Renesas Electronics Corporation · TSE:6723

Renesas Electronics — Q2 FY2017 Earnings Presentation

24 slides from Renesas Electronics's earnings presentation, Jul 28, 2017

  1. Slide 1: FY17/12 Q2 Presentation

    FY17/12 Q2 PRESENTATION RENESAS ELECTRONICS CORPORATION JULY 28, 2017 © 2017 Renesas Electronics Corporation. All rights reserved.

  2. Slide 2: Growth and Earnings Targets to Maximize Shareholder Value

    GROWTH AND EARNINGS TARGETS TO MAXIMIZE SHAREHOLDER VALUE Long-Term Financial Targets*1 Clear Path for Gross Margin Expansion Top-line growth Top-line Growth 2x SAM Growth Rate *2 (Including cost reduction) Margin Improvements Better Product Mix 44% 50% GM *3 : *5 Intersil Integration OM : 12% *4Ove

  3. Slide 3: Clear Path to Gross Margin Improvement

    CLEAR PATH TO GROSS MARGIN IMPROVEMENT Gross Margin Intersil Integration 50% Better Product Mix Top-line Growth Operating Leverage through Increased Scale 44% Organic Growth*1 CY16/12 Long Term Target *1: Including Intersil acquisition © 2017 Renesas Electronics Corporation. All rights reserved. Pag

  4. Slide 4: Combination of Organic and Inorganic Growth

    Organic Inorganic COMBINATION OF ORGANIC AND INORGANIC GROWTH Automotive Industrial Broad-Based Inorganic + Organic MCUs Intensive R&D Approaches SoCs Strategic Partnerships and Alliances Analog & Strategic Investment including Mixed Signal Further Acquisitions (Acquired for $ 3.2B in Feb 2017) Powe

  5. Slide 5: Non-GAAP Basis Information

    NON-GAAP BASIS INFORMATION The figures in this section are mainly based on Non-GAAP (Generally Accepted Accounting Principles) stated on a financial reporting basis and are provided as additional information. The Group Implemented a change in fiscal term starting from FY16/12 in which the fiscal yea

  6. Slide 6: FY17/12 Q2 Financial Snapshot (Non-GAAP Basis)

    Non-GAAP FY17/12 Q2 FINANCIAL SNAPSHOT (NON-GAAP BASIS*1) YoY and QoQ results as well as the changes from May 12 FCT of the Net Sales and Semi Sales are rounded off to one decimal place. CY16 CY17 (FY17/12) (B yen) Apr-Jun Apr-Jun 1H Jan-Mar Change from 1H Apr-Jun (Q2) (Q2) YoY QoQ YoY (Jan-Jun) (Q1

  7. Slide 7: FY17/12 Q2 Semiconductor Sales

    FY17/12 Q2 SEMICONDUCTOR SALES YoY + 46.8 B yen (+31.7%) (B yen) +33.7 +46.8 Currency impact -0.1 +13.0 Sales increase Recovery from (Including Intersil the Kumamoto Earthquake consolidation) 194.3 147.5 0 0 0 Apr-Jun FY17/12 Q2 FY16/3 2016Q4 FY16/12 Q1 (Apr-Jun 2017) © 2017 Renesas Electronics Corp

  8. Slide 8: Quarterly Semiconductor Sales Trends

    QUARTERLY SEMICONDUCTOR SALES TRENDS (B yen) Actual basis (B yen) Pro-forma basis*1 Automotive Industrial Broad-based Other Automotive Industrial Broad-based Other QoQ: +7.2% 194.3 QoQ: +12.6% YoY: +31.7% 194.3 YoY: +19.9% 200 200 1.1 178.2 176.6 181.3 1.1 172.6 0.8 163.2 QoQ: +48.0% 1.1 162.5 QoQ:

