Revenues. Net income. Basic earnings per share attributable to Hitachi Koki Co., Ltd. stockholders

Transcription

1 Financial Results (Consolidated) for the First Quarter of the Fiscal Year Ending March 31, 2017 [IFRS] July 27, 2016 Hitachi Koki Co., Ltd. Stock Code: 6581 Stock Exchange Listing: Tokyo (First Section) (URL: Representative: Osami Maehara, President & Representative Executive Officer Inquiries: Yasunori Miyane, General Manager, Public Relations Strategy Office ( ) Scheduled Submission Date for Quarterly Report (Shihanki Hokokusho): August 10, 2016 Scheduled Commencement Date for Dividend Payments: Preparation of Supplementary Materials for the Quarterly Financial Results: Yes Holding of Presentation of Quarterly Financial Results: Yes (for analysts) (Figures have been rounded to the nearest million.) 1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2017 (April 1, 2016 to June 30, 2016) (1) Consolidated Operating Results (Cumulative Total) (Percentages represent change compared with the same period of the previous fiscal year.) Adjusted operating Income before income income taxes (%) (%) (%) Three months ended June 30, , ,066 (5.1) 969 (51.5) Three months ended June 30, , ,123 (15.5) 1, attributable to Hitachi Koki Co., Ltd. stockholders Comprehensive income (%) (%) (%) Three months ended June 30, (51.6) 660 (52.4) (7,184) Three months ended June 30, , , ,123 Basic earnings per share attributable to Hitachi Koki Co., Ltd. stockholders Diluted earnings per share attributable to Hitachi Koki Co., Ltd. stockholders (Yen) (Yen) Three months ended June 30, Three months ended June 30, Important: To more appropriately present the actual condition of its management, from the fiscal year ending March 31, 2017 the Company presents Adjusted operating income, an indicator calculated by subtracting cost of sales and selling, general and administrative expenses from revenues, instead of Operating income. (2) Consolidated Financial Position Total assets Total equity 1 Total Hitachi Koki Co., Ltd. stockholders equity Hitachi Koki Co., Ltd. stockholders equity ratio (%) As of June 30, , , , As of March 31, , , , Cash Dividends Dividends per share Reference date First quarter Second quarter Third quarter Fiscal year-end (June 30) (September 30) (December 31) (March 31) Full fiscal year (Yen) (Yen) (Yen) (Yen) (Yen) Fiscal Fiscal 2016 Fiscal 2016 (forecast) Note: Adjustment to most recently announced dividend forecast: No The dividend forecast for fiscal 2016 is undetermined.

2 3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2017 (April 1, 2016 to March 31, 2017) (Percentages represent change compared with the previous cumulative second quarter or fiscal year, as applicable.) Basic earnings per share Adjusted Income before attributable to attributable to operating income income taxes Hitachi Koki Co., Hitachi Koki Co., Ltd. stockholders Ltd. stockholders (%) (%) (%) (%) (Yen) Cumulative second quarter 87, ,400 (5.3) 2,000 (42.3) 850 (62.9) 8.38 Full fiscal year 180, , , , Note: Adjustment to most recently announced consolidated forecasts: Yes Important: To more appropriately present the actual condition of its management, from the fiscal year ending March 31, 2017 the Company presents Adjusted operating income, an indicator calculated by subtracting cost of sales and selling, general and administrative expenses from revenues, instead of Operating income. Adjusted operating income for fiscal 2015 was 3,263 million. Notes (1) Changes in material subsidiaries during the period (changes regarding specific subsidiaries attendant with changes in scope of consolidation): No New: companies ( ) Eliminated: companies ( ) (2) Changes in accounting policy and changes in accounting estimates (a) Changes in accounting policy required by IFRS: No (b) Other changes in accounting policy aside from those in (a) above: No (c) Changes in accounting estimates: No (3) Number of shares issued (common stock) Number of shares at the end of the period (including treasury stock) June 30, ,072,776 March 31, ,072,776 Number of treasury shares at the end of the period June 30, ,681,317 March 31, ,681,248 Average number of shares outstanding Three months ended Three months ended 101,391,464 (cumulative with earlier quarters) June 30, 2016 June 30, ,393,792 Information Regarding the Implementation of Quarterly Review Procedures These quarterly financial results are not subject to quarterly review procedures based on the Financial Instruments and Exchange Law. Review procedures for the quarterly financial statements based on the Financial Instruments and Exchange Law had not been completed at the time of disclosure of these quarterly financial results. Explanation of the Appropriate Use of Performance Forecasts and Other Related Instructions The forecasts shown above and other forward-looking statements are based on information available at the time they were prepared and certain assumptions we consider reasonable. Actual consolidated performance may differ sharply from our forecasts due to a wide range of factors. For information regarding the scenarios underlying the assumptions we used for our forecasts, please refer to the (3) Commentary on Our Consolidated Performance Forecasts section in 1. Commentary on Quarterly Financial Statements below. The Company will post supplementary documents to the financial results on its website on Wednesday, July 27, The Company plans to hold a results presentation meeting for analysts on Thursday, July 28, The Company plans to post the materials that will be distributed at the meeting on its website promptly after the close of the meeting. 2

