(fiscal year ending march 31, 2019) earnings …q1 fy16 q2 q3 q4 q1 fy17 q2 q3 q4 q1 fy18 y net...

1Q FY2018(Fiscal Year Ending March 31, 2019)

Earnings Presentation Aug. 2018

2Copyright© Furusato Industries, Ltd. All Rights Reserved

１．Financial Results

２．Forecast

３．Non-consolidated Financial Results

3

1Q Financial Summary

Copyright© Furusato Industries, Ltd. All Rights Reserved

Net Sales✓+¥2,743M,＋12.5％ Y-o-Y✓Machine & Facility Seg. substantial growth

Gross Profit✓＋¥394M,＋13.2％ Y-o-Y✓Construction & Piping Products Seg. Margin up 1pt

SG&A Expenses✓＋¥77M,＋2.9％ Y-o-Y✓Special factor in FY17（Additional amortization of Nagoya Branch of G-net)

4

P/L (Consolidated)


（Millions of yen） Q1 FY17 Q1 FY18YoY％

H1 FY18Forecast

Progress%

Net sales 21,921 24,665 +12.5％ 48,600 50.8％

Gross profit 2,996 3,391 +13.2％ 6,870 49.4％

SG&A Ex. 2,638 2,716 +2.9％ 5,470 49.7％

Operating income 358 674 +88.3％ 1,400 48.2％

Ordinary income 440 800 +81.8％ 1,500 53.4％

Net income attributable to owners of parent 255 500 +95.9％ 950 52.7％

5

Quarterly Sales


Construction & Piping Products Seg.

•+¥775M, +10.9％ Y-o-Y

•Steel Frame Building Supplies Business

busy

10,864 11,065 11,593 12,280 11,212

12,233 12,551 12,831 12,100

3,586 4,466

6,221 5,058

3,586

5,676 5,165 5,260 4,666

6,599

7,476

7,862 7,034

7,123

7,586 8,333 7,321 7,898

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

■Net Sales

Equipment & Tools Machine & Facility Construction & Puping Products

Machine & Facility Seg.

•+¥1,079M, +30.1％Y-o-Y

•Delivery date of machine tool more

prolonged

Equipment & Tools Seg.

•+¥888M, +7.9％ Y-o-Y

•Industrial Equipment, Machine and

Tools for Automotive double-digit Y-o-Y

growth

Sales growth across all segments

Rounded down to the nearest million yen

96.5 98.0

99.8 100.0 101.8 102.3

103.9 102.5

103.7

98.0

101.5

105.3

101.9

106.0 105.5

108.9

106.2

110.1

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

□Industrial Production Index

Industrial Production Transport Equipment

6

Equipment & Tools SegmentBusiness Environment


Industrial Production Index（Overall）

•+1.9％ Y-o-Y

Industrial Production Index

(Transport equipment）

•+4.1％ Y-o-Y

2010＝100

Continued moderate Growth


New Construction Starts of Houses

•98％ Y-o-Y

•The fourth consecutive quarterly

decrease

Continued Y-o-Y decrease

247,079 253,072 250,696

223,290

249,916 246,924 244,511

207,997

245,040

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

□New Construction Starts of Houses

104.9%

107.1% 107.9%103.2%

101.1%

97.6% 97.5%

93.2%

98.0%

Y-o-Y %

Equipment & Tools SegmentBusiness Environment


Housing Equipment Business

（Housing Equipment, G-net ）

•-¥26M, -2.0％ Y-o-Y

10,864 11,065 11,593

12,280

11,212

12,233 12,551 12,831

12,100

7,752 8,044 8,279 8,937

8,200 9,124 9,087 9,399 9,052

1,444 1,379

1,501

1,565

1,325

1,475 1,660 1,690

1,547 1,352 1,354 1,566

1,379

1,286

1,234 1,515

1,438 1,259

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

□Net Sales

Industrial Equipment Machine & Tools for Automotive

Housing Equipment Other

Machine & Tools for Automotive

Business （Gifu Shoji）

•+¥221M, +16.7％ Y-o-Y

Equipment & Tools Business

（Equipment & Tools, G-net）

•+¥851M, +10.4％ Y-o-Y

Equipment & Tools, Machine & Tools for Automotive double-digit growth／Housing Equipment down

