Renesas Electronics Corporation · TSE:6723

Renesas Electronics — Investor Day (February 2020)

30 slides from Renesas Electronics's investor day presentation, Feb 17, 2020

  1. Slide 1: Strategy Update

    ＜表紙サンプル＞ 産業制御システム向け STRATEGY UPDATE RZ/G セキュリティソリューションの紹介 IEC 62443-4-2認証取得に向けて FEBRUARY 17, 2020 HIDETOSHI SHIBATA PRESIDENT AND CEO RENESAS ELECTRONICS CORPORATION © 2020 Renesas Electronics Corporation. All rights reserved.

  2. Slide 2: Presenter Introduction

    PRESENTER INTRODUCTION Automotive Solution Business Unit (“ABU”) IoT and Infrastructure Corporate ABU Business Strategy Digital Analog & Power Business Unit (“IIBU”) Hidetoshi Shibata Shuhei Shinkai Shingo Yamamoto Takeshi Kataoka Tomomitsu Maoka Sailesh Chittipeddi Representative Director, SVP / CF

  3. Slide 3: In a World Switched On…

    IN A WORLD SWITCHED ON… Core Automotive ENGAGING SERVING IN WIDER SPECTRUM FAST GROWING Industrial IN DATA-CENTRIC WORLD VERTICALS Edge OFFERING SOLUTIONS Infra TO MAKE OUR LIVES EASIER Endpoint IoT Sense Move / Store Compute Actuate Source: 8x increase in electric vehicles by 2025 by Strategy Analy

  4. Slide 4: In a World Switched On…

    IN A WORLD SWITCHED ON… Core 8x 20% 34％ 40% Automotive ENGAGING SERVING Increase in IN WIDERADAS SPECTRUM market CAGR FAST IoT sensors GROWING Content expansion CAGR Industrial electric vehicle IN DATA-CENTRIC 2019WORLD - 2027 VERTICALS 2018 - 2024 from 4G to 5G Edge 2016 - 2025 OFFERING SOLUTIONS I

  5. Slide 5: In a World Switched On…

    IN A WORLD SWITCHED ON… Core 8% Automotive ENGAGING SERVING IN WIDER SPECTRUM FAST GROWING 7% Industrial IN DATA-CENTRIC WORLD VERTICALS Edge OFFERING SOLUTIONS Long-term 5% Infra market (SAM) TO MAKE OUR LIVES EASIER CAGR Endpoint 8% IoT Sense Move / Store Compute Actuate Source: 8x increase in ele

  6. Slide 6: Portfolio Aligned with High-Growth End Markets

    PORTFOLIO ALIGNED WITH HIGH-GROWTH END MARKETS 2019 Revenue by end market  No.1 automotive MCU supplier  Most advanced geometry combined with MONOS technology  Functional safety and security Automotive Automotive  Leading MCU and SoC supplier 52%  Rich and extensive technology offering such as

  7. Slide 7: What We Do

    WHAT WE DO Product portfolio Focus verticals Sense Move / Store Compute Actuate  Sensor (optical,  Timing  ADAS/AD platform  Motor solution Auto flow, humidity, gas,  Optical  Gateway  OIS servo- CO2, temperature, controller  Memory interface  DRP / e-AI thermopile)  PMIC  High bandwidth

  8. Slide 8: 2019 Revenue Composition

    2019 REVENUE COMPOSITION Automotive Industrial, Infra and IoT Control Info Industrial Infra IoT Total 75% + 25% - 40% - 25% - 35% + SoC, 10% - MCU, 55% + MCU, 50% - MCU, 50% + MCU, 50% - MCU, 60% + Analog, 90% + SoC, 10% + SoC, 25% + Analog, 15% - SoC, 35% - Analog, 50% - Analog, 30% + Power, 25% -

  9. Slide 9: Our Vision, Mission and Value

    OUR VISION, MISSION AND VALUE © 2020 Renesas Electronics Corporation. All rights reserved. 7

  10. Slide 10: My Cause

    MY CAUSE To make our lives easier by complementing human capabilities © 2020 Renesas Electronics Corporation. All rights reserved. 8

  11. Slide 11: Corporate Strategy – Balanced Growth

    CORPORATE STRATEGY – BALANCED GROWTH Balanced growth through diversification Diversification:  Product Corporate strategy  Market  People Common thread: Unit strategy  Reliability  Stickiness  Constant innovation Division strategy © 2020 Renesas Electronics Corporation. All rights reserved. 9

  12. Slide 12: Diversification

    DIVERSIFICATION Renesas (2016) Renesas+Intersil+IDT (2019) Power Power 11% 9% Analog 14% Analog By Product 58% MCU 30% 49% MCU 17% SoC 12% SoC IoT IoT Infra 2% 15% 18% Automotive Infra Automotive By End market 56% 12% 51% Industrial 27% Industrial 19% Direct Direct Tokuyakuten 26% Tokuyakuten 32% By

  13. Slide 13: Growth Plan

    GROWTH PLAN Long-term Long-term Renesas Market (SAM) Revenue (oku-yen) Long-term CAGR CAGR target Renesas 7% * Automotive 2019 Actual control Automotive 8％ ** 7,182 Automotive control 4％ 2019 Adjusted Information EoL FX 6,204 ADAS Information 4％ Others xEV Automotive ADAS 17％ others xEV 18％ Industri

  14. Slide 14: Automotive

    AUTOMOTIVE Revenue (oku-yen) Growth Driver How We Win  Continued electronic  Scalable product offering to Grow content growth streamline E/E architecture Control @SAM Control Electric / electronic ADAS / AD product offering 50%-   architecture evolution expansion to full spectrum 3,330  Winning

