Slide 1: FY2008 Financial Results
FY2008 Financial Results May 15, 2009
Slide 2: FY 2008 Results / FY 2009 Outlook / Advanced Service Business / Future steps
1 FY 2008 Results 2 FY 2009 Outlook 3 Efforts on “Advanced Service Business” 4 Future steps for long-term growth 1
Slide 3: FY2008 Highlights
FY2008 Highlights 43％ decrease in revenue, 62％ decrease in ordinary profit Semiconductor Design: Cadence business is solid while Tester business substantially decreased and profitability of Design Service business has dropped Electronic Components: Revenue substantially decreased but profitability o
Slide 4: FY 2008 Results
FY 2008 Results 〔mil. yen〕 Sanei Overseas Consolidate Innotech IT ACCESS YoY Hytechs Sales d Net Sales 23,763 3,295 2,583 4,557 30,018 -43% Cost of Sales 19,167 2,658 1,608 4,439 23,669 -47% Gross Profit 4,596 636 975 118 6,349 -26% S G A 3,706 500 610 128 5,118 -2% Operating 889 136 364 -9 1,230 -6
Slide 5: Comparison by Segment
Comparison by Segment 〔mil. yen〕 FY2007 FY2008 YoY Net Sales 52,836 30,018 -43% Semiconductor Design 18,927 13,818 -27% Electronic Components 33,909 16,200 -52% Cost of Sales 44,271 23,669 -47% Gross Profit 8,564 6,349 -26% Semiconductor Design 5,517 3,936 -29% Electronic Components 3,047 2,413 -21%
Slide 6: Sales by Business
Sales by Business 〔mil. yen〕 FY2007 FY2008 YoY Factors Semiconductor Design 18,927 13,818 -27% Less sales but longer term of Cadence 7,984 6,943 -13% contracts obtained Decrease in semiconductor Semiconductor Testers 5,497 2,506 -54% facility investment Replacement from current ASIC Design and Sales
Slide 7: Better results than previously announced
Better results than previously announced 〔mil. yen〕 Estimate FY 2008 results change （as of Feb. 12） Net Sales 29,500 30,018 2% Operating Profit 1,100 1,230 12% Ordinary Profit 1,100 1,218 11% Net Profit 500 475 -5% Changing factor Increase in gross profit 49 Semiconductor Design 86 Electronic Compon
Slide 8: Realizing high profitability by pursuing the Advanced Service Business
Realizing high profitability by pursuing the “Advanced Service Business” FY2008 Results Average of 17 Average of 19 Innotech semiconductor system trading houses integrators Operating Profit Ratio ４.１％ 1.7％ 6.8％ Ordinary Profit Ratio ４.１％ 1.6％ 7.3％ Net Profit Ratio １.６％ 0.2％ 2.9％ 7
Slide 9: Financial Structure is Improving
Financial Structure is Improving （bil. yen） 70% Ratio of bank loans 10 60% Equity Capital ratio Operating CF 50% 40% 4.2 bil. yen 5 30% 20% 10% 0% 0 FY2005 FY2006 FY2007 FY2008 8
Slide 10: FY 2008 Results / FY 2009 Outlook
1 FY 2008 Results 2 FY 2009 Outlook 3 Efforts on “Advanced Service Business” 4 Future steps for long-term growth 9
Slide 11: Highlights of FY2009
Highlights of FY2009 Reducing 700 mil. Yen of cost (including cost of sales） thorough review of the cost structure Facing with the tough business environment and set realistic expectations Organizational reform and strengthening the management scheme; preparing for the new growth 10
Slide 12: FY2009 Estimate
FY2009 Estimate 〔mil. yen〕 Sanei IT Overseas Innotech Consolidated Hytechs ACCESS Sales 1H FY 1H FY 1H FY 1H FY 1H FY Net Sales 8,400 18,800 1,200 2,800 1,150 2,500 1,500 3,700 10,600 24,500 C o s t 6,730 15,250 1,000 2,320 730 1,590 1,450 3,590 8,260 19,450 ofSales Gross Profit 1,670 3,550 200 480
Slide 13: Estimate by Segment
Estimate by Segment 〔mil. yen〕 FY2008 FY2009［Est］ YoY Net Sales 30,018 24,500 -18% Semiconductor Design 12,880 10,600 -18% Electronic Components 17,138 13,900 -19% Cost of Goods Sales 23,669 19,450 -18% Gross Profit 6,349 5,050 -20% Semiconductor Design 3,746 2,850 -24% Electronic Components 2,603 2
Slide 14: Estimate by Business
Estimate by Business 〔mil. yen〕 FY2008 FY2009〔est〕 YoY Factors Semiconductor Design 12,880 10,600 -18% Expect same level of sales under Cadence 6,943 6,700 -3% the severe economy Semiconductor Testers 1,568 500 -68% Expand test solution ASIC Design and Sales 1,102 600 -46% Focus on developing new or
Slide 15: Dividend
Dividend Dividends FY2009 : Dividends will be 5yen (interim 2yen) Acquiring treasury stocks （announced on May 13, 2009) 1 million stocks, 500 million yen Number of treasury stocks as of March 2009: 3 million stocks （13％ of ratio of shareholding） 14
Slide 16: Efforts for Further Growth
