Renesas Electronics Corporation · TSE:6723
Renesas Electronics — NEC Electronics — H1 FY08/3 Earnings Presentation
26 slides from Renesas Electronics's earnings presentation, Nov 13, 2007
Slide 1: 1H FY08/3 Financial Results and Outlook
1H FY08/3 Financial Results and Outlook Toshio Nakajima President and CEO November 13, 2007 NEC Electronics Corporation http://www.necel.com/ir/en/ 1
Slide 2: Agenda
Agenda I. 1H FY08/3 Financial Results 9Sales and profits exceeded the original forecasts announced on May 14, 2007 9Recovered operating income mainly by diligent fixed cost reduction II. FY08/3 Full-Year Forecasts 9The full-year forecasts remain unchanged, due to uncertain market conditions in Q4. 9
Slide 3: I. 1H FY08/3 Financial Results
I. 1H FY08/3 Financial Results II. FY08/3 Full-Year Forecasts III. Measures to Improve Performance 3
Slide 4: Financial Snapshot
Financial Snapshot FY08/3 Q1, June 30 Q2, Sept. 30 1H, Sept. 30 (B Yen) Actual Actual Actual YoY HoH Net Sales 173.6 177.4 351.0 +8.0 +1.7 Semiconductor Sales 165.0 169.1 334.1 +6.3 +2.2 Operating Income (Loss) -2.2 4.1 1.9 +8.8 +23.5 Income (Loss) Before Income Taxes 0.4 1.4 1.8 +7.4 +31.6 Net Inco
Slide 5: Trends in Quarterly Results
Trends in Quarterly Results (B Yen) Net 191.2 sales 185.6 177.8 177.9 177.4 170.3 171.4 173.6 Semicon 181.2 165.3 165.9 166.8 165.2 179.1 162.7 Sales 169.7 171.1 169.1 146.1 162.0 165.0 160.7 158.7 160.0 158.1 160.8 156.8 140.3 Recovered from 9 consecutive quarters of operating losses Op. Margin 8.2
Slide 6: Factors in Operating Profits/Losses
Factors in Operating Profits/Losses YoY (B Yen) QoQ (B Yen) Semicon. Semicon. Sales Sales 169.7 -0.6 169.1 +4.1 165.0 169.1 Profits from Sales decline exchange and lower fab gains utilization rates + Approx. 2.0B (95% to 92%) -Approx. 3.0B Reduced other fixed costs Out of 20B yen Fixed + Approx. 2.0
Slide 7: Semiconductor Sales by Platform (YoY)
Semiconductor Sales by Platform (YoY) (B Yen) 200 YoY 169.7 -0% 169.1 160 +/- Factors SoC SoC 67.5 -4% 64.9 +)EMMA™ products for digital AV, LSIs for game consoles, 120 companion chips for mobile phones -) LSIs for printers, digital cameras, and DVD drives MCU MCU 80 41.2 +12% 46.1 +) Growth in auto
Slide 8: Semiconductor Sales by Platform (QoQ)
Semiconductor Sales by Platform (QoQ) (B Yen) 200 QoQ ＋2% 169.1 165.0 +/- Factors 160 SoC SoC +) EMMA™ products for digital AV, ＋2% 64.9 63.6 LSIs for PC-related devices 120 -)Digital baseband LSIs for mobile phones, LSIs for some consumer electronics applications MCU MCU 80 44.4 ＋4% 46.1 +) Growth
Slide 9: Semiconductor Sales by Application
Semiconductor Sales by Application YoY QoQ (B Yen) 169.7 169.1 169.1 165.0 Communications 17.1 Communications 17.1 24.6 -31％ 20.7 -18％ Decline in small LCD driver ICs Decline in mobile phone chips Computing & Peripherals 32.6 Computing & Peripherals 32.6 34.7 -6% 29.5 +10% Decline in LSIs for printe
Slide 10: Balance Sheet
Balance Sheet (B Yen) Sept. 30, 2006 Mar. 31, 2007 Sept. 30, 2007 Cash and Cash Equivalents 222.0 185.4 191.4 Accounts Receivable 116.7 99.5 100.3 Inventories 80.3 79.2 80.2 PP&E 308.6 296.2 282.5 Other Assets 49.4 35.6 33.6 Total Assets 777.0 695.9 687.9 Accounts Payable 169.2 132.5 130.0 Debt Paya
Slide 11: Cash Flows
Cash Flows FY07/3 FY08/3 (B Yen) 1H 1Q 2Q 1H Cash Flows from 34.6 1.5 27.7 29.1 Operating Activities Cash Flows from -21.1 -7.3 -11.5 -18.8 Investing Activities Free Cash Flows 13.4 -5.9 16.2 10.3 11
Slide 12: II. FY08/3 Full-Year Forecasts
I. 1H FY08/3 Financial Results II. FY08/3 Full-Year Forecasts III. Measures to Improve Performance 12
Slide 13: FY08/3 Full-Year Forecasts
FY08/3 Full-Year Forecasts The Thefull-year full-yearforecasts forecastsremain remainunchanged, unchanged,due duetotouncertain uncertainmarket marketconditions conditionsininQ4, Q4, however, we are committed to securing operating profits in 2H as well, however, we are committed to securing operating
Slide 14: Trends in Amount of Orders
Trends in Amount of Orders Orders Ordersfor forgeneral-purpose general-purposeproducts, products,such suchasasmicrocontrollers microcontrollersand and discrete discretedevices devicesare arehealthy, healthy,however, however,adjustments adjustmentsininLCD LCDdriver driver ICs ICsand andmobile mobilep
Slide 15: Semiconductor Sales by Platform (HoH Forecast)
Semiconductor Sales by Platform (HoH Forecast) (B Yen) 400 ＨoＨ +1% +/- Factors 334.1 Approx. 336.0 SoC +) EMMA™ products for digital AV SoC - LSIs for DVD drive 300 Low-single -) Digital baseband LSIs for mobile Digit % 128.5 phones, LSIs for digital cameras (Compared to Original Forecasts: approx.
