Japan Display Inc. · TSE:6740
Japan Display — H1 FY24/3 Earnings Presentation
43 slides from Japan Display's earnings presentation, Nov 10, 2023
Slide 1: FY24/3 H1 Corporate Presentation
FY24/3 H1 Corporate Presentation November 10, 2023
Slide 2: PersonalTech For A Better World
PersonalTech For A Better World Copyright 2023 Japan Display Inc. All Rights Reserved. Slide 2
Slide 3: FY24/3 H1 Earnings
|_| Japan Display Inc. _ JDI FY24/3 H1 Earnings
Slide 4: FY24/3 H1 Earnings Overview
FY24/3 H1 Earnings Overview Outperformed Forecast on Positive FX, Higher Fab Productivity, Cost Reductions, and Breakthrough to OLED Profitability Core businesses (Automotive, JPY vs. Plan Smartwatch/VR) up, while non-core Sales 119.9B ＋8％ business (LCD smartphone) down on strategic downsizing to fo
Slide 5: FY24/3 H1 Sales by Product Area
FY24/3 H1 Sales by Product Area Steady Growth of Smartwatch/VR, Automotive Temporarily Down on Withdrawals from Unprofitable Products, and Strategic Downsizing of Non-Core LCD Smartphone Business Core Business （JPY billion） Automotive (YoY -5.2％) 100.3 103.2 Sales temporarily down due to withdrawals
Slide 6: FY24/3 H1 Operating Profit Breakdown
FY24/3 H1 Operating Profit Breakdown YoY Previous Forecast （JPY billion） （JPY billion） FY23/3 H1 FY24/3 H1 FY24/3 H1 FY24/3 H1 (ACT) (ACT) (FCST) (ACT) Sales: 138.3 Sales: 119.9 Sales: 111.4 Sales: 119.9 -11.8 -21.4 -21.4 -29.1 USD/JPY Inventory 134→141 impact, etc. Inventory impact, etc. USD/JPY 13
Slide 7: FY24/3 Forecast (Upward Revision)
FY24/3 Forecast (Upward Revision)
Slide 8: FY24/3 Forecast (Upward Revision)
FY24/3 Forecast (Upward Revision) Revised Up on Positive FX, Higher Fab Productivity, Cost Reductions, and Breakthrough to OLED Profitability Reduced VR Outlook – Will Update Post-Xmas Sales Season (JPY billion) FY24/3 H1 H2 Full-Year Full-Year Actual New FCST New FCST vs. Prev FCST Sales 119.9 127.
Slide 9: FY24/3 H2 Operating Profit Breakdown
FY24/3 H2 Operating Profit Breakdown Losses to Nearly Halve On Back of Product Mix Improvements & Fixed Cost Reductions （JPY billion） FY24/3 H1 (ACT) FY24/3 H2 (FCST) Sales: 119.9 Sales: 127.1 Operating Operating Profit Profit Note: JPY-0.2billion of FX impact is due to a change in FY24/3 H2 FX assu
Slide 10: FY24/3 H2 Operating Profit Breakdown
FY24/3 H2 Operating Profit Breakdown Losses To Shrink by c. 60% on Positive FX, Higher Fab Productivity, Fixed Cost Reductions, and Breakthrough to OLED Profitability （JPY billion） FY23/3 H2 (ACT) FY24/3 H2 (FCST) Sales: 132.4 Sales: 127.1 USD/JPY 137→140 Inventory impact, etc. Operating Operating P
Slide 11: FY24/3 H1 Business & METAGROWTH 2026 Strategy Update
FY24/3 H1 Business & METAGROWTH 2026 Strategy Update
Slide 12: Overview (1)
Overview (1) ◼ Executing METAGROWTH 2026 Growth Strategy to Deliver Total Transformation of JDI Business Model & Earnings Foundation, while Developing New Global Display Ecosystem Based on JDI Global No.1 Technology Set ◼ Production End at Older G4 Tottori Fab to Reduce Fixed Costs & Drive Higher Ea
Slide 13: Overview (2)
Overview (2) ◼ Late Entrant to OLED, But Have Leveraged JDI’s Deep Display Expertise to Overtake Peers & Build Competitive Advantage. OLED Business Has Broken Through to Profitability. Immense Customer Demand: Forecast FY24/3 OLED Sales +74% YOY ◼ eLEAP, JDI’s NextGen OLED, Delivers Unprecedented Co
Slide 14: Overview (3)
Overview (3) ◼ Signed MOU for Large-Scale eLEAP Project in Wuhu, China – Will Expand eLEAP Production Capacity by >50X ◼ Switched HKC Alliance Discussions from eLEAP to Automobiles ◼ Accelerating METAGROWTH 2026 with Acquisition of JOLED Engineering Talent Copyright 2023 Japan Display Inc. All Right
