Tsubakimoto Chain Co. Mid-term Management Plan 2020 Presentation Meeting
President and Representative Director
Yasushi Ohara
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Long-Term Vision 2020 and Mid-Term Plan
Mid-Term Management Plan 2020
Contents
2
Review of Mid-Term Plan for 2016
Commemorating Our Centennial
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Long-Term Vision 2020 and Mid-Term Plan
3
Commemorating Our Centennial
Mid-Term Management Plan 2020
4
Long-Term Vision 2020
Global leaders Niche leaders
Establishing an unshakable position in target markets
The way it should be in 2020 = Leading Global Company
Consolidated sales ¥300 billion Operating income ratio 10%
International sales ratio 70%
Performance targets
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
11/3 12/3 13/3 14/3 15/3 16/3 17/3 21/3
Long-Term Vision 2020 and Mid-Term Plan 2016
5
Mid-Term Plan 2012
Mid-Term Plan 2020
Plan for implementing our Long-Term Vision 2020 Mid-Term Plan
Each division must target these goals, resolve current issues, engage in M&A activity, and integrate its businesses.
Mid-Term Plan 2016
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Long-Term Vision 2020 and Mid-Term Plan
Commemorating Our Centennial
Review of Mid-Term Plan for 2016
7
Mid-Term Plan 2016 Basic Policies
Transition to a market-oriented corporate culture 1
Exercise comprehensive strengths of Group 2
Enhance earning power 3
Develop and fully utilize manpower 4
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
2016年3月23日
Transition to a market-oriented corporate culture
8
① Creation of new products, new technologies, etc. (Chain)
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
(1) 100th Anniversary Model: “G8” Series ・ Neptune® Chain (on sale Jun ‘15)
・ Lambda Chain (on sale Oct ‘15)
・TTUPM-H, WT2515G-M (on sale Jan ‘16) ・Ultra low-friction and wear resistant
・ SUPER Chain (on sale Jun ‘16)
(2) Plastic Top Chain
・ RS® Roller Chain (on sale Jun ‘16)
Transition to a market-oriented corporate culture
9
① Creation of new products, new technologies, etc. (PTUC)
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
(1) Power Cylinder Worm Series (on sale Oct ‘15)
(2) Echt-Flex Coupling NER Series (on sale Jan ’16)
(3) Power Lock KE Series: low contact pressure (on sale Jan ‘16)
(4) Axia Motor™ (on sale Apr ’17)
10
Transition to a market-oriented corporate culture
◆ Axia Motor TM
Pocket mechanism
New structure eliminates oil leaks.
For small light-load conveyors, orthogonal hollow gear motors in the food industry, distribution centers, and the like.
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Narrow space
Grease pocket
Grease does not flow into oil seal side.
Transition to a market-oriented corporate culture
11
① Creation of new products, new technologies, etc. (Automotive Parts)
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
(1) Low-cost bush chain
(2) Low-wear Silent Chain
(3) New Mechanism: Ring-type tensioner
(4) Sprocket with rubber cushion
Transition to a market-oriented corporate culture
12
① Creation of new products, new technologies, etc. (Materials Handling)
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
(2) Linisort® S-C (received one order in FY2016)
(4) AGV Mark I-e (Commenced field test in FY2016)
(3) Labostocker® 150M (Under development: testing prototype)
(1) SYMTRUCK (chassis conveyor line) (Installed one in FY2016; received order for one more in FY2017)
(5) New FS-L Flow® (conveying equipment for grain silos) (Orders received)
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Expansion of overseas bases (Results for FY 2014 to FY 2016)
13
Auto parts second plant (Korea)
• Auto parts plant expanded (USA)
・Auto parts plant constructed (Czech) ・Auto parts office established (Germany) ・Conclusion of technical assistance agreements (Italy) ・European chip conveyor plant concentrated (Slovakia) ・Sales company established (Spain)
・Materials handling systems manufacturing company established (India) ・Sales company established (Vietnam) ・New materials handling systems plant completed (Indonesia) ・Sales company established (Philippines)
・Sprocket manufacturing company established ・Auto parts plant constructed (Tianjin)
・Sales company established (Korea) ・Auto parts second plant constructed (Korea)
USA China
East Asia
Indian Ocean Rim
Europe
Auto parts plant (Czech)
Materials handling systems plant (Indonesia)
Enhance earning power
14
① Goals Results Objectives
Cha
in
MIK2018 Development
<FY 2018 target> Labor productivity +30% On-time delivery 100%
Implementation items completed two years ahead of schedule
• Improve productivity through further enhancements • Continue to increase effectiveness after 2017
PTU
C Tsubaki E&M
Plant reorganization (3 plants2 Plants)
<FY 2018 target> Productivity +30%
Completed as planned
Maintain increased effectiveness toward FY 2018
