consolidated business results for the fiscal 2019 bando ... · sales of large-scale conveyor belt...

Copyright © 2020 Bando Chemical Industries, Ltd. All Rights Reserved.

Consolidated Business Resultsfor the Fiscal 2019

Bando Chemical Industries, Ltd.May 12, 2020


Contents

Ⅰ. Financial summary for FY2019

Ⅱ. Business results forecast for FY2020

1/18


Ⅰ． Financial summary for FY2019

2/18


FY2019 Highlights

FY2018 FY2019 FY2019 Forecast

Result ResultYear-on-year

change

Announced on

Aug 9, 2019

Revised on

Apr 24, 2020

Revenue 94,318 90,247 -4,070 93,000 90,000

Core operating

income6,503 5,252 -1,250 6,000 5,000

Operating income 6,815 2,056 -4,758 6,000 2,000

Profit before income tax 7,166 2,095 -5,071

Profit attributable to owners of parent 5,457 682 -4,774 4,500 500

（yen mil.）

3/18


FY2019 Highlights

◼ Revenue decreased mainly in overseas area due to economic deceleration by prolonging of U.S.-China trade friction and the spread of the novel coronavirus.

◼ Core operating income decreased due to decrease in revenue and cost to sales ratio increase in existing business, despite increase in income by new consolidation of Aimedic MMT Co., Ltd. (hereinafter, “Aimedic MMT”).

◼ Operating income decreased due to temporary losses such as the impairment loss of goodwill of Aimedic MMT(-3,274 million yen)and the amendment loss of retirement benefit plan(-447 million yen).

➢ In IFRS, goodwill is tested for impairment annually. An impairment loss is recognized when recoverable amount calculated based on future cash flows is below carrying amount of assets including goodwill. We recalculated the future cash flows based on the redemption price decline of main products in Aimedic MMT over the next two years and revised new products development progress. As a result, we recorded the impairment loss for FY2019.

4/18


209 240 243 220

FY2016 FY2017 FY2018 FY2019

FY2019 Revenue by region

Japan

Other

Asia

China

（￥100 mil.）

(Note) Revenue by region above were after inter-segment elimination.

487 491 520 516

FY2016 FY2017 FY2018 FY2019

87 91 93 89

FY2016 FY2017 FY2018 FY2019

99 88 88 77

FY2016 FY2017 FY2018 FY2019

5/18


6,503

-838 +606 -265

-977 +223

5,252

FY2018 result Sales volume

decrease

Cost to sales

ratio decrease

（Note）

Gross profit

decrease due

to effects of

FOREX raes

SGA expense

increase

（Note）

SGA expense

decrease due

to effects of

FOREX rates

FY2019 result

(yen mil.)

FY2019 Core operating income analysis

6/18

(Note) In existing business, not including Aimedic MMT, the cost to sales ratio increased (resulted in decreased core operating income) and SGA expense decreased (resulted in increased core operating income).


FY2019 Segment performance

（yen mil.）

FY2018 FY2019

Result Result Change Rate of change

Revenue 94,318 90,247 -4,070 -4.3%

Automotive Parts 41,650 38,953 -2,697 -6.5%

Industrial Products 35,424 32,765 -2,659 -7.5%

Advance Elastomer Products 14,627 13,685 -941 -6.4%

Other 3,880 5,575 +1,694 +43.7%

Adjustments -1,264 -731 +532 －

Core operating income 6,503 5,252 -1,250 -19.2%

Automotive Parts 3,182 2,129 -1,052 -33.1%

Industrial Products 2,141 2,195 +53 +2.5%

Advance Elastomer Products 617 333 -283 -45.9%

Other 530 595 +64 +12.2%

Adjustments 31 -1 -33 －

7/18


0

100

200

300

400

FY2018 FY2019

Automotive Parts overview

◼ In U.S., revenue decreased due to decrease in production of vehicles, despite increase in aftermarket sales.

