Okuma Corporation Okuma Corporation

Okuma Corporation
Fiscal Year 2006 Financial Results
May 17, 2007
0
Toward an era of new global growth
Basic Policies for the New Okuma
Becoming
Becoming an
an excellent
excellent company
company in
in machine
machine tools
tools
Total
Total responsibility
responsibility
Speed
Speed
Kani K5 Factory completed in February 2007
1
Toward an era of new global growth
Table of Contents
Part 1　Fiscal Year 2006 Financial Results
Transition of Company Organization to the New Okuma
View on Fiscal Year 2006 Financial Results
Looking Back at Fiscal Year 2006
Summary of Fiscal Year 2006 Results
Trends in Financial Results by Quarter
Orders and Net Sales by Product Category
Sales Composition Comparison by Product Category
Comparison of Balance Sheets
Cash Flows/Capital Investment/Depreciation Expenses
Principal Management Indicators
Part 2　Future Management Policies
Machine Tool Order Trends
Machine Tool Order Trends—Domestic Demand by Industry
Machine Tool Order Trends—Overseas Demand by Geographic Region
Toward an Era of New Global Growth
Okuma’s Business Policies for the Future
1) Enjoying a New Era of Global Growth
2) Raising Productivity through Consolidation and Reorganization of Plants
3) Deploying Our Accumulated Strengths and Creating New Technologies
Part 3　Forecast of Business Results for Fiscal Year 2007
Forecast of Business Results for Fiscal Year 2007
2
Toward an era of new global growth
Part 1
Fiscal Year 2006 Financial Results
3
Toward an era of new global growth
Transition of Company Organization to the New Okuma
Step 1: Integration of management through share exchange and company split
on October 1, 2005
(Company split) (Corporate name change)
(Share exchange)
Okuma Holdings, Inc.
Okuma Holdings, Inc.
(Formerly Okuma Corporation)
(Separated company)
Okuma Corporation
(Wholly owned)
Okuma Corporation
(Wholly owned)
Okuma Corporation
(Wholly owned)
Okuma & Howa
Machinery Ltd.
(Wholly owned)
Okuma Engineering
Co., Ltd.
(Newly established company) (Newly established company)
Step 2: On July, 1, 2006, Okuma Holdings, Inc. merged and absorbed three companies:
Okuma Corporation, Okuma & Howa Machinery Ltd., and Okuma Engineering Co., Ltd.
and changed its corporate name to Okuma Corporation.
(Absorbed and merged)
(Corporate name change)
Okuma Holdings, Inc.
（Formerly Okuma Corporation）
Wholly owned
Okuma Corporation
Wholly owned
Okuma & Howa
Machinery Ltd.
Wholly owned
Okuma Engineering
Co., Ltd.
4
(New)
Okuma
Corporation
Toward an era of new global growth
View on Fiscal Year 2006 Financial Results
Consolidated
Unconsolidated
FY2005 : 1st half shows unconsolidated accounts for the former Okuma
FY2005: Okuma & Howa Machinery Ltd. is only included
Corporation.
in the scope of consolidation in 2nd half.
2nd half shows unconsolidated accounts for Okuma Holdings, Inc.
FY2006 : April-June shows unconsolidated accounts for Okuma Holdings, Inc.
FY2006: Okuma & Howa Machinery Ltd. is included
July-September shows unconsolidated accounts for new Okuma
in the scope of consolidation in both 1st and 2nd half.
Corporation (after merging of four companies).
FY2005
1st half
2nd half
FY2006
1st half
FY2005
1st half
2nd half
FY2006
2nd half
(April-June) (July-September)
Okuma
Holdings, Inc.
Okuma &
Howa
Machinery
Ltd.
Okuma &
Howa
Machinery
Ltd.
Consolidated Consolidated
subsidiaries subsidiaries
New Okuma Corporation
Okuma
Engineering
Co., Ltd.
Okuma
Corporation
Okuma
Holdings,
Inc.
New Okuma Corporation
Okuma
Engineering
Co., Ltd.
