Closing briefing material for the fiscal year ended ... · December 31, 2012 1. FY Dec12 financial review and performance summary handout FY Dec 2012: results of operation Renewed

The outlook on our future performance provided in this document has been produced by ourselves independently based on data made available as of now and involves risks and uncertain factors. As such, no guarantee is given towards the achievement of the figures in the forecast.

Ticker Code:5943

February 12, 2013

Closing briefing materialClosing briefing materialfor the fiscal year ended for the fiscal year ended

December 31, 2012December 31, 2012

1

FY Dec12 financial review and performance summary handout

FY Dec 2012: results of operationFY Dec 2012: results of operation

Renewed record high profit by actively introducing new products

Renewed record high profit Renewed record high profit by actively introducing new productsby actively introducing new products

* Annual average exchange rate 1USD:80.11JPY / 1RMB:12.72JPY

1,7501,7501,7501,750

1,8431,8431,8431,843

1,8701,8701,8701,870

88888888

81818181

71717171

98989898

87878787

73737373

38383838

59595959

47474747

FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012

Sales

Operating Income

Ordinary Income

Net Income

■■■■Sales

■■■■OperatingIncome

■■■■Ordinary Income

■■■■Net Income

■■■■ROE

■■■■ROA

187.0 bil yen (up 1.5%)

8.8 bil yen (up 8.0%)

9.8 bil yen (up 12.7%)

5.9 bil yen (up 24.6%)

6.7%

3.8%

::::

::::

::::

::::

::::

::::

[Unit: 100mn JPY]

2

FY Dec 2012: results of operation / segmentFY Dec 2012: results of operation / segment

Domestic business records an increase both in sales a nd profit, while overseas business move into the black

Domestic business records an increase both in sales a nd profit, Domestic business records an increase both in sales a nd profit, while overseas business move into the blackwhile overseas business move into the black

3


1,5891,5891,5891,589

1,7041,7041,7041,704

1,7271,7271,7271,727

83838383

67676767

86868686

0000

100100100100

200200200200

300300300300

400400400400

500500500500

600600600600

700700700700

800800800800

900900900900

1,0001,0001,0001,000

1,1001,1001,1001,100

1,2001,2001,2001,200

1,3001,3001,3001,300

1,4001,4001,4001,400

1,5001,5001,5001,500

1,6001,6001,6001,600

1,7001,7001,7001,700

1,8001,8001,8001,800

1,9001,9001,9001,900

2,0002,0002,0002,000


0000

60606060

120120120120

180180180180

SalesSalesSalesSales

Operat ingOperat ingOperat ingOperat ing

ProfitProfitProfitProfit

143143143143

138138138138

160160160160

1111

4444

▲ 1▲ 1▲ 1▲ 1

0000

100100100100

200200200200


-8-8-8-8


Operat ingOperat ingOperat ingOperat ing

ProfitProfitProfitProfit

[Unit: 100mn JPY]

■■■■■■■■Domestic businessDomestic business ■■■■■■■■Overseas businessOverseas business

[Unit: 100mn JPY]

FY Dec 2012: results of operation / segmentFY Dec 2012: results of operation / segment

[Unit: 100mn JPY]


■■■■■■■■Domestic business: sales by product areaDomestic business: sales by product area

54

※New energy area for 2010 are included in hot water air-conditioners area

160160160160

138138138138

143143143143143143143143

1,7271,7271,7271,7271,7271,7271,7271,727

1,5891,5891,5891,589

1,7041,7041,7041,704

70707070

74747474

37373737

50505050

30303030

36363636

76767676 41414141 25252525

0000 150150150150

FY2012FY2012FY2012FY2012

FY2011FY2011FY2011FY2011

FY2010FY2010FY2010FY2010

Ch inaCh inaCh inaCh ina North Amer ic aNorth Amer ic aNorth Amer ic aNorth Amer ic a Othe rsOthe rsOthe rsOthe rs

■■■■■■■■Overseas business: sales by regionOverseas business: sales by region

989989989989

71717171 158158158158

161161161161

255255255255

243243243243

176176176176

196196196196

1,0591,0591,0591,059

1,0421,0421,0421,042

90909090144144144144 252252252252 181181181181

0000 1000100010001000

FY2012FY2012FY2012FY2012

FY2011FY2011FY2011FY2011

FY2010FY2010FY2010FY2010

Hot wate r air-condit ione rs areaHot wate r air-condit ione rs areaHot wate r air-condit ione rs areaHot wate r air-condit ione rs area New ene rgy areaNew ene rgy areaNew ene rgy areaNew ene rgy area Househo ld system areaHouseho ld system areaHouseho ld system areaHouseho ld system area

K itchen areaK itchen areaK itchen areaK itchen area Othe r areaOthe r areaOthe r areaOthe r area

[Unit: 100mn JPY]

FY Dec 2012: operating income / factors behind the increase in pFY Dec 2012: operating income / factors behind the increase in p rofitrofit

[Unit: 100mn JPY]

