Slide 1: FY09/3 Financial Results
FY09/3 Financial Results Toshio Nakajima President and CEO May 11, 2009 NEC Electronics Corporation http://www.necel.com/ir/en/ 1
Slide 2: Executive Summary
Executive Summary I. FY09/3 Financial Results •Semiconductor sales and operating loss in FY09/3 Q4 were worse than had been estimated on Jan. 29, 2009 •Accelerated structural reforms II. FY10/3 Forecasts •Lowered full-year forecasts by 12% year on year •Advance structural reforms, centering on 90 bi
Slide 3: I. FY09/3 Financial Results: Summary Q4 Full Year
I. FY09/3 Financial Results Summary Q4 Full Year II. FY10/3 Forecasts 3
Slide 4: Financial Snapshot
Financial Snapshot FY09/3 (B yen) 4Q Full-Year Difference between Actual YoY QoQ Actual YoY Original Forecasts (Announced Jan 29, 2009) Net Sales 85.5 -80.4 -41.8 546.5 -141.3 -8.5 -48.5% -32.8% -20.5% Semiconductor Sales 80.7 -74.7 -42.0 521.7 -131.5 -8.3 -48.1% -34.2% -20.1% Operating Income -53.6
Slide 5: Trends in Quarterly Results
Trends in Quarterly Results （B yen） 177.8 177.9 177.4 170.3 171.4 173.6 170.8 166.8 162.7 165.2 166.0 166.3 167.3 169.7 171.1 169.1 155.4 146.1 162.0 165.0 163.7 160.0 156.8 158.1 160.8 159.2 159.2 127.3 140.3 122.7 85.5 Net Sales Semicon. 80.7 Sales FY06/3 FY07/3 FY08/3 FY09/3 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 6: I. FY09/3 Financial Results: Q4
I. FY09/3 Financial Results Summary <Q4> Full Year II. FY10/3 Forecasts 6
Slide 7: Q4 Semiconductor Sales by Platform
Q4 Semiconductor Sales by Platform (B yen) SoC -30％ 55.7 39.0 QoQ -34% 122.7 Forex impact FY09/3 Q3 FY09/3 Q4 from strong yen Approx. -5.5B MCU -33％ 80.7 31.3 20.8 FY09/3 Q3 FY09/3 Q4 Discrete & IC -42％ 35.7 (US$1=101 yen , Euro 1=137 yen ) (US$1=91 yen , Euro 1=120 yen ) 20.8 FY09/3 Q3 FY09/3 Q4 FY
Slide 8: Factors in Operating Income (Loss)
Factors in Operating Income (Loss) (B yen) QoQ 122.7 Semicon. Sales - 4 2. 0 80.7 -）Lower GP due to decreased sales (Including forex impact) and decrease in production (Utilization rate 73%→43%) -）Cost from accelerated structural reform +）Cost reduction effect including fixed Operating production ex
Slide 9: Non-Operating Income/Expense, Provision for Income Taxes
Non-Operating Income/Expense, Provision for Income Taxes (B yen) FY08/ FY09/3 3 Full- 9M Year Cumulative Q4 Full-Year Non-OP. Income (Loss) -8.3 -5.1 - 15.9 (Worsened) -21.0 Income Recording of the loss provision related to pending legal issues Expense Costs related to consolidation of manufacturing
Slide 10: I. FY09/3 Financial Results: Full Year
I. FY09/3 Financial Results Summary Q4 <Full Year> II. FY10/3 Forecasts 10
Slide 11: FY09/3 Semiconductor Sales by Platform
FY09/3 Semiconductor Sales by Platform SoC -11％ Factors (B yen) •Overall decrease in 251.3 222.5 sales •Increase in market share of ASIC YoY -20% •Increase in sales of EMMA products for Forex impact digital AV 653.3 from strong yen Approx. -30.0B FY08/3 FY09/3 MCU -21％ Factors 180.1 •Overall decreas
Slide 12: FY09/3 Factors in Operating Income (Loss)
FY09/3 Factors in Operating Income (Loss) (B yen) YoY 653.3 Semicon. Sales -131 521.7 .5 -）Lower GP due to decreased sales (Including forex impact) and decrease in production -）Cost related to accelerated structural reform +）Decrease in depreciation +）Cost reduction effect including fixed production
Slide 13: Balance Sheet
Balance Sheet (B yen) 08/3 08/12 09/3 Cash and Cash Equivalents 165.5 156.5 101.3 Accounts Receivable 96.4 68.1 52.5 Inventories 75.8 82.1 63.2 PP&E 259.1 244.7 242.1 Other Assets 19.5 28.0 23.5 Total Assets 616.3 579.4 482.5 Accounts Payable 107.3 110.9 78.8 Debt Payable 116.6 117.0 116.9 Other Lia
Slide 14: Cash Flows
Cash Flows FY08/3 FY09/3 (B yen) Q4 Full-year Q3 Q4 Full-year Cash Flows from Operating 0.5 -43.3 10.5 -36.3 -6.9 Activities Cash Flows from Investing -4.3 -37.8 -7.2 -18.7* -49.3 Activities Free Cash Flows -3.8 5.5 3.3 -55.0 -56.2 *Cost of equipment delivered before Q3 14
Slide 15: II. FY10/3 Forecasts
I. FY09/3 Financial Results II. FY10/3 Forecasts 15
Slide 16: FY10/3 Financial Forecasts
