Renesas Electronics Corporation · TSE:6723
Renesas Electronics — Q1 FY2015/03 Earnings Presentation
30 slides from Renesas Electronics's earnings presentation, Aug 6, 2014
Slide 1: Renesas Efforts towards Further Growth in Profits
Renesas Efforts towards Further Growth in Profits Renesas Electronics Corporation August 6, 2014
Slide 2: Renesas’ mission: to develop society and industry
Renesas Efforts towards Further Growth in Profits Renesas’ mission: to develop society and industry Formulation of “Reform plan” Achieve double-digit operating profit ratio in FY 2017/03 1. Structural Reforms 2. Selection and Concentration Build absolutely profitable structure Focus on advantageous
Slide 3: 1. Progress of Structural Reforms
1. Progress of Structural Reforms Steadily advancing each and every structural reform measure to build a solid, profitable financial base Manufacturing structural reforms Streamlining of human resources (Changes in # of sites in Japan) (Changes in # of consolidated headcounts) Front-end line Back-
Slide 4: 2. Selection and Concentration
2. Selection and Concentration Enhance selection and concentration to three focus domains of “Automotive”, “Industrial/HE” and “OA/ICT”, the three domains with high entry barriers and profitable growth Reorganize non-focus domains PC/Office Withdrawal from ODD SoC and low- voltage Power MOSFET f
Slide 5: 3. Operational Changes that support Business and Production Reforms
3. Operational Changes that support Business and Production Reforms (Future Renesas) 1. Customer-oriented/Increased value 2. Improved development and production efficiency 3. Rapid decision-making Simplified organization Reallocation of resources Revised personnel system Simplified the structure of
Slide 6: Tangible Results of the Reform Plan
Tangible Results of the Reform Plan Profitable Financial Base, Back on Track for Growth Operating Ratio -5.7% 0.0% 5.0% 11.3% 409.4 416.9 416.1 Temporary increase in profit caused by 376.4 currency impact, inventory buildup for structural reforms and front-loaded demand increase ahead of the Consoli
Slide 7: As a Trusted Partner for Customers
As a Trusted Partner for Customers Sustain and enforce Renesas strengths by cultivating advanced technological development and by continuously supplying high quality products in tandem with structural reforms Lead the industry with High-quality product supply advanced development strength World’
Slide 8: Future Focus Domains
Future Focus Domains Efforts towards Further Growth in Profits © 2014 Renesas Electronics Corporation. All rights reserved. 8
Slide 9: Renesas Market Position
Renesas Market Position No.1 MCU supplier in the world with more than double the shares of Renesas‘ closest competitors No. 1 in both the Automotive and Industrial product categories, the two largest categories in the global MCU market (56% of the whole market) WW MCU market by product category
Slide 10: Renesas Strength on the Global Stage
Renesas Strength on the Global Stage No. 1 supplier of automotive semiconductors in the world Achieved market share increase in North America, Europe and emerging countries with sales growth outpacing the market W/W Automotive Automotive Semiconductor Semiconductor CAGR by region/Renesas share (
Slide 11: Accelerate R&D Investment in Focus Domains
Accelerate R&D Investment in Focus Domains Aggressively invest the funds acquired through third-party share allotment in competitive focus domains Plan R&D investment in FY 2014 on development of next-generation automotive platform and industrial communication platform, etc. Aggressive investmen
Slide 12: R&D Direction: Evolving Value Proposal for Focus Domains
R&D Direction: Evolving Value Proposal for Focus Domains Change the focus domains to shift from product-orientation to application- orientation and provide three-level solution offerings To widen application value and to broaden the customer base, expand solution lineups through aggressive inves
Slide 13: Solution Offerings from Focus Domains
3 Solution Offerings from Focus Domains Automotive Industrial/HE OA/ICT Integrated cockpit Industrial Ethernet Platform for network Car navigation + ADAS Industry-standard platform and surveillance camera Eco system collaboration Platform value Eco System Software, Application New solu
Slide 14: Market Growth of Focus Business Domains: Automotive
Market Growth of Focus Business Domains: Automotive Annual vehicle production in FY2014 to FY2017 is expected to increase by 4.2% pushed by growth from the emerging countries The amount of semiconductors incorporated per vehicle increased to the 190 (emerging countries) to 400 US$ (Europe, U.S,
Slide 15: Renesas Core Competence in Focus Domains: Automotive
