Financial Resultsfor FY 2019 Second Quarter11/8/2018
F-TECH Inc.
TSE 1st Section ：7212
http://www.ftech.co.jp
Copyright(c) 2018 F-TECH INC. All Right Reserved1Table of Contents

1. Financial Results
Overview
2. Earnings Forecast
3. Business Strategy
4. Topics

Yuichi Fukuda
President & CEO
Copyright(c) 2018 F-TECH INC. All Right Reserved

2

Table of Contents

1. Financial Results
Overview
2. Earnings Forecast
3. Business Strategy
4. Topics

Yuichi Fukuda
President & CEO
Copyright(c) 2018 F-TECH INC. All Right Reserved3Consolidated Financial Results Overview (Year on Year)(Unit: M Yen)

FY 2018 Q2 Actual

FY 2019 Q2 Actual

Difference

107,511―

115,393―

Operating Income

3,902

3.6%

2,995

2.6%

▲907 ▲23.3%

Income before tax

3,248

3.0%

2,567

2.2%

▲680 ▲20.9%

Profit Attributableto owners of parent

1,969

1.8%

1,398

1.2%

▲570 ▲29.0%

Earnings per share(Yen)

114.89―74.89―▲40.00 ▲34.8%

Sales

7,882

7.3%

Foreign Exchange Impact

FY 2018 Q2 Actual

FY 2019 Q2 Actual

Difference

1US$111.29 Yen

110.71Yen▲0.58 Yen

1CAN$86.16 Yen85.08 Yen▲1.08 Yen

1Yuan(RMB)

16.37 Yen

17.00 Yen

0.63 Yen

Increase in sales and decrease in profit.
(Sales increased by tooling sales, but profit decreased mainly because production of highmargin products ended.)
Copyright(c) 2018 F-TECH INC. All Right Reserved4

Consolidated sales by Segment (Year on Year)(Unit ：M yen)

120,000
100,000

Share of Sales (%)

Consolidated sales by segment
107,511
115,393
Japan 15,108

Japan 12.5%

Japan 13.1%

N. America
66,855

N. America
59.8%

N. America
57.9%

Asia 29,795

Asia 33,429

Asia 27.7%

Asia 29.0%

FY 2018 Q2 Actual

FY 2019 Q2 Actual

FY 2018 Q2 Actual

FY 2019 Q2 Actual

Japan 13,393

80,00060,000N. America
64,322(Japan)
0.6%
Increase(N. America)▲1.9%
Decrease

40,00020,0000(Asia)
1.3%
Increase

FY 2018 Q2Actual

FY 2019 Q2Actual

Difference

Difference(%)

FX Impact

Net
Difference

Difference
(%)

Japan

13,393

15,108

1,715

12.8%

－1,715

12.8%

N. America

64,322

66,855

2,533

3.9%

▲851

3,384

5.3%

Asia

29,79533,429

3,633

12.2%

997

2,636

8.8%

Consolidated

107,511115,393

7,882

7.3%

146

7,736

7.2%

Sales increase in all segments (Biggest contributors are NA in money amount, Japan in percentage)
Copyright(c) 2018 F-TECH INC. All Right Reserved

5Operating Income by Segment (Year on Year)(Unit ：M Yen)

Operating Income

Share

FY 2018 FY 2019
Q2
Q2
Difference
ActualActualDifference(%)

FY 2018
Q2
Actual

FY 2019
Q2
ActualDifference
(%)

Japan

935232▲703▲75.2%

24.0%

7.8%

▲16.2%

N. America

727

▲319

▲1,046▲143.9%18.6%▲10.7%▲29.3%

Asia

2,297

2,810

512

22.3%

58.9%93.8%

35.0%

Total

3,960

2,723

▲1,237▲31.2%

101.5%

90.9%▲10.6%

Adjustment▲57271329-%

▲1.5%

9.1%

10.6%

Consolidation

3,9022,995▲907▲23.3%

100.0%

100.0%

0.0%

Copyright(c) 2018 F-TECH INC. All Right Reserved

6

Table of Contents

1. Financial Results
Overview
2. Earnings Forecast
3. Business Strategy
4. Topics

Yuichi Fukuda
President & CEO
Copyright(c) 2018 F-TECH INC. All Right Reserved

7

Consolidated Results Forecast Overview (FY 2019 for the Full Year)(Unit ：M Yen)

FY 2019
Previous ForecastFY 2019
Current Forecast

Difference

226,000―

233,000

―

7,000

3.1%

Operating profit

7,500

3.3%

6,500

2.8%

▲1,000▲13.3%

Profit before tax

6,600

2.9%

5,600

2.4%

▲1,000▲15.2%

Profit attributable toowners of parent

4,000

1.8%

3,100

1.3%

▲900

▲22.5%

Earnings per share(Yen)