Consolidated Consolidated
subsidiaries subsidiaries
Okuma
Holdings,
Inc.
New Okuma Corporation
Okuma
Corporation
New Okuma Corporation
Okuma
Engineering
Co., Ltd.
Okuma
Corporation
2nd half
(April-June) (July-September)
Okuma
Holdings,
Inc.
Okuma
Corporation
1st half
Consolidated
subsidiaries
5
Toward an era of new global growth
Looking Back at Fiscal Year 2006
Key points of fiscal year 2006 results and issues for the future
¾ New orders, net sales, and profits all reached record highs for
the second consecutive fiscal term, and revenues and profits
rose for the fourth consecutive term.
¾ Record-high operating profit margin (14.4%)
¾ Plan for year-end cash dividends per share of ¥10.00 (including
¥5.00 yen merger commemorative dividend), with annual cash
dividends per share reaching an all-time high of ¥15.00.
¾ Gearing up for continuous growth, we implemented proactive
capital investments (¥11.5 billion).
¾ Return on total assets (operating income to total asset ratio)
rose to 14.3%, as we continued initiatives for raising our
earnings ratios and total asset turnover ratio and strived to
improve capital efficiency.
6
Toward an era of new global growth
Summary of Fiscal Year 2006 Results
Achieving increases in revenues and profits for four consecutive fiscal terms
(¥100 million)
FY2005
FY2006
Amount
of
change
(%)
(%)
(Reference)
Forecast
results
FY2006
(as of 14 Nov 06)
1,513.4
100.0
1,888.0
100.0
374.6
1,825.0
Operating
profit
186.9
12.3
272.6
14.4
85.8
243.0
Ordinary
profit
170.7
11.3
256.4
13.6
85.7
228.0
Net profit
121.1
8.0
156.9
8.3
35.8
134.0
Net sales
Exchange rates
Actual rates
US$1 = ¥117.0
Actual rates in previous year US$1 = ¥113.9
(Reference) Assumed rate for the 2nd. half of FY2006
US$1 = ¥115.0
1 Euro = ¥151.0
1 Euro = ¥138.1
1 Euro = ¥146.0
Effects of exchange rate fluctuations (at the operating profit level) US$ = ¥1.0 billion Euro = ¥2.2 billion
7
Toward an era of new global growth
Trends in Financial Results by Quarter
Operating profit margin steadily rising
(¥100 million)
600
25%
546.1
Operating
Operating profit
profit margin
margin
500
468.1
453.2
400
417.6
407.5
Net
Net sales
sales
20%
456.1
17.1%
348.7
300
304.0
13.7%
12.3%
12.4%
12.8%
15%
13.7%
13.5%
10.8%
10%
200
5%
100
0
0%
FY2005
1Q
FY2005
2Q
FY2005
3Q
FY2005
4Q
FY2006
1Q
FY2006
2Q
FY2006
3Q
FY2006
4Q
Note: Okuma & Howa Machinery Ltd. was accounted for as a consolidated subsidiary from 3Q FY2005.
8
Toward an era of new global growth
Orders and Net Sales by Product Category
・Amid a continued favorable order environment, new orders rose ¥11.2
billion to ¥190.0 billion while net sales rose ¥37.5 billion to ¥188.8 billion.
・The order backlog remained at a high level.
New orders
FY2005
FY2006
(¥100 million / %)
Net sales
Order backlog
%
FY2005
change
FY2006
%
change
FY2005
FY2006
%
change
NC lathes
506
549
8.5
470
547
16.4
152
154
1.3
Machining
centers
953
937
(1.7)
750
932
24.3
430
435
1.2
Multitasking
machines
261
355
36.0
238
339
42.4
83
99
19.3
NC grinders
50
39
37
51
26
14
Others
18
21
19
19
0
3
1,788
1,900
6.3 1,513
1,888
691
704
Total
24.8
1.9
Note: New orders in fiscal 2005 include ¥14.7 billion in backlog orders received of newly consolidated
Okuma & Howa Machinery Ltd. As of the end of September 2005.