Slide 15: Overview (4)
Overview (4) ◼ Continued Focus on Sustainability & Newly Announced Support for TCFD ◼ Moving Forward with CHINA + INDIA Fab Strategy, Building Local Production & Presence in Massive, Growing Markets Copyright 2023 Japan Display Inc. All Rights Reserved. Slide 15
Slide 16: METAGROWTH in Value Creation
METAGROWTH 2026 Global No. 1 Technology Leadership to Best Serve Customers and Deliver PersonalTech For A Better World METAGROWTH in Value Creation Copyright 2023 Japan Display Inc. All Rights Reserved. Slide 16
Slide 17: METAGROWTH 2026 Core Strategy
METAGROWTH 2026 Core Strategy Displays are a foundational technology for modern society JDI has unmatched technological capabilities to deliver customer and social value and improve people’s lives 1 2 3 Market-Leading Global No. 1 Technology, GreenTech & Technology Transformational Sustainability Le
Slide 18: FY24/3 Strategic Initiatives
FY24/3 Strategic Initiatives Build a New Global Display Ecosystem based on JDI’s Global No.1 1 Technology Set ▪ Create unprecedented customer value through eLEAP and other NextGen tech ▪ Cement JDI’s unique competitive advantages ▪ Transform business model & drastically improve profitability Dramati
Slide 19: FY24/3 Strategic Initiatives
FY24/3 Strategic Initiatives Technology Revolution: Developing & Commercializing JDI’s 3 Global No.1 Technology Set ▪ NextGen OLED eLEAP ▪ High performance, ultra-low power consumption, low-cost backplane technology HMO ▪ Smart Lighting LumiFree ▪ Other new technologies, products, & businesses under
Slide 20: FY24/3 Strategic Initiatives
FY24/3 Strategic Initiatives MOU with Wuhu Economic and Technical Development 5 Zone on Large-Scale eLEAP Project (Sep 2023) ▪ Final agreement to be concluded by December-end 2023 ▪ Will increase JDI’s eLEAP production capacity by >50X Copyright 2023 Japan Display Inc. All Rights Reserved. Slide 20
Slide 21: Dramatically Strengthening Competitiveness via Fab Optimization
Dramatically Strengthening Competitiveness via Fab Optimization Increasing Core Profitability through Fixed Cost Reductions & Asset-Light Execution Japan ▪ Mobara Fab (G6, Chiba） → LCD Smartphone Line Downsizing FY24/3 Q1 ▪ Ishikawa Fab (G4.5, Ishikawa) Hakusan Fab ▪ Tottori Fab (G4, Tottori) → Prod
Slide 22: eLEAP (NextGen OLED)
eLEAP (NextGen OLED) ▪ environment positive eLEAP ▪ Lithography with maskless deposition ▪ Extreme long life, low power, & high luminance ▪ Any shape Patterning Copyright 2023 Japan Display Inc. All Rights Reserved. Slide 22
Slide 23: eLEAP's Unprecedented Customer Value
eLEAP’s Unprecedented Customer Value High Long Brightness (2X) Lifetime (3X) Lifetime New After 1yr After 3yrs After 5yrs Comparison 0h 1000h 3000h 5000h Conventional OLED eLEAP 28% 60% Conventional eLEAP OLED Brightness, vividness & free shapes unimaginable with existing technology eLEAP ※ Image as
Slide 24: eLEAP's Unprecedented Environmental Value
eLEAP’s Unprecedented Environmental Value Maskless OLED deposition is a breakthrough, environment positive production process that eliminates mask cleaning chemicals 150k tons p.a. of CO2 emission reduction via deployment at JDI Mobara 150k tons of yearly CO2 emissions = CO2 Cedar forest Absorption
Slide 25: eLEAP Powerfully Moves OLED Forward
eLEAP Powerfully Moves OLED Forward OLED Is A Truly Extraordinary Display Technology Beautiful, No Backlight, Ultra High Ultra-Wide Fast, Nearly Thin, Contrast & Viewing Instant Lightweight, Wider Color Angles Refresh Rates Low Power Gamut However, OLED Has Inherent Issues Creating a New Global Disp
