YOKOGAWA ELECTRIC CORPORATION Yokogawa Electric Corporation
Yokogawa Industrial AutomationReduce blind spots Avoid surprises Preempt bottlenecks
October 31, 2014
Takashi Nishijima
President and Chief Operating Officer
Contents 1. Present Business Environment① FY14 Revised Forecast, Dividend
② Two Major Challenges
③ Enhanced Measures for Improving Profitability
2. Yokogawa Industrial Automation－Solutions Service Business－
P.2
P.5
① Present Business Model and Solutions Service Business
② Differences Between Non-Japan and Japan Businesses
③ Developing Vertically and Horizontally to Expand Business
④ Yokogawa's Strengths
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① FY14 Revised Forecast, Dividend (Billion ¥)
＜FY14 forecast＞
FY13
results
FY14
revised forecast
Difference Growth rate
Orders | 406.0 | 417.0 | 11.0 | 2.7% |
Sales | 388.5 | 400.0 | 11.5 | 3.0％ |
Operating income | 25.9 | 28.0 | 2.1 | 8.1％ |
Ordinary income | 25.7 | 26.0 | 0.3 | 1.2％ |
Net income | 12.3 | Not finalized | － | － |
Exchange rate 1$= (¥) 1€= | 100.67 yen 135.24 yen | 100.00 yen 135.00 yen | -0.67 yen -0.24 yen | - 0.1% - 0.2% |
＜FY14 dividend＞ ６yen
14.0
We are soliciting applications from
1H 2H Total
employees for a voluntary retirement
program. The number of applicants is not
６yen
Not finalized
Not finalized
yet known, and therefore it is difficult to rationally assess extraordinary losses.
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② Two Major Challenges
・Intensifying competition in high-growth
markets outside Japan
・Structural change in Japan
・Structural change in control business
A tough situation for securing a profit
Two major challenges
・Business restructuring must outpace rapid market change
・Achieving real growth (excluding impact of exchange rates)
Priority measures:
1. Measures for accelerating growth ２. Enhanced measures for improving
profitability
2-1. Reduce costs for Japan business
1-1. Establish solutions service business model
and expand business
1-2. Expand product portfolio for focus industries
1-3. Inject resources in high-growth markets
2-2. Enhance cost competitiveness（mainly
Japan production costs）
2-3. Improve efficiency through global
optimization
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③ Enhanced Measures for Improving Profitability
2-1. Reduce costs for Japan business
■Review current business
processes and functions, and
optimize cost structure
Solicitation of applications for voluntary retirement program
2-2. Enhance cost competitiveness（mainly Japan production costs）
■Improve efficiency at main Japan factory
2-3. Improve efficiency through global optimization
■Strengthen global effort to reduce procurement costs
■Make more effective use of global engineering resources
Achieve sustainable growth
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－Solutions Service Business－
① Present Business Model and Solutions Service Business
Greenfield Brownfield
Business planning
Design/
construction
Operation
Replace or scrap
Plant lifecycle
Operation
【Our main solutions and services】
FEED
Basic design
【Conventional
services】
System upgrade /
modification to
Detailed design
Engineering
Combined test
Delivery, start-up
Maintenance
Annual maintenance contract
Hardware repair and replacement
System replacement
expand functions
Improvement of
- Efficiency
- Quality
- Safety
- Energy use
Replacement cycle
【Solutions service business】
Delivery and start-up of complete system
Optimize existing operations by providing mainly instrumentation solutions and services
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－Solutions Service Business－
② Differences Between Non-Japan and Japan Businesses
Greenfield Brownfield
Business planning
Design/
construction
Operation
Replace or scrap
Plant lifecycle
Operatio
【Non-Japan business】
・Increasing number of greenfield projects
→ Strong competition, somewhat lower gross margin
・Strengthen track record by getting more brownfield
projects
Forte industries
Limited: oil & gas, petrochemicals
Market share
Much room for growth
【Japan business】
・Mostly brownfield projects
→ Less competition, somewhat higher gross margin
This market expected to decline
Forte industries
- Many
Market share
- already high
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－Solutions Service Business－
③ Developing Vertically and Horizontally to Expand Business
【Manufacturing】
Experience, knowhow
【Non-manufacturing】
Management
Production planning, logistics
（ERP）
What produced
Operation
instruct report
Production process mgt.
management
（MES）
instruct
How produced report
Production Production process ctrl.
control
Increasingly complex, rapidly
Control systems/
field instruments
Rising need for flexibility, speed, and
changing business environment
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2014/10/31
efficiency through sharing and integration of
info at/between each level of organization
7
2. Our Industrial Automation－Solutions Service Business－
④ Yokogawa's Strengths
Prerequisite for integration of info from each level:
→ Detailed knowledge of customer operations
Management
Data
What produced
Operation
instruct report
Data
Sharing and integration of complex production data best
facilitated by vendor with
management
How produced
instruct report
detailed understanding of
customer operations
Production control
Data
Production
data
Yokogawa's strengths: Our extensive knowhow and experience in optimizing
customer operations, and having the right people who can put this to use.
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The information pertaining to our business plans and forecasts that
has been provided in this presentation and at analyst meetings contains forward-looking statements that are based on our management's current knowledge and require the making of assumptions about future events. As such, it cannot be guaranteed that these statements will not differ materially from actual results.
IR Group, Corporate Communication Department
Yokogawa Electric Corporation
Email: Yokogawa_Electric_IR6841@cs.jp.yokogawa.com
Phone: +81-422-52-5530
URL: http://www.yokogawa.com/pr/ir/index.htm
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