Japan Aviation Electronics Industry, Limited · TSE:6807

Japan Aviation Electronics Industry — FY2016 Earnings Presentation

31 slides from Japan Aviation Electronics Industry's earnings presentation, Apr 26, 2017

1. Slide 1: Financial Results for FY2016 and Prospects for FY2017

   Financial Results for FY2016 and Prospects for FY2017 April 26, 2017 6807 Japan Aviation Electronics Industry, Ltd. Copyright ©2017. Japan Aviation Electronics Industry. Ltd

2. Slide 2: Agenda

   Agenda Technology to Inspire Innovation I. Financial Results for FY2016 II. Prospects and Strategy for FY2017 Copyright ©2017. Japan Aviation Electronics Industry. Ltd 2

3. Slide 3: I. Financial Results for FY2016

   Technology to Inspire Innovation Ⅰ. Financial Results for FY2016 （From April 1, 2016 to March 31, 2017） Copyright ©2017. Japan Aviation Electronics Industry. Ltd 3

4. Slide 4: Net Sales and Incomes

   Net Sales and Incomes Technology to Inspire Innovation (JPY in 100millions) FY2015 FY2016 Year/Year Projections (announced 1H 2H 1H 2H Change Oct.2016) （％） Net Sales 971 824 1,795 899 1,196 2,095 300 117% 2,070 Operating Sales 124 55 179 41 79 121 -58 67% 125 to Net Sales 12.8% 6.7% 10.0% 4.6% 6.6%

5. Slide 5: Connector Business Outlook

   Connector Business Outlook Technology to Inspire Innovation Quarterly Net sales and Operating Income （JPY in 100 millions） 557 536 475 Net Sales 408 306 324 13.7% Operating 9.1% Margin 8.7% 7.8% 8.2% 56 Operating 48 49 Income 4.9% 37 26 15 FY2015/3Q FY2015/4Q FY2016/1Q FY2016/2Q FY2016/3Q FY2016/4Q

6. Slide 6: Connector Business

   Connector Business Technology to Inspire Innovation （JPY in 100 millions） Sales By Market Segment ▶ Mobile Devices Significant sales increase was 2,000 1,893 achieved by products newly launched 1,589 ▶ Automotive Mobile Devices 1,052 Sales declined due to exchange 707 rate impact and regional demand

7. Slide 7: UIS Business

   UIS Business Technology to Inspire Innovation （JPY in 100 millions） Sales by Market Segment 100 ▶ Automotive（capacitive touch 80 81 panel for automotive） Slight increase due to transition to new car model and exchange Automotive 48 51 rate impact 50 ▶ Industrial & Infrastructure Industrial & No sale

8. Slide 8: Aerospace Business

   Aerospace Business Technology to Inspire Innovation （JPY in 100 millions） Sales by Market Segment ▶ Defense & Space 150 Decrease on year-over-year basis 118 due to sluggish defense spending 114 on domestic products Industrial, 100 ▶ Industrial, Infrastructure & Infrastructure, Automotive & Automotiv

9. Slide 9: FY2016 Results Overview

   FY2016 Results Overview Technology to Inspire Innovation ▶ Increased sales significantly by new products launched for Mobile Devices ▶ Improved operating income in 2H, thanks to steady recovery from troublesome product releases in 1H Continued improvement of profitability to achieve financial target

10. Slide 10: II. Prospects and Strategy for FY2017

    Technology to Inspire Innovation Ⅱ. Prospects and Strategy for FY2017 （From April 1, 2017 to March 31, 2018） Copyright ©2017. Japan Aviation Electronics Industry. Ltd 10

11. Slide 11: FY2017 Environment and Strategy

    FY2017 Environment and Strategy Technology to Inspire Innovation ▶ Business Environment  Slow economic recovery, and higher uncertainty  More in-vehicle electronics, continuous innovation in mobile devices, and market recovery in industrial and infrastructure ▶ Key Strategy  Carry out product dev

12. Slide 12: Prospects for FY2017

    Prospects for FY2017 Technology to Inspire Innovation (JPY in 100millions) FY2016 FY2017 1H 2H 1H Year/Year Change Projections Year/Year Change （％） （％） Net Sales 899 1,196 2,095 1,200 301 134% 2,300 205 110% Operating 41 79 121 80 39 193% 160 39 133% Income to Net Sales 4.6% 6.6% 5.8% 6.7% 7.0% Ordi

13. Slide 13: Prospects for Sales by Business Segment

    Prospects for Sales by Business Segment Technology to Inspire Innovation (JPY in 100millions) FY2016 FY2017 1H 1H Year/Year Change Projections Year/Year Change （％） （％） Connector 799 1,893 1,100 301 138% 2,090 197 110% UIS 37 81 41 4 109% 82 1 101% Aerospace 59 114 55 -4 94% 120 6 105% Others 3 7 4 1

14. Slide 14: Connector Business Strategy [Mobile Devices①]

    Connector Business Strategy［Mobile Devices①］ Technology to Inspire Innovation Expand sales by promoting new products and keeping existing product lineup competitive Sales growth in Mobile Device market ▶ New products led to sales （JPY in 100 millions） 1,210 growth for FY 2016 1,052 New Products ▶ La

15. Slide 15: Connector Business Strategy [Mobile Devices②]

    Connector Business Strategy［Mobile Devices②］ Technology to Inspire Innovation Full-scale Sales expansion of Type-C™ connector DX07 ▶ Market will grow as expected Sales growth of DX07 series ⇒ 500 million units for Type-C Sales Target installed devices（100 million （JPY in 100 millions） for FY2017 uni

