20180214 IR Web version (E) pptx · Forecast of FY2018 Consolidated P/L based on IFRS FY2017 Forecastof FY2018 Change（％） S a l e s 90,153 98,000 +8.7% Operating Income 6,217

SUMIDA CORPORATION

FY2017 Full-Year Business Performance &

New Mid-term Business Plan (2018-2021)

February 14, 2018

Today’s Speakers

2Copyright© 2016 SUMIDA CORPORATION. All rights reserved.

Representative Executive Officer and CEO

Shigeyuki Yawata

Representative Executive Officer and President

Tomoharu Suseki

Representative Executive Officer and CFO

Yoshiyuki Honda

Today’s Program

Copyright© 2015 SUMIDA CORPORATION. All rights reserved. 3

１．Summary

CEO Shigeyuki Yawata

２．FY2017 Q4 and Full-Year Consolidated Financial Results

ＣＦＯ Yoshiyuki Honda

3. Master Plan Stage Ⅲ (2018-2021) Mid-Term Business Plan

President Tomoharu Suseki

CFO Yoshiyuki Honda

4. Q & A Session


Mid-term Business Plan StageⅡ (2015-2017）: Achievements

Mid-term Business Plan Stage Ⅲ (2018-2021）: Targets

� Sales

‐Expansion of Automotive and Industry-related sales

� Production

‐Vietnam No.2 plant & Ji’an plant in China ⇒Low cost

‐Europe and Mexico plants ⇒ Automation

� R&D

- Hired many talented engineers at home and abroad

5-billion-yen

operating Income

achieved

one year

ahead of schedule

� Automotive

‐New Energy Vehicles (EV/PHV/FCV)-related business

� Industry

‐ＩoT-related business

� Consumer Electronics

- Expansion of markets (North America/China /Japan)

� M&A

Aiming for more than

10-billion-yen

operating Income

Summary

FY2017 Q4 and Full Year

Consolidated Financial Results

Yoshiyuki HondaCFO

5 Copyright© 2018 SUMIDA CORPORATION. All rights reserved.

（Millions of yen）

FY2017 Q4 P/L based on IFRS

16.Ｑ4 17.Q3 17.Q4 Change % Change %

（A）（B) （C）（C)/(A) （C）/(B)

S a l e s 19,651 23,164 23,621 20.2％ 2.0％

G r o s s I n c o m e 3,468 4,021 3,423

Gross margin 17.7% 17.4% 14.5%

O p e r a t i n g I n c o m e 1,260 1,774 1,097 △12.9％ △38.2％

Operating margin 6.4% 7.7% 4.6%

Net Income before Taxes 1,090 1,673 1,019 △6.5％ △39.1％

Net Income Attributable toSUMIDA CORPORATION 883 1,136 1,261 42.8％ 11.0％

E P S （ y e n ） 38.07 42.56 47.24

FOR

EX

US$/yen 106.08 110.91 112.54

euro/yen 115.63 129.12 132.73

renminbi/yen 15.61 16.47 16.98

6

The highest quarterly sales achieved

※Sumida adopted IFRS from 2017 Q1. Figures for 2016 Q4 were converted based on IFRS.

Copyright© 2018 SUMIDA CORPORATION. All rights reserved.

Breakdowns of Operating Income Change FY2016 4Q → FY2017 4Q

7


Operating income down due to copper price increase

FY2016 4QOperating Income1,260

Sales up/Product mix

420

Productivity up

140

China wages/Social welfare

up△240

Effects of FOREX

50

Copper priceup

△320

Expensesup

△55

R&D Exp.up

△50 Others△108

FY2017 4QOperating Income1,097



FY2017 Full Year P/L based on IFRS

FY2016 FY2017 Change %

（A）（C）（C)/(A)S a l e s 81,052 90,153 11.2％

G r o s s I n c o m e 14.861 15,134

Gross margin 18.3% 16.8％

O p e r a t i n g I n c o m e 6,270 6,217 △0.8％

Operating margin 7.7% 6.9％

Net Income before Taxes 5,469 5,697 4.2％

Net Income Attributable toS U M I D A C O R P O R AT I O N 3,666 4,504 22.9％

E P S （ y e n ） 157.97 176.41

FOR

EX

US$/yen 109.31 112.28

euro/yen 120.75 126.21

renminbi/yen 16.51 16.54

8

The highest sales achieved※※Sumida adopted IFRS from 2017 Q1. Figures for 2016 Q4 were converted based on IFRS.


