Financial Results for Third Quarter FY2019 (for the year ending March 31, 2020)
February 6, 2020
Table of Contents
Ⅰ. Consolidated Results for Third Quarter FY2019
• | Summary of Financial Results | 3 |
• | Financial Results by Segment | 4 |
• | Details of Change in Profit | 5 |
• | Summary of Income Statement | 6 |
- Financial Results/Forecast by Segment
− Aerospace Systems | 7 | |
− Energy System & Plant Engineering | 8 | |
− Precision Machinery & Robot | 9 | |
− Ship & Offshore Structure | 10 | |
− Rolling Stock | 11 | |
− Motorcycle & Engine | 12 | |
• | Summary of Balance Sheet | 13 |
• | Summary of Cash Flows | 14 |
Ⅱ. Forecast for FY2019
• | Consolidated Operating Performance | 15 |
• | Forecast by Segment | 16 |
• | Before-tax ROIC by Segment | 17 |
• | R&D/CAPEX/Number of Employees | 18 |
• | Historical Data | 19 |
• | Market Overview | 20 |
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Summary of Financial Results
[Billion Yen]
FY2018 | FY2019 | Change | ||
3Q | 3Q | |||
Orders Received | ※ 1,096.6 | 1,022.6 | - | 73.9 |
Net Sales | 1,094.5 | 1,135.4 | + | 40.8 |
Operating Income | 36.8 | 30.9 | - | 5.8 |
Recurring Profit | 19.8 | 15.3 | - | 4.4 |
Net Income Attributable to | 11.3 | 4.7 | - | 6.6 |
Owners of Parent | ||||
※Revised order received of FY2018 3Q due to a change and a refinement of calculation methods of order received in the Precision Machinery & Robot segment (1081.9 billion yen → 1096.6 billion yen)
<> exchange rates>
Yen/US$ | 111.24 | 108.79 |
Yen/EUR | 129.28 | 122.00 |
vs. FY2018.3Q
- Orders Received
- Decreased mainly in Aerospace Systems and Ship
- Offshore Structure segment
- Net Sales
- Increased as a whole due to an increase in Aerospace Systems, Rolling Stock and other segments, despite a decrease in Ship & Offshore Structure and other segments
- Profits
- Operating income and recurring profit decreased due to a decrease in Precision Machinery & Robot, Motorcycle & Engine segment and other segments, despite an increase in Energy System
- Plant Engineering segments
- Net income attributable to owners of parent decreased due to a decrease in recurring profit, recognized loss on business withdrawal loss as extraordinary losses, and other factors
(Appendix)
Net Sales in Foreign Currencies for Third
Quarter FY2019 | [Billion] |
US$ | EUR |
1.53 | 0.28 |
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Financial Results by Segment
[Billion Yen]
Orders Received | Net Sales | Operating Income | ||||||||||||
FY2018 | FY2019 | Change | FY2018 | FY2019 | Change | FY2018 | FY2019 | Change | ||||||
3Q | 3Q | 3Q | 3Q | 3Q | 3Q | |||||||||
Aerospace Systems | 280.5 | 245.1 | - | 35.4 | 328.1 | 371.4 | + | 43.3 | 21.2 | 20.5 | - | 0.7 | ||
Energy System & | 201.6 | 184.3 | - | 17.2 | 168.8 | 162.3 | - | 6.5 | 4.5 | 13.0 | + | 8.4 | ||
Plant Engineering | ||||||||||||||
Precision Machinery & Robot | ※1 172.0 | 157.1 | - | 14.8 | 154.2 | 147.0 | - | 7.2 | 14.9 | 5.2 | - | 9.7 | ||
Ship & Offshore Structure | 65.2 | 31.6 | - | 33.6 | 63.0 | 53.0 | - | 10.0 | 2.8 | -0.7 | - | 3.5 | ||
Rolling Stock | 79.6 | 91.2 | + | 11.5 | 86.0 | 97.4 | + | 11.3 | -6.4 | -3.1 | + | 3.3 | ||
Motorcycle & Engine | 226.2 | 230.1 | + | 3.8 | 226.2 | 230.1 | + | 3.8 | 0.0 | -4.5 | - | 4.4 | ||
Others | 71.1 | 82.8 | + | 11.7 | 67.8 | 73.9 | + | 6.0 | 2.4 | 2.0 | - | 0.4 | ||
Eliminations and corporate※2 | - | - | - | - | - | - | -2.6 | -1.3 | + | 1.3 | ||||
Total | ※11,096.6 | 1,022.6 | - | 73.9 | 1,094.5 | 1,135.4 | + | 40.8 | 36.8 | 30.9 | - | 5.8 | ||
※1 Revised order received in FY2018 3Q of Precision Machinery & Robot segment due to change in calculation method of order received and refinement | ||||||||||||||
Precision Machinery & Robot | (before) | 157.3 | (after) | 172.0 | ||||||||||
Total | (before) | 1081.9 | (after) | 1096.6 |
※2 "Eliminations and corporate" includes some expenses incurred at Head Office which were not allocated to each industry segment for internal reporting
