Japan Aviation Electronics Industry, Limited · TSE:6807

Japan Aviation Electronics Industry — FY2017 Earnings Presentation

36 slides from Japan Aviation Electronics Industry's earnings presentation, Apr 25, 2018

1. Slide 1: Financial Results for FY2017 and Prospects for FY2018

   Financial Results for FY2017 and Prospects for FY2018 April 25, 2018 6807 Japan Aviation Electronics Industry, Ltd. Copyright ©2018. Japan Aviation Electronics Industry. Ltd

2. Slide 2: Agenda

   Agenda Technology to Inspire Innovation I. Financial Results for FY2017 II. Prospects and Strategy for FY2018 Copyright ©2018. Japan Aviation Electronics Industry. Ltd 2

3. Slide 3: Financial Results for FY2017

   Technology to Inspire Innovation Ⅰ. Financial Results for FY2017 （From April 1, 2017 to March 31, 2018） Copyright ©2018. Japan Aviation Electronics Industry. Ltd 3

4. Slide 4: Net Sales and Incomes

   Net Sales and Incomes Technology to Inspire Innovation (JPY in 100millions) FY2016 FY2017 Year/Year Projections (announced 1H 2H 1H 2H Change Jan.2018) Net Sales 899 1,196 2,095 1,245 1,294 2,539 444 121% 2,500 Operating 41 79 121 95 111 206 86 171% Sales 195 to Net Sales 4.6% 6.6% 5.8% 7.6% 8.6% 8.

5. Slide 5: Net Sales and Incomes

   Net Sales and Incomes Technology to Inspire Innovation ▶ Significantly recovered profits from previous years’ trend ▶ Recorded the second highest profits next to FY2014 （JPY in 100millions） Net Sales 2,539 2,095 1,912 1,795 1,598 259 232 206 179 174 165 155 169 Operating Ordinary 121 Income Income 9

6. Slide 6: Connector Business

   Connector Business Technology to Inspire Innovation （JPY in Sales by Market Segment Sales：122% (of FY2016) 100 millions） Year/Year 2,316 ▶ Mobile Devices Change • Significant growth in North 2,000 1,893 122% American customers 1,379 • Driven by USB Type-C “DX07 131% Mobile 1,052 series” and certain

7. Slide 7: Sales by Market Segment (Connector)

   Sales by Market Segment (Connector) Technology to Inspire Innovation ▶ Mobile Devices declined in 4Q due to seasonality and key customers’ production slow down ▶ Automotive and Industrial & Infrastructure grew steadily through out the year 627 （JPY in 100million） 592 557 550 547 537 385 363 301 Mobi

8. Slide 8: UIS Business

   UIS Business Technology to Inspire Innovation （JPY in 100 millions） Sales by Market Segment Sales 106% (of FY2016) 100 Year/Year 86 ▶ Automotive（capacitive touch 81 Change 106% panel) • Slightly decreased due to EOL 92% 47 of some models, despite of Automotive 51 mass production start of new 50 prod

9. Slide 9: Aerospace Business

   Aerospace Business Technology to Inspire Innovation （JPY in 100 millions） Sales by Market Segment 150 Sales：113% (of FY2016) Year/Year 129 Change ▶ Industrial & Infrastructure 114 113% and Automotive 100 Industrial & • Oil drilling sensor and linear Infrastructure 61 135% 82 motor for semiconductor

10. Slide 10: Prospects and Strategy for FY2018

    Technology to Inspire Innovation Ⅱ. Prospects and Strategy for FY2018 （From April 1, 2018 to March 31, 2019） Copyright ©2018. Japan Aviation Electronics Industry. Ltd 10

11. Slide 11: FY2018 Environment and Strategy

    FY2018 Environment and Strategy Technology to Inspire Innovation ▶ Business Environment  Uncertainty is expected to grow, although the global economy will continue to expand  Smartphone market growth is expected to slow down, but more in-vehicle electronics will be installed, and Industrial & Infr

12. Slide 12: Prospects for FY2018

    Prospects for FY2018 Technology to Inspire Innovation (JPY in 100millions) FY2017 FY2018 1H 2H 1H Year/Year Change Projections Year/Year Change Net Sales 1,245 1,294 2,539 1,165 -80 94% 2,400 -139 95% Operating 95 111 206 95 0 100% 200 -6 97% Income to Net Sales 7.6% 8.6% 8.1% 8.2% 8.3% Ordinary 85