Copper price up△820

9

FY2016Operating Income6,270

Effects of FOREX

100



Others△133

Productivity up500


1,190


up△710

R&D Exp.up

△180


Breakdowns of Operating Income ChangeFY2016 Full Year → ＦY2017 Full Year

Operating income slightly down due to copper price increase

10


Copper price increase offset by sales increase and effects of increased production

FY2017 PlanOperating Income

5,900


420

Effects of increased production

320


down190

Effects of FOREX

209

Copper priceup

△660

Expensesdown140

R&D Exp.down

30

Others△102

FY2017 ActualOperating Income6,217


Productivitydown△230

Breakdowns of Operating Income ChangeFY2017 Full Year Plan → ＦY2017 Full Year Actual

Forecast of FY2018 Consolidated P/Lbased on IFRS

FY2017 Forecast of FY2018 Change（％）

S a l e s 90,153 98,000 +8.7%

O p e r a t i n g I n c o m e 6,217 6,200 △0.3%

Operating margin 6.9% 6.3%

Net Income before Taxes 5,697 5,400 △5.2%

Net Income Attributable toSUMIDA CORPORATION 4,504 3,800 △15.6％

E P S ( y e n ) 176.41 142.27

FOREX

US$/yen 112.28 110.00

euro/yen 126.21 136.00renminbi/yen 16.54 16.40


11

Operating income is expected to stay flat despite sales increase.


FY2017

Actual

6,217

FY2018

Forecast…

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

△17

Factors to increase operating income

Sales growth 1,000Productivityimprovements

1,180

Costs reduction 1,020Effects of FOREX 400Expenses reduction 140TOTAL +3,740

Factors to decrease operating income

China wages increase △1,870Product mix △900Copper price increase △630R&D expenses increase

△200

Others △157TOTAL △3,757NET △17

12

Breakdowns of Operating Income ChangeFY2017 Actual → FY2018 Forecast



Master Plan Stage Ⅲ (2018-2021)

Mid-Term Business Plan

Feb 14, 2018 IR Briefing Session

Tomoharu Suseki, PresidentYoshiyuki Honda, CFO


Master Plan Stage I, II, III

14

Stage I: Building a base & Operational restructuring

Sales Target: 600 →776Operating income: 50 → 33

Stage II: Market Development & Growth

Sales Target and results: 1,000Operating income: 50

Stage III: Growth & Diversification

Sales Target: ≥1,000Operating income: 100

2015 – 2017

BP 2012-2014

Stage II Stage IIIBP 2015-2017 BP 2018 ++

Stage ISales: 1,000 Sales: ≥1,000Sales: 600

OP: 50

2012 – 2014

Master Plan 2012-2021

Stage I

Targets and Results

Stage II Targets

Stage III Tentative Targets 2018 – 2021

(100 Million yen = Oku yen)


Stage I, II Results

15

* 2016 IFRS based OP: 62.7 Oku yen

Target Act

Sales 600 776

Operating

Income50 33

Sales 1,000 902

Operating

Income50 62

Stage I

Stage II

Master Plan Stage I(2012-2014)

Master Plan Stage II (2015-2017)


3.4%2.7%

4.3%4.9%

7.7%

6.9%

0.02

0.04

0.06

0.08

2012 2013 2014 2015 2016 2017

OI%

513

639

776

862 811

902

18 17

33 42

63 62

0

50

100

150

200

250

0.00

300.00

600.00

900.00

1,200.00

2012 2013 2014 2015 2016 2017

Sales OI

� Both sales and operating income

largely grew in Stage I and II.

