Slide 1: FY2018 Financial Results ended March 31, 2018
DENSO Crafting the Core FY2018 /f : Financial Results endedj March 31, 2018 Ti | . Closing results Il. Strategies Apr. 27, 2018 / DENSO CORPORATION
Slide 2: Overview of FY2018 Financial Results
Overview of FY2018 Financial Results 1. Revenue increased due to an increase in vehicle production, as well as sales expansion. Operating profit also saw an increase due to the production volume increase and company cost reduction efforts. 2. For the new fiscal year, revenue will increase due to the
Slide 3: Overview of the Consolidated Financial Results
[Overview of the Consolidated Financial Results] 1. Consolidated revenue totaled 5,108.3 billion yen, increased by 581.1 billion yen (+12.8%) from the previous year. 2. Consolidated operating profit excluding other income/expenses totaled 412.7 billion yen, increased by 82.1 billion yen (+24.8%) fro
Slide 4: Sales by Customer (Quantity Base)
[Sales by Customer (Quantity Base)] Sales to Toyota Group Sales to the Toyota Group increased by 8.9% from the previous year. The reasons are as follows; 1) The car production increased in Japan, China and Europe. 2) Attach rate of safety related products has been expanded in Japan. Sales to non-Toy
Slide 5: Sales by Product (Quantity Base)
[Sales by Product (Quantity Base)] Sales of Thermal Systems Products Sales increased in Japan and China due to the production volume increase. Sales of Powertrain Systems Products Sales increased in Asia due to the production volume increase, and in North America due to sales expansion. Sales of Mob
Slide 6: Factors that Contributed to Increases or Decreases in Operating Profit
[Factors that Contributed to Increases or Decreases in Operating Profit*] *Excludes other income/expenses Negative factors 1. Raw material cost : -27.0 billion yen was due to an increase in material costs. 2. Expense : -23.0 billion yen was due to the increase of capital investment for future compet
Slide 7: Revenue and Operating Profit by Each Region
[Revenue and Operating Profit by Each Region*] *Based on Japanese yen 6
Slide 8: Revenue and Operating Profit by Each Region
[Revenue and Operating Profit by Each Region*] *Excluding the effect of foreign exchange rates and other income/expenses In Japan 1. The revenue increased by 14.8% from the previous year due to production volume increase and sales expansion of safety related products. 2. Operating profit increased b
Slide 9: Capital Expenditures, Depreciation and R&D Expenditures
[Capital Expenditures, Depreciation and R&D Expenditures] Capital Expenditure 1. Capital expenditure reached 347.2 billion yen because of the increase of capital investment for future competition area in addition to strengthen core production capabilities mainly for improving productivity. 2. In the
Slide 10: Full-Year Financial Forecast
[Full-Year Financial Forecast] Regarding the full-year forecast, we expect revenue of 5,320.0 billion yen. Due to the investment cost for the future competitiveness and R&D expenditure, overall operating profit will decrease. We used 105 yen to the U.S. dollar and 130 yen to the euro for the full-ye
Slide 11: Factors in Full-Year Forecast for Operating Profit
[Factors that Contributed to Increases or Decreases in Full-Year Forecasts for Operating Profit] Negative factors Currency exchange loss: -27.5 billion yen Raw material cost: -8.0 billion yen Transient factor in FY18: -12.0 billion yen Excluding the negative factors mentioned above, starting the ope
Slide 12: Return to Shareholders
[Return to Shareholders] Annual dividend per share for FY2018 is 130 yen and for FY2019 expect to be 130 yen. We will continue to enhance corporate value and further profit return to our shareholders. 11
Slide 13: II. Strategies
Il. Strategies Crafting the Core 12 /36 12
Slide 14: DENSO Group Long Term Policy 2030
[DENSO Group Long Term Policy 2030] The slogan of the Long Term Policy 2030 is “Bringing hope for the future for our planet, society, and all people.” We have included “inspiring” in the goal of the long-term policy. We wish to create inspiring value for customers, partners, and all other stakeholde
Slide 15: Target for Revenue & Profit
[Target for Revenue & Profit] DENSO will create hope for the future for all people by achieving sustainable growth. We aim to achieve revenues of 7 trillion yen and an operating profit ratio of 10% by FY2026. By FY 2022 as a halfway mark to the goal, we aim to achieve revenue of 5.6 trillion yen and
Slide 16: Strategy for Future Growth