5


* Cost of outsourced works is the cost for installation of products handled

FY2011Operating

income81.8

FY2012Operating

income88.3

Reduction Reduction in SG&Ain SG&A

+10.2+10.2Increase in Increase in the cost of the cost of outsourced outsourced

worksworks

▲▲4.14.1

Decrease due to Decrease due to number of units, number of units,

selling price, selling price, product mix, etcproduct mix, etc

▲▲18.918.9

Changes in raw Changes in raw material cost material cost

+13.9+13.9

Reduction in Reduction in raw material cost raw material cost

due to cost due to cost reduction effortsreduction efforts

+19.2+19.2Increase in Increase in processing processing

costcost

▲▲13.013.0

Influence of Influence of exchange ratesexchange rates

▲▲0.80.8

Forecast for financial and Forecast for financial and Business performance Business performance

for the fiscal year ending for the fiscal year ending December 31, 2013December 31, 2013

6

930930930930

813813813813

834834834834

883883883883

900900900900

799799799799844844844844

833833833833

0000

1100110011001100

FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012 FY2013 (fo recast)FY2013 (fo recast)FY2013 (fo recast)FY2013 (fo recast)

250250250250

1250125012501250

Number of new housing starts

（thousand）

Number of new housing units

transferred to new owners

●Larger preferential treatment for energy-saving homes

●Growth of the used house market and homerenovation market

●New housing improved(outlook for 2013 is in the 930 thousands)

◆◆中国中国

●Acceleration of the spreading of gas power generation system

●“ECO-Jozu” becoming a de facto standard ●Acceleration of the spreading of solar power generation and solar water heaters

7

●Continuance of the fixed price purchase system

●Increased demand towards long-term reliability

●Continued trend of conversion into gas appliances (water heaters, stoves)


FY Dec 2013: domestic business / external environme nt (1)FY Dec 2013: domestic business / external environme nt (1)

●Concern over increase in raw material cost for materials and parts, etc

Economic environment expected to recover, demand fo r Economic environment expected to recover, demand fo r gas and kerosene appliances and renewable energy to remain strongas and kerosene appliances and renewable energy to remain stron gg

Housing industryHousing industryHousing industry

Gas and kerosene appliancesGas and kerosene appliancesGas and kerosene appliances Renewable energyRenewable energyRenewable energy

FY2010 FY2011 FY2012 FY2013(forecast)

670

FY2010 FY2011 FY2012 FY2013(forecast)

FY Dec 2013: domestic business / external environme nt (2)FY Dec 2013: domestic business / external environme nt (2)

8


Gas and kerosene appliances to Gas and kerosene appliances to maintain high levelmaintain high level

For gas appliances, a 4.5% increase For gas appliances, a 4.5% increase expected for the full financial yearexpected for the full financial year

Trends in conversion to gas appliances to continueTrends in conversion to gas appliances to continueTrends in conversion to gas appliances to continue

[Unit: Thousand][Unit: Thousand]

3,124(unchanged from

previous year)

Electric water heaterElectric water heaterElectric water heaterElectric water heater・・・・

Eco CuteEco CuteEco CuteEco Cute

GasGasGasGas・・・・Kerosene water heaterKerosene water heaterKerosene water heaterKerosene water heater

2,859

3,1013,134

1,059

718

657

595 597

632

570

1, 303(+4.5% yoy)

1,139

1,246

IH Cooking HeaterIH Cooking HeaterIH Cooking HeaterIH Cooking Heater

Gas BuiltGas BuiltGas BuiltGas Built----in Stovein Stovein Stovein Stove

561

Outlook on demand for water heatersOutlook on demand for water heaters Outlook on demand for built-in stovesOutlook on demand for built-in stoves

•Gas water heaters: excluding #8 and below. •Company estimate for 2013

•Excluding units with 1 burner •Company estimate for 2013

FY Dec 2013: overseas business / external environmentFY Dec 2013: overseas business / external environment


9

●●●●Maintaining of stable economic growth●●●●Expansion of domestic demand through the Government’s income-doubling plan (2020)●●●●Increase in housing for low-income earners

●●●●Continuation of additional stringent policy for the acquisition of properties●●●●Increase in minimum wage

●●●●Economic environment heading for recovery●●●●Clear recovery of the housing market

●●●●Restart of Government subsidy for tanklessproducts (from Jan 2013)

●●●●Expansion of low NOx 20ppm regulatory region (South CA4 county, North CA9 county)

North America: Increase in demand through recovery of the housing market

China: Growing market through urbanizationand expansion of domestic demand

Performance planPerformance planfor the fiscal year ending for the fiscal year ending

December 31, 2013December 31, 2013

10


FY Dec 2013: management planFY Dec 2013: management plan

11

* Assumption on annual average exchange rate 1USD : 81JPY / 1RMB:12.78JPY

1,8431,8431,8431,843 1,8701,8701,8701,870

1,9201,9201,9201,920

95959595

88888888

81818181

10110110110198989898

87878787

47474747

6262626259595959

FY2 0 1 1FY2 0 1 1FY2 0 1 1FY2 0 1 1 FY2 0 1 2FY2 0 1 2FY2 0 1 2FY2 0 1 2 FY2 0 1 3 ( f o re c ast)FY2 0 1 3 ( f o re c ast)FY2 0 1 3 ( f o re c ast)FY2 0 1 3 ( f o re c ast)

Sales

Operating Income

Ordinary Income

Net Income

■■■■Sales

■■■■Operating Income

■■■■Ordinary Income

■■■■Net Income

■■■■ROE

■■■■ROA

192.0 bil JPY (up 2.6%)

