Sumitomo Heavy Industries : Presentation Material for the 1st Quarter of FY 2024

Financial Summary for Q1 FY2024

2024/4/26

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2024/4/26

Financial Summary for FY2024-1Q

Actual

FY2024-1Q

/Same period of

previous fiscal year

(change)

Year-on-year comparison

Orders：JPY 221.1 billion	/	260.0 billion （38.9）billion
Net sales：JPY 254.8 billion	/	248.2 billion	6.6 billion
Operating profit：JPY 18.4 billion	/	16.2 billion	2.3 billion
- Market environment	: While demand from North America was strong, the domestic market showed a
	gradual recovery but with weakening in some areas. Slowdowns persisted in
	Europe and China.
- Orders	: Decreased due to inventory adjustment in hydraulic excavators, a drop in
	demand for semiconductor-related products, and other factors.
- Net sales	: Increased year on year because backlog of orders led to sales increases in
	Energy & Lifeline and Logistics & Construction, although reductions were
	observed in Mechatronics and Industrial Machinery.
- Operating profit	: Increased year on year due to an increase in sales and foreign exchange profit.

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2024/4/26

Financial Summary for FY2024-1Q

	FY2023-1Q	FY2024-1Q	Year-on-
	Actual	Actual	year
Unit: JPY billion	(2023.1-2023.3)	(2024.1-2024.3)	change
Orders	260.0	221.1	(38.9)
Net sales	248.2	254.8	6.6
Operating profit	16.2	18.4	2.3
Operating profit ratio	6.5%	7.2%	-
Ordinary profit	16.4	18.8	2.4
Ordinary profit ratio	6.6%	7.3%	-
Extraordinary loss	(0.1)	(0.2)	(0.0)
Current profit	10.8	13.6	2.8
Current profit ratio	4.4%	5.3%	-
Currency exchange rate	¥132	¥150	-
(US dollars)

	FY2023	Forecast
	FY2024
	Actual
	(2024.1-2024.12)
(2023.1-2023.12)
		(As of February 2024)
	1,008.7	1,120.0
	1,081.5	1,110.0
	74.4	70.0
6.9%	6.3％
	70.2	66.0
6.5%	5.9％
	(18.8)	(5.0)
	32.7	41.0
	3.0%	3.7％
¥139	￥135

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2024/4/26

Performance by Segment for FY2024-1Q

			Orders			Net sales				Operating profit
		1Q FY2023	1Q FY2024		1Q FY2023	1Q FY2024		1Q FY2023	1Q FY2024
		Change	Change	Actual	Actual		Change
	Unit: JPY billion	Actual	Actual		Actual	Actual		/Operating profit ratio	/Operating profit
								(%)	ratio (%)
Mechatronics	51.8	47.2	(4.5)	53.2	49.4	(3.8)	3.2		6.0	1.7		3.4	(1.5)
	(Plastics machinery)	22.0	20.7	(1.3)	25.8	20.3	(5.5)
	(Others)	48.4	41.8	(6.6)	42.6	46.2	3.6
Industrial Machinery	70.5	62.5	(7.9)	68.4	66.5	(1.9)	7.1		10.4	6.2		9.3	(0.9)
	(Hydraulic excavators)	61.8	39.2	(22.6)	54.8	55.1	0.3
	(Others)	36.6	45.5	8.9	33.0	39.4	6.4
Logistics & Construction	98.4	84.7	(13.6)	87.8	94.5	6.7	6.0		6.8	9.2		9.8	3.3
Energy & Lifeline	37.7	25.0	(12.8)	37.4	42.9	5.4	(0.5)		(1.4)	0.9		2.0	1.4
Others	1.6	1.6	0.1	1.5	1.6	0.2	0.5		-	0.5		-	0.0
Total	260.0	221.1	(38.9)	248.2	254.8	6.6	16.2		6.5	18.4		7.2	2.3

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2024/4/26

Analysis of Changes in Operating Profit for 2024-1Q

Unit: JPY billion

	Effect of sales		Effect of exchange
	increases/decreases		rates
	Unit: JPY billion
Mechatronics
(1.0)
Industrial Machinery	0.6
Logistics & Construction	1.4
Energy & Lifeline	(0.4)

Selling & administrative	Others
expenses

• Costs related to personnel, research and development and the resumption of economic activities all increased.

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2024/4/26

Consolidated Balance Sheet

Unit: JPY billion	December 2023	March 2024	Change
Current Assets	748.3	789.8	41.6
Cash and deposits	104.5	118.4	13.9
Notes and accounts	289.9	287.3	(2.6)
receivable
Inventories	321.1	347.6	26.5
Others	32.9	36.6	3.7
Non-current Assets	452.6	464.2	11.7
Property, plant and	330.0	340.7	10.7
equipment
Intangible assets	45.6	46.9	1.3
Investments and	77.0	76.6	(0.3)
other assets
Total	1,200.9	1,254.1	53.2

Unit: JPY billion	December 2023	March 2024	Change
Liabilities	573.4	604.9	31.5
Notes and accounts payable	180.8	174.7	(6.2)
- trade
Interest-bearing debts	162.2	203.6	41.4
Others	230.3	226.7	(3.7)
Net Assets	627.5	649.1	21.7
Shareholders' equity	488.5	493.2	4.7
Accumulated other	131.3	147.6	16.3
comprehensive income
Non-controlling interests	7.7	8.4	0.7
Total liabilities and net assets	1,200.9	1,254.1	53.2
Net interest-bearing debts ratio	4.8%	6.8%	2.0%
Shareholders' equity ratio	51.6%	51.1%	(0.5%)

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2024/4/26

Mechatronics

1Q FY2024: Orders, sales, and operating profit all decreased due to a continuing slowdown in the Chinese market for small-to-medium sized gear reducers and lower demand for motors and inverters attributable to inventory adjustments by customers in Europe.