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Details of Change in Profit
- Operating Profit
-5.8Billion yen (FY2018.3Q 36.8 Billion yen ⇒ FY2019.3Q 30.9 Billion yen)
Loss on Rolling Stock
Project in FY2018.3Q
-3.7
Effects of
foreign exchange rates
Change in product mix and other factors
+8.5
Long Island Rail
-7.6 +5.0
-5.3
Change in selling, general and administrative expenses
-2.7
Road Project
36.8
FY2018.3Q
Change in Sales
30.9
-5.8 Billion yen
FY2019.3Q
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Summary of Income Statement
[Billion Yen]
( | FY2018.3Q | ⇒ | FY2019.3Q | ) | |||||
Operating Income | - | 5.8 | ( | 36.8 | ⇒ | 30.9 | ) | ||
・ Net Sales | + | 40.8 | ( | 1,094.5 | ⇒ | 1,135.4 | ) | ||
・ Cost of sales | + | 43.9 | ( | 910.1 | ⇒ | 954.0 | ) | ||
・ Selling, general & administrative expenses | + | 2.7 | ( | 147.6 | ⇒ | 150.3 | ) | ||
- | Salaries and benefits | + | 1.0 | ( | 40.3 | ⇒ | 41.3 | ) | |
- | R&D expenses | + | 2.9 | ( | 33.4 | ⇒ | 36.3 | ) | |
Non-operating Income / Expenses | + | 1.3 | ( | -16.9 | ⇒ | -15.6 | ) | ||
・ Net Interest expense (incl. dividend income) | - | 0.4 | ( | -1.5 | ⇒ | -2.0 | ) | ||
・ Equity in income of unconsolidated subsidiaries and affiliates | - | 0.1 | ( | 1.0 | ⇒ | 0.8 | ) | ||
・ Gain and loss on foreign exchange | - | 0.1 | ( | -4.6 | ⇒ | -4.7 | ) | ||
・ Payments for the in-service issues of commercial aircraft jet | + | 2.1 | ( | -9.7 | ⇒ | -7.6 | ) | ||
engines | |||||||||
・ Others | + | 0.0 | ( | -2.0 | ⇒ | -2.0 | ) | ||
Extraordinary Income / Losses | - | 1.1 | ( | - | ⇒ | -1.1 | ) | ||
- Gain on sales of fixed assets | + | 1.2 | ( | - | ⇒ | 1.2 | ) | ||
- | Loss on business withdrawal | - | 2.3 | ( | - | ⇒ | -2.3 | ) |
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Aerospace Systems
Main Products: Aircrafts for Japan Ministry of Defense(MOD), Component parts for commercial aircrafts, Commercial helicopters, Missiles, Space equipment, Jet engines, Aerospace Gearbox
FY2018(Accumulated) | FY2019(Accumulated) | |||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |||||||||||||
U:In Octorber | ||||||||||||||||||||
Orders Received | Net Sales | |||||||||||||||||||
L: In this time | ||||||||||||||||||||
[Billion Yen] | Order backlog | [520.0] | ||||||||||||||||||
530.0 | ||||||||||||||||||||
431.6 463.9 | 547.4Billion Yen | [415.0] | ||||||||||||||||||
371.4 | ||||||||||||||||||||
201.1 | 250.8 | |||||||||||||||||||
122.1 | ||||||||||||||||||||
104.9 | ||||||||||||||||||||
79.0 | 69.7 | |||||||||||||||||||
Operating Income | Operating Margin | |||||||||||||||||||
FY2019 3Q (vs. FY2018 3Q)
- Orders Received: Decreased due to a decrease in aircrafts for MOD and component parts for commercial aircrafts, despite keeping high standard of component parts for commercial aircraft jet engines
- Net Sales: Increased due to an increase in aircrafts for MOD, component parts for commercial aircrafts and component parts for commercial aircraft jet engines, and other factors
- Operating Income: Remained at the same level due to an increase in R&D expense for component parts for commercial aircraft jet engines, and other factors, despite an increase in sales
FY2019 Forecast (vs. Forecast in October)
- Orders Received: Revised down due to a decrease in component parts for commercial aircrafts, and other factors
- Net Sales: Revised up due to swift collection of sales information for component parts for commercial aircraft jet engines
[Billion Yen] | 6.7% | • Operating Income: Revised up due to promotion of cost reduction | ||||||||
7.0% | for component parts for commercial aircrafts | |||||||||
6.4% | 5.5% [28.0] | and an increase in sales of component parts for | ||||||||
commercial aircraft jet engines | ||||||||||
4.5% | 3.9% | 3.8% | 36.0 | Sales units of component parts for commercial aircraft [Unit] | ||||||
5.0% | 32.6 | FY2018 3Q | FY2019 3Q | |||||||
20.5 | ||||||||||
21.2 | Boeing 767 | 23 | 25 | |||||||
9.4 | 9.7 | Boeing 777 | 29 | 35 | ||||||
