.0 Total FY2017 FY2018 FY Hitachi Zosen Corp. 28

29 Numerical Forecast (Machinery) Marine Diesel Engine Process Equipment Others 15.5 Order Intake Press Machine Systematic Machinery Marine Diesel Engine Process Equipment Others Net Sales Press Machine Systematic Machinery FY2017 FY2018 FY FY2017 FY2018 FY Operating Income Marine Diesel Engine Press Machine Process Equipment Systematic Machinery Othres Total Total 2.5 Total 3.5 Total 4.5 FY2017 FY2018 FY Hitachi Zosen Corp. 29

30 Basic Strategies Basic Strategy(1) Restructure business foundation and improve productivity Business areas expansion Use ICT Reinforce the structure of risk management Take specific measures to increase profitability Strengthen financial condition and increase investment capacity for growth Basic Strategy(2) Maximize Hitz Group comprehensive strengths Form business clusters and maximize synergy Promote consolidated basis profit monitoring HRD by job rotation Basic Strategy(3) Promote Portfolio Management Clarify position of each business by Portfolio Priority given to growing business and new business in resource allocation Consider possibilities of revitalizing low-profit products 2017 Hitachi Zosen Corp. 30

31 Business areas expansion Expansion of Value Chain Earning Power Business Planning Finance, Electric Power Selling, Concession Engineering Manufacturing Service Renewable Energy(EfW), Desalination, After-sales Service, Water Treatment Maintenance, Operation Marine Diesel Engines, Process Equipment, System Machinery, Electronic Control Systems, Industrial Machines, Steel Structures, Shield Tunneling Machines, Functional Materials Smile Curve Advanced Technology Control Technology(Big Data, AI, IoT), Automation Technology, Advanced Simulation Technology 2017 Hitachi Zosen Corp. 31

32 Use ICT Expansion of AOM business Horizontal development of remote monitoring system(shield Machines, marine diesel engines etc.) Stabilize electric output in EfW plants by big data Productivity improvement Productivity improvement by robots and ICT Standardized design by ICT Business Areas EfW IoT Big Data, utilize AI Production Site Area Make works smart Achieve IoT innovation in production site Various data Collect and Store data Various data Ariake Chikkou Shield machine Hydraulic gates Marine diesel engines SCR Water treatment plants Visualization Analyze data Utilize AI Remote Monitoring System Support Center Automatic operation Abnormal diagnosis Support decisionmaking Lifetime diagnosis Preventive maintenance Mukaishima Sakai Technical Research Institute Maizuru Innovative Manufacturing & Technology Research Center) Kashiwa Ibaraki Innoshima 2017 Hitachi Zosen Corp. 32

33 Technology for People, the Earth, and the Future Hitachi Zosen creates links between mother nature and our future Cautionary Statement Forward-looking statements are based on information currently available to Hitachi Zosen Corporation. Therefore those forward-looking statements include unknown risks and uncertainties. Accordingly, you should note that the actual results could differ materially from those forward-looking statements. Risks and uncertainties that could influence the ultimate outcome include, but are not limited to, the economic conditions surrounding Hitachi Zosen Corporation and/or exchange rate fluctuation.