Revenue after inter-segment elimination

(¥100 mil.)

◼ Revenue decreased due to decrease in production of main customer, despite increase in aftermarket sales by aggressive customer developments.

◼ Sales of accessory drive power transmission belts and systems decreased in Thailand.

◼ Sales of variable speed belts for scooters decreased in India.

Japan

(-8.2％)◼ Sales of accessory drive power transmission

belts and systems decreased.

Core operating income

■ Core operating income decreased due to decrease in revenue.

Other

(-2.1%)

China

(-6.8%)

Asia

(-6.4％)


(-33.1％)

389416

2131(¥100 mil.)

0

10

20

30

FY2018 FY20198/18


Industrial Products overview

◼ In U.S. and Turkey, sales of industrial transmission belts decreased due to economic deceleration.


◼ Sales of transmission belts for agriculturalmachinery decreased mainly.

◼ Sales of transmission belts for agriculturalmachinery decreased mainly.

Japan

(-3.0％)

◼ Sales of industrial transmission belts decreased due to slowdown of machinery orders.

◼ Sales of large-scale conveyor belt and light-duty conveyor belt for logistics equipment increased.


◼ Dealing failures for customers occurred in the previous year, none in this year.

Other

(-5.4%)

China

(-22.6％)

Asia

(-31.9％)


(+2.5％)

327353

2221

0

100

200

300

FY2018 FY2019

0

10

20

FY2018 FY2019

9/18

(¥100 mil.)

(¥100 mil.)


Advance Elastomer Products overview


◼ Sales of films used in industrial materials and decorate materials decreased.

◼ Sales of precision belts decreased.


◼ Core operating income decreased due to decrease in revenue.

Precision Parts

(-8.2％)

Films

(-3.2％)


(-45.9％)

136

3.36.2

146

0

50

100

150

FY2018 FY2019

0

2

4

6

FY2018 FY2019

10/18

(¥100 mil.)

(¥100 mil.)


14

1716 16

2120

17

8

12

17

14

9

222236

225 230 237245

235226

232

230 225215

0

5

10

15

20

25

0

50

100

150

200

250

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

-5

Quarterly transition of business result

FY2017 (JGAAP) FY2018(IFRS)

-5

Property tax and size-based business tax

FY2019(IFRS)

Property tax and size-based business tax

11/18

：Net sales（JGAAP）

：Operating income（JGAAP）

：Revenue（IFRS）

：Core operating income（IFRS）

Revenue（¥100 mil.）


（¥100 mil.）


90

68

92

66

88

-42 -46 -50 -46

-141

49

22

42

20

-53

-150

-100

-50

0

50

100

150

FY2015

(JGAAP)

FY2016

(JGAAP)

FY2017

(IFRS)

FY2018

(IFRS)

FY2019

(IFRS)

CF from operating activities

CF from investing activities

Free CF

(￥100 mil.)

Transition of cash flow

12/18

(Notes)1. CF from operating activities for FY2016 decreased by 2.3 billion yen due to stopping liquidation of receivables.2. CF from operating activities for FY2018 decreased by 1.4 billion yen due to addressing the revision of

enforcement of “Act against Delay Payment of Subcontract Proceeds, etc. to Subcontractors.”3. CF from investing activities for FY2019 included payment for acquisition of Aimedic MMT(-9.2 billion yen.）


0

200

400

600

800

1,000

1,200

Non-current

assets 489

Other assets 13

Inventories 129

Trade and

other receivables

217

Cash and cash

equivalents

175

Equity

681

Other liabilities

240

Debt

104

Non-current

assets 614

Other assets 13

Inventories 128

Trade and

other receivables

201

Cash and cash

equivalents

144

Equity

639

Other liabilities

249

Debt

214

1,025 1,102

＜Assets＞・Net payment with cash on hand for acquisiton of AImedic MMT（-3 billion yen）

・Goodwill caused by the acquisition of Aimedic MMT(+8.5 billion yen)

