Japan Display Inc. · TSE:6740
Japan Display — Q1 FY2015 Earnings Presentation
25 slides from Japan Display's earnings presentation, Aug 7, 2015
Slide 1: First Quarter of FY 2015 Consolidated Financial Results
First Quarter of FY 2015 Consolidated Financial Results Japan Display Inc. August 7, 2015
Slide 2: 1. FY2015-1Q Results & 2Q Guidance 2. Market Trends & JDI Policy Actions 3.
1. FY2015-1Q Results & 2Q Guidance 2. Market Trends & JDI Policy Actions 3. Reforms Under the New Management Structure Copyright © 2015 Japan Display Inc. All Rights Reserved. 2
Slide 3: FY2015-1Q Results & 2Q Guidance
FY2015-1Q Results & 2Q Guidance Keiichi Yoshida Chief Financial Officer Copyright © 2015 Japan Display Inc. All Rights Reserved. 3
Slide 4: Summary of 1Q-FY 2015
Summary of 1Q-FY 2015 Net sales & op. income nearly in line with May 13 forecast Net sales up 97% YoY to Y246.1bn due to big increase in sales to major customer & China customers Op. income improved by Y14.9bn YoY to Y2.2bn, as a much larger sales volume outweighed higher fixed costs, lower pr
Slide 5: 1Q-FY 2015 Financial Results
1Q-FY 2015 Financial Results (Billion yen) Q1-FY15 Q1-FY14 YoY Chg. Q4-FY14 QoQ Chg. Net sales 246.1 125.2 ＋120.9 232.6 +13.5 Cost of sales 228.3 126.0 ＋102.3 207.5 +20.8 Gross profit 17.9 (0.9) ＋18.8 25.1 (7.2) 7.3% -0.7% 10.8% SG&A 15.6 11.8 ＋3.8 14.4 +1.2 Operating income 2.2 (12.7) ＋14.9 10.7 (8
Slide 6: Quarterly Results of Operations
Quarterly Results of Operations Quarterly Results （Billion Yen） Mobile Auto, C&I & Other 251.1 246.1 232.6 160.4 Net sales 125.2 211.8 192.7 209.9 120.2 90.3 34.8 40.2 39.3 39.9 36.2 5.9% 4.6% 0.9% -4.7% Operating -10.1% income 14.7 10.7 2.2 (7.6) (12.7) 12.7% 12.7% 6.1% 9.1% 3.5% EBITDA 32.0 29.5 4
Slide 7: 1Q-FY 2015 Operating Income Analysis
1Q-FY 2015 Operating Income Analysis Operating Income Analysis (YoY) （Billion yen） Price (3.7) Product Shipment Mix +23.5 (3.5) 2.2 1Q-FY14 Fixed FX Cost +6.1 1Q-FY15 (7.5) (12.7) Copyright © 2015 Japan Display Inc. All Rights Reserved. 7
Slide 8: 1Q-FY 2015 Balance Sheet
1Q-FY 2015 Balance Sheet (Billion yen) 6/2015 3/2015 6/2014 Cash and deposits 66.4 94.6 91.2 Accounts receivable 163.1 144.1 97.7 Other receivables 69.4 62.8 21.9 Inventories 117.0 113.4 99.9 Total current assets 440.4 436.7 339.4 Property, plant and equipment 357.5 348.9 354.9 Total assets 843.8 83
Slide 9: 1Q-FY 2015 Cash Flow
1Q-FY 2015 Cash Flow (Billion yen) 1Q-FY15 1Q-FY14 Income before income taxes (0.1) (16.9) Depreciation and amortization 20.3 17.1 Working capital (1) (7.0) (10.6) Increase (Decrease) in advance receipts 7.4 (5.2) Cash flow from operating activities 10.3 (13.3) Acquisitions of property and equipment
Slide 10: 2Q-FY2015 Financial Forecast
2Q-FY2015 Financial Forecast • Sales: Switch to new products for major customer to lower shipments, shipment vol. down QoQ; but revised selling prices expected to lift sales QoQ • Op. income: ¥8.0bn, up ¥5.8bn QoQ, due to revised selling prices etc. (up ¥15.6bn YoY) • Risks: Delayed components procu
Slide 11: Market Trends & JDI Policy Actions
Market Trends & JDI Policy Actions Shuji Aruga President and Chief Operating Officer Copyright © 2015 Japan Display Inc. All Rights Reserved. 11
Slide 12: Quarterly Sales by Product Category and Sales Region
Quarterly Sales by Product Category and Sales Region （Billion Yen） 250 200 US-Euro 150 Mobile Category 100 China 50 Other area Auto, C&I and Other 0 Category 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q(F) FY13 FY14 FY15 2Q-FY15 sales outlook (QoQ): US-Euro – flat due to new product ramp-up, China – up, Other ar
Slide 13: Sales of Smartphone Displays to China/Other Asia Customers
Sales of Smartphone Displays to China/Other Asia Customers (Billion yen) 100 100% 80 80% >=WQHD Full-HD 60 60% 欧米 HD720 40 40% <HD720 Pixel Eyes™ratio 20 20% 0 0% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15(F) (FY) WQHD product shipments up in 1Q15 but likely down in 2Q. But FHD continues to rise & ratio of hig
