Slide 1: FY08/3 Financial Results
FY08/3 Financial Results Toshio Nakajima President and CEO May 14, 2008 NEC Electronics Corporation http://www.necel.com/ir/en/ 1
Slide 2: Agenda
Agenda I. FY08/3 Financial Results 9Maintained operating profit in Q4 following on Q3 9Attained full-year operating profit of 5.1B yen with enhanced management efficiency 9Recorded a valuation allowance for deferred tax assets for a U.S. subsidiary II. FY09/3 Forecasts 9Aim to attain net profit desp
Slide 3: I. FY08/3 Financial Results
I. FY08/3 Financial Results Summary Q4 Full Year II. FY09/3 Forecasts III. Mid-term Outlook 3
Slide 4: Financial Snapshot
Financial Snapshot FY08/3 (B yen) Q4 March 31 Full-Year March 31 Difference Actual YoY QoQ Actual YoY between Original Forecasts (Announced May 14, 2007) Net Sales 166.0 -5.4 -4.8 687.7 -4.5 -2.3 Semiconductor Sales 155.4 -5.3 -8.3 653.3 -6.5 -16.7 Operating Income (Loss) 0.2 +18.0 -2.8 5.1 +33.7 +5
Slide 5: Trends in Quarterly Results
Trends in Quarterly Results (B yen) 191.2 185.6 177.8 177.9 177.4 170.3 171.4 173.6 170.8 181.2 165.3 165.9 166.8 165.2 166.0 179.1 162.7 171.1 Net Sales 169.7 169.1 146.1 162.0 165.0 163.7 160.7 158.7 160.0 158.1 160.8 156.8 155.4 Semicon. Sales 140.3 FY05/3 FY06/3 FY07/3 FY08/3 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 6: Q4 Results
I. FY08/3 Financial Results Summary Q4 Full Year II. FY09/3 Forecasts III. Mid-term Outlook 6
Slide 7: Q4 Semiconductor Sales by Platform
Q4 Semiconductor Sales by Platform (B yen) 160.8 YoY 163.7 QoQ 155.4 155.4 SoC -5% SoC -7% +) LSIs for DVD drives 63.7 +) Digital baseband LSIs for 62.4 - ) LSIs for printers mobile handsets 59.1 59.1 - ) LSIs for consumer electronics due to seasonal factors MCU ±0% MCU +2% +) Automotive MCUs +) Aut
Slide 8: Factors in Operating Income (Loss)
Factors in Operating Income (Loss) Semicon. YoY Semicon. QoQ Sales (B yen) Sales (B yen) -5.4 -8.3 160.8 155.4 163.7 155.4 -)Decreased sales +)Recouped R&D costs of (Forex Impact: 114yen to custom products 109yen per 1$) +)Decreased IT +)Cut technical outsourcing Lower utilization rates system relat
Slide 9: Non-Operating Income/Expense, Provision for Income Taxes
Non-Operating Income/Expense, Provision for Income Taxes FY07/3 FY08/3 Full- Year 9M Cumulative Q4 Full-Year (B yen) Original Actual Actual Actual Actual Forecasts Non-OP. Income (Loss) -6.8 1.4 - -7.0 8.3 - -10.0 Transfer of the photomask business and assets •NEC Fabserve, a wholly-owned Income sub
Slide 10: Full Year Results
I. FY08/3 Financial Results Summary Q4 Full Year II. FY09/3 Forecasts III. Mid-term Outlook 10
Slide 11: FY08/3 Semiconductor Sales by Platform
FY08/3 Semiconductor Sales by Platform (B yen) 700 659.7 653.3 +/- Factors SoC 600 SoC +) Increase in sales of EMMA products for 259.2 -3% 251.3 digital AV and LSIs for game consoles 500 -) Decrease in sales of LSIs for digital cameras and printers 400 MCU MCU +)Growth in sales of automotive MCUs in
Slide 12: Operating Expenses and CAPEX
Operating Expenses and CAPEX Reduced Reducedfixed fixedcosts costsby by22B 22Byen yenyear yearon onyear, year,exceeding exceedingthe the original originaltarget targetby by20B 20Byen. yen. (B yen) 50 R&D Expenses FY08/3 112.3B yen 50 SG&A (YoY -19.5B) FY08/3 84.7B yen Recouped R&D (YoY -2.3B) 35.2 c
Slide 13: Factors in Operating Income (Loss)
Factors in Operating Income (Loss) (B yen) YoY 659.7 653.3 -6.4 Semicon. Sales +)Reduced depreciation from enhanced investment efficiency +） Cut manufacturing related fixed costs, other costs incl. personnel costs -）Decreased sales (Forex Impact: 117yen to 116yen per 1$) 5B from FY07/3 one-time expe
Slide 14: II. FY09/3 Forecasts
I. FY08/3 Financial Results II. FY09/3 Forecasts III. Mid-term Outlook 14
Slide 15: FY09/3 Financial Forecasts
FY09/3 Financial Forecasts Aim Aim to to achieve achieve net net profits profits for for the the full full year year FY08/3 FY09/3 1H 2H Full-Year 1H 2H Full-Year (B yen) Actual Actual Actual Forecast Forecast Forecast YoY Net Sales 351.0 336.8 687.7 335.0 350.0 685.0 -2.7 Semiconductor Sales 334.1
Slide 16: Trends in Amount of Orders
Trends in Amount of Orders Amount of Orders (3-months moving average) FY08/3 Average Q4 Order Trends Although affected by strong yen, steady growth shown in all products except for multi-purpose discrete. Multi-purpose MCU and consumer electronics related products in particular show healthy recovery