214.15―165.97―▲48.18▲22.5%

Sales

Foreign Exchange
ImpactPrevious Forecast

Current Forecast

Difference

1US$

105.00 yen

107.86 yen

2.86 yen

1CAN$

81.00 yen

83.04 yen

2.04 yen

1Yuan(RMB)

16.60 yen

16.73 yen

0.13 yenIncrease in sales and decrease in profit (Mainly foreign exchange impacts)
Copyright(c) 2018 F-TECH INC. All Right Reserved8

Consolidated Sales by Segment (FY 2019 Forecast for the Full Year)(Unit ：M Yen)

Consolidated Sales by Segment

226,000
Japan 33,331

200,000
150,000

N. America
126,182

Share of Sales (%)

233,000
Japan 33,606

Japan 14.8%

Japan 14.4%

N. America
132,326

N. America
55.8%

N. America
56.8%

100,000
50,000Asia 66,485

Asia 67,066

Asia 29.4%

Asia 28.8%

Previous Forecast

Current Forecast

Previous Forecast

Current Forecast(Japan)▲0.4%
Decrease(North America)
1.0%
Increase(Asia)▲0.6%
Decrease

0Changes in Consolidated Sales
Previous
Forecast

Current
Forecast

Difference

Difference(%)

FX Impact

Net
Difference

Difference
(%)

Japan

33,33133,606

274

0.8%

－274

0.8%

N. America

126,182

132,326

6,143

4.9%

3,471

2,671

2.1%

Asia

66,48567,066

581

0.9%

647

▲66

▲0.1%

Consolidated

226,000

233,000

7,000

3.1%

4,119

2,880

1.3%

Sales increased (Incrase in Japan and N.America, as planned in Asia)
Copyright(c) 2018 F-TECH INC. All Right Reserved

9Operating Profit by Segment (FY 2019 Forecast for the Full Year)(Unit ：M Yen)

Operating Income
FY 2019
Previous
forecast

FY 2019
Current
forecast

Japan332

NorthAmerica

Share

Difference

Difference(%)

FY 2019
Previous
forecast

482

150

45.1%

4.4%

7.4%

3.0%

1,723

669

▲1,054▲61.2%

23.0%

10.3%

▲12.7%

Asia

5,955

5,299

▲655

▲11.0%

79.4%

81.5%

2.1%

Total

8,012

6,451

▲1,560▲19.5%

106.8%

99.3%

▲7.5%

Adjustment

▲512

48560

109.4%

▲6.8%

0.7%

7.5%

Consolidated

7,500

6,500

▲1,000▲13.3%

100.0%

100.0%－Copyright(c) 2018 F-TECH INC. All Right Reserved

FY 2019
DifferenceCurrent(%)
forecast

10Changes in Sales by Customer
100%
90%

172,456
3.9%

175,579
3.9%

196,343
3.5%

197,941
3.9%

4.4%

4.0%

3.8%

3.5%

8.6%

9.5%

80%

10.9%

12.0%

226,060
3.4%
3.5%

11.4%

233,000
3.4%
4.2%
3.1%
12.7%

Other
FTC

Suzuki
Mitsubishi
ToyotaNissan

70%

GM
Honda

79.9%

79.0%

77.6%

76.4%

75.2%

72.7%

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2014
137,708
14,8807,5365,209370
127

FY 2015
138,635
16,622
7,024
5,875
526
135

FY 2016
152,435
21,345
7,435
6,204
1,803
321

6,626
172,456

6,762
175,579

6,800
196,343

FY 2017
151,282
23,683
6,985
5,658
2,036
197
373
7,728
197,941

FY 2018
170,089
25,782
7,957
6,428
2,648
269
5,183
7,705
226,060

FY 2019
169,339
29,480
7,257
6,117
2,668
540
9,828
7,771
233,000

60%
50%

Honda
GM
NissanToyotaMitsubishi
Suzuki
FTC (New)
Other

Copyright(c) 2018 F-TECH INC. All Right Reserved

11Financial Position
Total Asset

Capital Investment

Depreciation

Interest-Bearing Debt

(Unit ：M Yen)
Dependence on
Interst-Bearing Debt

160,000

50.0%

140,000
40.0%

120,000
100,000

30.0%

80,00020.0%

60,00040,000

10.0%

20,0000Total Asset
Capital Investment
Depreciation
Interest-Bearing Debt
Dependence on
Interst-Bearing Debt

