Japan Display Inc. · TSE:6740
Japan Display — FY2023 Earnings Presentation
49 slides from Japan Display's earnings presentation, May 12, 2023
Slide 1: FY23/3 Full-Year Corporate Presentation
FY23/3 Full-Year Corporate Presentation May 12, 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: FY23/3 Overview
|_| Japan Display Inc. _ JDI FY23/3 Overview
Slide 4: FY23/3 Overview
FY23/3 Overview ◼ Terrible Market Environment, Operating & Net Income Loss – Triple punch of higher costs, lower demand, & lower capacity utilization driving large losses across global display industry – Rising material & energy costs, global inflation, rising interest rates, & global economic slowd
Slide 5: FY23/3 Overview | Mobile
FY23/3 Overview｜Mobile Mobile US/Euro 162.6 (JPY billion) -23% 76.2 59.0 Exiting Commoditized Smartphone Business to Focus Engineering Resources on JDI Proprietary NextGen Tech FY21/3 FY22/3 FY23/3 Mobile China Total Mobile Sales Down 36% YOY 41.4 34.9 -60% 16.7 FY21/3 FY22/3 FY23/3 Copyright 2023 J
Slide 6: FY23/3 Overview | Automotive
FY23/3 Overview｜Automotive Long-Term Growth Driver with Robust Stability due to Long-Term Supply Contracts Automotive (JPY billion) +26% 134.6 Ongoing Major Customer Engagements for 106.9 eLEAP & Other NextGen JDI Tech 88.1 Production Affected by Shanghai Lockdown in Q1. JDI Semiconductor Shortage R
Slide 7: FY23/3 Overview | Non-Mobile
FY23/3 Overview｜Non-Mobile JDI Proprietary Technology Set Deeply Productive Across Wide Range of Display & Non-Mobile (JPY billion) Non-Display Applications 71.4 -15% Diverse Product Portfolio Offers Both 56.2 60.5 Ongoing Growth & Stability FY23/3 Sales Decline on Lower VR & Wearable Shipments Root
Slide 8: FY23/3 Strategic Initiatives & Outcomes
FY23/3 Strategic Initiatives & Outcomes 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 profitabil
Slide 9: FY23/3 Strategic Initiatives & Outcomes
FY23/3 Strategic Initiatives & Outcomes Technology Revolution: Developing & Commercializing JDI 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, & busines
Slide 10: FY23/3 Strategic Initiatives & Outcomes
FY23/3 Strategic Initiatives & Outcomes Strategic Alliance with Global No. 3 Display Maker HKC (2023/04) 5 ▪ Generate overwhelming competitiveness & customer value by combining JDI’s proprietary technologies with HKC’s cost competitiveness & sales capabilities ▪ Cement JDI’s technology leadership in
Slide 11: Dramatically Strengthen Competitiveness via Fab Optimization
Dramatically Strengthen Competitiveness via Fab Optimization Increase Core Profitability through Fixed Cost Reductions & Shift to Asset-Light Strategy Japan ▪ Mobara Fab (G6, Chiba Pref.） ▪ Ishikawa Fab (G4.5, Ishikawa Pref.) ▪ Tottori Fab (G4, Tottori Pref.) Hakusan Fab ▪ Hakusan Fab (G6, Ishikawa
Slide 12: Q4 Capital Increase | Actions & Outcomes
FY23/3 Q4 Capital Increase｜Actions & Outcomes Accelerate METAGROWTH 2026 through Capital Injection & Debt Elimination Action Purpose/Outcome Ichigo lends JDI JPY 20B to repay JPY 20B 1 short-term INCJ loan Finance JDI (Total Ichigo loans to JDI: JPY 48B) 2 Ichigo buys JPY 53.7B of JDI debt from INCJ
Slide 13: Q4 Capital Increase | JDI Now Debt-Free
