Slide 1: FY18/12 Q2 Presentation
FY18/12 Q2 PRESENTATION RENESAS ELECTRONICS CORPORATION JULY 31, 2018 © 2018 Renesas Electronics Corporation. All rights reserved.
Slide 2: Financial Targets and Strategy
FINANCIAL TARGETS AND STRATEGY Long-term Financial Targets*1 (Starting from CY16) Clear Path to Gross Margin Expansion Topline growth Topline Growth High Single-Digit CAGR Manufacturing Optimization Margin Improvement Better Product Mix 44% Adj. GM *2 : *4 50% Adj. OM : 12% *3 *4 Over 20% Intersil C
Slide 3: Steps to Improve Gross Margin
STEPS TO IMPROVE GROSS MARGIN Adjusted Gross Margin*1 (Illustrative) Intersil Better Consolidation 50% Manufacturing Product Mix Optimization Topline Growth Operating Leverage through Increased Scale 44% Organic Growth + Consolidation of Intersil CY16/12 Long Term Target *1: Non-GAAP figure, Gross M
Slide 4: Custom Approaches for Focused Industries
Organic Inorganic CUSTOM APPROACHES FOR FOCUSED INDUSTRIES Automotive Industrial Broad-Based and others Inorganic + Organic MCUs Intensive R&D Approaches SoCs Strategic Partnerships and Alliances Analog & Mixed Strategic Investments including Further Acquisitions Intersil Signal (Acquired for $ 3.2B
Slide 5: Non-GAAP Basis Information
NON-GAAP BASIS INFORMATION In this section, Renesas Electronics Group (hereinafter “the Group”) applies Non- GAAP financial measures (hereinafter “Non-GAAP basis”) used for management’s decision making. The Group defines the Non-GAAP consolidated financial results as financial accounting figures (he
Slide 6: Revised GAAP/Non-GAAP Reconciliation (FY17/12-)
REVISED GAAP/NON-GAAP RECONCILIATION (FY17/12-) ・Non-GAAP Basis: Results excluding non-recurring and certain other items. Following the completion of the purchase of Intersil in February 2017, Non-GAAP figures exclude amortization of goodwill, amortization of purchased intangible assets, costs relat
Slide 7: GAAP/Non-GAAP Reconciliation (FY17/12-)
GAAP/NON-GAAP*1 RECONCILIATION (FY17/12-) FY17/12 FY18/12 (B yen) Q3 Q1 Q2 Q3 Q4 Q1 Q2 (Forecast) Operating Profit (GAAP/After PPA) 22.1 9.4 25.0 21.9 20.6 23.0 4.4 PPA Effects*2（Net Sales/COGS*3） +3.1 +8.5 +0.3 +0.4 +0.3 +0.3 +0.2 PPA Effects（R&D*4, SG＆A*5） Increase in depreciation of fixed assets,
Slide 8: GAAP/Non-GAAP Reconciliation (FY17/12-)
GAAP/NON-GAAP*1 RECONCILIATION (FY17/12-) FY17/12 FY18/12 (B yen) Q3 Q1 Q2 Q3 Q4 Q1 Q2 (Forecast) Net Profit Attributable to Shareholders of Parent Company 17.2 19.1 22.3 18.6 23.3 26.1 1.6 (GAAP/After PPA) Reconciliations in Operating +7.0 +19.6 +10.9 +12.2 +10.8 +10.9 +11.1 Profit Level Reconcilia
Slide 9: Q2 Financial Snapshot (Non-GAAP Basis)
Non-GAAP FY18/12 Q2 FINANCIAL SNAPSHOT (NON-GAAP BASIS*1) YoY and QoQ results as well as the changes from May 11 FCTs of the Net Sales and Semi Sales are rounded off to one decimal place. FY17 FY18 (FY18/12) (B yen) Apr-Jun Apr-Jun Apr-Jun 1H Jan-Mar Change from 1H (Q2) (Q2) YoY QoQ YoY (Q2) (Jan-Ju
Slide 10: Q2 Semiconductor Sales (YoY)
Non-GAAP FY18/12 Q2 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) YoY +4.8 B yen (+2.5%) (B yen) Currency impact +6.3 +4.8 -1.5 Sales increase (excluding currency impact) 194.3 199.1 FY17/12 Q2 *1: Non-GAAP Basis: Results excluding non-recurring and certain other items. Following the completion of the purc