Slide 16: FY07/3 & FY08/3 Op. Expenses and CAPEX
FY07/3 & FY08/3 Op. Expenses and CAPEX - FY08/3 R&D expenses to be approx. (B yen) 80 R&D Expenses 14.0B yen less than FY07/3. 80 SG&A Expenses - Current FY08/3 estimate is 4.0B yen - FY08/3 amount to be 2.5B yen less YoY 68.9 lower than original estimate from May 14, 2007. 60 60 62.9 57.7 40 40 43.
Slide 17: Non-Operating Income/Loss
Non-Operating Income/Loss Book BookStructural StructuralReform ReformCosts Costsmainly mainlyin in2H 2H FY07/3 FY08/3 Full-year 1H 2H Full-Year Original Original Present Original Present Actual Forecasts Actual Difference Forecasts Forecasts Difference Forecasts Forecasts Difference (As of May 14, (
Slide 18: III. Measures to Improve Performance
I. 1H FY08/3 Financial Results II. FY08/3 Full-Year Forecasts III. Measures to Improve Performance 18
Slide 19: Progress of New Management Policies
Progress of New Management Policies (Announced on Feb. 22, 2007) Executing ExecutingNew NewManagement ManagementPolicies Policies Items and Primary Measures Status (as of Nov. 13, 2007) Reallocate Reduce technology outsourcing costs roughly equivalent Completed development to 600 people resources Sh
Slide 20: Advanced Process Technology Dev't and Mfg.
Advanced Process Technology Dev’t and Mfg. Accelerate Acceleratedevelopment developmentof of fundamental fundamentalprocess processtechnology technology and andfocus focuson ondifferentiated differentiatedprocess processtechnology technology 40nm Process Technology (NEC Electronics’ next generatio
Slide 21: Mobile Handset System LSIs
Mobile Handset System LSIs Focus Focuson onselling selling“M2” “M2”dual-mode dual-modecommunications communicationsplatform platform ¾R&D is complete. Development costs are being reduced significantly. ¾M2 shipping in autumn, contributing to sales and profits. ¾Target new design-ins inside and outsi
Slide 22: Display Driver Business
Display Driver Business Enhance Enhancecompetitiveness competitivenessofofthis thiscore corebusiness, business,which which has hasaalarge largeshare sharein inthe thegrowing growingdisplay displaydriver drivermarket. market. In negotiations to establish strategic alliances. ¾Maintain technological
Slide 23: Automotive Semiconductor Business
Automotive Semiconductor Business Entering Entering Market Market for for Car Car Navigation Navigation Applications Applications • Achieved world-leading performance of 1920MIPS utilizing ARM11 quad core parallel processing technology • Sales target: 10B yen in 2010, 30B yen in 2015 • Mass Producti
Slide 24: Notice Concerning Shares Lifted from Grace Period for Delisting
Notice Concerning the NEC Electronics' Shares Lifted from Grace Period for Delisting As announced by the Tokyo Stock Exchange (TSE) on July 10, 2007, the ratio of the number of the company' shares held by the "special few" as of March 31, 2007, exceeded the TSE's previous listing criteria, and the c
Slide 25: Conclusions
Conclusions 1H financial results exceeded the original forecasts announced on May 14, 2007, and operating profits recovered We are committed to securing operating profits in 2H, and strive to improve financial performance further; however, the full-year forecasts remain unchanged due to uncertain
Slide 26: Cautionary Statements
Cautionary Statements The statements in this presentation with respect to the plans, strategies and forecasts of NEC Electronics and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. We caution you in advance that actual results could