5.3 | 4.8 | Boeing 777X | 5 | 8 | ||||||
Boeing 787 | 104 | 124 | ||||||||
FY2017 | FY2018 | FY2019 Forecast | ||||||||
Actual | Actual | In Octorber | In This Time | |||||||
Before-tax ROIC | 7.8% | 5.0% | 6.0% | 6.5% |
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Energy System & Plant Engineering
Main Products: Industrial plants(cement, fertilizer and others), Power plants, LNG tanks, Municipal waste incineration plants, Tunnel boring machines, Crushing machines,
Gas turbine co-generation system, Gas engines, Diesel engines, Gas turbines & steam turbines for marine & land, Marine propulsion system, Aero-dynamic machinery
FY2018(Accumulated) | FY2019(Accumulated) | ||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | ||||||||||||
U:In Octorber | |||||||||||||||||||
Orders Received | Net Sales | ||||||||||||||||||
L: In this time | |||||||||||||||||||
[Billion Yen] | Order backlog | [330.0] | |||||||||||||||||
263.5 | 403.4 Billion Yen | 280.0[250.0] | |||||||||||||||||
253.0 | 250.0 | ||||||||||||||||||
201.6 | 184.3 | ||||||||||||||||||
93.9 | 146.7 | 124.0 | |||||||||||||||||
69.8 | |||||||||||||||||||
FY2019 3Q (vs. FY2018 3Q)
- Orders Received: Decreased compared to FY2018 3Q when received orders of energy products including CCPP and LNG tanks in domestic market, despite orders received for major repair work on domestic municipal waste incineration plants and other factors
- Net Sales: Decreased due to a decrease in energy business ,and other factors, despite an increase in construction works of chemical plants for overseas market
- Operating Income: Increased due to an improvement in profitability of chemical plants for overseas market and energy business, and other factors, despite
a decrease in revenue
Operating Income | Operating Margin |
[Billion Yen] | 8.0% 6.4% |
16.0 |
4.5% | 5.2% | [11.5] | |
11.6 | 13.0 | ||
2.6% | 1.8% | ||
2.1% | |||
0.4% | 4.5 | 5.0 | |
0.2 | 2.2 | 0.8 | |
※1. CCPP = Combined Cycle Power Plant
FY2019 Forecast (vs. Forecast in October)
- Orders Received: Revised down due to a decrease in large projects for domestic market and time lug of energy projects, and other factors
• Net Sales: | No change |
- Operating Income: Revised up due to improvement in profitability of chemical plants for overseas market
FY2017 | FY2018 | FY2019 Forecast | ||
Actual | Actual | In Octorber | In This Time | |
Before-tax ROIC | 8.0% | 9.3% | 7.1% | 10.2% |
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Precision Machinery & Robot
Main Products: Hydraulic components for construction machinery, Hydraulic components and systems for industrial machines,
Marine application machines, Deck cranes and other marine deck equipment, Industrial robots, Medical and pharmaceutical robot
FY2018(Accumulated) | FY2019(Accumulated) | ||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | ||||||||||||
U:In Octorber | |||||||||||||||||||
Orders Received | Net Sales | ||||||||||||||||||
L: In this time | |||||||||||||||||||
[Billion Yen] | Order backlog | [240.0] | |||||||||||||||||
59.2Billion Yen | |||||||||||||||||||
230.0 | [230.0] | ||||||||||||||||||
172.0 | 225.2 | 222.0 | 157.1 | 220.0 | |||||||||||||||
115.4 | 104.6 | ||||||||||||||||||
57.1 | 52.9 | ||||||||||||||||||
Operating Income | Operating Margin | ||||
9.5% | 9.4% | 9.6% 9.6% | [Billion Yen] | ||
6.5% | ||||
21.3 | [16.0] | |||
3.6% | 3.5% | |||
14.9 | 3.2% | 14.5 | ||
9.6 | 5.2 | |||
4.5 | 1.7 | 3.2 | ||
FY2019 3Q (vs. FY2018 3Q)
- Orders Received: Decreased due to a decrease in hydraulic components for construction machinery and each series of robots
• Net Sales: | Same as above |
- Operating Income: Decreased due to a decrease in sales, an increase in materials cost and R&D expense of hydraulic components for construction machinery, and operating losses by a decrease in robots production in China, and other factor
FY2019 Forecast (vs. Forecast in October)
