Japan Display Inc. · TSE:6740

Japan Display — Q3 FY2015 Earnings Presentation

21 slides from Japan Display's earnings presentation, Feb 8, 2016

  1. Slide 1: Third Quarter of FY2015 Consolidated Financial Results

    Third Quarter of FY2015 Consolidated Financial Results Japan Display Inc. February 8, 2016

  2. Slide 2: Agenda

    Agenda 1. 3Q-FY15 Financial Results & 4Q Guidance 2. Market Trends & JDI’s Action 3. Progress of Management Reforms & Creating Stable Operating Base Note: The depreciation costs noted in this document include amortization of goodwill and non-operating depreciation. The R&D costs noted in this docume

  3. Slide 3: 3Q-FY2015 Results & 4Q Guidance

    3Q-FY2015 Results & 4Q Guidance Keiichi Yoshida Chief Financial Officer Copyright © 2016 Japan Display Inc. All Rights Reserved. 3

  4. Slide 4: 3Q-FY 2015 Topics

    3Q-FY 2015 Topics  Sales to China/other regions fell due to increased competition but with higher sales to a major customer total sales up 21% YoY to ¥305.0bn, in line with forecast.  Worse product mix YoY was a minus but operational reforms to lower costs & fixed costs led to ¥13.3bn in op. incom

  5. Slide 5: Operating Results (3 Mo. Ended Dec. 31, 2015)

    Operating Results (3 Mo. Ended Dec. 31, 2015) (Billion yen) Q3-FY15 Q3-FY14 YoY Chg. Q2-FY15 QoQ Chg. Net sales 305.0 251.1 53.9 261.7 43.3 Cost of sales 278.8 224.4 54.4 237.1 41.7 Gross profit 26.1 26.7 (0.6) 24.6 1.5 8.6% 10.6% 9.4% SG&A 12.8 12.0 0.8 16.3 (3.5) Operating income 13.3 14.7 (1.4) 8

  6. Slide 6: Operating Results (9 Mo. Ended Dec. 31, 2015)

    Operating Results (9 Mo. Ended Dec. 31, 2015) (Billion yen) 9 mo. ended 9 mo. ended YoY Chg. Dec.31, 2015 Dec.31, 2014 Net sales 812.8 536.7 276.1 ＋51.4% Cost of sales 744.2 506.1 238.1 Gross profit 68.6 30.7 38.0 ＋123.9% 8.4% 5.7% SG&A 44.7 36.2 8.5 Operating income (loss) 23.9 (5.6) 29.5 - 2.9% -1

  7. Slide 7: 3Q-FY 2015 Operating Income (QoQ Analysis)

    3Q-FY 2015 Operating Income (QoQ Analysis) (Billion yen) Fixed costs Forex (0.5) Shipments +6.4 Cost +1.1 reductions 13.3 (7.8) 8.3 +5.7 Selling prices, Product mix 2Q-FY15 3Q-FY15 Copyright © 2016 Japan Display Inc. All Rights Reserved. 7

  8. Slide 8: Balance Sheet

    Balance Sheet (Billion yen) 12/2015 3/2015 12/2014 Cash and deposits 120.0 94.6 89.1 Accounts receivable 139.9 144.1 159.6 Other receivables 106.3 62.8 78.6 Inventories 119.7 113.4 109.7 Others 23.9 21.8 26.4 Total current assets 509.8 436.7 463.4 Non-current assets 441.4 394.9 394.8 Total assets 95

  9. Slide 9: Cash Flow (9 Mo.)

    Cash Flow (9 Mo.) (Billion yen) 9 mo. ended 9 mo. ended Increase/ Dec.31, 2015 Dec.31, 2014 Decrease Income before income taxes 8.8 (5.2) 14.0 Depreciation and amortization 60.7 52.0 8.7 Working capital (1) 25.9 (2.4) 28.3 Decrease in advance receipts 47.5 (14.8) 62.3 Cash flow from operating activi

  10. Slide 10: 4Q-FY2015 Financial Forecast

    4Q-FY2015 Financial Forecast  Sales: Fall in customer demand likely to lower sales by 38% QoQ.  Op. income: Pushing further operational cost cuts, but large marginal profit decline from lower sales & higher OLED development R&D costs mean ¥1.9bn loss likely. Full-term: improvement expected.  Sale