13. Slide 13: Sales by Market Segment

    Sales by Market Segment Technology to Inspire Innovation ▶ Maintain over JPY100 billion sales in Mobile Devices, although net sales is expected to decline due to weaker demand of certain product launched in FY2016 ▶ Continue high growth in Automotive and Industrial & Infrastructure markets 2,539 2,4

14. Slide 14: Prospects for Sales by Business Segment

    Prospects for Sales by Business Segment Technology to Inspire Innovation (JPY in 100millions) FY2017 FY2018 Projections 1H 1H Year/Year Change Year/Year Change Connector 1,143 2,316 1,050 -93 92% 2,155 -161 93% UIS 41 86 43 2 104% 89 3 104% Aerospace 57 129 66 9 116% 144 15 112% Others 4 9 6 2 146%

15. Slide 15: Connector Business Strategy [Mobile Devices]

    Connector Business Strategy［Mobile Devices］ Technology to Inspire Innovation Continuously promote DX07 and Board-to-Board connectors ▶ Expand sales of “DX07 Series“ USB Type-C Connector  Keep and expand top class market share of receptacle connectors for notebook PC  Strengthen competitiveness by

16. Slide 16: Connector Business Strategy [Automotive①]

    Connector Business Strategy［Automotive①］ Technology to Inspire Innovation Strategy to achieve FY2018 plan ▶ Expand Japanese customer Sales for automotive connector business by customer(car maker)  Continue to focus on ICT projects （JPY in 100millions）  Commence mass-production of 644 in-vehicle di

17. Slide 17: Connector Business Strategy [Automotive②]

    Connector Business Strategy［Automotive②］ Technology to Inspire Innovation Strategy for further growth ▶ Promote in-vehicle ICT segment business by our own high speed Projection of automotive connector data transmission technology （Growth Area） ▶ Expand ADAS business with in- Next-generation vehicle

18. Slide 18: Connector Business Strategy [Automotive③]

    Connector Business Strategy［Automotive③］ Technology to Inspire Innovation Increase production capability for automotive connectors and harnesses ▶ JAE Philippines will build a new building in 2nd Plant  Expand total floor space by 1.5 fold for business expansion mainly for automotive connector  Co

19. Slide 19: Connector Business Strategy [Industrial & Infrastructure]

    ［Industrial & Connector Business Strategy Infrastructure］ Technology to Inspire Innovation Capture growing demand and broaden target in Factory Automation market ▶ Sales Expansion in Factory Sales for connector in Automation Industrial & Infrastructure market • Expand market share of major （JPY in 1

20. Slide 20: UIS Business Strategy

    UIS Business Strategy Technology to Inspire Innovation Accelerate promotion for capacitive touch panel for automotive ▶ Start mass production of next generation product Film type metal mesh sensor Glass type metal mesh sensor Industry’s Industry’s First First • Started mass-production in • Start mas

21. Slide 21: Aerospace Business Strategy

    Aerospace Business Strategy Technology to Inspire Innovation Expand Oil Drilling Sensor and Semiconductor Fabrication Equipment business in the growing market trend （JPY in 100millions） 50 Sales for Oil drilling sensor ▶ Oil Drilling Sensor 150%  Strengthen sales and service operation in North Amer

22. Slide 22: Strategy for Productivity Improvement

    Strategy for Productivity Improvement Technology to Inspire Innovation ▶ Enhance production system and expand Capital investment （JPY in 100million） investment for rationalization 220 Manufacturing  Continue capital investment for production 176 Infrastructure infrastructure (JAE Philippine’s plant

23. Slide 23: Direction for Mid-term Growth

    Direction for Mid-term Growth Technology to Inspire Innovation Pursue further growth in sales and profits by enhancing global marketing and productivity improvement ● Maintain Mobile Device sales ● Accelerate growth in Automotive and Industrial & Infrastructure markets ● Productivity improvement by

24. Slide 24: Technology to Inspire Innovation

    Technology to Inspire Innovation

25. Slide 25: Cautionary Statement

    Technology to Inspire Innovation <Cautionary Statement> The plans, strategies & results forecasts and targets for our company and our consolidated affiliates (hereinafter JAE) noted in these materials are forecasts and targets as of April 25, 2018, and include risks and uncertainties. The targets no

