Jvckenwood Corporation · TSE:6632
Jvckenwood — Q3 FY2010 Earnings Presentation
36 slides from Jvckenwood's earnings presentation, March 2010
Slide 1: JVC Kenwood Group's Results and Forecast Briefing
JVC Kenwood Group’s Results and Forecast Briefing Third Quarter of Fiscal Year Ending March 2010 JVC KENWOOD Holdings, Inc March, 2010 Copyright © 2010 JVC KENWOOD HOLDINGS All rights reserved. May not be copied or reprinted without prior written approval.
Slide 2: Agenda: Adjustments, Q3 Results Overview, Forecasts
Adjustments to Previous Earnings Results Haruo Kawahara, Chairman, President and CEO Financial Results Overview for Third Quarter of Fiscal Year Ending March 2010 Hiroshi Odaka, Director and CFO Business Forecasts and Future Measures for Fiscal Year Ending March 2010 Haruo Kawahara, Chairman, Presid
Slide 3: Adjustments to Previous Earnings Results
Adjustments to Previous Earnings Results Haruo Kawahara, Chairman, President and CEO We deeply apologize for the inconvenience and anxiety caused to all parties concerned with regard to the subject adjustments to previous earnings results and the associated delay in submitting the quarterly report f
Slide 4: Adjustments for JVC (announced on March 12)
Adjustments to Previous Earnings Results - Adjustments for JVC (announced on March 12) Adjustments to previous earnings results of Victor Company of Japan, Ltd. (JVC) Amount of Details of adjustments Period losses posted Posting of losses with respect to Spanish sales subsidiary FYE 3/’05 - 2Q FYE 3
Slide 5: Adjustments to Statements of Income of JVC
Adjustments to Previous Earnings Results - Adjustments for JVC (announced on March 12) Adjustments to Statements of Income of JVC Operating profit Net sales <Prior to adjustments> Operating Net income Net sales profit Net income <After adjustments> 900 (billion yen) 25 840.6→840.6 806.9→806.9 742.7→
Slide 6: Effects on JVC Kenwood
Adjustments to Previous Earnings Results - Effects on JVC Kenwood * Because we adopted the purchase method, profits and losses, net assets, and other accounting items of JVC for the periods prior to the management integration were not carried over to the consolidated financial statements of JVC Kenw
Slide 7: Adjustments to Balance Sheets of JVC Kenwood
Adjustments to Previous Earnings Results - Adjustments to Balance Sheets of JVC Kenwood 3Q of FYE 3/’09 * Recognition of impairment loss regarding the entire positive goodwill of 6.2 billion yen Decrease in net assets, * Disposition of the amortization of negative shareholders’ equity and total asse
Slide 8: Adjustments to Statements of Income of JVC Kenwood
Adjustments to Previous Earnings Results - Adjustments to Statements of Income of JVC Kenwood Simple addition of both JVC Kenwood’s income and loss companies’ income and loss (including those of JVC for the first half) 9.5 9.0 Income (billion yen) 1.4 2.9 (0.1) 0 -0.9 Operating (-1.5) Operating prof
Slide 9: Notes to Going Concern Prerequisite
Adjustments to Previous Earnings Results - Notes to Going Concern Prerequisite * JVC Kenwood posted a net loss of 30.7 billion yen for the previous fiscal year, and a net loss of 22.3 billion yen for the 3Q of the current fiscal year. * Failure to comply with the financial covenants of commitment-li
Slide 10: Punishment of Parties Concerned
Adjustments to Previous Earnings Results - Punishment of Parties Concerned * We have taken seriously the results of the investigation conducted by the Investigation Committee, and punished the officers involved and other parties concerned. * Last year we reduced the basic compensation for full-time
Slide 11: Measures to Prevent Recurrence: Management and Internal Control
Adjustments to Previous Earnings Results - Measures to Prevent Recurrence 1. Establishment of management system and internal control system to improve corporate culture * JVC Kenwood has developed an internal control system by formulating basic policies and such like for consolidated group managemen
Slide 12: Measures to Prevent Recurrence: Accounting Reform
Adjustments to Previous Earnings Results - Measures to Prevent Recurrence 2. Reform of accounting system and structure * JVC had a corporate culture in which the accounting department provided managerial assistance and assumed responsibility for achieving the earnings targets, but its internal contr