FY 2014111,062
12,715
7,508
44,679FY 2015
132,697
14,9878,920
56,570FY 2016
137,980
20,57810,081
58,686

FY 2017
144,420
14,094
10,33559,129FY 2018
150,525
12,436
11,66759,508FY 2019
144,414
10,065
11,653
52,776

40.2%

42.6%

42.5%

40.9%

39.5%

36.5%

Copyright(c) 2018 F-TECH INC. All Right Reserved

0.0%

12

Table of Contents

1. Financial ResultsOverview
2. Earnings Forecast
3. Business Strategy
4. Topics

Yuichi Fukuda
President & CEO
Copyright(c) 2018 F-TECH INC. All Right Reserved

13Midterm Three-Year Plan - Basic policy Corporate Policy
FY 2017

FY 2018

FY 2019

FY 2020
Achieving strong financial
positions and highprofitability

Actuals

TargetConsolidated Sales

ConsolidatedSales

Operatingprofit ratio

197.9 B Yen

Interest bearing debtratio

Operatingprofit ratio

212 B Yen

interest bearing debt
ratio

 Provide our customers with excellent value Production plants to maximize the profit
 Support function to minimize the cost and provide production plants with value
 Establish strong financial positions
 Acquire and expand new customers
 Propose new breakthrough products
 Establish new technologies and new processing methods
 Plan and execute new business opportunities

Copyright(c) 2018 F-TECH INC. All Right Reserved

14Midterm Three-Year Plan - Overview -Japan

N. America

ChinaAsia

Sales

Maintain current business, acquire new business

R&D

Efficient development with minimum cost and time

Manufacturing

Support stable new model startups, share the knowhow of high efficiency and high quality

Purchasing

Reduce purchase cost and logistic cost

EGAchieve lower equipment cost and high efficient processing methods

Administration

Enhance corporate governance, manage the risks, develop human resources

Planning

Analyze financial statements, suggest to improve profitability, follow up

Provide production plants with value

Enhance communication from Japan

Manufacturing plants to achieve midterm targets as profit center
Copyright(c) 2018 F-TECH INC. All Right Reserved

15Midterm Three-Year Plan - Targets Sales

Operating profit

Billion yen

Operationg profit ratio

Billion yen

220.0
200.0

Operating profit

209.0
197.9

207.0

212.0

12.0

10.5

10.0

9.0
8.0

180.0

8.0

160.0

6.0

140.0

4.0

120.0

2.0

100.0

8.0%

8.0

6.0%

4.1%

3.8%

Mar 2017
ActualMar 2018

4.3%

5.0%

Mar 2018

Mar 2019

Mar 2020

Investment plan

Billion yen

20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0

160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0

14.1

13.7

13.0
11.0Mar 2017
Actual0.0%

Mar 2019

Interest-bearing debt ratio

Billion yen

Mar 2018

Mar 2019

Mar 2020

4.0%
2.0%

0.0
Mar 2017
Actual

10.0%

144.4

146.9

Mar 2020

Total Assets
Interest-bearing debt
Interest-bearing debt ratio

140.0

140.0

59.1

58.0

54.6

49.0

40.9%

39.5%

39.0%

35.0%

Mar 2017
ActualMar 2018

Mar 2019

Mar 2020

Copyright(c) 2018 F-TECH INC. All Right Reserved

200.0%
180.0%
160.0%
140.0%
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%

16

Midterm Three-Year Plan - 2nd year plan vs actual Midterm Plan – 2nd year plan vs actual(Billion yen)

Midterm plan
2nd yearSales

FY 2019
2Q actual

Rate ofprogression

207

115.3

55.7%

Operating profit

92.99

33.2%

Investment plan

132.94

22.6%

Interest-bearing
debts

54.6

52.7

Achieved

Interest-bearing
debt ratio

39.0%

36.5%

Achieved

Sales, investment plan, and interest bearing debts/debt ratio targets wereprogressed as planned. Operating profit result was at 33% against the plan.
The operation in NA needs to be improved.
Copyright(c) 2018 F-TECH INC. All Right Reserved

17Challenges and Activities in North America
Challenges in NA region

Activities to improve situation in NA

Cost increase

Cost reduction

Labor, Outsourcing andassociated cost

In-house production, warehouse cost
reduction, manpower reduction, etc.

Loss increase

Loss reduction
Improve accuracy of stamped parts, scrap
reduction, etc.

Scrap/Additional
inspection

Lower efficiencies

Efficiency increase

Additional outsourcing

Improve associates’ skills, promote
automation, etc.

Deteriorating financial
statements

Support from HQ is being provided.