- Orders Received: Revised down due to a decrease in hydraulic components for construction machinery, industrial robots, and other factors, despite robots for semiconductor manufacturing equipment are tend to increase
• Net Sales: | Same as above |
- Operating Income: Revised down due to sales decrease
※About revised order received in FY2018
Revised order received in FY2018 as below due to change
in calculation method of order received and refinement
1Q | 2Q | 3Q | 4Q | ||||||
Before | 50.9 | 104.8 | 157.3 | 222.4 | |||||
After | 57.1 | 115.4 | 172.0 | 225.2 | |||||
FY2017 | FY2018 | FY2019 Forecast | |||||||
Actual | Actual | In Octorber | In This Time | ||||||
Before-tax ROIC | 22.9% | 19.8% | 12.2% | 10.0% |
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Ship & Offshore Structure
Main Products: LNG carriers, LPG carriers, Bulk carriers, Submarines, JETFOIL
FY2018(Accumulated) | FY2019(Accumulated) | ||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | ||||
U:In Octorber | |||||||||||
Orders Received | Net Sales | ||||||||||
L: In this time | |||||||||||
[Billion Yen] | Order backlog | |||
81.1 78.9 | 80.0 Billion Yen | [70.0] | ||
65.2 | [100.0] | 70.0 | ||
60.0 | ||||
53.0 | ||||
39.7 | 22.8 | 37.1 | ||
22.0 | 21.5 |
FY2019 3Q (vs. FY2018 3Q)
- Orders Received: Decreased compared to FY2018 3Q when received orders of submarines, despite received orders of LPG carriers
- Net Sales: Decreased due to a decrease in construction works of LNG carriers and LPG carriers
- Operating Income: Decreased due to a decrease in new building ships and operation losses, and other factors
FY2019 Forecast (vs. Forecast in October)
- Orders Received: Revised down due to time lug of LNG carriers and other factors
• Net Sales: | No change |
- Operating Income: Revised up due to revising periodic cost and other factors
Operating Income | Operating Margin |
[Billion Yen] | 2.8 | Units of Orders Received and Sales of New Building Ships | |||||||||||
6.1% | [Unit] | ||||||||||||
1.2 | 4.4% | Orders Received | Sales※ | Orders Backlog | |||||||||
1.3 | 1.0 | FY2018 3Q | FY2019 3Q | FY2018 3Q | FY2019 3Q | FY2019 3Q | |||||||
[-2.5] | |||||||||||||
LNG carriers | 5 | 2 | |||||||||||
3.2% | -0.7 | ||||||||||||
1.3% | -0.3 | -1.4 | -2.0 | LPG carriers | 2 | 6 | 6 | 5 | |||||
Submarines | 1 | 2 | 2 | 2 | |||||||||
Others | 2 | 2 | 4 | 4 | |||||||||
-1.7% | -1.4% | -2.8% | Total | 3 | 2 | 15 | 14 | 11 | |||||
※Sales includes units by percentage-of-completion method | |||||||||||||
-3.9%
FY2017 | FY2018 | FY2019 Forecast | ||
Actual | Actual | In Octorber | In This Time | |
Before-tax ROIC | -21.3% | 3.2% | -1.8% | 0.1% |
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Rolling Stock
Main Products: Electric train cars (incl. Shinkansen), Electric and diesel locomotives, Passenger coaches, Bogies
FY2018(Accumulated) | FY2019(Accumulated) | |||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |||||||||||||||||
U:In Octorber | ||||||||||||||||||||||||
Orders Received | Net Sales | |||||||||||||||||||||||
L: In this time | ||||||||||||||||||||||||
[160.0] | ||||||||||||||||||||||||
[Billion Yen] | ||||||||||||||||||||||||
Order backlog | [130.0]150.0 | |||||||||||||||||||||||
136.0 | ||||||||||||||||||||||||
506.1 Billion Yen | 130.0 | |||||||||||||||||||||||
124.6 | ||||||||||||||||||||||||
79.6 86.0 | 91.2 | |||||||||||||||||||||||
60.5 | 59.3 | |||||||||||||||||||||||
24.9 23.3 | 16.0 20.4 | |||||||||||||||||||||||
Operating Income | Operating Margin | |||||||||||||||||||||||
[Billion Yen] | ||||||||||||||||||||||||
-3.1 | [1.0] | |||||||||||||||||||||||
-0.9 | -3.5 | -4.3 | -2.0 | |||||||||||||||||||||
FY2019 3Q (vs. FY2018 3Q)
- Orders Received: Increased due to received orders of subway for domestic market
- Net Sales: Increased due to an increase in passenger carts for domestic and the US market, despite decrease in component parts for overseas market
- Operating Income: Improved due to a decrease in temporary expense of the US projects incurred in FY2018 3Q, sales increase, and other factors, despite a deterioration of profitability of some projects