9.5 bil yen (up 7.5%)

10.1 bil yen (up 2.9%)

6.2 bil yen (up 3.7%)

6.5%

3.8%

::::

::::

::::

::::

::::

::::

[Unit: 100mn JPY]

A year of “turning point” for moving on to a new sta geA year of A year of ““ turning pointturning point ”” for moving on to a new stagefor moving on to a new stage

FY Dec 2013: management plan / segmentFY Dec 2013: management plan / segment

12


1,7041,7041,7041,704 1,7271,7271,7271,727

1,7671,7671,7671,767

86868686

83838383

93939393

0000

100100100100

200200200200

300300300300

400400400400

500500500500

600600600600

700700700700

800800800800

900900900900

1,0001,0001,0001,000

1,1001,1001,1001,100

1,2001,2001,2001,200

1,3001,3001,3001,300

1,4001,4001,4001,400

1,5001,5001,5001,500

1,6001,6001,6001,600

1,7001,7001,7001,700

1,8001,8001,8001,800

1,9001,9001,9001,900

2,0002,0002,0002,000

FY 2011FY 2011FY 2011FY 2011 FY 2012FY 2012FY 2012FY 2012 FY 2013 (fo r ecas t )FY 2013 (fo r ecas t )FY 2013 (fo r ecas t )FY 2013 (fo r ecas t )

0000

60606060

120120120120

180180180180


Operating IncomeOperating IncomeOperating IncomeOperating Income

153153153153

143143143143138138138138

2222

▲ 1▲ 1▲ 1▲ 1

1111

0000

100100100100

200200200200

FY 2011FY 2011FY 2011FY 2011 FY 2012FY 2012FY 2012FY 2012 FY2013(for eca s t )FY2013(for eca s t )FY2013(for eca s t )FY2013(for eca s t )

-8-8-8-8


Operating IncomeOperating IncomeOperating IncomeOperating Income

[Unit: 100mn JPY]

■■■■■■■■Domestic businessDomestic business ■■■■■■■■Overseas businessOverseas business[Unit: 100mn JPY]

Aim for an increase in sales and profit both for domestic and overseas businesses

Aim for an increase in sales and profit Aim for an increase in sales and profit both for domestic and overseas businessesboth for domestic and overseas businesses

Changes have been made to include the sales from in stallation and after-sales service (AS) for the products we handle under each area fromthe current term. These were originally disclosed u nder “other areas.”

Disclosure will be in line with our operation that leverages ourcollective strength in “products, installation and AS.”

Changes have been made to include the sales from in stallation and after-sales service (AS) for the products we handle under each area fromthe current term. These were originally disclosed u nder “other areas.”

Disclosure will be in line with our operation that leverages ourcollective strength in “products, installation and AS.”

[Changes to disclosure of sales by area]

13

Hot water air conditioning area Hot water air-conditioners

Domestic business

New energy area New energy appliances

Household equipment area Household equipments

Kitchen area Kitchen instruments

Other areas Installation, AS, externally sold parts, etc

(Former disclosure)(Former disclosure) (New disclosure)(New disclosure)

* AS=after-sales service

Hot water air conditioning area

Hot water air-conditioners, installation, AS

Domestic business

New energy area New energy appliances, installation, AS

Household equipment area

Household equipment, installation, AS

Kitchen area Kitchen instrument, installation, AS

Other areas Externally sold parts, etc

1,1381,1381,1381,138

1,1211,1211,1211,121

96969696

71717171

164164164164

181181181181

254254254254

260260260260

73737373

68686868

1,1511,1511,1511,151 118118118118 168168168168 269269269269 61616161

0000 1000100010001000

FY2013FY2013FY2013FY2013

FY2012FY2012FY2012FY2012

FY2011FY2011FY2011FY2011

Hot wate r air-condit ion in g areaHot wate r air-condit ion in g areaHot wate r air-condit ion in g areaHot wate r air-condit ion in g area New ene rgy areaNew ene rgy areaNew ene rgy areaNew ene rgy area Househo ld system areaHouseho ld system areaHouseho ld system areaHouseho ld system area

K itchen areaK itchen areaK itchen areaK itchen area Othe r areaOthe r areaOthe r areaOthe r area

FY Dec 2013: management plan / segmentFY Dec 2013: management plan / segment

[Unit: 100mn JPY]


514

* Sales from installation and after-sales service for 2011 new energy areaare included in the hot water air conditioning area

1,7041,7041,7041,704

1,7271,7271,7271,727

138138138138

143143143143

■■■■■■■■Domestic business: sales by product area Domestic business: sales by product area

1,7671,7671,7671,7671,7671,7671,7671,767

153153153153153153153153

[Unit: 100M yen]

76767676

70707070

41414141

37373737

25252525

30303030

85858585 43434343 25252525

0000 150150150150

FY2013FY2013FY2013FY2013

FY2012FY2012FY2012FY2012

FY2011FY2011FY2011FY2011

Ch inaCh inaCh inaCh ina North Ame r ic aNorth Ame r ic aNorth Ame r ic aNorth Ame r ic a Othe rsOthe rsOthe rsOthe rs

■■■■■■■■Overseas business: sales by regionOverseas business: sales by region[Unit: 100mn JPY]