FY23/3 Q4 Capital Increase｜JDI Now Debt-Free JDI Debt Outstanding (JPY billion) 160.8 101.7 95.7 95.1 73.7 Debt- Free 0 FY19/3 FY20/3 FY21/3 FY22/3 FY23/3 Q3 FY23/3 Copyright 2023 Japan Display Inc. All Rights Reserved. Slide 13
Slide 14: Q4 Capital Increase | Robust Equity Position
FY23/3 Q4 Capital Increase｜Robust Equity Position Shareholder Equity (JPY billion) 55.8% Shareholders' Equity Equity Ratio 28.2% 17.6% 17.4% 13.1% 124.2 72.7 -0.2% 51.1 39.5 45.5 -1.2 FY19/3 FY20/3 FY21/3 FY22/3 FY23/3 Q3 FY23/3 Copyright 2023 Japan Display Inc. All Rights Reserved. Slide 14
Slide 15: Strategic Alliance with HKC | Unprecedented Customer Value
Strategic Alliance with HKC｜Unprecedented Customer Value One Team One Goal Global No.1 eLEAP Cost Competitiveness World-Class Backplane Massive Production Technologies: LTPO/HMO Capacity High-End Automotive Strong Sales Force Displays JDI and HKC will jointly plan and build word-class eLEAP fabs, ta
Slide 16: Strategic Alliance with HKC | Market Share Goals
Strategic Alliance with HKC｜Market Share Goals Global No.1 in Mid- & High-End Segments of Key Strategic Markets Wearables Global No.1 by 2027 Automotive Global No.1 by 2028 VR Global No.1 by 2028 Monitors Global No.1 by 2028 Notebooks & Tablets Global No.3 by 2028 Copyright 2023 Japan Display Inc. A
Slide 17: FY23/3 Earnings Review
|_| Japan Display Inc. _ JDI FY23/3 Earnings Review
Slide 18: FY23/3 Earnings Overview
FY23/3 Earnings Overview Strategy Execution Drove FY21/3 & FY22/3 Improvements, but FY23/3 Downturn in Terrible Market Environment (JPY billion) FY20/3 FY21/3 FY22/3 FY23/3 Sales 504.0 341.7 295.9 270.7 EBITDA -19.5 -12.5 0.2 -36.2 Operating Profit -38.5 -26.2 -8.6 -44.4 Recurring Profit -57.9 -32.7
Slide 19: FY23/3 Sales by Product Area
FY23/3 Sales by Product Area Continue to Exit Mobile. Non-Mobile Shrank on Global Economic Slowdown. Despite IC Shortage, Automotive Up on Strong Demand for JDI Products & Weaker Yen Sales by Product Area (JPY billion) ▪ Automotive: Strong demand & resolution 295.9 of JDI component shortages outweig
Slide 20: FY23/3 Full-Year Results
FY23/3 Full-Year Results Profitability Worsened on Deterioration in Business Environment & Increase in Material & Energy Costs. (JPY billion) JPY 15 billion gain on Ichigo Forgiveness of JDI debt (JPY billion) EBITDA Operating Profit Net Income 0.2 -8.6 -8.1 -25.8 -31.9 -36.2 -39.1 -47.3 -44.4 FY22/
Slide 21: FY23/3 Operating Profit Breakdown
FY23/3 Operating Profit Breakdown Fixed Cost Reductions & Yen Depreciation Positive, but Losses Widened on Lower Volumes & Higher Materials & Energy Costs FY22/3 FY23/3 (JPY billion) USD/JPY 112→135 Mainly inventory write-down Operating Operating Profit Profit Copyright 2023 Japan Display Inc. All R
Slide 22: FY24/3 Forecast
|_| Japan Display Inc. _ JDI FY24/3 Forecast
Slide 23: FY24/3 Forecast
FY24/3 Forecast Business Environment Remains Difficult on Continued High Material & Energy Costs & Slowdown of Global Economy. Short-Term Sales Decline from Withdrawal from Unprofitable Businesses Will Contribute to Structural Improvement in Profitability from FY25/3 Onward (JPY billion) FY23/3 FY24
Slide 24: FY23/3 → FY24/3 Operating Profit Breakdown
