Data File 2006
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DATA FILE 2006 KAWASAKI HEAVY INDUSTRIES, LTD. Code No. (7012) HISTORY Kawasaki Heavy Industries, Ltd. (KHI) traces its origins to an industrial shipyard in Tsukiji, Tokyo, established by Shozo Kawasaki in 1878. In 1896, KHI was incorporated under the laws of Japan as Kawasaki Dockyard Co., Ltd. The Company later expanded its business to include the manufacture of rolling stock, steel, steel structures, industrial machinery, automobiles and aircraft. KHI also engaged in the shipping business through the company known as Kawasaki Kisen Kaisha, Ltd., which later became an independent company. In 1939, KHI adopted its present name, Kawasaki Heavy Industries, Ltd. In 1950, KHI’s steel manufacturing division was divested and Kawasaki Steel Corporation was formed. In 1969, Kawasaki Aircraft Co., Ltd. and Kawasaki Rolling Stock Mfg. Co., Ltd., former divisions which had been divested, were merged back into KHI, forming an integrated heavy industry enterprise. KHI established a subsidiary in the United States to sell its motorcycles in 1966. In 1975, through its local subsidiary, KHI began to produce motorcycles in the United States ahead of any other Japanese producer of any type of motor vehicle. Subsequently, through its U.S. subsidiaries, KHI began to manufacture rolling stock in New York in 1986, wheel loaders in Georgia in 1987, and small gasoline engines in Missouri in 1989. In 1993, KHI established a local subsidiary to acquire a hydraulic machinery manufacturing business in Plymouth, U.K., its first production facility in Europe. In 2001, KHI built a new rolling stock plant in Lincoln, Nebraska, where we already have a motorcycle plant. The new plant started full-scale operation in April 2002. KHI also reorganised several industry segments of the Group to improve profitability, including spinning off the shipbuilding, hydraulics, plant engineering businesses. In 2002,Kasawaki Shipbuilding Corporation and Kawasaki Precision Machinery, Ltd., in 2005, Kawasaki Plant Systems, Ltd. was established as wholly owned subsidiaries. KHI has been seeking to expand its activities in Asia. KHI has joint ventures in Malaysia, Thailand, the Philippines and Indonesia to manufacture motorcycles as well as a shipbuilding joint venture in China and other production and/or sales facilities in the Philippines and Korea. CONTENTS FINANCIAL HIGHLIGHTS ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 1 KEY INDICATORS ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 2 SEGMENT INFORMATION ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4 OVERSEAS SALES ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 5 OPERATIONS BY SEGMENT SHIPBUILDING ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 6 ROLLING STOCK・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 8 AEROSPACE・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 10 GAS TURBINES & MACHINERY・・・・・・・・・・・・・・・・・・・・・・・・・・ 13 PLANT & INFRASTRUCTURE ENGINEERING ・・・・・・・・・・・・・ 16 CONSUMER PRODUCTS & MACHINERY ・・・・・・・・・・・・・・・・・19 CONDENSED BALANCE SHEETS ・・・・・・・・・・・・・・・・・・・・・・・・・・ 22 CONDENSED STATEMENTS OF INCOME ・・・・・・・・・・・・・・・・・・・23 