fy2014 3q consolidated financial results · 2018-06-12 · actual results in the future may differ...

Copyright © 2015 NIKKISO CO., LTD .All rights reserved. 1

[Notice] 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.

February 2, 2015

Securities code: 6376

FY2014 3Q Consolidated Financial ResultsFor the nine months to December 31, 2014


Overview of the 3Q results Net sales and orders increased, while operating income decreased in the 3rd

quarter year on year.

Market conditions in the Industrial business such as energy and aviation remained steady. However, in the Medical business, lingering backlash after pre-consumption-tax-hike surge in demand had adverse impact on the domestic market, resulted in the lower sales of dialysis machines than estimated.

Orders and net sales increased year on year, thanks to the steady growth in LEWA and Aviation as well as the contribution of newly consolidated companies.

Operating Income decreased year on year.- Expenditure associated with acquisition of Geveke, factory restructuring and R&D of UV-LED

business.- Profit of the Industrial business increased thanks to revenue increase in LEWA as well as

Aerospace division.- Profit of the medical business decreased due to the drop in the domestic sales of dialysis

machines.

Recently crude oil prices have been showing a downward trend. If the prices continue to stay at this level, there will be adverse impact on the amount of orders in upstream business, due to foreseeable shrink in capital investment. On the other hand, there will be favorable impact on the amount of orders in downstream business, since raw material cost decline may cause the increase in capital investment.


FY2013 3Q FY2014 3QYoY comparison

Amount %

Orders 87,366 97,669 + 10,303 + 11.8%

Net Sales 78,739 88,431 + 9,691 + 12.3%

Operating Income 3,910 3,017 -893 -22.8%Ratio to net sales 5.5 % 3.4%

Ordinary Income 6,002 5,883 -118 -2.0%Ratio to net sales 7.6 % 6.7 %

Net Income 3,104 3,292 +188 +6.1%Ratio to net sales 3.9 % 3.7 %

Exchange Rate(average during the period)

Against the US dollar 97.64 yen 104.25 yen +6.61 yen -Against the euro 129.29 yen 138.19 yen +8.90 yen -

(Unit: millions of yen)

Overview of the 3Q results


Non-Operating Income (Expenses) and Extraordinary Gains (Losses)(Unit: millions of yen)

Overview of the 3Q results


Amount Remarks

Non-operating income(expenses), net + 2,091 + 2,866 + 774

Interest received (paid), net (482) (369) + 112Foreign exchange gains(losses), net + 2,044 + 2,485 + 441 Depreciation of yen

Extraordinary gains(losses) (551) (251) + 299

Gain on sales of noncurrent assets + 5 + 128 + 122 Sold unutilized asset

Loss on sales of the business - (340) -340 Sold part of the business of Geveke

Business purchasing expenses (348) - + 348

Foreign Exchange conversion rate

Against the US dollar 105.39yen 120.55yen +15.16yen

(conversion rate of foreign subsidiaries’ financial report) (97.75yen) (109.45yen) (+11.70yen)

Against the euro 145.05yen 146.54yen +1.49yen

(conversion rate of foreign subsidiaries’ financial report) (131.87yen) (138.87yen) (+7.00yen)


Business Segment Performance


Amount %

Industrial Business

Orders 49,183 59,194 + 10,010 + 20.4%

Net Sales 42,824 50,398 + 7,556 + 17.6%

Operating Income 1,930 2,198 + 268 + 13.9%Ratio to net sales 4.5% 4.4％

Medical Business

Orders 38,182 38,475 + 292 + 0.8%

Net Sales 35,897 38,032 + 2,135 + 5.9%

Operating Income 4,504 3,375 - 1,129 -25.1%Ratio to net sales 12.5% 8.9％

Eliminations and corporate Operating Income (2,525) (2,556) -31 -



Overview of the 3Q resultsIndustrial Division【Pumps & Systems】

【Precision equipment】

FY 2013 3Q FY 2014 3QYoY comparison

Amount %

Orders 43,325 51,934 +8,609 +19.9%

Net Sales 37,172 43,101 +5,929 +16.0%


Orders and sales of LEWA products for oil & gas production site continued to be favorable.

