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transcript
Devoted to Steel Tubes
Financial Results BriefingFor the Year Ending March 31, 2016
Chairman & CEO Hiroyuki Suzuki
I. Consolidated Financial Highlights for the Year Ending March 31, 2016 ・・・P. 2
II. Nonconsolidated Financial Highlights for the Year Ending March 31, 2016 ・・・P. 12
III. Performance Forecasts for the Year Ending March 31, 2017 ・・・P. 20
IV. Progress of the ‘Fourth Medium-Term Management Plan’ ・・・P. 26
(Reference) Overview and Trends in Business Performance of Overseas Group Companies ・・・P. 46
(Reference) Features of the Maruichi Group ・・・P. 55
May 12, 20161
Devoted to Steel Tubes
I. Consolidated Financial Highlights for the Year Ending March 31, 2016
2
Devoted to Steel Tubes
15,600 15,412
20,080
17,734 17,027 17,657 17,553
22,586
19,919 18,944
7,453
10,617
13,748
9,299 11,184
FY2012 FY2013 FY2014 FY2015 FY2016
Operating incomeOrdinary income
Net income attributable to owners of parent
Profits (Millions of yen)
Net sales (Millions of yen)
120,615 117,688
136,547
152,668 144,968
FY2012 FY2013 FY2014 FY2015 FY2016
Consolidated Operating Results
3
FY2015Results
FY2016Results
Increase/decrease
Forecasts announced in
April
Increase/decrease
Net sales 152,668 144,968 ▲ 5.0% 144,500 +0.3%
Operating Income 17,734 17,027 ▲ 4.0% 17,100 ▲ 0.4%
Ordinary Income 19,919 18,944 ▲ 4.9% 18,700 +1.3%Net income attributable to
owners of parent 9,299 11,184 +20.3% 10,800 +3.6%
(Millions of yen)
Devoted to Steel Tubes
Consolidated Operating Results Statements of Income
4
AmountPercentage
of total(%)
AmountPercentage
of total(%)
AmountPercentage
of total(%)
AmountPercentage
of total(%)
AmountPercentage
of total(%)
Net sales 120,615 100.0 117,688 100.0 136,548 100.0 152,668 100.0 144,969 100.0
Cost of sales 94,136 78.0 91,482 77.7 104,571 76.6 122,198 80.0 114,974 79.3
Gross profit 26,479 22.0 26,206 22.3 31,977 23.4 30,470 20.0 29,995 20.7
Selling, general andadministrative expenses 10,879 9.0 10,793 9.2 11,896 8.7 12,736 8.3 12,967 8.9
Operating income 15,601 12.9 15,413 13.1 20,080 14.7 17,734 11.6 17,028 11.7
Non-operating income 3,133 2.6 2,660 2.3 3,109 2.3 2,882 1.9 2,933 2.0
Non-operating expenses 1,076 0.9 519 0.4 602 0.4 697 0.5 1,015 0.7
Ordinary income 17,658 14.6 17,554 14.9 22,587 16.5 19,919 13.0 18,945 13.1
Extraordinary income 1,019 0.8 1,191 1.0 3,529 2.6 856 0.6 1,952 1.3
Extraordinary losses 2,882 2.4 248 0.2 3,842 2.8 5,444 3.6 2,844 2.0
Income before income taxesand minority interests 15,795 13.1 18,496 15.7 22,274 16.3 15,331 10.0 18,053 12.5
Income taxes 8,382 6.9 7,746 6.6 8,035 5.9 7,324 4.8 7,457 5.1
Net income attributable tonon-controlling interests (39) (0.0) 133 0.1 491 0.4 (1,293) (0.8) (589) (0.4)
Net income attributable toowners of parent 7,453 6.2 10,618 9.0 13,748 10.1 9,300 6.1 11,185 7.7
FY2012 FY2013 FY2014 FY2015 FY2016
(Millions of yen)
Devoted to Steel Tubes
The Year Ending March 31, 2016Consolidated P/L results: Factors for changes from FY2015
5
Net salesFactors attributable to the Company ¥-7.96 billion
FY2015 FY2016 Increase/decrease
Percentageincrease/decrease
MAC ¥+0.70 billion
MKK USA INC. (MOST ¥+4.32 billion) ¥+2.83 billion
MMX ¥+0.62 billion
SUNSCO(including Hanoi) ¥-3.66 billion
KUMA ¥+0.57 billion
Other domestic subsidiaries ¥-13.87 billionIncrease/decrease in consolidated elimination and reclassification ¥+13.07 billion
Operating incomeFactors attributable to the Company ¥-0.14 billionMAC ¥-0.27 billionMKK USA INC. ¥-0.91 billionMMX ¥+0.22 billionSUNSCO(including Hanoi) ¥+0.76 billionKUMA ¥+0.03 billion
(Interest income, dividends, etc.) 1.21 1.27 + 0.07 Alpha Metal ¥-0.11 billion(Equity in earnings of affiliated companies, etc.) 0.58 0.73 + 0.15 Increase in profits in other domestic subsidiaries ¥-0.32 billion
(Other non-operating income) 1.09 0.93 -0.17 Increase/decrease in consolidated elimination and reclassification ¥+0.04 billion
(Interest expense) (0.29) (0.34) -0.06 Ordinary income(Exchange loss, net) 0.00 (0.25) -0.25 Factors attributable to the Company ¥+0.25 billion
(Expenses of real estate rent) (0.23) (0.29) -0.06 MAC ¥-0.25 billion
(Other non-operating expenses) (0.18) (0.14) + 0.04 MKK USA INC. ¥-1.05 billion
Ordinary income 19.92 18.94 -0.97 (4.9)% MMX ¥+0.20 billion(Gains on sales of investments in securities) 0.82 1.87 + 1.06 SUNSCO(including Hanoi) ¥+0.74 billion
(Other extraordinary income) 0.04 0.08 + 0.04 KUMA ¥-0.05 billion
Impairment loss (5.36) (2.76) + 2.60 Alpha Metal ¥-0.05 billion(Losses on disposal of property, plant and equipment,etc.) (0.03) (0.08) -0.05 Increase in profits in other domestic subsidiaries ¥-0.34 billion
(Other extraordinary losses) (0.06) (0.01) + 0.04 Affiliated companies accounted for by the equity method ¥+0.15 billionIncome before income taxes and minorityinterests 15.33 18.05 + 2.72 +17.8% Increase/decrease in consolidated elimination and reclassification ¥-0.57 billion
(Income taxes) (7.32) (7.46) -0.13 Impact of impairment loss on net profit attributable to parent company shareholders
(Net income) 8.01 10.60 + 2.59(Net income attributable to non-controlling interests) (1.29) (0.59) + 0.70 FY2015 \3.91 billion FY2016 \2.28 billion
Net income attributable to owners of parent 9.30 11.18 + 1.88 +20.3%
Operating income 17.73 17.03 -0.71 (4.0)%
(5.0)%
FY2016(Billions of yen)
Net sales 152.67 144.97 -7.70
Devoted to Steel Tubes
Consolidated Business Results by Segment
6
Netsales
ShareOperatingincome
ShareNet
salesShare
Operatingincome
Share
Japan 101,204 66.3% 17,906 101.0% 91,960 63.4% 17,316 101.7%
NorthAmerica
21,684 14.2% (223) (1.3)% 25,829 17.8% (1,259) (7.4)%
Asia 30,812 20.2% (45) (0.3)% 27,748 19.1% 811 4.8%
Reconciliations (1,032) (0.7)% 97 0.5% (568) (0.4)% 160 0.9%
Total 152,668 100.0% 17,734 100.0% 144,969 100.0% 17,028 100.0%
FY2015 FY2016
(Millions of yen)
Devoted to Steel Tubes
Consolidated Operating Results
7
Statements of IncomeMajor factors for changes from forecastsannounced in April
Net sales Forecast Result Amount of impact
Factors attributable to Maruichi ¥89.20 billion ¥89.62 billion ¥0.42 billionMAC ¥7.29 billion ¥7.29 billion ¥0.00 billionMKK USA INC. ¥12.20 billion ¥12.35 billion ¥0.15 billion
MOST ¥4.29 billion ¥4.32 billion ¥0.02 billion
MMX ¥1.87 billion ¥1.87 billion ¥0.00 billionSUNSCO (including Hanoi) ¥23.39 billion ¥23.42 billion ¥0.04 billionKUMA ¥4.44 billion ¥4.33 billion ¥(0.11) billionAlpha Metal ¥3.00 billion ¥2.79 billion ¥(0.21) billionConsolidated adjustments (mainly for machinery sales andrelated steel strip) ¥(1.18) billion ¥(1.02) billion ¥0.16 billion