Equipment & Tools SegmentQuarterly Sales Trend



Orders Received for Machine Tool

（Japan Machine Tool Builders Association）

•116％ Y-o-Y

•Domestic demand 124.4％ Y-o-Y

•Overseas demand 110.7％ Y-o-Y

128,589 139,942 132,295 130,749 156,212 168,011 174,358 189,355 194,388

184,064 165,361 181,399 226,911

250,343 248,269 290,663

303,090 277,212

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

□Machine Tool Orders Received

Overseas Demand Domestic Demand

76.4%82.1%

96.6%

112.3%

130.0%136.4%

148.2%

137.7%

116.0%

Y-o-Y %

Y-o-Y growth continued, slowdown in growth

Machine & Facility SegmentBusiness Environment



Factory Automation Business

（FA, G-net）

•+¥110M, +20.1％ Y-o-Y

•Recording 61% of backlog at 4QE FY17

as sales

Machine Tool Business

（Machine, G-net）

•+¥969M, +31.9％ Y-o-Y

•Recording 44% of backlog at 4QE FY17

as sales

Both businesses double-digit growth／More prolonged delivery date

Machine & Facility SegmentQuarterly Sales Trend


3,015 3,576

5,526

4,244

3,040

5,026

4,376 4,352 4,009

570

889

695

814

546

649

789 908

656

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

■Net Sales

Machine Tool Factory Automation


Factory Automation Business

（FA, G-net）

•+¥100M, +11.1％ Y-o-Y

•Backlog at 1QE ¥1,327M

➢+¥249M, +23.1％ vs. 4QE

4,517 4,132 3,877 3,667

5,658

4,815

6,019 5,850 5,407

586 800

625 765

906

846

981 892

1,006

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

□Orders Received

Machine Tool Factory Automation

Machine Tool Business

（Machine, G-net）

•-¥251M, -4.4％ Y-o-Y

•Backlog at 1QE ¥10,340M

➢+¥1,172M, +12.7％ vs. 4QE

Orders received slowdown, backlog up

Machine & Facility SegmentQuarterly Orders Received


1,318,773 1,342,033

1,241,998 1,200,816

1,378,208 1,363,990

1,259,833 1,207,689

1,347,662

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

□Steel Frame used for building

99.3%

102.8%102.7%

106.9%104.5%

101.6% 101.4%100.6% 97.8%

Y-o-Y %


Steel frame used for building

•97.8％ Y-o-Y

•FY16 5,103Kt

•FY17 5,209Kt

Unite：ton

Steel frame remained at high level／

FY18 estimated 5.2～5.3Mt

Construction & Piping Products SegmentBusiness Environment

71,000

69,000

71,000

74,000 76,000

78,000

81,000

84,000

87,000

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

□Steel Product Price


Steel Product Price

•114.5％ Y-o-Y

•The seventh consecutive quarter of

growth

Unit：Yen／ton

