Oki Electric Industry Company, Limited · TSE:6703
Oki Electric Industry — H1 FY2007 Earnings Presentation
37 slides from Oki Electric Industry's earnings presentation, Oct 26, 2006
Slide 1: Financial Results for the First Half of Fiscal Year ending March 31, 2007
Financial Results for the First Half of Fiscal Year ending March 31, 2007 Oct. 26, 2006 Oki Electric Industry Co., Ltd. 1
Slide 2: Table of Contents
Table of Contents 1. 1st Half of FY ending March 2007 1.1 Financial Results Outline 1.2 Profit and Loss 1.3 Segment Information 2. Revision of Full Year Projections 3. Progress in Major Management Measures The projections and plans on this material are subject to change depending upon the changes of
Slide 3: 1st Half Outline
1st Half Outline Sales increased by 12.8 billion yen from July 27 announcement Income level, approximately as planned (Billion yen) FY end. FY end. July 27 Mar.06 Mar. 07 Projections Net Sales 319.1 312.8 300.0 Operating income (4.2) (11.6) (12.0) Recurring income (5.7) (15.1) (15.5) Net income (3.9
Slide 4: 1st Half Profit and Loss Outline
1st Half Profit and Loss Outline H1, FY H1, FY July 27 Cost of sales ratio (Billion yen) worsened by 1.4 points due Mar. 06 Mar. 07 proj. to price declines, etc. Net sales 319.1 312.8 300.0 (Cost of sales ratio) (77.2%) (78.6%) SG&A increase due to rise Cost of sales 246.5 245.8 in labor costs and s
Slide 5: 1st Half Segment Information
1st Half Segment Information <Causes of YoY variance> Net sales (Billion yen) Net sales: Decreased by 6.3 B yen 319.1 312.8 300.0 15.2 Printer sales increased, particularly in color 16.2 16.0 Others NIP 71.0 82.4 76.0 Printers Decrease in sales for telecom carriers 77.6 impacted decrease in total sa
Slide 6: Segment Information: Info-telecom Systems
Segment Information: Info-telecom Systems Net sales (Billion yen) <Causes of YoY variance> Net sales: Decreased by 12.8 B yen 155.3 136.0 Financial market: Decreased by 0.4 B yen 8.5 142.5 11.0 Others Recovery trend in security-enhanced ATM 26.0 15.5 30.5 Enterprises Higher sales in volume in H2 of
Slide 7: Segment Information: Semiconductors
Segment Information: Semiconductors Net sales (Billion yen) <Causes of YoY variance> 77.6 Net sales: Decreased by 5.9 B yen 71.7 72.0 8.4 Others Logic: Decreased by 9.3 B yen 1.6 10.7 10.5 18.4 1.4 1.5 Optical Decrease in driver sales due to inventory components adjustment by LCD panel vendors 19.7
Slide 8: Segment Information: Printers
Segment Information: Printers Net sales (Billion yen) <Causes of YoY variance> 82.4 Net sales: Increased by 11.4 B yen 76.0 71.0 Color NIP: Increased by 9.7 B yen 36.7 Increase in unit shipment and sales for 32.0 Mono NIP, 35.0 SIDM, others consumables Mono NIP, SIDM, others: Increased by 1.7 B yen
Slide 9: Table of Contents
Table of Contents 1. 1st Half of FY ending March 2007 2. Revision of Full Year Projections 2.1 Assumption for the Projections 2.2 Revision of the Projections 3. Progress in Major Management Measures 9
Slide 10: Assumption of the Full Year Projections
Assumption of the Full Year Projections <Operating environment> ¾ Info-telecom Systems Recovery trend in financial institutions’ investments Telecom carriers decrease investments on fixed-network equipment, while starting trials for NGN ¾ Semiconductors Recovery sign in LCD panels Stable sales in ch
Slide 11: Revision of the Projections
Revision of the Projections Net sales increases by 10.0 B yen, particularly in sales for the financial market, public sectors, and EMS Operating income is as planned. 1.0 B yen increase in Info-telecom and 1.0 B yen decrease in Printers Net sales Operating income FY Mar. 07 plan <Ref.> FY Mar. 07 pl
Slide 12: Table of Contents
Table of Contents 1. 1st Half of FY ending March 2007 2. Revision of Full Year Projections 3. Progress in Major Management Measures Flexible and speedy business operation Basic concept for NGN-related business Measures targeting postal service privatization Creating new products for enterprise netwo
Slide 13: Progress in Business Structure Revamps
Progress in Business Structure Revamps In this fiscal year, Oki has worked to revamp its business structure, according to its “Oki’s scenario for the era of changes,” as we explained in April. <Measures> 1. Flexible and speedy business operation 2. Changes in base business structure 3. Expand new bu
