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Financial results for FY2018 Q2
Financial Summary
Aug. 10, 2018
NIKKISO CO., LTD.
Securities code: 6376
Disclaimer
This material contains forward-looking statements about future business performance. These statements by definition involve risks and uncertainties and are not intended to guarantee future performance. Actual results in the future may differ from the
estimates presented in the material herein due to changes in the business environment and other factors.
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 2
Financial results for FY2018 Q2
News Topic
Total investment (planned): ¥17 billion*by the end of 2021
-Aerospace plant + administrative building: ¥11.2 bn-Industrial and other business: ¥4.5 bn-Land: ¥1.3 bn
Aims of the new plant
◆ Schedule
The new plant is intended to expand productivity, yield advanced technologies and optimize manufacturing, and ultimately establish a company-wide quality control system.
Aerospace plant starts
operation
Autumn 2018
Construction of
cryogenic pump test
facilities
Cryogenic pump
plant starts operation
Establishment of quality
control system and of
development with advanced
technologies in all business
fields
2021202020192018
Phase I of construction work of Miyazaki plant completed at the end of July 2018
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 3
Financial results for FY2018 Q2
Consolidated Performance
Millions of JPY
FY2017 Q2Jan.2017 – Jun. 2017
FY2018 Q2Jan. 2018 – Jun. 2018
YoY comparison
Change Change rate
Orders 64,547 84,730 +20,183 +31.3%
Revenue 62,910 75,578 +12,668 +20.1%
Operating profit 2,441 3,168 +726 +29.7%
Operating margin 3.9% 4.2%
Profit before tax 2,316 2,762 +445 +19.2%
Pretax profit margin 3.7% 3.7%
Profit for the yearattributable to owners of the company 1,762 2,033 +270 +15.4%
Profit marginattributable to owners of the company
2.8% 2.7%
Average foreign exchange rate
Against the US dollar (Yen) 112.34 108.67 △3.67 -
Against the euro (Yen) 121.66 131.55 +9.89 -
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 4
Financial results for FY2018 Q2
Breakdown of Profit/Loss
Millions of JPY FY2017 Q2Jan.2017 – Jun. 2017
FY2018 Q2Jan. 2018 – Jun. 2018 Change Remarks
Gross profit 21,685 25,772 +4,087
- Selling, general and administrative expenses △19,830 △22,967 △3,136 Increase due to joining of CI Group
- Other income 685 430 △255
- Other expenses △97 △67 +30
Operating profit 2,441 3,168 +726
- Financial income 346 342 △3
- Financial costs △554 △864 △310Increase in interest expenses(△158)Increase in foreign exchange loss due to the appreciation of the yen(-132)
- Share of profit of associates and joint ventures accounted for using the equity method 82 116 +33
Profit before tax 2,316 2,762 +445
Exchange rate for the conversion of the performance of overseas subsidiaries
- Against the US dollar (Yen) 112.34 108.67 △3.67
- Against the euro (Yen) 121.66 131.55 +9.89
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 5
Financial results for FY2018 Q2
Performance by Business Segment
Millions of JPY FY2017 Q2Jan.2017 – Jun. 2017
FY2018 Q2Jan. 2018 – Jun. 2018
YoY comparison
Change Change rate
Industrial Business
Orders 38,360 54,598 +16,238 +42.3%
Revenue 36,424 46,786 +10,362 +28.5%
Operating profit 2,610 2,666 +56 +2.1%
Operating margin 7.2% 5.7%
Industrial DivisionOrders 25,592 39,826 +14,234 +55.6%
Revenue 23,998 33,567 +9,568 +39.9%
Precision Equipment Division
Orders 4,996 6,705 +1,709 +34.2%
Revenue 4,798 5,156 +358 +7.5%
Aerospace DivisionOrders 7,675 8,016 +340 +4.4%
Revenue 7,569 8,005 +435 +5.8%
Medical Business
Orders 26,187 30,132 +3,944 +15.1%
Revenue 26,485 28,791 +2,305 +8.7%
Operating profit 1,816 2,164 +347 +19.1%
Operating margin 6.9% 7.5%
Corporate expenses, etc. Operating profit △1,985 △1,663 +322 -
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 6
Financial results for FY2018 Q2
Industrial Division
FY2017 Q2Jan.2017 – Jun. 2017
FY2018 Q2Jan. 2018 – Jun. 2018 YoY comparison
Change Change rate
Orders 25,592 39,826+
14,234+55.6%
Revenue 23,998 33,567 +9,568 +39.9%
1. Overview
2. Consolidated performance 3. Revenue Composition ratio by Product
Millions of JPY
✓ The petroleum and natural gas markets are expected to recover and expand as evidenced by a rise in crude oil prices and a worldwide expansion in the LNG market both from supply and demand perspectives. This increased orders received by LEWA and CI Group, which thus are on a recovery track.
