Medium-Term Management Plan 2019 (Construction Crane Business) Shogo Yokoyama, President. Sumitomo Heavy Industries Construction Cranes Co., Ltd.

Transcription

1 True satisfaction for all Medium-Term Management Plan 2019 (Construction Crane Business) HSC's Corporate Vision Sumitomo Heavy Industries Construction Cranes Co., Ltd. Shogo Yokoyama, President September 21, 2018 HSC is committed to improving society through innovation based on confidence and reliability in the crane business.

2 INDEX 00 About construction cranes 01 What is a crawler crane? 02 Market environment 03 From SHI & HCM to HSC 04 Outline of our medium-term management plan "Soaring 2019 for the Next Stage" 1

3 Classification of Construction Cranes Fixed Tower cranes Link-Belt core business Construction cranes Mobile Truck type (using general-purpose trucks or dedicated chassis; street-legal) HTC (hydraulic truck cranes) (drive axle: rear only; steering: front only) ATC (all terrain cranes) (drive axle: front and rear, multiple; steering: front and rear) Wheel type RTC (rough terrain cranes) (four-wheel drive & steering enabling passing through narrow streets and moving on rough terrain) HSC core business Crawler type Machine proper to be supplied on an OEM basis SCX (crawler cranes) TCC/TLX (telescopic crawler cranes) Outstandingly stable, bestsuited for rough-terrain and soft-ground applications SDX (earth drills) 2

4 INDEX 00 About construction cranes 01 What is a crawler crane? 02 Market environment 03 From SHI & HCM to HSC 04 Outline of our medium-term management plan "Soaring 2019 for the Next Stage" 3

5 Crawler Crane (Structure & Part Name) Bar Pendant Wire Rope Mast Hook Block Counter Weight Winch Front Attachment Towards a New Stage of Innovation Upper Structure Cab Lower Structure (Crawler) 4

6 SCX features (Easy assembly & transport) Front-rear Split Frame Quick Draw system (Self-removal system of crawler side frame) 5

7 SCX (winner of 2017 MACHIN DESIGN award and the Minister of Economy, Trade and Industry award) Moving toward a future of progress 6

8 INDEX 00 About construction cranes 01 What is a crawler crane? 02 Market environment 03 From SHI & HCM to HSC 04 Outline of our medium-term management plan "Soaring 2019 for the Next Stage" 7

9 Crawler Crane Global Players Japan North America HSC Link-Belt Integration of Kobelco Construction Machinery and Kobelco Cranes End of Kobelco- Manitowoc relationship Kobelco Nippon Sharyo KATO (former IHI) CC<300t Terex Manitowoc Acquisition of IHI Construction Machinery Limited by Kato Works Co., Ltd. = continuation of relationship with Terex Continuation of structural reforms by Manitowoc and Terex in North America Liebherr Fuwa XCMG China Sennebogen Zoom Lion SANY Others Europe 8

10 Global Demand for Crawler Cranes: Past Changes and Future Projection Global Demand: Past Changes and Future Projections * Data compiled by HSC Soaring 2019 Plan for the Next Stage Units sold Market マーケット伸び率 growth ( 17 18) China Others Asia Europe North America Japan +41% +8% +49% +12% (7%) (7%) 2018 projection 2019 forecast Others = Central & South America + East Europe, Russia & CIS + Middle East & Africa Asia = Australian-Asiatic + India 9

11 INDEX 00 About construction cranes 01 What is a crawler crane? 02 Market environment 03 From SHI & HCM to HSC 04 Outline of our medium-term management plan "Soaring 2019 for the Next Stage" 10

12 History SHI & HCM to HSC Establishment of SHI at Besshi Copper Mine 1600 s Origin of Sumitomo Establishment of Hitachi as maintenance company of Coal mine at Hitachi Beginning of Construction Machinery division in Niihama through partnership with Link- Belt (FMC) Sumitomo Hitachi Developed U05 on domestic technology SHI: Sumitomo Heavy Industries, Ltd., HCM: Hitachi Construction Machinery Co., Ltd., FMC: FMC corporation Launched SC(PAX) series Developed U106 for multi purposes Launched CX series machine Hitachi Sumitomo Heavy Industries Construction Crane Co., Ltd. established with HCM & SHI holding 50% of shares each. Supplied over 20,000 cranes Launched SCX-2 series Mar. 31, 2017 Share transfer (HCM 34%, SHI 66%) Nov. 28, 2017 Official announcement of new company name & new brand name Apr. 1, 2018 Name change date Launched SCX-3 series Supplied over 5,000 cranes. True satisfaction for all H : High Quality S : Satisfaction C : Confidence 11

13 HSC Product Lineup (Crawler Crane Series) 800HLX SCX900HD HLX SCX1200HD HLX 2000HLX Crawler crane at Saijo Office 6000SLX: 500t capacity Crawler cranes 55t 500t (7 models) SCX550 SCX700-3 SCX900-3 SCX SCX SCX SLX Crawler cranes (high line pull, heavy duty) 80t 200t (6 models) OEM crawler cranes (machine proper) supplied to Link-Belt 80USt 300USt (9 models) 12

14 HSC Product Lineup (Foundation Work Machines and More) SDX207 SDX407-2 SDX612 Earth drills (3 models) SGX120S-2 Foundation improvement machine (1 model) SDX207 SDX TLX Telescopic crawler cranes (3 models) SQX500HD-2 Crane for port cargo handling (1 model) 13

