Renesas Electronics Corporation · TSE:6723
Renesas Electronics — Investor Day (May 2024)
12 slides from Renesas Electronics's investor day presentation, May 16, 2024
Slide 1: Finance
FINANCE MAY 16, 2024 SHUHEI SHINKAI SVP AND CFO RENESAS ELECTRONICS CORPORATION © 2024 Renesas Electronics Corporation. All rights reserved.
Slide 2: Progress to Date
Non-GAAP PROGRESS TO DATE Peak and trough*1 EPS*2 (yen) (oku yen) 4,000 (10.1%) 300 20% 3,000 Revenue 200 2,000 0 4Q 2022 1Q 2024 60% 100 (2.6%pts) Gross margin 55% 0 2Q 2022 4Q 2022 2021 2022 2023 *1: Company data, Quarterly basis. Period: from 1Q 2022 to 1Q 2024, Trough is the lowest figure after
Slide 3: 6x Break Down – 2023 Actions
6x BREAK DOWN – 2023 ACTIONS 3x Valuation Execution of mid-term plan Naka 40nm MCU Takasaki SiC b-2 Capex a Wolfspeed CRD*1 / WSA*2 M&A Panthronics Transphorm b-1 Valuation gap-fill Downcycle management Inventory management 2023 b-1 Shareholder return Dividend Buyback Others INCJ exit Nikkei 225 202
Slide 4: Mid-Term Model
Non-GAAP MID-TERM MODEL 2019 2020 2021 2022 2023 Mid-term model*1 Adjusted*1 Revenue Grow 6,204 6,357 8,894 12,282 11,648 (oku yen) @SAM+ Gross margin 43% 48% 54% 56% 57% 55% Operating margin 12% 19% 29% 35% 32% 30% *1: FX $1 = 100yen, €1 = 120yen. Excluding 6” fab shutdown & structural reform-relat
Slide 5: Revenue Growth
REVENUE GROWTH Revenue Long-term Renesas Growth (oku yen) 25,000 CAGR vs SAM drivers Automotive Renesas Control 20,000 Automotive Infotainment ADAS Automotive control Scalability 15,000 xEV Infotainment IIoT ADAS Software / Tool 10,000 Industrial xEV Portfolio Industrial, Infra and IoT 5,000 Infra I
Slide 6: Margins Model
Non-GAAP MARGINS MODEL Gross margin Power IIoT Utilization growth Outsource growth Productivity & others 56% Emphasis on growth 1H 2024 adj.*1 Long term Operating margin Efficiency gains Volume SG&A R&D GM change 30% Operating leverage 1H 2024 adj.*1 Long term *1: FX $1 = 100yen, €1 = 120yen. Exclud
Slide 7: Capital Allocation Policy
CAPITAL ALLOCATION POLICY Operating cash flow Capex 5% of revenue on ave. Deleverage Net <1x in 3 years Dividend Strategic Phased investment increase to (incl. buyback) 30+% of FCF © 2024 Renesas Electronics Corporation. All rights reserved. 7
Slide 8: Altium – Value Creation Framework
ALTIUM – VALUE CREATION FRAMEWORK Value Platform Longer time frame Revenue synergy Cost synergy Track records Deleverage ~3 ~6 Further upside Day 1 years years Time © 2024 Renesas Electronics Corporation. All rights reserved. 8
Slide 9: Model House Keeping
MODEL HOUSE KEEPING Revenue growth SAM+ Gross margin 55% R&D % ≈16% SG&A % ≈8% Operating margin 30% EBITDA margin 40% Tax rate 15~20% Capital expenditures 5% as mid-term average Inventory 120 days FCF margin 20~30% Net leverage <1.0x in mid-term © 2024 Renesas Electronics Corporation. All rights res
Slide 10: 6x Break Down – Near Term Priorities
6x BREAK DOWN – NEAR TERM PRIORITIES 3x Valuation Execution of mid-term plan a b-2 ▪ Maximizing scale benefit Valuation gap-fill b-1 ▪ Secular growth b-1 ▪ Capital allocation 2023 ▪ Addressing overhang concern 2022 Market cap Multiple expansion 2x b-2 ▪ Digitalization Scale a © 2024 Renesas Electron
Slide 11: Thank You
THANK YOU © 2024 Renesas Electronics Corporation. All rights reserved. 11
Slide 12: Forward-Looking Statements
(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 looking statements do not r