Auto
mot
ive
Parts
Manufacturing reform activities
<Productivity improvement targets> (1) New assembly plant +30% (2) 4 plants in Saitama +15%
Achieved goal ahead of schedule
Train personnel and strengthen production equipment & maintenance management under the theme of “stable production” to accommodate increased production
Mat
eria
ls
Han
dlin
g
Design productivity improvement
(1) Modular design activity
Progress 80% Continue in FY 2017 (2) Progress in new diagram numbering
(Diagram-free provisions made)
Improve productivity
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Estimate of Mid-Term Plan 2016
15
Operations Group
Sales Operating Income
Budget Estimated Achievement rate Budget Estimated Achievement
rate
Chain 729 589 80.8% 61 60 98.4% Power
Transmission Units and
Components 261 210 80.5% 28 18 64.3%
Automotive Parts 744 746 100.3% 111 117 105.4%
Materials Handling Systems 474 417 88.0% 21 7 33.3%
Consolidated 2,200 1,970 89.5% 220 197 89.5%
The estimated figures are based on the published value of November 7, 2016.
Med-term earning budgets (Sales: ¥220 billion, Operating income: ¥22 billion) Neither target was reached. (¥100 million)
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Pending issues for Med-Term Plan 2016
16
Chain Division
Materials Handling Systems Operations
All Companies • Engage in M&A activity
Power Transmission Units and Components Operations
• Establish European manufacturing base • Expand sales of conveyor chain in the Chinese market
• Develop and introduce large products
• Improve profitability • Expand business in emerging markets
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Long-Term Vision 2020 and Mid-Term Plan
Commemorating Our Centennial
Mid-term Management Plan 2020
18
Mid-Term Management Plan 2020 Basic Policies
Convert our corporate culture to a market-focused approach 1
Exercise comprehensive strengths of Group 2
Achieve our objectives for 2020, “The way it should be” 3
Overarching Policies
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Mid-Term Management Plan 2020 Basic Policies
Convert our corporate culture to a market-focused approach ①
Product development and manufacturing strategies that consistently respond to the needs of the market (region/industry)
Americas
Europe
China East Asia (Taiwan, South Korea, Japan)
Indian Ocean Rim (Including Oceania)
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Mid-Term Management Plan 2020 Basic Policies
Exercise comprehensive strengths of Group ②
< Increase corporate value > We will pursue synergies among our business groups and
utilize our group's comprehensive strengths to improve the value of group companies.
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Mid-Term Management Plan 2020 Basic Policies
Achieve our objectives for 2020, “The way it should be” ③
⇒ Leading Global Company Global leaders Niche leaders
Establishing an unshakable position in target markets
Consolidated sales ¥300 billion Operating income ratio 10%
International sales ratio 70%
Performance targets
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
22
Mid-Term Plan 2020 “The way it should be”
◆ Chain Secure our status as global leader and niche leader by developing the leading product the market needs
・ Expand global share of G8 Series roller chain
・ Re-development of the Japanese market ⇒ Japan Marketing Project (JM-Pj) Promotion
・ Establish & expand the production base in order to devise an optimal global supply system
・ Implement an innovative production system for improved productivity
< FY 2017 Objectives >
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Mid-Term Plan 2020 “The way it should be”
◆ Power Transmission Units and Components Establish a solid position as a category leader with core products that demonstrate technological superiority and cost competitiveness
・ Introduce new products that meet customer needs
・Promote quality improvements and stabilization in production bases for power transmission products both domestically and internationally
・ Re-development of the Japanese market ⇒ Japan Marketing Project (JM-Pj) Promotion
< FY 2017 Objectives >
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Mid-Term Plan 2020 “The way it should be”
◆ Automotive Parts
< FY 2017 Objectives > ・Develop order entry activities to achieve global sales of ¥100 billion by 2020
・Develop new chains with excellent balance between cost and performance
・Enhance and manage global production bases for increased production and optimized production locations
1. Timing chain drive systems Commanding share of world market through Dantotsu improvement activities (42%) 2. Expand the non-timing-chain business
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Mid-Term Plan 2020 “The way it should be”
◆ Materials Handling 1. Enhance profitability
2. Attain leading market share in specified markets