  9. Slide 9: Gross Margin, Operating Margin and Opex Trajectory

    Non-GAAP GROSS MARGIN, OPERATING MARGIN AND OPEX TRAJECTORY (NON-GAAP BASIS*1) <R&D Ratio (%)> QoQ: +1.7pts <Gross Margin (%)> YoY: +0.8pts QoQ: +0.2pts 20 50 YoY: +1.4pts 16.2 16.1 16.7 16.9 45.8 45.6 45.7 15 16.9 45 45.5 14.9 15.2 42.2 14.2 44.3 44.3 10 13.1 40 42.1 42.5 11.6 10.8 11.5 11.0 41.5 4

  10. Slide 10: FY17/12 Q2 Operating Income

    Non-GAAP FY17/12 Q2 OPERATING INCOME Increase in R&D,SG&A QoQ -0.1 B yen (excluding amortization of (B yen) goodwill) Currency -9.8 impact Accounting Impact (Inventory revaluation, etc) +10.5 -0.7 -0.1 Changes in volume and costs (excluding currency impact) 29.1 29.0 0.0 0.0 0.0 FY17/12 Q1 FY17/12 Q

  11. Slide 11: FY17/12 Q2 Operating Income

    Non-GAAP FY17/12 Q2 OPERATING INCOME Increase in R&D,SG&A YoY + 8.2 B yen (excluding amortization of (B yen) goodwill) -15.0 +24.6 Currency Accounting Impact impact (Inventory revaluation, etc) -0.1 -1.4 Changes in volume and costs 29.0 (excluding currency impact) 20.9 0.0 0.0 0.0 Apr-Jun FY17/12 Q2

  12. Slide 12: FY17/12 Q2 Operating Income

    Non-GAAP FY17/12 Q2 OPERATING INCOME vs FCT +6.5 B yen (B yen) Increase in R&D,SG&A (excluding amortization of goodwill) -0.7 +3.1 +2.0 Changes in volume and costs +2.1 Accounting Impact (excluding currency Currency (Inventory revaluation, etc) impact) impact 29.0 22.5 0.0 0.0 0.0 FY17/12 Q2 FY17/12

  13. Slide 13: FY17/12 1H Operating Income

    Non-GAAP FY17/12 1H OPERATING INCOME YoY + 19.4 B yen (B yen) -14.0 Increase in R&D,SG&A Currency +40.8 (excluding amortization of impact Accounting Impact goodwill) (Inventory revaluation, etc) -2.6 -4.8 58.1 Changes in volume and costs 38.7 (excluding currency impact) 0.0 0.0 0.0 Jan-Jun FY17/12 1

  14. Slide 14: FY17/12 Q3 Financial Forecasts (Non-GAAP Basis)

    Non-GAAP FY17/12 Q3 FINANCIAL FORECASTS (NON-GAAP BASIS*1) YoY and QoQ results of the Net Sales and Semiconductor Sales are rounded off to one decimal place. CY16 CY17 (FY17/12) (B yen) 9 months 9 months Q2 Q3 Forecast July-Sep YoY QoQ Forecast YoY (Jan-Sep) (Apr-Jun) (July-Sep) (Jan-Sep) Net Sales

  15. Slide 15: FY17/12 Q3 Operating Income Forecast

    Non-GAAP FY17/12 Q3 OPERATING INCOME FORECAST QoQ + 1.5 B yen (B yen) Decrease in R&D,SG&A (excluding amortization of Accounting Impact goodwill) (Inventory revaluation, etc) ±0 +1.2 +3.2 -2.9 Currency impact Changes in volume and costs (excluding currency impact) 29.0 30.5 0.0 0.0 0.0 FY17/12 Q2 FY

  16. Slide 16: FY17/12 Q3 Operating Income Forecast

    Non-GAAP FY17/12 Q3 OPERATING INCOME FORECAST YoY + 14.0 B yen Increase in R&D,SG&A (excluding amortization of (B yen) goodwill) -9.9 Accounting Impact +19.1 (Inventory revaluation, etc) +1.6 Changes in volume and costs (excluding currency impact) +3.1 Currency 30.5 impact 16.6 0.0 0.0 0.0 FY17/12 Q

