Japan Display Inc. · TSE:6740

Japan Display — FY2024 Earnings Presentation

62 slides from Japan Display's earnings presentation, May 13, 2024

1. Slide 1: FY24/3 Full-Year Corporate Presentation

   FY24/3 Full-Year Corporate Presentation May 13, 2024

2. Slide 2: PersonalTech For A Better World

   PersonalTech For A Better World Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 2

3. Slide 3: FY24/3 Overview

   » 4 [| Japan Display Inc. : — JDI FY24/3 Overview

4. Slide 4: FY24/3 Overview ①

   FY24/3 Overview ①  Rapid Progress in Gamechanging eLEAP Technology Development, Launch of Mass Production in Dec 2024  Lower Sales & Higher Profitability – Continuing to Lower Break- Even Point via Relentless Fixed Cost Reductions & Higher Productivity – Production-end at less competitive G3.5 Hig

5. Slide 5: FY24/3 Overview ②

   FY24/3 Overview ②  JDI Ishikawa Fab Severely Impacted by M7.6 Earthquake that Hit Ishikawa Prefecture on New Year's Day – Decisive Response & Minimal Earnings Impact – Experienced multiple burst pipes, water leaks, boiler stoppages, equipment damage, and machine misalignment – Immediately launched

6. Slide 6: FY24/3 Overview ③

   FY24/3 Overview ③  Strong Growth in Profitable & Strategically Important OLED Business – Continuing market shift from LCD to OLED – JDI’s world-leading OLED technology driving strong customer demand & JDI market share growth – 100% fab utilization – customer demand exceeds capacity, will fill incre

7. Slide 7: FY24/3 Overview ④

   FY24/3 Overview ④  In Contrast, LCD Business Remains Unprofitable & Requires Continued Radical Transformation – JDI Is Committed to Getting It Done – Relentless cost reductions – Generating multiple new Global No. 1 technologies, products, & businesses in line with METAGROWTH 2026 growth strategy –

8. Slide 8: FY24/3 Overview | Automotive (Core)

   FY24/3 Overview｜Automotive (Core) Long-Term Growth Driver with Automotive Robust Stability due to Long-Term (JPY billion) -1% Supply Contracts 134.6 133.2 106.9 Ongoing Major Customer Engagements for eLEAP & Other NextGen JDI Tech Sales Slightly Down YoY from Exit FY22/3 FY23/3 FY24/3 of Unprofitabl

9. Slide 9: FY24/3 Overview | Smartwatch/VR (Core)

   FY24/3 Overview｜Smartwatch/VR (Core) Smartwatch/VR (JPY billion) Diverse Product Portfolio Offers Both 71.4 +22% 73.5 Ongoing Growth & Stability 60.5 OLED +74% YoY, with VR Also Up Driving >20% YoY Growth FY22/3 FY23/3 FY24/3 Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 9

10. Slide 10: FY24/3 Overview | LCD Smartphone (Non-Core)

    FY24/3 Overview｜LCD Smartphone (Non-Core) LCD Smartphone US/Euro Exiting Commoditized Smartphone 76.2 (JPY billion) 59.0 -56% Business to Focus Engineering Resources on JDI Proprietary 26.1 NextGen Tech FY22/3 FY23/3 FY24/3 Will Re-enter Smartphones with LCD Smartphone China Competitively Advantaged

11. Slide 11: FY24/3 Earnings

    » 4 [| Japan Display Inc. : — JDI FY24/3 Earnings

12. Slide 12: FY24/3 Earnings Summary

    FY24/3 Earnings Summary Lower Sales & Higher Profitability – Continuing to Lower Break-Even Point via Relentless Fixed Cost Reductions & Higher Productivity （Units: JPY billion） Result YoY Sales 239.2 -12％ Grew core businesses (Automotive, Core Businesses 206.7 +6% Smartwatch/VR), while continuing t