(forecast)

(forecast)

FY Dec 2013: operating income / profit increase planFY Dec 2013: operating income / profit increase plan

15


[Unit: 100mn JPY]

* Cost of outsourced works is the cost for installation of products handled

FY2012Operating income

88.3

FY2013Operating income

95.0

Increase in Increase in SG&A SG&A

▲▲8.88.8

Increase in Increase in the cost of the cost of outsourced outsourced

works works

▲▲4.64.6

Increase due to Increase due to number of units, number of units,

selling price, selling price, product mix, etc product mix, etc

+11.3+11.3

Reduction in Reduction in raw material cost raw material cost

due to cost due to cost reduction efforts reduction efforts

+15.6+15.6

Increase inIncrease inprocessing cost processing cost

▲▲3.33.3

Influence of Influence of exchange rates exchange rates

▲▲0.30.3

Change in raw Change in raw material costmaterial cost

▲▲3.23.2

FY Dec 13: Major domestic product groups / plan *R eferenceFY Dec 13: Major domestic product groups / plan *R eference

Kitchen areaKitchen areaKitchen areaHousehold equipment system area

Household equipment Household equipment system areasystem area

16

[Unit: Thousand]

137137137137 112112112112

390390390390406406406406

442442442442

113113113113

0000

FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012 FY2013 (fo recast)FY2013 (fo recast)FY2013 (fo recast)FY2013 (fo recast)

Tabletop stoveTabletop stoveTabletop stoveTabletop stove

Built-in stoveBuilt-in stoveBuilt-in stoveBuilt-in stove

156156156156

146146146146

155155155155155155155155

527527527527 518518518518

555555555555555555555555


* Excluding units with 1 burner

Hot water air conditioning areaHot water air conditioning areaHot water air conditioning area

* Gas water heaters: excluding #8 and below

661661661661690690690690

395395395395366366366366

158158158158 154154154154

708708708708

353353353353

153153153153

0000

1300130013001300

FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012 FY2013(fo recast)FY2013(fo recast)FY2013(fo recast)FY2013(fo recast)

Kerosene water heaterKerosene water heaterKerosene water heaterKerosene water heater

Gas water heaterGas water heaterGas water heaterGas water heater

Gas bath boilerGas bath boilerGas bath boilerGas bath boiler

31313131 28282828

1313131311111111

112112112112

107107107107

29292929

13131313

113113113113

0000


Bathroom vanityBathroom vanityBathroom vanityBathroom vanity

System KitchenSystem KitchenSystem KitchenSystem Kitchen

System BathSystem BathSystem BathSystem Bath

1,2141,2141,2141,214 1,2101,2101,2101,2101,2141,2141,2141,2141,2141,2141,2141,214

FY Dec 13: Major domestic product groups / demand o utlook *RefeFY Dec 13: Major domestic product groups / demand o utlook *Refe rence rence

Kitchen areaKitchen areaKitchen areaHousehold equipment system area

Household equipment Household equipment system areasystem area

17

[Unit: Thousand]

1,6221,6221,6221,6221,7221,7221,7221,722

1,0861,0861,0861,086

393393393393381381381381

1,7491,7491,7491,749

1,0321,0321,0321,032 993993993993

382382382382

0000

2,0002,0002,0002,000


Kerosene water heaterKerosene water heaterKerosene water heaterKerosene water heater

Gas water heater Gas water heater Gas water heater Gas water heater

Gas bath boilerGas bath boilerGas bath boilerGas bath boiler

724724724724 745745745745

617617617617715715715715

1,5741,5741,5741,574

1,6411,6411,6411,641

791791791791

754754754754

1,7171,7171,7171,717

0000

2000200020002000


Bathroom vanityBathroom vanityBathroom vanityBathroom vanity

System KitchenSystem KitchenSystem KitchenSystem Kitchen

System bathSystem bathSystem bathSystem bath

2,6852,6852,6852,685 2,4502,4502,4502,450

1,1391,1391,1391,1391,2461,2461,2461,246

1,3031,3031,3031,303

2,3272,3272,3272,327

0000

2,0002,0002,0002,000


Tabletop stoveTabletop stoveTabletop stoveTabletop stove

Built-in stoveBuilt-in stoveBuilt-in stoveBuilt-in stove

3,1013,1013,1013,101 3,1343,1343,1343,134

2,9152,9152,9152,915

3,1013,1013,1013,101

3,2623,2623,2623,2623,2623,2623,2623,262 3,8243,8243,8243,824

3,6963,6963,6963,6963,6303,6303,6303,6303,6303,6303,6303,630


* Excluding units with 1 burner

Hot water air conditioning areaHot water air conditioning areaHot water air conditioning area

3,1243,1243,1243,1243,1243,1243,1243,124

* Gas water heaters: excluding #8 and below

Acquisition of shares in Sakura (Cayman) Co., Ltd

18

Developing growth business Developing growth business Developing growth business Developing growth business Developing growth business Developing growth business Developing growth business Developing growth business ––––––––Overseas businessOverseas businessOverseas businessOverseas businessOverseas businessOverseas businessOverseas businessOverseas business--------

Outline of the TransactionOutline of the TransactionOutline of the TransactionOutline of the TransactionOutline of the TransactionOutline of the TransactionOutline of the TransactionOutline of the Transaction