✓ In domestic pump business, cryogenic pump business for LPG facilities demonstrated strong performance, which improved the performance of overall industrial business.
往復動ポンプ
キャンドモータポンプ
クライオジェニックポンプ
その他
Geveke
CI グループ
Reciprocating pump
Canned motor pump
Cryogenics pump
CI Group
Others
40%
7%19%
8%
22%
4%
FY2018
Q2
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 7
Financial results for FY2018 Q2
Performance trend of LEWA
2017 YTD 2018 YTD7
195 194 204
220 236 232
51
105
151
200
58
132
211
148
189
217 217 224
219
46
107
170
236
46
94
217
1727 30 31 28
21
3 918
28
1 417
98 103 91 95
107 120 125
119
101
84
106
133
-200
-150
-100
-50
0
50
100
150
0
50
100
150
200
250
300
350
11 12 13 14 15 16 Q1 Q2 Q3 Q4 Q12 Q23 Q34 Q45 18計画
受注高(左軸) 売上収益(左軸) EBITDA(左軸) 受注残高(右軸)
Q1 Q4Q3Q2
Orders (Left axis) Revenue (Left axis) EBITDA (Left axis) Orders backlog (Right axis)Millions of €
(Forecast)
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 8
Financial results for FY2018 Q2
Performance trend of Cryogenic Industries Group
FY2017 ※unaudited FY2018
Millions of $
310
18
0 2
3010
20
41
12
30
45
18
35
65
15
34
73
49
14
15
16
0
50
100
0
50
100
150
FY2017 Q1 FY2017 Q2 FY2017 Q4 FY2018 Q1 FY2018 Q2 FY2018 Q4(計画)
百万
ACD 売上収益(左軸) Cryoquip 売上収益(左軸) Cosmodyne 売上収益(左軸) EBITDA(右軸)Revenue (Left axis) Revenue (Left axis) Revenue (Left axis) (Right axis)
(Forecast)
31
65
124
28
67
148
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 9
Financial results for FY2018 Q2
Precision Equipment Division
水質調整システム
ファインセラミック
その他
粉体計測
1. Overview
Millions of JPY
✓ In power plant business, inquiries about water-conditioning system for Southeast Asia were on an increasing trend. We will strive for a steady increase in orders received in the second half of FY2018.
✓ Due to an expansion in usage of electronic components, investment in the relevant manufacturing industry is buoyant, which considerably increased orders received of the new warm isostatic laminator.
2. Consolidated performance 3. Revenue Composition ratio by Product
FY2017 Q2Jan.2017 – Jun. 2017
FY2018 Q2Jan. 2018 – Jun. 2018 YoY comparison
Change Change rate
Orders 4,996 6,705 +1,709 +34.2%
Revenue 4,798 5,156 +358 +7.5%
Water conditioning system
Precision equipment
Fine ceramics
Others
30%
41%
23%
6%
0
FY2018
Q2
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 10
Financial results for FY2018 Q2
Aerospace Division
1. Overview
2. Consolidated performance 3. Revenue Composition ratio by Product
Millions of JPY
✓ Although a partial decline in cascade demand continued from FY2018 Q1 and slightly reduced revenue compared to the initial plan, business saw an increase in revenue year-on-year due to steady growth in shipments of items produced at the first plant in Hanoi, Vietnam.
✓ We will implement the growth strategy for further profitability by re-establishing the production system including the new plant in Miyazaki to be put into operation this autumn and the second plant in Hanoi, Vietnam, to be completed this autumn.
FY2017 Q2Jan.2017 – Jun. 2017
FY2018 Q2Jan. 2018 – Jun. 2018 YoY comparison
Change Change rate
Orders 7,675 8,016 +340 +4.4%
Revenue 7,569 8,005 +435 +5.8%
カスケード
翼部品
その他
エンジン部品
ナセル部品
Cascade
Nacelle parts
Wing parts
Jet engine parts
Others
45%
17%
25%
9%
4%
FY2018
Q2
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 11
(Japan) Dialysis machines
(Overseas) Dialysis machines
(Japan) Disposable
(Overseas) Disposable
Maintenance
CRRT
Others
Financial results for FY2018 Q2
Medical Division
2. Consolidated performance 3. Revenue Composition ratio by Product
1. Overview
Millions of JPY
✓ In the hemodialysis-related business, the demand for hemodialysis equipment recovered in the domestic market, which led to an increase in sales of disposables such as blood tubing lines.