13. Slide 13: FY24/3 Q4 (3M) Earnings Summary

    FY24/3 Q4 (3M) Earnings Summary EBITDA & OP Significantly Improved on Back of Big OLED Growth, Fixed Cost Reductions, & Tighter Inventory Management （Units: JPY billion） Result YoY Sales 58.8 -6％ Core businesses (Automotive, Smartwatch/VR) grew steadily, while non-core businesses (LCD Core Businesse

14. Slide 14: FY24/3 Sales by Segments

    FY24/3 Sales by Segments Automotive Slightly Down on Withdrawal from Unprofitable Products OLED +74% YoY Driving Smartwatch/VR Growth LCD Smartphone Down on Strategic Downsizing 206.7 195.1 （JPY billion） Automotive (YoY -1.0%) Sales slightly down due to withdrawal from Core Businesses 133.2 unprofit

15. Slide 15: FY24/3 Q4 (3M) Sales by Segments

    FY24/3 Q4 (3M) Sales by Segments Automotive Slightly Down on Withdrawal from Unprofitable Products OLED +171% YoY Driving Smartwatch/VR Growth LCD Smartphone Down on Strategic Downsizing 51.9 47.3 （JPY billion） Automotive (YoY -0.1%) Core Businesses Sales flat despite withdrawal from unprofitable 34

16. Slide 16: FY24/3 Operating Profit Change Breakdown

    FY24/3 Operating Profit Change Breakdown Operating Loss Shrank on Leaner Business Structure & Relentless Fixed Cost Reductions (JPY billion) FY23/3 FY24/3 (Actual) (Actual) Sales: 270.7 Sales: 239.2 -34.1 -44.4 Higashiura Fab Fall-off of production end ＆ inventory Mobara Fab cost valuation losses US

17. Slide 17: FY24/3 Q4 (3M) Operating Profit Change Breakdown

    FY24/3 Q4 (3M) Operating Profit Change Breakdown Operating Loss Shrank on Leaner Business Structure & Relentless Fixed Cost Reductions and OLED Growth （JPY billion) FY23/3 Q4 (3M) FY24/3 Q4 (3M) (Actual) (Actual) Sales: 62.7 Sales: 58.8 -6.5 Higashiura Fab production end ＆ Mobara Fab cost -22.0 redu

18. Slide 18: FY25/3 Forecast

    » 4 [| Japan Display Inc. : — JDI FY25/3 Forecast

19. Slide 19: FY25/3 Forecast

    FY25/3 Forecast Continue to Transform Business Portfolio & Drive Higher Earnings from Core Businesses While Shrinking Commoditized LCD Smartphone & Unprofitable Automotive Products EBITDA Positive in H2 (JPY billion) FY24/3 FY25/3 FCST FY24/3 FY25/3 FCST YoY H1 H2 H1 H2 Full-Year Full-Year Sales 119

20. Slide 20: FY24/3 → FY25/3 Operating Profit Breakdown

    FY24/3 → FY25/3 Operating Profit Breakdown OP to Improve on Strong OLED Growth, eLEAP/HMO Licensing, & Higher Operating Productivity (JPY billion） FY24/3 FY25/3 (Actual) (Forecast) Sales: 239.2 Sales: 221.8 Fall-off of inventory valuation losses Tighter inventory control OLED growth eLEAP/HMO licens

21. Slide 21: FY25/3 H1 → FY25/3 H2 Operating Profit Breakdown

    FY25/3 H1 → FY25/3 H2 Operating Profit Breakdown OP Improvement Driven by Higher LTPS Fab Utilization & eLEAP/HMO Licensing EBITDA Positive in H2 （JPY billion） FY25/3 H1 FY25/3 H2 (Forecast) (Forecast) eLEAP/HMO licensing USD/JPY 145 Operating Operating Profit Profit Copyright 2024 Japan Display Inc

22. Slide 22: Business & METAGROWTH 2026 Update

    Business & METAGROWTH 2026 Update

23. Slide 23: METAGROWTH in Value Creation

    METAGROWTH 2026 Growth Strategy Global No. 1 Technology Leadership to Best Serve Customers and Deliver PersonalTech For A Better World METAGROWTH in Value Creation Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 23

