consolidated results for the fiscal year ended mar. 2017, the mid … · 2017-07-03 ·...
TRANSCRIPT
Consolidated Results for the Fiscal Year Ended Mar. 2017, the Mid-term Managerial
Plan, and the Consolidated Earnings Forecast for the Fiscal Year Ending Mar.
2018
<Cautionary matter of description regarding future prospect>
Please bear in mind that the forecast of our business performance and future forecast described in thismaterial are forecasts judged by our company on the basis of the business environment at this point intime. The actual business performance can be different depending on the development of the businessenvironment hereafter.
May 17, 2017
SAXA Holdings, Inc.
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■ Today’s topics
1.Overview of the consolidated results for the Fiscal Year ended Mar. 2017
2.Mid-term managerial plan (the Fiscal Year ending Mar. 2018 to the Fiscal Year ending Mar. 2020)
3.Consolidated earnings forecast for the Fiscal Year ending Mar. 2018
The figures and ratios in this document have been rounded off to the indicated.
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■ Overview of the consolidated results for the Fiscal Year ended Mar. 2017
1.Major activities (business expansion and the fortification of our management base)
2.Major breakdown of the increase/decrease in consolidated sales
3.Major breakdown of the increase/decrease in consolidated operating profit
4.Consolidated profits and losses
5.Consolidated balance sheet
6.Consolidated cash flow
1. Business expansion
(1) Office market① Release of UTM (unified threat management) SS3000Ⅱ② Release of the key telephone system “PLATIA Ⅱ” series
(2) System integration business
① Provision of MCS Global Cloud (Managed Client Security)② Provision of the vehicle number recognition system
2. Fortification of our management base
Fortification of our management base
① Reduction of interest-bearing debts② Strengthening of the financial standing③ Rationalization of personnel
1.Major activities (business expansion and the fortification of our management base)Overview of the consolidated results for the Fiscal Year ended Mar. 2017
Rapid changes in the amusement marketIntensification of competitions in the System integration business
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FY16/Mar FY17/Mar40.4 billion yen46.4 billion yen Sales dropped 6
billion yen.
[unit: 100 million yen]
Office market
SI business
Security systemsParts, etc.
Network solution
field258
+6-40
-22
Security solution
field206
Network solution
field260
2.Major breakdown of the increase/decrease in consolidated salesOverview of the consolidated results for the Fiscal Year ended Mar. 2017
-4
The sales in the office market are as estimated as a whole, but the number of orders declined in the amusement market and System integration business, due to the rapid changes and the intensification of competitions respectively.
・Key telephone system (+4)・Network devices (+2)
・Amusement business (-55)
Amusement market
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Security solution
field144
FY16/Mar FY17/Mar
1 billion yen1.6 billion yen Profit dropped 600 million yen.
[unit: 100 million yen]
Reduction in material
cost/streamlining of production
Drop in cost of purchase
Decrease in depreciation
Effect ofThe reform
Of the managementstructure
(annual net)
Augmentation of personnel …
Drop in sales/Change of
the product lineup
Upfront investment
R&D
-12
+2+2
+3
The efforts for curtailing cost by reducing material cost and streamlining product processes bore some fruit, but sales dropped considerably. Accordingly, profit declined 600 million yen.
+6
3.Major breakdown of the increase/decrease in consolidated operating profitOverview of the consolidated results for the Fiscal Year ended Mar. 2017
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-4
-3
4.Consolidated profits and lossesOverview of the consolidated results for the Fiscal Year ended Mar. 2017
FY16/MarResults
FY17/MarResults Change Increase/de
crease(A) (B) (B-A) Rate
Network solution field 258 260 2 1%
Security solution field 206 144 -62 -30%
Net sales 464 404 -60 -13%
Operating income 16 10 -6 -38%
Ordinary income 17 11 -6 -35%
Current net income that belongs to theshareholders of the parent company 5 5 -0 -0%
Current net income per share 8.86 yen 8.42 yen - -
ROE 2.3% 2.2% -0.1% -
Dividend 3 yen (estimated) 5 yen
Sales and profit dropped due to the significant changes in the market environment. For the term ended Mar. 2016, the special loss due to the reform of our management structure was posted, and so the current net income that belongs to the shareholders of the parent company for the Fiscal Year ended Mar. 2017 is at the same level as that for the Fiscal Year ended Mar. 2016. ROE, too, is at the same level, being 2.2%.
