SUMIDA CORPORATION...2016/02/15 · euro/yen 141.15 136.96 132.52 euro/US$ 1.26 1.12 1.09 Slowing down in the second half of the year Operating Income Analysis 2015 Q3 vs. 2015 Q4

SUMIDA CORPORATION

Performance Briefings

<for FY2015 Fourth Quarter & Full Year>

February 15, 2016

Today’ Speakers

Representative Executive Officer & CEOShigeyuki Yawata

Copyright© 2015 SUMIDA CORPORATION. All rights reserved.

Representative Executive Officer & President

Tomoharu Suseki

Representative Executive Officer & CFOYoshiyuki Honda

Today’s Program


１．2015 Consolidated Financial Results (Q4 & Full-Year)

ＣＦＯ Yoshiyuki Honda

２．２０１５ Review and Future Directions

ＣＥＯ Shigeyuki Yawata

３．２０１６ Strategies

President Tomoharu Suseki

４．Q & A Session

2015 Consolidated Financial Results (Q4 & Full-Year)

Yoshiyuki Honda

CFO



（Million yen）

Consolidated P/L for FY2015 Q4

14.Ｑ4 15.Q3 15.Q4 Change % Change %

（A）（B）（C）（C）/(A) (C)/(B)

S a l e s 19,624 22,152 20,537 4.7％ △7.3％

G r o s s I n c o m e 3,430 4,235 3,193

GI ratio 17.5％ 19.1％ 15.5％

O p e r a t i n g I n c o m e 576 1,484 524 △9.0％ △64.7％

OI ratio 2.9％ 6.7% 2.6％

O r d i n a r y I n c o m e 435 1,126 283 △34.8％ △74.8％

Income before Taxes 780 1,104 112

N e t I n c o m e 8 764 197 － △74.2％

E P S （ Y e n ） 0.39 32.94 8.51

FO

REX

US$/yen 111.94 122.44 121.14

euro/yen 141.15 136.96 132.52

euro/US$ 1.26 1.12 1.09

Slowing down in the second half of the year

Operating Income Analysis 2015 Q3 vs. 2015 Q4

2015 Q3Operating Income1,484

Due toRevenue

Down△490

（Million yen）

2015 Q4OperatingIncome

524Due to

Forex Rates△30

Due toRaw Materials

Up△30

Due to China Wages

Up△90

Due toOthers△60

Due to Production Efficiency

Down△260



（Million yen）

Consolidated P/L for 2015 Jan-Dec

2014 Jan-Dec 2015 Jan-Dec Change %

（A）（B）（B）/（A）

S a l e s 77,562 86,236 11.2％

G r o s s I n c o m e 13,8 14,941

GI ratio 17.9% 17.3％

O p e r a t i n g I n c o m e 3,345 4,237 26.7％

OI ratio 4.3% 4.9％

O r d i n a r y I n c o m e 2,799 3,309 18.2％

Income before Taxes 3,162 2,932

N e t I n c o m e 1,346 2,032 50.9％

E P S （ y e n ） 58.01 87.55

FO

REX

US$/yen 104.99 120.78

euro/yen 140.20 134.81

euro/US$ 1.34 1.12

Record-breaking annual sales for two consecutive years

Operating Income Analysis2014 Jan-Dec vs. 2015 Jan-Dec

2014 Jan-DecOperating Income3,345

Due to Revenue Up

970

（Million yen）

2015 Jan-Dec Operating Income4,237

Due to Forex Rates

△750

Due to Raw Materials

Down1,150

Due toChina Wages

Up△890

Due toOthers△228

Due to Production Efficiency

Up640


Sales by Market Segment

0

20,000

40,000

60,000


（Million yen）

Consumer Electronics（Automotive) Industry

Sales by Region

0

25,000

50,000


（Million yen）

Europe China/Taiwan Asia excluding China North America

Consolidated B/S

2014Dec 31

2015Dec 31

Change

Current Assets 38,332 37,978 △353

Cash & Deposits 3,753 3,569 △183

Notes & A/R 17,013 16,998 △14

Inventory 14,119 14,262 143

Others 3,446 3,146 △299

Fixed Assets 31,728 29,877 △1,851

Tangible Fixed Assets 23,018 22,676 △342

Intangible Fixed Assets 3,527 2,912 △615

Others 5,182 4,289 △893

Deferred Assets 49 20 △28

TOTAL ASSETS 70,110 67,876 △2,234

Current Ratio 1.28 1.48

