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A Message to Investors

About ONEX Corporation

Since it was established in 1951, ONEX Corporation has taken a leading position in the industry as a comprehensive metal heat treatment service provider and equipment manufacturer, having accumulated a wide range of carburizing technologies that include vacuum heat treatment, high-frequency heat treatment, nitriding treatment, and ceramic coating. Based on its principle of always putting the customer first, ONEX aims to make further technological advances while leaping ahead of the competition as a leading listed company specializing in heat treatment.

Find out more about ONEX Corporation

ONEX's technologies

An overview of ONEX's technologies that support Japan's manufacturing industry


ONEX's technological advantages

An explanation of how ONEX has derived technological advantages from effectively integrating strict quality control and precise control technologies with heat treatment technologies developed over many years


Financial highlights

Updated data on ONEX's financial results and indicators


Latest financial report

A report on ONEX's latest financial results and outlook


Corporate governance

An overview of ONEX's corporate structure and fundamental approach to governance


Financial highlights (non-consolidated)


million yen %

Net sales

Net assets

Ordinary income

Total assets

Net income attributable to shareholders of the parent company (loss)

Equity ratio (%)

Return on equity (%)

Return on assets (%)


(Thousands of yen)
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
Net sales 5,143,904 5,269,806 4,362,705 4,418,121 4,628,596 4,529,747
Ordinary income 637,328 597,867 111,289 61,260 292,816 120,002
Net income attributable to shareholders of the parent company (loss) 361,140 332,491 139,774 34,976 174,619 69,999
Net assets 4,749,101 5,014,768 5,011,491 5,005,875 5,184,494 5,177,203
Total assets 8,639,719 7,757,482 7,379,748 7,363,510 8,005,626 8,806,417
Net assets per share 271.72 286.94 302.47 302.16 313.00 312.58
Equity ratio (%) 55.0 64.6 67.9 68.0 64.8 58.8
Return on equity (%) 7.89 6.81 2.79 0.70 3.43 1.35
Return on assets (%) 4.2 4.3 1.9 0.5 2.2 0.8

Financial highlights (3Q FY2017)


(Thousands of yen)
3Q FY2017 3Q FY2016 Increase (decrease)
Net sales 4,049,794 3,861,528 4.9%
Operating income 245,314 210,078 16.8%
Ordinary income 245,963 212,069 16.0%
Net income (loss) attributable to shareholders of the parent company 108,701 113,883 4.8%

Segment Information (3Q FY2017)

(Thousands of yen)
Metal Heat Treatment and Processing Business Logistics Business Adjustments Amount recorded on quarterly consolidated statements of income
Sales to external customers 3,592,355 457,439   4,049,794
Internal sales or transfers between segments   204,359 -204,359  
Total 3,592,355 661,798 -204,359 4,049,794
Segment income 199,157 20,041 26,116 245,314

Latest financial report

Analysis of Financial Results

During the fiscal year ended June 30, 2016, the Japanese economy continued to recover moderately amid ongoing improvements in employment and income conditions. Nevertheless, caution regarding the business outlook grew as the yen continued to appreciate and stock prices declined following the adoption of a negative interest rate policy by the Bank of Japan. The global economy appeared at risk of a downturn due to developments in the financial and capital markets. Although the U.S. economy continued to pick up, there was a strong tendency worldwide to avoid risks in view of the outlook for a number of trends, including uncertainty in Europe due to problems associated with the United Kingdom's withdrawal from the European Union, together with declining prices for resources, the slowdown of economic growth in emerging and resource-rich countries, and diverging monetary policies in advanced countries.

Against this backdrop, the ONEX Group worked to secure orders and cut costs. In its Metal Heat Treatment and Processing Business segment, the Group carried out measures to shorten delivery times and optimize production at each of its factories. Given the ongoing decline in the price of butane, a main material in this business, manufacturing cost prices decreased. On the other hand, orders were down in the first half of the fiscal year as a result of production adjustments in China, reflecting the country's economic slowdown. The launch of mass production at ONEX Tech Center Corporation, a consolidated subsidiary that began operations in December 2015, was delayed, and costs were incurred for equipment needed for mass production. In addition, due to the impact of falling interest rates in the market, liabilities for retirement benefits rose markedly by ¥244 million (up ¥38 million compared to the previous fiscal year). As a result of these factors, both sales and income in this segment fell year on year. Likewise, sales decreased year on year in the Logistics Business segment, mainly due to declining shipments of road-building equipment.