Operating income Forecast Result Amount of impactFactors attributable to Maruichi ¥15.60 billion ¥15.97 billion ¥0.37 billionMAC ¥0.15 billion ¥0.05 billion ¥(0.10) billionMKK USA INC. ¥(1.51) billion ¥(1.51) billion ¥0.01 billionMOST ¥(0.03) billion ¥(0.06) billion ¥(0.02) billionMMX ¥0.39 billion ¥0.33 billion ¥(0.06) billionSUNSCO (including Hanoi) ¥0.57 billion ¥0.56 billion ¥(0.02) billionKUMA ¥0.22 billion ¥0.26 billion ¥0.03 billionAlpha Metal ¥0.08 billion ¥0.08 billion ¥(0.00) billionOther domestic subsidiaries ¥1.23 billion ¥1.15 billion ¥(0.08) billionGoodwill ¥0.00 billion ¥0.00 billion ¥0.00 billionConsolidated adjustments ¥0.39 billion ¥0.20 billion ¥(0.19) billion
Ordinary income Forecast Result Amount of impactFactors attributable to Maruichi ¥18.50 billion ¥18.94 billion ¥0.44 billionMAC ¥0.18 billion ¥0.08 billion ¥(0.10) billionMKK USA INC. ¥(1.54) billion ¥(1.62) billion ¥(0.08) billionMOST ¥(0.12) billion ¥(0.06) billion ¥0.60 billionMMX ¥0.35 billion ¥0.31 billion ¥(0.04) billionSUNSCO (including Hanoi) ¥0.06 billion ¥0.58 billion ¥(0.02) billionKUMA ¥0.12 billion ¥0.16 billion ¥0.04 billionAlpha Metal ¥0.10 billion ¥0.10 billion ¥(0.00) billionOther domestic subsidiaries ¥1.58 billion ¥1.51 billion ¥(0.07) billionAffiliated companies accounted for by the equity method ¥0.66 billion ¥0.73 billion ¥0.07 billionConsolidated adjustments ¥(1.72) billion ¥(1.78) billion ¥(0.06) billion
Net income attributable to owners of parent Forecast Result Amount of impact
Factors attributable to Maruichi ¥4.60 billion ¥5.05 billion ¥0.45 billionMAC ¥0.11 billion ¥(0.01) billion ¥(0.11) billionMKK USA INC. ¥(3.50) billion ¥(3.49) billion ¥0.01 billionMOST ¥(0.09) billion ¥(0.14) billion ¥(0.05) billionMMX ¥0.27 billion ¥0.26 billion ¥0.02 billionSUNSCO (including Hanoi) ¥0.30 billion ¥0.44 billion ¥0.15 billionKUMA ¥0.07 billion ¥0.08 billion ¥0.01 billionAlpha Metal ¥0.07 billion ¥0.07 billion ¥(0.00) billionOther domestic subsidiaries ¥1.06 billion ¥1.04 billion ¥(0.02) billionConsolidated adjustments ¥7.91 billion ¥7.89 billion ¥(0.02) billion
Net sales 144.50 144.97 0.47
Net incomeattributable toowners ofparent
10.80 11.18 0.38
Operatingincome 17.10 17.03 -0.07
Ordinaryincome 18.70 18.94 0.24
Forecastsannounced in
AprilFY2016 results Change
(Billions of yen)
FY2016
Devoted to Steel Tubes
Consolidated Operating Results
8
Maruichi SteelTube 89.20 15.60 18.50 4.60
MAC 7.29 0.15 0.18 0.11
MKK USA INC. 12.20 (1.51) (1.54) (3.50)
MOST 4.29 (0.03) (0.12) (0.09)
MMX 1.87 0.39 0.35 0.27SUNSCO(including
Hanoi)23.39 0.57 0.60 0.30
KUMA 4.44 0.22 0.12 0.07
Alpha Metal 3.00 0.08 0.10 0.07
Other domesticsubsidiaries 2.16 1.23 1.58 1.06
Affiliated companiesaccounted for by the
equity method0.66
Goodwill 0.00
Consolidatedadjustments (3.34) 0.39 (1.72) 7.91
Total 144.50 17.10 18.70 10.80
Netsales
Operatingincome
Ordinary
income
Netincome
attributableto ownersof parent
Forecasts announced in Apr. 2016
Change Change Change Change
89.62 0.42 15.97 0.37 18.94 0.44 5.05 0.45
7.29 0.00 0.05 -0.01 0.08 -0.10 (0.01) -0.11
12.35 0.15 (1.51) 0.01 (1.62) -0.08 (3.49) 0.01
4.32 0.02 (0.06) -0.02 (0.06) 0.06 (0.14) -0.05
1.87 0.00 0.33 -0.06 0.31 -0.04 0.26 -0.02
23.42 0.04 0.56 -0.02 0.58 -0.02 0.44 0.15
4.33 -0.11 0.26 0.03 0.16 0.04 0.08 0.01
2.79 -0.21 0.08 (0.00) 0.10 (0.00) 0.07 (0.00)
2.16 0.00 1.15 -0.08 1.51 -0.07 1.04 -0.02
0.73 0.07
0.00 0.00
(3.18) 0.16 0.20 -0.19 (1.78) -0.06 7.89 -0.02
144.97 0.47 17.03 -0.07 18.94 0.24 11.18 0.38
Net sales Operating income Ordinary incomeNet income
attributable to ownersof parent
Results for FY2016
Differences between forecasts announced inApril and actual results of major companies
(Billions of yen)
Devoted to Steel Tubes
Consolidated Operating Results
9
(Billions of yen)Cash and bankdeposits
Japan ¥+4.44billion Overseas ¥-0.48 billion Consolidatedadjustments
¥+0.01 billion
Previous Year Current Year Change Trade notes andaccounts
Japan ¥-4.97 billion Overseas ¥-1.10 billion Consolidatedadjustments
¥+1.74 billion
Current assets 153.8 148.0 -5.83 Inventories Japan ¥-2.10 billion Overseas ¥-5.10 billion Consolidatedadjustments
¥-0.25 billion
(Cash and bank deposits) 61.3 65.3 +3.97 Others SubsidiaryNCD
¥+0.40 billion Others ¥+1.30 billion Consolidatedadjustments
¥+0.28 billion
(Trade notes and accountsreceivable) 35.0 30.6 -4.33(Inventories) 30.0 22.5 -7.44(Others) 27.5 29.5 +1.98 Maruichi ¥+0.04billion Domestic
subsidiaries¥+1.41billion MOST ¥-0.11 billion
Long-term assets 167.7 146.9 -20.75 MAC ¥+0.25billion MKK USAINC.
¥-2.27 billion SUNSCO ¥-1.87 billion
(Property, plant andequipment) 87.3 84.8 -2.43 KUMA ¥-0.21 billion MMX ¥+0.37 billion Consolidated
adjustments¥-0.06 billion
(Intangible assets) 3.3 2.2 -1.16 Intangible assets Maruichi ¥-0.00 billion Subsidiaries ¥-1.16 billion Consolidatedadjustments
¥-0.00 billion
(Investments and otherassets) 77.1 59.9 -17.16
Total assets 321.5 294.9 -26.58Current liabilities 46.0 38.3 -7.67
(Trade notes and accountspayable) 24.5 17.9 -6.63 Trade notes and
accounts payableJapan ¥-5.90 billion Overseas ¥-2.91 billion Consolidated
adjustments¥+2.18 billion
(Short-term bank loans) 10.6 9.3 -1.26 Alpha Metal ¥+0.18 billion SUNSCO ¥-0.96 billion MKK USA INC. ¥-0.60 billion
(Accrued income taxes) 3.0 4.1 +1.14 KUMA ¥+0.00 billion MMX ¥+0.12 billion Consolidatedadjustments
¥+0.00 billion
(Others) 7.9 7.0 -0.91 Accrued incometaxes
Maruichi ¥+1.19 billion Subsidiaries ¥-0.06 billion Consolidatedadjustments
¥+0.00 billion
Long-term liabilities 21.1 14.7 -6.42 Others Maruichi ¥-0.79 billion Subsidiaries ¥-0.26 billion Consolidatedadjustments
¥-0.33 billion
Total liabilities 67.1 53.0 -14.09Net assets 254.4 241.9 -12.50
(Common stock) 9.6 9.6 +0.00 Maruichi ¥-3.56 billion Domesticsubsidiaries
¥-0.02 billion Consolidatedadjustments
¥-0.04 billion
(Additional paid-in capital) 15.8 15.8 -0.00 SUNSCO ¥-2.34 billion KUMA ¥-0.01 billion MKK USA INC. ¥-0.45 billion
(Retained earnings) 223.2 228.3 +5.14 MMX ¥+0.00 billion MAC ¥+0.00 billion MOST ¥+0.00 billion
(Treasury stock) (20.5) (27.0) -6.46(Unrealized holding gains onavailable-for-salesecurities ) 14.4 4.6 -9.80(Foreign currency translationadjustments) 1.3 0.9 -0.38 Retained earnings Japan ¥-0.72 billion Overseas ¥-3.44 billion Consolidated
adjustments¥+9.30 billion
(Remeasurements of definedbenefit plans) (0.1) (0.1) +0.04 ¥-2.06 billion
(Stock options) 0.1 0.1 -0.01(Minority interests) 10.6 9.6 -1.03 Foreign currency
translation End of December 2014: ¥120.55/US$ → End of December 2015: ¥120.61/US$
Total liabilities and netassets 321.5 294.9 -26.58
Consolidatedadjustments
Long-termliabilities
Unrealized holdinggains on available-for-sale securities
Maruichi ¥-7.74 billion Subsidiaries ¥-0.00 billion
Factors for increases/decreases of current assets
FY2016 full-year results
Factors for increases/decreases of long-term liabilities
¥+7.99billion
Factors for increases/decreases of net assets
Factors for increases/decreases of long-term assets
Property, plantand equipment
Factors for increases/decreases of current liabilities