Slide 26: eLEAP Development Advancing at Tremendous Speed
eLEAP Development Advancing at Tremendous Speed eLEAP 14” Prototype Display Area eLEAP 1.4” Prototype 58X First Customer Samples: July 2023 Specs & performance surpass customer expectations. First Customer At DIC2023 in Shanghai, eLEAP wins highest award: the Special Samples: Sep 2022 Technology Pri
Slide 27: Display Tech's Three Revolutions
Display Tech’s Three Revolutions eLEAP Completes the 3 rd Display Tech Revolution 3 rd Revolution 2nd 1st Revolution eLEAP Revolution Liquid Crystal OLED Cathode Ray (LCD) The 2.5 Tube (CRT) Evolution World's First Maskless Deposition + Lithographic OLED Gorgeous, fast, & Compact, energy-efficient &
Slide 28: JDI is Working to Become the Undisputed Global Leader in OLED
JDI is Working to Become the Undisputed Global Leader in OLED ◼ eLEAP is a Gamechanger for Global Display Tech. eLEAP Combines Unmatched Performance, Low Cost, & the Ability to Scale Across All Display Sizes & Applications ◼ eLEAP’s Total Addressable Market (TAM) is thus the total Global Display Mar
Slide 29: JDI Large-Scale eLEAP Project in Wuhu, China
JDI Large-Scale eLEAP Project in Wuhu, China Wuhu JDI ▪ JDI has signed a memorandum of understanding (MOU) with the Wuhu Economic and Technical Development Zone on September 29, 2023 ▪ The final contract is scheduled to be concluded by December-end 2023. ▪ The project will increase JDI’s eLEAP produ
Slide 30: Accelerating METAGROWTH 2026 with JOLED Engineering Talent
Accelerating METAGROWTH 2026 with JOLED Engineering Talent ▪ Acquisition of World-Class JOLED OLED Engineering Talent to Support and Broaden eLEAP Rollout ▪ JOLED Talent and OLED IP and Know-How Will Significantly Accelerate METAGROWTH 2026 Growth Strategy JOLED Engineers Acquired JOLED Engineering
Slide 31: JDI Sustainability – Working for a Better World
JDI Sustainability – Working for a Better World JDI is deeply committed to being an environmentally JDI conscious, sustainable company and always considers its GreenTech fabs’ impacts & works to reduce resource usage & emissions. eLEAP JDI’s ecological To progress the JDI supports TCFD and JDI‘s com
Slide 32: JDI Sustainability – Support for TCFD
JDI Sustainability – Support for TCFD JDI recognizes the importance of identifying climate change risks and opportunities, generating robust responses, and disclosing those responses in order to support its sustainable growth. JDI has therefore decided to support TCFD. By incorporating climate chang
Slide 33: JDI Sustainability – Inclusion in FTSE Blossom Japan Index Series
JDI Sustainability – Inclusion in FTSE Blossom Japan Index Series JDI is working to become a more environmentally friendly and sustainable company. JDI always considers its fabs’ impact on the environment and is reducing resource usage and emissions JDI‘s ongoing commitment to ESG concerns has been
Slide 34: CHINA + INDIA JDI Fab Strategy
CHINA + INDIA JDI Fab Strategy Local Production & Presence in Massive, Growing Markets CHINA INDIA ▪ Inbound inquiries from multiple Indian ▪ Target signing of final contract for conglomerates for technical support & Wuhu large-scale eLEAP project by joint business development in India December-end
Slide 35: Appendix
|_| Japan Display Inc. _ JDI Appendix
Slide 36: Quarterly Sales Breakdown by Product Category
Quarterly Sales Breakdown by Product Category （JPY billion） Core Business 56.8 59.0 58.2 45.8 47.4 47.3 44.9 39.8 41.4 35.9 Automotive 35.7 39.7 34.0 26.4 33.1 34.9 29.1 Smartwatch/VR 20.9 23.9 26.9 19 21 19 24 15 16 15 14 12 16 Non-Core Business 30.1 32.1 29.6 25.9 LCD Smartphone (US/Euro) 22.2 22.