Regarding LNG pumps as well as downstream pumps used in petrochemical plants, orders were almost as planned, while sales decreased due to postponement in shipping schedule for some pump products and weak domestic sales.

The drop in oil price have little impact on the business at this point.

Orders and sales of precision equipment remained strong since the R&D investment and capital expenditure in the related industries started to show signs of recovery in Japan and overseas.


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2006 2007 2008 2009 2010 2011 2012 2013 1Q 2Q 3Q 4Q 2014Forecast

Orders (Left axis) Net Sales (Left axis) EBITDA (Left axis) Order Backlog (Right axis)

2014 YTD

Industrial Division

Performance Trends of LEWA (Unit: millions of euros)



Amount %

Orders 5,858 7,217 +1,359 +23.2%

Net Sales 5,669 7,254 +1,585 +28.0%


Overview of the 3Q resultsAerospace Division

In aviation industry, as well as increasing the number of production of existing models, aircraft manufacturers have been developing new-type aircrafts.

Since the demand for lightweight airframe has kept strong, manufacturers have been replacing existing parts with CFRP based parts.

Sales continued to be favorable centered on the main product, Cascade. Received a number of inquiries regarding CFRP based components. Executed preparation in Hanoi plant toward the production of new components used

for aircraft’s main wing.




Amount %

Orders 38,182 38,475 +292 +0.8%

Net Sales 35,897 38,032 +2,135 +5.9%

Overview of the 3Q resultsMedical Division

Sales of dialysis machines in Japan decreased year on year due to the prolonged backlash after pre-consumption-tax-hike-surge in demand in the last FY. While maintenance sales kept strong due to the increase in the number of contract.

Sales in Europe have shown some signs of recovery trend. In China exports of dialysis machines as well as knock-down parts for joint venture increased year on year, while sales of dialysis machines in the market were below the target.

【Dialysis Machines】

【Disposables】 Sales of dialyzers were stagnant, whereas sales of blood tubing lines and dialysates

have shown steady growth. 【CRRT】 Incorporated CRRT business into consolidated Nikkiso from beginning of FY2014

and focused on building the business structure.


Full-year Financial Forecast for FY 2014


FY 2013 FY 2014(Forecast)

YoY comparison

Amount %

Orders 122,325 135,000 +12,674 +10.4%

Net Sales 121,548 135,000 +13,451 +11.1%

Operating Income 9,423 10,000 +576 +6.1%Ratio to net sales 7.8% 7.4%

Ordinary Income 11,330 10,000 -1,330 -11.7%Ratio to net sales 9.3% 7.4%

Net Income 5,897 6,000 +102 +1.7%Ratio to net sales 4.9% 4.4%

Exchange Rate(average during the period)

*(4th quarter assumption)

Against the US dollar 98.78 yen 105.69 yen (110yen) +6.91 yen -Against the euro 131.89 yen 138.65 yen (140yen) +6.76 yen -


Financial forecast for FY 2014Consolidated Performance < No change > Domestic sales of dialysis machines have been stagnant. However, there have been some

movement of large amount of inquiries toward the end of fiscal year. Information on the production and shipping schedule toward the end of the fiscal year, and

financial performance in the foreign subsidiaries are under close analysis.


Financial forecast for FY 2014Performance by Business Segment

FY 2013 FY 2014(Forecast)

YoY comparisonAmount %

Industrial Business

Orders 69,307 81,000 +11,692 +16.9%Net Sales 68,588 81,000 +12,411 +18.1%

Operating Income 5,102 6,200 +1,097 +21.5%Ratio to net sales 7.4% 7.7％

Industrial DivisionOrders 61,130 71,000 +9,869 +16.1%Net Sales 60,636 71,000 +10,363 +17.1%

Aerospace DivisionOrders 8,172 10,000 +1,827 +22.4%Net Sales 7,947 10,000 +2,052 +25.8%