  11. Slide 11: Market Trends and JDI's Action

    Market Trends and JDI’s Action Shuji Aruga President and Chief Operating Officer Copyright © 2016 Japan Display Inc. All Rights Reserved. 11

  12. Slide 12: Quarterly Sales by Product Category and Sales Region

    Quarterly Sales by Product Category and Sales Region （Billion yen） 300 250 200 US/EUR Mobile Category 150 100 China 50 Other areas Auto, C&I and Other 0 Category 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15F (FY)  3Q-FY15 sales to China/other reg. down QoQ due to increased competition. Also, softne

  13. Slide 13: Sales of Smartphone Displays to China/Asia Customers

    Sales of Smartphone Displays to China/Asia Customers (Billion yen) 100 100% ≧Hi-Reso (provisional) 80 80% Full-HD 60 60% ≦HD720 欧米 Pixel Eyes™ratio 40 40% 20 20% 0 0% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15F (FY)  3Q15 was in line with forecast but 4Q15 to fall short of our mid-Nov. forecast due to

  14. Slide 14: Sales Forecast by Resolution and Customer Region

    Sales Forecast by Resolution and Customer Region 3Q-FY15 Sales (actual) 4Q-FY15 1Q-FY16 Sales Sales vs. Aug 7 est Results QoQ QoQ (est) QoQ (est) WQHD China/Asia Full-HD Largest customer HD720 China/Asia Pixel Eyes™ Copyright © 2016 Japan Display Inc. All Rights Reserved. 14

  15. Slide 15: Vol. Sales of Smartphone Displays in CHN mkt (JDI est)

    Vol. Sales of Smartphone Displays in CHN mkt (JDI est) • Demand in China smartphone mkt steady vol. sales growth of >=HD720; 4Q-FY15: Mkt seasonality, China mkt weakness  lower >=HD720 vol. sales. • JDI 3Q-FY15 shipments down on greater competition with OLED in high price range mkt; med. price ran

  16. Slide 16: Road Map Of Products That Can Win Through

    Road Map Of Products That Can Win Through FY15 FY16 FY17 4K2K Resolution line-up WQHD Hi-Reso Display (provisional) Full-HD XO display Mod- Conventional modules（thin, narrow border) ules (provisional) Gen-2 Platform Gen-1 Next-gen UI, Eyes™ Narrow border, higher touch Pixel thin, sensitivity, real b

  17. Slide 17: Progress of Management Reforms & Creating Stable Operating Base

    Progress of Management Reforms & Creating Stable Operating Base Mitsuru Homma Chairman and Chief Executive Officer Copyright © 2016 Japan Display Inc. All Rights Reserved. 17

  18. Slide 18: Management Reform Achievements (1)

    Management Reform Achievements (1) Lower BEP Lower mfg cost • FY15-4Q break-even fab utilization rate Lower fixed cost est.: 27 pts lower than FY15-1Q. Cut operational losses Reform China operations • Major boost from cuts in defectives, materials & fixed costs. Sound cash flow Shorten lead times •

  19. Slide 19: Management Reform Achievements (2)

    Management Reform Achievements (2) • Lower than planned BEP =>positive op. income impact of ¥39.3bn in 2H-FY15, ¥45.6bn FY15 full year. • 4Q: Incr. competition, seasonality, China mkt weakness => big drop in utilization rate likely but improved biz structure to enable a profit; op. income est: -¥1.9

  20. Slide 20: Stable Operating Base (Growth Strategy)

    Stable Operating Base（Growth Strategy） Jul 2015 Apr 2016 2018 Management reform project Goals: 1st ・Lower BE fab utilization rate OP 10% phase ・Sound cash flow Continuous improvement EBITDA 20% ・Change mindset ROE >10% Structural reform 2nd project phase ・Fundamental fixed costs cuts Business restru

  21. Slide 21: Forward Looking Statement

    Forward Looking Statement: Any information related to market trends or industries mentioned in this document is based on information available at present and JDI does not guarantee that this information is accurate or complete. Any plan, estimation, calculation, quotation, evaluation, prediction, ex

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