The seventh consecutive quarterly growth

Construction & Piping Products SegmentBusiness Environment

（H-beam200ｘ100； High price in Tokyo market）

Copyright© Furusato Industries, Ltd. All Rights Reserved 14

Piping Products Business

（Piping Products, Furusato）

•+¥23M, +1.4％ Y-o-Y

5,198 5,924

6,234

5,289 5,465 5,949

6,557

5,508 6,217

1,401

1,551 1,627

1,744 1,657

1,637

1,775

1,812

1,681

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

□Net Sales

Steel Frame Building Supplies Piping Products

Steel Frame Building Supplies Business

（Steel Frame Building Supplies,

Furusato）

•+¥751M, +13.7％ Y-o-Y

•In-house product +8.2％ Y-o-Y

➢Turnbuckle brace：Volume +0.3％, Ave. unit price +8.6％

•Purchasing supplies +15.5％ Y-o-Y

➢High strength bolts：Volume +7.4％, Ave. unit price +1.8％

Steel Frame double-digit growth／Piping Products slight growth

Construction & Piping Products SegmentQuarterly Sales Trend


15

Gross Profit by Segment



H1 FY18Forecast

Progress%

Equipment & Tools 1,230 1,329 +8.0％ 2,835 46.9％

Margin 11.0% 11.0% - 11.8% -

Machine & Facility 267 322 +20.9％ 725 44.5％

Margin 7.5% 6.9% (0.6)P 7.7% -

Construction &Piping Products 1,498 1,737 +16.0％ 3,310 52.5％

Margin 21.0% 22.0% +1.0P 22.0% -

Construction & Piping Products margin +1pt

2,475 2,459 2,493 2,518 2,638 2,642 2,585 2,626

2,716


Selling expenses

•+¥10M, +2.7％ Y-o-Y

•Freightage & packing expenses

+5.6％ Y-o-Y

General administrative ex. & others

•+¥16M, +2.4％ Y-o-Y

Personnel expenses

•+¥50M, +3.2％ Y-o-Y

•No. of employees +2.4％ Y-o-Y

358 361 387 369 388 427 430 408 399

1,518 1,479 1,491 1,521 1,566 1,528 1,562 1,570 1,616

598 681 614 626 683 686 592 647

700

Q1FY16

Q2 Q3 Q4 Q1FY17

Q2 Q3 Q4 Q1FY18

□SG&A Expenses

Selling expensesPersonnel expensesGeneral administrative ex. ＆ Others

103.0%

101.2%102.6% 101.3%

106.6%107.4% 103.7% 104.3%

102.9%

Y-o-Y （ Total）

+2.9% Y-o-Y due primarily to personnel and freightage expenses

SG&A Expenses Quarterly Trend


17

Operating Income by Segment



H1 FY18Forecast

Progress%

Equipment & Tools 130 234 +79.1％ 525 44.6％

Margin 1.2% 1.9% +0.7P 2.2% -

Machine & Facility 17 57 +235.6％ 205 28.2％

Margin 0.5% 1.2% +0.7P 2.2% -

Construction &Piping Products 224 351 +56.6％ 670 52.5％

Margin 3.2% 4.5% +1.3P 4.5% -

＋88.3％ Overall, all segments up


11,312 11,176

+731 -244 -622

Beginning Operating CF Investing CF Financing CF Year-end

Cash Flows (Consolidated)