Short-term bankloans
Investments andother assets Japan ¥-24.22 billion Overseas ¥-0.92 billion
Consolidatedadjustments
Balance Sheets compared with the previous fiscal year
Devoted to Steel Tubes
Consolidated Operating Results
5.6
12.5
9.9 8.8
6.2
3.0
2.8
4.7 4.45.2
6.06.7
2.9
3.2
Depreciation
Capital investment
(Billions of yen)
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
10
Capital investment anddepreciation
Budget for 2H
Budget for 1H
Budget for 1H
Budget for 2H
Devoted to Steel Tubes
623 637 634 642 632 647 634 644
405 392 396 400 396 387 388 384
809 891 936 964 971 1023 1016 960
1,837 1,920 1,966 2,006 1,999 2,057 2,038 1,988
0
500
1000
1500
2000
2500
Sep. 2012 Mar. 2013 Sep. 2013 Mar. 2014 Sep. 2014 Mar. 2015 Sep. 2015 Mar. 2016
(32) (36) (44) (40) (41) (41) (40) (40)
Employees: : Overseas consolidated subsidiaries
11
: Domestic consolidated subsidiaries
: Maruichi Steel Tube
Figures in parentheses indicate employees temporarily transferred overseas
Devoted to Steel Tubes
II. Nonconsolidated Financial Highlights for the Year Ending March 31, 2016
12
Devoted to Steel Tubes
90,784
86,653
94,132
97,576
89,615
FY2012 FY2013 FY2014 FY2015 FY2016
Nonconsolidated Operating Results
14,567 14,228
17,320
16,108 15,968 17,094 16,720
19,932
18,688 18,936
4,975
9,717
12,332 12,926
5,049
FY2012 FY2013 FY2014 FY2015 FY2016
Operating income
Ordinary income
Net income
Profits (Millions of yen)
Net sales (Millions of yen)
13
FY2015
Results
FY2016
Results
Increase/
decrease
Forecasts
announced
in April
Increase/
decrease
Net Sales 97,576 89,615 -8.2% 89,200 +0.5%
Operating Income 16,108 15,968 -0.9% 15,600 +2.4%
Ordinary Income 18,688 18,936 +1.3% 18,500 +2.4%
Net Income 12,926 5,049 -60.9% 4,600 +9.8%
(Millions of yen)
Devoted to Steel Tubes
Nonconsolidated Operating Results Statements of Income
14
AmountPercentageof total (%)
AmountPercentageof total(%)
AmountPercentageof total(%)
AmountPercentageof total(%)
AmountPercentageof total (%)
Net sales 90,784 100.0% 86,654 100.0% 94,133 100.0% 97,576 100.0% 89,616 100.0%
Cost of sales 70,210 77.3% 66,280 76.5% 70,265 74.6% 74,875 76.7% 67,194 75.0%
Gross profit 20,574 22.7% 20,374 23.5% 23,868 25.4% 22,701 23.3% 22,422 25.0%
Selling, general andadministrative expenses 6,007 6.6% 6,145 7.1% 6,547 7.0% 6,592 6.8% 6,454 7.2%
Operating income 14,568 16.0% 14,228 16.4% 17,321 18.4% 16,109 16.5% 15,968 17.8%
Non-operating income 2,965 3.3% 2,862 3.3% 3,000 3.2% 2,901 3.0% 3,464 3.9%
Non-operating expenses 437 0.5% 370 0.4% 388 0.4% 321 0.3% 495 0.6%
Ordinary income 17,095 18.8% 16,721 19.3% 19,932 21.2% 18,688 19.2% 18,937 21.1%
Extraordinary income 67 0.1% 1,190 1.4% 3,432 3.6% 823 0.8% 1,945 2.2%
Extraordinary losses 5,283 5.8% 2,374 2.7% 4,070 4.3% 41 0.0% 9,213 10.3%
Profit before income taxes 11,878 13.1% 15,537 17.9% 19,294 20.5% 19,471 20.0% 11,669 13.0%
Income taxes 6,785 7.5% 5,559 6.4% 6,707 7.1% 6,065 6.2% 6,833 7.6%
Income taxes - deferred 118 0.1% 260 0.3% 254 0.3% 479 0.5% (214) (0.2)%
Net income 4,976 5.5% 9,717 11.2% 12,333 13.1% 12,927 13.2% 5,050 5.6%
FY2012 FY2013 FY2014 FY2015 FY2016
(Millions of yen)
Devoted to Steel Tubes
Nonconsolidated Operating Results
15
Increase/decrease
Domestic pipe sales volume ¥-2.87 billionFY2015 FY2016 Increase/
decreasePercentage increase/
decrease Domestic pipe unit selling price ¥-4.25 billionExport pipe sales volume ¥-0.90 billionExport pipe unit selling price ¥-0.13 billionSteel strip sales volume ¥0.15 billionSteel strip unit selling price ¥-0.53 billionPole Division ¥-0.16 billionRelated steel strip ¥0.73 billionMachinery, others ¥-0.00 billion
Increase/decrease
Gross sales volume ¥-0.66 billionGross unit selling price ¥-3.95 billionCost of sales ¥4.60 billionSelling, general and administrative expenses ¥-0.13 billion
(Dividend income, interest from bonds, etc.) 1.91 2.30 +0.39(House rent income) 0.57 0.65 +0.08 Increase/decrease
(Royalty income) 0.29 0.26 -0.03 From operating income ¥-0.14 billion(Other non-operating income) 0.13 0.25 +0.13 Dividend income, interest on securities, etc. ¥0.39 billion(Rent expenses) (0.28) (0.37) -0.09 Other non-operating income ¥0.17 billion(Other non-operating expenses) (0.04) (0.12) -0.08 Non-operating expenses ¥-0.17 billion
(Gains on sales of investments in securities) 0.82 1.87 +1.06 Increase/decrease
(Gains on sales of property, plant and equipment) 0.01 0.07 +0.07 From ordinary income ¥0.25 billion(Other extraordinary income) 0.00 0.00 +0.00 Gains on sales of investmentsin securities ¥1.06 billion(Losses on sales of securities) 0.00 0.00 +0.00 Gains on sales of property, plant and equipment ¥0.07 billion
(Losses on valuation of securities) 0.00 (9.14) -9.14 ¥-9.14 billion(Costs of disposal and removal of property, plant andequipment, etc.) (0.02) (0.07) -0.05 ¥-0.05 billion
(Other extraordinary loss) (0.02) (0.00) +0.02 Others ¥0.02 billion
(Income taxes) (6.07) (6.83) -0.77 From income before income taxes ¥-7.80 billion(Income taxes–deferred) (0.48) 0.21 +0.69 Income taxes ¥-0.77 billion
Income taxes–deferred ¥0.69 billion
Increase/decrease
Net sales
Operating income
Ordinary income
Income before income taxes
Net income
Costs of disposal and removal of property, plant andequipment, etc.
Losses on valuation of securities(loss of valuation of MKK USA INC.)
-40.1%
1.3%
-60.9%
18.69Ordinary income
-7.8011.6719.47Income before income taxes
-0.9%-0.1415.97
-7.96 89.62
(Billions of yen)
FY2016
-8.2%97.58Net sales
16.11Operating income
-7.885.0512.93Net income
+0.2518.94
Statements of IncomeMajor factors for changes fromFY2015
Devoted to Steel Tubes
Nonconsolidated Operating Results
16
(Billions of yen)
Increase/decrease
Domestic pipe sales volume ¥-0.16 billionDomestic pipe unit selling price ¥+0.39 billionExport pipe sales volume ¥+0.00 billionExport pipe unit selling price ¥+0.00 billionSteel strip sales volume ¥-0.03 billionSteel strip unit selling price ¥+0.01 billionPole Division ¥+0.19 billionRelated steel strip ¥-0.02 billionMachinery, others ¥+0.05 billion
Increase/decrease
¥-0.03 billion¥+0.58 billion
(Factors attributable to domestic pipe unit selling price) (¥+0.43 billion)Cost of sales ¥-0.36 billionSelling, general and administrative expenses ¥+0.17 billion
Increase/decrease
From operating income ¥+0.37 billionDividend income, interest on securities, etc. ¥-0.02 billionOther non-operating income ¥+0.16 billionNon-operating expenses ¥-0.07 billion
Increase/decrease
From ordinary income ¥+0.44 billion¥+0.00 billion
¥+0.00 billion
¥-0.03 billion
Loss on valuation of investment securitie ¥+0.06 billionOthers ¥+0.00 billion
Increase/decrease
From income before income taxes ¥+0.47 billionIncome taxes ¥-0.23 billionIncome taxes-deferred ¥+0.21 billion
Net income
Costs of disposal and removal of property, plantand equipment, etc.
