Nihon Dempa Kogyo Co., Ltd. · TSE:6779
Nihon Dempa Kogyo — FY2019 Earnings Presentation
30 slides from Nihon Dempa Kogyo's earnings presentation, Jul 15, 2020
Slide 1: Results of Operations for Fiscal 2019 (Ended March 31, 2020)
Results of Operations for Fiscal 2019 (Ended March 31, 2020) Nihon Dempa Kogyo Co., Ltd. July 15, 2020 [Note] Statements made in this presentation with respect to our current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements ab
Slide 2: Contents
＜Contents＞ １．Results for FY2019 (Ended March 31, 2020) ２．Overview of Medium-Term Management Plan ３．Background and Purpose of Issuing Class-A Shares Presented by Hiromi Katoh, Representative Director and President 2
Slide 3: Summary of Performance
１．Results for FY2019 (Ended March 31, 2020) Summary of Performance (Million yen) ① ② ③ ④＝②＋③ ④－① Change from FY2018 FY2019 FY2019 Outlook Result FY2019 Temporary Result (Excluding Initial Outlook （Excluding as of May 10 Result Factors （Excluding temporary as of May 10 temporary factors） factors） tem
Slide 4: Net Sales by Application – FY2018 vs FY2019
１．Results for FY2019 (Ended March 31, 2020) Net Sales by Application – FY2018 vs Initial Outlook (Billion yen) 500 50 450 45 42.5 42.5 2.0 1.9 39.5 その他 Others 400 40 1.7 2.1 1.8 5.5 5.4 1.7 Synthesizers, Sensors and 350 35 シンセ・センサ・超音波機器等 4.4 Ultrasonic, etc. 1.9 1.9 300 30 2.3 6.8 6.1 民生 Consumer 25
Slide 5: Comments by Application
１．Results for FY2019 (Ended March 31, 2020) Comments by Application Net Sales Applications FY19 Trends, Current and Future Outlook FY18 FY19 (Billion yen) • In fiscal 2019, demand for new cars globally was slow and suffered a year-on-year decline Automotive 19.6 → 18.9 • The impact of COVID-19 is dr
Slide 6: Operating Income – Factor Analysis compared to FY2018
１．Results for FY2019 (Ended March 31, 2020) Operating Income – Factor Analysis compared to FY2018 (Billion yen) ▲¥0.95 billion 0.5 Fixed cost structure significantly improved, and 0 despite a worsening in the product mix FY18 (decrease of industrial equipment, increase of mobiles/IoT) Result maintai
Slide 7: Operating Income – Factor Analysis compared to Initial Outlook
１．Results for FY2020 (Ended March 31, 2020) Operating Income – Factor Analysis compared to Initial Outlook (Billion yen) ▲¥2.6 billion 1.0 Revised approach to make medium-term 0.5 Initial management plan, since there were issues with outlook +¥0.60 the decision-making process of conventional Operati
Slide 8: Results for FY2019 – Quarterly Results
１．Results for FY2019 (Ended March 31, 2020) Results for FY2019 – Quarterly Results Nets Sales (Billion yen) Profit (Billion yen, excluding temporary factors） 営業利益 (特殊要因除く) Operating income 税引前利益 Income before (Excluding temporary factors) income tax 10.8 11.0 10.5 10.4 10.3 9.9 9.8 9.3 ▲0.04 ▲0.18 ▲
Slide 9: Quarterly Net Sales by Key Application
１．Results for FY2019 (Ended March 31, 2020) Results for FY2019 – Quarterly Net Sales by Key Application Automotive Industrial Equipment Mobile Communications/IoT (Billion yen) 50 5.0 40 4.0 30 3.0 20 2.0 IoT 10 1.0 Mobiles 00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY
Slide 10: Outlook for FY2020
１．Results for FY2019 (Ended March 31, 2020) Outlook for FY2020 As it is difficult to predict the impact of COVID-19 on business performance, we have been unable to prepare the outlook for the current fiscal year (ended March 31, 2021) . We will announce the outlook as soon as it becomes possible. Th
Slide 11: Overview of Medium-Term Management Plan
１．Results for FY2019 (Ended March 31, 2020) ２．Overview of Medium-Term Management Plan ３．Background and Purpose of Issuing Class-A shares 11
Slide 12: Current Status of NDK and the Medium-Term Management Plan
２．Overview of Medium-Term Management Plan Current Status of NDK and the Medium-Term Management Plan Full-fledged Lehman 5G/ADAS Shock Groundwork prepared from FY18 Current medium-term • Production transfer management plan • Structural reform • Steady effort Aggressive • To move to a (Head office/Suz
Slide 13: Major Issues and Measures
２．Overview of Medium-Term Management Plan Major Issues and Measures Period of the Medium-Term Management Plan; FY2020~FY2022 Major Issues Direction of Measures Specific Measures Expenses: Reduce fixed costs further (1) Continue structural reforms/ Improve drastically reduce fixed expenses Improve Sa
Slide 14: Improve Business Profit – Achieve Targets in FY2022
２．Overview of Medium-Term Management Plan Improve Business Profit – Achieve Targets in FY2022 PL (Sales/Operating Income Ratio) Targets 7% Operating 1% -1% Key points of the Medium- income ratio Term Management Plan -23% -21% • Do not pursue excessive sales level • Lower the break even point (BEP)
Slide 15: Improve Business Profit – Achieve Targets for Operating Income
２．Overview of Medium-Term Management Plan Improve Business Profit – Achieve Targets for Operating Income • From fiscal 2019 to fiscal 2022, operating income is expected to improve by about ¥5 billion • In addition to the effect of reducing fixed costs (by about ¥2 billion), there is an increase of a