24. Slide 24: META

    “Comprehensive, Overarching” META Underscores JDI’s Commitment to Transformational Growth Metaverse Also a JDI Growth Driver

25. Slide 25: Core Strategy

    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 Leadership Growth

26. Slide 26: Core Strategy | Global No.1 Technology Leadership

    Core Strategy | Global No.1 Technology Leadership  JDI has regained technology leadership in the global display industry with its Global No. 1 proprietary technologies, including eLEAP (NextGen OLED), HMO (High Mobility Oxide), Metaverse (Ultra High Resolution), 1 & Rælclear (Transparent Displays)

27. Slide 27: Core Strategy | Market-Leading Tech, Transformational Growth

    Core Strategy | Market-Leading Tech, Transformational Growth  The global display business is a technology industry. JDI is a technology company. So are its customers. Customers’ needs are superior technology & high cost performance  Support JDI’s customers' value creation & competitive advantage b

28. Slide 28: Core Strategy | GreenTech & Sustainability

    Core Strategy | GreenTech & Sustainability  Address deeply important global environmental issues via JDI environment positive GreenTech such as eLEAP & HMO, which deliver significant value to JDI’s socially conscious customers  Companies exist to serve society. JDI will 3 always run its business t

29. Slide 29: Ishikawa Earthquake & Fab Recovery (January 2024)

    Ishikawa Earthquake & Fab Recovery (January 2024) JDI Ishikawa Fab January 1st: M7.6 Earthquake hit Ishikawa  JDI Ishikawa Fab experienced multiple burst pipes, water leaks, boiler stoppages, equipment damage, and machine misalignment January 2nd: Immediate Response  Immediately launched 70-person

30. Slide 30: Dramatically Strengthen Competitiveness via Fab Optimization

    Dramatically Strengthen Competitiveness via Fab Optimization Increase Core Profitability and Capital Efficiency through Fixed Cost Reductions & Asset-Light Execution Japan  Mobara Fab (G6, Chiba） → LCD Smartphone Line Downsizing FY23 Q1  Ishikawa Fab (G4.5, Ishikawa) Hakusan Fab  Tottori Fab (G4,

31. Slide 31: Strong Growth in Profitable & Strategically Important OLED Business

    Strong Growth in Profitable & Strategically Important OLED Business  Continuing market shift from LCD to OLED  JDI’s world-leading OLED technology OLED driving strong customer demand & JDI market share growth +74%  100% fab utilization – customer demand exceeds capacity, will fill increased deman

32. Slide 32: 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

33. Slide 33: 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 while working to reduce resource consumption & emissions. eLEAP JDI’s ecological To actively participate JDI support

34. Slide 34: JDI's World-Class Intellectual Property (IP) Portfolio

    JDI’s World-Class Intellectual Property (IP) Portfolio JDI continues to grow and strengthen its world-class IP portfolio, with over 5,000 global OLED patents granted and over 500 eLEAP patents filed, and new agreements with Tianma Microelectronics, Innolux, and TCL CSOT to license JDI patents over t

35. Slide 35: METAGROWTH 2026 – New Technology, Products, & Businesses ①

    METAGROWTH 2026 – New Technology, Products, & Businesses ① JDI’s LumiFree, the world’s first fully customizable LED lighting control technology, has been in mass production since July 2023 Currently shipping to two major lighting solution providers, Tokistar and Daiko LumiFree won the 2024 Award for

36. Slide 36: METAGROWTH 2026 – New Technology, Products, & Businesses ②

    METAGROWTH 2026 – New Technology, Products, & Businesses ② Self-Care Tailored for You Virgo presentation available at: https://ssl4.eir-parts.net/doc/6740/tdnet/2392184/00.pdf Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 36

37. Slide 37: LCD Business Requires Continued Radical Transformation

    LCD Business Requires Continued Radical Transformation Requirements Opportunities 1. Relentless cost reductions 1. Tight supply for high- performance LTPS LCD, at 2. In line with METAGROWTH which JDI excels 2026 growth strategy, generate multiple new 2. Geopolitical risk moving Global No. 1 technolo