As a result of the factors described above, consolidated sales and every level of income decreased compared with the previous fiscal year. In the fiscal year under review, net sales amounted to ¥5,151 million, down 1.2% year on year. The Company posted an operating loss of ¥32 million and an ordinary loss of ¥27 million, compared with operating income of ¥313 million and ordinary income of ¥324 million in the previous fiscal year. Likewise, net income attributable to shareholders of the parent company of ¥191 million in the previous fiscal year turned into a net loss of ¥85 million in the fiscal year under review.

Financial results by segment are presented as follows.

[Metal Heat Treatment and Processing Business Segment (ONEX Corporation and ONEX Tech Center Corporation)]

In this segment, energy costs, including gas and electricity, decreased in line with the declining price of crude oil. The Group worked to lower cost prices by optimizing production and shortening delivery times. On the sales front, orders for heat treatment from automotive-related industries-the Group's main source of customers-were solid in the fiscal year under review. On the other hand, orders for heat treatment of construction machinery and industrial machinery decreased temporarily, mainly due to the economic slowdown in China. Industrial machinery-related orders rebounded in the second half of the fiscal year, but construction machinery-related orders remained sluggish. Consequently, sales decreased overall compared to the previous fiscal year.

In the wind power generation industry, the Group is mainly involved in the heat processing of gears for gearboxes. While opportunities for adopting renewable energy are growing, the industry has stagnated in Japan due to a requirement imposed on developers to conduct wind power environmental assessments, effective from October 2012. In the fiscal year under review, facilities for which environmental assessments had been completed began operating according to rates set under Japan's feed-in tariff system, but the industry was negatively affected by the low price of crude oil and intensifying competition from foreign companies. Reflecting these factors, orders fell year on year.

Ordinary income and net income both decreased in this segment compared with the previous fiscal year, mainly due to higher costs of sales and selling, general and administrative expenses, as well as a substantial rise in liabilities for retirement benefits, which grew ¥246 million year on year (up ¥35 million compared to the previous fiscal year) as a result of lower market interest rates. If the discount rate used to calculate retirement benefit obligations decreases substantially as a result of falling market interest rates, the Company will process the retirement benefits as a lump sum in the accrued fiscal year.

As a result of the factors described above, net sales in this segment edged down 0.5% year on year to ¥4,604 million, while segment income of ¥252 million in the previous fiscal year turned into a loss of ¥87 million.

[Logistics Business Segment (ONEX Line Corporation)]

In this segment, sales decreased compared with the previous fiscal year due to a temporary fall in orders from customers involved in road pavement work. Nevertheless, the business made use of leased vehicles for deliveries, and strove to reduce fuel consumption by carefully managing operations, rationalizing vehicle allocation, and promoting eco-friendly driving. Fuel costs decreased due to the decline in diesel prices. Despite these efforts, segment income fell year on year due to higher depreciation costs, which reflected an increase in the segment's total number of vehicles owing to the opening of a new facility in Mie Prefecture.

As a result of the above factors, the Logistics Business segment posted net sales of ¥547 million, down 6.2% year on year, and segment income of ¥23 million, a decrease of 23.5%.

Forecast of Financial Results in the Fiscal Year Ending June 30, 2017

Looking ahead in the fiscal year underway, Japan's economy is expected to continue its moderate recovery on the back of government measures. Nevertheless, downside risks are growing as a result of changes in the financial and capital markets and rising uncertainty in the global economy associated with exchange rate and crude oil price fluctuations, economic trends in resource-rich countries and emerging countries, particularly China, and the issue of the United Kingdom's separation from the European Union.

Based on this outlook, and to respond to structural shifts in Japan's manufacturing industries, the ONEX Group is establishing a production system that can more quickly meet the needs of customers. To achieve these ends, the Group has expanded its network of facilities with the startup of ONEX Tech Center Corporation's heat treatment plant in the city of Kameyama in Mie Prefecture. These plans to expand the facilities, however, include large initial investments in industrial machinery. Therefore, ONEX Tech Center Corporation is expected to post an operating loss, and the Company forecasts year-on-year decreases in income, while net sales are forecast to increase.