Slide 13: Financial Results Overview for Third Quarter of FYE March 2010
With the submission on March 12, 2010 of the quarterly report on earnings results for the third quarter of the fiscal year ending March 2010, which had been delayed, JVC Kenwood’s stock was no longer classed as securities under supervision (confirmation). Financial Results Overview for Third Quarter
Slide 14: 3Q - Business Results (Consolidated)
3Q - Business Results (Consolidated) Net sales * The CE business recovered steadily, as it did in the 2Q, and its sales increased from the previous period. * Sales of the H&M, PS and ET businesses decreased. Sales of JVC Kenwood declined. Profits and losses * Both the consumer and OEM sectors of the
Slide 15: 3Q - Financial Results - Net Sales
3Q - Financial Results - Net Sales 3Q: JPY 102.1B (1-3Q: JPY 305.4B) * The CE business recovered steadily, as it did in the second quarter. Meanwhile, in the H&M business, display operations in Europe were curtailed and the recovery in sales of camcorders was slow. The recovery in orders received wa
Slide 16: 3Q - Financial Results - Operating profit
3Q - Financial Results - Operating profit 3Q: JPY-0.9B (1-3Q: JPY-8.7B) * The CE business picked up steadily, moving into the black compared with the red ink in the corresponding period of the previous fiscal year. However, in the H&M business, earnings fell due to a decline in sales and prices of c
Slide 17: 3Q - Financial Results - Ordinary Income
3Q - Financial Results - Ordinary Income 3Q: JPY -3.3B (1-3Q: JPY-14.3B) * Ordinary income was much lower than expected due to a decrease in operating profit, but limited deterioration of about JPY0.4B from the previous period, reflecting a decline of operating profit and improved non-Operating prof
Slide 18: 3Q - Financial Results - Net income
3Q - Financial Results - Net income 3Q: JPY -5.4B (1-3Q: JPY -22.3 B) * Net income was much lower than expected due to a decrease in operating profit, but improved JPY5.7B from the previous period thanks to a significant decline of extraordinary loss, as seen by a fall in impairment losses of JPY5.4
Slide 19: Effects of Structural reforms and management integration
3Q - Effects of Structural reforms and management integration Effects of structural reforms Effects of integration (additional measures) * Cost synergy (such as development, * Reform of business structure procurement and intellectual property) * Reform of employment structure * Accounting effects (p
Slide 20: 3Q - Car Electronics Business
3Q - Car Electronics Business Net sales for 3Q: JPY 26.3B (1-3Q: JPY 77.7B) Operating profit for 3Q: JPY 0.8B (1-3Q: JPY 0.3B) * Consumer: As in the 2Q, sales recovered centering on the overseas markets, and a high market share was maintained in major regions. * OEM: Reflecting a recovery in auto sa
Slide 21: 3Q - Home & Mobile Electronics Business
3Q - Home & Mobile Electronics Business Net sales for 3Q: JPY 39.8B (1-3Q: JPY 117.6B) Operating profit for 3Q: JPY -1.6B (1-3Q: JPY -8.1B) * Home audio (HA): Turned a profit due to the effects of business structural reform, as it did in 2Q. * Display (DP): Earnings improved although sales decreased
Slide 22: 3Q - Professional System Business
3Q - Professional System Business Net sales: JPY 21.3B (1-3Q: JPY 65.9B) Operating profit: JPY -0.2B (1-3Q: JPY -1.5B) * Communications (COM): The Land Mobile Radio (LMR) sector began to recover in the 2Q. However, overall orders for communications equipment leveled off because investment budgets fo
Slide 23: 3Q - Entertainment Business
3Q - Entertainment Business Net sales: JPY 11.5B (1-3Q: JPY 35.0B) Operating profit: JPY -0.6B (nine months: JPY -0.9 B) * Contents: Anime-related products fared well, but sales of blockbusters decreased and sales of old albums weakened. * Consignment: The quantity of consignments fell because we we
Slide 24: 3Q - Financial Results - Financial Status
3Q - Financial Results - Financial Status Balance Sheets * Total assets decreased by JPY52.4B from the end of FYE 3/’09 due to a declines in trades receivable and inventory assets and sale of tangible fixed assets. * Interest-bearing debt (total of borrowings and corporate bonds) decreased by JPY15.