FY2019 Forecast (vs. Forecast in October)
- Orders Received: No change
- Net Sales: Revised down due to time lug of US projects
- Operating Income: Revised down due to shortage of profit improvement in US projects and other factors
1.3% | ||||||||||||||
- | ||||||||||||||
-3.9% | -7.4% | -3.2% | ||||||||||||
-8.8 | -11.0% | -7.3% | ||||||||||||
-13.7 | -17.3% | |||||||||||||
-19.5% | ||||||||||||||
FY2017 | FY2018 | FY2019 Forecast | ||||||||||||
Actual | Actual | In Octorber | In This Time | |||||||||||
Before-tax ROIC | -26.2% | -26.4% | 1.6% | -3.9% |
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Motorcycle & Engine
Main Products: Motorcycles, Utility Vehicles, All-Terrain Vehicles(ATVs), Personal Watercraft, General-purpose Gasoline Engines
FY2018(Accumulated) | FY2019(Accumulated) | ||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | ||||||||
U:In Octorber | |||||||||||||||
Net Sales | |||||||||||||||
L: In this time | |||||||||||||||
[Billion Yen] | [350.0] | ||||||||||||||
356.8 | |||||||||||||||
345.0 | |||||||||||||||
226.2 | 230.1 | ||||||||||||||
144.4 | 147.2 | ||||||||||||||
73.7 | 68.3 | ||||||||||||||
FY2019 3Q (vs. FY2018 3Q)
- Net Sales: Increased due to an increase in vehicles in the US market
- Operating Income: Despite revenue increase, deteriorated due to the appreciation of the yen against the euro and the US dollar, an increase in manufacturing costs due to appreciation of the Thai baht against the yen, and
other factors, | when compared to FY 2018 3Q |
FY2019 Forecast (vs. Forecast in October)
- Net Sales: Revised down due to recall of vehicles ,and slowdown growth of general-purpose gasoline engines market
- Operating Income: Same as above
Operating Income | Operating Margin |
[Billion Yen]
14.3
4.0% | [9.0] | |
-3.3-4.6 | -2.8-3.3-4.5 | 3.0 |
0.8% |
-4.4% | -0.0% | -2.2% | -1.9% | |
-4.1% | ||||
-3.2% |
Wholesales by Product | [Thousands of units, Billion Yen] | ||||||||||
FY2018 3Q | FY2019 3Q | ||||||||||
Unit | Amount | Unit | Amount | ||||||||
Motorcycles for developed contries | 100 | 78.8 | 101 | 72.9 | |||||||
Motorcycles for emerging market | 253 | 60.1 | 252 | 58.9 | |||||||
Utility Vehicles, ATVs & PWC | 47 | 53.5 | 51 | 63.7 | |||||||
General-purpose gasoline engines | 33.7 | 34.6 | |||||||||
Total | 400 | 226.2 | 404 | 230.1 | |||||||
FY2017 | FY2018 | FY2019 Forecast | |||||||||
Actual | Actual | In Octorber | In This Time | ||||||||
Before-tax ROIC | 9.4% | 8.4% | 5.7% | 1.3% |
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Summary of Balance Sheet
[Billion Yen] | ||||
End of | End of | Change | ||
Mar. 2019 | Dec. 2019 | |||
Cash on hand and in banks | 74.3 | 74.4 | + | 0.0 |
Change in CAPEX and others [Billion Yen]
Trade receivables | 427.6 | 548.2 | + | 120.5 |
Inventories | 592.8 | 666.8 | + | 73.9 |
Total fixed assets | 502.4 | 503.7 | + | 1.2 |
Others assets | 241.5 | 260.3 | + | 18.7 |
Total assets | 1,838.8 | 2,053.5 | + | 214.6 |
Trade payables | 370.2 | 338.4 | - | 31.8 |
Interest-bearing debt | 439.4 | 787.6 | + | 348.2 |
Advances from customers | 181.4 | 145.9 | - | 35.5 |
494.4
Fixed Asset_______ |
CAPEX___________59.8 |
Depriciation_______ |
41.5 |
499.6503.7
48.247.8
39.945.2
Other liabilities | 355.4 | 306.5 | - | 48.9 |
Total liabilities | 1,346.5 | 1,578.5 | + | 231.9 |
Total shareholders' equity | 483.5 | 471.6 | - | 11.8 |
Other net assets | 8.7 | 3.3 | - | 5.3 |
Total net assets | 492.2 | 475.0 | - | 17.2 |
Total liabilities & net assets | 1,838.8 | 2,053.5 | + | 214.6 |
Ratio of shareholders' equity to total assets | 25.9% | 22.3% | ||
Net D/E Ratio | 76.6% | 155.3% |
- Assets increased due to an increase in working capital in Aerospace Systems segment and other factors
- Liabilities increased as a whole due to an increase in interest- bearing debt by an increase in working capital, despite trade payables decrease
