Oki Electric Industry Company, Limited · TSE:6703
Oki Electric Industry — Q1 FY ending March 2007 Earnings Presentation
26 slides from Oki Electric Industry's earnings presentation, Jul 27, 2006
Slide 1: Financial Results for the First Quarter of Fiscal Year ending March 31, 2007
Financial Results for the First Quarter of Fiscal Year ending March 31, 2007 July 27, 2006 Oki Electric Industry Co., Ltd. 1
Slide 2: Table of Contents
Table of Contents 1. 1st Quarter of FY ending March 2007 1.1 Financial Results Outline 1.2 Profit and Loss 1.3 Segment Information 2. Target for 1st Half of FY ending March 2007 3. Measures in Major Businesses The projections and plans on this material are subject to change depending upon the change
Slide 3: Q1 Results and H1 Projections
Q1 Results and H1 Projections Q1 results and H1 projections are as planned Q1 H1 projections/measures Overall Sales and income decreased on a year-on- year as planned As planned Larger sales and income in Q2 and H2 Financial: Increase in security-available and overseas Financial: Recovery in ATM, he
Slide 4: Q1 Financial Results Outline
Q1 Financial Results Outline Results were as planned, while sales and income decreased on year-on- year basis Comparison to previous Q1 ¾ Net sales: Decreased by 5.9 B yen to 130.4 B yen due to reduced investment for fixed-line systems by telecom carriers, and impact from LCD panel inventory adjustm
Slide 5: Q1 Financial Results Outline
Q1 Financial Results Outline Q1, FY Q1, FY (Billion yen) Mar. 06 Mar. 07 Cost of sales ratio worsened by 1.6 points due to price down Net sales 136.3 130.4 and increase in fixed costs (Cost of sales ratio) (76.8%) (78.4%) Cost of sales 104.7 102.2 Increase in SG&A due to increase in personnel costs,
Slide 6: Segment Information: Consolidated basis
Segment Information: Consolidated basis Net sales (Billion yen) Though decreased on a year-on- 136.3 year basis, results were as planned 130.4 7.3 8.2 Others Net sales: Decreased by 5.9 B yen 31.8 38.3 Printers on a year-on-year basis 35.8 Printer sales increased, particularly in 33.2 Semiconductors
Slide 7: Segment Information: Info-Telecom Systems
Segment Information: Info-Telecom Systems (Billion yen) Net sales Net sales 61.4 Financial market: Decreased by 5.5 B yen 3.9 Recovery trend in ATM 8.9 50.7 3.9 6.3 Others Though sales of counter terminals was 9.8 Enterprises large in Q1 last year, this year it will be 22.8 5.5 Public sector heavy i
Slide 8: Segment Information: Semiconductors
Segment Information: Semiconductors (Billion yen) Net sales Net sales 35.8 33.2 Foundry, Logic: Decreased by 3.5 B yen 3.8 Others 0.5 5.4 Optical Major reasons include decrease in 8.9 0.6 components driver sales due to inventory 8.1 System adjustment by LCD panel vendors memories Foundry: Increased
Slide 9: Segment Information: Printers
Segment Information: Printers Net sales (Billion yen) Net sales 38.3 Color NIP: Increased by 3.6 B yen 31.8 Increase in unit shipment and sales Mono NIP, 17.7 SIDM, others for consumables 14.8 Mono NIP, SIDM, etc.: Increased by 2.9 B yen 20.6 Color NIP 17.0 Sales increase in SIDM and office machines
Slide 10: Table of Contents
Table of Contents 1. 1st Quarter of FY ending March 2007 1.1 Financial Results Outline 1.2 Profit and Loss 1.3 Segment Information 2. Target for 1st Half of FY ending March 2007 3. Measures in Major Businesses The projections and plans on this material are subject to change depending upon the change
Slide 11: Target for H1, FY ending March 2007
Target for H1, FY ending March 2007 Net sales: 300.0 B yen Unchanged from the previous announcement on April 27 Sales by segment also remains the same as previously announced Operating income/loss: 12.0 B yen of loss Unchanged from the previous announcement on April 27 Info-telecom: Plan to increase
Slide 12: Table of Contents
Table of Contents 1. 1st Quarter of FY ending March 2007 1.1 Financial Results Outline 1.2 Profit and Loss 1.3 Segment Information 2. Target for 1st Half of FY ending March 2007 3. Measures in Major Businesses The projections and plans on this material are subject to change depending upon the change
Slide 13: Management Target in FY Mar. 2008
Management Target in FY Mar. 2008 Target of net sales and operating income by segment FY Mar. 2006 FY Mar. 2007 (Plan) FY Mar. 2008 (Target) (Results) (Billion yen) Net sales Operating income Net sales Operating income Net sales Operating income Financial market 100.1 121.0 130.0 Telecom carriers 98