15 HSC Production Facilities, Domestic Sales and Service Locations and Overseas Sales Network HSC Organization HCME Europe Middle East (100%) HMEC (100%) (34%) HCM (Capital-based relationship) (66%) SHI (100%) Japan: Collaboration of HSC sales & service and group companies Overseas: North America: Collaboration with Link-Belt (OEM) Europe: Supply through a sole agent (HCME) Middle East: Supply through a sole agent (HMEC) Others: Supply through HSC agents HCME (Netherlands) Overseas locations and sales network HSC (Japan) HSC Worldwide excluding Link- Belt territory Production facility Sales/service location Head Office Production facilities (2) CC OEM agreement CC distribution territory USA Link-Belt North America, Central & South America CC distribution territory Domestic locations and sales network Branch offices (5) Sales locations (11) Link-Belt (USA) Nagoya Works Location, Obu, Aichi HMEC (UAE) HCME: Hitachi Construction Machinery (Europe) N.V. HMEC: Hitachi Construction Machinery Middle East Corporation FZE Saijo Office Location: Saijo, Ehime Head Office Location: Higashi Ueno, Taitoku, Tokyo 14

16 Sales and Margins Global HSC 21C Comeback 2013 Breakthrough 2016 Sales (millions of yen) Operating Income Ratio Become a world leader in the crane industry by offering attractive products to customers 1) Reestablish and maintain profitability 2) Establish a foundation for the next stage of growth 3) Define what we should be 10 years from now: "A dependable partner close at hand" Become a world leader in profitability Operating Income Ratio Net Sales 15

17 INDEX 00 About construction cranes 01 What is a crawler crane? 02 Market environment 03 From SHI & HCM to HSC 04 Outline of our medium-term management plan "Soaring 2019 for the Next Stage" 16

18 Outline of Medium-Term Management Plan "Soaring 2019 for the Next Stage" Goal Maintain and increase profitability Numerical management target Strategy Operating income ratio >8% Maintain a virtuous cycle by front-loading and investment to achieve differentiation in product development, production efficiency, quality and cost * * Front-loading: When used in the context of product development, "front-loading" refers to a strategy that aims for early identification and resolution of quality and cost problems in the product development process. 17

19 Strategic Goals and Priority Measures of Medium-Term Management Plan "Soaring 2019 for the Next Stage" Strengthen management foundation Personnel recruiting and training Operational efficiency improvement (including necessary capital investment) Defective work cost reduction (including the implementation of retroactive measures) Make products more competitive Establish presence Increase parts and maintenance sales Improve productivity Making next models more competitive (development of concepts and basic modules) Making next-generation models more competitive (R&D goal setting and technology development) Strengthen sales and marketing efforts (strengthening systems for collecting and analyzing market information) Strengthening agent business (establishment of agent support program) Increasing direct support (improving profitability and efficiency through preventive maintenance) Expansion of parts sales (improving estimation work efficiency and making parts prices reasonable) Improving productivity of key products (improving the assembling efficiency of new 200t and 350t models) Establishing a production system capable of meeting changing market needs (improvement of bottleneck processes) 18

20 Strengthen Management Foundation and Improve Productivity [millions of yen] Capital Investment Plan Improvement at key locations Three-year total: 4,540 (million yen) IT system/operational efficiency improvement Productivity improvement Personnel to be assigned FY2017 FY2018 FY

21 Make Products More Competitive Strategy: Maintain a virtuous cycle through front-loading and investment and achieve differentiation in product development, production efficiency, quality and cost CUSTOMERS MARKETING Identification of quality requirements Functional planning SERVICE Maintain and increase satisfaction DEVELOPMENT Functional engineering PDI CFT activities SALES ACTIVITIES Deliver satisfaction INSPECTION Confirmation of quality requirements MANUFACTURING Functional implementation Competitive in cost Competitive in quality Enhanced customer satisfaction Increase in orders received Active investment PDI:Product Development Innovation CFT:Cross Function Team 20

22 Establish Presence China Others Asia Europe North America Japan Incl. China 35% 11% 21% 5% 10% 18% Excl. China -- 16% 33% 8% 16% 27% 41% 8% 49% 12% (7%) ( 7%) Market trend '17 '18 Market size (relative to total demand) Market growth (over previous year) Others = Central & South America + East Europe, Russia & CIS + Middle East & Africa Asia = Australian-Asiatic + India New agency setup currently under study North Europe Russia New agency Europe Branch office setup Middle East Agency rearrangements under study China India New service agency setup Collaboration with group company Indonesia South Africa Market research Japan HSC sales offices and service locations, collaboration with group companies Expand sales of models intended for newly developing countries Resident representative office (new) America Closer tie-up with LBC First half of 2018: Completed Second half of 2018: To be completed In and after 2019: F/S or planning underway 21

23 Increase Sales of Parts and Maintenance Services Quality Assurance Corrective Maintenance Utilization of remote sensing Preventive Maintenance Predictive Maintenance Failure Failure Useful life Functional degradation Correct Early repair Investigate Repair Early detection Notify Maintenance Early preventive action Proposal Maintenance Early prediction Proposal Study Receive order Receive order Receive order Identify machine location accurately so as not to miss repair opportunities Check on operation status as required in order to detect problems and minimize downtime Check on oil and filters for replacement needs prior to regular inspections Check! Check! Check! Check! Check on machine status and keep an eye on important parts 22

24 Progress of Medium-Term Management Plan Comeback 2013 Breakthrough 2016 Soaring 2019 Sales (millions of yen) 1) Reestablish and maintain profitability 2) Establish a foundation for the next stage of growth 3) Define what we should be 10 years from now: "A dependable partner close at hand" Become a world leader in profitability Maintain or increase profitability Operating income ratio of 8% or more Operating Income Ratio Operating Income Ratio Net Sales 23

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