Slide 11: Q2 Semiconductor Sales (QoQ)
Non-GAAP FY18/12 Q2 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) QoQ +17.1 B yen (+9.4%) (B yen) +16.6 Currency impact +20.3 +17.1 -3.2impact Currency Sales increase Sales increase (excluding currency impact) 199.1 182.0 *1: Non-GAAP Basis: Results excluding non-recurring and certain other items. Followin
Slide 12: Q2 Semiconductor Sales (vs Forecast)
Non-GAAP FY18/12 Q2 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) (B yen) Vs FCT +6.4 B yen (+3.3%) +3.7 +2.7 +6.4 Currency impact Sales increase (excluding currency impact) 192.7 199.1 *1: Non-GAAP Basis: Results excluding non-recurring and certain other items. Following the completion of the purchase of
Slide 13: Quarterly Semiconductor Sales Trends
Non-GAAP QUARTERLY SEMICONDUCTOR SALES TRENDS (NON-GAAP BASIS*1) (B yen) Actual basis Automotive Industrial Broad-based Other 206.4 199.1 QoQ: +9.4% 194.3 192.3 2.2 YoY: +2.5% 200 1.0 172.6 1.1 0.8 182.0 40.9 0.6 QoQ: +7.2% 40.7 40.8 YoY: +0.1% 0.8 41.3 38.1 28.3 150 54.2 QoQ: +1,2% 48.5 48.5 51.5 Y
Slide 14: Gross Margin, Operating Margin and Opex Trajectory
Non-GAAP GROSS MARGIN, OPERATING MARGIN AND OPEX TRAJECTORY (NON-GAAP BASIS*1) <R&D Ratio (%)> QoQ: -2.2pts <Gross Margin (%)> QoQ: -2.6pts YoY: -1.9pts YoY: -0.3pt 20 50 47.7 47.9 18 17.2 45 48.0 45.6 45.5 45.7 45.4 16 16.9 16.9 15.0 44.3 16.7 15.9 16.3 40 42.5 16.1 14 15.2 35 12 30 10 Q1 Q2 Q3 Q1
Slide 15: Q2 Operating Income (YoY)
Non-GAAP FY18/12 Q2 OPERATING INCOME (NON-GAAP BASIS*1) (B yen) YoY +4.9 B yen Impact from changes in Accounting Impact production volume, etc. (inventory revaluation, etc.) +3.6 -5.0 +3.0 0 +3.3 Sales increase (excluding currency Decreases in Currency R&D,SG&A (excluding impact impact) amortization
Slide 16: Q2 Operating Income (QoQ)
Non-GAAP FY18/12 Q2 OPERATING INCOME (NON-GAAP BASIS*1) QoQ +2.5 B yen Impact from changes in (B yen) production Increases in volume, etc. R&D,SG&A (excluding amortization of Accounting Impact -5.1 goodwill, etc.) (inventory revaluation, +10.6 etc.) -0.6 -1.5 Currency impact -0.9 Sales increase (exc
Slide 17: Q2 Operating Income (vs Forecast)
Non-GAAP FY18/12 Q2 OPERATING INCOME (NON-GAAP BASIS*1) vs FCT +8.8 B yen （B yen) Decreases in R&D,SG&A Sales increase (excluding amortization of (excluding currency goodwill, etc.) impact) +1.5 +2.7 Currency +1.8 impact +1.6 +1.2 Impact from changes in production volume, etc. Accounting Impact 33.9
Slide 18: Q3 Financial Forecasts
Non-GAAP FY18/12 Q3 FINANCIAL FORECASTS (NON-GAAP BASIS*1) YoY and QoQ forecasts of the Net Sales and Semi Sales are rounded off to one decimal place. FY17 FY18 (FY18/12) (B yen) 9 months Q3 9 months Q2 Q3 Forecast YoY QoQ Forecast YoY (July-Sep) (Jan-Sep) (Apr-Jun) (July-Sep) (Jan-Sep) Net Sales 19
Slide 19: Q3 Semiconductor Sales Forecast (YoY)
Non-GAAP FY18/12 Q3 SEMICONDUCTOR SALES FORECAST (NON-GAAP BASIS*1) (B yen) YoY -19.7 B yen (-10.2%) -2.5 -17.2 -19.7 Currency impact Sales decrease (excluding currency impact) 192.3 172.6 *1: Non-GAAP Basis: Results excluding non-recurring and certain other items. Following the completion of the pu
Slide 20: Q3 Semiconductor Sales Forecast (QoQ)