FY23/3 → FY24/3 Operating Profit Breakdown Despite Lower Sales & Higher Material & Energy Costs, Profitability to Improve on Product Mix Improvements & Fixed Cost Reductions FY23/3 FY24/3 (JPY billion) • eLEAP/HMO royalties • Automotive mix improvement USD/JPY 135→130 Operating Operating Profit Prof
Slide 25: FY24/3 H1 → FY24/3 H2 Operating Profit Breakdown
FY24/3 H1 → FY24/3 H2 Operating Profit Breakdown Product Mix Improvements & Contributions from New Technologies such as eLEAP & HMO to Drive Higher Earnings from FY24/3 H2 FY24/3 H1 FY24/3 H2 (JPY billion) • eLEAP/HMO royalties • Automotive mix improvement USD/JPY 130 forecast unchanged Operating Op
Slide 26: METAGROWTH 2026 Update
|_| Japan Display Inc. _ JBI METAGROWTH 2026 Update
Slide 27: METAGROWTH in Value Creation
Core Strategy 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 27
Slide 28: META
“Comprehensive, Overarching” META Underscores JDI’s Commitment to Transformational Growth Metaverse Also a JDI Growth Driver
Slide 29: 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
Slide 30: 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)
Slide 31: 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
Slide 32: 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
Slide 33: eLEAP (NextGen OLED)
FY23/3 Update｜METAGROWTH 2026 Six Proprietary Growth Drivers eLEAP (NextGen OLED) 1 High Brightness, Long Lifetime, High Resolution GreenTech ◼ First samples shipped August 2022, first customer order February 2023, mass production from 2024 ◼ Ongoing licensing discussions with multiple parties ◼ Str
Slide 34: HMO (High Mobility Oxide)
FY23/3 Update｜METAGROWTH 2026 Six Proprietary Growth Drivers HMO（High Mobility Oxide） 2 Ultra-Low Power, High Resolution & Large Screen Capable Backplane Tech ◼ Progressing development for broad array of applications, mass production from 2024 ◼ Ongoing licensing discussions with multiple parties ◼
Slide 35: Metaverse (Ultra High Resolution)
FY23/3 Update｜METAGROWTH 2026 Six Proprietary Growth Drivers Metaverse (Ultra High Resolution) 3 Unparalleled Immersive Experience ◼ 2000ppi displays on glass substrates, generating best-in-class price performance, in mass production from 2025 ◼ One-off drop in demand in FY23/3, but robust demand fr
Slide 36: AutoTech
FY23/3 Update｜METAGROWTH 2026 Six Proprietary Growth Drivers AutoTech 4 EV-Focused Integrated Cockpit ◼ Evolution of next-generation HUD & integrated cockpit, expansion of applications enabled by new technology ◼ Strong customer demand for eLEAP in automotive applications – it is environmental impac
Slide 37: Rælclear (Transparent Interface)
FY23/3 Update｜METAGROWTH 2026 Six Proprietary Growth Drivers Rælclear (Transparent Interface) 5 World’s Highest Transparency ◼ 12-inch model in production, broad use as barrier- free communication tool ◼ 21-inch model mass production from autumn 2023 ◼ Favorable reception at CES & other global exhib
Slide 38: New Tech, Products & Businesses
FY23/3 Update｜METAGROWTH 2026 Six Proprietary Growth Drivers New Tech, Products & Businesses 6 New Uses for JDI Technology Set ◼ Succeeded in developing world’s first free-lighting Smart Light LumiFree & have received orders from multiple customers. Mass production from FY24/3 Q1 ◼ Progress in devel