Slide 16: Improve Business Profit (1) Drastically reduce fixed costs
２．Overview of Medium-Term Management Plan Improve Business Profit (1) Drastically reduce fixed costs • Measures such as production transfers and restructuring at Head Office and Suzhou are now underway and a reduction in fixed costs of about ¥4 billion has been achieved (compared to fiscal 2017) • A
Slide 17: Revise the composition of sales: Automotive crystal market
２．Overview of Medium-Term Management Plan Improve Business Profit (2) Revise the composition of sales for existing products • In the automotive market, where NDK holds about 50% of the global market share, we anticipate an increase in demand centered on ADAS • Aiming to maintain a high market share
Slide 18: Revise the composition of sales: 5G base stations
２．Overview of Medium-Term Management Plan Improve Business Profit (2) Revise the composition of sales for existing products • 5G base stations are expected to enter full-scale operations during period of the Medium-Term Management Plan • Aiming to capture demand centered on OCXO (Oven controlled cry
Slide 19: Revise the composition of sales: 5G smartphones
２．Overview of Medium-Term Management Plan Improve Business Profit (2) Revise the composition of sales for existing products • The spread of 5G smartphones is in full swing. In addition to the miniaturization needs unique to mobile units, there is a high possibility that high-frequency needs will inc
Slide 20: Revise the composition of sales: SAW business joint venture
２．Overview of Medium-Term Management Plan Improve Business Profit (2) Revise the composition of sales for existing products • Convert the SAW business from NDK’S own business to a joint venture with a Chinese partner • Aiming for growth and expansion by combining NDK’s technological development and
Slide 21: Stabilize finances (3) Improve Financial Position
２．Overview of Medium-Term Management Plan Stabilize finances (3) Improve Financial Position • Targeting a shareholders’ equity ratio of over 20% by the end of fiscal 2022 by increasing capital and accumulating three-years of profits • Over the course of the Medium-Term Management Plan, we will prior
Slide 22: Strengthening Resources for Front-End Processes
２．Overview of Medium-Term Management Plan Clarification of Investment (4) Strengthening Resources for Front-End Processes Manufacturing Processes for Main Crystal Products Front-end processes Back-end processes Developing Assembly/ Wafer slice Photolithographic Sealing Testing raw crystals adjustmen
Slide 23: Enhance Productivity of Back-End Processes
２．Overview of Medium-Term Management Plan Clarification of Investment Strategy (5) Enhance Productivity of Back-End Processes Manufacturing Processes for Main Crystal Products Front-end processes Back-end processes Developing raw Photolithographic Assembly/ Wafer slice Sealing Testing crystals proce
Slide 24: Background and Purpose of Issuing Class-A shares
１．Results for FY2019 (Ended March 31, 2020) ２．Overview of Medium-Term Management Plan ３．Background and Purpose of Issuing Class-A shares 24
Slide 25: NDK's Business Performance
３．Background and Purpose of Issuing Class-A shares NDK’ Business Performance • Sales were slow due to the impact of sluggish demand in the automotive market and intensifying competition in the mobile/IoT market. In addition, NDK reported two large impairment losses. This resulted in the third consec
Slide 26: Financial Condition
３．Background and Purpose of Issuing Class-A shares Financial Condition • Posted large losses in fiscal 2017/fiscal 2019 leading to a significant worsening of NDK’s financial position. (Undercapitalization and Excessive debt) • Although the business environment is currently uncertain, it is essential
Slide 27: Stabilize finances: Receiving external investment
３． Background and Purpose of Issuing Class-A shares Stabilize finances Receiving external investment • Accepted investment*1 from Japan Industrial Solutions Co., Ltd. (JIS) by issuing Class-A shares Approval required at the July 31 Ordinary General Meeting of Shareholders Amount of investment
Slide 28: Overview of Investment Scheme
３．Background and Purpose of Issuing Class-A shares Overview of Investment Scheme • JIS is a Japanese fund backed by DBJ and three mega banks • This scheme involves NDK issuing Class-A shares and accepting a capital injection of ¥5 billion Development Bank Sumitomo Mitsui JIS Limited Mizuho Bank Ltd.
Slide 29: Direction Following the Issuing of Class-A shares
３．Background and Purpose of Issuing Class-A shares Direction Following the Issuing of Class-A shares July June September 2020 2023 2023 General meeting of shareholders Approved Investment (¥5 billion) Net Assets Financial Strategy Common stock Period for NDK to exercise its options conversion reques
Slide 30: Thank you everyone for your time
Thank you everyone for your time For Investor relations related inquiries, please contact: Corporate Planning Group Nihon Dempa Kogyo Co., Ltd. Mail: irmaster@ndk.com 30