NGK INSULATORS, LTD FY2023 1st Half Results
(from April 1, 2023 to September 30, 2023)
October 30, 2023
This is a translation of materials used for the analyst meeting held online, Japan on October 30, 2023
President
Shigeru Kobayashi
This document contains forward-looking statements that are based on management's expectations, estimates, projection and assumptions that were available and reasonable
at the time of release. Actual future results and trends may differ materially from those in the forecasts due to a variety of factors.
© 2023 NGK INSULATORS, LTD. All rights reserved. | 1 |
Agenda
Summary of financial results for FY2023 (1st Half results/Forecasts for FY2023)
Forecasts for Each Business Segment
Improving Enterprise Value
Capital Profitability and Growth Potential of Existing Business
Aiming for creation of new products ＆ businesses
R&D/ Capital Expenditures & Depreciation Costs
Promoting ESG Management
Capital Policy (Treasury Shares Purchase /Sustainable Finance)
Total Assets・Dividend／Summary of Cash Flow
© 2023 NGK INSULATORS, LTD. All rights reserved. | 2 |
Summary of Financial 1st Half Results for FY2023
FY2022
（Bln. Yen） 1st half
Announcement
April
FY2023 | YOY Change |
1st half | FX Impact Growth ratio |
Net sales Operating Income Ordinary Income
Net income Attributable to Owners of the Parent
274.7
38.8
34.5
26.5
265.0
25.0
23.0
16.0
282.9
32.5
28.9
18.2
＋9.4 ＋ 3％
＋2.6 -16％
-16％
-31％
Exchange | USD | 133yen |
Rate | EUR | 139yen |
(130yen)
(140yen)
141yen ＋8yen
154yen ＋15yen
Sales Increased; Operating Income Decreased Year on Year.
Sales and Income Decreased compared to the April Announcement.
■ Environment | Both sales and income increased due to a rise in demand resulting from higher sales quantities of trucks |
in China and the strengthening of emissions regulations in addition to a recovery in automotive | |
production against the background of an easing of component shortages including semiconductors. |
■Digital Society
Both sales and income decreased as demand for semiconductor manufacturing equipment products and electronic components decreased due to the stagnation of investment in semiconductors and data centers.
■Energy & Industry | There was an increasing in sales, and profitability was improved, reflecting insulator's price revisions | |
and stable demand in its market in the U.S. | ||
© 2023 NGK INSULATORS, LTD. All rights reserved. | 3 |
Forecasts for FY2023
（Bln. Yen） FY2022
Announcement
April
FY2023 | YOY Change |
FX Impact Growth ratio |
Net sales | 559.2 | 575.0 | ＋13.8 | ＋3％ | ||
565.0 | ||||||
Operating Income | 66.8 | 62.0 | +3.9 | -7％ | ||
56.0 | ||||||
Ordinary Income | 65.9 | 58.0 | -12％ | |||
53.0 | ||||||
Net income Attributable | 55.0 | 39.0 | ||||
38.5 | rates in 2nd half | |||||
to Owners of the Parent | ||||||
Assumed exchange -29％ | ||||||
Exchange | USD | 135yen | (130yen) | 141yen | 140yen | ＋6yen |
Rate | EUR | 141yen | (140yen) | 152yen | 150yen ＋11yen |
Sales Increased; Operating Income Decreased Year on Year.
Sales and Income Decreased compared to the April Announcement.
■Environment
Both sales and income are expected to increase due to a recovery in automotive production associated with the easing of component shortages, which continued from the first half of the fiscal year, higher sales volumes of trucks in China and the positive effect of the weak yen.
■Digital Society
Both sales and income are expected to decrease due to a decline in demand as the stagnation of investment in semiconductors and data centers will continue and a market recovery will be delayed further than assumed at the beginning of the fiscal year.
■Energy & Industry | Sales are expected to increase and losses to fall, with business breaking even due to insulator's price | |
revisions and demand in the U.S. being steady, and demand for Industrial heating systems for Lithium- | ||
ion battery cathode materials increasing. | 4 | |
© 2023 NGK INSULATORS, LTD. All rights reserved. |
Sales Change Analysis for FY2023
（Bln. Yen）
© 2023 NGK INSULATORS, LTD. All rights reserved. | 5 |
Operating income Change Analysis for FY2023
（Bln. Yen）
© 2023 NGK INSULATORS, LTD. All rights reserved. | 6 |
Forecasts for the Environment Business
- Automotive Related
Both sales and income are expected to increase compared to the April forecast as demand increases due to the increase in truck and off-road vehicle sales in China, and with the added positive effect of the weak yen. Demand for products for passenger vehicles will increase compared with the previous year due to the global increase in passenger vehicle sales and the strengthening of China's emissions regulations. In addition, demand for products for trucks and off-road vehicles is expected to increase due to the strengthening of China's off-road emissions regulations and in increase in the number of trucks sold in China.
