mid-term management plan 2020 - tsubakimoto...

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

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Review of Mid-Term Plan for 2016

Commemorating Our Centennial



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Mid-Term Management Plan 2020

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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


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

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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 6




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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


2016年3月23日

Transition to a market-oriented corporate culture

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① Creation of new products, new technologies, etc. (Chain)


(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)


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① Creation of new products, new technologies, etc. (PTUC)


(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)

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◆ 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.


Narrow space

Grease pocket

Grease does not flow into oil seal side.


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① Creation of new products, new technologies, etc. (Automotive Parts)


(1) Low-cost bush chain

(2) Low-wear Silent Chain

(3) New Mechanism: Ring-type tensioner

(4) Sprocket with rubber cushion


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① Creation of new products, new technologies, etc. (Materials Handling)


(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)


Expansion of overseas bases (Results for FY 2014 to FY 2016)

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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

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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


Estimate of Mid-Term Plan 2016

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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)


Pending issues for Med-Term Plan 2016

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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 17



Mid-term Management Plan 2020

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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


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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)


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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.


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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


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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 >


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◆ 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



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◆ 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


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◆ 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



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(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)


Mid-term Management Plan 2020: Basic Policies regarding ESG

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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


「Sales Breakdown by Business and Region

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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


Sales Breakdown by Business and Region

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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


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


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

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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.


Financial indicators



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TSUBAKI SPIRIT


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< 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


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