Medical Business

Medical Division

Orders 53,017 54,000 +982 +1.9%Net Sales 52,960 54,000 +1,039 +2.0%

Operating Income 7,845 7,300 -545 -7.0%Ratio to net sales 14.8％ 13.5％

Eliminations and corporate Operating Income (3,524) (3,500) +24 -



Reference Materials


Consolidated Balance Sheets(Unit: millions of yen)

As ofMarch 31,

2014

As ofDecember31, 2014

Changes% to Total

as ofMarch 31,

2014

% to Total as of

December 31, 2014

[Total Assets] 161,283 163,591 +2,307 100.0% 100.0%

Current assets 86,154 87,419 +1,265 53.4% 53.4%

Cash and deposits 19,728 20,040 +312 12.2% 12.3%

Accounts receivable-trade 41,166 35,059 -6,106 25.5% 21.4%

Inventory 21,695 27,738 +6,043 13.5% 17.0%

Noncurrent assets 74,129 76,172 +1,042 46.6% 46.6%

Property, plant and equipment 27,056 29,952 +2,896 16.8% 18.3%

Goodwill 25,662 23,999 -1,662 15.9% 14.7%

[Total Liabilities] 93,911 95,205 +1,293 58.2% 58.2%

Accounts payable-trade 16,997 16,278 -719 10.5% 10.0%

Loan, bond 56,737 60,020 +3,282 35.2% 36.7%

[Total Equity] 67,372 68,386 +1,014 41.8% 41.8%


Japan40%

Asia18%

North America

13%

Europe24%

Others5%

Total sales overseas 60%

Medical DivisionAerospace Division

Total

Industrial Division

Net Sales Composition Ratio by Region

25%

30%

35%

40%

45%

50%

55%

60%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2005 2006 2007 2008 2009 2010 2011 2012 2013

Asia North America Europe Others Ratio of net sales overseas

20%

27%

35%

12%

6% 8%

87%

4%

72%

10%

15%

3% Japan

Asia

North America

Europe

Others

(Unit: million of yen)

Net sales trends by overseas region

FY 20143Q

FY 20143Q

FY 20143Q

FY 20143Q


FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Net income per share (Yen) 47.49 33.86 42.47 89.41 76.46

ROE 7.8% 5.7% 6.8% 12.9% 9.6%

ROA 6.1% 3.9% 5.3% 7.0% 7.6%

Operating margin 7.3% 6.5% 7.3% 7.2% 7.8%

Equity ratio 40.5% 39.3% 41.8% 41.4% 40.8%

DE ratio 0.99 1.08 0.90 0.87 0.86

Capital Investments, R&D Expenses, Depreciation & Amortization

Trends in Management Indicators

Financial Data

* ROE: Return on equity ROA: Ratio of ordinary income to total assets

FY 2011 FY 2012 FY 2013 FY 2014(Forecast)

YoYComparison

Capital investments 3,242 4,377 9,093 7,500 -1,593

R&D expenses 1,125 1,433 1,889 2,200 +311

Depreciation expenses 2,738 2,841 3,452 4,000 +548

Goodwill amortization 1,479 1,499 1,785 2,100 +315

FY 2014 3Q

4,841

1,260

3,210

1,500



+0.9

+1.2

-0.9

-2.1

3.91

3.01

+3.1

New consolidation

impact(gross profit)

-3.1

Operating income decreased 0.9 billion yen year on year. Gross profit increased mainly due to improvement of profit margins in the Industrial Division as

well as consolidation of newly acquired business entities. SG & A increased mainly due to expenditure involved in business expansion as well as new

consolidation and related cost associated with acquisitions.