- Net assets decreased due to a decrease in payment of dividend, in foreign currency translation adjustment, and other factors
FY2017 3Q | FY2018 3Q | FY2019 3Q |
Change in interest-bearing debt [Billion Yen]
Long-term debt | Short-term debt | |||||||||
800 | ||||||||||
600 | ||||||||||
400 | ||||||||||
200 | ||||||||||
0 | ||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q |
FY2017 | FY2018 | FY2019 |
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Summary of Cash Flows
[Billion Yen]
FY2018 | FY2019 | Change | ||
3Q | 3Q | |||
Cash flows from | -207.4 | -288.4 | - | 80.9 |
operating activities | ||||
Cash flows from | -67.4 | -46.2 | + | 21.1 |
investing activities | ||||
Free Cash Flows | -274.8 | -334.6 | - | 59.7 |
Cash flows from | 254.4 | 335.8 | + | 81.3 |
financing activities | ||||
- Cash flows from operating activities deteriorated due to an increase in working capital in Aerospace Systems segment
- Cash flows from investing activities improved due to a decrease in CAPEX in Aerospace Systems segment
- Given the above mentioned changes, free cash flows deteriorated
Change in CF from operating activities & others
[Billion Yen] | 701.3 | 748.8 | |
608.0 | |||
Working capital___ ___ ___ __ | |||
Income before | |||
income taxes & | |||
minority interests______ | 27.1 | 19.8 | 14.2 |
FY2017 3Q | FY2018 3Q | FY2019 3Q | |
CF from operating activities____ |
-206.7-207.4
-288.4
Change in FCF &
Net Income attributable to Owners of Parent [Billion Yen]
Net Income Attributable to | |||
Owners of Parent______ | 14.5 | 11.3 | |
4.7 | |||
FY2017 3Q | FY2018 3Q | FY2019 3Q | |
FCF_______________ | |||
-273.6 | -274.8 | ||
-334.6 |
© 2020 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved | 14 |
Consolidated Operating Performance
[Billion Yen] | ||||||
FY2018 | FY2019 | Change | ||||
Actual | In Oct. | In This Time | vs. FY2018 | vs. In Oct. | ||
Orders Received | ※11,588.7 | 1,650.0 | 1,550.0 | - | 38.7 | - 100.0 |
Net Sales | 1,594.7 | 1,660.0 | 1,660.0 | + | 65.3 | - |
Operating Income | 64.0 | 56.0 | 60.0 | - | 4.0 | + 4.0 |
Recurring Profit | 37.8 | 41.0 | 41.0 | + | 3.2 | - |
Net Income Attributable | 27.4 | 25.0 | 25.0 | - | 2.4 | - |
to Owners of Parent | ||||||
Before-tax ROIC | 4.5% | 4.8% | 4.8% | + 0.3% | - | |
ROE | 5.8% | 5.2% | 5.2% | - | 0.6% | - |
Dividend(per share) | 70 yen | 70 yen | 70 yen | - | - | |
※1 Revised order received in FY2018 of Precision Machinery & Robot segment due to change in calculation method of order received and refinement (1585.9 billion yen → 1588.7 billion yen)
※2 >
Yen/US$ | 110.77 | 107.00 | 107.00 |
Yen/EUR | 128.33 | 118.00 | 118.00 |
※2 Assumed rates are applied to the outstanding foreign exchange exposure as of October 31, 2019
Reasons for the Revision
- Orders Received
- Revised down due to a decrease in Energy System & Plant Engineering and Ship & Offshore Structure segments, and other factors
- Net Sales
- Remain unchanged as a whole due to an increase in Aerospace Systems segment and other factors, despite a decreases in Precision Machinery & Robot and Rolling Stock segments
- Profit
- Operating income revised up as a whole due to an increase in Aerospace Systems, Energy System & Plant Engineering and other segments, despite a decrease in Motorcycle & Engine and other segments
- Recurring profit and net income attributable to owners of parent remain unchanged due to payment for the in-service issue of commercial aircraft jet engines, and other factors, despite revised up operating income, and increased in equity in income of affiliates, and other factors
(Appendix)
Impact on profit by FX fluctuation of 1 yen
[Billion Yen] | ||
Operating | Recurring | |
Income | Profit | |
US$ | 0.80 | 0.88 |
EUR | 0.10 | 0.05 |
© 2020 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved | 15 |
Forecast by Segment
[Billion Yen] | |||||||||||||||
Orders Received | Net Sales | Operating Income | |||||||||||||
FY2018 | FY2019 Forecast | FY2018 | FY2019 Forecast | FY2018 | FY2019 Forecast | ||||||||||
