Renesas Electronics Corporation · TSE:6723

Renesas Electronics — Q1 FY16/12 Earnings Presentation

26 slides from Renesas Electronics's earnings presentation, Aug 10, 2016

  1. Slide 1: FY16/12 Q1 Financial Results

    FY16/12 Q1 FINANCIAL RESULTS RENESAS ELECTRONICS CORPORATION AUGUST 10, 2016 © 2016 Renesas Electronics Corporation. All rights reserved.

  2. Slide 2: Non-GAAP financial measures and change of fiscal term

    FY16/12 Q1 FINANCIAL RESULTS Since FY16/3, Renesas Electronics Group (hereinafter “the Group”) started to disclose 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 f

  3. Slide 3: FY16/12 Q1 Financial Snapshot

    FY16/12 Q1 FINANCIAL SNAPSHOT YoY and QoQ results as well as the Change from June 7 FCT of the Net Sales and Semiconductor Sales are rounded off to one decimal place FY16/3 FY16/12 (B yen) Q1 Change from Q1 Q4 Q1 YoY QoQ June 7 FCT Forecasts Net Sales 179.3 167.8 145.0 152.0 -15.2% -9.4% +4.8% Semic

  4. Slide 4: FY16/12 Q1 Highlights (Non-GAAP Basis)

    Non-GAAP FY16/12 Q1 HIGHLIGHTS (NON-GAAP BASIS*1) Results Major factors Semi. Sales￥147.5 B  Decreased QoQ due to stronger yen and earthquake impact QoQ: -9.6%  Increased from the previous forecast due to more-than- vs FCT: +4.6% expected increases in production volume  Increased QoQ due to seaso

  5. Slide 5: FY16/12 Q1 Semiconductor Sales (Non-GAAP Basis)

    Non-GAAP FY16/12 Q1 SEMICONDUCTOR SALES (NON-GAAP BASIS) QoQ (B YEN) Currency impact -5.0 -15.7 Sales decrease due to -13.0 withdrawal from non- focus products -3.5 +5.8 Earthquake impact (production decline) Others 163.2 147.5 0 0 0 FY16/3 FY16/3Q4 FY16/12 FY16/12Q1 Q4 Q1 © 2016 Renesas Electronics

  6. Slide 6: Semiconductor Sales: Change from the Previous Forecast

    Non-GAAP FY16/12 Q1 SEMICONDUCTOR SALES (NON-GAAP BASIS) CHANGE FROM THE PREVIOUS FORECAST (B YEN) Sales decrease due to withdrawal from non- focus products Earthquake impact +4.8 +0.3 (production decline) Others +6.5 +0.4 +1.0 Currency impact 147.5 141.0 0 0 0 FY16/12 Q1 FY16/12 Q1 FY16/3 Forecast

  7. Slide 7: Gross Margin (Non-GAAP Basis)

    Non-GAAP GROSS MARGIN (NON-GAAP BASIS) <Quarterly Trends (%)> <QoQ> 50 Target Currency Sales decrease 44.3% 42.1% impact (Excl. currency impact) -0.5Pts +4.2Pts 45.8 -1.5Pts 45 Seasonal decrease in 44.3 42.2 44.3 manufacturing- fixed costs, etc 42.1 42.1 40 41.5 FY15/Q4 FY16/Q1 39.4 <YoY> Currency S

  8. Slide 8: OPEX (Non-GAAP Basis)

    Non-GAAP OPEX*1 (NON-GAAP BASIS) <R&D Ratio (%)> Target <SG&A Ratio (%)> Target 20 20 18.0 18 18 16.8 16.2 16.1 15.8 15.5 16 16 15.2 15.3 15.2 14 14.9 14 14.5 14.2 14.2 12 13.1 12 11.6 11.5 10 10.7 11.0 10 8 8 6 6 4 4 2 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY14 FY15 FY16 FY14