Slide 25: 3Q - Financial Status: Cash Flow
3Q - Financial Results - Financial Status Cash Flow Key measure “Increase of Cash” In the consolidated 1-3Q, based on “Increase of Cash” as a key measure for the current period, we attempted to reduce assets such as accounts receivable, inventory assets, and properties, and redeemed corporate bonds.
Slide 26: Business Forecasts and Future Measures for FYE March 2010
Business Forecasts and Future Measures for Fiscal Year Ending March 2010 Haruo Kawahara, Chairman, President and CEO 26
Slide 27: Earnings Forecast for FYE3/'10
Earnings Forecast for FYE3/’10 * Operating profit for the current fiscal year was affected by the adjustments to previous earnings results, and Operating profit for the first quarter was the lowest so far in the current fiscal year. * Operating profit for the third quarter under review remained unch
Slide 28: Forecast for FYE 3/'10 - Quarterly Trends
Forecast for FYE 3/’10 - Quarterly Trends * The Car Electronics business and the home audio sector moved into the black, and earnings of the LMR sector recovered. Thus, our intrinsically strong businesses were revived. * In the display sector, earnings stopped declining due to the apparent effects o
Slide 29: Earnings Forecast - Earnings by Business Segment
Earnings Forecast for FYE 3/’10 - Earnings by Business Segment Factors for deterioration of earnings * Earnings at the Camcorder (CAM) sector were substantially lower (particularly in Europe), hurt by lower competitiveness of models for 2009, price declines and a delay in the introduction of new pro
Slide 30: Business Structural Reform Action Plan
Accomplishment of Key Measures - Business Structural Reform Action Plan 1. We expect the structural reform of the Home & Mobile Electronics business to be completed soon (1) Structural reform in Europe - Slated to be completed at the end of 4Q (effects expected for the next fiscal year: 3.0 billion
Slide 31: Structural Reform of the Business Solution Business
Accomplishment of Key Measures - Business Structural Reform Action Plan 2. Structural reform of the Business Solution business (1) Reorganization; consolidation to the JVC Head Office (Yokohama) * Concentration of the Sales, Technology and Service Departments of JVC’s Business Solution Division, whi
Slide 32: Accomplishment of Key Measures - Outlook for 4Q
Accomplishment of Key Measures - Outlook for 4Q Car Electronics business * With the introduction of new products after the CES, we expect earnings of the Car Electronics business for the current fiscal year to peak in the 4Q with the year’s largest profit. Home & Mobile Electronics business * We exp
Slide 33: Sweeping Reforms in Next Fiscal Year
Sweeping Reforms in Next Fiscal Year JVC Kenwood will aim to improve earnings and financial foundation at the earliest possible time through reconstructing the corporate structure that was damaged by the adjustments to previous earnings results. Business reforms - Concentration of management resourc
Slide 34: Forward-looking statements notice
Expressions contained in this presentation materials referring to the Company's future plans, intentions and expectations are categorized as forward- looking statements. Such statements reflect management's expectations of future events, and accordingly, they are inherently susceptible to risk, unce
Slide 35: Reference: Quarterly Results by Segment
Reference （単位：百万円） (millions of yen) FYE 3/’09 '09/3期 FYE 3/’10 '10/3期 JVC Kenwood ＨＤ 3Q 4Q 通期 year Full fiscal 1Q 2Q 3Q 売上高 Net sales 126,574 104,634 311,299 98,578 104,746 102,101 カーエレクトロニクス Car Electronics 23,437 23,181 92,237 24,827 26,577 26,337 ホーム＆モバイルエレクトロニクス Home & Mobile Electronics 58,645
Slide 36: Reference: JVC Results FY2005-FY2009
Reference （単位：百万円） (millions of yen) JVC ＪＶＣ Fiscal year ended '05/3期 Fiscal year ended '06/3期 Fiscal year ended '07/3期 Fiscal year ended '08/3期 Fiscal year ended '09/3期 March 2005 March 2006 March 2007 March 2008 March 2009 売上高 Net sales 840,581 806,884 742,647 658,286 459,668 民生 Consumer Electroni
JVC KENWOOD Holdings — Q3 FY2010 Earnings Presentation on 6ix