9
Toward an era of new global growth
Sales Composition Comparison by Product Category　Increase in percentage of multitasking machine sales
Increase in sales of large-sized NC lathes and machining centers
NC lathes
29.0
FY2006
Machining centers
49.4
31.1
FY2005
49.5
26.4
FY2004
50.5
30.4
FY2003
0%
20%
15.7
17.9
50.0
35.1
FY2002
NC grinders
Multitasking
Others
machines
2.7 1.0
17.9
14.0
45.3
40%
60%
10
2.4 1.3
2.7 2.5
3.4 2.2
13.9 2.8
80%
2.9
100%
Toward an era of new global growth
Comparison of Balance Sheets
Assets
Liabilities and Net Assets
(¥100 million)
2,015
1,788
2,015
Cash and deposits
360
1,788
Notes and
accounts payable
352
Cash and deposits
312
Accounts receivable
487
Accounts receivable
543
Interest-bearing debt
269
Other current liabilities 152
Inventories
369
Other current
assets
81
Property, plant,
and equipment
295
Inventories
429
(¥100 million)
Notes and
accounts payable
392
Interest-bearing debt
317
Other current liabilities
198
Other fixed liabilities 81
Other fixed liabilities 89
Total
shareholders’
equity
Total
shareholders’
equity
Other current
assets
61
Property, plant,
and equipment
963
857
371
Other fixed assets
245
Other fixed assets
252
End of March 2006
End of March 2007
Valuation and translation
adjustments 54
Minority interests16
End of March 2006
11
Valuation and translation
adjustments 46
Minority interests18
End of March 2007
Toward an era of new global growth
Cash Flows/Capital Investment /Depreciation Expenses
Carrying out proactive capital investment in gearing up for continuous growth
(¥100 million)
FY2005
Cash flows from operating
activities
117
167
Cash flows from investing
activities
(92)
(148)
Cash flows from financing
activities
93
17
326
358
Cash and cash equivalents at
end of fiscal year
(Capital Investment /Depreciation Expenses)
(¥100 million)
140
120
115
60
40
20
Kani K5 Factory : ¥6.0 billion
77
Capital
investment
Machine shop equipment :
¥2.5 billion
Depreciation expenses
100
80
FY2006
47
32
30
18
0
FY2004
FY2005
12
FY2006
Toward an era of new global growth
Principal Management Indicators
Return on total assets improved 1.7 percentage points from the
previous year to 14.3%
(%)
Trends in return on total assets
(Times)
Trends in total asset turnover ratio/
inventory turnover ratio
5
20
Return on total assets
4
15
12.6
14.3
Inventory turnover ratio
3.19
3.16
3.03
3
10
9.2
2
5
1
Total asset turnover ratio
0.99
1.02
0.99
0
0
FY2004
FY2005
FY2004
FY2006
FY2005
FY2006
Notes: Return on total assets = Operating profit/average total assets in fiscal year
Total asset turnover ratio = Net sales/average total assets in fiscal year
Inventory turnover ratio = Cost of sales/inventories at end of fiscal year
(The inventory turnover ratio for fiscal year 2005 was calculated by applying an assumed cost of sales for Okuma & Howa
Machinery Ltd. to the consolidated account.)
13
Toward an era of new global growth
Part 2
Future Management Policies
14
Toward an era of new global growth
Machine Tool Order Trends
Domestic and overseas demand for machine tools continues to record high growth rates.
Okuma Corporation (unconsolidated) is also recording robust domestic and overseas growth
in the value of machine tool orders.