DE ratio 1.95 1.78

ＣＣＣ（days） 112 107

2014Dec 31

2015Dec 31

Change

Current Liabilities 30,042 25,614 △4,427

Notes & A/P 7,931 7,042 △889

Loans 16,301 12,970 △3,331

Others 5,808 5,601 △207

Fixed Liabilities 22,344 23,593 1,248

Loans 18,214 20,200 1,985

Others 4,129 3,392 △736

Total Liabilities 52,386 49,207 △3,179

Shareholders’ Equity 20,294 21,862 1,567

Accumulated Other Comprehensive Income

△3,770 △4,525 △754

Subscription Rights to Shares － 73 73

Non-ControllingInterests

1,200 1,258 57

Total Net Assets 17,724 18,669 944

TOTAL Liabilities & Net Assets

70,110 67,876 △2,234

US$/yen 119.67 120.38

euro/yen 145.44 131.60

euro/US$ 1.22 1.09

（Million yen）


Consolidated Cash Flow

2014

Jan-Dec

2015 Jan-Dec

Change

Cash Flow from Operating Activities 1,512 5,515 4,002

Income before Taxes 3,162 2,932 △229

Depreciation 3,430 3,830 399

Net Working Capital △4,104 △2,050 2,054

Others △975 802 1,778

Cash Flow from Investing Activities △6,279 △4,366 1,912

Capital Investments △6,109 △4,378 1,731

Others △169 11 181

Cash Flow from Financing Activities 4,719 △1,054 △5,773

Net Interest-Bearing Debts 5,217 △495 △5,713

Dividend Payment △463 △464 △0

Others △34 △94 △59

Cash and cash equivalent at end of period 3,713 3,538 △174

（Million yen）


Cash flow from operating activities significantly increased

2014 2015 2017（Plan）

Net Income/Sales 1.7% 2.4% 2.6%

Sales/Total Assets 1.2 1.3 1.2

Total Assets/Net Equity 4.2 3.9 3.7

（D/E ratio）（1.9）（1.8）（1.7）

ＲＯＥ 9％ 12％ 12％

ROE & Other Financial Ratio


FY2016 Consolidated P/L Forecast

FY2015 FY2016 ForecastMid-Term Plan

2017

S a l e s 86,236 88,000 100,000

Operat ing Income 4,237 4,800 5,000

OI ratio 4.9% 5.5% 5.0％

Ord in a r y In c o me 3,309 4,200 4,100

N e t I n c o m e 2,032 2,500 2,600

E P S ( y e n ) 87.55 107.71 112.01

Forex Rates

US$/yen 120.78 120.00 118.00

euro/yen 134.81 137.00 137.00

（Million yen）


FY2015

4,237

FY2016

Forecast

4,800

0

1,000

2,000

3,000

4,000

5,000

+563

Plus Factors

Revenue increase 410

Production efficiency up 1,430

Costs reduction 1,780

Others 60

TOTAL 3,680

Minus Factors

Products mix △1,130

Wages increase △1,430

Social insurance up △330

Production transfer cost △90

Others △137

TOTAL △3,117

Net Increase 563

Operating Income Analysis


（Million yen）

（Million yen）

Effects by Foreign Exchange rates


Currency

Rates used for 2016

PlanDrop of

yen’s value

2016年（Forecast）

SalesOperatingIncome

1 USドル 120 yenwith every 1-yen drop

+261 +13

1 euro 137 yenwith every1-yen drop

+259 +33

1 Renminbi 18.7 yenwith every

0.1-yen drop+31 △33

（Million yen）

２０１５ Review and Future Strategies

CEO

Shigeyuki Yawata


Master Plan

‘12-’14 Mid-term Plan

Stage II Stage III

‘15-’17 Mid-term Plan ‘18～Mid-term Plan

Stage I

Sales: ¥100 billion Sales: ¥100 billion ～Sales : ¥60.0 billion

Stage I: Building a base & Operational restructuring

Sales : ¥77.5 billion

Operating income: ¥3.3 billion

‘12 – ‘14

Stage II: Market development & Growth

Sales : ¥100 billion

Operating income : ¥5 billion

‘15 – ‘17

Stage Ⅲ: Growth & Diversification

Sales: ¥100 billion～

Operating income : ¥10 billion～

’18～

*Figures in Stage Ⅰis actual.