Slide 14: Sales Expectation by Resolution and Customer Region
Sales Expectation by Resolution and Customer Region 1Q15 Sales (A) 2Q15 3Q15 vs. May 13 Sales Demand expectation Results QoQ QoQ FCST QoQ FCST WQHD China/Asia Full-HD Largest customer HD720 China/Asia Pixel Eyes™ Copyright © 2015 Japan Display Inc. All Rights Reserved. 14
Slide 15: Market Forecast & JDI's Policy Actions
Market Forecast & JDI's Policy Actions • Smartphone demand in China slowing down. • Smartphone maker mkt share undergoing big changes. Market • Expect intensified competition due to expanded in-cell product forecast sales by competitors & start-up of LTPS lines in Taiwan & China. • Impact of decline
Slide 16: Establishing Competitive Advantages
Establishing Competitive Advantages World’s largest Quick-to-mkt new technology CMOS-LTPS capacity for higher user value LTPS-LCD capacity as of end-FY16 Higher image OLED （K sheets/mo., G4.5 equiv.) quality New UI/UX 470 DCI (wide color gamut) 3 rd-gen Low-Power Consumption IPS-NEO™ (high contrast)
Slide 17: Development of New Product Markets
Development of New Product Markets Development of quick-to-mkt new value-added products, e.g. 2nd-gen Pixel Eyes™, curved displays, reflective displays Memory-in-pixel Reflective displays 2nd-gen for Curved displays Digital ESL (Electric smartphones for automobiles signage Shelf Label) Narrow bord
Slide 18: Reforms Under the New Management Structure
Reforms Under the New Management Structure Mitsuru Homma Chairman and Chief Executive Officer Copyright © 2015 Japan Display Inc. All Rights Reserved. 18
Slide 19: Mission of the New Representative Directors
Mission of the New Representative Directors Mitsuru Homma Chairman, Representative Director & CEO • Lead role in creating a corporate management foundation that can boost corporate value. • Leverage experience/networks to strengthen relationships with key customers & expand customer base. Shuji Arug
Slide 20: JDI Phase I (from start-up to now) Issues
JDI Phase I (from start-up to now) Issues Since JDI's start Y300bn has been invested in mfg. capacity & new technology; sales have grown 1.7x but earnings have underperformed （Billion Yen） Net 769.3 sales 614.6 457.4 Various operational losses 4.5% Cash flow: room to improve Operating income 27.
Slide 21: Market, Customers, Competition, Current Company Situation
Market, Customers, Competition, Current Company Situation JDI has gained competitive advantage in the LTPS LCD industry but we must remain proactive. Need to become totally lean & rational to enhance business competitiveness. Customer ・ Big changes in customer market share ・ China smartphone market
Slide 22: JDI Phase II: Mgmt. Reforms to Boost Corporate Value
JDI Phase II: Mgmt. Reforms to Boost Corporate Value Technology development Lower BEP to boost Lower mfg cost user value Cut operational losses Reform China operations Sound cash flow Change mindset Shorten lead times Clarify areas of responsibility Reduce inventory Strict adherence to planning Worl
Slide 23: Establish Business Pillars for Sound Mgmt Foundation
Establish 3 Business Pillars for Sound Mgmt Foundation Mobile business reaching maturity; grow auto business & nourish new 3rd pillar; move to 30% non-mobile sales ratio Volume (# of sheets) Mobile business Top: High-res HUD Volatile demand ESL reflective Bttm: Curved displays Smartphones MIP displa
Slide 24: Reform & Speed
Reform & Speed We will pursue reforms by fostering company-wide understanding of business challenges to maximize earnings not just sales. Rapidly raise corporate value to meet all stakeholder expectations. Copyright © 2015 Japan Display Inc. All Rights Reserved. 24
Slide 25: Forward Looking Statement
Forward Looking Statement: Any information related to market trends or industries mentioned in this document is based on information available at present and JDI does not guarantee that this information is accurate or complete. Any plan, estimation, calculation, quotation, evaluation, prediction, ex