Kokusai Electric Corporation · TSE:6525
Kokusai Electric — Q3 2025 Earnings Presentation
23 slides from Kokusai Electric's earnings presentation, Feb 7, 2025
Slide 1: Financial Briefings for the Third Quarter of the Fiscal Year Ending March 2025
|TRANSLATION-FOR REFERENCE ONLY- KOKUSAI ELECTRIC Financial Briefings for the Third Quarter of the Fiscal Year Ending March 2025 (April to December 2024) February 7, 2025 KOKUSAI ELECTRIC CORPORATION Alright reserved.
Slide 2: Summary of the Q3 results
First is a summary of the Q3 results. Page four are highlights. Specific details will be shared from the following pages and beyond.
Slide 3: Summary of consolidated financial results for Q3 and nine months
Page five is a summary of the consolidated financial results for the Q3 as well as the first nine months. In Q3, from October to December, both revenue and profits increased compared to the same period of last year, in line with the revised earnings forecast at the time of the Q2 results. Both reven
Slide 4: Factors behind YoY changes in revenue and adjusted operating income
Page six shows the factors behind the YoY changes in revenue and adjusted operating income for Q3. Equipment sales increased in Q3 as equipment sales grew for all logic/foundry, DRAM, and NAND applications. In addition, part sales, relocation, and modifications and legacy equipment sales of 200- mil
Slide 5: Sales composition by business
Page seven shows the sales composition by business. Equipment sales increased 12% and service sales increased 10% in Q3 compared to the same period last year. Compared to Q2, equipment sales increased 33% and service sales increased slightly. The reasons for the increase in equipment sales will be e
Slide 6: 300-millimeter equipment sales by application
Page eight shows sales of 300-millimeter equipment, which comprises the equipment business and sales of legacy equipment of 200 millimeters or less, which is included in the service business by application. In Q3, sales to logic/foundry, DRAM, and NAND increased 24%, 17%, and 20%, respectively, comp
Slide 7: Sales to China and rest of the world
Page nine shows the sales of equipment and sales divided into two categories: sales to local manufacturers in China; and sales to manufacturers outside of China. From here and on, sales to Chinese local manufacturers will be referred to as sales to China and those to non-Chinese local manufacturers
Slide 8: R&D expenses, capital expenditures, depreciation and amortization
Page 10 shows quarterly R&D expenses, capital expenditures, and depreciation and amortization. Research and development expenses for Q3 were JPY3.8 billion, roughly in line with our previous forecast and accounted for 6.2% of net sales. We will continue to invest in development of next-generation pr
Slide 9: Balance sheet
Page 11 is the balance sheet. Assets at the end of Q3 included an increase in property, plant, and equipment mainly due to the construction of a new plant and an increase in trade and other receivables due to higher sales, while cash and cash equivalents decreased significantly due to the purchase o
Slide 10: Quarterly cash flows
Page 12 shows quarterly cash flows. In Q3, free cash flow was a net outflow of JPY5.5 billion as investment cash flow outflows such as purchase of property, plant, and equipment exceeding operating cash flow inflows such as recording of quarterly income. Financing cash flow was a net outflow of JPY4
Slide 11: Key management indicators related to the balance sheet
Page 13 shows key management indicators related to the balance sheet. The equity ratio at the end of Q3 was 51.3%, remaining above 50%. Regarding the relationship between cash and debt, cash and cash equivalents decreased due to share buybacks and dividend payments, resulting in a net debt of JPY29.
Slide 12: Full-year forecast highlights
Page 15 are highlights. Specific details will be shared in the following pages and beyond.
Slide 13: Forecast for the fiscal year ending March 2025
Page 16 shows the forecast for the fiscal year ending March 2025. Since the Q3 results were in line with the full-year earnings forecast revised at the time of the Q2 results and the same trend is expected to continue in Q4, the full-year earnings forecast remains unchanged. There is also no change
Slide 14: Forecast changes versus previous year's results
On page 17, we summarize the reasons for the increase or decrease in the forecast for the fiscal year ending March 2025 compared to the previous year's actual results. Sales revenue is expected to increase 32% from the previous year due to three factors, and both worldwide and China are expected to
Slide 15: Sales by business segment and full-year forecast
Page 18 shows a breakdown of sales by business segment and the full-year forecast. Unchanged from the Q2 results, equipment sales and service sales are expected to increase 39% and 18%, respectively, over the same period last year. Due to the fast pace of recovery in equipment business sales, the sa
Slide 16: Sales by application and full-year forecast
Page 19 shows the breakdown of sales by application and the full-year forecast. Compared to the previous fiscal year, sales of equipment for logic/foundry, which has seen a marked recovery for advanced nodes, are expected to increase by JPY11 billion sales of equipment for DRAM, for which demand for
Slide 17: H1 and H2 sales breakdown, China and rest of world
Page 20 shows the breakdown of sales revenue by H1 and H2 and the forecast for fiscal year ending March 2025. The graph shows sales to China and the rest of the world broken down into equipment and services by application. The left graph is for the rest of the world and the right graph is for China.
Slide 18: Outlook for the business environment
Page 22 is the outlook for the business environment. In the semiconductor device market, we expect the demand for advanced devices to continue to drive the market. However, we are seeing a slow recovery in general purpose DRAM and NAND and the settling down of a mature node logic/foundry. In light o
Slide 19: Business environment and status by application
On page 23, we summarize the business environment and our status by application. In the logic/foundry market, active investment in mature nodes in China appears to be slowing down and the investment in mature nodes in Europe and the US is expected to continue to be restrained for some time. On the o
Slide 20: Impact of US and Japan export regulation revisions
Upon close examination of these issues, we have confirmed that there will be no direct impact on our equipment business due to regulatory revisions by the US government. We have confirmed that even if the Japanese government's regulatory amendments are enforced as per the public comments, the direct
Slide 21: Trend of sales to China and rest of the world
Page 24 shows the trend of sales to China and to the rest of the world. In the midterm management plan explained at the IR Day last June, we targeted a 10% or 15% increase in sales for the fiscal year March 2026 compared to the most recent forecast for the fiscal year March 2025, based on the assump
Slide 22: Product mix
Page 25 shows the product mix. In the fiscal year ending March 2024, while capital investment for the advanced device was restrained due to the sluggish market, CapEx for mature nodes was active, resulting in a decline in the sales composition ratio of batch ALD* compatible equipment and single wafe
Slide 23: Development roadmap, catalysts and KPIs
On page 26, we have summarized our semiconductor device development roadmap, our catalysts, and KPIs. There are no changes to the strategies and medium-term targets we have explained so far. We expect to achieve our midterm target in the year in which WFE reaches USD120 billion, either in the fiscal