Slide 1: FY09/3 Q3 Financial Results
FY09/3 Q3 Financial Results Toshio Nakajima President and CEO January 29, 2009 NEC Electronics Corporation http://www.necel.com/ir/en/ 1
Slide 2: Revised Forecasts
Revised Forecasts Lowered full-year forecasts for FY09/3 due to rapidly deteriorating economic environment and yen appreciation. (B yen) Forecasts as of Previous Forecasts Difference January 29, 2009 (October 21, 2008) Net Sales 555.0 660.0 -105.0 Semiconductor 530.0 630.0 -100.0 Sales Operating -55
Slide 3: Executive Summary
Executive Summary Ⅰ FY09/3 Q3 Financial Results ¾ Due to the deteriorating economic environment and yen appreciation, semiconductor sales and operating loss were much worse than had been estimated in the most recent announcement (Oct. 21, 2008) Ⅱ FY09/3 Forecasts ¾ Lowered full-year forecasts on exp
Slide 4: FY09/3 Q3 Financial Results
Ⅰ. FY09/3 Q3 Financial Results Ⅱ．FY09/3 Forecasts Ⅲ．Measures to Improve Future Financial Performance 4
Slide 5: Financial Snapshot
Financial Snapshot FY09/3 （B Yen） Q3, 12/31 9 Months Cumulative Actual YoY QoQ Actual YoY Net Sales 127.3 -43.4 -40.0 460.9 -60.8 Semiconductor Sales 122.7 -41.1 -36.5 441.0 -56.8 Operating Income -16.2 -19.2 -15.7 -15.0 -19.9 (Loss) Income (Loss) -20.1 -21.8 -19.8 -20.1 -23.6 Before Income Taxes Ne
Slide 6: Trends in Quarterly Results
Trends in Quarterly Results （B yen） 177.8 177.9 177.4 170.3 171.4 173.6 170.8 166.8 166.0 166.3 167.3 162.7 165.2 169.7 171.1 169.1 146.1 162.0 165.0 163.7 160.0 158.1 160.8 155.4 159.2 159.2 156.8 127.3 Net Sales 140.3 Semicon. 122.7 Sales FY06/3 FY07/3 FY08/3 FY09/3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3
Slide 7: Q3 Semiconductor Sales by Platform
Q3 Semiconductor Sales by Platform YoY -25% QoQ -23% (B yen) (B yen) 163.7 Currency impact 159.2 Approx. -6.0 Currency impact Approx. -3.5 63.7 SoC -13% 122.7 SoC -14% 64.5 122.7 55.7. 55.7 44.9 MCU -30% MCU -31% 45.1 31.3 31.3 Discrete & IC Discrete & IC 55.2 -35% 49.6 -28% 35.7 35.7 Display Approx
Slide 8: Factors in Operating Income (Loss)
Factors in Operating Income (Loss) 163.7 YoY (B yen) QoQ (B yen) Currency impact Approx. -6.0 159.2 Currency impact Approx. -3.5 Semicon. 122.7 Sales 122.7 Semicon. Sales -）Lower GP due to decrease in -）Lower GP due to decrease in sales （including currency impact） （Utilization rates 92%→73%） sales （
Slide 9: Balance Sheets
Balance Sheets As of As of As of (B yen) Dec. 31, 2007 Sep. 30, 2008 Dec. 31, 2008 Cash and Cash Equivalents 188.9 158.0 156.5 Accounts Receivable 92.6 95.3 68.1 Inventories 81.1 82.0 82.1 PP&E 273.8 257.0 244.7 Other Assets 31.3 29.7 28.0 Total Assets 667.6 622.0 579.4 Accounts Payable 118.3 111.9
Slide 10: Cash Flows
Cash Flows FY08/3 FY09/3 9 Months 9 Months (B yen) Q3 Cumulative Q2 Q3 Cumulative Cash Flows from Operating Activities 13.6 42.8 14.6 10.5 29.4 Cash Flows from Investing Activities -14.7 -33.5 -12.5 -7.2 -30.6 Free Cash Flows -1.0 9.3 2.1 3.3 -1.2 10
Slide 11: FY09/3 Forecasts
Ⅰ. FY09/3 Q3 Financial Results . Ⅱ. FY09/3 Forecasts Ⅲ. Measures to Improve Future Financial Performance 11
Slide 12: FY09/3 Financial Forecasts
FY09/3 Financial Forecasts Revised full-year forecasts on assumption of further downturn in business environment FY08/3 FY09/3 Full-Year 9 Months Full Year Previous Difference Difference Forecasts as from from Actual Actual Forecasts of January 29, (B yen) (October 21, Previous FY08/3 2008) 2009 For
Slide 13: Trends in Amount of Orders