16. Slide 16: Connector Business Strategy [Mobile Devices③]

    Connector Business Strategy［Mobile Devices③］ Technology to Inspire Innovation Expand to smartphone markets in China and emerging market countries ▶ Worldwide smartphone market is expected to grow from 1.48 billion units （2016）to 1.78 billion units（2019）by emerging market demand expansion ▶ Chinese s

17. Slide 17: Connector Business Strategy [Automotive①]

    Connector Business Strategy ［Automotive①］ Technology to Inspire Innovation Turn to growth by capturing European and Chinese automotive demand ▶ Reinforce European automotive Sales for Automotive business unit and increase human resource （JPY in 100 millions） 628 • Increase local engineers to 597 sup

18. Slide 18: Connector Business Strategy [Automotive②]

    Connector Business Strategy ［Automotive②］ Technology to Inspire Innovation Accelerate ADAS product development to sustain automotive business growth Sensors for ADAS ▶ Steady sales growth of in- Visual Signal vehicle digital camera for Front/Rear Cameras Side/Rea view mirror sensing Camera • Expand

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

    Connector Business Strategy［Industrial & Infrastructure] Technology to Inspire Innovation Continuously promote Industrial & Infrastructure business as the third pillar business ▶ Enhance marketing at Factory Sales for Industrial & Infrastructure Automation market （JPY in 100 millions） ▶ Intensify ma

20. Slide 20: UIS Business Strategy

    UIS Business Strategy Technology to Inspire Innovation Set strategy for mid-term growth over transition period ▶ Launch next generation of capacitive touch panel for automotive • Film-cell type with large screen, curved surface flexibility, and designability • Start mass production in FY2017 for dom

21. Slide 21: Aerospace Business Strategy

    Aerospace Business Strategy Technology to Inspire Innovation Regain profitability by sales increase and cost reduction ▶ Grow sales of oil drilling sensor • Enhance marketing of DDM (Digital Directional Module) and accelerometers in the market recovery trend • Target more than doubled DDM sales from

22. Slide 22: Technology Development for mid-term Growth

    Technology Development for mid-term Growth Technology to Inspire Innovation Promote development of advanced technology for IoT era ▶ Next generation of connection method for wearable market Female Connector  Washable, shielded, zipper- type connectors for wearable devices and smart clothes Male Con

23. Slide 23: Technology to Inspire Innovation

    Technology to Inspire Innovation

24. Slide 24: Cautionary Statement

    <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 26, 2017, and include risks and uncertainties. The targets noted in these materials are not pr

25. Slide 25: [Reference]

    [Reference] Technology to Inspire Innovation Copyright ©2017. Japan Aviation Electronics Industry. Ltd 25

26. Slide 26: Quarterly Net Sales and Incomes

    Quarterly Net Sales and Incomes Technology to Inspire Innovation （JPY in 100 millions） 602 594 532 457 Net Sales Operating Margin 367 367 10.1% 7.0% Operating Ordinary 6.2% 49 Income 46 Income 48 5.1% 37 42 27 3.9% 24 2.4% 14 16 9 6 3 FY2015/3Q FY2015/4Q FY2016/1Q FY2016/2Q FY2016/3Q FY2016/4Q Copyr

27. Slide 27: Overseas Sales Growth

    Overseas Sales Growth Technology to Inspire Innovation （JPY in 100 millions） 3,000 80% 73% Overseas Sales Ratio 71% 71% 2,500 70% 66% 61% 2,095 2,000 1,912 60% 1,795 54% 1,598 1,500 50% 1,296 1,124 1,526 1,361 1,267 1,000 1,048 40% 790 Overseas 602 500 30% Domestic 522 506 550 551 528 569 0 20% FY20

28. Slide 28: Sales by Market Segment

    Sales by Market Segment Technology to Inspire Innovation (JPY in 100millions) Year FY2015 FY2016 /Year Projections annouced 1H 2H 1H 2H Change Oct. 2016 Mobile 425 282 707 395 657 1,052 149% 990 Devices Automotive 342 342 684 315 340 655 96% 670 Industry & 127 119 246 123 132 255 104% 260 Infrastruc

29. Slide 29: Sales by Business Segment

    Sales by Business Segment Technology to Inspire Innovation (JPY in 100millions) Year FY2015 FY2016 /Year Projections announced 1H 2H 1H 2H Change in Oct.2016 Connector 876 714 1,589 799 1,093 1,893 119% 1,858 UIS 41 39 80 37 44 81 101% 80 Aerospace 50 67 118 59 56 114 97% 125 Others 4 4 8 3 4 7 91%

30. Slide 30: Operating Income by Business Segment

    Prospects for Sales by Business Segment Technology to Inspire Innovation (JPY in 100millions) FY2015 FY2016 Year/Year 1H 2H 1H 2H Change 150 71 221 64 97 161 -60 Connector 17.1% 9.9% 13.9% 8.0% 8.9% 8.5% 6 5 11 4 4 8 -3 UIS 13.9% 12.6% 13.2% 9.8% 9.3% 9.5% -8 -2 -10 -4 -2 -6 5 Aerospace -15.9% -3.3%

31. Slide 31: Prospects for Sales by Market Segment

    Prospects for Sales by Market Segment Technology to Inspire Innovation (JPY in 100millions) FY2016 FY2017 1H 1H Year/Year Change Projections Year/Year Change （％） （％） Mobile 395 1,052 670 275 170% 1,210 158 115% Devices Automotives 315 655 330 15 105% 670 15 102% Industry & Infrastructure 123 255 140

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