Slide 1: Business Report for FY2006
Business Report for FY2006 -From Apr.2006 to Mar.2007- SMK Corporation April,2007 1
Slide 2: Full fiscal term performance
Full fiscal term performance 2/43 +10.0% Sales amount: Million yen Profit: Million yen 80,000 79,074 10,000 71,860 70,000 9,000 60,000 +20.4% 8,000 6,190 7,000 50,000 5,512 5,166 6,000 40,000 4,290 5,000 3,473 3,693 4,000 30,000 3,000 20,000 2,000 10,000 1,000 0 0 FY2005 FY2006
Slide 3: Sales expenses
Sales expenses 3/43 (Unit : million yen) FY2005 FY2006 67,570 73,908 ( ): Ratio to total sales (94.0%) (93.5%) 80,000 [ ( Material costs + Expenses for external Material costs manufacturing processing) improved by 70,000 0.7%] 62.2%Æ61.5% About 492 million yen 60,000 54.0% Expenses for [Labor costs
Slide 4: Analysis of sales expenses
Analysis of sales expenses 4/43 (Unit : million yen) Analysis of factors for increase/decrease of consolidated Net Total operating profits [FY 2005 vs. FY 2006] 876 3,500 2,778 A. Factors for B. Factors profit increase for profit 2,500 Total -2,394 decrease Total allowance depreciation Increase in 3
Slide 5: Non-operating profit and loss
Non-operating profit and loss 5/43 (Unit : million yen) FY2005 FY2006 ( ): Ratio to total sales 1,222 1,024 (1.7%) (1.3%) 1,300 2 Comparison to last fiscal term -198 1,100 million yen 2 [Decline in currency exchange profit by 900 608 336 million yen] Yen lower by 10.08 yen last fiscal term 700 658 A
Slide 6: Extraordinary profit/loss
Extraordinary profit/loss (Unit : million yen) 6/43 FY2006 700 FY2005 34 -454 78 500 Gain on sale of fixed assets Gain on sale of investments in securities 300 544 Loss of disposed fixed assets, etc. Transfer to allowance for bad debt 100 7 77 Depletion loss -100 -204 Others -273 -72 -300 -28 -230 -
Slide 7: Sales amount, operating and ordinary profits, and profit for the current fiscal term
Sales amount, operating and ordinary profits, and profit for the 7/43 current fiscal term FY2005 FY2007 (Unit : million yen) +10.0% +4.3% (Unit : million yen) 90,000 When compared to last year’s 10,000 corresponding period 82,500 77,300 79,074 9,000 80,000 71,860 8,000 70,000 6,400 7,000 60,000 6,19
Slide 8: Market-specific sales amount FY2005 ~FY2007
Market-specific sales amount FY2005 ~FY2007 8/43 Unit: million yen 90,000 79,074 82,500 80,000 71,860 1,571 1,790 5,553 1,520 5,437 70,000 +2.1% 9,898 4,866 9,661 +11.7% 60,000 11,679 +2.5% -17.3% 50,000 31,593 30,325 40,000 23,117 +31.2% +4.2% 30,000 6,815 7,287 6,589 20,000 +3.4% +6.9% 24,086 25,2
Slide 9: Reference: Division-specific sales (consolidated) FY2005 ~ FY2007
Reference: Division-specific sales (consolidated) 9/43 FY2005 ~ FY2007 %: Unit: million yen 82,500 Constituent 79,074 ratio 80,000 71,860 5,631 4,730 6.8% 6.0% 70,000 4,798 6.7% 60,000 34,070 33,534 42.4% 41.3% 50,000 33,743 47.0% 40,000 30,000 20,000 46.4% 40,809 51.6% 42,798 51.9% 33,319 10,000 0
Slide 10: Reference: Division-specific operating profit (consolidated)
Reference: Division-specific operating profit (consolidated) 10/43 FY2005 FY2007 Unit: million yen 5,166 5,500 4,290 6,000 10 5,000 831 960 4,000 983 3,000 2,000 4,495 4,530 3,657 1,000 0 -350 -160 -1,000 FY2005Result FY2006Result FY2007Plan CS (Connector,Jack) FC (Switch,Remote Control,Unit,Module)
Slide 11: Trends of major markets Flat Panel TV
Trends of major markets Flat Panel TV 11/43 LCD (10 inches and over) and PDP TVs W/W production quantities (thousand SMK's action 90,000 ’05-’07 of sets) 80,000 CAGR 76,682 Intensification and expansion of remote 71% control business 70,000 LCD TV PDP TV 60,000 51,442 Optimization of product line-up
Slide 12: Trends of major markets Car Navigation Systems
Trends of major markets Car Navigation Systems 12/43 10,000 (thousand W/W production quantities ’05-’07 SMK's action of sets) CAGR 9,000 9.4% 8,000 Sustainment and expansion of touch panel 7,000 business 6,000 Expansion of connector sales Sales expansion of connectors for in-vehicle 5,000 cameras 9,