� In stage II, operating income

target was achieved, but sales

target was not. Major reason is

M&A activities were not

completed during this period.


Stage III Priority Action Plans

16

At the final stage of Master Plan, grow sales and operating income

more and more. In addition, further expand our target market and

products lineup, and reinforce business foundation.

Stage III Growth & Diversification

� Further increase Automotive and Industry business that has

driven the growth in Stage I and II. Challenge to increase

Consumer Electronics market related business again, so as to

make them grow.

� By expanding the lineup of non-coil business, speed up the

growth.

� Reshuffle and rejuvenate the members of top management

team in Stage III, so as to further grow in the next Master Plan

period.Copyright© 2018 SUMIDA CORPORATION. All rights reserved.

Stage III Numerical Targets

17

� Operating income generated by

� Existing business 85 oku yen

� M&A activities 15 oku yen

Operating Income 100 oku yen

2018 - 2021


Stage III Details of Numerical Targets

18

Note:We are not going to set a numerical sales

target for Stage III. This is because sales are

subject to change largely depending on

Forex. Instead, we will set a numerical

operating income target only, as it less

depend on Forex.

Sales numbers in this slide are for reference

only, being developed with the above

assumption.


Other KPI

P/L Statement

Existing

Business

M&A Total

Sales 1,180 200 1,380

Operating

income85 15 100

Net income 54 9 63

� CCC (days) : Keep 100 days

� ROE : 12% or above

� D/E Ratio : Keep 1.0

Exchange rates USD 110.0

EURO 136.0

CNY 16.4

Copper price 6,800 USD/ton

Plan Assumptions


64.4%

16.2%

19.4%

Automotive Industry

Consumer Elec

Stage III Strategies by Market

19

2017 Act

2021 Target

64.5%

16.8%

18.7%

1,180

2017 Act 2021 Plan CAGR

Automotive 581 760 6.9%

Industry 151 190 5.9%

Consumer

Electronics169 230 8.0%

Total 902 1,180 6.9%

� Keep the level of growth rate in Stage II in

Automotive and Industry related business.

� Largely increase Consumer Electronics

related business more than the last several

years.

� Accordingly, make Consumer Electronics

related business accounts for 20% of our

total sales.


902


Automotive

20

� Sales trend of 3 key products

ABS HID Keyless Entry System

� We will focus on the following 2 areas, so as to keep Automotive

business growing more and more.

Total sales of these 3 products in Stage III will slow down compared with the

previous stages.

Slightly up Down Up

EV/HEV Actuator


EV/HEV Applications

21

Charger Stand

EV （Car）Battery Management

System

On-board Charger

Motor BatteryPCU

Contactless Plug in


Industry

22

� Applications on which we have been focusing

� New applications to focus on in Stage III

FA RFID Medical, Healthcare

Same as before New area to focus on

FA RFID EnergyMedical, Healthcare

Up Up Up Down

IoT


Industry 4.0 and IoT

23

Digital transformation in Manufacturing industry

� Industry 4.0 and Internet of Things (IoT) will expand networking of various

machines and/or people.

� Our technologies can be applied to various business areas including power

supply module, noise control and communication.


Consumer Electronics

24

� Applications on which we have been focusing

� New applications to focus on in Stage III

Review a lineup of metal type inductors, and expand their sales.

Inductor forConsumer Electronics

Transformer for adapterCoils for

contactless charging

Up Up Up


Consumer Electronics Applications

25

Inductor Metal Inductor

Smartphone

Air CoilTransformer

Adaptor

Communication

Server-related

Smart home, AI speaker

Focus on the customers in

N.A., China and Japan

Home appliances


Stage III Strategies on Regions

26

� Establish a new site, and add new functions to the existing site as

follows. The following 2 are our priority locations.

India North America

Expand our business, targeting at

Automotive and Industry markets.

Further expand the current site,

sales office, and strengthen/add

new functions:

2018 and beyond

Establish a new

sales office

Establish a new

technology support site

Establish a new

manufacturing site

� Strengthen the function as

technology center

� Add manufacturing function


Stage III Strategies on Manufacturing

27

� Maintain the level of CAPEX in 2017

for the next 4 years.