Gains on sales of property, plant and equipment
Gains on sales of investments in securities
Factors attributable to company-wide unit selling price
Net salesFY2016
Operating income
Income before income taxes
Ordinary income
Factors attributable to company-wide sales volume
FY2016forecasts
announced inApril
FY2016results Change
Net sales 89.20 89.62 +0.42
Ordinaryincome 18.50 18.94 +0.44
Operatingincome 15.60 15.97 +0.37
Net income 4.60 5.05 +0.45
Income beforeincome taxes 11.20 11.67 +0.47
Statements of IncomeMajor factors for changes fromforecasts announced in April
Devoted to Steel Tubes
Nonconsolidated Operating Results
17
Balance Sheets compared withthe previous fiscal year
Current assetsCash and bank dep¥+8.44 billion
(Billions of yen) Income beforeincome taxes ¥+11.67 billion Depreciation ¥+2.44 billion Purchase of treasury
stock ¥-6.46 billion Losses on valuation ofinvestments ¥+9.14 billion
Stock-related ¥+1.39 billion Bond-related ¥+0.82 billionOperatingfunds ¥+3.53 billion
Previous Year Current Year Change Dividendsand taxes
¥-11.91 billion Capitalinvestments
¥-2.36 billion Others ¥+0.19 billion
Current assets 88.38 93.28 +4.90 Accountsreceivable
¥-3.28 billion
(Cash and bank deposits) 43.83 52.28 +8.44 Trade notesreceivable
¥-0.15 billion Tradeaccounts
¥-3.13 billion
(Trade notes and accountsreceivable) 29.74 26.45 -3.28 Inventories ¥-1.69 billion
(Inventories) 10.76 9.06 -1.69 Finishedgoods
¥-0.29 billion Raw materials ¥-1.42 billion Suppliesand others
¥+0.02 billion
(Others) 4.05 5.49 +1.44 Others ¥+1.44 billion
Long-term assets 146.28 122.12 -24.15 Advancespaid
¥-0.02 billion Others ¥+1.45 billion
(Property, plant and equipment) 43.93 43.96 +0.04 Long-term assets
(Intangible assets) 0.05 0.05 -0.00 Property, plantand equipment
¥+0.04 billion
(Investments and other assets) 102.30 78.11 -24.19 Newinvestments
¥+2.48 billion Depreciation ¥-2.44 billion
Total assets 234.65 215.41 -19.25 Investmentsand other
¥-24.19 billion
Current liabilities 22.30 21.82 -0.48 ¥-11.25 billion Stock-related ¥-1.38 billion Bond-related ¥-2.40 billion
(Trade notes and accountspayable) 14.47 13.59 -0.88 ¥-9.14 billion Others ¥-0.02 billion
(Accrued income taxes) 2.71 3.91 +1.19 Current liabilities
(Others) 5.12 4.33 -0.79 Trade notesand accounts
¥-0.88 billion
Long-term liabilities 7.87 4.31 -3.56 Trade notespayable
¥+0.04 billion Tradeaccounts
¥-0.92 billion
Total liabilities 30.18 26.13 -4.05 Others ¥-0.79 billion
Net assets 204.47 189.27 -15.20 ¥-0.40 billion Others ¥-0.39 billion
(Common stock) 9.60 9.60 +0.00 Long-term liabilities
(Additional paid-in capital) 14.63 14.63 -0.00 Long-termliabilities
¥-3.56 billion
(Retained earnings) 187.40 186.40 -0.99 ¥+0.05 billion ¥-3.62 billion Others ¥+0.00 billion
(Treasury stock) (20.51) (26.96) -6.46 Net assets(Unrealized holding gains onavailable-for-sale securities) 13.22 5.49 -7.74 Retained earnin¥-0.99 billion
(Stock options) 0.13 0.12 -0.01 Net income ¥+5.05 billion Dividends ¥-3.94 billion Interim dividends ¥-2.09 billion Loss on disposal oftreasury stock ¥-0.01 billion
Total liabilities and net assets 234.65 215.41 -19.25 ¥-7.74 billion
Bonds/investment trusts ¥+0.09 billion Listed stock ¥-6.58 billion ¥-1.25 billionListed stock (overseas)
FY2016
Long-term deferred taxliabilities
Valuation difference oninvestments in securities
Equipment accounts payable-other/notes payable
Accrued retirement benefits
Unrealized holding gains onavailable-for-sale securities
Loss on valuation of investment securities
-
Devoted to Steel Tubes
174.9 181.8 192.2 204.5 189.2
9.9 12.6
14.9
15.7
12.6 12.7
11.4
13.5
14.5
13.6 196.6 205.8
220.6
234.7
215.4
FY2012 FY2013 FY2014 FY2015 FY2016
27.0
2.6 6.5 6.0 6.8 6.6
41.1 43.2 43.2 43.9 44.0
29.8 25.9 28.6 35.5
26.3
51.3 59.1
63.7 64.2
50.6
10.6 9.4
10.1 10.8
9.1
30.4 28.8
29.3 29.7
26.5
30.8 32.9
39.7
43.8
52.3
196.6205.8
220.6
234.7
215.4
FY2012 FY2013 FY2014 FY2015 FY2016
Nonconsolidated Operating Results Changes in balance sheets
Cash and
bank
deposits
Investment
securities
Accounts
receivable
Inventories
Property,
plant and
equipment
Otherassets
Accounts
payable
Other
liabilities
Assets Liabilities and net assets
Bank loans
Net assets
(Billions of yen)
(including treasury stock)
(including treasury stock
)
(including treasury stock
)
(including treasury stock )
19.8 20.5
(including treasury stock)20.5 20.5
Investments
in affiliated
companies
18
Devoted to Steel Tubes
Nonconsolidated Operating Results
2.0
4.1
5.7
2.9
2.4
1.8
1.5
2.5 2.1 2.1 2.2
2.4
1.1
1.4
Depreciation
Capital investments
(Billions of yen)
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
19
Capital investments anddepreciation
Budget for 2H
Budget for 2HB
udget for 1H
Budget for 1H
Devoted to Steel Tubes
III. Performance Forecasts for the Year Ending March 31, 2017
20
Devoted to Steel Tubes
Consolidated and Nonconsolidated Sales Results and forecasts
(Millions of yen)
117,688
136,548
152,668 144,969
138,700
86,653 94,133
97,576
89,616 86,400
58,072 63,559
75,146 74,317
66,300
42,004 43,704 47,988
44,582 41,500
FY2013 FY2014 FY2015 FY2016 FY2017 Forecasts
Consolidated net sales (full year)Nonconsolidated net sales (full year)Consolidated net sales (1H)Nonconsolidated net sales (1H)
21
Devoted to Steel Tubes
Consolidated and Nonconsolidated Ordinary IncomeResults and forecasts
(Millions of yen)
15,412
22,587
19,919 18,945
22,200
14,228
19,932
18,688 18,937 18,100
7,069
10,834 10,230
8,595
11,200
6,402
9,753 9,666 9,203 8,900
FY2013 FY2014 FY2015 FY2016 FY2017 Forecasts
Consolidated ordinary income (full year)Nonconsolidated ordinary income (full year)Consolidated ordinary income (1H)Nonconsolidated ordinary income (1H)
22
Devoted to Steel Tubes
Consolidated Operating Results ForecastsCompared with ‘Fourth Medium-Term Management Plan’ by Segment
-23-
FY2017 Forecasts Fourth Medium-Term Management Plan FY2018 Targets
Net sales Share Operatingincome Share Net sales Share Operating
income Share
Japan 87,356 63.0% 18,042 85.5% 108,500 58.6% 19,100 84.9%
North America 21,842 15.7% 1,285 6.1% 39,600 21.4% 1,800 8.0%
Asia 29,502 21.3% 1,773 8.4% 36,900 19.9% 1,600 7.1%
Reconciliations 0 0.0% 0 0.0% 0 0.0% 0 0.0%
Total 138,700 100.0% 21,100 100.0% 185,000 100.0% 22,500 100.0%
(Millions of yen)
Devoted to Steel Tubes
Consolidated and Nonconsolidated Profit Forecasts
24
Consolidatedfinancial forecasts
1H Forecasts 2H ForecastsFull-year
Forecasts Sales profit ratio
Net sales 66,300 72,400 138,700 - 144,969 (4.3)%
Operating income 10,200 10,900 21,100 15.2% 17,028 23.9%
Ordinary income 11,200 11,000 22,200 16.0% 18,945 17.2%
Net income attributableto owners of parent 7,700 8,000 15,700 11.3% 11,185 40.4%
Nonconsolidatedfinancial forecasts
1H Forecasts 2H ForecastsFull-year
Forecasts Sales profit ratio
Net sales 41,500 44,900 86,400 - 89,616 (3.6)%
Operating income 7,300 8,800 16,100 18.6% 15,968 0.8%
Ordinary income 8,900 9,200 18,100 20.9% 18,937 (4.4)%
Net income 6,200 6,500 12,700 14.7% 5,050 151.5%
FY2017 ForecastsFY2016Results
Full-year forecastsYoY
increase/decrease
