IHI CORPORATION Management Review: Progress with Project Change
November 9, 2021
Hiroshi Ide, President and Chief Executive Officer
Copyright © 2021 IHI Corporation All Rights Reserved.
Contents
- Overview of Project Change
- Second-QuarterReview
- Business Area Progress
- Aero Engine, Space & Defense
- Resources, Energy & Environment
- Industrial Systems & General-Purpose Machinery
- Social Infrastructure & Offshore Facilities
- Growth Business Creation
- Summary
Copyright © 2021 IHI Corporation All Rights Reserved. | 2 |
Project Change | Second-Quarter Review | Business Area Progress | Growth Business Creation | Summary |
Overview of Project Change
- Positioning
Project Change | Next medium-term | Sustainable | |
Group Management Policies 2019 | FY2020~2022 | management plan | growth |
FY2023～2025 | Relentlessly explore | ||
COVID-19 | |||
Reform businesses in | Complete business portfolio | new opportunities for | |
FY2019～2021 | |||
optimization, becoming | businesses that can | ||
Transform | response to operating | ||
enterprise with multiple core | resolve social issues | ||
climate changes | |||
businesses | |||
Retain basic concept | |||
- Project Change emphases: Management that embraces ESG values
Return to growth trajectory
Further strengthen earnings foundations
Expand lifecycle businesses
Overcome operating
environment changes to
drive value creation
Reallocate personnel
Pursue diversity and inclusion
Adopt new work practices
Financial strategies
Strengthen cash flow generation
Allocate funds optimally
Build solid financial position
Create growth businesses that address social issues
Materialize fulfilling lifestyles
Air transportation systems
Safe, comfortable, economical,
and eco-friendly
Carbon solutions | Maintenance and disaster | |
prevention and mitigation | ||
Materialize carbon-free, circular | Develop robust, economically | |
economies and comfortable and | and eco-friendly social | |
secure decentralized communities | infrastructure | |
Become carbon-free | Prevent and mitigate disasters |
Copyright © 2021 IHI Corporation All Rights Reserved. | 3 |
Progress Change | Second-Quarter Review | Business Area Progress | Growth Business Creation | Summary |
Second-Quarter Review
Progress
assessment
- Progressed steadily with measures, including to strengthen cost structure and expand lifecycle businesses
- Notwithstanding soaring raw materials and transportation costs and other external factors, reinforced earnings base to position IHI to reach FY2022 management targets
Results | ||||||||||||||||||||
FY2020 Q2 | FY2021 Q2 | FY2021 | ||||||||||||||||||
forecasts | ||||||||||||||||||||
• | Revenue improved for all business areas | |||||||||||||||||||
Revenue | ¥481.7 billion | ¥516.5 billion | ¥1,180 billion | |||||||||||||||||
Operating profit increased in three business | ||||||||||||||||||||
• | ||||||||||||||||||||
Operating profit (loss) | ||||||||||||||||||||
areas and companywide (Social Infrastructure | (¥6.1 billion) | ¥26.3 billion | ¥70 billion | |||||||||||||||||
& Offshore Facilities earnings dropped owing | Operating profit | (1.3%) | 5.1% | 5.9% | ||||||||||||||||
to rising steel prices and transportation | margin | |||||||||||||||||||
costs） | Profit (loss) | (¥9.7 billion) | ¥15.1 billion | ¥35 billion | ||||||||||||||||
• | In terms of profitability, all the profit items | attributable to owners | ||||||||||||||||||
of the parent | ||||||||||||||||||||
turned profitable, posting operating profit | ||||||||||||||||||||
Operating | ||||||||||||||||||||
even after excluding fixed asset sales gains | ||||||||||||||||||||
profit margin | ||||||||||||||||||||
Operating profit | Reform | Sales of | above 8% | |||||||||||||||||
Expand | assets | Other | 100 | |||||||||||||||||
(Billions of yen) | Strengthen | business | ||||||||||||||||||
lifecycle | 70.0 | |||||||||||||||||||
cost | structure | |||||||||||||||||||
businesses | ||||||||||||||||||||
Recover from | structure | |||||||||||||||||||
50 | ||||||||||||||||||||
27.9 | pandemic | |||||||||||||||||||
0 | ||||||||||||||||||||
20 | 年度 | コロナ影響 | コスト構造 | ライフサイクル | 事業構造 | 資産売却 | その他 | 021年度 | FY202220 2年度 | |||||||||||
FY2020 | FY2021 | |||||||||||||||||||
からの回復 | の強化 | ビジネスの拡大 | の改革 | 4 | ||||||||||||||||
Copyright © 2021 IHI Corporation All Rights Reserved. |
Progress Change | Second-Quarter Review | Business Area Progress | Growth Business Creation | Summary |
Aero Engine, Space & Defense
Business environment
- Passenger demand for domestic and short-haul international flights recovering on vaccination progress
- Air cargo demand robust and exceeding pre-pandemic levels
- From FY2022, international passenger demand should recover on vaccination progress and domestic flight demand turnaround, with aero engine maintenance demand rising as more aircraft operate
Recover from
pandemic
Strengthen
cost structure
Expand lifecycle businesses
Future
initiatives
Project Change progress
- Increased spare parts sales amid moderate aviation demand recovery
- Boosted productivity with new engines (by procuring materials and parts just in time and by digitizing processes to stabilize them
- Launched operations at Tsurugashima Works (reinforced
structure to take advantage of recovery and growth in | Tsurugashima Works |
commercial aero-engine business) | |
- Aviation demand trending upward, should recover further in and beyond FY2022
- Will prepare for rapid demand recovery by becoming more cost-competitive and building more efficient structure based on robust quality assurance setup
Copyright © 2021 IHI Corporation All Rights Reserved. | 5 |
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IHI Corporation published this content on 09 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 November 2021 06:12:11 UTC.