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[unit: 100 million yen]
Section of assets End ofFY16/Mar(A)
End ofFY17/Mar (B)
ChangeMain reasons for change(B-A)
Current assets 252 252 -0
Fixed assets, etc. 173 164 -9Decrease due to the depreciation of tangible fixed assets and the amortization of intangible fixed assets
Total assets 426 416 -10
Section of liabilities and net assets
End ofFY16/Mar(A)
End ofFY17/Mar (B)
ChangeMain reasons for change
(B-A)
Current liabilities 119 112 -7 Decrease due to the redemption of corporate bonds and the repayment of short-term debts
Fixed liabilities 85 77 -8 Decrease in long-term debts and liabilities for retirement benefits
Total liabilities 204 189 -15
Net assets 222 227 5 Increase in cumulative adjustment amount due to the posting of net profit and retirement benefits
Total liabilities and net assets 426 416 -10
Equity ratio 51.8% 54.3% 2.5%
5.Consolidated balance sheetOverview of the consolidated results for the Fiscal Year ended Mar. 2017
Assets decreased 1 billion yen through the streamlining of development, etc., liabilities dropped 1.5 billion yen due to the repayment of debts, etc., and net assets increased 500 million yen due to the posting of net income, etc. Consequently, total assets declined 1 billion yen.
[unit: 100 million yen]
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6.Consolidated cash flowsOverview of the consolidated results for the Fiscal Year ended Mar. 2017
[unit: 100 million yen]End of
FY16/MarEnd of
FY17/Mar
A.Cash flow from operating activities 24 37
Current net income before taxes and other adjustments 11 9
Depreciation 28 22
Change in working capital -5 5
Others -10 0
B.Cash flow from investment activities -17 -16
Payment for equipment investment -17 -16
Other investment activities - -
Free cash flow 7 21
C.Cash flow from financial activities 2 -10
Term-end balance of cash and cash equivalents 72 83
The term-end balance of cash and cash equivalents increased by 1.1 billion yen as there was expenditure for investment activities, but the current net income that belongs to the shareholders of the parent company and depreciation were posted.
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■ New mid-term managerial plan (the Fiscal Year ending Mar. 2018 to the Fiscal Year ending Mar. 2020)
1.Background of the revision to our mid-term managerial plan
2.Positioning of the new mid-term managerial plan
3.Outline of the new mid-term managerial plan
4.Target management indicators
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ResultsConsolidated sales: 46.4 billion yenConsolidated ordinary income: 1.7 billion yenROE: 2.3%
ResultsConsolidated sales: 40.4 billion yenConsolidated ordinary income: 1.1 billion yenROE: 2.2%
Term ended Mar. 2016
Term ended Mar. 2017
Term ending Mar. 2018
GoalsConsolidated sales: 46 billion yenConsolidated ordinary income: 1.5 billion yenROE: 2.3%
GoalsConsolidated sales: 55 billion yen or overConsolidated ordinary income:3 billion yen or overROE: 5% or higher ASAP
GoalsConsolidated sales: 47.5 billion yenConsolidated ordinary income: 2.1 billion yenROE: 4.2%
Goals achieved
Goals not achieved
1-1. Background of the revision to our mid-term managerial planMid-term managerial plan
0
50
100
150
200
250
300
350
400
450
500
Results forFY16/Mar
Initial forecastfor FY17/Mar
Results forFY17/Mar
464
404
■SI business: ▲800 million yen■Amusement business: ▲5.1 billion yen
475
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[unit: 100 million y
Development of a profitable management base for business growth
Return to a growth track
Existingbusiness
Design of a new mid-term managerial plan
1-2. Background of the revision to our mid-term managerial plan (changes in the business environment) Mid-term managerial plan
Significant changes in the business environment
Current situation Future
① The market will remain uncertain and unstable.② Competitions will remain fierce.③ Spread of digital transformation
① Downturn of the amusement market beyond expectation② Intensification of competitions in the System integration business③ Changes in the office and social infrastructure market environments
With the current business structure, it is difficult to implement the mid-term managerial plan.