FY2017 ForecastsFY2016Results
Full-year forecastsYoY
increase/decrease
(Millions of yen)
Devoted to Steel Tubes
Full-year Forecasts by Consolidated Major Companies FY2017
-25-
Compared withthe previous
period
Compared withthe previous
period
Compared withthe previous
period
Compared withthe previous
period
MaruichiSteel Tube
41,500 (3,082) 7,300 160 8,900 (303) 6,200 (1,426)
MAC 3,170 (679) 161 32 177 38 106 22
MKK USA INC. 4,957 (2,113) 397 1,375 385 1,383 316 1,095
MOST 2,014 318 213 238 220 249 132 161
MMX 1,032 144 179 11 190 62 133 38
SUNSCO(including Hanoi) 10,953 (1,728) 815 515 829 592 829 727
KUMA 1,995 (142) 123 32 112 103 74 80
Alpha Metal 1,833 505 33 1 39 (5) 27 (3)
Other domesticsubsidiaries
1,104 73 727 182 1,001 154 693 113
Affiliated companiesaccounted for by the
equity method194 (42)
Goodwill 0 0
Consolidatedadjustments
(2,258) (1,312) 252 110 (845) 374 (810) 309
Total 66,300 (8,017) 10,200 2,657 11,200 2,605 7,700 1,116
1H Forecasts
Net salesOperating
incomeOrdinaryincome
Net incomeattributable to
ow ners of parentCompared with
the previous
period
Compared with
the previous
period
Compared with
the previous
period
Compared with
the previous
period
86,400 (3,216) 16,100 132 18,100 (837) 12,700 7,650
6,033 (1,258) 267 216 296 220 178 184
9,954 (2,400) 443 1,948 448 1,984 372 3,862
3,736 (581) 283 340 290 432 174 315
2,119 245 292 (40) 275 (36) 193 (62)
25,511 2,087 1,527 972 1,432 852 1,432 990
3,991 (336) 245 (11) 224 64 148 64
3,766 979 90 10 102 2 71 5
2,192 32 1,364 213 1,668 159 1,156 120
499 (232)
0 0
(5,002) (1,820) 488 292 (1,134) 648 (723) (8,614)
138,700 (6,269) 21,100 4,072 22,200 3,255 15,700 4,515
Full-year Forecasts
Net salesOperating
incomeOrdinaryincome
Net incomeattributable to
ow ners of parent
(Millions of yen)
Devoted to Steel Tubes
IV. Progress of the ‘Fourth Medium-Term Management Plan’
26
Devoted to Steel Tubes
FY2014Results
FY2015Results
FY2016Forecasts
FY2017Targets
Net sales 152.7 145.0 138.7 185.0
Operating income 17.7 17.0 21.1 22.5
Operating margin 11.6% 11.7% 15.2% 12%
ROE 3.9% 4.7% 6.6% 6.5% or over
Shareholderreturn ratio
(3-year average)
52.2%(3-year average) 255.2% 49.5%
70% orover (3-year
average)
Returning profitsto society
(3-year average)
¥14 million(3-year average) ¥21 million
Approximately 0.5% of nonconsolidated
net income after payment of dividends
Approximately 0.5% of nonconsolidated
net income after payment of dividends
(3-year average)
Targets and Results of the ‘Fourth Medium-Term Management Plan’
27
Final Year of ‘Fourth Medium-Term Management Plan’
Final Year of ‘Third Medium-Term Management Plan’ Fourth Medium-Term Management Plan(Billions of yen)
Devoted to Steel Tubes
Major Initiatives of the ‘Fourth Medium-Term Management Plan’
1. Growth strategy
2. Shareholder-focused capital policy
3. Social contribution
28
Devoted to Steel Tubes
80.9 89.1 90.8 86.7 94.1 97.5 100.5 89.6 104.2
86.4 105.1
2.6 3.1 1.6 2.3 2.6 3.0
1.8 3.1
1.0
3.4
10.5 10.1 12.7 14.1
17.4 21.7
34.6
25.8
36.7
21.8
39.6
11.0 13.9 14.0 15.4
22.7 30.8
36.1
27.7
36.5
29.5
36.9
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015(Targets)
FY2015(Results)
FY2016(Targets)
FY2016(Forecasts)
FY2017(Targets)
Net Sales (Billions of yen)Nonconsolidated sales in Japan Other sales in JapanNorth America Asia
29
Targets during the Fourth Medium-TermManagement Plan
Net Sales Targets and Progress
185.0
102.4 115.7 120.6 117.8 136.5 152.6 174.2 144.9 180.5 138.7 185.0Total
Devoted to Steel Tubes 30
Operating Income Targets and Progress
10.4 14.9 14.6 14.2
17.3 16.1 16.6 16.1 17.2 16.1 18.0 1.5
0.7 0.3 1.1
1.8 1.8 1.4 1.3 1.4 1.9
1.1
-0.8
0.3 0.8 0.1
0.4
-0.2
1.1
-1.2
1.8 1.3 1.8
-0.2
0.7
-0.2
0.6 1.4
0.8 1.5 1.8 1.6
(5.0)
0.0
5.0
10.0
15.0
20.0
25.0Operating Income (Billions of yen) Nonconsolidated operating income in Japan
Other operating income in JapanNorth AmericaAsia
Targets during the Fourth Medium-Term Management Plan
22.5
10.9 16.6 15.5 15.4 20.1 17.7 20.5 17.0 21.9 21.1 22.5Total
13% 13%15%
12% 12% 12% 12%15%
12%
16%17%
20%18% 17%
19%17%
21%
18%
2%0%
2%0%
3%
-1%
5%
6%
4%
-5%
0%
5%
10%
15%
20%
25%
FY2011 FY2012 FY2013 FY2014 FY2015(Targets)
FY2015(Results)
FY2016(Targets)
FY2016(Forecasts)
FY2017(Targets)
Operating Margin Overall Domestic Overseas Targets of FY2017: 12%
Devoted to Steel Tubes 31
3.9%
5.0%
3.6%
5.0%
6.1%
3.9%
4.7%
6.6%
70.3%53.7%
130.4%
61.5%50.5%
46.9%
255.2%
49.5%
0.0%
50.0%
100.0%
150.0%
200.0%
250.0%
300.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016(Forecasts)
ROE Shareholder return ratio
Capital Policy Targets and Progress
3-year average of shareholder return ratio →70% or moreROE of FY2017 →6.5%or more
Devoted to Steel Tubes
Moving ahead with overhauls of domestic facilities and increasing production efficiency
32
FY2015 FY2016 FY2017 3-yeartotal
Planned Results Planned Planned Planned
Total capital investment 9.9 6.2 5.8 3.7 15.7
Domestic group
companies
Capitalinvestment 7.4 4.3 4.1 2.7 11.1
Depreciation 2.7 3.0 3.2 2.8 9.0
Overseas group
companies
Capitalinvestment 2.5 1.9 1.7 1.0 4.6
Depreciation 3.7 3.6 2.8 4.3 10.7
(Billions of yen)
Major capital investments results (FY2015)Domestic Sakai Plant: (Renovation of No. 1 Unit and
terminal piers): ¥0.8 billion Relocation of Yokohama Sales Office of
Maruichi Kohan: ¥0.8 billionOverseas MAC: Facilities renewal: ¥0.6 billion MMX: No. 2 Plant: ¥0.6 billion
Major capital investments plan (FY2016)Domestic Tokyo Plant: Renewal of tube manufacturing units, etc.:
¥0.8 billion Takuma Plant: Renewal of CGL and rolling mills: ¥0.8
billion Sakai Plant: Renovation of tube manufacturing units and
slitter: ¥0.5 billionOverseas MAC: Establishment of new warehouse:¥0.6 billion KUMA: Establishment of new stainless steel line (large
diameter): ¥0.3 billion
Capital Investment Plan (announced March 2015) and Results of ‘Fourth Medium-Term Management Plan’
Devoted to Steel Tubes 33
Restructuring and streamlining the domestic production framework and properly allocating human resources
• Overview: Terminate steel tube manufacturing at the Osaka Plant and transfer electrical conduit manufacturing to the Sakai Plant, with the aim of consolidating and streamlining the Company’s electrical conduit manufacturing
• Total investment: Approx. ¥0.5 billion*The consolidation has left no manufacturing equipment at the Osaka Plant. It is therefore renamed the “Osaka Warehouse.”
Overview of Sakai Plant (at end of March 2016)• Location: Nishi-ku, Sakai city, Osaka• Area: 154,002㎡• Monthly production: 220,000,000tons• Number of employees: 139
Improvements Made by Consolidation with the Sakai Plant
Limits on night operation at the Osaka Plant due to proximity to residential area
→Sakai Plant located in industrial zone where night operation is possible
Reduction in transport costs
Efficient allocation of human resources
Sakai Plant No. 6 Unit
Consolidating Osaka Plant with Sakai Plant (Completed March 2016)
Devoted to Steel Tubes
• March 2015: Structural tubing business acquired from Evraz NA INC., established MOST, Inc.
