Slide 1: Looking Back on the Reform Plan
Looking Back on the “Reform Plan” Renesas Electronics Corporation May 11, 2016 © 2016 Renesas Electronics Corporation. All rights reserved.
Slide 2: Impact of the Kumamoto Earthquake
Impact of the Kumamoto Earthquake © 2016 Renesas Electronics Corporation. All rights reserved. Page 2
Slide 3: Situation of the Kawashiri Factory After the Disaster
Situation of the Kawashiri Factory After the Disaster Equipment & Components Personnel Building & Clean room (Jigs & Tools) No human casualties Damage to the quartz jigs ・Safety confirmation system ・Confirmed safety of all ・Switched to stockpiles employees ・Requested assistance No large-scale
Slide 4: Current Supply Chain Situation
Renesas Electronics Group Outsourced production Current Supply Chain Situation Front-end Back-end Customers Earthquake Earthquake Renesas Semiconductor Subcontractors: Manufacturing Co., Ltd, Kawashiri Factory Several subcontractors were Operation Recovery*1 affected by the quake 20% Automotive, R
Slide 5: Impact on Performance by Kumamoto Earthquake
Impact on Performance by Kumamoto Earthquake Impact on Net Sales Impact from shutdown/low operation of production line (April - June) Impact from shutdown/low operation of contractors’ production lines Impact on Profits Profit decrease from decrease in net sales (production) Recording of res
Slide 6: Looking Back on the Reform Plan
Looking Back on the Reform Plan © 2016 Renesas Electronics Corporation. All rights reserved. Page 6
Slide 7: Reform Plan Targets
Reform Plan Targets Achieve gross margin of 45% and double-digit operating margin in FY2016 Manufacturing Selection and Concentration Structural Reforms Execution 実行フェーズ Phase 30か月 30 months Structural Reforms of the Underlying Business- and （2013年10月 (Oct 2013 Manufacturing Operations ～2015年度末） -Ma
Slide 8: Selection and Concentration
Selection and Concentration Selection and Concentration Focus on advantageous businesses to significantly improve gross margin Change of Business Portfolio Growth of Core Business FY 2012 FY 2015 796.8 753.3 Comm- Comm- PC/ unication Semiconductor 724.7 unication Office 5% Sales (B yen) 675.6 PC/Off
Slide 9: Manufacturing Structural Reform
Manufacturing Structural Reforms Manufacturing Structural Reform Realigned manufacturing sites with selection and concentration of businesses In-house / Outsourced Consolidated or transferred production lines <March 31, 2013> <March 31, 2016> Sub- Back-end Line contractor • Hakodate in Japan • Fukui
Slide 10: Towards an Optimal Manufacturing Structure
Manufacturing Structural Reforms Towards an Optimal Manufacturing Structure Production data available from Production technology manufacturing equipment (process node used by wafer) (1 data per Due 6-inch wafer) Efficient production system that realizes Higher functionality requires high quality
Slide 11: Streamlining of Human Resources
Selection and Concentration Streamlining of Human Resources Manufacturing Structural Reforms Streamlined headcounts in line with selection and concentration of businesses and manufacturing reforms # of Employees -Approx. 4,500 Early retirement program 33,840 -Approx. 3,400 Realignment of 27,200 -14,
Slide 12: Operational Reforms
Business operation reforms Operational Reforms Realized optimized management resources with via various measures Realigned companies/sites by function to enhance operational efficiency Realignment of Realigned manufacturing/design companies (April 2015) manufacturing/ Realigned design sites (Jun
Slide 13: Fixed Cost and Break Even Point
Reform Plan Achievements Fixed Cost and Break Even Point Became more resistant to the highly volatile semiconductor market Break-Even Points of Net Sales Semiconductor Sales Approx. 150 B yen Trends in Fixed Cost FY12 FY13 FY14 FY15 © 2016 Renesas Electronics Corporation. All rights reserved. Page 1
Slide 14: Improved Profit through the Reform Plan
Reform Plan Achievements Improved Profit through the Reform Plan Improved gross margin and cost efficiency measures have expanded operating margin 833.0 Net Sales (B yen) 785.8 791.1 693.3 44.1% 40.3% 37.2% 15.0% 30.9% Gross Margin 33% 13.2% 8.1% 103.8 104.4 100.0 Operating Margin -3.0% 67.6 -23.2 O
Slide 15: Future Challenges
Future Challenges Need to tackle emerging issues in addition to the remaining Reform Plan issues Optimization of Consider every means including realignment to establish a Manufacturing manufacturing structure optimized with Renesas’ future business Structure environment Continue to withdraw from
Slide 16: Summary
Summary Based on the Reform Plan, Renesas promoted: (1) Selection and concentration of business; (2) Structural reforms concentrating on streamlining of production and human resources; and (3) Operational reforms Improved gross and operating margins by strengthening its capacity to address fluct
Slide 17: Forward-Looking Statements
(FOREWARD-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. We caution you in advance that actual r