[Strategy for Future Growth] 1. Promote the value of vehicles and drive growth in the new field of mobility. 2. Increase the profitability of existing business as a solid foundation for profits. 3. Strengthen R&D of key device and differentiate components and systems. 4. Accelerate the execution of
Slide 17: Organization Changes for the Strategy
[Organization Changes for the Strategy] 1. Strengthening overall system perspective In the conventional organization, respective businesses units offered the best possible subsystems for individual optimization. In the future, integrated control of the overall vehicle system will be required to achi
Slide 18: Organization Changes for the Strategy
[Organization Changes for the Strategy] 1. Strengthening overall system perspective To offer value from the viewpoint of overall vehicle systems, the Information & Safety Systems Group has been renamed the Mobility Systems Group. Meanwhile, the Mobility Systems Function Unit has been established to
Slide 19: Organization Changes for the Strategy
[Organization Changes for the Strategy] 1. Strengthening overall system perspective 2. Strengthening competitiveness by integrating key devices We will enhance our development capabilities and competitiveness for key devices such as ECUs, sensors, semiconductors, and motors and significantly differe
Slide 20: DENSO Group Mid-term Policy 2021
[DENSO Group Mid-term Policy 2021] To achieve targeting revenue and operating profit ratio, DENSO established detail action plans. 1. Creating new kinds of value 2. Strengthening profitability in support of future growth 3. Transforming our business foundation 19
Slide 21: DENSO Group Mid-term Policy 2021
[DENSO Group Mid-term Policy 2021] 3. Transforming our business foundation 20
Slide 22: Initiatives in Focus Fields of Mobility
[Initiatives in Focus Fields of Mobility] We will focus on the following fields so as to deliver new value to the society. Electrification Advanced Safety / Automated Driving Connected Cars 21
Slide 23: Initiatives in Focus Fields: Electrification
[Initiatives in Focus Fields : Electrification] We will lead the electrification market by taking full advantage of technologies acquired over the years and the track record of supplying products. We will further advance the future-oriented technologies to help promote the spread of EVs. We will con
Slide 24: Initiatives in Focus Fields: Electrification
[Initiatives in Focus Fields : Electrification] Expansion of the electrification market The electrification market is expected to grow rapidly to 15 million vehicles by 2025. The EV market will also expand rapidly, and there will be growing demand for systems with large electric power. Technology of
Slide 25: Initiatives in Focus Fields: Electrification
[Initiatives in Focus Fields : Electrification] Expanding global manufacturing capacity We have decided to expand our manufacturing capacity in the U.S. in anticipation of the future expansion of the electrification market. We will invest an additional 1 billion dollars and create 1,000 jobs by 2020
Slide 26: Initiatives in Focus Fields: Advanced Safety / Automated Driving
[Initiatives in Focus Fields : Advanced Safety / Automated Driving] We have improved sensing technologies by proposing next-generation sensors using cutting-edge technologies. We will not only develop sensors but also systems including semiconductors and ECUs to propose automated driving platforms.
Slide 27: Initiatives in Focus Fields: Advanced Safety / Automated Driving
[Initiatives in Focus Fields : Advanced Safety / Automated Driving] DENSO developed a new vision sensor and a millimeter-wave radar sensor In developing advanced safety products, we need to meet the requirements of a car assessment called NCAP. In 2016, NCAP required compliance with Autonomous Emerg
Slide 28: Initiatives in Focus Fields: Advanced Safety / Automated Driving
[Initiatives in Focus Fields : Advanced Safety / Automated Driving] DENSO Established Global R&D Tokyo The development system involves 200 employees conducting R&D and developing automated driving and connectivity technologies. Global R&D Tokyo takes full advantage of its geographical location to co
Slide 29: Initiatives in Focus Fields: Advanced Safety / Automated Driving
[Initiatives in Focus Fields : Advanced Safety / Automated Driving] The role of Global R&D Tokyo Global R&D Tokyo will: 1. Develop and demonstrate competitive functionalities with many partners including universities and research institutes; 2. Collect data in various environments; 3. Develop electr
Slide 30: Initiatives in Focus Fields: Connected Cars
