Slide 1: FY17/12 Q4/Full-Year Presentation
FY17/12 Q4/FULL-YEAR PRESENTATION RENESAS ELECTRONICS CORPORATION FEBRUARY 9, 2018 © 2018 Renesas Electronics Corporation. All rights reserved.
Slide 2: Growth and Earnings Targets to Maximize Shareholder Value
GROWTH AND EARNINGS TARGETS TO MAXIMIZE SHAREHOLDER VALUE Long-Term Financial Targets*1 Clear Path for Gross Margin Expansion Top-line growth Top-line Growth 2x SAM Growth Rate *2 (Including cost reduction) Margin Improvements Better Product Mix 44% 50% GM *3 : *5 Intersil Integration OM : 12% *4Ove
Slide 3: Clear Path to Gross Margin Improvement
CLEAR PATH TO GROSS MARGIN IMPROVEMENT Gross Margin Intersil Integration 50% Better Top-line Growth Product Mix (Operating Leverage through Increased Scale) (Including Cost Reduction Effect) 44% Organic Growth*1 CY16/12 Long Term Target *1: Including Intersil acquisition © 2018 Renesas Electronics C
Slide 4: Combination of Organic and Inorganic Growth
Organic Inorganic COMBINATION OF ORGANIC AND INORGANIC GROWTH Automotive Industrial Broad-Based, etc. Inorganic + Organic MCUs Intensive R&D Approaches SoCs Strategic Partnerships and Alliances Analog & Strategic Investment including Mixed Former-Intersil Signal Further Acquisitions (Acquired for US
Slide 5: Non-GAAP Basis Information
NON-GAAP BASIS INFORMATION In this section, Renesas Electronics Group (hereinafter “the Group”) applies Non- GAAP financial measures (hereinafter “Non-GAAP basis”) used for management’s decision making. The Group defines the Non-GAAP consolidated financial results as financial accounting figures (he
Slide 6: Revised GAAP/Non-GAAP Reconciliation (FY17/12)
REVISED GAAP/NON-GAAP RECONCILIATION (FY17/12) ・Non-GAAP Basis: Results excluding non-recurring and certain other items. Starting from FY2017 ending December 2017, the Non-GAAP basis excludes amortization of goodwill, amortization of purchased intangible assets, costs related to the Intersil acquisi
Slide 7: GAAP/Non-GAAP Reconciliation (FY17/12)
GAAP/NON-GAAP*1 RECONCILIATION (FY17/12) FY2017/12 FY2018/12 (B yen) Q1 Q2 Q3 Q4 Q1(Forecast) Operating Profit (GAAP/After PPA) 22.1 9.4 25.0 21.9 10.0 PPA Effects*2（Net Sales/COGS*3） +3.1 +8.5 +0.3 +0.4 +0.3 PPA Effects（SG＆A*4） Increase in depreciation of fixed assets, etc. +0.1 +0.2 +0.2 +0.2 +0.1
Slide 8: GAAP/Non-GAAP Reconciliation (FY17/12)
GAAP/NON-GAAP*1 RECONCILIATION (FY17/12) FY2017/12 FY2018/12 (B yen) Q1 Q2 Q3 Q4 Q1 (Forecast) Net Profit Attributable to Shareholders 17.2 19.1 22.3 18.6 16.0 of Parent Company (GAAP/After PPA) Reconciliations in Operating Profit +7.0 +19.6 +10.9 +12.2 +10.7 Level Reconciliations in Ordinary Profit
Slide 9: FY17/12 Q4/Full-Year Financial Snapshot (Non-GAAP Basis)
Non-GAAP FY17/12 Q4/FULL-YEAR FINANCIAL SNAPSHOT (NON-GAAP BASIS*1) YoY and QoQ results as well as the changes from November 2 FCTs of the Net Sales and Semi Sales are rounded off to one decimal place. CY16 CY17 (FY17/12) （B yen） 12 Months Oct-Dec Oct-Dec 12 Months Jul-Sep Change from Oct-Dec Cumula
Slide 10: FY17/12 Q4 Semiconductor Sales (Non-GAAP Basis)
Non-GAAP FY17/12 Q4 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) YoY +45.1 B yen (+28%) (B yen) Recovery from the Kumamoto Earthquake +34.1 +45.1 +2.5 Sales increase +8.5 (Including Intersil 206.5 integration) Currency impact 161.4 *1: Results excluding non-recurring and certain other items. Non-GAAP basi