Trends in Amount of Orders Amount of Orders （3-months moving average) FY08/3 Average An accelerated downturn in general-purpose products as well as slowdown in automotive products and digital consumer products since November 2008. Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug S
Slide 14: FY09/3 Q4 Semiconductor Sales Outlook by Platform
FY09/3 Q4 Semiconductor Sales Outlook by Platform (B yen) YoY (B yen) QoQ Approx. -43% Approx. -27% 155.4 SoC 122.7 59.1 Greater than -20％ Approx. Approx. 89.0 55.7 SoC 89.0 MCU Approx. -20％ 44.8 Greater than -40％ MCU 31.3 Approx. -20％ Discrete & IC 51.5 Approx. -60％ Discrete & IC Approx. Display 35
Slide 15: FY09/3 Q4 Factors Affecting Op. Profit/Loss
FY09/3 Q4 Factors Affecting Op. Profit/Loss 155.4 YoY (B yen) QoQ (B yen) Currency Impact Approx. -8.5 Currency Impact 122.7 Approx. -5.0 Semicon. Sales Approx. 89.0 Approx. 89.0 Semicon. Sales -） Lower GP due to lower sales （including currency impact） -） Lower GP due to lower sales -） Increase in d
Slide 16: Measures to Improve Future Financial Performance
Ⅰ. FY09/3 Q3 Financial Results Ⅱ．FY09/3 Forecasts Ⅲ. Measures to Improve Future Financial Performance 16
Slide 17: Trends in Amount of Orders Compared with IT Bubble
Trends in Amount of Orders Compared with IT Bubble Index of 3-month moving average* ( The company’s amount of sales in June is used to calculate amount of orders for corresponding month) Amount of orders Trends from Jun 00 - Dec 02 From Jun 08 to Dec 08 (when IT bubble burst) plotted at twice the ac
Slide 18: New Management Strategies
New Management Strategies Reduce fixed costs by 80 billion yen over two years ¾ FY10/3 Reduce fixed costs by approx. 60 billion yen ¾ FY11/3 Reduce fixed costs by approx. 20 billion yen * Additional cost reduction under consideration. Improve the break-even point for FY11/3 to approx. 500 billion ye
Slide 19: Reduce Fixed Costs by 60B Yen in FY10/3
Reduce Fixed Costs by 60B Yen in FY10/3 Reduce manufacturing-related fixed costs by approx. 30.0 billion yen – Cost reduction effect from closure of certain fabrication lines （Approx. 8.0 billion yen） Closure of 8-inch line in Yamagata and 300mm prototype line in Sagamihara, Japan – Cost reduction e
Slide 20: Accelerate Realignment of Fabrication Lines
Accelerate Realignment of Fabrication Lines Japan Shougang NEC Electronics Co., Ltd. (jointly established with Shougang Group) Front end: Considering sale in FY10/3 1H NEC Electronics America, Inc. （Roseville） Closure of 6-inch line NEC Semiconductors Yamagata, Ltd. scheduled for March 2010* 8-inch
Slide 21: Eco-products to Drive Sales Growth
Eco-products to Drive Sales Growth Channel management resources toward ‘eco-products’ that contribute to reduced CO2 emissions （B yen） 330.0 230.0 Estimate for FY09/3 Planned for FY12/3 Major Product Groups Low power consumption devices Eco MCUs Embedded DRAM ASICs Devices contribute to energy- savi
Slide 22: Summary
Summary Persevere in executing crucial structural reforms Improve the break-even point for FY11/3 to 500.0 billion yen （Reduce fixed costs by 80.0 billion yen over the next two years) Cultivate markets for eco-products to drive new sales growth 22
Slide 23: 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
Slide 24: Appendix: Semiconductor Sales by Application
Appendix： Semiconductor Sales by Application (B yen) 169.1 165.0 163.7 155.4 159.2 159.2 17.1 20.7 15.6 16.4 16.3 17.0 32.6 30.1 29.5 30.0 30.6 122.7 27.1 Communications 15.4 Computing 34.5 35.3 33.0 32.1 31.9 17.0 & Peripherals 31.7 Consumer 31.9 Electronics 27.7 27.4 29.0 28.8 29.2 29.8 Automotive