Master Plan 2012-2017 & beyond

To Aim for ¥100 billion sales & ¥5 billion operating income in Stage II

Copyright© 2015 SUMIDA CORPORATION. All rights reserved. Strictly Confidential.

Since CFO Honda already explained the financial results, I’m going to review overall

performance in fiscal year 2015.

As the first year of Mid-Term Business Plan Stage II (2015-2017), 2015 has been a

very successful year for Sumida. Total sales in 2015 were up 11% from the

sales in the previous year. Linking the profit increase to dividend, total dividend payout for

2015 has been decided to be 26 yen per share, an increase of 6 yen per share from the

previous year.

This chart shows our Master Plan which started from 2012. With market development and

growth as main objectives, we are aiming for 100 billion yen sales and 5 billion yen operating

income in Stage II, which got off to a very good start in 2015. We recognize that 2016 will be

a very important year to ensure an attainment of the targets set in Stage II.

2015 Expansion of Production Sites

ChinaTaipingPanyuNanningShanghaiChangdeJi’an – expanded in 2015＋１１０００㎡SuQian

GermanyLehestenNeumarkt/OPf.ObernzellRadeberg

Romaniaexpanded in 2015＋３０００㎡（３０％）

Sloveniaexpanded in 2015＋１３００㎡（６５％）

ThailandVietnamNo. factoryNo.2 factory build in 2015

JapanAomoriNagano

MexicoExpanded in 2015＋２０００㎡（４４％）


Completed expansion of production capability for a 100 billion-yen sales company

As one of the key measures implemented in 2015, we expanded our production

capability to accommodate 100 a billion yen sales in the near future. Plants to produce

automotive-related products in Romania, Slovenia and Mexico were expanded and new

plants in China and Vietnam were built. At the same time, we have completed

expansion of distributor networks in the U.S. and China.

Sumida will continue growing in 2016 despite of some concerns

Car makers expected to grow３％ per annum-Benefited from falling gasoline price, also from last-minute demand for cars before consumption tax increase in Japan & before expiration of termination of automobile acquisition tax reduction in China

Customers


2016 Business Environments

Decrease of law materials prices・Depreciation of renminbi-Decrease of prices of copper, oil and iron ore ⇒ Favorable for costs reduction of

coils (wires, cores & plastics)-Depreciation of renminbi ⇒ Favorable for Sumida’s costs reduction on yen basis

Costs

China economy’s slow down & Extreme decline of oil prices

Concerns

The world’s car market is expected to grow 3% in 2016 with the aid of low-priced gasoline

in the U.S. and in Europe as well as of last-minute demand for cars before increase of

consumption tax in Japan and termination of automobile acquisition tax reduction in China.

In terms of costs, a decline in raw materials prices and depreciation of renminbi will serve as

costs reduction factors for Sumida. Coils are made of three main components, ferrite core made

largely of iron ore, wires made of copper and plastic. Prices of the raw materials for those

components have been declining lately. Due to depreciation of renminbi, production costs for

Sumida products produced in China are expected to virtually decline.

On the other hand, there are concerns about an adverse effect on the world’s economy

from China economy slowdown and a substantial decline of oil prices. However, I think

that Sumida will be able to continue growing in 2016 following a growing market trend

in 2015.

0

500

1,000

2015 2016 2017

880

42

Launching new products and M&A will be indispensable for achieving Mid-Term Business Plan Stage Ⅱ and for laying the ground work for Stage Ⅲ

To achieve ¥100 billion sales

From organic growth→¥93 billion

New businesses including M&A →¥7 billion

2015Actual

2016Plan

2017Plan

Sales Operating Income

（100 million yen）

Sales Growth in 2017


2016 Strategies to Achieve MTBP in 2017

Launching new products

Costs reductions Production transfer Rationalization investments

Correction of currency mix

M&A

Improvement of Profitability

862

1000

48 50

Under these circumstances, we aim for total sales of 88 billion yen and operating income of 4.8

billion yen in 2016. There are some items that should be done during 2016 to ensure an attainment of

the Mid-Term Business Plan Stage II and to lay the ground work for the Stage III. This chart was

made when the Stage II was announced a year ago. Revenues of 93 billion yen from the existing

businesses have come into sight at this moment. However, additional revenues of 7 billion yen

expected from new businesses including M&A still remain an issue. Later, President Suseki will

explain about this. Also, we have to launch new products from a perspective of profitability

improvement, which will also be explained by President Suseki.

This is the end of my presentation. Thank you very much for listening.