In consideration of these factors, ONEX Corporation forecasts the following consolidated financial results in the fiscal year ending June 30, 2017: net sales of ¥5,390 million, a year-on-year increase of 4.7%, operating income of ¥20 million, ordinary income of ¥30 million, and a net loss attributable to shareholders of the parent company of ¥60 million.

ONEX Corporation (5987) Summary Report on FY2017 Q3 Settlement of Accounts

1. Qualitative information concerning quarterly settlement of accounts

(1) Description of business performance

During this consolidated cumulative third quarter, Japan’s economy remained on a course of gentle recovery, with both employment and personal income continuing to improve, although some companies apparently lagged in the pace of this improvement due to rising energy prices as the fall in crude oil prices slowed and the yen trended lower on international currency markets. Overseas, the US economy maintained its course of steady recovery, while the Chinese economy appeared to regain some momentum. The growing risk of fluctuations in foreign exchange, financial, and capital markets makes the future outlook increasingly uncertain. Factors contributing to this fluctuation risk include Britain’s withdrawal from the European Union, political developments in leading European states, a change in economic policies under the new US President, and geopolitical risks in the Middle East, North Korea, and elsewhere.

Given these economic conditions, the ONEX Group sought to increase profitability by boosting productivity and cutting costs. In our most important markets—automotive, construction machinery, and industrial machinery—orders received for construction machinery appeared to bottom out but remained sluggish. Orders related to industrial machinery grew for products such as reduction gears for robots, while conditions were favorable for orders received related to auto parts. As a result, net sales increased from the same consolidated cumulative quarter of the previous fiscal year. The lower cost of electricity and other production costs and efforts to reduce expenses resulted in higher profits compared to the same consolidated cumulative quarter of the previous fiscal year.

As a result, during this consolidated cumulative third quarter, net sales stood at JPY4,049 million (up 4.9% YoY). Operating income was JPY245 million (up 16.8% YoY), ordinary income JPY245 million (up 16.0% YoY), and net income attributable to shareholders of the parent company JPY113 million (up 4.8% YoY).

Performance by business segment is outlined below.

1. Metal Heat Treatment and Processing Business
In the metal heat treatment and processing industry, overall orders received trended up, with favorable conditions for orders in the key automotive market. Orders for industrial machinery also grew. While orders for construction machinery were slow, they showed some signs of bottoming out. In addition, the net sales generated by ONEX Tech Center Corporation grew, resulting in net sales growth compared to the same consolidated cumulative quarter of the previous fiscal year.

Segment profit increased due to lower electricity costs and success in implementing all measures to secure profitability by boosting productivity and cutting labor costs and miscellaneous expenses.

Due to all these factors, net sales in this segment stood at JPY3,592 million (up 4.4% YoY), while segment profit was JPY199 million (up 24.6% YoY).

2. Logistics Business
Net sales in the Logistics Business increased due to increased sales volumes accompanying the opening of the Mie Office, as well as stable volumes of machinery and other heavy cargo handled. Despite efforts to ensure thorough operations management, increase the efficiency of vehicle allocation, reduce fuel consumption through eco-friendly driving practices, and outsource activities requiring trucks, profits in this segment fell for various reasons, including rising diesel oil prices, rising labor costs, and increased depreciation costs accompanying an increase in the number of vehicles.

As a result, net sales in this segment stood at JPY457 million (up 8.9% YoY). Segment profit was JPY20 million (down 26.1% YoY).

(2) Description of financial conditions

Total assets rose to JPY10,033 million, up JPY880 million from the end of the previous consolidated fiscal year, due mainly to an increase of JPY885 million in cash and deposits.

Total liabilities rose to JPY4,751 million, up JPY755 million from the end of the previous consolidated fiscal year, due mainly to an increase of JPY689 million in long-term debt.

(Net assets)
Total net assets rose to JPY5,281 million, up JPY124 million from the end of the previous consolidated fiscal year, due mainly to increases of JPY80 million in retained earnings and JPY44 million in valuation differences on available-for-sale securities.

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