Expansion of Major Plants

� China Ji’An plant - Phase III

� Vietnam Quang Ngai plant – phase II

� Mexico Guadalajara plant

� Slovenia Slovenia plant

� Strengthen Centralized purchasing

system more, to reduce the

purchasing costs.

� Copper price assumption:

6,800USD/ton

� An increase of minimum wage in

China for the next 4 years is

expected be higher than Stage II.

� Make large productivity

improvements, so that they can

cancel out an wage increase.

Increase CAPEX for that.

Major areas of CAPEX

� Automotive related

� Consumer Electronics related

CAPEX Material Purchasing

Labor cost (DL cost)


Stage III Strategies on M&A Activities

28

� Continue to search for, select, and negotiate with the company(ies)

to merge and acquire on a global basis and based on the above 3

categories.

Coil

Company Coil Business

Non-Coil

Passive Components

Company

Customers,

Distributors & EMS

Downstream

add

Upstream

Material Supplier

Category I Category II Category III


Act as a Global One in all aspects, including markets, customers,

management staff, organization (e.g. manufacturing)

Global

For Further Growth

29

Work to become a leaner organization so as to quickly handle a

need and make a decision

Speed

Keep focusing on electronic components, and also work to expand

the business domain in non-coil fields

Focus

Sumida Business Principle：Global, Speed, Focus



Stage Ⅲ Finance Strategies


FY2017 --- the Final Year of Mid-term Business Plan Stage Ⅱ

FY2017 FY2017Stage Ⅱ Plan

Achievement %

S a l e s 90,153 100,000 90.2％

Operating Income 6,217 5,000 124.3％

Operating margin 6.9% 5.0%

N e t I n c o m ea t t r i b u t a b l e t oS U M I D AC O R P O R A T I O N

4,504 2,600 173.2％

FOR

EX

US $/yen 112.28 118.00

euro/yen 126.21 137.00

Income targets were achieved.Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 31

Breakdowns of Operating Income ChangeFY2014 → FY2017

Change of depreciation

methods600

32


Effects of Forex△580


FY2017Operating Income

6,217Others△168

Productivity up1,500


2,500China wages

/Social welfareup

△2,140R&D Exp.

up△670


Costs down1,250

Effects of IFRS580

FY2017（Actual）

FY2017（Plan）

CCC 100 days 100 days

ＲＯＥ (3 year average） 15.5％ more than 12％

Sales Profit Ratio 3.5% 2.6%

Sales/Total Assets 1.2 1.2

Total Assets/Net Equity 3.6 3.7

（Net D/E Rtio）（1.0）（1.5）

33

Monitoring Targets/Components of ROE


FY2017 FY2021 Targets CAGR

Sales 902億円 1,380億円 11.2％

Operating Income 62億円 100億円 12.6％

Net Income attributable to SUMIDA CORPORATION

45億円 63億円 8.7％

《Forex assumptions》

米ドル/円 112.28円 110.00円

ユーロ/円 126.21円 136.00円

⼈⺠元/円 16.54円 16.40円

34

Stage Ⅲ Targets vs. FY2017

Steady growth in Stage Ⅲ


FY2017 FY2021 Targets CAGR

Sales 902 1,380 11.2％

Operating Income 62 100 12.6％

Net Income attributable to SUMIDA CORPORATION

45 63 8.7％

《Forex assumptions》US$/yen 112.28円 110.00円

euro/yen 126.21円 136.00円

renminbi/yen 16.54円 16.40円

LME Copper price US$6,193/t US$6,800/t

（Hundreds of Millions of yen）

Breakdowns of Operating Income ChangeFY2017 → FY2021

FY2017

62

FY2021

Forecast

100

0

50

100

+38

Factors increasing operating income

Sales growth 40

Costs reductions 22Productivityimprovements 30

M&A and others 15

TOTAL 107

Factors decreasing operating income

Wages increase △24Social welfare increase in China △6

R&D investments △12

Product mix △15Increase of sales & admin. expenses △9

Others △3TOTAL △69

NET +38

35

（Hundreds of Millions of yen）

Aiming for OP increase with sales increase, costs reduction and productivity improvementCopyright© 2018 SUMIDA CORPORATION. All rights reserved.

