Slide 1: FY2017 Financial Results ended March 31, 2017
DENSO Crafting the Core FY2017 Financial Results ended March 31, 2017 I. Closing results ~~ II. Strategies Apr 28, 2017 DENSO CORPORATION
Slide 2: Overview of FY2017 Financial Results
Overview of FY2017 Financial Results 1. Revenue increased due to production volume increase and sales expansion despite appreciation of the Yen. Despite production volume increase and cost reduction efforts, operating profit excludes other income/expenses decreased due to the appreciation of the Yen
Slide 3: Overview of the consolidated financial results
[Overview of the consolidated financial results] We posted revenue of 4,527.1 billion yen, up 2.6 billion yen from the previous year, equivalent to annual revenue growth of 0.1%. Operating profit (excludes other income/ expenses) reached 326.4 billion yen, 38.8 billion yen lower than a year,down 10.
Slide 4: Sales by customer
[Sales by customer](Quantity base) Sales to the Toyota Group Sales to the Toyota Group increased 7.0 % from the previous year. Production volume increased in Japan, North America and Asia. Production level also increased mainly in Japan and North America due to the large growth of installation ratio
Slide 5: Sales by product
[Sales by product] (Quantity base) Sales of Thermal Systems products Sales increased in China and Europe due to the production volume increase in addition to the sales expansion of air conditioners. Sales of Powertrain Systems products Sales increased due to production volume increase in Asia ,North
Slide 6: Factors contributing to changes in operating profit
[Factors that contributed to increases or decreases in operating profit(excludes other income/expenses)] Negative factors 1) Appreciation of yen: An increase of 83.0 billion yen was due to the impact of the strong yen, which is 12 yen higher against US dollar and 14 yen higher against Euro. 2) Highe
Slide 7: Changes in revenue and operating profit in the past four years
[The changes in the revenue and operating profit in the past four years] The actual rate of each fiscal year is converted to the actual rate for the year ended March 2017. The baseline is the year ended March 2014 when the highest operating profit rate ever was recorded. During the past four years,
Slide 8: Revenue and operating profit by operating region
[Revenue and operating profit by operating region] * Based on Japanese yen
Slide 9: Revenue and operating profit by operating region
[Revenue and operating profit by operating region] * Excluding the effect of foreign exchange rates and other income / expenses. Japan • Despite impact of the exchange rate ,the production volume increase led to a increase in revenue from the previous year. • Operating profit decreased from the prev
Slide 10: Capital Expenditures, Depreciation and R&D Expenditures
[Capital Expenditures, Depreciation and R&D Expenditures] • Capital expenditure reached 337.4 billion yen, because of the cost reduction effort. • In the next fiscal year, we expect effect of cost reduction but we also promote investment in streamlining which lead to 345.0 billion yen. • Depreciatio
Slide 11: Full-year financial forecast
[Full-year financial forecast] We expect revenue to be 4,610.0 billion yen, operating profit (excludes other income/ expenses) to be 327.0 billion yen. The original forecast was based on the currency rate of 110 yen to the dollar and 115 yen to the euro. Car production volume of Japanese manufacture
Slide 12: Factors in full-year forecast for operating profit
[Factors that contributed to increases or decreases in full-year forecasts for operating profit(excludes other income/expenses)] Negative factors ・The depreciation allowance, expenses, and raw materials costs will increase by 71.5 billion yen. Positive factors ・The production volume will increase an
Slide 13: Return to Shareholders
[Return to Shareholders] Annual dividend per share for FY2017 is 120 yen and for FY2018 expect to be 120 yen. We will continue to enhance corporate value and further profit return to our shareholders.