  17. Slide 17: GAAP Basis Information

    GAAP BASIS INFORMATION The figures in this section are mainly based on GAAP (Generally Accepted Accounting Principles) stated on a financial reporting basis and are provided as additional information. © 2017 Renesas Electronics Corporation. All rights reserved. Page 17 BIG IDEAS FOR EVERY SPACE

  18. Slide 18: Former GAAP/Non-GAAP Reconciliation (Until FY16/12)

    FORMER GAAP/NON-GAAP RECONCILIATION (UNTIL FY16/12) FY15/3 FY16/3 FY16/12 (B Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Semiconductor Sales (GAAP) ① 201.2 199.6 177.4 175.1 174.5 177.0 160.9 163.2 147.5 148.3 161.4 Renesas SP Drivers*1 ② -17.6 -21.0 - - - - - - - - - Semiconductor Sales (Non-GAAP*2) ①+②

  19. Slide 19: Revised GAAP/Non-GAAP Reconciliation (From FY17/12)

    REVISED GAAP/NON-GAAP RECONCILIATION (FROM FY17/12) FY16/12 FY17/12 (B Yen) Q1 Q2 Q3 Q1 Q2 Q3 (Forecast) Net Sales 152.0 152.6 166.4 177.6 198.1 195.2 Gross Profit (GAAP) 65.1 62.9 74.7 80.8 90.5 88.8 Inventory Buildup*1 +2.3 +2.0 +1.2 - - - Stock-Based Compensation (COGS) - - - +0 +0 +0 Gross Profi

  20. Slide 20: FY17/12 Q2 Financial Snapshot

    FY17/12 Q2 FINANCIAL SNAPSHOT YoY and QoQ results as well as the changes from May 12 FCT of the Net Sales and Semi Sales are rounded off to one decimal place. CY16 CY17 (FY17/12) (B yen) Apr-Jun Apr-Jun 1H Jan-Mar Change from 1H Apr-Jun (Q1) (Q2) (Q2) YoY QoQ YoY (Jan-Jun) May 12 FCT Actual Forecast

  21. Slide 21: Balance Sheets

    BALANCE SHEETS As of Jun. 30, As of Sep. 30, As of Dec. 31, As of Mar. 31, As of Jun. 30, (B Yen) 2016 2016 2016 2017 2017 Total Assets 823.2 758.2 823.1 966.8 994.2 Cash and Cash Equivalents *1 397.3 326.2 354.3 101.0 126.6 Inventories 97.0 92.1 97.3 106.4 109.0 Liabilities 447.7 376.2 400.7 534.0

  22. Slide 22: EBITDA and Cash Flows

    EBITDA*1 AND CASH FLOWS Insurance income receivable: +10.5 Acquisition-related payments: -16.0 <EBITDA (B yen)> <Cash Flows (B yen)> Cash flows from operating activities 59.5 50 47.7 Cash flows from investing activities 46.3 45.6 46.0 Free cash flows *2 50 45.1 45 41.0 35.8 40 37.4 31.5 32.6 32.6 31

  23. Slide 23: FY17/12 Q3 Financial Forecasts

    FY17/12 Q3 FINANCIAL FORECASTS YoY and QoQ results of the Net Sales and Semiconductor Sales are rounded off to one decimal place. CY16 CY17 (FY17/12) (B yen) 9 months 9 months Q2 Q3 Forecast July-Sep YoY QoQ Forecast YoY (Jan-Sep) (Apr-Jun) (July-Sep) (Jan-Sep) Net Sales 152.6 472.4 198.1 195.2 +27.

  24. Slide 24: Forward-Looking Statements

    BIG IDEAS FOR EVERY SPACE (FORWARD-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. Such forward-l

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