38. Slide 38: eLEAP Launch

    » 4 [| Japan Display Inc. : — JDI eLEAP Launch

39. Slide 39: eLEAP (NextGen OLED)

    eLEAP (NextGen OLED)  environment positive eLEAP  Lithography with maskless deposition  Extreme long life, low power, & high luminance  Any shape Patterning Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 39

40. Slide 40: OLED Is The Winning Display Technology ①

    OLED Is The Winning Display Technology ① Due to its superior performance & continuing cost reductions, OLED is positioned to become the overwhelming display market leader Display Market Share OLED Is The Winning Display Technology LCD And eLEAP Is The Winning OLED Technology OLED Copyright 2024 Japa

41. Slide 41: OLED Is The Winning Display Technology ②

    OLED Is The Winning Display Technology ② Unlike LCDs that require backlighting, OLED displays have self- illuminating, organic pixels, offering unparalleled viewing experience Superb Video Beautiful, Fully Ultra-Wide Performance Natural Organic Viewing (Extraordinarily Color Palette Angles Fast Refr

42. Slide 42: OLED Is The Winning Display Technology ③

    OLED Is The Winning Display Technology ③ Across Smartphones, Automotive, and Notebook PCs (and also other market segments), the market leaders have all begun the shift from LCD to OLED in order to deliver best-in-class display performance for their customers The major global smartphone Leading Europ

43. Slide 43: OLED Dominates Alternative Technologies: MicroLED & MicroOLED

    OLED Dominates Alternative Technologies: MicroLED & MicroOLED Customer product roadmaps strongly suggest that OLED will continue to prevail over MicroLED & MicroOLED as the superior display technology that best matches consumers’ mass market needs for outstanding display performance at an affordable

44. Slide 44: OLED Massive Growth Upside

    OLED Massive Growth Upside As OLED continues to replace LCD and take market share, the growth upside is massive 100% 100% 100% Growth Upside USD 41B TAM USD 12B TAM USD 21B TAM 2024 Market Share 54% 1% 3% Smartphones Automotive Notebook PCs Copyright 2024 Japan Display Inc. All Rights Reserved. 2024

45. Slide 45: eLEAP Is The Winning OLED Technology

    eLEAP Is The Winning OLED Technology Despite Its Superb Performance, OLED Has ! Short Lifetime Inherent Issues These issues make OLED dysfunctional ! High Production Cost for a wide variety of display applications eLEAP Powerfully Moves OLED Forward eLEAP keeps all of OLED’s advantages while solving

46. Slide 46: eLEAP's Unprecedented Customer Value ①

    eLEAP’s Unprecedented Customer Value ① 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

47. Slide 47: eLEAP's Unprecedented Customer Value ②

    eLEAP’s Unprecedented Customer Value ② Using eLEAP’s lithography with maskless deposition process instead of conventional OLED’s FMM (fine metal masks) will reduce OLED production costs by c. 30% eLEAP Panel Cost Reduction  No FMM purchasing costs or cleaning costs (chemical & water usage)  No FMM

48. Slide 48: 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

49. Slide 49: eLEAP Development Advancing at Tremendous Speed ①

    eLEAP Development Advancing at Tremendous Speed ① eLEAP 14” Prototype Display Area eLEAP 1.4” Prototype 58X First Customer Samples: July 2023 Specs & performance surpass customer expectations. First Customer At DIC2023, eLEAP wins Special Technology Prize, the highest Samples: Sep 2022 award Copyrig

50. Slide 50: eLEAP Development Advancing at Tremendous Speed ②

    eLEAP Development Advancing at Tremendous Speed ② JDI has developed an ultra-high brightness 14-inch eLEAP display that achieves a peak brightness of 1600 nits using a single stack 1600 nits  The 14-inch eLEAP display uses a single-stack structure to deliver brightness of 1600 nits Single Stack  F

51. Slide 51: 2024 – The Year of eLEAP

    2024 – The Year of eLEAP eLEAP 2024 The World’s Most Advanced OLED Current Production Yield: >60% JDI Mass Production Launch: December 2024 Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 51