Efforts for Further Growth Thorough review of the cost structure 700 mil. Yen of reduction of SGA （including 200 mil. yen of personnel expense including cost of sales） variable cost ▲19％, human resources cost ▲8％, fixed cost▲７％ Organizational reform and strengthening management scheme Cros
Slide 17: Cost reduction
Cost reduction 〔bil. Yen〕 8 7 2.3 Personel expense 6 including cost of 2.1 sales 5 Human resources cost 4 2.9 2.7 3 Variable cost 2 1.4 1.1 1 Fixed cost 0.9 0.8 0 FY2008 FY2009 16
Slide 18: New Organization: Reform and Stronger Management
New Organization: Reform and Stronger Management President & CEO ： Makoto Sumita Board member： Takashi Takahashi Cadence Board member： Hiroaki Okawa ASIC Tester (New)Board member ： Toshihiko Ono HDD (New)Board member ： Yousuke Kaburagi Devices Board member ：Shinji Sakai Corporate President & CEO ： Y
Slide 19: Efforts on Advanced Service Business
1 FY 2008 Results 2 FY 2009 Outlook 3 Efforts on “Advanced Service Business” 4 Future steps for long-term growth 18
Slide 20: Innotech Strategies
Innotech Strategies Expanding test solutions → Forming alliances with companies in Taiwan and Korea → Cultivating local and international customers Merging device, CPU board, and embedded software (IT ACCESS) businesses and cooperating on them in a cross- organizational manner Further increasing HDD
Slide 21: Cadence
Cadence 〔bil. yen〕 - Sales - Multi-year licensing scheme assures stability 8 〔bil yen〕 6 7.7 7.5 4 2 FY2008 FY2009 0 Strengthen relationship with FY2008 FY2009 Cadence management （Estimate） Expanding sales in the Japanese market Mainly to system makers Established a stable business model resistant t
Slide 22: Testers
Testers Smaller size, higher functionality Retset - Sales - Improvement of cost performance Improved technology to reduce test time and enhance throughput 〔bil. yen〕 2 Realizing specifications requested by customers Customizing user-friendly functionalities Expanding business with technologies accum
Slide 23: IT ACCESS and Target Applications
IT ACCESS and Target Applications Stronger one stop solutions for embedded products Browser RTOS GUI Data analysis Data management Security Cost reduction Turnkey Solution Time to Market Stronger portfolio for strategic applications Wireless HD transmission Laser diode drivers ＨＤＭＩ standard High-spe
Slide 24: HDD
HDD Efforts by Innotech - Sales - 〔Bil yen〕 Focusing on 2.5 inch 10 Focusing on strategic customers Stronger collaboration with HGST to achieve higher cost performance than competitors 5 Enhancing engineering support Obtaining higher trusts from customers Relentless low cost operations 0 FY2008 FY20
Slide 25: Future steps for long-term growth
1 FY 2008 Results 2 FY 2009 Outlook 3 Efforts on “Advanced Service Business” 4 Future steps for long-term growth 24
Slide 26: Outlook for business environment after recession
Outlook for business environment after recession The driving force for growing business is no longer coming from developed countries but from the rest of the world Japanese companies no longer excel in developing cutting- edge technologies and in operations Needs for new businesses, services, and pr
Slide 27: Boards Actively Developing the New Market
Creating high value by cross organizational collaboration Tightly integrated Embedded software Devices Boards Networking Graphics Low power Smaller sizes Actively Developing the New Market Environmental Medical Security Industrial 26
Slide 28: Innotech Internally Developed CPU Boards
Innotech Internally Developed CPU Boards Small size, low power, single power source Incorporating Intel Atom Processor Established optimal trade-off between performance and power consumption Effect from CPU heating is minimum; allowing flexible designing options for embedded products adopted by more
Slide 29: Horizontal Work Sharing Model: Areas Handled by ODM and EMS
Horizontal Work Sharing Model: Areas Handled by ODM and EMS maintenance Determination Manufacturing Distribution evaluation Hardware Mechanical Marketing of specs, Sales and Software Planning service, Product Testing control Quality design design design design Exterior Manufacturing ODM（Original Des
Slide 30: Note for Forward Looking Statements
Note for Forward Looking Statements The information provided in this presentation includes forward looking statements based on current expectations, forecasts or beliefs. Such forward looking statements include a number of preliminary assumptions about future events that are subject to factors and u