Slide 1: FY08/3 Q1 Financial Results and Outlook
FY08/3 Q1 Financial Results and Outlook NEC Electronics Corporation July 30, 2007 http://www.necel.com/ir/en/ 1
Slide 2: Agenda
Agenda I. FY08/3 Q1 Financial Results 9 Sales and profits/losses were slightly better than expected II. FY08/3 Forecasts 9 Current business performance is slightly better than expected; however, FY08/3 forecasts will remain unchanged 9 Aim to attain operating profits in Q2 , supported by an increase
Slide 3: I. FY08/3 Q1 Financial Results
I. FY08/3 Q1 Financial Results II. FY08/3 Forecasts III. Measures to Improve Performance 3
Slide 4: Financial Snapshot
Financial Snapshot FY07/3 FY08/3 Q1 June 30 Q4 March 31 Q1 June 30 (B Yen) Actual Actual Actual YoY QoQ Net Sales 165.2 171.4 173.6 +8.3 +2.2 Semiconductor Sales 158.1 160.8 165.0 +6.9 +4.2 Operating Income (Loss) -5.8 -17.8 -2.2 +3.5 +15.6 Income (Loss) Before -4.8 -26.3 0.4 +5.3 +26.7 Income Taxes
Slide 5: Trends in Quarterly Results
Trends in Quarterly Results (B yen) Net Sales 185.6 191.2 177.8 177.9 170.3 171.4 173.6 181.2 165.3 165.9 166.8 165.2 179.1 162.7 169.7 171.1 146.1 162.0 165.0 160.7 158.7 160.0 158.1 160.8 Semicon. 156.8 Sales 140.3 Op. Margin 8.2% 8.1% Op. Income 15.2 15.5 (Loss) Expensed Structural 0.7% 0.8% Tech
Slide 6: Semiconductor Sales by Platform (YoY)
Semiconductor Sales by Platform (YoY) (B Yen) 200 YoY ＋4% 165.0 158.1 160 +/- Factors SoC SoC +) LSIs for game consoles, ＋8% 63.6 59.0 Companion chips for mobile phones 120 -) System memory for mobile phones, LSIs for digital cameras MCU MCU +) Growth in automotive MCUs 80 40.8 +9% 44.4 +) Growth in
Slide 7: Semiconductor Sales by Platform (QoQ)
Semiconductor Sales by Platform (QoQ) (B Yen) 200 QoQ ＋3% 165.0 160.8 160 +/- Factors SoC SoC +) LSIs for game consoles, ＋2% 63.6 62.4 Companion chips for mobile phones 120 -) System memory for mobile phones, LSIs for digital cameras MCU MCU 80 ＋1% +) Growth in All Flash MCUs 44.0 44.4 -) Seasonal d
Slide 8: Semiconductor Sales by Application
Semiconductor Sales by Applicaton (B Yen) YoY QoQ 165.0 165.0 158.1 Communications 160.8 Communications -28％ 20.7 -10％ 20.7 Decline in small LCD driver ICs 22.9 Decline in small LCD driver ICs 28.5 Computing & Peripherals Computing & Peripherals -2% 29.5 ＋9% 29.5 Decline in LSIs for printers 27.0 In
Slide 9: Factors in Operating Loss
Factors in Operating Loss Semiconductor YoY (B Yen) QoQ (B Yen) Sales 158.1 Approx. + 7.0 165.0 160.8 Approx. + 4.0 165.0 Reduced expenses Reduced expenses other than COGS Increased Gross Profit other than COGS Reduced R&D +5.8 Increased Gross profit +7.3 Reduced R&D +1.6 Reduced SG&A +2.5 + sales i
Slide 10: Items in Non-Operating Income
Items in Non-Operating Income Item Amount Description Interest and 0.5 B dividend Income yen Gains on the •NEC Fabserve, a wholly-owned subsidiary, sale of the transferred its photomask business to Dai Nippon photomask Printing Co., Ltd. in June, 2007 business •The name of the new company establishe
Slide 11: Balance Sheet
Balance Sheet 06/06 07/03 07/06 Cash and Cash Equivalents 204.8 185.4 177.3 Accounts Receivable 106.5 99.5 104.2 Inventories 76.1 82.6 83.4 PP&E 309.5 292.8 287.9 Other Assets 45.6 35.6 37.1 Total Assets 742.6 695.9 690.0 Accounts Payable 137.5 132.5 127.3 Debt Payable 146.6 136.0 133.7 Other Liabil
Slide 12: Cash Flows
Cash Flows FY07/3 FY08/3 (B yen) Q1 Q4 Full Year Q1 Cash Flows from 7.8 12.7 66.7 1.5 Operating Activities Cash Flows from -12.4 -30.3 -78.5 -7.3 Investing Activities Free Cash Flows -4.6 -17.6 -11.8 -5.9 12
Slide 13: II. FY08/3 Forecasts
I. FY08/3 Q1 Financial Results II. FY08/3 Forecasts III. Measures to Improve Performance 13
Slide 14: FY08/3 Forecasts
FY08/3 Forecasts FY08/3 FY08/3forecasts forecastsremain remainunchanged unchangedfrom fromthe theprevious previous announcement announcementononMay May14,14,although althoughfinancial financialresults resultsfor forQ1 Q1were were slightly slightlybetter betterthan thanexpected expected FY07/3 FY08/3
Slide 15: Order Backlog and Amount of Orders
Order Backlog and Amount of Orders Order Orderbacklog backlogand andamount amountof oforders ordersare arerecovering recovering Order OrderBacklog Backlog Amount Amountof ofOrders Orders Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2006 2007 15
Slide 16: Semiconductor Sales by Platform (QoQ Forecast)
Semiconductor Sales by Platform (QoQ Forecast) 200 (B Yen) + Mid-single digits% 165.0 160 +/- Factors SoC SoC + High-single +) LSIs for digital AV, incl. EMMA 63.6 digits % LSIs for printers 120 -) Digital Baseband LSIs and system memory for mobile phones MCU MCU + 80 Mid-single +) Automotive and ge
Slide 17: III. Measures to Improve Performance
I. FY08/3 Q1 Financial Results II. FY08/3 Forecasts III. Measures to Improve Performance 17
Slide 18: Progress of New Management Policies
Progress of New Management Policies (Announced on Feb. 22, 2007) Executing ExecutingNew NewManagement ManagementPolicies Policies Item Primary Measures Status Reallocate Reduce technology outsourcing costs roughly Completed development equivalent to 600 people resources Shift development resources e
Slide 19: Notice Concerning the Ratio of Shares Held by the Special Few
Notice Concerning the Ratio of Shares Held by the "Special Few" Notice issued by the Tokyo Stock Exchange (TSE) concerning the ratio of the number of shares held by the “Special Few” on July 10, 2007. •NEC Electronics’ shares held by the “Special Few”* as of March 31, 2007 exceeded 75%, meeting the
Slide 20: Conclusions
Conclusions Financial results for Q1 were slightly better than expected; however, full-year forecasts remain unchanged Aim to attain operating profits in Q2, supported by increasing orders Continue to implement new management policies announced on Feb 22, 2007 20
Slide 21: Cautionary Statements
Cautionary Statements The statements in this presentation with respect to the plans, strategies and forecasts of NEC Electronics and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. We caution you in advance that actual results could