The activities are being implemented by HQ and subsidiaries working together.
Copyright(c) 2018 F-TECH INC. All Right Reserved18Current Status in North America
External factors that deteriorate improvement outcome
Major customers : Changes in model mix

Up: Expense increase due to production increase in Canada

ProfitProfitLabor costDown

US trade policies : Tariff on imported materials from Canada and Mexico.

Activities are mostly on schedule【Cost reduction】
In-house production,warehouse cost
reduction, manpower
reduction, etc.

【Loss reduction】【Efficiency increase】

Improve accuracy ofstamped parts, scrap
reduction, etc

Improve associates’
skills, promote
automation, etc.

Accelerating the improvement activitiesCopyright(c) 2018 F-TECH INC. All Right Reserved

19

Table of Contents

1. Financial Results
Overview
2. Earnings Forecast
3. Business Strategy
4. Topics

Yuichi Fukuda
President & CEO
Copyright(c) 2018 F-TECH INC. All Right Reserved

20

Business Status
Honda

F-tech supplies the parts to 100% of global models
We acquire high confidence from customers by achieving weight reduction
while strength and rigidity requirements are maintained
Foreign OEMs
GM: Suspension/mount parts are supplied

Japanese OEMs
Nissan: Control parts are supplied

In 2018, Global supply share 18.9%/18.7%(FR)(RR)

In 2018, Global supply share 50.8%(K Unit)
4,000
3,000In 2023,
GM production volume
will be about 91 billionunits

40 (％)
30

2,00020

1,0001002018
201025%49.2% 50.8%75%02017 2018 2019 2020 2021 2022
FR Units
RR Units
FR Share2023
RR ShareMainly Suspension, Mount Parts-New business from new customers/Production start-

Ftech

Others

Mainly Control parts- Acquire business also from Mitsubishi, Suzuki -By responding to customers’ requirements appropriately, we continuously obtain businessfrom both foreign and Japanese OEMs including new business opportunities.
Copyright(c) 2018 F-TECH INC. All Right Reserved21

Business Status – New model startups in the 1st half of FY 2019Japan

AreaCustomer

April

May

HONDA

June

July

CR-V

VEZEL

Kuki
⇒JapanKuki⇒Japan (EU)

August【Legend】
Model Name

OTHER

North
America

September

RDX

HONDA

Production location⇒Where to ship

INSIGHT
FPA
⇒USA

China

OTHER
HONDA

CDX

CRIDERSPIRIORFTZ⇒ChinaFTZ⇒ChinaFTW⇒China

OTHER

KIKCS

ORLANDO

FTZ⇒TaiwanFTW⇒ChinaAsia

HONDAOTHERERTIGA

New F

WGN-R

ERTIGA

FTI⇒Indonesia

FMTL⇒ThailandVEEGEE⇒IndiaVEEGEE⇒IndiaCopyright(c) 2018 F-TECH INC. All Right Reserved22

Business Status – New model startups in the 1st half of FY 2019
CR-V
SOP: June 2018
Location : Japan (Kuki)
Products : Suspension parts
Mount parts
Pedal control parts

ERTIGA, WGN-R

CRIDER , SPIRIOR
SOP: Sep. 2018
Location : China (FTZ)
China (FTW)
Products : Suspension parts
Mount parts
Mount parts

Suspension parts

Pedal parts

SOP: April, June, Aug. 2018
Location : Indonesia (FTI)
India (VEEGEE)
Products : Pedal control parts

We had mass production startups of major products that have been awarded by meeting thecustomer’s requirements, and the parts for new models acquired by active sales activities.
Copyright(c) 2018 F-TECH INC. All Right Reserved23

Research & Development Capability< Ftech's unique development technology >Achieving optimum design byintegrating existing know-howsand simulation technologies

Improving
design accuracy
Achieving the design
including following aspects
・Product performance(strength, rigidity, vibration)

・Production area

(Stamping, Weld, Paint）

Furtherweight reduction

Improvingdevelopment speed

Space beam analysis

・Minimize prototype
・Improve design
accuracy

Balancing strength, rigidity,
and crash performancewith weight reduction

Reducing development
period by 2 months

Copyright(c) 2018 F-TECH INC. All Right Reserved24

Collaboration
Collaboration withmaterial manufacturers-Material evolutionExpanding the grades(Ultra hightensile steel)
590/780 ⇒ 980/1180
Product specification/shape based on thematerials and processes
・Crash performance
・Rigidity(Steeringstability/Noisevibration)
・Strength
leading to optimum
structure

Body frame parts◆Material
・Steel : Mainly High Tensilie Strength Steel(780～980Mpa class)◆Welding
・Mainly Resistance welding(Spot/Projection Weld)