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New mid-term managerial plan
Term ending Mar. 2018 → Term ending Mar. 2020Term ended Mar. 2016→
Old mid-term managerial plan
既存事業
Period for streamlining our business thoroughly and developing a foothold for growth
Activities in the new mid-term managerial plan
Activities in the old mid-term managerial plan
■Development of a management base for earning for business growth
■Return to a growth track
Beyond 2020
Redevelopment of our business structure・Expansion of our core business・Creation of new business・Streamlining of business
2. Positioning of the new mid-term managerial planMid-term managerial plan
Fortification of our business base・Optimization of group functions・Reduction in total cost・Improvement of the financial standing・Rationalization of personnel
Basic policies■Shift to a business that can grow sustainably■Reform to develop an ideal revenue structure
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Business expansionRedevelopment of our business structure・Expansion of core business・Creation of new business・Streamlining of business
3-1. Redevelopment of our business structureMid-term managerial plan
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New mid-term managerial plan
Old mid-term managerial plan
New
Video business
Existing business
Existing business
Amusement business
Network business for the office market
Network business for the office market
SIbusiness
Amusement business
SI business
既存製品+サービス 新規製品+サービス
New
channelE
xisting channel
Market cultivation
IP network Sensing Core technology
Existing products + services New products + services
Provision of differentiated products
Provision of new products + services
Cultivation of new channels by proposing solutions
Data analysis
Machine learningFailure prediction
R&D
Video accumulation
Cloud base
3-2. Expansion of our core business (Office market)Mid-term managerial plan
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Further market cultivationBusiness phone solution Network solution
3-3. Expansion of our core business (video business)Mid-term managerial plan
Core technology
Application services
IP network SensingVideo
accumulation
DistributionSocial infrastructure
Office Security
Target marketsTarget markets
Video compression Cloud base
R&DNVR
Network camera
+
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Creation of new business in the markets of social infrastructure, including transportation, medicine, and welfare
Creation of new business in the markets of social infrastructure, including transportation, medicine, and welfare
Requests from customers
PartnershipM&A
IoT servicesVideo solution
System integration
R&DImage analysis Data analysis
Core technologyIP network Sensing Video
accumulation
Cloud base
3-4. Creation of new businessMid-term managerial plan
Machine learning
Behavioral analysis
Biometric authentication
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v・Surveillance ・Crime prevention ・Marketing ・Customers
Video compression in the markets of transportation, social infrastructure, etc.
Features of our video compression system
Router Mobile networkPoE HUB Compression NVR
① Compress full HD videos to about 1/10 (transmittable via LTE lines) ② Compress the videos taken with multiple cameras at the same time ③ The viewer and CODEC are unchanged.
Surveillance with high-resolution cameras
Long-time recordingLow capacity, low cost
Browsing with a smartphone
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3-5. Concrete example of our core business (video business)Mid-term managerial plan
vVideo services in the markets of transportation, social infrastructure, etc.
・Surveillance ・Crime prevention ・Marketing ・Customers
① Detection of violating vehicles(Even running vehicles can be checked.)
② Detection of unregistered vehicles
Facility/parking lot
Features of our number recognition system
③ Management of vehicles entering and leaving a factory
Road
Factory
Analysis and study
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3-6. Creation of new business (video solution examples)Mid-term managerial plan
vIoT-based smart care services in the markets of medicine, social infrastructure, etc.
Biometric sensor
Camera (image)
Microphone (sound)
OP device control
Learned data
Mobile GW
Lifelogging service (example)
The elderly Health condition analysis Recommendation menu Recreation
Menu
IoT
Analysis and study
AI
・Device management・Security
Platform
Services
AI marketing
Sensor
Camera
・Medicine ・Follow-up ・Sports
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3-7. Creation of new business (examples of IoT services)Mid-term managerial plan
1.Optimization of group functions
① SAXA Inc., a primary operating company・Reform of the business promotion system by organizing divisions
according to function rather than business・Separation of a new business cultivation division as an independent one
② Revision to the allocation of managerial resources for redeveloping ourbusiness structure
2.Reduction in totalcost
① Continued reduction of total cost for the processes of development, procurement, production, sale, and maintenance
② Reduction of leakage cost ③ Improvement of development productivity and quality
3.Improvement of financial standing
① Improvement in the efficiency of capital, development, and investment② Reduction in inventory assets③ Optimization of the cash position and reduction in interest-bearing debts
4.Rationalization ofpersonnel
① Development and securing of personnel for responding to the changes in business structures and business transformation
3-8. Major activities for “strengthening our management base”Mid-term managerial plan
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セキュリティソリューション分野
4. Target management indicatorsMid-term managerial plan
Goals for the Fiscal Year ending Mar. 2020Consolidated sales: 46 billion yen, consolidated ordinary income:
2 billion yen, ROE: 5% or over
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Goals forFY20/Mar
Results forFY17/Mar 64%
72%
12%
19%
24%
9%
19%
28%
Network solution field
Amusement
Core business (office networks and video), new business
40.4 billion yen
46 billion yen
Security solution field
■ Consolidated earnings forecast for the Fiscal Year ending Mar. 2018
1.Estimated consolidated sales
2.Estimated consolidated profit/loss
3.Investment plans
The figures and ratios in this document have been rounded off to the indicated.