(¥100 million)
(Japan Machine Tool Builders’ Association)
(Okuma Corporation (unconsolidated))
(¥100 million)
450
4,500
400
Total
Total
4,000
3,500
350
3,000
300
2,500
Domestic
Domestic demand
demand
200
1,500
150
Overseas
Overseas demand
demand
100
Overseas
Overseas demand
demand
50
500
0
0
ⅠⅡ Ⅲ Ⅳ Ⅰ Ⅱ ⅢⅣ Ⅰ Ⅱ ⅢⅣ Ⅰ Ⅱ Ⅲ Ⅳ ⅠⅡ Ⅲ Ⅳ ⅠⅡ Ⅲ ⅣⅠ Ⅱ ⅢⅣ
Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ
FY2000
Total
Domestic
demand
Overseas
demand
Domestic
Domestic
demand
demand
250
2,000
1,000
Total
Total
FY2001
FY2002
FY2003
FY2004
FY2005
9,975 7,008
5,352 3,653
7,282 9,124 13,006 13,812 14,746
3,748 4,808 7,175 7,444 7,316
4,623 3,355
3,534 4,316
5,831 6,368
FY2000
FY2006
7,430
Total
Domestic
demand
Overseas
demand
FY2001
FY2002
FY2003
FY2004 FY2005
1,002 1,323
567
771
845
413
604
283
609
306
751
402
432
321
303
350
436
552
FY2006
1,597
956
640
Source: Japan Machine Tool Builders’ Association
15
Toward an era of new global growth
Machine Tool Order Trends—Domestic Demand by Industry
Signs of a recovery in demand emerging from the automobile industry,
which had been trending downward.
Demand for general machinery trending downward, but still remains at a high level.
Japan Machine Tool Builders’ Association
(¥100 million)
Value of orders by industry
900
General
General machinery
machinery
FY2006
Percentage
of orders by
industry
800
700
600
Automobile
Automobile
500
Others
Others
400
300
Electric
Electric machinery
machinery
200
Japan
Machine
Okuma
Tool
Corporation
Builders’
(reference)
Association
General
machinery
45％
70％
Automobile
27％
18％
7％
5％
21％
7％
Electric
machinery
100
Others
0
Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ
FY2000
FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
Type of industry
General
machinery
2,045
1,308
1,277
1,825
2,797
3,088
3,306
Construction machinery, dies, industrial
machinery, semiconductor/LCD
production equipment, etc.
Automobile
1,333
1,335
1,555
1,596
2,532
2,411
1,963
Passenger cars, trucks,
motorcycles, etc.
485
281
236
354
506
479
506
1,489
730
679
1,033
1,340
1,466
1,541
Electric
machinery
Others
Motors, TVs, OA equipment, etc.
Aircraft, ships, iron and steel
Source: Japan Machine Tool Builders’ Association
16
Toward an era of new global growth
Machine Tool Order Trends—Overseas Demand by
Geographic Region
Remarkable growth in machine tool demand in North America, Europe, and Asia
Okuma Corporation (unconsolidated) is recording continued robust demand
in North America and sharp growth in demand in Europe.
(¥100 million) (Japan Machine Tool Builders’ Association) (¥100 million) Okuma Corporation (unconsolidated)
800
80
Asia/Pacific
Asia/Pacific
700
North
North America
America
70
600
60
500
50
North
North
America
America
Europe
Europe
40
400
300
30
Europe
Europe
200
Others
Others
100
20
Asia/Pacific
Asia/Pacific
10
Others
Others
0
0
Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ
Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ ⅢⅣ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ ⅡⅢ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ ⅠⅡ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ
FY2000
FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2000
FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
North
America
2,106
1,207
1,108
1,306
1,961
2,162
2,487
North
America
196
100
107
144
157
263
259
Europe
1,466
1,175
972
1,120
1,549
1,505
2,282
Europe
162
152
79
90
123
149
217
947
804
1,347
1,773
2,172
2,559
2,501
Asia
58
55
100
101
140
127
149
Asia
Source: Japan Machine Tool Builders’ Association
17
Toward an era of new global growth
Toward a New Era of Global Growth
Global demand for machine tools exceeded ¥5 trillion and is
expected to expand over the medium and long terms.
(Trends in global machine tool
production)
¾Automobile production is expanding globally and
the level of demand in the BRICs, Eastern Europe,
and other countries is rising.
US$ 100 million
500
US$43.5 billion ¾Prolonged global demand continues from heavy
industries, including construction machinery, aircraft
and ships, and resources and energy industries.