Further enhancing production where demand exists within the U.S., together with MAC (Los Angeles) and Leavitt (Chicago), and expanding business in the U.S. and Canada.
MOSTPortland, Oregon
34
Expanding sales on the U.S. West Coast
【FY2016】Renewing welding and plating equipment (scheduled completion in May)
LeavittChicago,
Illinois
【FY2015】March: Completed upgrades to tube manufacturing units and slitterIncreased efficiency by consolidating and renewing existing equipment
【FY2016】Scheduled construction of new warehouse (scheduled completion in December)
MACLos Angeles,
California
Strengthening sales in the northwest of the U.S. and the west of Canada with MOST as a base
MAC: Increasing productivity by investing in improved equipment, and expanding sales by strengthening sales force
MAC No. 4 Unit
Devoted to Steel Tubes 35
【FY2015】June: Commencement of operation of 2-inch millManufacturing of exhaust pipes (stainless steel pipes) for automobiles and motorcycles
Bangalore Plant (Appearance) Opening Ceremony for Bangalore Plant, October 2015
【FY2016】Introduction of equipment for large-
diameter (4-inch) exhaust pipes (stainless steel pipes) for trucks and buses (scheduled completion in October)
Manesar Plant(near New Delhi)
Continuing necessary investments in automobile and motorcycle related business and strengthening transactions with Japanese manufacturers
Bangalore Plant
【India】 KUMA: Expanding sales and strengthening profitability through utilization of the new Bangalore Plant
Devoted to Steel Tubes 36
(Domestic) Initiatives for training and developing human resources
New initiatives for the ‘Fourth Medium-Term Management Plan’【Recruitment Activities】・ Enhancing activities to improve candidates’awareness of firm(Participating in open and university-based job fairs in Kanto and Kansai)【Training human resources】
・ Enhancing training of new recruits(Short-term dispatches overseas, introduction of training in languages and business accounting,
enhancement of safety training, and introduction of training aimed at improving communication skills in group situations)・ Introducing training for management positions on different levels (e.g., introduction of leadership coaching)
March 2016 Formulating an action plan based on the “Act to Advance Women’s Success in Their Working Life”【Current Initiatives】
・Active recruitment of female candidates (three out seven college graduates employed in 2016)・Active effort to employ staff on temporary contracts on a permanent basis.【Targets】
(1) To increase average length of service of female employees(2) To employ women in management positions
Training program for new employees, 2016
Increased focus on recruitment and training human resources
Initiatives relating to “Act to Advance Women’s Success in Their Working Life”
Devoted to Steel Tubes
◆ Number of new employees dispatched from Japan to overseas for training
37
Destination No. of participants
2004 China 262005 Korea 272006 China 372007 Vietnam 322008 Indonesia 362009 Vietnam 282010 China 242011 Vietnam 282012 China Canceled2013 Vietnam 292014 Vietnam 202015 Indonesia 20Total 307
◆ Number of employees dispatched from Japan to overseas for short-term training (persons)
Developing human resources that can perform overseas and enhancing local human resources
No. of employees2012 62013 62014 72015 10
2016 (plan) 8Total 37
(persons) 海外出向者人数2011 232012 252013 362014 402015 412016 40
23 2536 40 41 40
0
20
40
60
2011 2012 2013 2014 2015 2016
(persons) Number of employees dispatched overseas
Training in Indonesia in 2015
◆ Number of employees by destination country (March 31, 2016)
the U.S. 10Mexico 6
Vietnam 16China 4
Indonesia 1India 3Total 40
(persons)
Development of “human resources that can perform overseas” with a focus on young employees
Increasing the ratio of employees in Japan who have experience of overseas posting, and having them play an active role leveraging their overseas experience after they return to Japan
Devoted to Steel Tubes 38
No. of short-term trainees
No. of long-term trainees
2006 0 42007 2 02008 1 42009 0 32010 7 22011 8 42012 12 142013 12 02014 5 02015 0 3Total 47 34
No. of trainees
2013 22014 32015 2Total 7
(persons)
◆ Number of short-term/long-term trainees accepted from SUNSCO and SUNSCO Hanoi of Vietnam in Japan
◆ Number of engineering trainees accepted from MAC USA
*Training period is about two months.
(persons)
MAC trainees (Nagoya Plant)
◆8 short-term trainees from ISTW of Indonesia were accepted in October 2015
ISTW trainees (Nagoya Plant)
ISTW trainees (Nagoya Plant)
Developing human resources that can perform overseas and enhancing local human resources
Development of “human resources that can perform overseas” with a focus on young employees
Employing local human resources
Devoted to Steel Tubes
・Continuation of the dividend policy of setting 50% of expected net income (*) in the nonconsolidated statements of income as annual dividend*Expected net income calculated as “nonconsolidated ordinary income x (1-effective corporate tax rate) x 50%)”, with an estimated effective corporate tax rate for FY2017 of 30.7%・Maintaining the minimum annual dividend at ¥50 per share
High profitability and a policy that prioritizes shareholders
(Figures in the parenthesis indicate dividend per share in yen.) (Millions of yen)
Interim dividendYear-end dividendAnnual dividend
(25.00) (46.50) (71.50)2,118 3,940 6,058 ― 12,926 46.9% 46.9% 3.9%
500,000 shares5,930 11,566 17,496 763 34,975 50.0% 52.2% 5.0%
(25.00) (52.00) (77.00) 2,000,000 shares2,094 4,303 6,396 6,491 5,050 126.7% 255.2% 4.7%
(25.00) (51.00) (76.00)2,069 4,220 6,289 12,700 49.5% 49.5% 6.6%
ROE(consolidated)
Share buybacksNumber of shares/price
Net income Dividend payout ratio
Total return ratio
FY2017 forecasts
FY2015
FY2013 to FY2015 3-year total
FY2016
(Reference) Status of dividend paid
Maintaining a high dividend payout ratio
・Maintaining high profitability Achieving shareholder return ratio of 70% or over (as a three-year average)
・Active share buybacks ROE of 6.5% or above
39
Updated
・ Buy-back of one million shares in July 2015 and a further million shares in January 2016
Devoted to Steel Tubes
Initiatives for FY2015 Support for NPO Asia Prevention of Blindness Association Sponsoring Osaka Philharmonic Association Sponsoring the 67th Shōsōin Exhibition Support for “iPS Cell Research Fund” at the Center for iPS Cell Research and Application, Kyoto University
Support world-class research into iPS cells which can establish the causes of disease and contribute to development of safe drugs, and also have potential applications in the promising field of regenerative medicine.
Sponsoring the “Theater of the Heart” activities of Shiki Theatre CompanySupported “Theater of the Heart” program that provides free tickets to elementary schoolchildren throughout Japan to inspire children to express their dearest thoughts and emotions through the medium of the stage.
40
Culture Education Sports Environmental protection
Social contribution
Returning a fixed amount of revenue to society as a sustainable corporate group that grows and develops together with society
Providing approximately 0.5% of nonconsolidated net income after payment of dividends
Updated
Devoted to Steel Tubes 41
2,260
2,935
3,660
3,300
2,110 1,896
2,055 1,932
2,215
2,669 2,846
2,700
3,085
11,669
17,060 17,288
12,526
8,110
11,090 9,755
10,084
12,398
14,828
19,207
17,388
16,759
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Mar.2005
Mar.2006
Mar.2007
Mar.2008
Mar.2009
Mar.2010
Mar.2011
Mar.2012
Mar.2013
Mar.2014
Mar.2015
Sep.2015
Mar.2016
(Reference) Change in the Stock Prices(based on the closing price of the month)
Sto
ckp
riceo
fM
aru
ichi
Ste
el
Tu
be
(Yen)
Nikkei Stock Average
Stock price of Maruichi Steel Tube
Nik
ke
iS
toc
kA
vera
ge
Devoted to Steel Tubes
30,446 29,905 29,443 27,778 28,616 27,767 27,366
24,835 24,310 26,654 25,316 23,964 23,547 22,439
12,262 12,955 12,843
15,420 17,458 18,727 19,479
19,378 19,256 16,285 16,215 14,697 14,688 13,461
7,079 7,574 8,775 9,271 9,265 9,271 11,255
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mar. 2010 Mar. 2011 Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016
Trading unit of share was lowered to 100 shares in October 2005.In April 2008, 4,260,000 shares of the treasury stocks were canceled.