19

Subject companies

�Sakura (Cayman) Co., Ltd and its subsidiaries・Sakura China Holdings (Hong Kong) Company Limited・Sakura China Co., Ltd・Foshan Yingshun Bath & Kitchen Co., Ltd (Guangdong

Province)

Acquisition price �Total of approximately USD 100 million

Schedule

�Share purchase is expected to take place at the end of August 2013 after necessary procedures for the transaction are taken, including the review to be conducted by the Chinese authorities under the Antitrust Law

Description

�Acquisition of 55% shares in Sakura (Cayman) Co., Ltd�Acquisition of 6.11% shares from minority shareholders of

Sakura China Co., Ltd�Jointly manage Sakura (Cayman) Co., Ltd and its subsidiarieswith Taiwan Sakura Corporation which is the other major

shareholder


Transaction SchemeTransaction SchemeTransaction SchemeTransaction SchemeTransaction SchemeTransaction SchemeTransaction SchemeTransaction Scheme <Reference ><Reference ><Reference ><Reference ><Reference ><Reference ><Reference ><Reference >

NORITZ Corp.NORITZ Corp.NORITZ Corp.NORITZ Corp.NORITZ Corp.NORITZ Corp.NORITZ Corp.NORITZ Corp.

Taiwan Sakura CorporationTaiwan Sakura CorporationTaiwan Sakura CorporationTaiwan Sakura CorporationTaiwan Sakura CorporationTaiwan Sakura CorporationTaiwan Sakura CorporationTaiwan Sakura Corporation(Taiwan)(Taiwan)(Taiwan)(Taiwan)(Taiwan)(Taiwan)(Taiwan)(Taiwan)

Sakura Enterprises (B.V.I.) Ltd.Sakura Enterprises (B.V.I.) Ltd.Sakura Enterprises (B.V.I.) Ltd.Sakura Enterprises (B.V.I.) Ltd.Sakura Enterprises (B.V.I.) Ltd.Sakura Enterprises (B.V.I.) Ltd.Sakura Enterprises (B.V.I.) Ltd.Sakura Enterprises (B.V.I.) Ltd.(Virgin Islands)(Virgin Islands)(Virgin Islands)(Virgin Islands)(Virgin Islands)(Virgin Islands)(Virgin Islands)(Virgin Islands)

Sakura (Cayman) Co., LtdSakura (Cayman) Co., LtdSakura (Cayman) Co., LtdSakura (Cayman) Co., LtdSakura (Cayman) Co., LtdSakura (Cayman) Co., LtdSakura (Cayman) Co., LtdSakura (Cayman) Co., Ltd(Cayman)(Cayman)(Cayman)(Cayman)(Cayman)(Cayman)(Cayman)(Cayman)

Sakura China Holdings Sakura China Holdings Sakura China Holdings Sakura China Holdings Sakura China Holdings Sakura China Holdings Sakura China Holdings Sakura China Holdings (Hong Kong) Company Limited (Hong Kong) Company Limited (Hong Kong) Company Limited (Hong Kong) Company Limited (Hong Kong) Company Limited (Hong Kong) Company Limited (Hong Kong) Company Limited (Hong Kong) Company Limited

(Hong Kong)(Hong Kong)(Hong Kong)(Hong Kong)(Hong Kong)(Hong Kong)(Hong Kong)(Hong Kong)

Sakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., Ltd(China, Jiangsu)(China, Jiangsu)(China, Jiangsu)(China, Jiangsu)(China, Jiangsu)(China, Jiangsu)(China, Jiangsu)(China, Jiangsu)

Minority Minority Minority Minority Minority Minority Minority Minority ShareholdersShareholdersShareholdersShareholdersShareholdersShareholdersShareholdersShareholders

100%

100%

90%

45% 55%

2.78%

1.11%

20

6.11%


Our actual share holdingOur actual share holdingOur actual share holdingOur actual share holding55.61%55.61%55.61%55.61%

●●●●経済成長の減速が鮮明経済成長の減速が鮮明経済成長の減速が鮮明経済成長の減速が鮮明

●不動産取得の追加引締め策継続●不動産取得の追加引締め策継続●不動産取得の追加引締め策継続●不動産取得の追加引締め策継続

●最低賃金の上昇●最低賃金の上昇●最低賃金の上昇●最低賃金の上昇

●低所得者向け住宅の増加●低所得者向け住宅の増加●低所得者向け住宅の増加●低所得者向け住宅の増加

●環境省エネ商品補助金制度開始●環境省エネ商品補助金制度開始●環境省エネ商品補助金制度開始●環境省エネ商品補助金制度開始

Overview of Sakura China Overview of Sakura China Co., LtdCo., Ltd

Company name

HQ location

Sakura China Co., Ltd

Jiangsu province, Kunshan city (江蘇省昆山市青陽南路1号)

Housing equipment manufacturer with nationwide business in China

Housing equipment manufacturer with Housing equipment manufacturer with nationwide business in Chinanationwide business in China

No. of employees Approximately 3,000

Outline of businessProduction and sales of gas water heaters, gas stoves, range hoods, electric water heaters, sterilizers, sinks, taps, bath heating units, ventilating fan, etc