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1-1. Estimated consolidated salesConsolidated earnings forecast for the Fiscal Year ending Mar. 2018
[unit: 100 million yen]FY17/Mar
ResultFY18/MarForecast
Year-over-yearChange
Increase/decrease
(A) (B) (B-A) Rate
Key telephone systems 142 137 -5 -4%
Network equipment ,etc. 118 125 7 6%
Network solution field 260 262 2 1%
Security systems 73 77 4 5%
Parts, etc. 71 71 0 0%
Security solutions field 144 148 4 3%
Total 404 410 6 1%
Sales are estimated to increase 600 million yen, as the business of offering products and services for offices and video services will expand through our efforts to grow our core business.
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FY17/Mar FY18/Mar41 billion yen40.4 billion yen 600 million yen
increase in sales
Office …
Video businessSI business Security
system
Parts, etc.
-9+4
±0
In the office market, the number of orders for OEM key telephone systems decreased, but the sales of network equipment are healthy. As for the video business, which is our core business, the number of orders is expected to grow, due to the enhanced promotion.
1-2. Major breakdown of the estimated increase/decrease in consolidated salesConsolidated earnings forecast for the term ending Mar. 2018
+7+4
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・Key telephone system (-5)・Network devices (+9)
[unit: 100 million yen]
・Amusement business(-4)
Amusement market
Network solution
field260
Security solution
field144
NetworkSolution
field262
Security solution
field148
[unit: 100 million yen]
FY17/MarResult
FY18/MarForecast Change Increase/
decrease
(A) (B) (B-A) Rate
Network solution field 260 262 2 1%
Security solution field 144 148 4 3%
Sales 404 410 6 1%
Operating income 10 6 -4 -40%
Ordinary income 11 6 -5 -45%Current net income that belongs to the shareholders of the parent company 5 3 -2 -40%
Current net income per share 8.42 yen 4.28 yen - -
ROE 2.2% 1.1% -1.1% -
Dividend (planned) 5 yen (forecasted) 3 yen
Sales are estimated to increase while profit is forecasted to decline, and ROE is projected to decrease to 1.1%, as the R&D for upfront investment for new business was posted. The dividend is estimated to be 3 yen, according to our dividend policy.
2-1. Estimated consolidated profit/lossConsolidated earnings forecast for the Fiscal Year ending Mar. 2018
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FY17/Mar FY18/Mar600 million yen1 billion yen 4 million yen
decrease in profit
[unit: 100 million yen]
Sales growth/changes in product
lineup
Reduction in material
cost/production streamlining
Streamlining of
development
Decrease in depreciation
Augmentation of SGA, etc.
Increase in procurement
cost
R&D for upfront
investment
Cost for restructuring
+3+1
+3
-3
We aim to increase profit by boosting sales, changing our product lineup, streamlining production and development processes, etc. However, the costs for sales, procurement, R&D for upfront investment, and restructuring will augment, decreasing profit. Accordingly, profit is forecasted to decline 400 million yen.
+1
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-2
-3
2-2. Major breakdown of the increase/decrease in estimated consolidated operating incomeConsolidated earnings forecast for the Fiscal Year ending Mar. 2018
-4
3. Investment plansConsolidated earnings forecast for the Fiscal Year ending Mar. 2018
FY17/MarResults (A)
FY18/MarForecast (B)
Change(B-A)
Capital investment (Tangible) 4 7 3
Capital investment (Intangible) 12 13 1
Total 16 20 4
R&D cost 47 45 -2
(R&D for upfront investment) (3) (6) (3)
Depreciation expenses 22 21 -1
[unit: 100 million yen]
We will secure the budget for investing in software, molds, etc. for developing new products and the upfront investment for creating new business.
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Technology to connect, and more aheadTowards realization of comfortable life, namelyassured, comfortable and convenient life, to further pass on to connect our technology with future of our customers, and that is SAXA.
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