[Initiatives in Focus Fields : Connected Cars] We are undergoing a paradigm shift from vehicle ownership to utilization and service. To increase the added value of vehicles and offer safety, security, and the pleasure of driving to users, we will develop vehicle systems that are integrated with clou
Slide 31: Initiatives in Focus Fields: Connected Cars
[Initiatives in Focus Fields : Connected Cars] DENSO developed advanced vehicle operation system We have long offered operational management services for commercial vehicles such as trucks and buses, which are small in number but high in environmental impact, and which require higher levels of safet
Slide 32: Partnership Strategies
[Partnership Strategies ] In new fields such as automated driving, increasingly complicated and advanced technologies are required. As the pace of technology innovation accelerates, we cannot develop technology by ourselves as fast as the market changes. We have therefore been actively building alli
Slide 33: Partnership Strategies
[Partnership Strategies ] Advanced Safety / Automated Driving We took a stake in ThinCI which has the underlying technology for data flow processors, to strengthen the collaboration for developing in-vehicle semiconductor IPs for integrated control. We also increased our stake in Renesas, which is o
Slide 34: Sustainability
[Sustainability] The objective of our sustainability management “Inspire various stakeholders by creating value in the areas of the environment and safety, and thereby achieve sustainable growth of the company and society.” In fact, this is the essence of the DENSO Group Long Term Policy 2030 that I
Slide 35: Example: Environment
[Example: Environment] ECO Vision 2025 We formulated Eco Vision 2025 as an action plan to achieve a sustainable society by 2050 and established three targets to be achieved by then: half the energy consumption, twice as clean, and twice as green. Ten specific actions are being taken to achieve the t
Slide 36: Example: Social
[Example: Social] DENSO was selected under the Health & Productivity Stock Selection program for the second consecutive year We consider keeping our employees healthy as a management priority. We have been improving health and productivity management by introducing measures to promote both mental an
Slide 37: For mobility society full of smiles
For mobility society full of smiles, DENSO will keep providing solutions that will provides people everywhere with something to smile about. DENSO Crafting the Core 36 /36 36
Slide 38: DENSO Crafting the Core
DENSO Crafting the Core
Slide 39: 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 37 37
Slide 40: FY18 Non-Consolidated Financial Results
FY18 Non-Consolidated Financial Results Income Statements(Japanese accounting standards) (Ratio to Sales) (Unit: Billions of Yen,%) cl nnn 8 “Amount — % Net Sales UM 2,671.9 | ( 100.0 ) 2,472.8 199.1 8.1 Operating Income I 1) ) AO8.2000 12:0) 49.6 58.6 118.2 ttl se CU G-8 1D ANN 980-90) 01 CHINN SSH
Slide 41: Pre-Conditions (Foreign Exchange Rate/Car Production)
Pre-Conditions (Foreign Exchange Rate/Car Production) FY2018 Full Year FY2019 Full Year FY2018 First-Half FY2018 Second-Half Prior Year| Actual | Change Prior Year| Actual | Change |Prior Year| Actual | Change | Forecast | Change Foreign Exchange usb 105} 11 +6| iii] 111 -0} 108] 9111 +3 105 6 Rate
Slide 42: Consolidated Revenue (By Customer)
Consolidated Revenue (By Customer) (Unit: Billions of Yen) Change ear FY2017 canes excludes Amount ___% to Total J Amount | % to Total | Amount % % Toyota 2,124.2 | 41.5 1,926.3 42.5 197.9) 10.3 8.2 Daihatsu 116.0 2.3 95.9 21 20.1 21.0 20.5 Hino 60.3 1.2 52.8 1.2 7.5 14.3 14.1 Toyota Group 2,300.6 4
Slide 43: Consolidated Revenue (By Product)
Consolidated Revenue (By Product) (Unit: Billions of Yen,%) Change FY2018 FY2017 Change excludes difference Amount % to Total Amount % to Total Amount % % Thermal Systems 1,452.2 28.4 1,356.6) 30.0) 95.5 7.0 3.6 Powertrain Systems 1,260.6 24.7 1,160.6 25.7) 100.0 8.6 5.2 Electrification Systems 815.
Slide 44: Consolidated Revenue (By Product) - Previous product category
Consolidated Revenue (By Product) - Previous product category - (Unit: Billions of Yen,%) FY2018 FY2017 Change Change excludes Amount %toTotal | Amount | %toTotal | Amount % % Thermal Systems 1,452.2, 28.4 1,356.6 30.0) 95.5) 7.0 3.6 Powertrain Systems 1,260.6 24.7 1,160.6 25.7 100.0 8.6 5.2 Informa
Slide 45: Capital Expenditures, Depreciation and R&D Expenditures
Capital Expenditures, Depreciation and R&D Expenditures (Unit: Billions of Yen) FYI7 FY18 Change FY19F Change Percent Percent Japan 215.7 217.7 0.9% 240.0 10.2% North America 51.8} 43.8) -15.4% 62.5 42.7% Europe 23.6) 30.8] 30.5% 32.0 3.9% Asia 44.1 52.7| 19.5% 63.0 19.5% Others 2.2 2.2 0.0% 25 13.6