Production base Kunshan city, Jiangsu province/Foshan city, Guangdong Province

Sales base Provinces and autonomous regions in China nationwide

Established April 1994

※as of end 2011

21


Overview of Sakura China Overview of Sakura China Co., LtdCo., Ltd

Water heaters, range hoods and cooking stoves are the main products

Water heaters, range hoods and cooking stoves are Water heaters, range hoods and cooking stoves are the main productsthe main products

22

■■■■■■■■Main products: Sales breakdown

■■■■■■■■Main channels:Distribution breakdown

Water heater

Range hood

Cooking stove

Others

Cooking stoveRange hoodWater heater

FY Dec2011


Electronics retail store

Exclusive shop

Department store

Others

FY Dec2011

Current status of Sakura China Current status of Sakura China Current status of Sakura China Current status of Sakura China Current status of Sakura China Current status of Sakura China Current status of Sakura China Current status of Sakura China Co., LtdCo., Ltd

23

�Distribution reform is ongoing, from electronics retail stores to exclusive shops

�Reforming management structure to expand the exclusive shop route

Status

Performance

• Increase number of exclusive shops

• Increase product for exclusive shops


231,910231,910231,910231,910

（（（（21.7bn JPY21.7bn JPY21.7bn JPY21.7bn JPY））））

259,279259,279259,279259,279


236,961236,961236,961236,961


23,44823,44823,44823,448


18,86518,86518,86518,865

（（（（1.6bn JPY1.6bn JPY1.6bn JPY1.6bn JPY）））） 5,5965,5965,5965,596




Operating Operating Operating Operating

IncomeIncomeIncomeIncome

[Unit: thousand USD]

※Sakura（Cayman）Co.,Ltd Consolidated result

※Annual average rate：1USD 09：93.69JPY、10：88.22JPY、11:79.94JPY

Current statusCurrent statusCurrent statusCurrent statusCurrent statusCurrent statusCurrent statusCurrent status of of of of of of of of NotitzNotitzNotitzNotitzNotitzNotitzNotitzNotitz (China) Co(China) Co(China) Co(China) Co(China) Co(China) Co(China) Co(China) Co.,.,.,.,.,.,.,., LtdLtdLtdLtdLtdLtdLtdLtd

�1993: Entered the Chinese market by establishing a JV with a local company

�2004: Established a 100% owned subsidiary

�2007: Constructed New Shanghai plant in Fengxian District, Shanghai City

�Acquired top share in the Shanghai area

�Enhanced recognition as a high-class brand

�Produce major high-function parts for gas water heaters at the New Shanghai Plant

StatusStatus

24

PerformancePerformance

[Unit: 100 mn JPY]


74 74 74 74

70 70 70 70

76 76 76 76



Synergy between Noritz and Sakura China Co., LtdSynergy between Noritz and Sakura China Co., LtdSynergy between Noritz and Sakura China Co., LtdSynergy between Noritz and Sakura China Co., LtdSynergy between Noritz and Sakura China Co., LtdSynergy between Noritz and Sakura China Co., LtdSynergy between Noritz and Sakura China Co., LtdSynergy between Noritz and Sakura China Co., Ltd

■Extensive product line-up of housing facilities(water heater, kitchen instrument)

■Operating nationwide in China(47 branches, 20 master distributors)

■Operates ca 4,000 exclusive shops

■Outstanding press technology and ability to procure molds

■Product line-up of high-class gas water heaters (capacity for technological development for environment, energy saving)

■Top share in the Shanghai area

■Sales mainly through electronics retail stores

■Knowhow on high-quality, highly-efficient production

Complement each other

�Enhance business performance by mutually supplying products

�Develop attractive products through joint development

�Improve production efficiency by extending production technology

�Reduce procurement cost by leveraging advantage over volume

AimAimAim

Sakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., LtdSakura China Co., Ltd

25

Noritz (China) Co., LtdNoritz (China) Co., LtdNoritz (China) Co., LtdNoritz (China) Co., LtdNoritz (China) Co., LtdNoritz (China) Co., LtdNoritz (China) Co., LtdNoritz (China) Co., Ltd


Characteristics of Noritz and Sakura ChinaCharacteristics of Noritz and Sakura ChinaCharacteristics of Noritz and Sakura ChinaCharacteristics of Noritz and Sakura ChinaCharacteristics of Noritz and Sakura ChinaCharacteristics of Noritz and Sakura ChinaCharacteristics of Noritz and Sakura ChinaCharacteristics of Noritz and Sakura China

Strategic significance of the TransactionStrategic significance of the TransactionStrategic significance of the TransactionStrategic significance of the TransactionStrategic significance of the TransactionStrategic significance of the TransactionStrategic significance of the TransactionStrategic significance of the Transaction

Achieve Mid-term Business Plan goals (V plan 16) by expanding overseas business

Achieve MidAchieve Mid --term Business Plan goals (V plan 16) by term Business Plan goals (V plan 16) by expanding overseas businessexpanding overseas business

Sales 187.0bil

0.18bil

8.8bil

8.6bil

Domestic

Overseas

172.7bil

Operating income

Domestic

Overseas

Ordinary Income

Net income

14.3bil

5.9bil

9.8bil

250bil

210bil210bil

40bil40bil

15bil

2.5bil2.5bil

12.5bil12.5bil

8.5bil

15.7bil

(FY Dec2012)(FY Dec2012) (FY Dec2016)(FY Dec2016)