		Actual	Actual	Year-on-year		Actual FY2023	Forecast FY2024
		1Q FY2023	1Q FY2024
		change		(2023.1-2023.12)	(2024.1-2024.12)
	Unit: JPY billion	(2023.1-2023.3)	(2024.1-2024.3)
	Orders	51.8	47.2	(4.5)		197.8	221.0
	Net sales	53.2	49.4	(3.8)		220.0	213.0
	Operating profit	3.2	1.7	(1.5)		12.4	10.0
	Operating profit	6.0	3.4	-	5.6	4.7
	ratio (%)
	Backlog of orders	107.7	90.3	-	92.5
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2024/4/26

Industrial Machinery

1Q FY2024 : Orders, sales and operating profit all decreased due to a slowdown in demand centering on electric and electronics-related products in China and continuing sluggish investment in Europe.

1Q FY2024：Orders decreased due in part to inventory adjustment and postponement of investment by customers resulting from softening of the semiconductor market. However, both sales and operating profit increased partly because there was a huge backlog of orders.

		1Q FY2023	1Q FY2024	Year-on-year
		Actual	Actual
		change
	Unit: JPY billion	(2023.1-2023.3)	(2024.1-2024.3)
	Plastics machinery	22.0	20.7	(1.3)
	Others	48.4	41.8	(6.6)
Orders	70.5	62.5	(7.9)
	Plastics machinery	25.8	20.3	(5.5)
	Others	42.6	46.2	3.6
Net sales	68.4	66.5	(1.9)
Operating profit	7.1	6.2	(0.9)
Operating profit ratio (%)	10.4	9.3	-
Backlog of orders	193.5	177.6	-

FY2023	Forecast
Actual	FY2023
(2023.1-2023.12)	(2024.1-2024.12)
89.3	102.5
175.6	184.5
265.0	287.0
97.1	95.0
182.8	190.0
279.8	285.0
25.6	26.0
9.1	9.1
181.5

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2024/4/26

Logistics & Construction

1Q FY2024 : Orders decreased due to a decline in response to a significant number of advance orders in Japan during the previous fiscal year and inventory adjustments in the US.

Sales were largely unchanged from the previous year, while operating profit increased in part due to price revisions in Japan.

1Q FY2024 : Mobile cranes saw increases in all of orders, sales, and operating profit because demand remained strong in North America.

For industrial cranes, orders increased due to large-scale projects for iron manufacture and shipbuilding, but sales and operating profit decreased because there were few projects that could be factored into sales in the current fiscal year.

		1Q FY2023	1Q FY2024	Year-on-year
		Actual	Actual
		change
	Unit: JPY billion	(2023.1-2023.3)	(2024.1-2024.3)
	Hydraulic excavators	61.8	39.2	(22.6)
	Others	36.6	45.5	8.9
Orders	98.4	84.7	(13.6)
	Hydraulic excavators	54.8	55.1	0.3
	Others	33.0	39.4	6.4
Net sales	87.8	94.5	6.7
Operating profit	6.0	9.2	3.3
Operating profit ratio (%)	6.8	9.8	-
Backlog of orders	258.7	248.2	-

FY2023	Forecast
Actual	FY2024
(2023.1-2023.12)	(2024.1-2024.12)
212.5	260.0
181.1	159.0
393.6	419.0
242.4	271.0
151.0	157.0
393.4	428.0
28.1	31.5
7.1	7.4
257.9

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2024/4/26

Energy & Lifeline

1Q FY2024: For energy plants, orders decreased due to a reduction in service projects in Europe. However, variations in the progress of construction work led to an increase in sales, and operating profit remained unchanged from the previous fiscal year.

For other businesses, order decreased partly as a result of the suspension of new shipbuilding orders from FY2024 onward. Sales and operating profit increased because of a backlog of orders.

		1Q FY2023	1Q FY2024	Year-on-year		FY2023 Actual	Forecast FY2024
		Actual	Actual
		change		(2023.1-2023.12)	(2024.1-2024.12)
	Unit: JPY billion	(2023.1-2023.3)	(2024.1-2024.3)
	Orders	37.7	25.0	(12.8)		146.3	189.0
	Net sales	37.4	42.9	5.4		182.2	181.0
	Operating profit	(0.5)	0.9	1.4		6.3	1.0
	Operating profit	(1.4)	2.0	-	3.5	0.6
	ratio (%)
	Backlog of orders	259.7	210.4	-	228.3
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