  15. Slide 15: Industrial, Infra and IoT

    INDUSTRIAL, INFRA AND IoT Revenue (oku-yen) Growth Driver How We Win  Robotics applications  Differentiated and scalable Grow  Human-machine interaction product offerings @SAM+ Industrial Industrial  Realtime synchronization  Winning combos 40%- Strategic collaborations with 5G   2,874 techno

  16. Slide 16: Illustrative Scenarios for Winning

    ILLUSTRATIVE SCENARIOS FOR WINNING Automotive Industrial Infra IoT RA MCUs Cloud connection ADAS / AD SoCs MPUs Scalability Analog & xEV & ADAS / AD Human-Machine 5G Mixed Winning combos Signal solutions Interface (“HMI”) Data center Power Discretes © 2020 Renesas Electronics Corporation. All rights

  17. Slide 17: How We Win – Automotive

    HOW WE WIN – AUTOMOTIVE 1 Computing Power / Battery management Bottom side MCU / SoC PMIC PMIC Converge MCU / SoC architectures to offer seamlessly scalable solutions PMICs fully Reusable S/W & Common IP Scalable Line-up calibrated to our PMIC MCUs and SoCs Performance R-Car V3U Cognitive High-end

  18. Slide 18: How We Win – Automotive 2

    HOW WE WIN – AUTOMOTIVE 2 Camera / Video interface Sensing Analog HD Link Sensing ECU Radar / Lidar Camera module HV Power IC PMIC Strategic partnerships PMIC MIPI HD link IC V-ch Power lines ISL78083 HD link IC (Tx) Camera PMIC (Rx) R-Car V3x AHL Ultra low noise, 4D Solid state, high resolution L

  19. Slide 19: How We Win – Industrial

    HOW WE WIN – INDUSTRIAL MPU HMI MCU / MPU HMI solution Touch Touch + Vision & AI Scalable lineup for MCUs and MPUs High Graphics / graphics / AI Linux Performance Time Real time sensitive motor & drive network A, New Series G Series DRP-AI T Series N Series into MPU Functional integration Power G

  20. Slide 20: How We Win – Infra and IoT

    HOW WE WIN – INFRA AND IoT Infra IoT 5G Arm MCU Connectivity Revenue for RF (4G & 5G) CAGR +35% Fastest entry to market with Bluetooth® Low Energy  RF ICs for massive MIMO Security for IoT  Beamformer ICs for mm Wave 2015 2019 phased array antennas NB IoT Data center MIP competitive landscape 10

  21. Slide 21: Result-Oriented, Pragmatic Approach

    RESULT-ORIENTED, PRAGMATIC APPROACH Delivering results Achievable target Make or buy Clearer accountability © 2020 Renesas Electronics Corporation. All rights reserved. 19

  22. Slide 22: Target Financial Model

    Non-GAAP TARGET FINANCIAL MODEL Long-term target* 2019 2019 Industrial, Actual Adjusted* Automotive Total Infra and IoT 7,182 6,204 Grow Grow Grow Revenue oku-yen oku-yen @SAM @SAM+ @SAM+ Gross margin 44% 43%** 40-45% 55-60% 50% Operating margin 13% 12% 10-15% 25-30% 20%+ * FX 1USD=100yen, 1EUR=120y

  23. Slide 23: Margin Expansion

    Non-GAAP MARGIN EXPANSION Gross margin (%) Key Contributors Depreciation scale down 50% Structural reform 43 % Product mix improvement Volume increase 2019 Adjusted Long-term target * FX for 2019 Adjusted and Long-term target: 1USD=100yen, 1EUR=120yen, continuing business only © 2020 Renesas Electro

  24. Slide 24: IDT Integration

    IDT INTEGRATION Phase 0 Phase I Phase II One Renesas Sep 11, Mar 30, Apr 1, Jul 1, Jan 1, 2018 2019 2019 2019 2020 DA signing Closing Partial Full Integration of legal entities, organization organization business processes, integration integration IT systems, etc. 2 business units Integration of 6 s

  25. Slide 25: Savings

    SAVINGS ($m) 2019 2020 Key Contributors 120 100 Patent and design tools 80 60 120 Organization and operation 40 85 80 Procurement 20 0 Distribution margin 8.99 Actual Estimate Target As of January 24th, 2020 Gross savings on an annual run rate basis, in $m © 2020 Renesas Electronics Corporation. All

  26. Slide 26: Revenue Synergies

    REVENUE SYNERGIES Strategy Solution 2019 Actual Boost Winning LTV of Deeper sales per customer combinations $ 129m Broader Win New customer 11,802 new new customers acquisition customers © 2020 Renesas Electronics Corporation. All rights reserved. 24

  27. Slide 27: 100+ Winning Combos Within 1 Year of Acquisition

    100+ WINNING COMBOS WITHIN 1 YEAR OF ACQUISITION FPGA Automotive Industrial Infra designs  Electric vehicle charger  Carbon monoxide detector  Cellular base station  Xilinx Versal ACAP power and  Automotive infotainment and  Edge computing for security  Fleet tracking timing dashboard system

  28. Slide 28: Cultural Fusion

    CULTURAL FUSION GM ~60% 800 25% OM ~20% Headcount in Above manager Profitability Silicon Valley from Intersil or IDT Diverse team Financial discipline Entrepreneurial mindset © 2020 Renesas Electronics Corporation. All rights reserved. 26

  29. Slide 29: Summary

    SUMMARY Well positioned portfolio To address high growth market With emphasis on delivering results … to make our lives easier © 2020 Renesas Electronics Corporation. All rights reserved. 27

  30. Slide 30: Renesas.com

    Renesas.com © 2020 Renesas Electronics Corporation. All rights reserved.

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