3 1. Commentary on Quarterly Financial Statements (1) Commentary on Our Consolidated Business Results In the three months ended June 30, 2016, the Hitachi Koki Group s sales increased in Japan compared with the same period of the previous fiscal year due to factors including the rollout of proactive sales measures to expand sales of strategic and other products amid signs of a recovery in housing investment. In Europe, despite the impact of the protracted slump in Russia and the appreciation of the yen, sales increased substantially due to factors including firm sales in Northern and Eastern Europe and the addition of metabo AG, a power tool manufacturer in Germany, through an acquisition in March In North America, although there was a substantial impact from the appreciation of the yen, sales grew due to factors including strong sales of pneumatic tools, a Hitachi Koki strong point, backed by economic recovery, as well as the addition of metabo AG. In Asia and other regions, there was a slowdown in China, Thailand, Australia and elsewhere, although sales in India remained firm. As a result of these factors, revenues increased 26% compared with the same period of the previous fiscal year to 43,325 million. As for income, due to factors including growth in sales of pneumatic tools in Japan and North America, where profitability is high, the initial materialization of results from structural reforms conducted up to the previous fiscal year, and thorough cost cutting that included reducing the cost of goods, operating income was 1,209 million. This was equivalent to a 40% decrease compared with the same period of the previous fiscal year, but in the same period of the previous fiscal year the Hitachi Koki Group recorded 882 million in gain on revision of retirement benefit plan upon the shift of a portion of its retirement benefit system from a defined benefit pension plan to a defined contribution pension plan. Compared with 1,138 million, which is operating income for the same period of the previous fiscal year less that gain, operating income increased 6%. Income before income taxes decreased 52% to 969 million, net income decreased 52% to 675 million and net income attributable to Hitachi Koki Co., Ltd. stockholders decreased 52% to 660 million. Adjusted operating income, an indicator calculated by subtracting cost of sales and selling, general and administrative expenses from revenues, decreased 5% compared with the same period of the previous fiscal year to 1,066 million. ( Adjusted operating income is presented on the cover page of these quarterly financial results.) Performance by Business Segment 1) Power Tools In Japan, despite sluggish sales of construction-related products, the Hitachi Koki Group gained a positive response by conducting a promotional campaign for the two-year warranty on products with its original AC (corded) brushless motor to follow its campaign for 6.0Ah lithium-ion batteries, among other factors, and revenues increased 2% compared with the same period of the previous fiscal year. In Europe, a slump continued in Russia and the yen appreciated in currency translation, but due to factors including growth in Northern and Eastern Europe and the addition to the Hitachi Koki Group of metabo AG, which has a high ratio of sales in Europe, revenues increased 80% compared with the same period of the previous fiscal year. In North America, despite the substantial appreciation of the yen in currency translation, sales were strong amid a continuing economic recovery trend, including sales of cordless power tools and pneumatic tools, a Hitachi Koki Group strong point where it has a competitive edge. Moreover, 3

4 with the newly added revenues from metabo AG and other factors, revenues increased 7% compared with the same period of the previous fiscal year. In Asia and other regions, sales were firm in India, but sales in China, Thailand and Australia slowed substantially with the impact of a weakening Chinese economy, currency depreciation, lower resource prices and other factors, and revenues decreased 4% compared with the same period of the previous fiscal year. As a result of these factors, segment revenues increased 26% compared with the same period of the previous fiscal year to 42,216 million. Segment profit was 1,028 million due to factors including sales growth in developed countries, where profitability is high, proactive sales promotion of high-value-added strategic products and the materialization of effects from structural reform. This was a decrease of 43% compared with the same period of the previous fiscal year, but an increase of 2% excluding the 801 million gain on revision of retirement benefit plan recorded in the same period of the previous fiscal year. Adjusted segment profit decreased 11% compared with the same period of the previous fiscal year to 885 million. 2) Life-Science Instruments In Japan, despite proactive PR at large-scale exhibitions and efforts to cultivate and deepen materials-related customers, sales were weak to university and government research facilities, which are key customers. Overseas, sales increased substantially because the Hitachi Koki Group worked to drum up new orders by making the rounds of users together with distributors, and captured large spot orders in North America and Asia, among other factors. As a result, segment revenues increased 15% compared with the same period of the previous fiscal year to 1,109 million. Segment profit decreased 13% compared with the same period of the previous fiscal year but increased 41% excluding the 81 million gain on revision of retirement benefit plan recorded in the same period of the previous fiscal year. Adjusted segment profit increased 40% compared with the same period of the previous fiscal year to 181 million. (2) Commentary on Our Consolidated Financial Position 1) Total Assets, Total Liabilities and Total Equity At the end of the first quarter, total assets were 180,167 million, a decrease of 10,866 million from the end of the previous fiscal year. Current assets were 119,777 million, a decrease of 5,764 million. This was mainly the result of factors including a decrease in trade receivables due to expedited debt recovery and other factors and a decrease in inventories due to the effect of currency translation and other factors. Total liabilities were 77,652 million, a decrease of 2,462 million. This was mainly a result of factors including more efficient management and a decrease in borrowings due to the effect of currency translation and other factors. Total equity was 102,515 million, a decrease of 8,404 million. This was mainly due to factors including a decrease in other comprehensive income resulting from the effect of currency translation and other factors. 2) Cash Flow Net cash provided by operating activities was 5,878 million due to factors including expedited recovery of trade receivables and the maintenance of appropriate inventory using the European distribution center. 4