Non-GAAP FY18/12 Q3 SEMICONDUCTOR SALES FORECAST (NON-GAAP BASIS*1) QoQ -26.5 B yen (-13.3%) (B yen) Currency impact -26.5 -26.5 ±0 Sales decrease (excluding currency impact) 199.1 172.6 FY18/12 Q2 *1: Non-GAAP Basis: Results excluding non-recurring and certain other items. Following the completion
Slide 21: Q3 Operating Income Forecast (YoY)
Non-GAAP FY18/12 Q3 OPERATING INCOME FORECAST (NON-GAAP BASIS*1) (B yen) YoY -20.5 B yen Sales decrease (excluding currency impact) Currency impact +3.8 -11.3 -1.3 Accounting Impact from changes in Impact (inventory production volume, etc. revaluation, etc.) 35.9 -8.6 -3.0 Increases in R&D,SG&A (exc
Slide 22: Q3 Operating Income Forecast (QoQ)
Non-GAAP FY18/12 Q3 OPERATING INCOME FORECAST (NON-GAAP BASIS*1) (B yen) QoQ -18.4 B yen Sales decrease (excluding Currency currency impact) impact +0.9 -0.3 Accounting -17.4 Impact (inventory Impact from changes in revaluation, etc.) production volume, etc. 33.9 -1.9 +0.3 Increases in R&D,SG&A (exc
Slide 23: GAAP Basis Information
GAAP BASIS INFORMATION The figures in this section are mainly based on GAAP (Generally Accepted Accounting Principles) stated on a financial reporting basis and are provided as additional information. © 2018 Renesas Electronics Corporation. All rights reserved. Page 23 BIG IDEAS FOR EVERY SPACE
Slide 24: Former GAAP/Non-GAAP Reconciliation (Until FY16/12)
FORMER GAAP/NON-GAAP RECONCILIATION (UNTIL FY16/12) FY15/3 FY16/3 FY16/12 (B Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Semiconductor Sales (GAAP) ① 201.2 199.6 177.4 175.1 174.5 177.0 160.9 163.2 147.5 148.3 161.4 Renesas SP Drivers*1② -17.6 -21.0 - - - - - - - - - Semiconductor Sales (Non-GAAP*2) ①+② 1
Slide 25: FY18/12 Q2 Financial Snapshot (GAAP)
FY18/12 Q2 FINANCIAL SNAPSHOT YoY and QoQ results as well as the changes from May 11 FCTs of the Net Sales and Semi Sales are rounded off to one decimal place. FY17/12 FY18/12 (B yen) Q2 Q2 Q2 1H Q1 Change from 1H (Jan-Mar) (Apr-Jun) (Apr-Jun) YoY QoQ YoY (Apr-Jun) (Jan-Jun) May 11 FCT Actual Foreca
Slide 26: Balance Sheets
BALANCE SHEETS*1 As of Jun. 30, As of Sept. 30, As of Dec. 31, As of Mar. 31, As of Jun. 30, (B yen) 2017 2017 2017 2018 2018 Total Assets 1,018.5 1,023.7 1,062.7 1,016.2 1,044.3 Cash and Cash Equivalents *2 126.6 124.4 139.5 124.3 160.3 Inventories 109.0 120.6 126.6 138.8 138.5 Liabilities 566.7 54
Slide 27: EBITDA and Cash Flows
EBITDA*1 AND CASH FLOWS Insurance income receivable: +10.5 <EBITDA (B yen)> <Cash Flows (B yen)> Cash flows from operating 59.5 Acquisition-related payments: -16.0 60 60 activities 54.1 54.8 Cash flows from investing 51.0 55 52.6 52.3 activities 47.2 Free cash flows*3 44.0 50 40 35.8 45 42.7 32.6 31
Slide 28: FY18/12 Q3 Financial Forecasts (GAAP)
FY18/12 Q3 FINANCIAL FORECASTS YoY and QoQ forecasts of the Net Sales and Semi Sales are rounded off to one decimal place. *1 FY17/12 FY18/12 (B yen) Q3 Q2 Q3 Forecast 9 months 9 months YoY QoQ (Jan-Sep) YoY （Jul-Sep） （Jan-Sep） (Apr-Jun) (Jul-Sep) Forecast Net Sales 195.5 570.1 203.5 175.6 -10.2% -1
Slide 29: Forward-Looking Statements
BIG IDEAS FOR EVERY SPACE (FORWARD-LOOKING STATEMENTS) The statements in this presentation with respect to the plans, strategies and forecasts of Renesas Electronics and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. Such forward-l