FY10/3 Financial Forecasts Aim Aim to to achieve achieve operating operating profits profits for for the the full full year year FY10/3 1H 2H Full-Year (B yen) Forecast YoY Forecast YoY Forecast YoY -66.5 Net Sales 215.0 -118.6 265.0 +52.1 480.0 -12.2% -61.7 Semiconductor Sales 205.0 -113.4 255.0 +5
Slide 17: Trends in Amount of Orders
Trends in Amount of Orders Amount of Orders (3-months moving average) FY09/3 Average Bottomed in February, general purpose products in Asia and some digital AV related products showed recovery. Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr FY08/3 FY09/3 17
Slide 18: FY10/3 Semiconductor Sales Forecast
FY10/3 Semiconductor Sales Forecast (B yen) SoC Approx. -5％ Factors •Sales of EMMA products 222.5 for digital AV are expected to increase YoY -12% Forex impact 521.7 from strong yen FY09/3 FY10/3 e -Approx. 15.0B MCU Approx. -10％ Factors •Increase in sales of multi-purpose MCUs 460.0 141.8 particula
Slide 19: FY10/3 Fixed Cost Reduction Measures
FY10/3 Fixed Cost Reduction Measures Reduce Fixed Costs by Approx. 90B Yen in FY10/3 （An additional 30B yen additional reduction as of Jan 2009) Achieved 100B yen fixed cost reduction from the doubled figure of fixed cost in the first half of FY09/3 Cost Reduction of Approx. 90B yen (YoY) FY09/3 FY1
Slide 20: Measures to reduce fixed Costs by 90B Yen
Measures to reduce fixed Costs by 90B Yen Streamline Cost Efficiency through Structural Reform Measures Approx. 80B yen •Closure of – Streamline equipment-related expenses (Approx. 22B yen) manufacturing lines (at including reduction of depreciation cost, lease, the end of CY2008) 8-inch line mainte
Slide 21: FY10/3 Forecast for Operating Income (Loss)
FY10/3 Forecast for Operating Income (Loss) (B yen) 521.7 YoY Forex impact from strong yen Approx. -15B Semicon. Sales 460.0 -61.7 +）Improved GP due to fixed cost reduction +）Reduced variable costs Decreased GP Operating due to decline Increased in sales Profit GP Approx. Approx. -37B yen +67B yen O
Slide 22: Conclusion
Conclusion Accelerate the Structural Reorganization to Improve Financial Structure Force through fixed cost reduction of approx. 90B yen Achieve operating profit Work toward Business Integration with Renesas Technology, and Aim to Grow and Increase Profitability 22
Slide 23: 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
Slide 24: Appendix
Appendix NEC ELECTRONICS 24
Slide 25: FY09/3 Operating Expenses and CAPEX
FY09/3 Operating Expenses and CAPEX (B yen) R&D Expenses FY09/3 110.4B yen SG&A 50 (YoY 1.9B yen) 50 FY09/3 78.6B yen Recouped R&D costs of custom products (YoY -6.0B yen) 29.3 30.3 30.0 28.3 26.4 26.7 26.9 24.6 20.5 20.2 22.2 21.5 21.3 20.7 19.5 17.3 FY08/3 FY08/3 FY09/3 FY09/3 0 0 1Q 2Q 3Q 4Q 1Q 2
Slide 26: Q4 Semiconductor Sales by Application
Q4 Semiconductor Sales by Application YoY-48％ QoQ-34％ (B yen) 155.4 Communications 17.0 -29% 122.7 27.1 Computing & Peripherals -64% 15.4 Communications -22% 31.7 Consumer Electronics 17.0 Computing & Peripherals -43% -26% 80.7 80.7 12.1 31.9 Consumer Electronics 12.1 -27% 29.2 Auto & Industrial 9.7
Slide 27: FY10/3 Operating Expenses and CAPEX Outlook
FY10/3 Operating Expenses and CAPEX Outlook (B yen) R&D Expenses SG&A FY10/3 Approx. 70B yen 100 FY10/3 Approx. 90B yen 100 (YoY -20B yen) (YoY -5B yen) 56.7 53.7 48.0 42.0 41.7 36.8 35.5 35.5 0 0 FY09/3 1H FY09/3 2H FY10/3 1H e FY10/3 2H e FY09/3 1H FY09/3 2H FY10/3 1H e FY10/3 2H e 100 100 Depreci
Slide 28: Company's Position in Semiconductor Market
Company’s Position in Semiconductor Market The company was able to minimize the sales decline to less than the average market performance and expanded its market share Semiconductor Market Growth NECEL Sales Growth Ranking *Indexed CY2006 as 1 CY06 CY07 CY08 +5.3% 1 Sales growth 1 rate of NECEL 10th
Slide 29: Eco-products to Drive Sales Growth
Eco-products to Drive Sales Growth Channel management resources toward ‘eco-products’ that contribute to reduced CO2 emissions Major Product Groups Low power consumption devices Eco MCUs Embedded DRAM ASICs Devices contribute to energy- saving eco-products MCUs for air conditioner, MCUs for automobi