Slide 14: Financial System Business
Financial System Business Main Measures Enhance profitability in base financial business (ATM, bank branch systems, cash management systems) ¾ Increase in sales by full-scales expansion of security-available ATMs and renewal in ATMs for convenience stores ¾ Expand sales of cash management equipment
Slide 15: ATM Business
ATM Business Market Trend Convenience stores enhance security against counterfeit cards and stolen PIN numbers The banknote recycling-type ATM market grows in China, Korea, etc. Financial institutions deploy measures for sound management (biz outsourcing, price-cut request) Business Strategy Enhance
Slide 16: Telecom Carrier Business
Telecom Carrier Business Main Measures: Targeting NGN (Next Generation Network) - NGN: Next generation network for the ubiquitous society, which realizes all-IP, service layer separation, enhancement of QoS and security, and integration of fixed/wireless infrastructures (mobile/WiMax) Biz. area Oki’
Slide 17: Public Sector Business / Enterprise Business
Public Sector Business / Enterprise Business Public Sector: Main Measures Government solutions: Enhance promotion for large projects by government. Deploy Oki’s unique EA solutions through u-Japan promotion team Transportation systems: Enhance DSRC-related business for next version VICS. Increase sh
Slide 18: Semiconductor Business (1)
Semiconductor Business (1) Main Measures (1) Focus on differentiating technologies including high voltage process, low power consumption and non volatile memories Large TFT driver: T-CON Timing Controller Drive the industry with high quality, high definition, high-speed and low power consumption tec
Slide 19: Semiconductor Business (2)
Semiconductor Business (2) Main Measures (2) Concentrate on wireless market for system LSIs Differentiate with “wireless technology” including mixed signal, modulation /demodulation and RF, and “low power consumption technology” including SOS PHS Base band: With the technologies cultivated in the Ja
Slide 20: Printer Business
Printer Business Color NIP: Main Measures Reduce costs: ¾ Review cost measures at all process points ¾ Reduce logistic costs, make efficient sales investments, and review other costs ¾ Reduce costs through new LED head Shift from low-end desktop models to mid and high-end models ¾ Increase street pr
Slide 21: Color NIP Market Share
Color NIP Market Share HP expands market share with laser tandem model Oki remains No.2 50% 12% 45.9% K-Minolta 39.7% 39.6% 10% 38.3% Epson 40% 37.0% OKI 8.1% 8.3% 7.7% 7.7% 8% 7.1% 30% Xerox HP OKI Xerox Epson Dell Dell K-Minolta 6% Samsung Canon Samsung 20% Ricoh Lexmark Ricoh 4% Canon 10% Lexmark
Slide 22: Enhance Offices for the Printer Business
Enhance Offices for the Printer Business Enhance global offices, including sales company in Beijing, to increase sales ability Oki Trading (Beijing) Co., Ltd. Oki Data Dalian Co., Ltd. July 2006 October 2005 Sales company Software company Operation of new UK Plant November 2005 Oki Systems Korea Co.
Slide 23: <Reference> Q1 Cash Flows
<Reference> Q1 Cash Flows Issued 30.0 B yen of convertible-bond-type-bonds with stock acquisition rights in June 2006 Q1, FY Q1, FY (Billion yen) Variance Notes Mar.06 Mar.07 I. Cash flows from operating activities (18.7) (6.6) 12.1 Income before income taxes (5.0) (10.6) (5.6) <Working capital> Mar
Slide 24: <Reference> Q1 Balance Sheet (1)
<Reference> Q1 Balance Sheet (1) <Balance Sheet: Assets> Cash and deposits increase by 17.0 B yen on a YoY basis due to increase in cash from issuance of corporate bond (For corporate bond redemption) Inventories increase by 14.7 B yen on a YoY basis due to sales increase in printers, long-term proj
Slide 25: <Reference> Q1 Balance Sheet (2)
<Reference> Q1 Balance Sheet (2) <Balance Sheet: Liabilities and Shareholders’ Equity> Issued 30.0 B yen of convertible-bond-type-bonds with stock acquisition rights in June 2006 (Billion yen) * For easier comparison, the amount is calculated based on the previous method <After changes> before the c
Slide 26: Glossary
Glossary P3 ATM Automated Teller Machine P16 NMS Network Management System NGN Next Generation Network SI System Integration ITS Intelligent Transport System GMPLS Generalized Multi-Protocol Label LCD Liquid Crystal Display Switching SOS Silicon on Sapphire ADM Add-Drop Multiplexer NIP Non-Impact Pr
Oki Electric Industry — Q1 FY ending March 2007 Earnings Presentation on 6ix