Slide 13: Trends of major markets Cellular Phones
Trends of major markets Cellular Phones 13/43 W/W production quantities 1,200,000 (thousand of sets) ’05-’07 CAGR SMK's action 1,000,000 16.8% Expanded entry of orders received from major overseas manufacturers 800,000 Development of interface connectors, internal connectors and RF parts for ever th
Slide 14: Trends of major markets Personal Computer
Personal Computer 14/43 Trends of major markets (Desktop & Notebook PCs) 250,000 (thousand ’05-’07 CAGR W/W production quantities of sets) 9.5% 232,878 214,919 SMK's action 200,000 194,333 87,274 Notebook 73,995 58,900 Desktop Marketing of Windows Vista-compatible remote 150,000 controls and light r
Slide 15: Major risks for SMK for company management
Major risks for SMK for company management 15/43 1. Competition and pricing trends (prices and costs) 2. Risk (economic, political and social) on spreading into overseas countries 3. Fluctuation of US$ exchange rate (SMK's budget rate: 115 yen/$) 4. Movement of major markets and customers (cellular
Slide 16: SMK's management challenges
SMK's management challenges 16/43 1. Three challenges *Enhancement of SMK's brand recognition *Quality improvement by TN (transnational) ZD activities *Another try for creation of better quality products, “Only conscientious parts can build good equipment” 2. Turn-around of red-ink business into bla
Slide 17: The 7th middle-term business plan
The 7th middle-term business plan 17/43 Slogan Creating an exciting future Vision 1. 1. Realization Realization of of sales sales growth growth accompanying accompanying reasonable reasonable profits profits 2. 2. Build-up Build-up of of value value creation creation models models sustaining sustain
Slide 18: Division-specific target amounts of sales and profit
<Consolidated> Division-specific target amounts of sales and profit 18/43 The core of growth Realization by each Division of growth accompanying based on our 7th Middle Term Business reasonable profits Plan CS FY2009 Target Operating FY2006 Result profit rate FY2009 Target FY2009 Target FC TP FY2006
Slide 19: Market-specific sales targets
<Consolidated> Market-specific sales targets 19/43 102,500 Million yen 79,074 Middle term strategic markets => Digital AV, IT and automotive electronics products ¾ CS Div. Cellular phones, digital AV and automotive products ¾ FC Div. Cellular phones, digital AV products, PCs and automotive products
Slide 20: Sales by market region
<Consolidated> Sales by market region (with FY2006, actual performance and with FY2009, targets) 20/43 Ratio of overseas sales - from 67% Æ 73% Japan Europe area China area 41,000 2,958 3,200 36,889 30,000 America area 17,040 18,000 15,915 Asia area 10,300 6,272 Unit:million yen
Slide 21: Strategies for achievement of plans
21/43 Strategies for achievement of plans Strengthening of marketing power Finding new drivers with potential for growth Strengthening basic supporting technology - concentration in marketing of our standard products -
Slide 22: Number of announcements of new products
Number of announcements of new products (of part 22/43 manufacturers, annual bases) 35 30 27 28 24 25 Number 20 15 10 5 0 FY2004 FY2005 FY2006 Source: New product information on respective companies' home pages (from Apr. to Mar.)
Slide 23: SMK supports the "Beijing-Paris Rally"
SMK supports the "Beijing-Paris Rally". 23/43 *Supports "SMK Special" making entry in the 3rd "Beijing Paris-Rally" (the 1st race conducted in 1907) (Our entry is a 1916 Lancia Theta. All 134 entries being antique cars) *Starting on May 27, 2007 from Beijing to arrive in Paris on June 30, for total
Slide 24: Division
ae Division SMIK.