Slide 11: FY17/12 Full-Year Semiconductor Sales (Non-GAAP Basis)
Non-GAAP FY17/12 FULL-YEAR SEMICONDUCTOR SALES (NON-GAAP BASIS*1) (B yen) YoY +145.2 B yen (+23%) Recovery from the Kumamoto +108.6 Earthquake +145.2 +24.0 Sales increase +12.6 Currency impact (Including Intersil integration) 765.7 620.4 *1: Results excluding non-recurring and certain other items. N
Slide 12: Quarterly Semiconductor Sales Trends
Non-GAAP QUARTERLY SEMICONDUCTOR SALES TRENDS (NON-GAAP BASIS*1) (B yen) Actual basis (B yen) Pro-forma basis*2 Automotive Industrial Broad-based Other QoQ: +7.4% Automotive Industrial Broad-based Other 206.5 YoY: +28.0% 206.5 YoY: +16.9% 200 194.3 192.3 2.2 200 194.3 192.3 2.2 1.1 0.8 178.2 181.3 1
Slide 13: Gross Margin, Operating Margin and Opex Trajectories
Non-GAAP GROSS MARGIN, OPERATING MARGIN AND OPEX TRAJECTORIES (NON-GAAP BASIS*1) <Gross Margin (%)> QoQ: +0.1pts 20 <R&D Ratio (%)> QoQ: +0.3pts 50 YoY: +2.3pts 16.216.1 16.7 16.9 YoY: -0.6pts 45.8 45.6 45.7 15 45 47.7 47.9 16.9 16.0 16.3 45.5 14.9 15.2 42.2 14.2 44.3 44.3 10 13.1 40 42.1 42.5 11.6
Slide 14: FY17/12 Q4 Operating Income
Non-GAAP FY17/12 Q4 OPERATING INCOME (NON-GAAP BASIS*1) Increase in R&D,SG&A QoQ -1.8 B yen (excluding amortization of (B yen) goodwill, etc.) +3.8 +0.9 +2.8 Changes in volume -9.3 and costs Accounting (excluding currency Currency Impact (Inventory impact impact) revaluation, etc.) 35.9 34.1 0.0 0.0
Slide 15: FY17/12 Q4 Operating Income
Non-GAAP FY17/12 Q4 OPERATING INCOME (NON-GAAP BASIS*1) Increase in R&D,SG&A (excluding amortization of YoY + 11.3 B yen goodwill, etc.) (B yen) -13.6 Accounting Impact (Inventory +20.2 revaluation, etc.) 0 +4.7 Changes in volume and costs Currency impact (excluding 34.1 currency impact) 22.8 0.0 0.
Slide 16: FY17/12 Q4 Operating Income
Non-GAAP FY17/12 Q4 OPERATING INCOME (NON-GAAP BASIS*1) vs FCT +8.1 B yen （B yen) Decrease in R&D,SG&A (excluding amortization of goodwill, etc.) +3.8 +0.4 +2.1 Changes in +1.9 Accounting volume and costs Currency impact Impact (Inventory revaluation, etc.) (excluding currency impact) 34.1 25.9 0.0
Slide 17: FY17/12 Full-Year Operating Income
Non-GAAP FY17/12 FULL-YEAR OPERATING INCOME (NON-GAAP BASIS*1) YoY + 50.1 B yen Increase in R&D,SG&A (excluding amortization of (B yen) goodwill, etc.) -36.5 Accounting Impact (Inventory +81.2 revaluation, etc.) +6.2 Changes in Currency -0.9 volume and costs impact (excluding 128.1 currency impact)
Slide 18: FY18/12 Q1 Financial Forecasts
Non-GAAP FY18/12 Q1 FINANCIAL FORECASTS (NON-GAAP BASIS*1) YoY and QoQ forecasts of the Net Sales and Semi Sales are rounded off to one decimal place. FY17/12 FY18/12 (B yen) Q1 Q4 Q1 Forecast YoY QoQ (Jan-Mar) (Oct-Dec) (Jan-Mar) Net Sales 177.6 210.2 182.0 +2.5% -13.4% Semi Sales 172.5 206.5 178.7
Slide 19: FY18/12 Q1 Operating Income Forecast
Non-GAAP FY18/12 Q1 OPERATING INCOME FORECAST (NON-GAAP BASIS*1) QoQ -13.5 B yen (B yen) Currency Accounting impact Impact (Inventory Changes in revaluation, etc.) volume and costs -2.1 (excluding -2.0 currency impact) 34.1 -17.1 +7.5 Decrease in R&D,SG&A 20.6 (excluding amortization of goodwill) 0.