  9. Slide 9: Operating Margin (Non-GAAP Basis)

    Non-GAAP OPERATING MARGIN (NON-GAAP BASIS) Seasonal decrease in <Quarterly Trends (%)> Target <QoQ> R&D, SG&A 13.7% Currency 20 10.6% impact Sales decrease +4.1Pts (Excl. currency 17.8 -1.5Pts 18 impact) 15.7 -3.7Pts +4.2Pts 16 15.0 13.8 13.7 Seasonal decrease in 14 12.6 manufacturing-fixed costs, e

  10. Slide 10: Q2 Financial Forecasts

    FY16/12 Q2 FINANCIAL FORECASTS © 2016 Renesas Electronics Corporation. All rights reserved. Page 10

  11. Slide 11: Summary of FY16/12 Q2 Financial Forecasts

    SUMMARY OF FY16/12 Q2 FINANCIAL FORECASTS Forecasts Major factors  Expect to decrease QoQ due to stronger yen Semi Sales￥145.0 B QoQ: -1.7%  Anticipate the negative earthquake impact to diminish QoQ  Expect to decrease QoQ due to stronger yen and seasonal Gross Margin 38.9% increases in manufactu

  12. Slide 12: FY16/12 Q2 Financial Forecasts

    FY16/12 Q2 FINANCIAL FORECASTS YoY and QoQ results as well as the 1H FCT of the Net Sales and Semiconductor Sales are rounded off to one decimal place FY16/3 FY16/12 (B yen) Q2 1H Q1 Q2 FCT YoY QoQ 1H FCT Net Sales 181.4 360.7 152.0 149.0 -17.8% -1.9% 301.0 Semiconductor Sales 177.0 351.5 147.5 145.

  13. Slide 13: Q2 Semiconductor Sales Forecast

    FY16/12 Q2 SEMICONDUCTOR SALES FORECAST QoQ (B YEN) +0.2 -2.5 -5.4 -2.3 +6.5 +5.0 Sales decrease due to Others Currency impact withdrawal from non- Earthquake focus products impact 147.5 145.0 0 0 0 FY16/12 Q1 FY16/12 Q2 FY16/3 ActualQ4 FY16/12 ForecastQ1 © 2016 Renesas Electronics Corporation. All

  14. Slide 14: Other Topic: Nishiki Factory

    OTHER TOPIC (RENESAS SEMICONDUCTOR PACKAGE & TEST SOLUTIONS’ NISHIKI FACTORY) As of July 2015  Determine within approx. 1 year whether to transfer or consolidate the site  Increase in demand for high quality products including those for automotive applications  Reexamined the Group’s overall back

  15. Slide 15: Appendix

    APPENDIX © 2016 Renesas Electronics Corporation. All rights reserved. Page 15

  16. Slide 16: GAAP/Non-GAAP Reconciliation

    GAAP/NON-GAAP RECONCILIATION FY15/03 FY16/03 FY16/12 (B Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Semiconductor Sales (GAAP) ① 201.2 199.6 177.4 175.1 174.5 177.0 160.9 163.2 147.5 Renesas SP Drivers*1 ② -17.6 -21.0 - - - - - - - Semiconductor Sales (Non-GAAP) ①+② 183.6 178.6 177.4 175.1 174.5 177.0 160.9 163

  17. Slide 17: Semiconductor Sales by Business (Non-GAAP Basis)

    Non-GAAP SEMICONDUCTOR SALES BY BUSINESS (NON-GAAP BASIS) Automotive Business General-Purpose Business Sales (B yen) Sales (B yen) 100 Automotive Control Automotive Information Industrial OA/ICT Other General-Purpose 1,000 YoY -6% 100 YoY -23% 1,000 94.4 93.6 78.6 82.4 81.7 QoQ -10% QoQ -9% 80 79.1