STOCK INFORMATION ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 24 FINANCIAL HIGHLIGHTS Kawasaki Heavy Industries, Ltd. and consolidated subsidiaries Years ended March 31 Millions of yen 2002 2003 2004 2005 2006 For the year: Net sales \1,144,534 \1,239,598 \1,160,252 \1,241,592 \1,322,487 Net income 6,282 13,022 6,333 11,479 16,467 Net income per share (yen) 4.5 9.3 4.4 7.9 11.2 Return on average shareholders' equity (%) 3.8% 7.6% 3.5% 5.9% 7.5% Cash dividends per share (yen) - 2.0 2.0 2.5 3.0 At year end: Total assets 1,255,075 1,149,161 1,156,904 1,194,473 1,284,085 Working capital 150,114 137,771 121,941 138,523 113,240 Current ratio (%) 119.9% 120.0% 118.0% 119.8% 114.1% Total shareholders' equity 167,731 174,585 190,175 201,465 237,588 Net Sales Total Assets Years ended March 31 (Billion \) As of March 31 (Billion \) 1,400 1,322 1,240 1,242 1,400 1,255 1,284 1,145 1,160 1,149 1,157 1,194 1,200 1,200 1,000 1,000 800 800 600 600 400 400 200 200 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Net Income (Loss) Total Shareholders' Equity Years ended March 31 (Billion \) As of March 31 (Billion \) 18 16.5 250 237.6 16 190.2 201.5 14 13.0 200 174.6 11.5 167.7 12 10 150 8 6.3 6.3 100 6 4 50 2 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 1 KEY INDICATORS (CONSOLIDATED BASIS) Ratio of Operating Income to Sales Earnings per Share Return on Sales Cash Flow per Share Years ended March 31 Years ended March 31 (%) (\) 4 40 3 30 2 20 1 10 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Operating Income to Sales -■- EPS ■ 4.5 9.3 4.4 7.9 11.2 2.74 2.46 1.92 1.99 3.16 CFPS ■ 27.5 32.1 27.0 29.8 32.0 ROS -◆- 0.55 1.05 0.55 0.92 1.25 Earnings per Share: Net Income/Average Number of Operating Income to Sales: Operating Income/Net Sales. Shares Outstanding. ROS: Net Income/Net Sales. Cash Flow per Share: (Net Income + Depreciation) /Average Number of Shares Outstanding. Return on Shareholders' Equity Return on Assets Book Value per Share Years ended March 31 As of March 31 (%) (\) 10 200 150 5 100 50 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 ROE -■- 3.8 7.6 3.5 5.9 7.5 120.6 125.6 131.8 139.7 152.5 ROA -◆- 0.5 1.1 0.5 1.0 1.3 Book Value per Share: Total Shareholders' Equity/ ROE: Net Income/Average Shareholders' Equity. Number of Shares Outstanding. ROA: Net Income/Average Total Assets. 2 Net Sales per Employee Interest Coverage Years ended March 31 Years ended March 31 (million \) (Multiples) 50 10 40 8 30 6 20 4 10 2 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 39.55 43.28 39.59 43.29 45.73 2.97 3.42 3.54 4.44 8.37 Net Sales per Employee: Net Sales/Number of Employees. Interest Coverage: (Operating Income + Interest and Dividend Income)/Interest Expense. Asset Turnover Debt to Equity Ratio Years ended March 31 Years ended March 31 (Multiples) 1.2 300 1.0 250 0.8 200 0.6 150 0.4 100 0.2 50 0.0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 0.91 1.03 1.01 1.06 1.07 238 210 187 154 119 Asset Turnover: Net Sales/Average Total Assets. Debt to Equity Ratio: (Interest Bearing Debt- Cash on Hand and in Banks) /Total Shareholders' Equity. 