Slide 1: FY18/12 Q4/Full-Year Presentation
FY18/12 Q4/FULL-YEAR PRESENTATION RENESAS ELECTRONICS CORPORATION FEBRUARY 8, 2019 © 2019 Renesas Electronics Corporation. All rights reserved.
Slide 2: Financial Targets and Strategy
FINANCIAL TARGETS AND STRATEGY Long-Term Financial Targets*1 (Starting from CY16) Clear Path to Gross Margin Expansion Topline growth Topline Growth High Single-Digit CAGR Manufacturing Optimization Margin Improvement *4 Better Product Mix 44% Adj. GM *2 : *4 50% Adj. OM : 12% *3 Over 20% Intersil C
Slide 3: Steps to Improve Gross Margin
STEPS TO IMPROVE GROSS MARGIN Adjusted Gross Margin*1 (Illustrative) Intersil Better Consolidation 50% Manufacturing Product Mix Optimization Topline Growth Operating Leverage through Increased Scale 44% Organic Growth + Consolidation of Intersil CY16/12 Long-Term Target *1: Non-GAAP figure, Gross M
Slide 4: Custom Approaches for Focused Industries
Organic Inorganic CUSTOM APPROACHES FOR FOCUSED INDUSTRIES Automotive Industrial Broad-Based and others Inorganic + Organic MCUs Intensive R&D Approaches SoCs Strategic Partnerships and Alliances Analog & Mixed Strategic Investments including Further Acquisitions Intersil: Acquired for $ 3.2B in Feb
Slide 5: Non-GAAP Basis Information
NON-GAAP BASIS INFORMATION In this section, Renesas Electronics Group (hereinafter “the Group”) applies Non- GAAP financial measures (hereinafter “Non-GAAP basis”) used for management’s decision making. The Group defines the Non-GAAP consolidated financial results as financial accounting figures (he
Slide 6: Revised GAAP/Non-GAAP Reconciliation (FY17/12-)
REVISED GAAP/NON-GAAP RECONCILIATION (FY17/12-) ・Non-GAAP Basis: Non-GAAP figures are calculated by adjusting or removing non-recurring items and other adjustments from GAAP figures. The Group believes non-GAAP measures provide useful information in understanding and evaluating the Group’s constant
Slide 7: GAAP/Non-GAAP Reconciliation (FY17/12-)
GAAP/NON-GAAP*1 RECONCILIATION (FY17/12-) FY17/12 FY18/12 (B yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Operating Profit (GAAP/After PPA) 22.1 9.4 25.0 21.9 20.6 23.0 13.1 10.1 PPA Effects*2（Net Sales/COGS*3） +3.1 +8.5 +0.3 +0.4 +0.3 +0.3 +0.3 +0.3 PPA Effects（R&D*4, SG＆A*5） Increase in depreciation of fixed asse
Slide 8: GAAP/Non-GAAP Reconciliation (FY17/12-)
GAAP/NON-GAAP*1 RECONCILIATION (FY17/12-) FY17/12 FY18/12 (B yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 O4 Net Profit Attributable to Shareholders of Parent 17.2 19.1 22.3 18.6 23.3 26.1 7.6 -2.4 Company (GAAP/After PPA) Reconciliations in Operating +7.0 +19.6 +10.9 +12.2 +10.8 +10.9 +11.1 +11.1 Profit Level Reconci
Slide 9: FY18/12 Q4 Financial Snapshot (Non-GAAP Basis)
Non-GAAP FY18/12 Q4 FINANCIAL SNAPSHOT (NON-GAAP BASIS*1) YoY and QoQ results as well as the changes from July 31 FCTs of the Net Sales and Semi Sales are rounded off to one decimal place. FY17 FY18 (FY18/12) (B yen) Oct-Dec Oct-Dec Full Year Oct-Dec Full Year Jul-Sep Change from Change from (Q4) (Q
Slide 10: FY18/12 Q4 Semiconductor Sales (YoY)
Non-GAAP FY18/12 Q4 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) YoY -22.7 B yen (-11.0%) (B yen) -0.8 Currency impact -21.9 -22.7 Sales decrease (excluding currency impact) 206.5 183.8 *1: Non-GAAP Basis: Non-GAAP figures are calculated by adjusting or removing non-recurring items and other adjustments f