Actual | In Oct. | In This | Change | Actual | In Oct. | In This | Change | Actual | In Oct. | In This | Change | ||||
Time | vs. In Oct. | Time | vs. In Oct. | Time | vs. In Oct. | ||||||||||
Aerospace Systems | 431.6 | 415.0 | 410.0 | - | 5.0 | 463.9 | 520.0 | 530.0 | + | 10.0 | 32.6 | 28.0 | 36.0 | + | 8.0 |
Energy System & | 263.5 | 330.0 | 280.0 | - | 50.0 | 253.0 | 250.0 | 250.0 | - | 11.6 | 11.5 | 16.0 | + | 4.5 | |
Plant Engineering | |||||||||||||||
Precision Machinery & Robot | ※1 225.2 | 240.0 | 230.0 | - | 10.0 | 222.0 | 230.0 | 220.0 | - | 10.0 | 21.3 | 16.0 | 14.5 | - | 1.5 |
Ship & Offshore Structure | 81.1 | 100.0 | 60.0 | - | 40.0 | 78.9 | 70.0 | 70.0 | - | 1.0 | -2.5 | -2.0 | + | 0.5 | |
Rolling Stock | 136.0 | 130.0 | 130.0 | - | 124.6 | 160.0 | 150.0 | - | 10.0 | -13.7 | 1.0 | -2.0 | - | 3.0 | |
Motorcycle & Engine | 356.8 | 350.0 | 345.0 | - | 5.0 | 356.8 | 350.0 | 345.0 | - | 5.0 | 14.3 | 9.0 | 3.0 | - | 6.0 |
Others | 94.2 | 85.0 | 95.0 | + | 10.0 | 95.1 | 80.0 | 95.0 | + | 15.0 | 2.5 | 1.0 | 1.5 | + | 0.5 |
Eliminations and corporate※2 | - | - | - | - | - | - | - | - | -5.7 | -8.0 | -7.0 | + | 1.0 | ||
Total | ※1 | 1,650.0 | 1,550.0 | - 100.0 | 1,594.7 | 1,660.0 | 1,660.0 | - | 64.0 | 56.0 | 60.0 | + | 4.0 | ||
1,588.7 | |||||||||||||||
※1 | Revised order received of FY2018 due to a change and a refinement of calculation methods of order received in the Precision Machinery & Robot segment | ||||
Precision Machinery & Robot | (before) | 222.4 | (after) | 225.2 | |
Total | (before) | 1585.9 | (after) | 1588.7 | |
※2 | "Eliminations and corporate" includes some expenses incurred at Head Office which were not allocated to each industry segment for internal reporting |
© 2020 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved | 16 |
Before-tax ROIC by Segment
Before-tax ROIC | Operating Margin | Asset Turnover(Times) | ||||||||||||||
(EBIT/Invested Capital) | (Operating Income/Net Sales) | (Net Sales/Total Assets) | ||||||||||||||
FY2018 | FY2019 Forecast | FY2018 | FY2019 Forecast | FY2018 | FY2019 Forecast | |||||||||||
Actual | In Oct. | In This | Change | Actual | In Oct. | In This | Change | Actual | In Oct. | In This | Change | |||||
Time | vs. In Oct. | Time | vs. In Oct. | Time | vs. In Oct. | |||||||||||
Aerospace Systems | 5.0% | 6.0% | 6.5% | + | 0.5% | 7.0% | 5.3% | 6.7% | + | 1.4% | 0.71 | 0.73 | 0.74 | + | 0.01 | |
Energy System & | 9.3% | 7.1% | 10.2% | + | 3.1% | 4.5% | 4.6% | 6.4% | + | 1.8% | 0.83 | 0.81 | 0.81 | - | ||
Plant Engineering | ||||||||||||||||
Precision Machinery & | 19.8% | 12.2% | 10.0% | - | 2.2% | 9.6% | 6.9% | 6.5% | - | 0.4% | 1.08 | 1.19 | 1.13 | - | 0.06 | |
Robot | ||||||||||||||||
Ship & Offshore | 3.2% | -1.8% | 0.1% | + | 1.9% | 1.3% | -3.5% | -2.8% | + | 0.7% | 0.64 | 0.58 | 0.54 | - | 0.04 | |
Structure | ||||||||||||||||
Rolling Stock | -26.4% | 1.6% | -3.9% | - | 5.5% | -11.0% | 0.6% | -1.3% | - | 1.9% | 0.59 | 0.80 | 0.76 | - | 0.04 | |
Motorcycle & Engine | 8.4% | 5.7% | 1.3% | - | 4.4% | 4.0% | 2.5% | 0.8% | - | 1.7% | 1.25 | 1.27 | 1.25 | - | 0.02 | |
Total | 4.5% | 4.8% | 4.8% | - | 4.0% | 3.3% | 3.6% | + | 0.3% | 0.86 | 0.90 | 0.90 | - | |||
© 2020 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved | 17 |
R&D/CAPEX/Number of Employees
[Billion Yen/Persons] | |||||||
FY2018 | FY2019 Forecast | ||||||
Actual | In Octorber | In This Time | Change | ||||
vs. In Oct. | |||||||
R&D Expenses | 48.7 | 59.0 | 56.0 | - | 3.0 | ||
CAPEX | 66.9 | 77.0 | 77.0 | - | |||
(Construction Base)※ | |||||||
Depreciation and | 59.0 | 61.5 | 61.5 | - | |||
Amortization※ | |||||||
Domestic | 26,171 | 26,800 | 26,800 | - | |||
Overseas | 9,520 | 9,800 | 9,800 | - | |||
Number of Employees | 35,691 | 36,600 | 36,600 | - | |||
※Capex represents the total of newly recorded property, plant and equipment and newly recorded intangible assets.
Depreciation & amortization represents depreciation/amortization expenses for property, plant and equipment and intangible assets.