FY2017 FY2021（Plan）

CCC 100 days Less than 100 days

ＲＯＥ（3 year average） 15.5％ 12.6％

Sales Profit Ratio 3.5% 4.3%

Sales/Total Assets 1.2 1.1

Total Assets/Net Equity 3.6 2.5

（Net D/E Ratio）（1.0）（1.0）

36

Monitoring Targets/Components of ROE

Targets are set in consideration of financial healthCopyright© 2018 SUMIDA CORPORATION. All rights reserved.

37

Total CAPEX in Stage Ⅲ (2018-2021)

TOTAL CAPEX

For the coming 4 years（2018-2021）

For the past 4 years(2014-2017） Growth

%2017

350 〜 390 238 +50％〜

+60％

88

【Estimated CAPEX Plan】2018 2019 2020 2021

100 80〜95 80〜95 80〜95


（Hundreds of Millions of yen)

１. Central control of foreign exchange risks

(a) Natural hedge : same currency-based production and sales

(b) Foreign exchange exposures of all Sumida group companies are centrally controlled at a Hong Kong subsidiary

２． Visualization of financial information by unifying accountingsystem

(a) Same accounting system is used at all group companies

３． Strengthening internal controls at overseas subsidiaries

(a) Stand-alone financial statements of each subsidiarywill not be used to evaluate its performance.

(b) Profitability is controlled by each business unit consisting of several subsidiaries.

38

Construction of a mechanism for internal controlcompleted to support Mid-term Plan Stage Ⅲ


Dividend Policy

◎ As returning profit to our shareholders is our top priority, wepay dividend based on payout ratio of 25%-30%.

◎ Dividend is paid for each quarter.

◎ From Q1 to Q3, we pay dividend that is determined at the endof each quarter. For Q4, the dividend is determined so thattotal annual dividend paid for the year reflects payout ratio of25%-30%.

【Dividend payment (yen/share)】Q1 Q2 Q3 Q4 TOTAL Payout %

FY2016年 6.00 6.00 6.00 16.00 34.00 21.5%

FY2017 6.00 6.00 6.00 27.00 45.00 25.5%

FY2018年（forecast) 6.00 6.00 6.00 18.00 36.00 25.3％


*

Disclaimer Regarding Forward Looking Statements


Sumida Corporation (referred to as "Sumida") makes this document available for informational

purposes only. This document contains certain “forward-looking statements” which reflect

management’s current views and the assumptions made with respect to specific future events

and financial performance. Such statements are based on currently available information, and

by their nature are subject to various risks and uncertainties that could cause actual results to

differ materially from those projected or implied in “forward-looking statements” and from

historical trends.

These risks include but are not limited to domestic and global economic business conditions,

successful execution of our strategy and our ability to realise the resulting benefits, our ability

to develop and market new products, changes in legislation, legal claims, changes in exchange

and interest rates, changes in tax rates, actuarial assumptions, raw materials and employee

costs, our ability to restructure our operations, the rate of technological changes, political,

economic and other developments in countries where Sumida operates, industry consolidation

and competition. As a result, Sumida’s actual future results may differ materially from the plans,

goals and expectations set forth in such forward-looking statements. Sumida is under no

obligation to, and expressly disclaims any obligations to, update or alter its forward-looking

statements, whether as a result of new information, subsequent or otherwise.

Sumida is under no liability of any person in respect of any loss and damage which may be

suffered or incurred or which may arise directly or indirectly in respect of information contained.

All rights, including, but not limited to the copyright, reserved. No part of this document may be

reproduced in any means without the prior written permission of Sumida.

Documents

20180214 IR Web version (E) pptx · Forecast of FY2018 Consolidated P/L based on IFRS FY2017 Forecastof FY2018 Change（％） S a l e s 90,153 98,000 +8.7% Operating Income 6,217