5 Net cash used in investing activities was 721 million due to purchase of property, plant and equipment, among other factors. Net cash used in financing activities was 1,069 million due to factors including cash dividends paid. As a result of the above, cash and cash equivalents as of June 30, 2016 increased 2,404 million from the end of the previous fiscal year to 32,438 million. (3) Commentary on Our Consolidated Performance Forecasts Looking at the current economic environment, as the yen becomes fixed at a high level, worsening corporate earnings and flat business conditions are likely in Japan, despite a recovery trend in housing investment. In Europe, although an overall moderate recovery is expected, there are concerns about recession and instability in exchange rates in the United Kingdom and the Eurozone caused by the issue of the United Kingdom s departure from the EU. In North America, a continued recovery in business conditions is expected, led by personal consumption and housing investment. In emerging countries, there are some regions where weak business conditions are forecast, but moderate growth is expected overall. Under these conditions, the Hitachi Koki Group will work to improve results through the following measures. Measures of the Hitachi Koki Group In the power tools business, the Hitachi Koki Group will focus investment of its management resources on both development and sales in the developed countries of Japan, North America and Europe, where markets remain large and highly profitable. In addition to working to further enhance its lineup of strategic products with a competitive edge, the Group will increase its presence in core markets by conducting timely launches of new products tailored to user needs. The Group will also work to capture repeat orders and further increase customer satisfaction through measures including strengthening sales capabilities by making effective use of resources, various promotional activities that are flexibly planned and executed according to local circumstances and thorough efforts for service first (a policy of putting customers above all else). Moreover, the Group will strive to build a cooperative system with the aim of generating synergy with new subsidiary metabo AG at an early stage. In the life-science instruments business, the Hitachi Koki Group will work to expand sales by continuing measures such as approaching university and government research facilities, which are key customers, unearthing demand by following up on various large-scale exhibitions, strengthening cooperation with overseas distributors and further cultivating and deepening materials-related customers. As for earnings, while working to increase profitability through measures such as promoting sales of core products and accessories with a high profit margin, including new products, the Hitachi Koki Group will work to cut total costs and enhance profitability through measures including reducing the cost of goods in order to realize results at an early stage from the drastic structural reforms it is currently implementing. Consolidated Performance Forecasts The Hitachi Koki Group will work to secure results by steadily carrying out the above measures. However, in light of exchange rate fluctuations with the yen becoming fixed at a high level since the United Kingdom s referendum on leaving the EU, the Group has revised the forecast for 5

6 revenues in its consolidated performance forecasts as follows. The exchange rate assumptions for the second quarter onward are 105 per U.S. dollar, 115 per euro and a euro/u.s. dollar cross rate of For income items, the Hitachi Koki Group will continue to aim to achieve its initial forecasts, assuming that sales on a volume basis are generally as planned, that there will be virtually no effect from current yen/u.s. dollar exchange rate fluctuations due to the Group s establishment of a streamlined production system, and that the euro/u.s. dollar cross rate, which has the greatest impact on the Group s income, will be basically flat, among other factors. (1) Six Months Ending September 30, 2016 (April 1 - September 30, 2016) s of Income Adjusted attributable to Operating before operating Hitachi Koki Co., income income income* Ltd. taxes stockholders Previous forecast (A) 95,600 2,400 2,200 2, Revised forecast (B) 87,300 2,400 2,200 2, Increase (decrease) (B - A) (8,300) Increase (decrease) (%) (8.7) [Reference] Results for the six months ended September 20, ,719 2,533 3,452 3,467 2,289 (2) Fiscal Year Ending March 31, 2017 (April 1, March 31, 2017) s of Income Adjusted attributable to Operating before operating Hitachi Koki Co., income income income* Ltd. taxes stockholders Previous forecast (A) 197,000 7,600 7,300 6,800 4,300 Revised forecast (B) 180,000 7,600 7,300 6,800 4,300 Increase (decrease) (B - A) (17,000) Increase (decrease) (%) (8.6) [Reference] Results for the fiscal year ended March 31, ,570 3,263 2,645 2,776 1,086 * Adjusted operating income is calculated by subtracting cost of sales and selling, general and administrative expenses from revenues. Adjusted operating income is presented instead of Operating income on the cover page of these quarterly financial results. 2. Items Related to Summary Information (Notes) (1) Changes in Material Subsidiaries during the Period None applicable. (2) Changes in Accounting Policy and Changes in Accounting Estimates None applicable. 6