・Prepare new factories to target product development, improve promotion and order growth, and prepare exhibition models
・Practice thorough management on a cell-by-cell and project-by-project basis and shift to a profit structure with reduced BEP ・Through modular design activities, VA/VE activities, and easy device installation, achieve cost reductions and quality improvements
< FY 2017 Objectives >
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Mid-Term Plan 2020 “The way it should be”
(2) Specialize in product development and improvement (by establishing a product development area and enhanced production facilities)
Concept and aim of the new materials handling plant (Saitama Plant)
(4) Create a safe, comfortable and environment-friendly plant Incorporate seismic resistance;
LED illumination; and energy-efficient air conditioning
(3) Refine and share manufacturing skills and maintenance skills (establish a manufacturing workshop)
(1) Create a fascinating factory (with product exhibition spaces)
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Mid-term Management Plan 2020: Basic Policies regarding ESG
27
Raise environmental awareness through manufacturing ・Total CO2 emissions reduction target: 30% reduction below FY 2013 level (In Japan, FY 2030)
Diligently practice a “safety first” policy ・ Visualize risk information, implement training for unforeseen circumstances
Become a company that allows all employees to feel their work is rewarding and worthwhile ・ Reform our approach to work, develop human resources, promote successful women, and improve human resource systems for consistency with the circumstances of the respective countries in which we operate
Environment
Safety
Personnel
Generate customer value and contribute to society ・ Adhere to the Corporate Governance Code ・ Ensure compliance with corporate ethics and risk management according to our Internal Control Regulations.
Governance
E
S
G
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
「Sales Breakdown by Business and Region
28
Operations Group (¥100 million)
Region
Americas
Europe
Indian Ocean Rim
China South Korea & Taiwan
Japan
Other*
FYE2021 Consolidated sales
¥300 billion
Operations Group Sales Operating
income
Chain 781 93 PTUC 281 30
Automotive Parts 1,000 150
Materials Handling 573 34
Other*2 399 - Consolidated
(Operating income margin)
3,000*1 300*1
(10%)
*M&A builds on our existing business to improve global competitiveness *1: Includes consolidation adjustment amounts
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Sales Breakdown by Business and Region
29
589
781
210 281
639
218
Chain Operations Power Transmission Units and Components Operations
Japan, South Korea &Taiwan , China, Indian Ocean Rim, Europe, Americas (Yen 100 million)
16/3 17/3 21/3 16/3 17/3 21/3
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Sales Breakdown by Business and Region
30
746
1,000
417
573
734
443
Japan, South Korea &Taiwan , China, Indian Ocean Rim, Europe, Americas (Yen 100 million)
Automotive Parts Operations
Materials Handling Systems Operations
16/3 17/3 21/3 16/3 17/3 21/3
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11/3 12/3 13/3 14/3 15/3 16/3 17/3 21/3
Achieving the goals of our Mid-term Management Plan 2020
31 April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Growth of existing businesses (sales expansion) ⇒ Achieving our goals in each segment
1) Pursuit of M&A 2) Strengthening of new business ・Agribusiness ・Monitoring business ・eLINK EV power systems, etc.
¥300 billion
¥197 billion
Mid-term Management Plan 2020: Capital Policy and Other Matters
32
Investment plan
We will pay a dividend based on a consolidated dividend payout ratio of 30% while investing in growth as outlined above
Target the following indicators in order to maintain a sound financial foundation
Dividend Policy Net D/E ratio: 0.2 times or below Fiscal year ending March 31, 2021
Total capital investment: Approximately 40 to 50 billion yen (Total over four years from FY 2017 to FY 2020)
*The above figures do not include M&A costs.
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Financial indicators
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
Commemorating Our Centennial
33
Long-Term Vision 2020 and Mid-Term Plan
Review of Mid-Term Plan for 2016
34
TSUBAKI SPIRIT
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
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Commemorating Our Centennial
< Corporate PR (Improving awareness) >
Commemorating Our Centennial Looking ahead to our next centennial
while commemorating our first centennial
To accelerate our Group’s momentum and expand business opportunities, we will effectively emphasize gratitude for the past while focusing on our promise for the future
April 12, 2017 Mid-term Management Plan 2020 Presentation Meeting
End