Slide 17: FY09/3 Semiconductor Sales Forecast
FY09/3 Semiconductor Sales Forecast (B yen) Forex impact from stong yen -Approx. 30B 700 653.3 650.0 SoC 600 SoC YoY: Decrease by lower single digit % 251.3 +)EMMA products for digital AV, LSIs for 500 DVD drives - ) LSIs for digital cameras 400 MCU MCU YoY: Increase by mid single digit % 180.1 300
Slide 18: Operating Expenses and CAPEX Outlook
Operating Expenses and CAPEX Outlook Invest Invest for for future future growth growth while while maintaining maintaining cost cost efficiency efficiency (B yen) 100 R&D Expenses FY09/3 Approx. 115B 100 SG&A FY09/3 Approx. 84B 57.6 57.0 58.0 54.7 42.7 42.0 42.0 42.0 0 0 1H 2H 1H 2H 1H 2H 1H 2H FY08
Slide 19: FY09/3 Forecast for Operating Income (Loss)
FY09/3 Forecast for Operating Income (Loss) 680.0 (B yen) Forex impact from strong yen Expanding market Approx. -30B 653.3 share in focus areas 650.0 Semicon. Sales +)Reduced depreciation from enhanced investment efficiency +） Lower fixed costs due to various measures incl. early retirement 30.0 Imp
Slide 20: III. Mid-term Outlook
I. FY08/3 Financial Results II. FY09/3 Forecasts III. Mid-term Outlook 20
Slide 21: Progress of Management Policies
Progress of Management Policies (Announced in Feb. 22, 2007) Items and Primary Measures Status (as of May 14, 2008) Reallocate Reduce technology outsourcing costs roughly equivalent to Completed development 600 people resources Shift development resources roughly equivalent to 400 Completed employee
Slide 22: Mid-term Outlook
Mid-term Outlook Semicon. Forex impact from strong yen Sales Approx. -30B 659.7 653.3 650.0 e in i n creas s s a Sale wth are gro SoC Improve profitability Operating profit by sales expansion MCU margin 5％ Discrete Improve cost structure Attain net & IC and increase design-wins profit Secured Fixed
Slide 23: Mid-term Sales Outlook- SoC
Mid-term Sales Outlook- SoC Large Largeprojects projectsin inprogress, progress,which whichwill willcontribute contributeto tosales salesexpansion expansion (B yen) Digital consumer LSI ¾ Focusing on specific application LSIs (ie. Camera engine) for mobile 300 handsets Design-wins for several global
Slide 24: Mid-term Sales Outlook- MCU
Mid-term Sales Outlook- MCU Automotive Automotiveand andmulti-purpose multi-purposeMCUs MCUscontributing contributingto tosteady steadygrowth growth (B yen) Super low-power “eco-friendly” MCU ¾ Introduced All Flash MCU using unique low-power technologies 300 32bit 16bit 8bit Normal NEC Industry best
Slide 25: Mid-term Sales Outlook- Discrete & IC
Mid-term Sales Outlook- Discrete & IC Focusing Focusingon onstrong strongproducts, products,enhancing enhancingcost costcompetitiveness competitivenessby byshifting shiftingto to larger largerwafers wafersand andutilizing utilizingoutside outsidemanufacturing manufacturingcapacity capacity (B yen) P
Slide 26: Conclusion
Conclusion Recovered Recovered operating operating profits profits in in FY08/3 FY08/3 with with improvements improvements in in management management efficiency. efficiency. Aim Aim to to attain attain net net profit profit in in FY09/3 FY09/3 Aim Aim to to attain attain operating operating profit
Slide 27: 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 28: Appendix
Appendix NEC ELECTRONICS 28
Slide 29: Q4 Semiconductor Sales by Application
Q4 Semiconductor Sales by Application (B yen) YoY QoQ 160.8 163.7 Communications Communications -26％ 155.4 155.4 +9％ Decline in small driver ICs 15.6 Increase in digital baseband 22.9 17.0 LSIs for mobile handsets 17.0 Computing & Peripherals ＋0% 30.1 Computing & Peripherals Decline in large driver
Slide 30: Balance Sheet
Balance Sheet (B yen) 07/3 07/12 08/3 Cash and Cash Equivalents 185.4 188.9 165.5 Accounts Receivable 99.5 92.6 96.4 Inventories 79.2 81.1 75.8 PP&E 296.2 273.8 259.1 Other Assets 35.6 31.3 19.5 Total Assets 695.9 667.6 616.3 Accounts Payable 132.5 117.4 107.3 Debt Payable 136.0 132.0 116.6 Other Li
Slide 31: Cash Flows
Cash Flows Recorded Recordedpositive positivefree freecash cashflows flowsfor forthe thefirst firsttime timein intwo twoyears years FY07/3 FY08/3 (B yen) Q4 Full-year Q3 Q4 Full-year Cash Flows from Operating 12.7 66.7 13.6 0.5 43.3 Activities Cash Flows from Investing -30.3 -78.5 -14.7 -4.3 -37.8 A