Company: Yaskawa Electric (6506 JP)
Event: FY15 Results
QMG product view: POSITIVE (JA33.3 Industrial process control apparatus)
• Revenue: JPY400bn – in line with consensus estimates (Toyo Keizai) and +10% yoy
• Operating profit: JPY31.5bn – in line with consensus estimates (Toyo Keizai) and +22.7% yoy
• Operating margin: +81bps to 7.88% (in line with consensus/corporate guidance)
• 2016 guidance: Revenue +8.7% to JPY435bn (consensus cJPY423bn) and operating profit +15.8% to JPY36.5bn. Operating margin therefore +52bps to 8.4%.
FY15 represents the 6th consecutive year of sales growth with FY results in line with both company guidance and consensus estimates. Consensus sales numbers for FY16 are likely to increase on the back of stronger company guidance – this is supported by QMG data which remains very positive indicating +17.6% product level sales growth and +470bps of operating margin expansion.
If there is anything that the market may be concerned with/disappointed about in these results, we note that H1 guidance is indicating a decline in operating margin to 7.45% (from 7.9% FY15 and 7.7% at H114). That said, the shares have been weak into results and current EV/Sales multiple of 1.16x is attractive when considering consensus upgrades and average 1.1-1.4x multiples that the stock has traded on in the past.
Sales trend of JA33.3 remains well above general manufacturers: