Slide 1: FY13/3 Q1 Financial Results
FY13/3 Q1 Financial Results Renesas Electronics Corporation August 2, 2012 Yasushi Akao, President © 2012 Renesas Electronics Corporation. All rights reserved.
Slide 2: Agenda
Agenda I. FY13/3 Q1 Financial Results II. FY13/3 Financial Forecasts III. Toward a Robust and Profitable Business Structure III-1. Business Strategy III-2. Production Structural Reforms and Reduction in Human Resources IV. Summary 2 © 2012 Renesas Electronics Corporation. All rights reserved.
Slide 3: Executive Summary
Executive Summary Ⅰ. FY13/3 Q1 Financial Results Semiconductor sales decreased to 168.2 B yen, a reduction by 9.5% QoQ, due to impact of integrating the company’s IT systems Operating loss decreased QoQ by streamlining R&D and SG&A despite lower profit caused by sales decline II ．FY13/3 Financia
Slide 4: I. FY13/3 Q1 Financial Results
I. FY13/3 Q1 Financial Results 4 © 2012 Renesas Electronics Corporation. All rights reserved.
Slide 5: FY13/3 Q1 Financial Snapshot
FY13/3 Q1 Financial Snapshot Semiconductor sales decreased to 168.2 billion yen, a reduction by 9.5% QoQ, due to impact of IT system integration Operating loss decreased QoQ by streamlining R&D and SG&A despite lower profit caused by sales decline FY12/3 FY13/3 (B yen) YoY QoQ Q1 Q4 Q1 (%) (%) -
Slide 6: Quarterly Financial Results
Quarterly Financial Results FY12/3 FY13/3 Q1 Q2 Q3 Q4 Q1 243.3 222.9 （B yen） 207.2 209.7 186.6 Net Sales 218.2 198.0 185.8 Semi. Sales 184.0 168.2 Operating Income (Loss) -10.1 -4.0 -17.6 -19.1 -23.6 6 © 2012 Renesas Electronics Corporation. All rights reserved.
Slide 7: Order Trend
Order Trend Order trend based on real demand continues to recover, bottoming out in FY12/3 Q3 despite QoQ sales decrease affected by IT system integration Automotive orders continues steadily without big fluctuation Order trend by application （Jan. 2011 - Jun. 2012） +around 5% +5 to 9% Average o
Slide 8: FY13/3 Q1 Operating Income (Loss) QoQ
FY13/3 Q1 Operating Income (Loss) QoQ Operating loss decreased by 6 B yen QoQ due to higher profit from production increase and decreased R&D and SG&A despite lower profit from sales decrease FY12/3 FY13/3 Q4 Q1 （B yen） Decreased R&D and SG&A +5.0 -17.6 Higher profit from -23.6 -5.6 +6.6 productio
Slide 9: FY13/3 Q1 Balance Sheets
FY13/3 Q1 Balance Sheets As of Mar.31, As of Jun.30, (B yen) 2012 2012 Total Assets 858.2 785.7 Cash and Cash Equivalents 131.9 87.0 Inventories 151.8 163.8 Liabilities 631.7 585.4 Interest-Bearing Debt 258.3 246.5 Shareholders’ Equity 243.4 222.7 Net Assets 226.5 200.3 D/E Ratio (Gross) 1.19 1.29 D
Slide 10: FY13/3 Q1 Cash Flows
FY13/3 Q1 Cash Flows Expect cash flows to be recovered, bottoming out in FY13/3 Q1, except possible expense impact due to implementation of early retirement incentive program FY12/3 FY13/3 (B yen) Q1 Q4 Full-year Q1 Cash Flows from Operating -29.2 -6.6 -9.7 -18.1 Activities Cash Flows from Investi
Slide 11: II. FY13/3 Financial Forecasts
II. FY13/3 Financial Forecasts 11 © 2012 Renesas Electronics Corporation. All rights reserved.
Slide 12: FY13/3 Consolidated Financial Forecasts
FY13/3 Consolidated Financial Forecasts Expect to achieve full-year operating profit of 21 B yen, an increase of 77.8 B yen YoY with semiconductor sales increase by 25 B yen YoY Forecast full-year net loss of 150 B yen due to special income (loss) of negative 155 B yen followed by implementation
Slide 13: FY13/3 Full-year Semiconductor Sales (YoY)
FY13/3 Full-year Semiconductor Sales (YoY) MCU sales are expected to increase by around 5% due to steady demand in automotive MCU and demand recover in non-automotive MCU Sales of Analog & Power and SoC are expected to be nearly flat QoQ, complementing sales decrease from transfer or withdrawal
Slide 14: FY13/3 Semiconductor Sales Quarterly Trend
FY13/3 Semiconductor Sales Quarterly Trend Continue sales recovery also from Q3 in addition to an increase by 24% QoQ in Q2 owing to sales increase from large-scale projects as well as continuous order recovery Factors of increase and <377.0> <434.0> decrease from Q2 <SoC> （B yen） <208.8> ・Signifi
Slide 15: FY13/3 Full-year Operating Income (Loss) Forecasts
FY13/3 Full-year Operating Income (Loss) Forecasts Expect to achieve full-year operating profit of 21 billion, due to expense reduction effect centering on reduction in human resources in addition to higher profit from sales increase 21.0 （B yen） Decreased Expense reduction R&D and SG&A measures F
Slide 16: FY13/3 Full-year Net Income (Loss)
FY13/3 Full-year Net Income (Loss) Expect to record special income (loss) of negative 155 B yen due to implementation of early retirement program and business/ production structural reforms FY13/3 （B yen） Operating Non-operating income (loss): Net Income -11 B yen Income (Loss) (Loss) Special inco
Slide 17: III. Toward a Robust and Profitable Business Structure
III. Toward a Robust and Profitable Business Structure 17 © 2012 Renesas Electronics Corporation. All rights reserved.
Slide 18: Measures Taken to Date for a Robust and Profitable Business Structure
Measures Taken to Date in Order to Establish a Robust and Profitable Business Structure Faithfully executed on various measures post Apr. 2010 establishment, aimed at realizing merger synergies and implementing structural reforms Reduced fixed costs by 20% over 2 years, while also achieving enha
Slide 19: Promote Business Strategy and Production Structural Reforms and Human Resource Rationalization
Promote Business Strategy and Production Structural Reforms as well as Human Resource Rationalization to Respond to Changes Despite faithful execution of post-merger measures, have been faced with various changes in the market and competitive environment, i.e.; impact of the Great East Japan Earth
Slide 20: III-1. Business Strategy
III. Toward a Robust and Profitable Business Structure III-1. Business Strategy 20 © 2012 Renesas Electronics Corporation. All rights reserved.
Slide 21: Toward a Smart Society
Toward a Smart Society The networking of segments and applications for which Renesas provides semiconductor products will bring about a “Smart Society” that allows for an ecologically friendly, secure, safe, convenient and comfortable life Smart Society Smart Smart Smart Smart Smart Smart Car Grid
Slide 22: Bigger x Higher-Growth Markets in Smart Society
CY11-16 CAGR of Semiconductor SAM （M$/year) Bigger × Higher-Growth Markets in “Smart Society” CY2011 Market Size CY2016 Market Size CY11-16 CAGR Automotive Medical Infrastructure Storage Game Console Infrastructure Peripheral Military/Aerospace STB Smart Card Phone 3-4G Mobile Phone Audio TV Other C
Slide 23: Automotive Solutions
Automotive Solutions Automotive Industry Home Communication Health/ Appliance Medical • FA/Machine Tool • Mobile Phone • Powertrain • White Goods (Smartphone) • Medical Equipment • Water/Gas/Electric • Chassis Meter • Air Conditioner • Tablet • MRI • Body • Power Generation • Game Console • Wired/Wi
Slide 24: Automotive Solutions
Automotive Solutions A driving force behind increased sophistication of automotive functions Automotive Drive Assist Powertrain Chassis Body Infotainment Safety Network HEV/EV （ADAS） WW #1 share WW 40nm achieving higher performance Low-voltage power MOSFET #1 share MCU and lower power consumptio
Slide 25: Strong Position in Automotive Semiconductor
Strong Position in Automotive Semiconductor Maintained No. 1 position globally in automotive semiconductors Aim to become No. 3 position in automotive analog & power semiconductors Automotive Semi. WW Automotive Semi. EU Automotive Semi. US Company CY09 CY10 CY11 Company CY11 Company CY09 CY10 C
Slide 26: Build Strategic Partnerships in Automotive
Build Strategic Partnerships in Automotive Enhance customers’ product development capability by sharing long-term technology and product roadmap Auto Automobile Roadmap N Maker +5 years Electric System Electric Component Roadmap Component MCU MSIG Power N years Chassis Roadmap Maker Mecha- N years
Slide 27: Analog's Approaches to Compete Higher Quality with Automotive MCU
Analog’s Approaches to Compete Higher Quality with Automotive MCU Implement quality improvement program commonly used in MCU and Analog at design and production stage Steadily reduce defect ratio target of Zero Defect Percent Automotive Analog ASIC Defective Quality Improvement (ppm) Shipment qu
Slide 28: Further Enhance Business
Further Enhance Business Increase customer value by leveraging track record as a Strategic Partner to expand kit solution offering Now Future Met Tier1 maker’s Expand kit requirements as a solutions with Strategic Partner MCU and Analog Expanded & Power Increase Offered one-stop solutions design-
Slide 29: Industrial Solutions
Industrial Solutions Automotive Industry Home Communication Health/ Appliance Medical • FA/Machine Tool • Mobile Phone • Powertrain • White Goods (Smartphone) • Medical Equipment • Water/Gas/Electric • Chassis Meter • Air Conditioner • Tablet • MRI • Body • Power Generation • Game Console • Wired/Wi
Slide 30: Industrial Application Solutions for Social Infrastructure
Industrial Application Solutions for Social Infrastructure Renesas to support social infrastructure with MCU, Analog & Power, and SoC Industrial Water/Gas/ Power Building FA/Machine Tool Plant Transportation Electric Meter Generation Management WW #1 share Lower power product lineup using Invert
Slide 31: MCU – Key for Motor Control for Energy Savings
MCU –Key for Motor Control for Energy Savings MCU is essential component for achieving energy efficiency – embedded in various electrical devices and responsible for controlling motors accountable 50% of total electricity consumption Focus on MCU to control inverter motor which enables further e
Slide 32: Total Solution for Inverter Motor
Total Solution for Inverter Motor Leverage our superiority in invertor motor control and offer optimal total solutions for energy-savings by combining our world leading MCU and power devices Working to provide the “All Renesas Solution” that will meet demands in markets the world over Increase m
Slide 33: Solutions for Smartphone
Solutions for Smartphone Automotive Industry Home Communication Health/ Appliance Medical • FA/Machine Tool • Mobile Phone • Powertrain • White Goods (Smartphone) • Medical Equipment • Water/Gas/Electric • Chassis Meter • Air Conditioner • Tablet • MRI • Body • Power Generation • Game Console • Wire
Slide 34: Contribute to Smartphone's Evolution with New Technologies
Contribute to Smartphone’s Evolution with New Technologies Accelerate efforts to achieve greater sophistication, further miniaturization and enhanced energy efficiency, leveraging our world leading product lineup Deliver innovation and a new market value to smartphones through proprietary techno
Slide 35: Enhance General-Purpose Products Used Across Multiple Applications
Enhance General-Purpose Products Used Across Multiple Applications Enhance competitiveness and lineup of general-purpose products that are applicable beyond application segments Automotive Industry Home Communication Health/ Appliance Medical 1,000 products 1,000 MCU Smart MCU from/for Power new p
Slide 36: Optimize SoC Business Portfolio
Optimize SoC Business Portfolio - Cease New Product Development for Home Multimedia SoC - Share of home multimedia in overall SoC(*) （％） (*) Excl. Power Amplifier Business transferred in Mar. 2012 －Past－ 30 30 Scale back development of SoCs 25 25 for short life-cycle applications Future direction of
Slide 37: Increase Earning Capacity by Changing Business Portfolio
Increase Earning Capacity by Changing Business Portfolio Increase earning capacity by focusing on strong segments which build Smart Society based on track record in existing segments Breakdown of sales （FY10/3-FY15/3) SoC 37 A&P MCU FY10/3 FY11/3 FY12/3 FY13/3 FY14/3 FY15/3 37 © 2012 Renesas Elect
Slide 38: III-2. Production Structural Reforms and Reduction in Human Resources
III. Toward a Robust and Profitable Business Structure III-2. Production Structural Reforms and Reduction in Human Resources 38 © 2012 Renesas Electronics Corporation. All rights reserved.
Slide 39: Realignment of Production Sites in Japan
Realignment of Production Sites in Japan Complete production site realignment within 3 years Shrink Shrink Shrink Continue production production Continue production Shrink Shrink Shrink production production capacity, capacity, production capacity, and production production capacity, on an however
Slide 40: Approach to Fab Network with Production Realignment
Approach to Fab Network with Production Realignment Continuous and stable supply of existing products will be secured by establishing a complete fab network including foundries Renesas’ Concept of Fab Network After Production Structural Reforms Customer Customer Outsource (Foundry) Outsource Outso
Slide 41: Production Structure after Completion of Structural Reforms
Production Structure after Completion of Structural Reforms Establish production structure able to respond to market fluctuations and enhance product competitiveness through wafer enlargement and increased outsourcing in Front-end production, and a further shift to offshore production and increase
Slide 42: Effects of Structural Reforms
Effects of Structural Reforms Significant improvements to the profit structure are anticipated as a result of implementing early retirement programs and structural reforms to business/production Achieve cost reductions of approx. 43 B yen Implementation of per year with in excess of five thousand
Slide 43: IV. Summary
IV. Summary 43 © 2012 Renesas Electronics Corporation. All rights reserved.
Slide 44: Summary: Target Business Structure
Summary: Target Business Structure Sales Breakdown by Business Fixed Cost Trend （FY10/3 to FY15/3） (FY10/3 to FY15/3) Decreased fixed cost by 20% 100% in 2 years since the merger with synergies and structural reforms SoC 21% Decrease by Expect further decrease by 80% 45% comparedimplementation of bu
Slide 45: Forward-Looking Statements
(FOREWARD-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. We caution you in advance that actual r