3 SEGMENT INFORMATION Years ended March 31 (Billion \) Other NET SALES OPERATING INCOME 1,400 60 Consumer Products & 1,200 50 Machinery Plant & 40 Infrastructure 1,000 Engineering 30 Gas Turbines & 800 Machinery 20 600 Aerospace 10 400 Rolling Stock 0 200 2004 -10 Shipbuilding 0 2006 2004 2005 2006 -20 2005 Net Sales (Billion \) 2004 2005 2006 Shipbuilding 94.9 87.1 109.7 Rolling Stock 120.6 171.7 168.3 Aerospace 173.8 188.3 218.5 Gas Turbines & Machinery 136.5 141.4 161.4 Plant & Infrastructure Engineering 191.4 191.0 164.5 Consumer Products & Machinery 318.3 338.5 367.0 Other 124.7 123.7 133.1 Total 1,160.3 1,241.6 1,322.5 Operating Income (Loss) (Billion \) 2004 2005 2006 Shipbuilding (2.4) 1.0 (1.7) Rolling Stock 4.3 7.8 8.8 Aerospace 4.2 6.1 9.7 Gas Turbines & Machinery 4.5 2.7 6.8 Plant & Infrastructure Engineering 1.2 (14.5) (8.5) Consumer Products & Machinery 7.3 16.7 19.9 Other 3.2 5.0 6.7 Net Operating Income 22.3 24.7 41.8 Ratio of Operating Income to Sales 2004 2005 2006 Shipbuilding (2.5%) 1.1% (1.6%) Rolling Stock 3.6% 4.5% 5.2% Aerospace 2.4% 3.2% 4.4% Gas Turbines & Machinery 3.3% 1.9% 4.2% Plant & Infrastructure Engineering 0.6% (7.6%) (5.2%) Consumer Products & Machinery 2.3% 4.9% 5.4% Other 2.4% 4.0% 5.0% Total 1.9% 2.0% 3.2% 4 Years ended March 31 (Billion \) Other ORDERS RECEIVED ORDER BACKLOG 1,400 1,400 Consumer Products & Machinery 1,200 1,200 Plant & Infrastructure 1,000 1,000 Engineering Gas Turbines & 800 800 Machinery Aerospace 600 600 400 400 Rolling Stock 200 200 Shipbuilding 0 0 2004 2005 2006 2004 2005 2006 (Billion \) Orders Received Order Backlog 2004 2005 2006 2004 2005 2006 Shipbuilding 123.8 155.8 128.3 193.7 263.7 289.2 Rolling Stock 153.4 178.4 203.2 294.0 300.8 346.3 Aerospace 216.2 214.7 229.3 260.3 287.4 301.6 Gas Turbines & Machinery 130.0 162.7 188.1 140.3 163.4 195.1 Plant & Infrastructure Engineering 156.1 126.4 97.3 273.8 210.2 144.1 Consumer Products & Machinery 318.3 338.5 367.0 0.0 0.0 0.0 Other 128.9 125.4 138.5 27.2 28.8 34.1 Total 1,226.7 1,301.8 1,351.6 1,189.4 1,254.4 1,310.4 OVERSEAS SALES Years ended March 31 2006 2006 Million \ % against Other net sales Areas North America 282,149 21.3% 8.2% Europe 109,060 8.2% Asia Asia 197,503 14.9% 14.9% Other Areas 107,103 8.2% Domestic Total Overseas Sales 695,815 52.6% Sales Europe 47.4% Domestic Sales 626,672 47.4% 8.2% Net Sales 1,322,487 100.0% North America 21.3% 5 Shipbuilding (Years ended March 31) -Consolidated Basis- (Million \) 2002 2003 2004 2005 2006 Sales 92,478 105,458 94,939 87,081 109,697 Orders Received 106,106 110,926 123,756 155,832 128,323 Order Backlog 194,275 173,304 193,705 263,707 289,227 (Years ended March 31) (Million \) 300,000 250,000 200,000 150,000 100,000 50,000 0 2002 2003 2004 2005 2006 Sales Orders Received Order Backlog (Years ended March 31) -Parent (until 1st half of 2003) and Kawasaki Shipbuilding Corporation (from 2nd half of 2003) - (Million \) 2002 2003 2004 2005 2006 Sales 89,995 101,748 92,043 83,655 105,108 Newly Constructed Ships 76,502 90,649 77,507 74,241 90,763 Exports 62,278 66,135 56,448 50,617 64,617 Orders Received 103,655 107,201 121,766 151,799 124,066 Order Backlog 193,812 173,081 194,388 263,503 289,387 Note: Shipbuilding business in "Kawasaki Heavy Industries, Ltd.