Slide 14: Flexible and Speedy Business Operations
Flexible and Speedy Business Operations 1. Create new in-house venture companies and units <Aims> Ubiquitous Ubiquitous Services Services • Handle company-wide projects and novel projects flexibly and speedily, which are difficult for existing in- Mechatronics Mechatronics house companies Wireless W
Slide 15: Basic Concept for NGN-related Business
Basic Concept for NGN-related Business <Oki’s NGN vision> Three convergences which realize Ubiquitous Services Various applications of voice, video and data can be used ubiquitously, free from wired/ wireless, access types or media types Ubiquitous Services: Individualize and provide services at use
Slide 16: Oki's Approach to NGN: NGN and Ubiquitous Services Convergence
Oki’s Approach to NGN: NGN and Ubiquitous Services Convergence Convergence of of services services and and networks networks enabled enabled by by NGN NGN -2003 - - 2005 - - 2007 - - 201X - Convergence of services (Converging user experience) fixed fixed ++ web web ++ internal internal service servi
Slide 17: What is NGN?
What is NGN? Next generation telecom network based on full-IP integrated network (The infrastructure for carrier networks) ITU-T recommendation Y.2001 Ubiquitous services by industry Telecom Public Financial Enterprise Carrier Sector Features Carrier Ubiquitous Service Legacy networks Integrated I
Slide 18: NGN Strategy
NGN Strategy Oki will become the key player in the NGN market through information and telecom convergence Oki promotes info-telecom convergence strategy at an early stage • Develops Japan’s first VoIP system (1996) • Create market with Japan’s first CTI system (1997) • Operate world’s largest (5 m
Slide 19: Business for NGN Carrier Network
Business for NGN Carrier Network Oki’s Oki’s strategy strategy for for carrier carrier networks: networks: Focus Focus on on creating creating value value at at each each edge edge in in the the four four areas areas Carrier Ubiquitous Service Platform Target for NGN carrier ¾ Provide info-telecom c
Slide 20: Enhancing Oki's Development Structure for Carrier Networks in NGN
Enhancing Oki’s Development Structure for Carrier Networks in NGN Enhance Enhance organization organization to to respond respond to to NGN NGN •• Focus Focus on on NGN NGN as as itit will will expand expand as as the the infrastructure infrastructure for for Ubiquitous Ubiquitous Society Society ••
Slide 21: Business Opportunities in Privatization of the Postal Office
Business Opportunities in Privatization of the Postal Office Market size of postal office privatization <Market size projection> (Source: Oki projections) (Amount of IT investments excluding 190.0 host-related business) Others 9Expect a market size of 190 billion yen in 140.0 Business quality, FY en
Slide 22: Launch New Key Telephone System
Launch New Key Telephone System Combine the advanced functions of SS9100, the stability of IPstage EX300 and the usability of Office stage in a single Key Telephone System Advanced Stability Usability functions Most powerful compatibility with IP and Mobile 22
Slide 23: Create New Products for Enterprise Networks and IP Systems
Create New Products for Enterprise Networks and IP Systems Oki Fare Telecom 06 FY ending March 2007 FY ending Model March 2008 1H Q3 Q4 IP IP Centrex Centrex at at large/mid-size large/mid-size R7.0 companies accelerate companies accelerate Large-scale PBX R6.0 IP IP Centrex Centrex at at large/mid-
Slide 24: Create New Semiconductor Products - SOS Business Deployment
Create New Semiconductor Products - SOS Business Deployment - Enhance alliance with Peregrine Semiconductor Corp.: Launch business of RF front end (RF-FE) products utilizing ultra CMOS, SOS features 9 FY Mar. 07: Expand business by establishing coherent production at Oki and enhancing business with
Slide 25: Improve Color NIP Profitability
Improve Color NIP Profitability Promote cost reduction project ¾ Review cost structure at development and production processes ¾ Reduce logistic costs, make efficient sales investments, and review other costs ¾ Reduce costs through new LED head Shift from low-end desktop models to mid and high-end m