Renesas Core Competence in Focus Domains: Automotive Automotive Information / Automotive Control Driver Assistance Driver Powertrain Chassis/Safety Body ＡＤＡＳ**** information Semiconductor 4,898 M US$ 6,558 M US$ 5,646 M US$ 5,446 M US$ 648 M US$ Market Scale* Market Growth +8.1% +7.5% +5.7% +8.4% +2
Slide 16: Market Growth of Focus Domains: Industrial
Market Growth of Focus Domains: Industrial Industrial equipment market is expected to show stable growth in the medium term. FA in particular will continue to grow outpacing the growth of total industrial equipment Expect the industrial equipment semiconductor market to outgrow the industrial eq
Slide 17: Renesas Core Competence in Focus Domains: Industrial/HE and OA/ICT
Renesas Core Competence in Focus Domains: Industrial/HE and OA/ICT HE: Home Electronics, OA: Office Automation, ICT: Information Communication Technology Industrial/HE OA/ICT Communication data Industrial Consumer processing* Semiconductor Market Scale** 28.7 B US$ 38.2 B US$ 218.0 B US$ Market Grow
Slide 18: Future Renesas Management Benchmarks
Future Renesas Management Benchmarks © 2014 Renesas Electronics Corporation. All rights reserved. 18
Slide 19: Further Selection and Concentration on Focus Domains
Further Selection and Concentration on Focus Domains Sales of non-focus businesses will decrease from acceleration of selection and concentration, at the same time sales of products with No. 1 market share will increase and realize improvement of product mix Sales breakdown of Trends in No.1 sales
Slide 20: Trend in Fixed-Costs and Break-Even Point
Trend in Fixed-Costs and Break-Even Point Aim to achieve further fixed-cost reductions and improve the break-even point through selection and concentration into highly-competitive focus domains and acceleration of manufacturing structural reforms approx. 100 B Yen approx. 100 B Yen Break-even poin
Slide 21: Gross Profit Ratio Improvement
Gross Profit Ratio Improvement Gross profit rate is increasing, supported by strict cost management Gross Profit Rate 45.0% 38.3% 36.1% 32.6% 31.2% 31.2% 29.3% Currency impact Structural reforms Product mix improvement, etc. FY11 1H FY11 2H FY12 1H FY12 2H FY13 1H FY13 2H FY16 2H © 2014 Renesas El
Slide 22: Optimization of R&D and SG&A
Optimization of R&D and SG&A Despite a temporary cost cutback from the selection of businesses, aim to expand growing strength by concentrating R&D cost on focus domains SG&A-to-sales ratio will be maintained at the 15% level SG&A (excluding R&D)/Net Sales R&D/Net Sales 37.7% 37.6% 35.0% 32.6% 3
Slide 23: Targeted Financial Model
Targeted Financial Model (Billion yen / In comparison with net sales) FY 2011 FY 2012 FY 2013 FY 2016 Aim: Focus domains will Net Sales 883.1 785.8 833.0 outperform their markets Gross Profit (Ratio) 31.2% 30.9% 37.2% 45.0% R&D (Ratio)* 20.7% 17.5% 13.8% 15.0% Selling, general and administrative exp
Slide 24: Reform Plan Milestones
Reform Plan Milestones Complete structural reforms by FY2015 and arrive at stable and profitable cost structure Complete withdrawal from non-focus domains and return to growth after FY2016 (B Yen) Net Sales Operating Income (Loss) Operating Profit Ratio 883.1 833.0 785.8 8.1% -56.8 -23.2 67.6 FY
Slide 25: Renesas Electronics Corporation
Renesas Electronics Corporation
Slide 26: Appendix
Appendix © 2014 Renesas Electronics Corporation. All rights reserved. 26
Slide 27: Appendix: Automotive Control MCU - World’s State-of-the-Art 40nm Product Lineup
Appendix: Automotive Control MCU - World’s State-of-the-Art 40nm Product Lineup - First and only chip firm ready to begin mass production Expanding design-in worldwide Device solution 40nm MONOS 5 products 1 product 1 product 1 product 4 products 2 products flash Powertrain EV/HEV Display Safety
Slide 28: Appendix: Compact and Light ECU for HEV/EV
Appendix: Compact and Light ECU for HEV/EV Optimal kit solution Kit offerings that realize compact and light Solution Highly-efficient control with motor control MCU Optimized kit solution of MCU and power devices and tuning tool offerings Ease the thermal design burden through temperature cal
Slide 29: Appendix: Convergence of Automotive Information (IT)
Appendix: Convergence of Automotive Information (IT) Leveraging the technologies of the No. 1 market share, advance convergence of IT and control for the realization of future safe, secure and comfortable automotive society Security functions are essential to guard against rapid increase in exte
Slide 30: Appendix: Power Efficiency through Industrial Ethernet Controller
Appendix: Power Efficiency through Industrial Ethernet Controller R-IN dramatically improves in-plant network performance and also allows customers to easily set up the environment by supporting multiple protocols Contributes to realization of smart society by applying R-IN to the factory’s uppe
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