✓ In overseas markets, sales of knock-down kits continued strong in China, and sales grew in Asia, which led to an increase in revenue and profit year-on-year in the hemodialysis-related business as a whole.
✓ In the CRRT business, temporary expenses were posted to restructure the development system. However, strong sales of equipment in our mainstay Chinese market made up for slow sales in other countries, which led to an increase in revenue year-on-year.
FY2017 Q2Jan.2017 – Jun. 2017
FY2018 Q2Jan. 2018 – Jun. 2018 YoY comparison
Change Change rate
Orders 26,187 30,132 +3,944 +15.1%
Revenue 26,485 28,791 +2,305 +8.7%
16%
13%
29%
3%
12%
8%
19%
FY2018
Q2
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
Financial forecast for FY2018
Consolidated Performance
12
Millions of JPYFY2017
Actual recordFY2018
Performance forecastYoY comparison
Change Change rate
Orders 140,412 162,000 +21,587 +15.4%
Revenue 140,912 162,000 +21,087 +15.0%
Operating profit 8,718 10,000 +1,281 +14.7%
Operating margin 6.2% 6.2%
Profit before tax 8,310 9,000 +689 +8.3%
Pretax profit margin 5.9% 5.6%
attributable to owners of the company
Profit for the year 5,182 5,900 +717 +13.8%
Profit margin attributable to owners of the company
3.7% 3.6%
Average/Forecast
Against the US dollar (Yen)Against the euro (Yen)
112.16126.70
108.00132.00
△4.16+5.30
--
Forex sensitivity for FY2018 (When yen was depreciated by 1 yen)
US dollar (Yen)
Euro (Yen)Revenue +460 million yen Operating profit +80 million yen
Revenue +390 million yen Operating profit +50 million yen
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
Financial forecast for FY2018
Performance by Business Segment
13
Millions of JPY
FY2017Actual record
FY2018Performance forecast
YoY comparison
Change Change rate
Industrial Business
Orders 85,406 101,900 +16,493 +19.3%
Revenue 85,228 101,800 +16,571 +19.4%
Operating profit 7,539 7,900 +360 +4.8%
Operating margin 8.8% 7.8%
Industrial DivisionOrders 58,827 72,300 +13,472 +22.9%
Revenue 59,715 71,700 +11,984 +20.1%
Precision Equipment Division
Orders 10,731 11,100 +368 +3.4%
Revenue 9,843 11,600 +1,756 +17.8%
Aerospace DivisionOrders 15,712 17,000 +1,287 +8.2%
Revenue 15,550 17,000 +1,449 +9.3%
Medical Business
Orders 55,005 60,100 +5,094 +9.3%
Revenue 55,684 60,200 +4,515 +8.1%
Operating profit 3,950 5,800 +1,849 +46.8%
Operating margin 7.1% 9.6%
Corporate expenses, etc. Operating profit △2,771 △3,700 △928 -
Appendix
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
< Medical >< Aerospace >< Industrial and Precision Equipment >
15
+474
+14,899
Simpleincrease
FY2018 Q2(Jan.2018-Jun.2018)
Orders
84,730Impact of FX
Simpleincrease Impact of FX
✓ Increase in LEWA due to improved market conditions
✓ Increase in new warm isostatic laminators
✓ Joining of CI group (+9,446)
✓ Increase in products from Vietnam
+998 +586 ▲246
+3,422 +522Impact of FX
Simpleincrease
FY2017 Q2(Jan.2017-Jun.2018)
Orders
64,547
Orders Analysis (vs FY2017 Q2)
Millions of JPY
✓ Recovery of demand for hemodialysis equipment and growth of disposables sales in domestic market
✓ Strong performance of overseas hemodialysis business
✓ Sales growth of CRRT business in the mainstay Chinese market
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
< Medical >< Aerospace >< Industrial and Precision Equipment >
16
FY2018 Q2(Jan.2018-Jun.2018)
Revenue
75,578
+771
Simpleincrease
Impact of FX
Simpleincrease Impact of FX
+680 ▲244
Simpleincrease Impact of FX
+421+1,883
+9,155
✓ Strong performance in the domestic pump business
✓ Joining of CI group (+7,289)
✓ Shipment growth from Vietnam Hanoi First Plant
✓ Recovery of demand for hemodialysis equipment and growth of disposables sales in domestic market
✓ Strong performance of overseas hemodialysis business
✓ Sales growth of CRRT business in the mainstay Chinese market
FY2017 Q2(Jan.2017-Jun.2017)
Revenue
62,910
Analysis (vs FY2017 Q2)Revenue
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
< Industrial and Precision Equipment >
< Aerospace > < Medical>
17
FY2017 Q2(Jan.2017-Jun.2017)
Operatingprofit
2,441
FY2018 Q2(Jan.2018-Jun.2018)
Operatingprofit
3,168
+0
Simpleincrease Impact of FX
Simpledecrease Impact of FX
▲1 ▲140
Simpleincrease
Impact of FX
+102+245
+197
Increase incorporate
expenses, etc.