26. Slide 26: Reference

    Technology to Inspire Innovation [Reference] Copyright ©2018. Japan Aviation Electronics Industry. Ltd 26

27. Slide 27: Sales by Market Segment

    Sales by Market Segment Technology to Inspire Innovation (JPY in 100millions) Year FY2016 FY2017 /Year Projections annouced 1H 2H 1H 2H Change Jan. 2018 Mobile 395 657 1,052 692 686 1,379 131% 1,350 Devices Automotive 315 340 655 331 367 698 107% 690 Industry & Infrastructure 123 132 255 154 173 327

28. Slide 28: Overseas Sales Growth

    Overseas Sales Growth Technology to Inspire Innovation （JPY in 100millions） 3,000 74% Overseas Sales Ratio 73% 71% 71% 2,539 66% 2,095 61% 1,912 2,000 1,795 1,598 1,885 1,296 1,526 1,361 1,267 1,000 1,048 790 Overseas Domestic 569 654 506 550 551 528 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Copyr

29. Slide 29: Sales by Business Segment

    Sales by Business Segment Technology to Inspire Innovation (JPY in 100millions) Year FY2016 FY2017 /Year Projections announced 1H 2H 1H 2H Change Jan.2018 Connector 799 1,093 1,893 1,143 1,173 2,316 122% 2,276 UIS 37 44 81 41 45 86 106% 86 Aerospace 59 56 114 57 72 129 113% 130 Others 3 4 7 4 4 9 12

30. Slide 30: Operating Income by Business Segment

    Operating Income by Business Segment Technology to Inspire Innovation (JPY in 100millions) FY2016 FY2017 Year/Year 1H 2H 1H 2H Change 64 97 161 112 121 233 72 Connector 8.0% 8.9% 8.5% 9.8% 10.3% 10.1% 4 4 8 4 4 8 0 UIS 9.8% 9.3% 9.5% 9.2% 9.7% 9.4% -4 -2 -6 1 6 7 13 Aerospace -6.8% -2.8% -4.9% 1.6%

31. Slide 31: Prospects for Sales by Market Segment

    Prospects for Sales by Market Segment Technology to Inspire Innovation (JPY in 100millions) FY2017 FY2018 1H 1H Year/Year Change Projections Year/Year Change Mobile 692 1,379 547 -145 79% 1,130 -249 82% Devices Automotive 331 698 378 47 114% 770 72 110% Industry & Infrastructure 154 327 185 31 120%

32. Slide 32: Type-C Usage and JAE's Product Lineup

    Type-C Usage and JAE’s Product Lineup Technology to Inspire Innovation Type-C Usage DX07 Series Product Lineup  Steady adoption in PC  Meet customer needs by wider installation over 60% in 2018 product variations (JAE forecast)  Expand high performance product  Installation exceeded 30% for in l

33. Slide 33: Connectors for Eco-friendly Vehicle

    Connectors for Eco-friendly Vehicle Technology to Inspire Innovation Focus on connection for Battery, Motor & Inverter/Converter ECU connector for high current connector high current BMS(Battery terminal Management System) charger(battery) high current・ high voltage motor/inverter quick charger plug

34. Slide 34: Connectors for Robot

    Connectors for Robot Technology to Inspire Innovation for Small size Servo motor JB10(circular) JN14 Released in Manipulator (low profile) CY2017 DF02 (rectangular) for Middle/Large size Servo motor JL10(circular)Enhanced in CY2017 Controller Released in JL04Ｖ(circular) CY2017 ＫN01 ＫN02 HB01 HB03 (r

35. Slide 35: UIS: Touch Panels for Automobile

    UIS: Touch Panels for Automobile Technology to Inspire Innovation Glass Film Standard Type Full Pellucidity Metal Mesh Metal Mesh (ITO) Type (ITO) Sensor Sensor Industry’s First Industry’s First Industry’s First Visual  High Sensitive  High Flexibility Invisible Metal Adopted in High Rigidity 

36. Slide 36: Aerospace: Key Products for Industrial Use

    Aerospace: Key Products for Industrial Use Technology to Inspire Innovation for Oil Drilling Equipment Sensor Package Sensor Extremely high JAE Products are Temperatures adopted at drilling Digital DM Harsh sites globally Environments Accelerometer s Vibration, Shock Geomagnetic Analog DM Sensor for

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