400
¾Recovery of processing industries underway in
manufacturing-oriented Japan due to “elimination
of excesses” and restoration of competitiveness.　300
¾In Japan, the U.S., and Europe, there is an
emergence of new markets such as LCDs,
semiconductors, and medical devices in addition to
investments for renovations and investments for
raising efficiency.
200
100
0
1985 1988 1991 1994 1997 2000 2003 2006
Source: American Machinist, Gardner Publications
¾With requirements for higher quality and enhanced
productivity, there is a rising need for high valueadded products, which is the strength of Japanese
manufacturers.
18
Toward an era of new global growth
Okuma’s Business Policies for the Future
(1) Enjoying an Era of New Global Growth
(2) Raising Productivity through Consolidation
and Reorganization of Plants
(3) Deploying Our Accumulated Strengths and
Creating New Technologies
19
Toward an era of new global growth
Okuma’s Business Policies for the Future
(1) Enjoying an Era of New Global Growth
z Upgrade and expand our product lineup through operational mergers
z Develop our business leveraging “strongest network of dealers.”
z Implement global investment strategy for the future.
20
Toward an era of new global growth
Upgrade and Expand Our Product Lineup through
Operational Mergers
Toward net sales exceeding ¥200 billion
Strengthen sales to such favorably performing heavy industries as construction
machinery, aircraft, and resources and energy.
Upgrade and Expand our product lineup through
operational mergers
Lathes
Multitasking
machines
Former Okuma
Corporation
Horizontal lathes
LOC
Former Okuma & Howa
Machinery Ltd.
Vertical lathes
V-R Series
Horizontal multitasking
machines
MULTUS Series
MACTURN Series
Vertical multitasking
machines
VTM Series
Target
industries
Construction
machinery
Aircraft
Resources and
energy
Machining
centers
Double column
machining centers
(5-sided applications)
MCR-B II
5 - axis double-column
machining centers
VMP Series
21
Toward an era of new global growth
Develop Our Business Leveraging “Strongest Network
of Dealers”
Utilize Okuma’s global network to expand sales of products of the former
Okuma & Howa Machinery Ltd.
Europe
Americas
• Upgrade our customer support structure
through the establishment of the Eastern Europe
Technology Center (Austria).
• Strengthen sales capabilities of dealers
in Eastern Europe and Russia (establish
technology centers in the Czech Republic
and Russia).
• As priority geographic regions, establish new
dealers in France as well as open new dealers
to cultivate the Ukraine market.
• Create new markets through “Partners in THINC”
(collaboration centered on OSP).
• Expand our competitiveness in oil country markets
and aluminum wheel markets.
• Focus sales promotions on the expanding medical
markets and on the construction machinery, and
aviation and aerospace industries.
• Strengthen operations in emerging markets such
as Mexico and South American countries.
Asia
• Strengthen sales and technical services by moving
and upgrading our sales subsidiary in Shanghai, China,
and establish a new sales and service base in Beijing.
• Expand production capabilities of BYJC Okuma (Beijing)
Machine Tool Co., Ltd., our manufacturing subsidiary in
Beijing.
• Establish a subsidiary in India as well as upgrade our
service structure and train dealers.
22
Toward an overseas
sales ratio of 60%
Toward an era of new global growth
Strengthening Competitiveness through “Partners in
THINC”
Offering total solutions via tie-ups with peripheral device makers, with
OSP at the core.
Establish center at U.S. base for acceleration of “Partners in THINC.”
“Partners in THINC” is:
A framework for creating value added through the utilization of
Okuma Corporation’s NC machines (OSP) by dealers and customers.
THINC is an abbreviation of The Intelligent NC. (It means intelligent
NC machines that “think autonomously” and “grow.”
Aims
¾Offer new added value through the fusion of machine tools and IT.
¾Enable users build proprietary system by opening the PC
functions of OSP.
¾Okuma serves as point of contact for flexible, speedier responses
to customer requirements.