Tomoharu Suseki

Representative Executive Officer & President

2016 Strategies


2015 sales exceeded its plan and almost achieved the target for Stage Ⅱ to

cover 80% of total sales with Automotive and Industry combined.

In 2016, we will make efforts toward achieving goals in 2017 (final year of Stage Ⅱ), especially focusing on strengthening Industry business.


Sales by Market Segment

2014 2015 2017 Plan

IndustryIndustry

100billion yen

86.2billion yen

77.6 billion yen

79%80%

75%

Stage IIStage I

Consumer Electronics

Automotive

ABS : Anti Breaking system

Smart Entry : Progressed type of Keyless Entry

HID : High Density Discharge (Xenon Lamp)

Demand for Smart Entry will significantly expand on a global basis.

Smart Entry

ABS


Prospects for Automotive Business in 2016 ①

Further expansion of core products

HID

To ensure a sustainable growth in the future with various new products


Prospects for Automotive Business in 2016 ②

Products for EV/HEV New Products

Mechatronics Products

Metal Inductor adaptable up to

150℃

Rapid Charger for EV

Control Trans for HEV

Rotor Position Sensor

SuspensionInjector

Reactor

New Charging System

Launching new products for new applications

To launch new products onto the markets to prepare for 2017 while expanding sales

of existing products


Prospects for Industry Business in 2016 ①

New Products

Power Module for security & server

Power Inductor with high functionality and reliability

Plastics RFID

Developing new products to prepare for 2017

For China

communication

infrastructure

RFID Products Energy

Existing Products

Inductor &Trans for industrial equipments Inductor

Reactor for

Power

Conditioner

Power Module with high reliability

Starting commercial production from

2015 Q4

Starting commercial production

from 2015 Q4

Starting commercial production

from 2016 Q1

▶Many ongoing development projects in Japan and the U.S.

Insulated trans for medical equipments (Endoscope & etc.)

Large power trans for medicalX-ray apparatus

Actuator for measuring equipments

To increase sales in medical market several folds in 3-5 years

▶Making sure to inherit customers from Nihon Kohden’s trans business

▶Acquired ISO13485(Medical ISO)

▶Acquired new projects in the U.S.

Bladder stimulating antenna

Ultra miniature antenna for hearing aids

Progress in 2015


Prospects for Industry Business in 2016 ②

Outlook in 2016

Solid progress in making specifications of products

for medical/healthcare markets

Market Trends

Distributor networks in China was thoroughly reviewed. From now on, we will do more business with the local Chinese makers.

In 2016, we will put a special emphasis on LED TV, Network-related Household Appliances

Past Now

TV・ＡＶ

Game

Digital Camera

HDD

Note PC

Mobile Phone

Smart Phone&

Tablet PC

-----

-----


Prospects for Consumer Electronics Business in 2016

To select businesses by focusing on profitability and added value without pursuing sales volume

Aiming for market share increase by expanding lineups of the existing products

Expanding market shares of existing product groups

0

20

40

60

2011 2012 2013 2014 2015 2016

Newly-built in2015 in low-cost areas


Measures for improving profitability

Production transfer from high-cost areas to low-cost areas

High-cost areas（Guangzhou）Panyu

（Dongguan）Taiping

Continuation of capital investments in automated production facilities

Reduction of raw materials purchase costs

Prices of oil-related and copper-related materials decreasing due to market trends Further strengthening purchasing power by promoting global procurement system

Ji’an factory in China Second factory in Vietnam

Plan

Increase capital investments to the level of 4-6 billion yen a year from 3 billion yen level in the past

86 88

500

2015 2016 2017


Ｍ＆Ａ

To clarify the directions for M&A by end of 2016

Coil

TechnologyIndustry

Automotive

CoilsModules

MechatronicsSensors

Consumer

Electronics

9

Technology

We have been developing additional new technologies utilizing our coil technology as a base.We are looking for M&A

to help us speed up this

direction.

Expansion of new market

Plan

50

100

93

M&A

We have been expanding our business in the medical /healthcare markets. We are looking for M&A to help us accelerating this trend.

We are looking for M&A to help us expand our coils’ shares in the global

market

Expansion of existing business

Plan

M&A Targets

100

(Billion yen)

Documents

SUMIDA CORPORATION...2016/02/15 · euro/yen 141.15 136.96 132.52 euro/US$ 1.26 1.12 1.09 Slowing down in the second half of the year Operating Income Analysis 2015 Q3 vs. 2015 Q4