© 2020 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved | 18 |
Historical Data
1,000.0
800.0
600.0
400.0
200.0
0.0
Share holders' equity(left axis) | Interest bearing debt(left axis) | Before-tax ROIC(right axis) | |||||||||||
398.4 | 446.6 | 439.4 | |||||||||||
444.6 | 414.3 | 400.6 | |||||||||||
484.6 | |||||||||||||
429.1 | 407.1 | ||||||||||||
304.2 | 276.4 | 389.2 | 428.9 | ||||||||||
319.8 | |||||||||||||
290.4 | 313.1 | 290.4 | 277.0 | 289.0 | 306.0 | 338.2 | 363.0 | 431.9 | 431.3 | 437.2 | 466.0 | 476.3 | |
237.5 | |||||||||||||
15.0%
12.0%
9.0%
6.0%
3.0%
0.0%
[Billion yen] | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 |
Before-tax ROIC | 5.1% | 8.7% | 11.2% | 4.5% | 0.2% | 6.0% | 7.4% | 6.1% | 8.1% | 10.4% | 9.4% | 5.0% | 3.9% | 4.5% |
Invested Capital | 557.3 | 594.6 | 589.6 | 679.7 | 705.9 | 718.2 | 713.2 | 822.8 | 807.6 | 846.3 | 829.7 | 837.9 | 912.7 | 915.8 |
Net Sales | 1,322.4 | 1,438.6 | 1,501.0 | 1,338.5 | 1,173.4 | 1,226.9 | 1,303.7 | 1,288.8 | 1,385.4 | 1,486.1 | 1,541.0 | 1,518.8 | 1,574.2 | 1,594.7 |
Operating Profit | 41.7 | 69.1 | 76.9 | 28.7 | -1.3 | 42.6 | 57.4 | 42.0 | 72.3 | 87.2 | 95.9 | 45.9 | 55.9 | 64.0 |
Recurring Profit | 30.8 | 49.0 | 63.9 | 38.7 | 14.2 | 49.1 | 63.6 | 39.3 | 60.6 | 84.2 | 93.2 | 36.6 | 43.2 | 37.8 |
Net Income | 16.4 | 29.7 | 35.1 | 11.7 | -10.8 | 25.9 | 23.3 | 30.8 | 38.6 | 51.6 | 46.0 | 26.2 | 28.9 | 27.4 |
Attributable to | ||||||||||||||
Owners of Parent | ||||||||||||||
Yen/US$ | 112 | 117 | 115 | 101 | 93 | 86 | 79 | 82 | 99 | 109 | 118 | 108 | 110 | 110 |
© 2020 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved | 19 |
Market Overview (1/2)
Aerospace Systems
- In military aircraft business, there is a certain demand within tight defense budget.
- In commercial aircraft business, the demand for component parts of aircrafts and aircraft jet engines increases along with the increased number of air passengers.
Energy System & Plant Engineering
- Overseas, resource developments and investing in oil and natural gas are on the path of recovery.
- In Asia, There is still a demand for energy infrastructure maintenance and the demand for distributed generations increases due to increased willingness to invest in environmental energy and energy conservation
- In Japan, there is still a replacement demand for aging equipment and others of incineration plants and industrial machineries. In terms of distributed generations, there is a large potential demand, but the investment plans are slightly behind schedule in view of the electricity deregulation.
Precision Machinery & Robot
- In construction machinery markets, domestic customers had been forced reduced production due to parts supply stagnation affected by Typhoon Nov. 19 (Hagibis).
- In addition, current sales in Korean market and emerging countries such as India and Indonesia are sluggish, however, the demand will become stable especially in emerging countries.
- In robots markets, a tough situation continue due to a postponement of capital expenditures in China because of the US-China trade friction and other factors
- In semiconductor markets, demand is recovering due to Taiwanese and Korean major semiconductor manufacturers have restarted investment.
- Estimating that the demand for robots will steadily expand in the medium to long term
© 2020 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved | 20 |
Market Overview (2/2)
Ship & Offshore Structure
- New-buildvessel price is on the path of moderate recovery and the demand for LNG fueled vessels increases along with strengthening environmental regulations.
- However, the competition is still intense due to stagnant demand for LNG transport vessels along with the LNG projects delay, continuation of assistance programs by South Korean Government, and other factors.
Motorcycle & Engine
- In motorcycle market, moderate growth continues mainly in Europe however decreased in emerging countries.
- In utility vehicle and personal watercraft market, stable growth continues mainly in US.
- In general purpose engine business, market growth temporarily slowed down due to inclement weather and the US-China trade friction
Rolling Stock
- In Japan, there is a steady replacement demand for aging railcars.
- In US, there is a growing new and replacement demand, including New York, which is our focus market.
- In Asia, the demand in emerging market increases along with promoting infrastructure exports by Japanese Government.
© 2020 KAWASAKI HEAVY INDUSTRIES, LTD. All Rights Reserved | 21 |
Figures recorded in the business forecasts are forecasts that reflect the judgment of the Company based on the information available at the time of release and include risks and uncertainties. Accordingly, the Company cautions investors not to make investment decisions solely on the basis of these forecasts.
Actual business results may differ materially from these business forecasts due to various important factors resulting from changes in the external environment and internal environment. Important factors that may affect actual business results include, but are not limited to, economic conditions, the yen exchange rate against the U.S. dollar and other currencies, the tax system, and laws and regulations.
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Kawasaki Heavy Industries Ltd. published this content on 06 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 February 2020 04:06:04 UTC