Transportation & Construction Systems Business Unit
Unceasing Challenge for New Value Creation
December 17, 2018
General Manager, Transportation & Construction Systems Business Unit Shoichiro Oka
Agenda
１．Organization and Business Overview
２．Strategy in “Medium-Term Management Plan 2020”
３．Financial Aspects
2 Organization Structure
Before Mar. 2018 45 Division 本部 Transportation & Construction Systems Business Unit
Planning ＆ Coordination Dept., 1819 部Dept. Transportation & Construction Systems Business Unit
Ship, Aerospace & リース・船舶・ Automotive Div., Automotive Div., Construction & Transportation No.1 No.2 Mining Systems Div. 航空宇宙事業本部Systems Div.
Lease & Business Construction Automotive Planning Dept.(co-control) Equipment Sales & Development Dept. Marketing Dept. No.1
Construction Ship & Marine Mobility Service Automotive Sales and Equipment Sales & Project Dept. Marketing Dept.1 Business Dept. Marketing Dept. No.2
Automotive Retail Construction Aerospace Dept. Automotive Sales and Finance Business Equipment Rental Marketing Dept.2 Dept. Business Dept
Aircraft & Engine Automotive Automotive Sales Leasing Dept. Manufacturing and Marketing Business Dept.1 Dept.3 Transportation Systems & Infrastructure Automotive Business Dept. Manufacturing Tire Dept. Business Dept.2
PFI Dept. 3 Organization Structure
After Apr. 2018 5 Division Transportation & Construction Systems Business Unit
Planning ＆ Coordination Dept., 18 Dept. Transportation & Construction Systems Business Unit
Co-control with Metal Products Business Unit Lease, Shipbuilding Automotive Automotive Sales & Automobility Business Construction & & Aerospace Manufacturing Marketing Business Div. Mining Systems Div. Business Div. Business Div. Div.
Lease & Business Construction Automotive Planning Dept.(co-control) Equipment Sales & Development Dept. Marketing Dept. No.1
Ship & Marine Automotive Automotive Sales Mobility Service Construction Project Dept. Manufacturing and Marketing Equipment Sales & Business Dept.1 Dept.1 Business Dept.1 Marketing Dept. No.2
Construction Aerospace Dept. Automotive Automotive Sales Mobility Service Manufacturing and Marketing Equipment Rental Business Dept.2 Dept.2 Business Dept.2 Business Dept Aircraft & Engine Automotive Automotive Sales Mobility Service Leasing Dept. Components and Marketing Business Dept. Dept.3 Business Dept.3
4 Principal Businesses (by Division)
Lease, Ship & Aerospace Business Division Automotive Manufacturing Business Division
Trade of automotive components and production General lease business equipment Trade of ships, chartered ship business Manufacturing of automobiles and automotive Shipbuilding components Trade of defense and aerospace equipment After-sales market business and related products Manufacturing of aircraft components Lease of aircraft and engines Automotive Sales & Marketing Business Division
Trade of automobiles Automotive distribution business Construction & Mining Systems Division Automotive dealing business
Trade of construction machinery Automobility Business Division Sales and services of construction machinery Sales and services of mining machinery Sales and services of agricultural machinery Auto leasing business Rental of general construction machinery Business related to cells for EVs Automotive sales and finance business Trade and sales of tires
5 Principal Businesses (by Function)
Construction machinery Lease, ship and and agricultural Automotive field aerospace field machinery field (including forklifts)
Manufacturing of Shipbuilding automobiles Processing and recycling Manufacturing Manufacturing of aircraft of mining machinery Manufacturing of components components automotive components
Trade Trade Distribution Sales Trade (ship, aerospace, Distribution and defense) Dealing Dealing Services After-sales services After-sales services EV-related
General lease Auto leasing Finance Chartered ships, co- Rental of general and owned ships Sales and financial services for automobiles construction machinery Asset Lease of aircraft and motorbikes Lease of aircraft engines
6 Agenda
１．Organization and Business Overview
２．Strategy in “Medium-Term Management Plan 2020”
３．Financial Aspects
7 Strategy 【Direction of strategy during the mid-term management plan】 “Enhancing business bases” and “Creating new values”, facing the Fourth Industrial Revolution squarely
【Three pillars of the strategy】
（１）To reinforce existing businesses
（２）To enhance the function of leasing and financing business and make synergies with other business
（３）To promote various businesses in the coming mobility society
8 Reinforcement of Construction & Mining Systems business Only one general trading company that has the ‘Division’. (We are the biggest player in terms of not only business scale but also organization in the trading companies.) Group Companies
SR-O BALTEM SMS Sumitec Equipment International
Transwest H&R KESA Mongolia TAIYO Kenki Rentall Veritread Komatsu Sumitec Sunstate Poland Ukraine Equipment Linder Kubota SCCM 住貿商貿