¾Advanced and simplified network connectivity with robotic and
measuring device systems
Showroom area bustling with VIP users
THINC for Your Customer
Principal partners in
THINC
・ABB
・Fanuc Robotics
・KENNAMETAL
・Marpos
・Reinshaw
・ZEISS
・BLUM
・ChipBlaster
・LNS
・Sandvik
Logos of 24 partner companies displayed in
Example of networked OSP and robotic control devices
reception area
23
Toward an era of new global growth
Future Global Investment Strategy
Allocate resources to sales and service along with investment in production
directed toward accelerating growth potential
Major capital investments in fiscal year 2007
Shift and direction of capital investments
¥2 billion planned for
global CS center
(tentative)
115
(¥100 million)
77
70
Strengthen
Strengthen sales
sales and
and service
service
・Construction
・Construction of
of highly
highly efficient
efficient
production
plant
production plant
・Expansion
・Expansion of
of production
production capacity
capacity
Global
Global development
development
18
Plant
Plant restructuring,
restructuring,
minimize
minimize logistics
logistics routes
routes
FY2004
FY2005
FY2006
FY2007
(plan)
24
zDevelopment of cutting-edge
machining technology to benefit
customers and promote
worldwide use
zDevelopment of original control
technology to meet customer
needs
zPromoting latest products and
technology
¥1 billion planned for new
logistics center (tentative)
zParts control center established
at headquarters to realize
concept of most efficient logistics
zRealize hybrids via automatic
warehousing for simultaneous
production and stock control
Toward an era of new global growth
Okuma’s Business Policies for the Future
(2) Increasing Productivity by Consolidation
and Reorganization of Plants
z Reorganize domestic production bases
z Undertake efforts to raise productivity
z Plant reorganization – Headquarters Plant
z Plant reorganization – Kani Plant
z Plant reorganization – Konan Plant
25
Toward an era of new global growth
Reorganization of Domestic Production Bases
Relocation of domestic production bases with combined requirements
for integrated production and demand fluctuation
World headquarters, Oguchi Plants (Oguchi Town, Aichi Prefecture)
Area: 150,000㎡
Vertical lathes
Double column MC
Konan Plant (Konan City, Aichi Prefecture)
Multitasking machines
Kani Plant (Kani City, Gifu Prefecture)
Area: 335,000㎡
Area: 100,000m2
26
Toward an era of new global growth
Efforts Undertaken to Increase Productivity
Aiming to reduce lead times by 30%
Dramatic increase in productivity by introducing autonomous and integrated
production system at Kani K5 Factory
Component machining
production
Headquarters
Machining
Double-column MC Production
Structure
(units produced monthly)
Assembly
(units)
40
Machining
Kani
Plant
Assembly
30
Reorganization
Autonomous and integrated
production system
Headquarters
Kani
Plant
Machining
20
Assembly
10
Machining
Assembly
Sales surge as a
result of increased
productivity
Mar 06
27
Sept
Mar 07
Sept
Mar 08
Toward an era of new global growth
Reorganization of Plants: Headquarters Plant
Production of double column MC shifts to K4 and K5 (Kani Plant)
Shift production of high-demand vertical lathes and multitasking machines
Integrated production of vertical and horizontal lathes,
multitasking machines
Assembly
Parts
machining
Assembly
Factory 3
Machining
Assembly
Factory 1
Assembly
Assembly
Assembly
Factory 2
Strategic
Strategic plant
plant flexibly
flexibly
responds
responds to
to demand
demand
fluctuations.
fluctuations.
28
Toward an era of new global growth
Reorganization of Plants: Kani Plant
Autonomous production system for MC currently being established.
Integrated production of
vertical, horizontal MC
Integrated production
of double column MC
K2
K4
Machining
Machining
K3
Machining
Machining
Assembly
Assembly
K5
Assembly
Assembly
K1
29
Toward an era of new global growth
Reorganization of Plants: Konan Plant
Efforts to strengthen production capacity and minimize lead times.
■ Applying highly efficient machine production skills from former Okuma Corporation to
former Okuma & Howa Machinery Ltd.