Operating Income Analysis < FY2013 vs FY2014 >

（Unit: billions of yen）

Gross Profit Up ¥ 5.22 bn

Operating Income decrease ¥0.9 bn

FY 2013 3Q

FY 20143Q

Forex impact(gross profit)

Forex impact(SG&A)

Net sales growth,

Change cost ofSales ratio Increase of

SG&A

New consolidation

impact (SG&A)


Orders Trends by Quarter(Unit: millions of yen)

1st quarter 2nd quarter 3rd quarter 4th quarter

Industrial Division

Pumps & Systems

FY 2012 10,469（8,200）

10,849（8,471）

9,847（7,585）

11,489（9,637）

FY 2013 14,057（11,874）

12,399（9,911）

12,793(10,472)

16,371(13,606)

FY 2014 16,040（13,764）

14,310（11,668）

17,274(14,810)

Industrial Division

Precision Equipment

FY 2012 1,439（412）

1,775（390）

1,439（326）

1,413（426）

FY 2013 1,007（371）

1,289（388）

1,776(950)

1,433(658)

FY 2014 1,137（486）

1,396（593）

1,774(820)

Aerospace Division

FY 2012 1,213（1,192）

1,457（1,453）

1,411（1,391）

1,858（1,855）

FY 2013 1,899（1,732）

1,906（1,876）

2,052(2,029)

2,314(2,241)

FY 2014 2,172（2,150）

2,710（2,705）

2,334(2,312)

Medical Division

FY 2012 11,677（1,956）

11,233（2,113）

13,080（2,412）

12,755（2,815）

FY 2013 12,140（2,248）

11,988（2,007）

14,053(2,401)

14,835(3,184)

FY 2014 12,614（3,881）

13,210（3,575）

12,650(3,277)

( ) overseas orders


Net Sales Trends by Quarter

( ) overseas sales



Industrial Division

Pumps & Systems

FY 2012 8,006（5,502）

10,232（7,178）

7,948（6,358）

16,797（14,100）

FY 2013 8,228（6,296）

14,216（11,436）

11,550(9,852)

21,693(18,863)

FY 2014 11,470（9,531）

14,883（12,137）

13,187(11,279)

Industrial Division

Precision Equipment

FY 2012 1,015（337）

1,608（472）

1,358（444）

2,212（456）

FY 2013 603（271）

1,427（410）

1,145(561)

1,770(546)

FY 2014 844（452）

1,358（553）

1,356(804)

Aerospace Division

FY 2012 1,215（1,189）

1,475（1,459）

1,415（1,394）

1,889（1,860）

FY 2013 1,739（1,732）

1,887（1,870）

2,042(2,023)

2,277(2,252)

FY 2014 2,167（2,150）

2,747（2,705）

2,339(2,312)

Medical Division

FY 2012 10,630（2,075）

12,087（2,075）

12,138（2,181）

13,637（2,987）

FY 2013 10,449（1,954）

13,219（2,338）

12,227(2,380)

17,062(3,314)

FY 2014 11,338（3,479）

14,614（3,883）

12,080(3,464)




Industrial Division

Pumps & Systems

FY 2012 28,220（17,636）

28,837（25,364）

30,736（26,591）

25,427（22,128）

FY 2013 31,351（27,709）

29,534（26,183）

30,777(26,802)

28,209(24,299)

FY 2014 32,779（28,532）

32,206（28,063）

36,293(31,595)

Industrial Division

Precision Equipment

FY 2012 1,198（456）

1,365（250）

1,445（132）

646（103）

FY 2013 955（200）

817（178）

1,448(586)

1,207(678)

FY 2014 1,500（712）

1,537（753）

1,956（769）

Aerospace Division

FY 2012 53（3）

34（7）

30（5）

0（0）

FY 2013 159（0）

179（6）

188(12)

225(1)

FY 2014 230（1）

193（1）

187（1）

Medical Division

FY 2012 2,757（1,476）

1,904（1,556）

2,846（1,788）

1,964（1,615）

FY 2013 3,654（1,909）

2,423（1,681）

4,249(1,600)

2,021(1,470)

FY 2014 3,297（1,872）

1,894（1,563）

2,464（1,376）

Order Backlog Trends by Quarter

( ) overseas order backlog

fy2014 3q consolidated financial results · 2018-06-12 · actual results in the future may differ...

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