・Record lease assets as right-of use assets by applying IFRS 16（＋2.6 billion yen）

＜Equity＞・Retained earnings decreased (-0.9 billion yen)

・Other components of equity decreased due to fluctuation of FOREX and stock market （-3 billion yen）

＜Liabilities＞・Debt increased due to the acquisition of AimedicMMT(+11 billion yen)

Consolidated Statement of Financial Position

（￥100 mil.）

FY2018 FY2019

13/18


Financial indicators

0

2

4

6

8

10

FY2015

(JGAAP)

FY2016

(JGAAP)

FY2017

(IFRS)

FY2018

(IFRS)

FY2019

(IFRS)

4.75.3 5.0 5.3

0.6

7.98.7

8.1 8.2

1.0

ROA/ROE

ROA

ROE

0

20

40

60

FY2015

(JGAAP)

FY2016

(JGAAP)

FY2017

(IFRS)

FY2018

(IFRS)

FY2019

(IFRS)

60.4 60.5 62.9 66.257.7

Capital ratio

0.0

10.0

20.0

30.0

40.0

FY2015

(JGAAP)

FY2016

(JGAAP)

FY2017

(IFRS)

FY2018

(IFRS)

FY2019

(IFRS)

22.926.3

18.715.3

33.7

D/E ratio

△ 100

△ 50

0

50

100

FY2015

(JGAAP)

FY2016

(JGAAP)

FY2017

(IFRS)

FY2018

(IFRS)

FY2019

(IFRS)

44.2 41.0 63.3 71.3

-69.8

Net cash / Net Debt

％

％

％

¥100 mil.

14/18


Ⅱ. Business results forecast for FY2020

15/18


FY2020 Business results forecast

16/18

◼ It is currently difficult to predict the forecast of business results for FY2020 reasonably at this stage due to the spread of the novel coronavirus.

We will announce it promptly when we can disclose reasonably forecast.


Transition of CAPEX, depreciation and R&D expenses

46 45

5247

4443 41

43 44 47

42 42 43 44 44

0

10

20

30

40

50

60

16/3 17/3 18/3 19/3 20/3FY2015 FY2016 FY2017 FY2018 FY2019

BF-2

17/18

(Notes)1. The effect of adopting IFRS 16 was not included on the above amount and graph.

The effect was an increase of capital expenditure by 1.2 billion yen, and an increase of depreciation and amortization by 1.3billion yen, respectively, for FY2019.

2. It is currently difficult to predict the amount for FY2020 at this stage.

JGAAP IFRS

Domestic capital expenditure Depreciation and amortization

Overseas capital expenditure R&D expenses (Bold, italic)（￥100 mil.）


4,386

4,951 5,1005,457

682

1,127 1,207 1,391 1,484 1,484130

865 152475

FY2015 FY2016 FY2017 FY2018 FY2019

Profit attributable to owners parent

Purchase of treasury stock

Dividend paid

24 2630 32 32

25.7% 24.1%26.9% 26.9%

214.3%

FY2015 FY2016 FY2017 FY2018 FY2019

Annual dividend per share (yen)

Payout ratio (%)

Shareholders returns

Annual dividend per share & Payout ratio Return of profits（yen mil.）

(Notes)1. Dividend is correction value after share consolidation at a rate of two shares of common stock into one took place Oct. 1, 2016. 2. The amount from FY 2017 was under IFRS. We decided the amount of dividend paid based on JGAAP profit before FY2018.3. The amount of dividend per share will be ￥32 because we emphasized the continuity of stable dividend payments.4. It is currently difficult to predict the amount for FY 2020 at this stage.

18/18

Our basic policy is to enhance the return of profits and aim for making stable dividend

payments targeting a consolidated payout ratio 30% over the near term, while

considering our earnings and financial position.

Basic Policy

consolidated business results for the fiscal 2019 bando ... · sales of large-scale conveyor belt...

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