Slide 37: FY24/3 Q2 Sales by Product Area
FY24/3 Q2 Sales by Product Area Automotive Down Temporarily on Withdrawals from Unprofitable Products, Smartwatch/VR Up Steadily, & LCD Smartphone Continued Strategic Downsizing Core Business （JPY billion） Automotive (YoY -14.4％) 59.0 58.2 Down due to withdrawals from unprofitable products, and reve
Slide 38: FY24/3 Q2 Operating Profit Breakdown
FY24/3 Q2 Operating Profit Breakdown YoY （JPY billion） FY23/3 Q2 FY24/3 Q2 Sales: 81.2 Sales: 67.0 Mitigated the negative impact of reduced shipments in non- core businesses due to Inventory strategic downsizing, and USD/JPY Accounting Effect higher materials, processing, 138→145 and energy costs th
Slide 39: FY24/3 Q2 Operating Profit Breakdown
FY24/3 Q2 Operating Profit Breakdown QoQ （JPY billion） FY24/3 Q1 FY24/3 Q2 Sales: 53.0 Sales: 67.0 Volume & mix improvements on increased OLED smartwatch and high-resolution VR LCD (core Inventory Accounting businesses) contributed to OP Effect improvements USD/JPY 138→145 Operating FX Volume Mix Ma
Slide 40: Consolidated B/S
Consolidated B/S (JPY billion) FY23/3 FY24/3 Q2 vs. FY23/3 Cash and deposits 26.2 29.7 ＋3.4 Accounts receivable - trade 40.9 32.7 -8.2 Accounts receivable - other 18.3 22.2 ＋3.9 Inventories 60.3 63.3 ＋2.9 Other 5.1 6.9 ＋1.8 Total current assets 150.9 154.7 ＋3.9 Total non-current assets 71.8 77.5 ＋5.
Slide 41: Consolidated P&L
Consolidated P&L FY23/3 FY24/3 (JPY billion) FY23/3 Q2 FY24/3 Q2 YoY YoY (H1) (H1) Sales 81.2 66.9 -14.3 138.3 119.9 -18.4 EBITDA -2.8 -5.9 -3.2 -7.5 -18.1 -10.6 Operating Profit -4.9 -7.6 -2.7 -11.8 -21.4 -9.7 Non-Operating Income 1.8 1.7 -0.2 5.0 4.4 -0.6 Non-Operating Expenses -1.0 -1.2 -0.1 -1.6
Slide 42: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement FY23/3 FY24/3 (JPY billion) FY23/3 Q1 FY24/3 Q2 YoY (H1) (H1) Income before income taxes -12.1 -16.1 -8.6 -28.2 -19.6 Depreciation & amortization 1.7 1.6 4.3 3.4 -0.9 Working capital 3.2 6.3 -8.5 9.5 ＋18.0 Other -2.5 9.6 -1.5 7.1 ＋8.5 Cash Flow from Operating Activit
Slide 43: Thank You!
Thank You! 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, expectation or oth