Abdul Latif Jameel
PT Traktor Nusantara 16 27 360 9,700 Countries Companies locations Employees
Distribution Rental Next-generation Businesses Businesses Businesses 9 Strengthening Construction & Mining Systems business
Earthmoving Generator /compressor Material handlingt Crane
Mining equipment Agricultural Small items and tools Aerial Equipment Products
Road Equipment Demolition machine Forestry equipment House/Toilet
【Distribution and service】 Canada ：SMS Equipment U.S： Linder Main Russia：Sumitec International Europe：Tecnosumit businesses China ：SCCM 【Rental】 U.S：Sunstate Equipment Japan：Taiyo Kenki Rental 10 Strengthening Construction & Mining Systems business
【Vision】 • “No.1 One-Stop-Solution Provider”
• To build a resilient business infrastructure that can respond accurately to cyclical market
【Growth Strategy】 1. Distribution and Service Promoting geographical Businesses business expansion by
2. Rental Businesses “Hands-on”
11 Reinforcement of Automobile Casting Parts Business As of As of initial investment now in KIRIU
KIRIU CORPORATION (Tochigi pref.) 3 7 Founded in 1906（SC Participated in 2004) countries countries Number of employees:5,722 (consolidated base) Products：Brake related parts and others
Fujiwa Machinery Industry 6 15 (Kunshan, China) locations locations Founded in 1995（SC Participated in 2006) Number of employees:1,430 Products：Brake parts, Drive parts etc. Sales Sales ¥27 ¥49 billion billion*
Result of FY2017 12 Reinforcement of automobile casting parts business Location map of KIRIU Group/Fujiwa Group
・KIRIU-LIOHO, ・Fujiwa machinary Industry[Hubei,Kunshan] ・KIRIU TECHNO[Yantai] (China) KIRIU-SAMIC (KOREA) KIRIU USA
KIRIU Corporation (Ashikaga, Yamagata, Oita, TECHNO) MUNJAL KIRIU[Haryana, KIRIU Thailand KIRIU MEXICANA Gujarat] (India)
KIRIU Indonesia
Sophistication of manufacturing operation in China, India 13 Reinforcement of the Collaboration with Sumitomo Precision Products Sumitomo Corporation became the largest shareholder of Sumitomo Precision Products Co., Ltd. in May 2017 and has been promoting further collaboration. Business fields of Sumitomo Main collaboration fields Precision Products
ICT- related Aircraft landing Aircraft heat businesses gear systems control systems
Thermal Aerospace- Industrial heat Sensors energy- and related exchangers (MEMS) environment- businesses related businesses
Sumitomo precision Products Co., Ltd.
Technologies and Worldwide Development Capabilities Customer Base
14 Strategy 【Direction of strategy during the mid-term management plan】 “Enhancing business bases” and “Creating new values”, facing the Fourth Industrial Revolution squarely
【Three pillars of the strategy】
（１）To reinforce existing businesses
（２）To enhance the function of leasing and financing business and make synergies with other business
（３）To promote various businesses in the coming mobility society
15 Leasing and financing businesses
General leasing Sumitomo Mitsui Finance and Leasing
Automobile leasing Sumitomo Mitsui Auto Service
Aircraft leasing SMBC Aviation Capital
Aircraft engine leasing Sumisho Aero Engine Lease Car & motorcycle retail financing OTO/SOF 16 Leasing and financing business -SMFL-
General leasing Sumitomo Mitsui Finance and Leasing
Automobile leasing Sumitomo Mitsui Auto Service
Aircraft leasing Customers Top-SMBCclass Aviation Capital in the 170,000 sectorAircraft engine leasingTotal asset companies Sumisho Aero¥5.7 Engine Lease Car & motorcycle retailtrillion financing OTO/SOF 17 Leasing and financing business -SMAS-
General leasing Sumitomo Mitsui Finance and Leasing
Automobile leasing Sumitomo Mitsui Auto Service
Aircraft leasing SMBC Aviation Capital
Aircraft engine leasing Total asset Number of Customers No.Sumisho１ ¥ Aero750 Engine vehicles Lease 40,000 in Japan Car & motorcyclebillion retail 790,000 Companies financing OTO/SOF 18 Leasing and financing business -SMBC AC-
General leasing SumitomoTotal Mitsui asset Finance and LeasingNumber of No.４ aircrafts in Automobilethe world leasing¥1.4 trillion 650 Sumitomo Mitsui Auto Service
Aircraft leasing SMBC Aviation Capital
Aircraft engine leasing Sumisho Aero Engine Lease Car & motorcycle retail financing OTO/SOF 19 Leasing and financing business -SAEL-
総合リース 三井住友ファイナンスNumber&リース of engines Total asset Establishedオートリース 34 ¥40 住友in 三井オートサービス billion 2013 航空機リースAircraft leasing
SMBC Aviation Capital
Aircraft engine leasing Sumisho Aero Engine Lease Car & motorcycle retail financing OTO/SOF 20 Leasing and financing business -OTO/SOF-
No.１ Total asset Customers Branches As ¥300 1.2mil 240 independent people player billion locations 航空機リース SMBC Aviation Capital
二輪/四輪ファイナンス Sumisho Aero Engine Lease Car & motorcycle retail financing OTO/SOF 21 Leasing business re-organization with SMFG
General leasing
SMFL
SMFG
4500 6500
SMFL
Deepening of Business Collaboration
22 Leasing business re-organization with SMFG
SMFG SC SMFG General 50 50 SMFL leasing
SC SMFG SMFL Automobile 18 SMAS leasing 34 22 26