Establishment of production structure of basic production plan, promotion of unit
modularization, shift to individual parts coating
■ Replacing equipment that creates bottlenecks with cutting-edge equipment
■ Restructuring assembly sites to increase production of large-size machines
Accelerated production of NC lathes, vertical MC, 5-axis and
multitasking machines
Machining
Machining
Assembly
Assembly
Assembly
Assembly
Factory 1
Assembly
Assembly
Assembly
Assembly
Factory 2
Center Factory
Factory 3
Factory 4
30
Toward an era of new global growth
Smooth Execution of K5 Vertical Startup Operation
Vertical startup operation of K5’s double column machining center assembly line on
schedule (April 07).
31
Toward an era of new global growth
Okuma Business Policies Moving Forward
(3) Deploying Our Accumulated Strengths and
Creating New Technologies
z Strength: “Total Responsibility”
z History of OSP evolution
z Next-generation machining center to serve as platform
for latest technology
z Recipient of 2006 Top 10 New Products Award
32
Toward an era of new global growth
Strength: “Total Responsibility”
Source of Okuma Strengths =
Total response to customer
expectations
Customers/Market
Integration drives progress =
Global market creation
Market
expansion
・ Cultivating new
customers in U.S. and
Europe
・Milestones in emerging
markets
Total Responsibility
Sales
Service
Technology
Responding to
market with
powerful
dealership network
Further
globalization
・ Further strengthening
customer base in U.S.
and Europe
・ Further strengthening
customer base in Japan
・ Integration of
new technology
and customer
bases through
merger
Manufacturing
Re T
sp ota
on l
sib
ilit
y
Integrated
Customer solutions
development of
provided via integration
manufacturing
of mechanics and
technology
electronics
Providing the most suitable products and services
balancing human resource and organizations
・ Integration with IT
・Thermo-friendly
・ Collision avoidance
・Integration of mechanics
and electronics
Progress through
integration
33
Toward an era of new global growth
Strength: “Total Responsibility”
Control technology as core competency, total support for customers.
Customers/Market
Products & Service
OSP Business Model
Needs & Wants
NCパネルコンピュータ
NC panel computer
IOデバイス
CAD/CAM
System
サーボドライブ
Servo Drive
絶対位置検出器
Absolute
encoder
サーボモータ
Servo
Motor
VACモータ
VAC
Motor
●Okuma swiftly realizes needs
and wants of machine makers
●Internal feedback regarding both
machines and electronics for
customer needs and wants
●Responsibility for global service
support for both mechanical and
electronic areas
●Flexible response to specific
customer needs, building
competitive capabilities
USER’S VOICE
Magazine that compiles case
examples of efforts to meet
customers needs and wants
(USER’S VOICE) —Reliable, high-quality product support is provided from deployment and proposing machining
technology to after sales service.—
34
Toward an era of new global growth
History of OSP Evolution
Constantly in pursuit of world firsts, Okuma offers the ever-dependable absolute
position feedback system and the software variable computer NC.
World’s first absolute
position feedback NC
OSPIII
World’s first computer
NC
OSP2000
World’s first practical NC
OSP-P200
1963
1972
2004
● Based on reliability as a basic principle, today’s products continue to offer the
same level of control as reflected by the absolute position feedback system, which
maintains position even if the power is cut off, and the variable software that
enables NC technology from becoming obsolete even after 10-20 years.
● The absolute position feedback system is not merely a technological concept, but
rather forms the core of Okuma business operations and is ingrained in our
corporate culture.
● The absolute position feedback system and original thinking form the foundation
for possibilities of control technology, and are grounded in the belief that “if there
is something in the world that is needed, our Company will develop it.”
(USER’S VOICE)
—We have been truly impressed with Okuma‘s “integration of mechanics and electronics“ concept and their
"absolute position feedback system" and have therefore deployed NC incorporated with OSP. —
35
Toward an era of new global growth
History of OSP Evolution
Proprietary NC technology forms a common thread running through all
Single Source
the accumulated development successes Okuma has earned since its
Machine &
founding, creating a wave of integrated technologies for our machines,
electronics and IT equipment.