Slide 20: FY18/12 Q1 Operating Income Forecast
Non-GAAP FY18/12 Q1 OPERATING INCOME FORECAST (NON-GAAP BASIS*1) YoY - 8.5 B yen (B yen) Changes in Increase in volume and costs R&D,SG&A Currency (excluding (excluding impact currency impact) amortization of -0.8 +1.1 -1.2 goodwill) Accounting -7.6 Impact (Inventory revaluation, etc.) 29.1 20.6 0.0
Slide 21: GAAP Basis Information
GAAP BASIS INFORMATION The figures in this section are mainly based on GAAP (Generally Accepted Accounting Principles) stated on a financial reporting basis and are provided as additional information. © 2018 Renesas Electronics Corporation. All rights reserved. Page 21 BIG IDEAS FOR EVERY SPACE
Slide 22: Former GAAP/Non-GAAP Reconciliation (Until FY16/12)
FORMER GAAP/NON-GAAP RECONCILIATION (UNTIL FY16/12) FY15/3 FY16/3 FY16/12 (B Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Semiconductor Sales (GAAP) ① 201.2 199.6 177.4 175.1 174.5 177.0 160.9 163.2 147.5 148.3 161.4 Renesas SP Drivers*1 ② -17.6 -21.0 - - - - - - - - - Semiconductor Sales (Non-GAAP*2) ①+②
Slide 23: FY17/12 Q4/Full-Year Financial Snapshot
FY17/12 Q4/FULL-YEAR FINANCIAL SNAPSHOT YoY and QoQ results as well as the changes from November 2 FCTs of the Net Sales and Semi Sales are rounded off to one decimal place. CY2016 CY2017 (FY17/12) (B yen) 12 Months Oct-Dec Oct-Dec 12 Months Jul-Sep*1 Change from Oct-Dec Cumulative （Q4） (Q4) YoY QoQ
Slide 24: Balance Sheets
BALANCE SHEETS*1 As of Dec. 31, As of Mar. 31, As of Jun. 30, As of Sep. 30, As of Dec. 31, (B yen) 2016 2017 2017 2017 2017 Total Assets 823.1 995.3 1,018.5 1,023.7 1,062.7 Cash and Cash Equivalents *2 354.3 101.0 126.6 124.4 139.5 Inventories 97.3 113.9 109.0 120.6 126.6 Liabilities 400.7 565.3 56
Slide 25: EBITDA and Cash Flows
*2 EBITDA*1 AND CASH FLOWS*2 Insurance income: +10.5 Acquisition-related payments: -16.0 <EBITDA (B yen)> <Cash Flows (B yen)> 60 *3 59.5 Cash flows from operating activities 54.1 52.6 Cash flows from investing activities 51.0 50 Free cash flows *3 45.1 44.0 50 47.7 46.3 35.8 31.5 32.6 32.6 31.4 42.
Slide 26: FY18/12 Q1 Financial Forecasts
FY18/12 Q1 FINANCIAL FORECASTS YoY and QoQ forecasts of the Net Sales and Semi Sales are rounded off to one decimal place. FY17/12 FY18/12 (B yen) Q1*1 Q1 Forecast Q4 YoY QoQ （Jan-Mar） （Oct-Dec） (Jan-Mar) Net Sales 177.2 210.2 182.0 +2.7% -13.4% Semi Sales 172.2 206.5 178.7 +3.8% -13.5% Gross Margin
Slide 27: Forward-Looking Statements
BIG IDEAS FOR EVERY SPACE (FORWARD-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. Such forward-l