Slide 1: FY16/3 Q2 Financial Results
FY16/3 Q2 Financial Results Renesas Electronics Corporation October 30, 2015 © 2015 Renesas Electronics Corporation. All rights reserved.
Slide 2: FY16/3 Q2 Financial Results (Non-GAAP note)
FY16/3 Q2 Financial Results Since FY16/3, Renesas Electronics Group (hereinafter “the Group”) started to disclose 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 fi
Slide 3: FY16/3 Q2 Summary of Financial Results
FY16/3 Q2 Summary of Financial Results Major factors affecting increase or decrease in Q2 semiconductor sales Semiconductor Sales Though General-Purpose business was slightly lower, overall semiconductor sales were in line with the Group’s expectation Automotive Business Despite the continuously
Slide 4: FY16/3 Q2 Financial Snapshot
FY16/3 Q2 Financial Snapshot Net sales were in line with the Group’s expectation Though gross margin improved YoY, QoQ and from the previous forecasts, part of this growth was supported by temporary improvement factors YoY and QoQ results as well as the Difference from previous forecasts of the Net
Slide 5: Semiconductor Sales by Business (Non-GAAP Basis)
Non-GAAP Semiconductor Sales by Business (Non-GAAP Basis *1) Sales of Automotive Business increased both YoY and QoQ, supported by rebound from the sales decline in Q1 Sales of General-Purpose Business decreased both YoY and QoQ as a result of the structural reforms and slowdown of the industrial pr
Slide 6: Quarterly Financial Results (Non-GAAP Basis)
Non-GAAP Quarterly Financial Results (Non-GAAP Basis) Gross margin increased from temporary factors Semiconductor Sales (B Yen) Operating Margin (%) FY17/3 target 200.0 175.3 189.4 188.7 177.7 183.6 178.6 177.4 175.1 174.5 177.0 200.0 20.0 17.8 15.7 15.0 150.0 150.0 15.0 12.6 10.9 10.7 9.6 100.0 100
Slide 7: Trends in R&D and SG&A Results (Non-GAAP Basis)
Non-GAAP Trends in R&D and SG&A Results (Non-GAAP Basis) The R&D increased QoQ from development of focus domains and SG&A *1 was flat QoQ R&D (B yen) SG&A (B yen) 40.0 40.0 33.9 31.7 31.3 32.7 29.2 28.9 29.2 29.2 27.8 27.7 30.0 27.1 26.5 24.3 24.4 27.0 30.0 23.2 22.1 19.9 20.9 19.7 20.0 20.0 10.0 10
Slide 8: FY16/3 Q3 Consolidated Forecasts
FY16/3 Q3 Consolidated Forecasts © 2015 Renesas Electronics Corporation. All rights reserved. Page 8
Slide 9: FY16/3 Q3 Summary of Forecasts
FY16/3 Q3 Summary of Forecasts Major factors affecting increase or decrease in Q3 semiconductor sales Semiconductor Sales Expect to decrease by 10% QoQ Automotive Business Automotive market is expected to remain uncertain due to sluggish sales in Japan and ASEAN regions Sales of Automotive Contr
Slide 10: FY16/3 Q3 Financial Forecasts
FY16/3 Q3 Financial Forecasts FY15/3 FY16/3 (B Yen) 9 months Q3 Q2 Q3 YoY QoQ cumulative Net Sales 191.9 181.4 163.0 -15.1% -10.1% 523.7 Semiconductor Sales 177.4 177.0 159.0 -10.4% -10.2% 510.5 Gross Margin 40.9% 47.1% 38.4% -2.6Pts. -8.8Pts. 43.5% Operating Income 29.5 30.7 14.0 -15.5 -16.7 77.1 (
Slide 11: Becoming Resistant to Market Volatility
Becoming Resistant to Market Volatility Shift to low volatility market while strengthening financial base to become more resistant to market volatility by lowering the break-even point through fixed-cost reduction Promotion of ‘Reform Plan’ • lowering the level of fixed costs (the break-even point o
Slide 12: APPENDIX
APPENDIX © 2015 Renesas Electronics Corporation. All rights reserved. Page 12
Slide 13: GAAP/Non-GAAP Reconciliation
GAAP/Non-GAAP Reconciliation FY14/03 FY15/03 FY16/03 (B Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Semiconductor Sales (GAAP) ① 189.6 207.7 207.6 191.8 201.2 199.6 177.4 175.1 174.5 177.0 Renesas SP Drivers*1 ② -14.3 -18.3 -19.0 -14.1 -17.6 -21.0 - - - - Semiconductor Sales (Non-GAAP) ①+② 175.3 189.4 188.7
Slide 14: Balance Sheets
Balance Sheets Equity ratio improved up to the 40% range （B Yen) As of Mar. 31, 2015 As of Jun. 30, 2015 As of Sep. 30, 2015 Total Assets 840.1 851.8 866.4 Cash and Cash Equivalents 343.7 368.7 388.1 Inventories 111.4 113.1 116.6 Liabilities 528.2 507.0 506.0 Interest-Bearing Debt 259.7 259.4 254.8
Slide 15: Cash Flows
Cash Flows FY15/3 FY16/3 （B Yen） Q1 Q2 Q3 Q4 Q1 Q2 Cash Flows from 2.0 24.2 Operating Activities 49.5 41.0 31.5 45.1 Cash Flows from -10.9 -8.0 Investing Activities -14.9 7.2 -5.4 -12.0 Free Cash Flows -8.9 34.7 48.2 16.2 26.2 33.1 © 2015 Renesas Electronics Corporation. All rights reserved. Page 15
Slide 16: Trends in Core and Non-Core Business Sales Ratio and Gross Margin
Non-GAAP Trends in Core and Non-Core Business Sales Ratio and Gross Margin (Non-GAAP Basis) Continuously improving gross margin through structural reforms and reforming business structure to become resistant to market volatility 120% 55.0% Core business Non-core business (Excl. Renesas SP Drivers) N
Slide 17: FY16/3 Q2 Operating Income
FY16/3 Q2 Operating Income QoQ (B yen) Q1 operating profit decreased by 1.7 B yen QoQ, mainly due to seasonal cost increases at the end of first half and concentrated R&D investment Increased R&D, -2.0 +3.5 SG&A Increased +1.9 Increase in profit manufacturing- -7.2 from inventory fixed cost, etc.
Slide 18: FY16/3 Q2 Net Income Attributable to Shareholders of Parent Company
FY16/3 Q2 Net Income Attributable to Shareholders of Parent Company (B Yen) Recorded net income attributable to shareholders of parent company of 27.5 B yen due to lower- than-expected special loss in addition to the exchange gains in Q2 Special income (loss) ＋3.0 -3.9 Non-operating income (loss)
Slide 19: FY16/3 Q3 Operating Income Forecast
FY16/3 Q3 Operating Income Forecast QoQ (B Yen) Despite seasonal cost increases at the end of the first half, operating income is expected to decrease by 16.7 B yen QoQ, due to decrease in profit from inventory variations, decrease in profit from sales decline and negative currency impact Decrease
Slide 20: FY16/3 Q3 Net Income Attributable to Shareholders Forecast
FY16/3 Q3 Net Income Attributable to Shareholders of Parent Company Forecast (B yen) Expect to achieve net income attributable to shareholders of parent company of 5.5 B yen in Q3, mainly due to special loss from manufacturing-related structural reforms Non-operating Special income (loss) income -
Slide 21: Forward-Looking Statements
(FOREWARD-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. We caution you in advance that actual r