Collaboration withBody manufactures-Processing technology
Chassis Suspension parts
・Forming method
・CAE/Prediction◆Material
・Steel ：Mainly Thicker Steeltechnology(270～590Mpa class)・Material knowledge
・Evaluation indicator ◆Welding
・Mainly Mig welding(With projection welding)

We integrate both companies’ Know-How, andchallenge to new business field to survive.
Copyright(c) 2018 F-TECH INC. All Right Reserved25

Production Technologies
Ultra precision plastic processing technology

Dissimilar material welding - steel and aluminum by applying FSW technology

Thickness increased area
Thickness reduced area

Material thickness『Increased +1mm』『Reduced -3mm』⇒END PLATE 18% lighter+1mm-3mm
Material

IncreaseReduce

The world’s first
4 new technologies
・Dissimilar metal weldingtechnology
・Anti rust technology
・FSW system
・Non-distructive test system⇒ Achieved following resultsfor FR SUBFRAME
Weight reduction-25%
Power saving-50%
Driving performance +20%

"Super Monodzukuri Award 2018“
hosted by Nikkan Kogyo Shimbun,
Ltd.

Mobility Related Parts Award
Copyright(c) 2018 F-TECH INC. All Right Reserved

60thThe Okochi
MemorialEngineering Award26

IR Activities – For Investors - Nikkei IR Fair Date : Aug 31 – Sep 1, 2018
Location ： Tokyo Big Sight

Booth Exhibit

Company presentation- Individual Investors Meeting Date ：Oct 24, 2018
Location ： Soka City Cultural Hall
- Plant Tour for Institutional Investors Date : Sep 28, 2018
Date : Oct 12, 2018
Location : Haga Technical Center
Location ： Kameyama Plant

Copyright(c) 2018 F-TECH INC. All Right Reserved27

IR Activities - Engineering Exhibition - Automotive Engineering Expo Date: July 11-13, 2018
Location: Portmesse Nagoya# of visitors：41,306
Booth exhibit,
CFRTP application technology, FSW dissimilarmaterial welding, Inverse torsion, Differential thickness
crash torsion, etc.

- 9th Light weight Technology expo -Date: January 16-18, 2019
Location: Tokyo Bigsight

Visibility with the public (Year on year)

34% ⇒ 58%
24%UP!!

(Ftech's data)

We demonstrate Ftech's R&D technologies to OEM manufacturers.
Copyright(c) 2018 F-TECH INC. All Right Reserved28

CSR - Environment Octover 11, 2018： Invited to speak at"Energy Efficiency Nation Pertnershipawards 2018" hosted by Ministry ofEnvironment and Water resources, Singapore<Reference>

June 2016: Energy Management Insight Award
January 2017: Energy Conservation Grand Prize
Chairman Prize of the Energy Conservation
CenterJanuary 2017: Honda Award for excellence (Environment)
Honda Green Competition Global Award forExcellence
Japan Award for Excellence

Copyright(c) 2018 F-TECH INC. All Right Reserved29

CSR - Social contribution Forest fostering

Scholarship fundation

Environment education for employees
to improve environment conservation awareness

In April 2017, F-Tech Scholarship
started to provide fund.
44 students from 32 colleges in Tokyo
area have received.

SaitamaWorkshop for Kids

As a "Saitama forest fostering supporter“, wecontribute to the societies through our forest
fostering activities

Students ceremony

We support to develop human resources who active
around the world through scholarship payment.

Copyright(c) 2018 F-TECH INC. All Right Reserved30

CSR - Social contribution Supply relief goods

We would like to express our heartfelt sympathy toeveryone who has been affected by this disaster

Rain storm hit westernJapan in July 2018
Haga Technical Center

Sent to: Disaster management HQ,Soja city, Okayama prefecture.
Item: Canned bread
Quantity: 792 cans

Relief item (Canned bread)Thank-you note from
Mayor of Soja city

We provided people who were affected with emergency food, which we hadstocked based on our past experience, through disaster management HQ.
Copyright(c) 2018 F-TECH INC. All Right Reserved31

Thank you for your attention

The future outlook and earnings forecasts in this document are made based on the information
available at the moment, and they include potential risks and uncertainties.
As a result, please bear in mind that actual business performance may substantially differ fromthe stated future forecasts due to changes in various factors.
For inquiries on IR information, please contact:

F-TECH INC. Management Planning Division
General Affairs Department/Accounting Department
TEL

0480-85-5211

Mailwebmaster@ftech.co.jp

Copyright(c)20182018 F-TECH
F-TECH INC.
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Reserved
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INC.
Right
Reserved