26


Major initiativesMajor initiativesfor the fiscal year ending for the fiscal year ending

December 31, 2013 December 31, 2013

27

FY Dec 2013: domestic business / hot water air cond itioning areaFY Dec 2013: domestic business / hot water air cond itioning area

28

[Unit: Thousand]

■■■■■■■■Expand sales of major productsExpand sales of major products


Launch of Launch of ECOECO--JozuJozu GQ and GT seriesGQ and GT series

Launch in January of the GQ-C2434 series

Launch in March of the GT-C2452-SFF series (for cold regions)

New product for North America

GQ-C2434 series

New product for Japan

■■■■■■■■Improve profitabilityImprove profitability

•• Standardization of parts for Standardization of parts for domestic/overseas GQ seriesdomestic/overseas GQ series

Increase revenue through expanding sales of ECO-Jozu and standardizing parts

Increase revenue through expanding sales of Increase revenue through expanding sales of ECOECO--JozuJozu and standardizing partsand standardizing parts

•• Consolidation of Taisei IndustrialConsolidation of Taisei Industrial ’’s s production baseproduction base

746746746746

506506506506

647647647647

975975975975

24.9%24.9%24.9%24.9%

29.0%29.0%29.0%29.0%

32.5%32.5%32.5%32.5%

41.2%41.2%41.2%41.2%

21.5%21.5%21.5%21.5%

25.3%25.3%25.3%25.3%

28.4%28.4%28.4%28.4%

37.0%37.0%37.0%37.0%

0000

900900900900

FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012 FY2013 (fo rec ast)FY2 013 (fo rec ast)FY2 013 (fo rec ast)FY2 013 (fo rec ast)

0 .0%0 .0%0 .0%0 .0%

60 .0 %60 .0 %60 .0 %60 .0 %

Demand of ECO-JozuDemand of ECO-JozuDemand of ECO-JozuDemand of ECO-Jozu

Ratio of ECO-Jozu（Our company）Ratio of ECO-Jozu（Our company）Ratio of ECO-Jozu（Our company）Ratio of ECO-Jozu（Our company）

Ratio of ECO-Jozu(Industry)Rat io of ECO-Jozu(Industry)Rat io of ECO-Jozu(Industry)Rat io of ECO-Jozu(Industry)

Transition in the ratio of ECO-JozuTransition in the ratio of ECOTransition in the ratio of ECO --JozuJozu

Aim for further improvement in sales efficiency and cost reduction

Aim for further improvement in sales efficiency Aim for further improvement in sales efficiency and cost reductionand cost reduction

FY Dec 2013: domestic business / kitchen areaFY Dec 2013: domestic business / kitchen area


■■■■■■■■Expand sales of major productsExpand sales of major products•• Expand sales of mid/highExpand sales of mid/high --class productsclass products

Grasp opportunity to respond to Grasp opportunity to respond to replacement demandreplacement demand

Proposal on energy-saving -Cook rice, boil water, reheat-

Proposal on safe and user-friendly stoves -Safe, easy to cook and clean-

•• Improve production efficiencyImprove production efficiency

Increase number of production lines Increase number of production lines for mid/highfor mid/high--class productsclass products

29

■■■■■■■■Improve profitabilityImprove profitability

1,2461,2461,2461,246

1,0591,0591,0591,059

1,1391,1391,1391,139

1,3031,3031,3031,303

34.0%34.0%34.0%34.0%

34.2%34.2%34.2%34.2%

32.6%32.6%32.6%32.6%

34.0%34.0%34.0%34.0%

0000

900900900900

FY2010FY2010FY2010FY2010 FY2011FY2011FY2011FY2011 FY2012FY2012FY2012FY2012 FY2013 (fo recast)FY20 13 (fo recast)FY20 13 (fo recast)FY20 13 (fo recast)

30 .0%30 .0%30 .0%30 .0%

Demand of Gas built- in stoveDemand of Gas built- in stoveDemand of Gas built- in stoveDemand of Gas built- in stove

Gas bu ilt- in stove share（our company）Gas bu ilt- in stove share（our company）Gas bu ilt- in stove share（our company）Gas bu ilt- in stove share（our company）

Transition in the share of built-in stovesTransition in the share of builtTransition in the share of built --in stovesin stoves

•• Further improve sales efficiency Further improve sales efficiency through consolidation of Harman and through consolidation of Harman and Noritz sales divisionsNoritz sales divisions

[Unit: Thousand]

FY Dec 2013: domestic business / new energy areaFY Dec 2013: domestic business / new energy area


■■■■■■■■Expand sales of solar power generation systemsExpand sales of solar power generation systemsExpand sales of solar power generation systemsExpand sales of solar power generation systemsExpand sales of solar power generation systemsExpand sales of solar power generation systemsExpand sales of solar power generation systemsExpand sales of solar power generation systems

30

•• Areas involved in the solar power generation systemAreas involved in the solar power generation system

•• Solar power generation system planSolar power generation system plan

Profit ratio

Cell ModulePower conditioner Material Sales, installation, after-sales service

Investmentsize

Produced internally

Designed internally

Assets accumulated in other areas utilized

(cost reduction by securing volume) (propose best energy mix)