Slide 11: FY18/12 Q4 Semiconductor Sales (QoQ)
Non-GAAP FY18/12 Q4 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) QoQ +8.2 B yen (+4.7%) (B yen) Currency impact +1.8 +6.4 +8.2 Sales Increase (excluding currency impact) 183.8 175.6 *1: Non-GAAP Basis: Non-GAAP figures are calculated by adjusting or removing non-recurring items and other adjustments from
Slide 12: FY18/12 Q4 Semiconductor Sales (vs Forecast)
Non-GAAP FY18/12 Q4 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) (B yen) vs FCT +2.7 B yen (+1.5%) Sales increase (excluding currency impact) Currency impact +1.6 +1.1 +2.7 183.8 181.1 *1: Non-GAAP Basis: Non-GAAP figures are calculated by adjusting or removing non-recurring items and other adjustments fr
Slide 13: Quarterly Semiconductor Sales Trends
Non-GAAP QUARTERLY SEMICONDUCTOR SALES TRENDS (NON-GAAP BASIS*1) (B yen) Actual basis Automotive Industrial Broad-based Other 206.4 199.1 200 194.3 192.3 2.2 183.8 182.0 1.0 QoQ: +4.7% 1.1 0.8 175.6 172.6 40.9 0.6 1.0 YoY: -11.0% 0.8 40.7 40.8 0.7 41.3 35.1 QoQ: -6.0% 28.8 38.1 150 37.3 YoY: -14.2%
Slide 14: Gross Margin, Operating Margin and Opex Trajectory
Non-GAAP GROSS MARGIN, OPERATING MARGIN AND OPEX TRAJECTORY (NON-GAAP BASIS*1) <R&D Ratio (%)> QoQ: -0.8pt <Gross Margin (%)> QoQ: -3.5pts YoY: -0.3pt YoY: -7.0pts 20 50 47.7 47.9 18 17.2 16.9 45 48.0 40.9 45.6 45.5 45.7 45.4 44.4 16 15.0 44.3 16.7 16.9 16.9 15.9 16.3 40 42.5 16.1 16.0 14 15.2 35 12
Slide 15: FY18/12 Q4 Operating Income (YoY)
Non-GAAP FY18/12 Q4 OPERATING INCOME (NON-GAAP BASIS*1) (B yen) YoY -12.9 B yen Sales decrease Currency (excluding currency impact impact) -0.5 +3.5 Decreases in -14.2 Impact from R&D,SG&A changes in (excluding Accounting Impact production amortization of (inventory revaluation, volume, etc. goodwil
Slide 16: FY18/12 Q4 Operating Income (QoQ)
Non-GAAP FY18/12 Q4 OPERATING INCOME (NON-GAAP BASIS*1) QoQ -3.0 B yen (B yen) Accounting Impact (inventory +4.1 revaluation, etc.) Decreases in -9.4 R&D,SG&A Sales Increase (excluding +1.4 (excluding currency amortization of +0.8 impact) goodwill, etc.) Currency Impact Impact from +0.2 changes in 2
Slide 17: FY18/12 Q4 Operating Income (vs Forecast)
Non-GAAP FY18/12 Q4 OPERATING INCOME (NON-GAAP BASIS*1) vs FCT +7.7 B yen （B yen) Decreases in R&D,SG&A (excluding amortization of Sales increase goodwill, etc.) (excluding currency impact) Currency +4.9 impact -0.6 +1.9 +1.0 +0.5 Impact from changes in 21.2 Accounting Impact production volume, (inv
Slide 18: Adoption of IFRS and Changes in Guidance
ADOPTION OF IFRS AND CHANGES IN GUIDANCE With the outlook that the Group will continue to expand globally and to provide financial figures that can be compared on a global scale, it has been decided that the Group will voluntarily adopt the International Financial Reporting Standards (“IFRS”) to i
Slide 19: FY19/12 Q1 Financial Forecasts
Non-GAAP FY19/12 Q1 FINANCIAL FORECASTS (NON-GAAP BASIS*1) YoY and QoQ forecasts of the Net Sales and Semi Sales are rounded off to one decimal place. FY19/1Q Non-GAAP Reconciliation FY19/1Q FY18/1Q FY18/4Q Forecast between Forecast (J-GAAP basis) (J-GAAP basis) YoY QoQ (J-GAAP basis) (IFRS) IFRS an