(Figures on the bars indicate the number of shares.)(Unit: thousand of shares)
Treasury stock
Individuals andothers
Foreign investors
Financialinstitutions
Domesticcorporations
10,796
Number ofShareholders(persons) 10,3739,481 11,015
32.4% 31.8% 31.3 % 29.6% 30.4%
26.4% 25.8% 28.4%26.9% 25.5%
13.1% 13.8% 13.7% 16.4% 18.6%
20.6% 20.5% 17.3% 17.2% 15.6%
7.5% 8.1% 9.3% 9.9% 9.9% 9.9%
15.6%
19.9%
25.1%
29.5%
11,942
42
12.0%
14.3%
20.7%
23.9%
29.1%
10,3069,364
(Reference) Change in Shareholder Distribution
Devoted to Steel Tubes
Major Initiatives of the ‘Fourth Medium-Term Management Plan’
1. Growth strategy
1) Maintaining high profit ratio in domestic operations and overhauling and streamlining facilities at domestic plants
Major issues Major initiatives Related page
i) Moving ahead with overhauls of domestic facilities and increasing production efficiency
ii) Restructuring and streamlining domestic production framework and properly allocating human resources
iii) Further strengthening the manufacturing and sales framework for the purpose of maintaining domestic competitiveness
a) Replacing facilities at domestic plants:3-year total investment: ¥15.0 billion (including affiliated plants)
b) Consolidating Osaka Plant into Sakai Plant
c) Further focusing efforts on recruitment and human resources education
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P. 33
P. 36
2) Bolstering profitability by utilizing overseas investments to dateMajor issues Major initiatives Related
page
i) Increasing profitability through full operation of new facilities at SUNSCO/Leavittand reinforcing sales capabilities
a) SUNSCO (HCM): Expanding sales of 16-inch, two small-diameter tube lines, CGL and CCL products by strengthening sales capabilities in Vietnam, selling API products to the U.S. and other regions, and improving export profits
b) Leavitt: Stably operating facilities, strengthening sales capabilities for API/ASTMA53B and products for automobiles and other users
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Devoted to Steel Tubes
2) Bolstering profitability by utilizing overseas investments to date
Major issues Major initiatives Related page
ii) Expanding sales on the U.S. West Coast
iii) Continuing necessary investment in automobile and motorcycle related business, and strengthening trading with Japanese manufacturers in various regions
iv) Tackling new business in non-automobile related fields
v) Focusing efforts on development of “human resources that can perform overseas” and “enhancing local human resources”
a) MAC: Streamlining production through investment in overhauling facilities and expanding sales by strengthening sales capabilities
b) Strengthening sales in the northwest of the U.S. and the west of Canada with MOST as the base
a) Mexico: Actively responding to the shift of production by various automobile companies and expanding transactions with European and the U.S. companies
b) India: Expanding sales and strengthening profitability through utilization of the new Bangalore Plant in India
c) Ensuring profitability by further increase of competitiveness in China (MMP), Vietnam, Indonesia, and the U.S. (Leavitt)
d) Considering expansion into new regions and new areas in the automobile field
a) Strengthening response for users in various regions including Japanese companies that are expanding into the regions
a) Continuing development of “human resources that can perform overseas” with a focus on young employees
b) Employing local human resources. Increasing the ratio of employees in Japan who have experience of overseas posting, and having them play an active role leveraging their overseas experience after they return to Japan
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P.37.38
Major Initiatives of the ‘Fourth Medium-Term Management Plan’
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Major issues Major initiatives Related page
i) Maintaining a high dividend payout ratio
ii) High profitability and a policy that prioritizes shareholders
a) Continuing dividend policy of “nonconsolidated ordinary income x (1-effective corporate tax rate) x 50%)”Returning the effect of the decrease in the effective corporate tax rate as dividendsRaising the minimum dividend from the current ¥30 per share to ¥50 per share
b) Raising shareholder return ratio (70% and over) and ROE (6.5% and over) by implementing share buyback
P. 39
2. Shareholder-focused capital policy
3. Social contribution
Major initiatives Related page
a) Providing approximately 0.5% of nonconsolidated net income after payment of dividends for cultural, educational, sports, environmental protection and other activities in local communities in Japan and overseas
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Major Initiatives of the ‘Fourth Medium-Term Management Plan’
Maintaining a high dividend payout ratio and raising shareholder return ratio and ROE
Returning a fixed amount of revenue to society as a sustainable corporate group that grows and develops together with society
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Devoted to Steel Tubes
(Reference) Overview and Trends in Business Performance of Overseas Group Companies
46
Devoted to Steel Tubes
Trends in business performance (including Hanoi) (Millions of US$)
Net salesOperatingincome
161 (3)
205 2
256 (2)
196 5
December 2016 Forecasts 236 13
277 54th Medium-Term Management Plan (December 2017) Targets
December 2015 Results
December 2014
December 2012
December 2013
Company name:
Maruichi Sun Steel Joint Stock Company(SUNSCO)
Founded: June 1996 (Capital participation in 2006)
Location: Ho Chi Minh and Hanoi, Vietnam
Capital: US$130 million
Shareholder distribution:
Maruichi Steel Tube 72.53%Toyota Tsusho 9.73%JFE Steel 8.00%Taiwanese shareholders 9.74%
Employees: 514
Production results:
233,600mt/year
47
Announced in May 2016
Devoted to Steel Tubes
Company name:
Maruichi Leavitt Pipe & Tube, LLC (Leavitt)
Founded: 1956 (Capital participation in 2008)
Location: Chicago, Illinois
Capital: US$25,225 thousand
Shareholder distribution:
MKK USA. INC 74.71%
Sumitomo Corporation of America25.29%
Employees: 133
Production results:
116,000mt/year
48
Announced in May 2016
Trends in business performance (Millions of US$)
Net salesOperatingincome
107 (1)
113 1
130 (5)
94 (11)
92 4
150 14th Medium-Term Management Plan (December 2017) Targets
December 2015 Results
December 2014
December 2012
December 2013
December 2016 Forecasts
Devoted to Steel Tubes
Trends in business performance (Millions of US$)
Net salesOperatingincome
69 3
66 2
62 3
60 0
56 2
70 54th Medium-Term Management Plan(as of December 2017) Targets
December 2014
December 2015 Results
December 2012
December 2013
December 2016 Forecasts
Company name:
Maruichi American Corporation(MAC)
Founded: December 1978
Location: California
Capital: US$7.5 million
Shareholder distribution:
Maruichi Steel Tube 53.00%
Metal One Corporation 30.00%
Maruichi Kohan 8.00%The Bank of Tokyo-MitsubishiUFJ, Ltd. 5.00%Sumitomo Mitsui BankingCorporation 4.00%
Employees: 68
Productionresults:
65,500mt/year
49
Announced in May 2016
Devoted to Steel Tubes
Company name:
Maruichi Oregon Steel Tube, LLC(MOST)
Founded: 2015
Location: Portland, Oregon
Capital: US$55 million (equivalent)
Shareholder distribution:
MKK USA 100%
Employees: 53
Production volume
40,300mt/year
Trends in business performance (Millions of US$)
Net salesOperatingincome
35 0
35 2
74 3
December 2015 Results
4th Medium-Term Management Plan(December 2017) Targets
December 2016 Forecasts
50
Announced in May 2016
Devoted to Steel Tubes
(Millions of US$)
Net salesOperatingincome
1 (1)
12 1
15 3
19 3
30 44th Medium-Term Management Plan(December 2017) Targets
Trends in business performance
December 2013
December 2014
December 2015 Results
December 2016 Forecasts
Companyname:
MARUICHIMEX S.A. de C.V. (Maruichimex)
Founded: January 2012
Location: Aguascalientes, Mexico
Capital: US$20.80 million (equivalent)
Shareholderdistribution:
MAC 30.00%
MKK USA 30.00%
Marubeni-ItochuSteel Group 20.00%Toyota Tsusho 20.00%
Employees: 44
Production results:
7,700mt/year
51
Announced In May 2016
Devoted to Steel Tubes
(Millions of US$)
Net salesOperatingincome
30 4
31 3
34 2
35 2
39 2
44 34th Medium-Term Management Plan (March2018) Targets
March 2016 Results
Trends in business performance
March 2015
March 2014
March 2013
March 2017 Forecasts
Company name:
Maruichi KUMA Steel Tube Private Limited(KUMA)
Founded: November 2003 (Capital participation in 2009)
Location: Manesar, Gurgaon, Haryana, and Bangalore, India
Capital: INR89 million (equivalent)Shareholder distribution:
Maruichi Steel Tube 70.00%Toyota Tsusho 30.00%
Employees: 78
Production results:
16,100 mt/year
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Announced in May 2016
Bangalore Plant
Devoted to Steel Tubes
Company name:
Maruichi Metal Product (Foshan) Co., Ltd. (MMP)
Founded: April 2005
Location: Foshan, Guangdong
Capital: US$18 million (equivalent)
Shareholder distribution:
Maruichi Steel Tube 35.00%
LARGE CROWN LIMITED 35.00%
Chung Mao Trading 15.00%
Toyota Tsusho 10.00%
Metal One Corporation 5.00%
Employees: 236
Maruichi Metal Product (Foshan) Co., Ltd.
Wuhan Branch
Maruichi Metal Product (Tianjin) Co., Ltd.53
Devoted to Steel Tubes
Company name: PT. Indonesia Steel Tube (ISTW)
Founded: December 1972
Location: Jakarta
Capital: US$4.35 million (equivalent)
Shareholder distribution:
Maruichi Steel Tube 20.00%
Metal One Corporation 60.00%
Local 20.00%
Employees: 614
Cikarang Plant in eastern Jakarta(Completion in August 2013) Semarang Plant
Jakarta Plant
54
Devoted to Steel Tubes
(Reference) Features of the Maruichi Group
55
Devoted to Steel Tubes
• As a leading steel tube company, our mission is to contribute to society by providing outstanding products and responding to the trust of customers.