| Honeycomb filters/GPF | : As expected at the beginning of the term, demand has remained strong generally, and sales increased |
(for gasoline fueled vehicles) | compared to the April forecast due to the effect of the weak yen. | |
| SiC-DPF | : Sales increased from the April forecast as demand increased more than initially expected in China due to |
(for diesel passenger vehicles/trucks) | the strengthening of off-road emissions regulations. | |
| Sensors | : Sales decreased slightly from the April forecast due to a slight decrease in volume in association with |
(for diesel passenger vehicles/trucks) | customer inventory adjustments. | |
| Cd-DPF/LSH | : Product demand increased from the April forecast due to an increase in truck sales in China. Sales also |
(for trucks) | increased due to the effect of the weak yen. |
© 2023 NGK INSULATORS, LTD. All rights reserved. | 7 |
The future perspective for the EN Business
〔Forecast for Automobile Sales〕 (NGK's Est) | 〔Forecast for emission regulations〕 (NGK's Est.) |
The EV ratio is virtually unchanged from the April forecast, and demand for the company's products is expected to remain at a certain level due to the introduction of new products with more advanced functions in response to the strengthening of emissions regulations in various countries.
The impact of the new emission regulation in Europe, Euro7
Launching GPF with Surface Adsorption Layer
(High value-added products )
In the European market, the new Euro 7 emissions regulations, which are scheduled to be introduced in 2025, will tighten regulations on the number of particulate material (PM) emissions.
In response, we have already developed and implemented a highly functional GPF product with a highly effective surface collection layer. We will promote our high-value-addedproducts
not only for passenger cars, but also for trucks
and off-road vehicles.
© 2023 NGK INSULATORS, LTD. All rights reserved.
Business Scale of NOx Sensor for Gasoline
Under the new Euro 7 emissions regulations, Continuous NOx Monitoring will be obligatory concerning gasoline engine. Demand for the NOx sensors for gasoline developed by the company is expected to materialize, and the scale of the business is expected to be larger than initially forecast.
We will capture demand with certainty while optimizing our production system
8
Forecasts for the Digital Society Business
- SPE Related (Components for semiconductor production equipment)
-
Demand for semiconductors has remained sluggish with the continued slump in smartphone and PC sales since last year. Although there are positive impacts from sales price revisions and the effect of the weak yen, long-term stagnation and a delay in the timing of recovery are clear with regard to demand for semiconductor manufacturing equipment, and sales and income are expected to decrease in comparison to the April forecast with demand also decreasing.
Although the sector will get back into form gradually from the end of the fiscal year, full-scale recovery is expected from next term on.
-
Demand for semiconductors has remained sluggish with the continued slump in smartphone and PC sales since last year. Although there are positive impacts from sales price revisions and the effect of the weak yen, long-term stagnation and a delay in the timing of recovery are clear with regard to demand for semiconductor manufacturing equipment, and sales and income are expected to decrease in comparison to the April forecast with demand also decreasing.
- Electronic Components
- Demand for piezoelectric element products for HDDs has decreased as data center investment has been curbed temporarily due to concentrated investment in AI infrastructure. Although it is anticipated that data center investment will resume gradually in the new year and demand will increase over the medium to long term, sales are expected to decrease in comparison to the April forecast.
- Sales of ceramic packaging for crystals are expected to decrease in comparison to the April forecast due to a delay in the recovery of smartphone sales in China.
- Metal Related
- Although product demand is on a recovery trend, sales are expected to decrease in comparison to the April forecast due to supply chain inventory adjustments.
© 2023 NGK INSULATORS, LTD. All rights reserved. | 9 |
The future perspective for the DS Business
- Components for semiconductor manufacturing equipment(SPE) ■ Electronic Components （Piezoceramic Actuators for HDD ）
〔Expected sales volume of HDD installed
in near-line servers〕
Due to the sluggishness of demand for semiconductors, WFE investment in fiscal year 2023 is expected to be lower than the March forecast. Although it is expected to recover from fiscal year 2024, the record high level of fiscal year 2022 will only be exceeded from fiscal year 2025 on. We will continue to invest for increased production to ensure that we capture demand for the company's products when the market expands again due to the progress in society of digitalization.
© 2023 NGK INSULATORS, LTD. All rights reserved.
The world's smallest multilayer piezoelectric actuator, which is used in the precise positioning of hard disk drives (HDD). These have been adopted widely in HDDs for nearline servers, contributing to their larger capacity.
Major US hyperscalers are currently holding back on data center investment, but demand for HDDs for nearline servers is expected to increase over the medium to long term as they resume data center investment aimed at the full-scale social implementation of AI learning data and the metaverse.
■ Special metals and molds（Beryllium copper products）
Industrial facilities
(For Semiconductors・LiB)
Semiconductor | Li battery |
test socket | inspection terminal |
Automotive (EV-related)
EV power supply | ECU substrate | |
-to-substrate | ||
port connector | ||
connector | ||
The demand for beryllium copper is expanding not only for EV-related connector | ||
components but also for inspection purposes in semiconductors and Li-batteries. | 10 |
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Disclaimer
NGK Insulators Ltd. published this content on 02 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 November 2023 08:41:51 UTC.