Expand by leveraging our strength and through minimum investment

Expand by leveraging our strength and Expand by leveraging our strength and through minimum investmentthrough minimum investment

Our Business areas

ResidentialResidential Plan: 25MWPlan: 25MW (2012: 9.4MW)(2012: 9.4MW)■Expand sales with single-family houses■Win opportunities with condos

CommercialCommercial Plan: 7.6MW Plan: 7.6MW (2012: 2.2MW)(2012: 2.2MW)

■Win opportunities with small-sized commercial properties

■Enhance installation(prime contract) capability

FY Dec 2013: overseas business / China, North AmericaFY Dec 2013: overseas business / China, North America


ChinaChinaChina North AmericaNorth AmericaNorth America

31

■■■■■■■■Expand sales of major Expand sales of major productsproducts

•• Expand sales areaExpand sales area•• Launch new largeLaunch new large --capacity, capacity,

highhigh --grade productsgrade products•• Develop new channelsDevelop new channels

■■■■■■■■ Expand sales of major productsExpand sales of major products•• Expand sales of nextExpand sales of next --generation ecogeneration eco --friendly friendly

products products Develop opportunities in the condensing market

•• Sales activities in line with the characteristics Sales activities in line with the characteristics of the areaof the areaSeek new OEM partner

Overseas business remain stable in the blackOverseas business remain stable in the blackOverseas business remain stable in the black

■■■■■■■■Improve profitabilityImprove profitability•• Reduce cost through internal Reduce cost through internal

production of partsproduction of parts•• Hold down personnel cost by Hold down personnel cost by

promoting automation promoting automation

■■■■■■■■ Improve profitabilityImprove profitability•• Strengthen technology and service Strengthen technology and service

capabilitiescapabilities•• Consolidate sales basesConsolidate sales bases

51515151

5757575759595959

52525252

58585858

77777777

53535353

58585858

63636363

55555555

59595959

82828282

FY Dec 2013: Capital expenditure, depreciation and R&D planFY Dec 2013: Capital expenditure, depreciation and R&D plan

32

[Unit: 100mn JPY]

Capital Capital Capital Capital Capital Capital Capital Capital ExpenditureExpenditureExpenditureExpenditureExpenditureExpenditureExpenditureExpenditure

Depreciation and Depreciation and Depreciation and Depreciation and Depreciation and Depreciation and Depreciation and Depreciation and AmortizationAmortizationAmortizationAmortizationAmortizationAmortizationAmortizationAmortization

R&D ExpenditureR&D ExpenditureR&D ExpenditureR&D ExpenditureR&D ExpenditureR&D ExpenditureR&D ExpenditureR&D Expenditure


FY2011FY2011FY2010FY2010 FY2012FY2012 FY2013FY2013(forecast)(forecast)



▲ 37 .6▲ 37 .6▲ 37 .6▲ 37 .6

17 .517 .517 .517 .5

100 .3100 .3100 .3100 .3

80 .380 .380 .380 .3

▲ 25 .3▲ 25 .3▲ 25 .3▲ 25 .3

62 .662 .662 .662 .6

86 .786 .786 .786 .798 .098 .098 .098 .0

61 .461 .461 .461 .465 .265 .265 .265 .2

125.0125.0125.0125.0

0000

FY2002FY2002FY2002FY2002 FY 2003FY 2003FY 2003FY 2003 FY2004FY2004FY2004FY2004 FY 2005FY 2005FY 2005FY 2005 FY 2006FY 2006FY 2006FY 2006 FY 2007FY 2007FY 2007FY 2007 FY 2008FY 2008FY 2008FY 2008 FY 2009FY 2009FY 2009FY 2009 FY 2010FY 2010FY 2010FY 2010 FY2011FY2011FY2011FY2011 FY 2012FY 2012FY 2012FY 2012

-50-50-50-50

0000

50505050

100100100100

150150150150

200200200200

250250250250

300300300300

Commemorat ive dividendCommemorat ive dividendCommemorat ive dividendCommemorat ive dividend

Dividend pe r sh areDividend pe r sh areDividend pe r sh areDividend pe r sh are

Ne t in come pe r sh areNe t in come pe r sh areNe t in come pe r sh areNe t in come pe r sh are15

17

28 28 28 28 28 28 28

3030303030

FY Dec 2013: scheduled dividendFY Dec 2013: scheduled dividend

33


Dividend increase of 2 yen, resulting in 30 yen, is expected for year-end of FY Dec 2012

Dividend increase of 2 yen, resulting in 30 yen, Dividend increase of 2 yen, resulting in 30 yen, is expected for yearis expected for year --end of FY Dec 2012end of FY Dec 2012

In principle, we intend to pay dividend continuously and stably,In principle, we intend to pay dividend continuously and stably, and our basic policy and our basic policy is to take into consideration our consolidated business performais to take into consideration our consolidated business performance and dividend nce and dividend payout ratio on a consolidated basis, based on the business envipayout ratio on a consolidated basis, based on the business environment, while ronment, while maintaining the financial standing of the company.maintaining the financial standing of the company.

34

Documents

Closing briefing material for the fiscal year ended ... · December 31, 2012 1. FY Dec12 financial review and performance summary handout FY Dec 2012: results of operation Renewed