Slide 25: CS Division
CS Division 25/43 CS= Connection System Major products Connectors Jacks Connectors Jacks Speaker terminals FPC connectors I/O connectors Card connectors Power jacks and headphone jacks
Slide 26: CS Division Amounts of sales and profit
26/43 CS Division Amounts of sales and profit (consolidated) Net sales Unit: 100M yen Profit
Slide 27: CS Division Transition of market-specific sales
27/43 CS Division Transition of market-specific sales (consolidated) 6% 4% 4% Industrial applications 58% 66% 65% Information technology applications 5% 6% 6% Vehicular applications 31% 24% 25% Audio/visual applications Result Result Plan
Slide 28: Card connectors and semiconductor sockets
Card connectors and semiconductor sockets 28/43 Small card connectors for cellular phones Sales transition 185 FY2005 as 176 microSD/TransFlash(TM) card connectors 100% 100 Memory Stick Micro(TM) card connectors Optimization of product variations Result Result Forecast Thinner Camera connectors Smal
Slide 29: PB connector
PB connector 29/43 PB-4A(h=0.8mm type) Sales transition 412 PB-4B(h=1.2mm type) FY2005 as 100% 140 100 Result Result Forecast Target Most small portable equipment Low in profile Proposals for /space effective versatile applications Shielding technology
Slide 30: 2007 strategic markets
2007 strategic markets 30/43 Car electronics Telecom In-vehicle camera connectors 0.4 mm spacing FPC connector, Growing market h=0.75 mm type Unit: million sets 14 High speed transmission 8 3 5 Shielding technology 2006 2007 2008 2009 Coaxial connectors VC connectors Small and low in profile Twin/fl
Slide 31: CS Division 2007 Policy
31/43 CS Division 2007 Policy 1. Promotion of development of designing technologies, products, and production technologies Timeliness and speeding up Patents and quality Implementation of business unit- and product model-specific strategies More effective investment (general or diverted equipment) P
Slide 32: Division
32/43 Division
Slide 33: FC Division
FC Division 33/43 FC=Functional Components [Major products] Switches, keyboards, control panels, earphone/microphone combinations, cradles, microphones, remote controls and camera modules SW UN (Unit) (Switch) Electret condenser Various types Earphone/microphon e combinations Cradles microphones (EC
Slide 34: FC Division Amounts of sales and profit
FC Division Amounts of sales and profit (consolidated) 34/43 Unit:100 million yen Net sales Operating income
Slide 35: FC Division Transition of market-specific sales
FC Division Transition of market-specific sales (consolidated) 35/43 Industrial applications 16% 17% 15% Living and intermediate components Information technology 25% 21% 23% applications 3% 4% 4% Vehicular applications Audio/visual applications 56% 58% 58% Result Result Plan
Slide 36: FC Division Strategic markets
36/43 FC Division Strategic markets Cellular Vehicular phone market application market Thin slide switches 2-done switches Small horizontal switches Rubber key switches In-vehicle remote controls (for vehicular Worldwide AC adapters nav. and audio equipment) Detector switches (DSI and DSJ series) Bl
Slide 37: FC Division Policy for 2007
37/43 FC Division Policy for 2007 Cost reduction Product development Human resources
Slide 38: Division
a Division SMIK.
Slide 39: TP Division Touch Panel
TP Division 39/43 Touch Panel Film/glass structure •Standard type •Reinforced glass type Resistance •Contamination resistant type •High transparency type •Low reflectance type Major Major sensitive system •Antibacterial type products products Glass/glass structure •Linear polarization type •Circular
Slide 40: TP Division Amounts of sales and profit
TP Division Amounts of sales and profit (consolidated) 40/43 Unit:100 million yen
Slide 41: TP Division Transition of market-specific sales
TP Division Transition of market-specific sales (consolidated) 41/43 Industrial applications 22% Living and intermediate 23% 26% components 3% 4% Information technology 5% applications 75% 73% Vehicular applications 67% Audio/visual 2% applications Result Result Plan
Slide 42: TP Division 2007 strategic markets
42/43 TP Division 2007 strategic markets Unit: K set/Year 50,000 45,000 Mobile :Business achieved :Target Game 10,000 Smart phone Portable Navi 5,000 MFP PPC 4,000 DVC Car Navi 3,000 PC 2,000 Interphone POS 1,000 Arcade game 500 KIOSK Handy terminal ATM 300 FA 200 Medical 100 <Qty> 2.5 3.8 6.5 7 8 1
Slide 43: TP Division 2007 Policy
43/43 TP Division 2007 Policy FY2007 strategic activity points Sales increase 1 Intensified marketing of differentiated products Glass/glass, and high transparency low reflectance film/glass for in-vehicle applications, force-feedback, and integrated type optical touch panels 2 Marketing in the over