Slide 39: CHINA + INDIA JDI Fab Strategy
CHINA + INDIA JDI Fab Strategy Local Production & Presence in Massive & Growing Markets CHINA INDIA ▪ Inbound inquiries from multiple Indian ▪ Finalize strategic alliance with global conglomerates for technical support & No.3 display maker HKC by June 2023 joint business development in India ▪ Agree
Slide 40: Financial Targets (KPI) | METAGROWTH 2026
Financial Targets (KPI) | METAGROWTH 2026 Will Announce Updated KPIs in August after Final HKC Alliance Agreement. See KPI Upside on eLEAP & Other NextGen Tech 194.5 767.2 750 545.4 144.5 99.1 353.7 82.4 94.5 (JPY billion) 270.7 285.8 60.3 240.0 250 43.6 Sales 26.4 44.5 8.0 10.9 EBITDA -5.5 Op. Prof
Slide 41: FY25/3 Forecast
FY25/3 Forecast Dramatic Improvement in Product Mix from FY25/3 due to Full-Scale Launch of Growth Drivers. Profitability Improvement on FY24/3 Exit from Mobile & Other Unprofitable Products Sales by Product Area (JPY billion) 285.8 (JPY billion) FY23/3 FY24/3 FY25/3 270.7 240.0 Actual Forecast Fore
Slide 42: FY24/3 → FY25/3 Operating Profit Forecast Breakdown
FY24/3 → FY25/3 Operating Profit Forecast Breakdown Significant Improvement on Product Mix Improvement, eLEAP Mass Production Start, & VR, Wearable, & Automotive Growth FY24/3 FY25/3 (JPY billion) • Production cost • Inventory • eLEAP mass increase on impact production start higher volumes • VR & we
Slide 43: FY24/3 Actions
FY24/3 Actions ◼ Deliver Structural Profitability from FY25/3 Onwards on Continued Dramatic Business Model Transformation – Transform business portfolio through exit from unprofitable businesses – Build stable technology-related revenue base built on Global No.1 technology set – Increase profitabili
Slide 44: Appendix
|_| Japan Display Inc. _ JDI Appendix
Slide 45: Quarterly Sales Breakdown by Product Category
Quarterly Sales Breakdown by Product Category 86.4 81.2 71.9 71.7 69.7 66.0 35.7 62.7 57.1 39.7 23.9 26.4 （JPY billion） 20.9 33.1 Automotive 26.9 34.9 16.0 21.1 15.0 19.4 Non-Mobile 19.3 14.3 Mobile (US/Euro) 22.0 14.5 12.4 21.4 14.2 18.6 Mobile (China) 18.8 17.4 10.1 12.7 8.7 10.0 11.7 11.0 5.7 3.4
Slide 46: Consolidated B/S
Consolidated B/S (JPY billion) FY22/3 FY23/3 FY23/3 YoY QoQ Q4 Q3 Q4 Cash and deposits 52.2 32.6 26.2 -26.0 -6.4 Accounts receivable - trade 56.3 38.4 40.9 -15.4 ＋2.5 Accounts receivable - other 23.5 39.4 18.3 -5.2 -21.1 Inventories 49.1 72.2 60.3 ＋11.3 -11.9 Other 5.4 5.2 5.1 -0.3 -0.2 Total curren
Slide 47: Consolidated P&L
Consolidated P&L (JPY billion) FY22/3 FY23/3 FY23/3 FY22/3 FY23/3 YoY Q4 Q3 Q4 (12M) (12M) Sales 86.4 69.7 62.7 295.9 270.7 -25.2 EBITDA 3.9 -8.5 -20.2 0.2 -36.2 -36.4 Operating Profit 1.5 -10.6 -22.0 -8.6 -44.4 -35.8 Non-Operating Income 1.6 0.6 1.6 4.0 5.6 ＋1.5 Non-Operating Expenses -1.1 -2.5 -1.
Slide 48: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement (JPY billion) FY23/3 FY23/3 FY23/3 FY23/3 FY22/3 FY23/3 YoY Q1 Q2 Q3 Q4 (12M) (12M) Income before income taxes -4.4 -4.2 -5.1 -8.2 -5.8 -21.9 -16.1 Depreciation & amortization 2.2 2.1 2.1 1.8 8.8 8.3 -0.5 Working capital -0.3 -8.2 -3.6 -9.0 -23.1 -21.1 ＋2.0 Gain on s
Slide 49: 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