Cash and cash equivalents -¥135M


Operating CF

Income before income tax

+800

Depreciation and

Amortization +134

Decrease (increase) in

notes and accounts

receivable +1,059

Increase (decrease) in

notes and accounts

payable -859

Income taxes paid -578

Others

Investing CF

Purchase of property,

plant and equipment -154

Payments for removal

of noncurrent assets -10

Gain on sales of

investment securities -1

Payments for guarantee

Deposits -58

Others

Financing CF

Repayments of long-term

loans payable -25

Cash dividends paid -597

Others


1,190

735

1,663 1,710

1,157 1,000

281 323 392

533

666 650

9,393

11,170 10,957 11,437 11,112

0

2,500

5,000

7,500

10,000

12,500

0

500

1,000

1,500

2,000

2,500

FY13 FY14 FY15 FY16 FY17 FY18 Scheduled

Cap ita l investment Deprecia tion and amortiza tion Cash and deposits


Capital Investment Depreciation and Amortization

＊Cash and deposits at the year-end


97.68

153.81

166.69161.06 159.44

165.55

29.5

46.5 50.5 48.5 48.0 50.0

30.2% 30.2% 30.3% 30.1% 30.1% 30.2%

15.0%

20.0%

25.0%

30.0%

0.00

100.00

200.00

FY13 FY14 FY15 FY16 FY17 FY18 Forecast

ＥＰＳ Dividend D ividend payout ra tio

Unit：Yen

Returns to Shareholders



２．Forecast



（Millions of yen） H1YoY％

H2YoY％

FULLYEAR

YoY%

Net sales 48,600 +2.5％ 52,900 +2.8％ 101,500 +2.6％

Gross profit 6,870 +5.7％ 7,500 +5.3％ 14,370 +5.5％

SG&A Ex. 5,470 +3.6％ 5,500 +5.5％ 10,970 +4.5％

Operating income 1,400 +15.0％ 2,000 +4.8％ 3,400 +8.8％

Ordinary income 1,500 +8.8％ 2,200 +5.5％ 3,500 +6.8％

Net income attributable to owners of parent 950 +9.5％ 1,450 +0.4％ 2,400 +3.8％

Unchanged from forecast announced on May 7

Forecast

Financial Summary

23

Forecast

Equipment & Tools Segment



H2YoY％

FULLYEAR

YoY%

Net sales 24,100 +2.8％ 26,300 +3.6％ 50,400 +3.2％

Industrial Equipment 17,780 +2.6％ 19,080 +3.2％ 36,860 +2.9％

Machine and Toolsfor Automotive 3,000 +7.1% 3,415 +1.9% 6,415 +4.3%

Housing Equipment 2,600 +3.2% 3,000 +1.6% 5,600 +2.3%

Others 720 (9.9)％ 805 +36.5％ 1,525 +9.8％

Gross profit 2,835 +6.3％ 3,095 +6.2％ 5,930 +6.2％

SG&A expenses 2,310 +4.4％ 2,310 +3.8％ 4,620 +4.1％

Operating income 525 +15.4％ 785 +14.1％ 1,310 +14.6％



H2YoY％

FULLYEAR

YoY%

Net sales 9,450 +2.0％ 10,550 +1.2％ 20,000 +1.6％

Machine Tool 8,100 +0.4％ 8,800 +0.8％ 16,900 +0.6％

Factory Automation 1,350 +12.9% 1,750 +3.0% 3,100 +7.1%

Gross profit 725 +10.1％ 855 +1.0％ 1,580 +2.4％

SG&A expenses 520 +2.7％ 510 +1.1％ 1,030 +1.9％

Operating income 205 +7.5％ 345 +0.9％ 550 +3.3％

Forecast

Machine & Equipment Segment



H2YoY％

FULLYEAR

YoY%

Net sales 15,050 +2.3％ 16,050 +2.5％ 31,100 +2.4％

Steel FrameBuilding Supplies 11,600 +1.6％ 12,250 +1.5％ 23,850 +1.6％

Piping Products 3,450 +4.7% 3,800 +5.9% 7,250 +5.3%

Gross profit 3,310 +5.6％ 3,550 +5.7％ 6,860 +5.7％

SG&A expenses 2,640 +3.7％ 2,680 +4.3％ 5,320 +4.0％

Operating income 670 +13.7％ 870 +10.3％ 1,540 +11.8％

Forecast

Construction & Piping Products Segment



２．Forecast



（Millions of yen） Q1 FY17 Q1 FY18 YoYYoY％

Net sales 7,124 7,901 +776 +10.9％

Gross profit 1,498 1,737 +239 +16.0％

SG&A Ex. 1,273 1,386 +112 +8.8％

Operating income 224 351 +127 +56.6％

Ordinary income 227 438 +161 +58.4％

Net income attributable to owners of parent 110 270 +159 +144.7％

Non-consolidated Results－Furusato



Net sales 13,798 15,617 +1,819 +13.2％

Gross profit 1,289 1,405 +116 +9.0％

SG&A Ex. 1,206 1,206 0 0％


Ordinary income 125 251 +126 +100.4％


Non-consolidated Results－G-net



Net sales 1,326 1,548 +221 +16.7％

Gross profit 208 246 +38 +18.03％

SG&A Ex. 143 153 +10 +7.0％


Ordinary income 82 108 +26 +31.8％


Non-consolidated Results－Gifu Shoji


This material contains forward-looking statements that reflects Furusato’s plans and expectations. These forward-looking statements are based on information currently available and a rational evaluation based on certain assumptions that may cause Furusato’s future results to be materially different from any future results expressed or implied by these forward-looking statements due to a number of factors including change of business environment, market trend and others.

Corporate Planning Division

ＴＥＬ：０６－６９４６－９６２１

ＦＡＸ：０６－６９４６－１９３４

E-mail ：[email protected]

(fiscal year ending march 31, 2019) earnings …q1 fy16 q2 q3 q4 q1 fy17 q2 q3 q4 q1 fy18 y net...

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