SMBC SMFL Aircraft 32 68 SMBC AC leasing
23 SMFL and Sumitomo Corporation’s Businesses
Mineral Resources, Transportation & Metal Products Infrastructure Media & Digital Living Related & Real Energy, Chemical & Construction Systems Business Unit Business Unit Business Unit Estate Business Unit Electronics Business Business Unit Unit
Factoring of metal Lease of manufacturing Lease of facilities Factoring of Lease of cable TV Finance for real materials and equipment for for overseas chemical materials automotive equipment estate projects products components industrial parks and products
Lease of metal Lease of solar Factoring of fiber, Lease of factory Financing for new Lease of ICT processing power generation wood, food related facilities for shipbuilding related equipment equipment equipment products chemicals materials
24 Business field of SMFL after re-organization General leasing
SMFL Business field of SMFL after re-organization Business field Business field of Bank Existing business Joint-operation of Sumitomo Corp. Mezzanine finance Development/ Fund investment Aircraft leasing PJ management Automobile leasing Finance Operating PJ investment leasing Finance Real estate/ leasing Infrastructure
Financial Business investment investment SMFG
Customer base Value-chain Construction Financial solution Business incubation 25 Strategy 【Direction of strategy during the mid-term management plan】 “Enhancing business bases” and “Creating new values”, facing the Fourth Industrial Revolution squarely
【Three pillars of the strategy】
（１）To reinforce existing businesses
（２）To enhance the function of leasing and financing business and make synergies with other business
（３）To promote various businesses in the coming mobility society
26 Environmental Changes
Change to Value Proposition
Ownership Utilization
Changes to Buyers
Individuals Fleet owners
Changes to Leading Players Manufacturers and distributors Service operators
Change to Rules of the Game
Pay per unit Pay per km
27 Mobility Services Envisioned by Sumitomo Corporation
What are mobility services?
Cannot charge or may Billable only when have to reimburse when a vehicle is in motion it is not in use
Who are mobility service providers?
Take non-operation risks Own and manage assets (risks of idleness)
Partner
Mobility service Platform and/or provider Tech 28 TBC (Alliance with Michelin)
TBC Corporation MICHELIN （50%） （50%）
Capital alliance with Consolidation of Michelin Secondary wholesales ↓ Integration and further Number of Enhancing B2B reinforcement of existing business businesses retail stores ↓ in the U.S. Enhancing To evolve E-commerce to the next-generation 2,500 mobility service provider Distribution warehouses To be a mobility 100 service platform in （After integration） North America
29 Acquiring new platform - China -
100% ”Zhongxin Group”
Automotive repairing service company Customer An automobile ”Zhongxin automobile Co., Ltd.” aftermarket parts sales company Number of （New Company） Repair factory 90
Number of car owned3 （Billion)
0.22 Number of car owned in China
0.11 2012 0.11 bil. 0.25bil. 2017 0.22 bil. 0.27bil. 0 2012 2013 2014 2015 2016 2017 2020 2020 0.28 bil.(forecast） 30 Evolving SMAS - a joint venture with OEMs -
Auto leasing SMAS
SMAS 33.4% A new truck finance •Expertise & leasing company •Sales & service force HINO MOTORS 16.5% •Technical capability •Customer base Mobilots Toyota Finance Corporation 50.1% •Financing power
To Utilize connected technology to meet diversifying needs
31 Evolution of SMAS -collaboration with OEM-
SMAS NISSAN MOTOR Corporation Construction of cascade reuse model of EV
Battery status
Primary use for new EV car Reuse as recycled battery for EV
Reuse at limited area Stationary storage battery
Time 32 geospatial information solution
Collaboration with “Start-ups”
Aerospace Electric Gogoro SINTAVIA Metal Additive HYLIION EV scooters, Charging infrastructure Hawkeye360 Manufacturing electric shaft for Commercial satellites trailer (geospatial information solution ) NExT-e Solutions RIVIAN NExT-e Solutions Shared EV Battery management system Vulog Free-floating carsharing Construction ActiveScaler & Mining akippa Equipment GMS Seamless Mobility solution Parking sharing Engine remote VERITREAD control TURO B2B matching Smart Drive P2P service Telematics carsharing Connected 33 “Hands-on” Challenges for Next- Generation Mobility
Gogoro’s EV smart scooter Free-floating EV carsharing sharing in Ishigaki-island service in Stockholm
1 2
34 Agenda
１．Organization and Business Overview
２．Strategy in “Medium-Term Management Plan 2020”
３．Financial Aspects
35 Quantitative Targets Total assets (Billions of yen) Enhancing Business Base Profit for the year attributable to Creating New Values owners of the parent (Billions of yen) Investments in the 3 years of medium- term management plan：¥180 billion 1,924 1,905 1,886
840 84.0 72.3 73.0 56.3
2015 2016 2017 2018 2019 2020 “Medium-Term Management BBBO 2017 Plan 2020” 36