Slide 20: GAAP Basis Information
GAAP BASIS INFORMATION The figures in this section are mainly based on GAAP (Generally Accepted Accounting Principles) stated on a financial reporting basis and are provided as additional information. © 2019 Renesas Electronics Corporation. All rights reserved. Page 20
Slide 21: Former GAAP/Non-GAAP Reconciliation (Until FY16/12)
FORMER GAAP/NON-GAAP RECONCILIATION (UNTIL FY16/12) FY15/3 FY16/3 FY16/12 (B Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Semiconductor Sales (GAAP) ① 201.2 199.6 177.4 175.1 174.5 177.0 160.9 163.2 147.5 148.3 161.4 Renesas SP Drivers*1② -17.6 -21.0 - - - - - - - - - Semiconductor Sales (Non-GAAP*2) ①+② 1
Slide 22: FY18/12 Q4 Financial Snapshot (GAAP)
GAAP FY18/12 Q4 FINANCIAL SNAPSHOT YoY and QoQ results as well as the changes from July 31 FCTs of the Net Sales and Semi Sales are rounded off to one decimal place. FY17/12 FY18/12 (B yen) Q4 Q4 Full Year Q4 Full Year Q3 Change from Change from (Jul-Sep) (Oct-Dec) (Oct-Dec) YoY QoQ (Jan-Dec) YoY (O
Slide 23: Balance Sheets
GAAP BALANCE SHEETS*1 As of Dec. 31, As of Mar. 31, As of Jun. 30, As of Sep. As of Dec. (B yen) 2017 2018 2018 30, 2018 31, 2018 Total Assets 1,051.5 1,016.2 1,044.3 1,042.9 967.8 Cash and Cash Equivalents *2 139.5 124.3 160.3 184.5 188.8 Inventories 126.6 138.8 138.5 141.5 118.0 Liabilities 539.6
Slide 24: EBITDA and Cash Flows
GAAP EBITDA*1 AND CASH FLOWS Insurance income receivable: +10.5 <EBITDA (B yen)> <Cash Flows (B yen)> Acquisition-related payments: -16.0 Cash flows from operating 59.5 60.0 60 60 activities 54.1 54.8 Cash flows from investing 51.0 55 52.6 52.3 activities 47.2 Free cash flows*3 44.0 50 41.6 46.8 45.
Slide 25: Other Information
OTHER INFORMATION This section is mainly based on non-financial information categorized as “other information”. © 2019 Renesas Electronics Corporation. All rights reserved. Page 25
Slide 26: Inventory
INVENTORY (MANAGERIAL ACCOUNTING BASIS, BILLON YEN） <Sales Channel Inventory*1 (by application) > <Inventory Change 100 (Work in Process + Finished Goods)> Automotive 50 150 Non- Automotive 0 17/3 17/6 17/9 17/12 18/3 18/6 18/9 18/12 100 In-House <Sales Channel Inventory (by product) > 100 50 MCU 50
Slide 27: Monthly Changes in Front-End Wafer Input and Foundry Purchases
MONTHLY CHANGES IN FRONT-END WAFER INPUT QUANTITY AND PURCHASE VOLUME FROM FOUNDRIES (8-INCH EQUIVALENT） <1,000 wafers / month> 350 300 250 200 Purchase Volume from Foundries 150 100 Front End Wafer Input 50 Quantity 0 1 7 / 1 1 7 / 2 1 7 / 3 1 7 / 4 1 7 / 5 1 7 / 6 1 7 / 7 1 7 / 8 1 7 / 9 1 7 / 1 0
Slide 28: Quarterly Trends in Front-End Utilization Rate
QUARTERLY TRENDS IN FRONT-END UTILIZATION RATE (WAFER INPUT BASIS) 100% 80% 60% 40% Total 20% 6-inch line 8-inch line 12-inch line 0% FY17/Q1 FY17/Q2 FY17/Q3 FY17/Q4 FY18/Q1 FY18/Q2 FY18/Q3 FY18/Q4 © 2019 Renesas Electronics Corporation. All rights reserved. Page 28
Slide 29: Big Ideas for Every Space (Forward-Looking Statements)
BIG IDEAS FOR EVERY SPACE (FORWARD-LOOKING STATEMENTS) The statements in this presentation with respect to the plans, strategies and forecasts of Renesas Electronics and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. Such forward-l