  18. Slide 18: EBITDA and Cash Flows

    EBITDA AND CASH FLOWS <EBITDA (B yen)> <Cash Flows (B yen)> 50 47.7 50 Cash flows from operating activities 46.3 45.1 Cash flows from investing activities 45 Free cash flows 41.0 40 40 32.6 31.5 35 33.1 30 33.1 27.5 31.2 30 26.2 20 23.0 17.0 25 18.9 10 20 10.5 15 0 10 -5.4 -6.5 -10 -8.7 5 -9.7 -12.0

  19. Slide 19: Balance Sheets

    BALANCE SHEETS （B Yen) As of Mar. 31, 2016 As of Jun. 30, 2016 Total Assets 849.4 823.2 Cash and Cash Equivalents 398.4 397.3 Inventories 108.4 97.0 Liabilities 467.6 447.7 Interest-Bearing Debt 244.3 237.9 Shareholders’ Equity 364.1 374.1 Net Assets 381.7 375.5 D/E Ratio (Gross) 0.64 0.64 Equity Ra

  20. Slide 20: Q1 Operating Income (QoQ)

    FY16/12 Q1 OPERATING INCOME QOQ (B YEN) Currency impact Sales decrease +6.2 -2.8 (Excl. currency impact) Seasonal decrease 18.6 in R&D, SG&A 15.7 -6.9 +6.4 Impact from change in production volume 0.0 0.0 0.0 Inventory changes: -1.2 FY16/3 Q1 FY16/3 Q4 - Inventory buildup for structural reforms -0.2

  21. Slide 21: Q1 Operating Income: Change from Previous Forecast

    FY16/12 Q1 OPERATING INCOME CHANGE FROM THE PREVIOUS FORECAST (B YEN) +1.5 +2.2 Decreased R&D, SG&A Impact from change in +4.6 production volume +0.3 18.6 Currency Sales increase impact (Excl. currency impact) 10.0 Inventory changes: +1.4 - Inventory buildup for structural reforms -0.5 （Q1 forecast:

  22. Slide 22: Q1 Net Income Attributable to Shareholders of Parent Company

    FY16/12 Q1 NET INCOME ATTRIBUTABLE TO SHAREHOLDERS OF PARENT COMPANY (B YEN) Non-operating income (loss) Special -2.3 income (loss) Income taxes, -5.6 non-controlling interests -0.7 Non-operating income +0.4 18.6 Non-operating expense -2.7 ・Interest expenses -0.6 10.0 ・Exchange losses -1.7 Special i

  23. Slide 23: Q2 Gross Margin / Operating Margin

    FY16/12 Q2 GROSS MARGIN / OPERATING MARGIN (QOQ) <Gross margin> <Operating margin> Currency impact Seasonal increase in 42.8% manufacturing-fixed Currency Seasonal increase in -0.6Pts +0.5Pts costs, etc. impact 12.2% manufacturing-fixed -3.8Pts costs, etc. Sales increase -1.6Pts (Excl. currency 38.9

  24. Slide 24: Q2 Operating Income Forecast

    FY16/12 Q2 OPERATING INCOME FORECAST QOQ (B YEN) Impact from change in production volume -3.1 +1.8 Currency impact Sales increase -5.9 Seasonal increase in (Excl. currency impact) R&D, SG&A 18.6 -4.0 Inventory changes: +1.3 7.4 - Inventory buildup for structural reforms -0.2 0.0 （Q1: -2.3, Q20.0 for

  25. Slide 25: Q2 Net Income Attributable to Shareholders Forecast

    FY16/3 Q2 NET INCOME ATTRIBUTABLE TO SHAREHOLDERS OF PARENT COMPANY FORECAST (B YEN) Non-operating income (loss) Special -0.7 income (loss) -4.4 7.4 Income taxes, non-controlling interests -0.8 1.5 Net Income attributable to Operating Income shareholders of parent company © 2016 Renesas Electronics

  26. Slide 26: Forward-Looking Statements

    (FOREWARD-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. We caution you in advance that actual r

Renesas Electronics — Q1 FY16/12 Earnings Presentation on 6ix