Control cutting-edge
Okuma’s proprietary manufacturing skills lead to realization
of high efficiency and low thermal generation.
New configuration of magnets results in smooth,
PREX linear motor
highly precise movement
World’s first collision avoidance system
Collision Avoidance System
is effective in auto or manual modes.
(CAS)
Thermal Deformation
Compensation System
Machines have capability to adjust to thermal
deformation in new technology known as
the “Thermo-Friendly Concept.”
2006
2005
2002年
1998
PREX motor
AbsoScale
1992
NC Turret
Commercialization of
world’s first maintenancefree digital servo system
product.
technology.
1991
One-Touch IGF
1989
High-speed NC control
1987
technology
Virtual simulation
1983
High-precision digital
1982
servo system
Brushless motor
1982
2 saddles, 4-axis control
1975
Absolute encoder
1963
1960
Unique
Unique technology
technology leads
leads
to
to customer
customer retention
retention
(USER’S VOICE)
—Total lead times have been cut by
some 30%.—
—I don’t have to worry about heat
fluctuations—this gives me a huge
sense of relief. —
2000
36
Toward an era of new global growth
Next-Generation Machining Center Brings Together
Range of Cutting-Edge Technologies
Production efficiency significantly increased for customer’s die machining.
Super high-speed, high-accuracy
double column machining center
MCR-H (Hyper).
r ld
Wo
W
t
firs
Finishing time cut by 1/2, realized with
adoption of the Okuma-developed PREX
linear motor.
fi
orld
rst
Machining dimensional changes cut to
20µm (previously 100µm)
Thermo-Friendly concept adopted to
double column MC.
Complete machining in one setting,
rich array of attachments.
Development of full product line equipped
with linear motors, Thermo-Friendly
concept and other technology
37
Toward an era of new global growth
Recipient 2006 Top 10 New Products Award
Double column
MCR
-H
MCR-H
First machine tool builder to be awarded
for four consecutive years
5
-axis
5-axis
MU-500V
Multitasking
MULTUS
Horizontal MC
MA-H
Vertical MC
MB-V
2005 Top 10 New
Products Award
2004 Top 10 New
Products Award
2006 Top 10 New
Products Award
2003 Top 10 New
Products Award
Creating the flow of
technology
2002 Japan Society of Mechanical
Engineers Award for "Thermal
Deformation Compensation System"
38
Toward an era of new global growth
Part 3: Forecast of Business Results for
Fiscal Year 2007
39
Toward an era of new global growth
Forecast of Business Results for Fiscal Year 2007
Income and profit are forecast to increase for the fifth consecutive period and to
reach highs for third consecutive periods. We plan for annual cash dividends per
share of ¥17 (a ¥2 increase from FY2006 and includes a 110th anniversary
commemorative dividend of ¥5).
(¥100 million)
FY2006
FY2007 (Forecast)
Amount of
change
(%)
(%)
1,888.0
100.0
2,040.0
100.0
152.0
Operating
profit
272.6
14.4
298.0
14.6
25.4
Ordinary profit
256.4
13.6
283.0
13.9
26.6
Net profit
156.9
8.3
170.0
8.3
13.1
Net sales
Exchange rates
Actual rates
Fixed Exchange Rate
US$1 = ¥117.0
US$1 = ¥115.0
40
1Euro = ¥151.0
1Euro = ¥155.0
Toward an era of new global growth
Disclaimer
Notice regarding Forecasts
These materials are for the purpose of providing information to investors and are not intended to
represent a buy or sell recommendation. Statements regarding future forecasts contained in these
materials are based on targets and forecasts and do not represent definite promises or guarantees.
These materials should be used with an awareness that the Company’s actual business results could
differ materially from the Company’s current forecasts. Statements regarding industries, etc., have
been prepared based on various types of data deemed to be reliable. However, the Company cannot
guarantee the absolute accuracy and integrity of this data. We provide these materials on the
assumption that client investors use their own judgment and assume responsibility when utilizing
these materials in every instance. The Company assumes no responsibility in any instance.
August 17,2007 – 3rd Edition
Toward an era of new global growth