52. Slide 52: eLEAP Completes the 3rd Display Tech Revolution

    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 & Higher Performance Moving images

53. Slide 53: Strategic Direction: JDI = The Undisputed Global OLED Leader

    Strategic Direction: JDI = The Undisputed Global OLED Leader  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

54. Slide 54: JDI Large-Scale eLEAP Project in Wuhu, China

    JDI Large-Scale eLEAP Project in Wuhu, China Wuhu JDI  JDI signed a memorandum of understanding (MOU) with the Wuhu Economic and Technical Development Zone on September 29, 2023, and discussions are progressing towards the signing of final contract in October 2024  Will increase JDI’s eLEAP produc

55. Slide 55: CHINA + INDIA JDI Fab Strategy

    CHINA + INDIA JDI Fab Strategy Local Production & Presence in Massive, Growing Markets CHINA INDIA  Target signing of final contract for  Inbound inquiries from multiple Indian Wuhu large-scale eLEAP project by conglomerates for technical support & October 2024 joint business development in India

56. Slide 56: Appendix

    » 4 [| Japan Display Inc. : — JDI Appendix

57. Slide 57: Quarterly Sales Breakdown by Segments

    Quarterly Sales Breakdown by Segments （JPY billion） Core Business 59.0 58.2 51.7 51.9 47.4 47.3 44.9 41.4 34.0 Automotive 39.7 35.2 34.9 26.9 33.1 34.9 29.1 Smartwatch/VR 19.3 24.3 14.5 14.3 12.4 15.8 16.5 16.9 Non-Core Business 22.2 22.3 15.7 15.4 18.8 17.4 8.1 8.6 8.8 6.9 LCD Smartphone (US/Euro)

58. Slide 58: FY24/3 Q4 (3M) Operating Profit Breakdown

    FY24/3 Q4 (3M) Operating Profit Breakdown FY23 2Q 営業利益増減要因（前四半期比） QoQ (JPY billion) FY24/3 Q3 (3M) FY24/3 Q4 (3M) (Actual) (Actual) Sales: 60.5 Sales: 58.8 -6.5 -6.2 USD/JPY 148→149 R&D expenses for next-generation product development Operating Operating Loss Loss Copyright 2024 Japan Display Inc. A

59. Slide 59: Consolidated B/S

    Consolidated B/S (JPY billion) FY23/3 FY24/3 vs. FY23/3 Cash and deposits 26.2 29.3 ＋3.1 Accounts receivable - trade 40.9 29.3 -11.6 Accounts receivable - other 18.3 17.9 -0.4 Inventories 60.3 64.0 ＋3.6 Other 5.1 11.5 ＋6.4 Total current assets 150.9 152.0 ＋1.1 Total non-current assets 71.8 72.0 ＋0.2

60. Slide 60: Consolidated P&L

    Consolidated P&L FY23/3 FY24/3 (JPY billion) FY23/3 Q4 FY24/3 Q4 YoY YoY (12M) (12M) Sales 62.7 58.8 -3.9 270.7 239.2 -31.6 EBITDA -20.2 -5.2 ＋15.0 -36.2 -28.2 ＋8.0 Operating Profit -22.0 -6.5 ＋15.5 -44.4 -34.1 ＋10.2 Non-Operating Income 1.6 1.8 ＋0.2 5.6 6.9 ＋1.4 Non-Operating Expenses -1.6 -2.0 -0.

61. Slide 61: Consolidated Cash Flow Statement

    Consolidated Cash Flow Statement FY23/3 FY24/3 (JPY billion) FY23/3 Q4 FY24/3 Q4 YoY (12M) (12M) Income before income taxes -21.9 -6.4 -21.9 -43.8 -21.9 Depreciation & amortization 8.3 1.3 8.3 6.0 -2.2 Working capital -21.1 -2.6 -21.1 11.2 ＋32.2 Gain on sale of subsidiary shares -13.5 0.0 -13.5 0.0

62. Slide 62: 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

Japan Display — FY2024 Earnings Presentation on 6ix