Slide 26: New Business Expansion: China Business
New Business Expansion: China Business Shift Oki’s business in China from a Japan-controlled style to a locally controlled business 1. Enhance marketing and sales capabilities Sales in China • Establish a sales administration company (Billion yen) Others (June, 06) Printers 50 45.0 • Enhance allianc
Slide 27: ATM Business in China
ATM Business in China Market and customer trend China China ATM ATM market market size size Installation of ATMs rapidly expand, mainly (thousand) (units shipped) 35 in large bank branch offices (50% annual growth) 30 Small branch offices install low-cost CDs 25 Full scale demand to enhance security
Slide 28: Semiconductor Business in China
Semiconductor Business in China Business Strategy (Billion yen) Sales for China Enhance product creation 40 Market Plan to integrate function of Shanghai’s sales office 30 26.0 and development and marketing office Product strategy 19.5 20 Deploy products utilizing Oki’s differentiating 13.5 technolo
Slide 29: Printer Business in China
Printer Business in China SIDM: Maximize SIDM profit by exploring new Sales Target channels and changing model mix (Billion yen) Establishing relationship with China’s largest 10 10.0 Color NIP distributor and increase sales of low end products SIDM Avoid price competition by building OKI brand 7.5
Slide 30: Expand and Create Service and Software Business
Expand and Create Service and Software Business By utilizing Oki’s technologies, knowledge and assets, Oki will expand service and software business that enable customers to focus on their primary business Sales target for operating service and software service in FY end. Mar. 2011: 150.0 B yen Expa
Slide 31: To Become an Excellent Growing Company
To Become an Excellent Growing Company FY FY Mar. Mar. 08: 08: Become Become aa company company with with stable stable profitability profitability by by achieving achieving management management target target FY FY Mar. Mar. 11: 11: Aim Aim to to be be an an excellent excellent growing growing && g
Slide 32: [Reference] Status of 'Changes in Base Business Structure' (1)
[Reference] Status of ‘Changes in Base Business Structure’ (1) Area Category Status Plans Establish a division for privatization of Accelerating in proposing Privatization of postal office in the in-house Financial solutions to the 4 business postal office Solutions Company companies Expand ATM shar
Slide 33: [Reference] Status of 'Changes in Base Business Structure' (2)
[Reference] Status of ‘Changes in Base Business Structure’ (2) Area Category Status Plans Accelerate new products by Restructure Change organization to product-based integrating planning, business organization (April 2004) development and sales divisions Focus on next generation Semicon Create new w
Slide 34: [Reference] H1, FY Mar. 07 Balance Sheet (1)
[Reference] H1, FY Mar. 07 Balance Sheet (1) <Balance Sheet: Assets> Cash and deposits increased by 7.1 B yen on a YoY basis due to increase in cash from issuance of corporate bond (For corporate bond redemption) Inventories increased by 26.4 B yen on a YoY basis due to sales increase in printers, l
Slide 35: [Reference] H1, FY Mar. 07 Balance Sheet (2)
[Reference] H1, FY Mar. 07 Balance Sheet (2) <Balance Sheet: Liabilities and Shareholders’ Equity> Issued 30.0 B yen of convertible-bond-type-bonds with stock acquisition rights in June 2006 * For easier comparison, the amount is calculated based on the previous method before the change of the corpo
Slide 36: [Reference] H1, FY Mar. 07 Cash Flows
[Reference] H1, FY Mar. 07 Cash Flows Free cash flows of H1, FY Mar. 07 remains as same as the previous year Issued 30.0 B yen of convertible-bond-type-bonds with stock acquisition rights in June 2006 FY Mar. 06 FY Mar. 07 (Billion yen) H1 Full year H1 Full year (plan) I. Cash flows from operating a
Slide 37: Glossary
Glossary P5 NIP Non-Impact Printer P19 STB Set Top Box ATM Automated Teller Machine P21 IT Information Technology LCD Liquid Crystal Display P23 MKT Multifunction Key Telephone LSI Large Scale Integration P24 CMOS Complementary Metal Oxide P2ROM Production Programmed Read Only Semiconductor Memory R
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