+322
✓ Strong performance in the domestic pump business
✓ Partial decline in cascade demand
✓ Cost reductions through in-house parts manufacture
✓ Growth of domestic and overseas hemodialysis businesses
✓ Write-off of temporary expenses for acquisition of CI group
Analysis (vs FY2017 Q2)Operating
profit
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 18
As of end of December 2017 As of end of June 2018
AmountComposition
ratio AmountComposition
ratio Change
Total assets 244,692 100.0% 249,372 100.0% +4,680
Current assets 119,103 48.7% 124,900 50.1% +5,796
Cash and cash equivalents 34,095 13.9% 35,794 14.4% +1,698
Trade and other receivables 50,434 20.6% 49,698 19.9% △736
Inventories 30,363 12.4% 33,987 13.6% +3,623
Non-current assets 125,588 51.3% 124,472 49.9% △1,116
Property, plant and equipment 38,454 15.7% 39,532 15.9% +1,077
Goodwill and Intangible assets 67,792 27.7% 65,102 26.1% △2,689
Total assets 167,905 68.6% 174,711 70.1% +6,806
Trade and other payables 22,624 9.2% 23,727 9.5% +1,102
Bonds and borrowings 122,528 50.1% 122,562 49.1% +33
Total equity 76,787 31.4% 74,661 29.9% △2,126
Consolidated Statement of Financial Position
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved. 19
Consolidated Statement of Cash Flows
Millions of JPY
FY2017Q2(Jan.2017-Jun.2017)
FY2018Q2(Jan.2018-Jun.2018)
Change
Cash flows from operating activities 2,634 7,124 +4,490
income before income taxes 2,316 2,762 +445
Depreciation and amortization 2,394 3,092 +697
Increase(decrease) of working capital 29 2,740 △2,770
Cash flows from investment activities 4,634 4,764 △129
Purchase of property, plant and equipment 2,227 4,233 △2,006
Balance of the transfer/acquisition of business - - -
Free cash flows △2,000 2,360 +4,360
Cash flows from financing activities 18,270 283 △17,986
increase of bank loan 18,956 1,095 △17,860
Cash dividends paid 569 569 +0
Cash and cash equivalents at the end of year 42,092 35,794 △6,297
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
Japan
38%
Asia
23%
North
America
17%
Europe
19%
Others
3%
MedicalAerospaceIndustrial and Precision
Equipment
20%
32%17%
28%
3%
FY2018
Q2
Japan
Asia
North America
Europe
Other
13%
7%
78%
2%
69%
16%
1% 11%3%
20
Nikkiso group total Revenue trend by overseas region
FY2018
Q2
Overseasrevenue ratio
62%(9months)
Revenue Composit ion Ratio by Region
JGAPP IFRS
FY2018
Q2
FY2018
Q2
Asia North America
Europe Other
Overseas revenue ratio (right axis)
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
Breakdown of forex sensitivity
21
FY2018Performance forecast
Against the US dollar Against the euro
RevenueOperating
profitRevenue
Operatingprofit
Industrial Division/Precision Equipment Division
+210 +30 +280 +20
Aerospace Division +200 +80 +0 +0
Medical Division +50 △30 +110 +20
Total +460 +80 +390 +50
Average/Forecast (Yen) 108.00 132.00
※When yen was depreciated by 1 yen
Millions of JPY
Copyright © 2018 NIKKISO CO., LTD. All rights reserved.
FY2016- IFRS -
FY2017- IFRS -
Earnings per share (Basic) 66.08 yen 71.82 yen
Return on equity (ROE) 7.2% 7.3%
Return on asset (ROA) 3.8% 3.9%
Operating margin 6.2% 6.2%
Equity ratio 37.4% 30.7%
Debt/equity ratio 1.05 times 1.63 times
FY2016- IFRS -
FY20172017
- IFRS -
Capital expenditure 7,635 7,508
Research and development expenditure 1,679 2,435
Depreciation and amortization 4,766 5,246
Financial data IFRS
22
Millions of JPY