• We respect all stakeholders, including shareholders, business partners, employees and local communities.
• We promote the creation of energy for growth and new values for the future by enhancing product reliability, technological capability, and sales capability by means of the wisdom, passion and action of each employee.
• We will continue being an outstanding company filled with dreams that all of our employees feel worthy of entrusting their lives to.
1. Management Philosophy
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Devoted to Steel Tubes
2. Domestic Production and Sales System
57
Head Office
Office and Sales Office
Plant
Warehouse and Pipe Center
Maruichi Group Companies
Maruichi Steel Tube Ltd. Head OfficeMaruichi Kohan Ltd. Head Office
Ginowan Pipe Center
Okinawa Maruichi Ltd.
Hokkaido Maruichi Steel Tube Ltd.
Kyushu Maruichi Steel Tube Ltd.
Shikoku Maruichi Steel Tube Ltd.
Kasuga Industry Ltd.
Alpha Metal Co., Ltd.
Sapporo Office
Tokyo Plant
Maruichi Kohan Tokyo Sales Office
Nagoya Plant
Sakai PlantSakai Pole PlantOsaka Pole Marketing Department
Tokyo OfficeTokyo Pole Marketing Department
Maruichi Kohan Sendai Sales Office
Maruichi Kohan Kitakami Sales OfficeMaruichi Kohan Niigata Sales Office
Maruichi Kohan Kitakanto Sales Office
Maruichi Kohan Yokohama Sales Office
Maruichi Kohan Hamamatsu Sales Office
Maruichi Kohan Hokuriku Sales Office
Nagoya OfficeMaruichi Kohan Okayama Sales Office
Takuma Plant
Hiroshima Office
Fukuoka Office
Maruichi Kohan Fukuoka Sales Office
Maruichi Kohan Shikoku Sales Office
Maruichi Steel Tube Osaka OfficeMaruichi Kohan Osaka Sales Office
Nankou Pipe Center
Nagasu Pipe Center
Shikoku Tube Tachibana Maruichi Steel Plant
Ichikawa Warehouse
Kashima Pole Plant
Maruichi Steel Tube Kitakami Processing Center
Maruichi Kohan Nagoya Sales Office
Devoted to Steel Tubes
3. Overseas Production Facilities
MAC(the U.S)
Leavitt(the U.S)
ISTW Semarang Plant
(Indonesia)
MMP (Foshan)(China)
ISTW Jakarta Plant(Indonesia)
SUNSCO(Vietnam)
KUMA (India)Manesar Plant
SUNSCO (Hanoi)(Vietnam)
Asia Americas
MMP (Tianjin)(China)
J-Spiral(Vietnam)
MMP (Foshan)Wuhan Branch (China)
Maruichimex(Mexico)
ISTW Cikarang Plant(Indonesia)
Alphamex(Mexico)
MOST(the U.S)
KUMA (India)Bangalore Plant
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Devoted to Steel Tubes
Production Where Demand Exists
Maruichi Steel Tube operates 12 plants, including affiliated companies, which
cover the areas from Hokkaido to Kyushu. Such wide-coverage plant operation
significantly contributes to the improvement of service to users, as well as the
reduction of distribution cost.
Variety of Products
Maruichi Steel Tube provides a variety of products to meet the diverse needs of
users.
Material Manufacturing and Processing
Steel strips of optimum quality processed at the Takuma Plant are used at each
plant of the Maruichi Group.
Independent Management
Maruichi Steel Tube’s management is independent of any affiliation and not
subject to restrictions regarding suppliers and customers. Maruichi Steel Tube
therefore is able to constantly conduct business operations in pursuit of
maximum profit.
Sound Financial Structure
The sound financial structure serves as the strong backbone of Maruichi Steel
Tube.
Dedicated to Tube Manufacturing
Maruichi Steel Tube is dedicated to steel tube manufacturing and related
businesses.
Adoption of Proprietary Sales System
Maruichi Steel Tube sells products through two channels: general trading
companies and Maruichi Kohan Ltd. Maruichi Kohan has its own warehouse
and also stocks and sells products. Under this system, Maruichi Steel Tube can
clearly grasp customer needs, demand trends and price trends, thus enabling
the company to devise management strategies that are sensitive to the market
at all times.
Business Development in the Pacific Rim
It has become easier to grasp market conditions, such as supply and demand
trends of hot coils and products.
4. Features
59
Independent Management
Material Manufacturing
and Processing
Adoption of Proprietary
Sales System
Business Development in the Pacific
Rim
Sound Financial Structure
Production Where Demand Exists
Dedicatedto Tube
ManufacturingVariety of Products
Devoted to Steel Tubes
1926 Maruichi Production founded as a bicycle parts manufacturer.
1935 Started manufacturing bicycle steel pipes.
1940 Changed company name to Maruichi Steel Tube Works.
1947 Established Maruichi Steel Tube Ltd.
1956 Reorganized Osaka Office and established Maruichi Kohan Ltd.
1957 Newly constructed Osaka Plant.
1958 Established Tokyo Office.Imported electric tube welding system manufactured byAbby Etona Co. of the U.S., and shifted to an electricresistance welded tube manufacturer.
1960 Changed the trade name to Maruichi Steel Tube Ltd.Established Nagoya Office.
1961 Newly constructed Tokyo Plant.
1962 Listed on the Second Sections of the Tokyo StockExchange and the Osaka Securities Exchange.
1964 Listed on the First Sections of the Tokyo StockExchange and the Osaka Securities Exchange.Established the Fukuoka Office.
1965 Newly constructed Sakai Plant.
1966 Newly constructed Nagoya Plant (integrated into currentNagoya Plant in 1984).Established Hiroshima Office.
1970 Established Hokkaido Maruichi Steel Tube Ltd.Established Sapporo Office.
1971 Established ISTW in Indonesia.
1972 Newly established Pole Plant.
Established Osaka Office.
1973 Newly constructed Tokyo No. 2 Plant.
1974 Established Shikoku Maruichi Steel Tube Ltd.
Established Kyushu Maruichi Steel Tube Ltd.
1977 Newly constructed Nagoya Second Plant (current Nagoya Plant).
Relocated the head office to the present location atatKitahorie, Nishi-ku, Osaka.Established MAC in the U.S.
1989 Newly constructed Takuma Plant.
1978
1995 Newly constructed Kashima Pole Plant.
1998
2000Completed construction of the new Hiroshima Officeand warehouse.
2002 Constructed the new warehouse in Tokyo No. 2 Plant.
2003Expanded the distribution warehouse and processingplant within Nagoya Plant.
2005 Took over the lighting pole business of JFE Steel Pipe Co., Ltd.
2006 Completed the cutting-to-size warehouse building in Nagoya Plant.Started operation of MMP in China.Invested in Toyo Superior Steel Tube Works.Invested in SUNSCO of Vietnam.
2008 Converted SUNSCO and Leavitt into consolidated subsidiaries.Completed renovation of Sakai Plant.
2009 Converted KUMA of India into a subsidiary.Started operation of Sakai Production Facility of SeikeiSteel Pipe Corporation.
2010 Converted Alpha Metal into a consolidated subsidiary.Started operation of SUNSCO Hanoi.Invested in J-Spiral Steel Pipe Co., Ltd. in Vietnam.
2011 Started operation of MMP Tianjin in China.Newly constructed the stainless steel tube factory atTokyo No. 2 Plant.Newly constructed the No. 2 factory at Sakai Pole Plant.
2012 Newly established Wuhan Branch for MMP in China.Newly constructed the No. 3 factory at Tokyo No. 2 Plant.Established Maruichimex in Mexico.
Started operation of the mega solar power facility in theTakuma Plant.Started operation of the second CGL/CCL of SUNSCO.
Completed consolidation of Tokyo Plant.Converted Maruichimex into a consolidated subsidiary.
2015 Converted MOST into a consolidated subsidiary.
2016 Completed consolidation of Osaka Plant.
2013
2014
Integrated Sapporo Plant of Hokkaido Maruichi SteelTube Ltd. into Tomakomai Plant.
5. History
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Devoted to Steel Tubes
1. We are intent on continuing pursuing shareholder-focused
management and making constant efforts to maximize shareholder
value in the future. Also, we will grow and develop into a corporate
organization that can be considered globally as number one in the
world in terms of both quality and quantity in the steel pipe industry.
2. This fiscal year is the second year of the fourth medium-term
management plan. The Group will make concerted efforts with a
view to achieving strong growth in Japan and abroad by flexibly
coping in a timely manner with a domestic and overseas business
environment that is constantly changing substantially.
Direction of the Maruichi Steel Tube Group
61
Devoted to Steel Tubes
DisclaimerPlans and forward-looking statements herein are based on the Company’s judgment drawn from currently available information. Please note that actual results may differ significantly from such plans and forward-looking statements due to various important factors.
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