Slide 14: DENSO
DENSO Crafting the Core
Slide 15: II. Strategy
Il. Strategy 1. Business environment surrounding DENSO and future priority areas 2. Priority areas 1) Electrification 2) ADAS/AD 3) Connected 4) FA business (Non-automotive business) 3. Alliance policy and status 4. Revenue and profit goals for FY2021 DENSO Crafting the Core 13/29
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Slide 17: Business environment surrounding DENSO and future priority areas
.<Business environment surrounding DENSO and future priority areas> The auto industry has been undergoing a once-in-a-century paradigm shift due to innovations such as electrification, automated driving, connected, and sharing. The structure of the auto industry has been changing dramatically due to
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Slide 19: Policy in the area of the environment
<Policy in the area of the environment> DENSO has improved the efficiency of internal combustion engines, actively spread electrification, and achieved optimal combinations of powertrain systems, in order to improve the fuel efficiency of all systems. We will take full advantage of the various busin
Slide 20: DENSO's strengths in the electrification area
<DENSO’s strengths in the electrification area> Since the release of the first Prius model 20 years ago, we have supplied products of world-class performance, quality, and quantity for hybrid vehicles. We have succeeded in reducing the size and improving the performance of key products for hybrid ve
Slide 21: Advancement in electrification area
<Advancement in electrification area> In the electrification area, we will continue to improve conventional electrification products, and will connect all in- vehicle systems and products to build an optimal energy management system. All forms of energy generated in vehicles such as motion, electric
Slide 22: Revenue target in the environment area
<Reveune target in the environment area> Based on our projection, the overall vehicle market will expand slowly by 2030, while the percentage of electric vehicles will increase significantly. We will steadily work on the tasks I mentioned earlier to take full advantage of the future market growth op
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Slide 24: Concept of initiatives in Security & Safety
<Concept of initiatives in Security & Safety> In the ADAS and automated driving areas, we will focus on developing technologies in these five areas for recognizing the driving environment, such as “sensing.” This area requires advanced technologies, quality, and reliability. This is an area where we
Slide 25: Track record in Security & Safety
<Track record in Security & Safety> In fiscal 2017, we developed the world’s smallest stereo vision sensor. This product has been used for Smart Assist III, an autonomous emergency braking system for Daihatsu’s Tanto released in November 2016. It was necessary to install a vision sensor in light mot
Slide 26: Advancement in Security & Safety
<Advancement in Security & Safety> We will also upgrade the driver assistance functions to achieve automated driving in the future. In terms of active safety functions, we will achieve collision avoidance with invisible pedestrians by coordinating with information in the vicinity. We will also accel
Slide 27: Revenue target in Security & Safety area
<Revenue target in Security & Safety area> We aim to attain the revenue target of one trillion yen for the information and safety systems business by fiscal 2021 by steadily working on the efforts I mentioned earlier. In the ADAS area, we have been making progress as planned. At present, we expect t
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Slide 29: Advancement in Connected
<Advancement in Connected> The progress in AI and IoT will significantly change the mobility society where vehicles, people, roads, goods, and services are connected. In response to this change, DENSO will expand its business in the non-automotive field. The Connected Services Promotion Business Uni
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Slide 31: Commitment to the FA (Factory Automation) business
<Commitment to the FA (Factory Automation) business> We have been working to create DANTOTSU factories by developing and introducing 1/N equipment in various production lines. We will increase the productivity at 130 plants globally and connect them by F-IoT to improve productivity by 30% by 2020 fr
Slide 32: Case 1: Expand the scope of automation using robots
Case 1: Expand the scope of automation 25/29 using robots (video) Reproduce human versatility using robots Dual-arm collaboration Decent Versatility Human “ Robot Previous _|f This time > We st > ® Robots keep operating Screw robot Screwdriver sequence & ne (single purpose) (general purpose) DENSO [
Slide 33: Case 2: Development of inspection packages
Case 2: Development of inspection packages (video) — «2 Reproduce the sophisticated thinking and motion of experienced workers with machine learning Recognition of overall Inspect overall by rotational moving of work Recognition of moving object oO . ‘ Inspect without Machine learning stop} ing oper
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Slide 35: Policy and status of alliances
<Policy and status of alliances> In the rapidly changing business environment, we have been accelerating collaboration with partners to take full advantage of each other’s strengths, instead of the conventional approach of developing everything in-house. The purpose of such collaboration is to procu
Slide 36: The recent results of alliances
<The recent results of alliances> We are collaborating with NEC, Toshiba, Ibiden, and other partners which have strengths in different areas on various themes. Meanwhile, we are actively investing capital in venture companies which have been developing unique technologies and building new business m
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Slide 38: Growth target toward FY2021
<Growth target toward FY2021> The profit bottomed out in fiscal 2017 as mentioned 6/29. From fiscal 2018, we will continue to invest in growth areas, and will reap the rewards of our “future-oriented investments with a clear vision” to increase the profit. We will focus on the four priority areas, a
Slide 39: DENSO
DENSO Crafting the Core
Slide 40: Appendix
Appendix + Non-Consolidated Financial Results + Pre-Conditions (Foreign Exchange Rate/Car Production) + Consolidated Revenue by Customer + Consolidated Revenue by Product + Capital Expenditures, Depreciation, and R&D Expenditures DENSO Crafting the Core
Slide 41: Non-Consolidated Financial Results
Non-Consolidated Financial Results Income Statements(Japanese accounting standards) (Ratio to Sales) (Unit: Billions of Yen,%) Account Change ‘Amount % Net Sales ( 100.0 ) 24728 | ( 1000 ) 24250} 479 2.0 Operating Income ( 20 ) 49.6 | ( 5.9 ) 142.2 -92.6 -65.1 Inoome Before ( 55) 1349 )( 78) 1896) -
Slide 42: Pre-Conditions (Foreign Exchange Rate/Car Production)
Pre-Conditions (Foreign Exchange Rate/Car Production) FY2017 Full Year FY2018 Full Year FY2017 First-Half FY2017 Second-Half Prior Year| Actual | Change [Prior Year| Actual | Change [Prior Year] Actual | Change | Forecast | Change Foreign Exchange | US 122| 105 -17| 118) 111 -7/ 120] 108 -12] 110 2
Slide 43: Consolidated Revenue (By Customer)
Consolidated Revenue (By Customer) 32 (Unit: Billions of Yen, %) FY2017 FY2016 Change canes excludes Amount _|% to Total] Amount |% to Total] Amount | _% % Toyota 1,926.3, 42.5 1,907.2) 42.2 1.0 | 6.9 Daihatsu 95.9 241 87.9 1.9 9.1 13.3 Hino 52.8 1.2 52.3 1.2 0.9 1.3 Toyota Group 2,075.0 45.8] 2,047
Slide 44: Consolidated Revenue (By Product)
Consolidated Revenue (By Product) w o (Unit: Billions of Yen,%) FY2017 FY2016 Change change) excludes Amount | %toTotal} Amount | %toTotal] Amount | % % Thermal Systems 1,356.6 30.0] 1,409.9 31.3 53.3) -3.8 5.1 Powertrain Systems 1,160.6, 25.7] 1,174.0) 25.9) 213.4) -1.1 6.2 Information & Safety Sys
Slide 45: Revenue by Product (Previous Category)
Appendix. Revenue by Product (Previous Category) <Unit: Billions of Yen, %> FY17 FY16 Change Amount | %toTotal| Amount _% toTotal| Amount Powertrain Control 1,612.6 35.7| 1,619.7 35.8 7A 0.4 Thermal ; 1,356.6) 30.0 1,409.9| 31.2 -53.3, 3.8 Information & Safety Systems 753.0 16.6) 689.3 15.2 63.7 9.2
Slide 46: Capital Expenditures, Depreciation and R&D Expenditures
Capital Expenditures, Depreciation and R&D Expenditures (Unit: Billions of Yen) FY16 FY17 Change FY18F Change Percent Percent Japan 191.0 215.7 12.9% 211.0 -2.2% North America 45.6 51.8 13.6% 57.0 10.0% Europe 30.9} 23.6 -23.6% 20.0 -15.3% Asia 64.9] 444 -32.0% 55.0 24.7% Others 17 2.2) 29.4% 2.0 -9