Slide 1: FY17/12 Q3 Presentation
FY17/12 Q3 PRESENTATION RENESAS ELECTRONICS CORPORATION NOVEMBER 2, 2017 © 2017 Renesas Electronics Corporation. All rights reserved.
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
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
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
Slide 5: PPA Effects in Balance Sheets (as of February 28, 2017)
PPA (PURCHASE PRICE ALLOCATION) EFFECTS*1 IN BALANCE SHEETS (AS OF FEBRUARY 28, 2017) (B yen) Inventory Property, plant -10.0 and equipment Intangible assets -10.2 -144.1 316.3 +39.0 Others*2 (Deferred tax liabilities, etc) 191.0 0.0 FY16/3 Q1 Goodwill amount before PPA FY16/3 Q2 Goodwill amount aft
Slide 6: PPA Effects in Profit and Loss Statement (GAAP)
PPA EFFECTS*1 IN PROFIT AND LOSS STATEMENT (GAAP) FY2017/12 (B yen) Q1 Q2 Q3 Q3 Cumulative Net Sales (Before PPA) 177.6 198.1 195.5 571.3 PPA Effects (Net Sales) -0.4 -0.8 +0 -1.2 Net Sales（After PPA) 177.2 197.3 195.5 570.1 Gross Profit (GAAP/Before PPA) 80.8 90.5 93.3 264.5 PPA Effects（Net Sales/C
Slide 7: 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
Slide 8: Revised GAAP/Non-GAAP Reconciliation (FY17/12)
REVISED GAAP/NON-GAAP RECONCILIATION (FY17/12) ・Non-GAAP Basis: Results excluding non-recurring and certain other items. Starting from FY2017 ending December 2017, the Non-GAAP basis excludes amortization of goodwill, amortization of purchased intangible assets, costs related to the Intersil acquisi
Slide 9: GAAP/Non-GAAP Reconciliation (FY17/12)
GAAP/NON-GAAP*1 RECONCILIATION (FY17/12) FY2017/12 (B yen) Q1 Q2 Q3 Q4 (Forecast) Operating Profit (GAAP/After PPA) 22.1 9.3 24.9 14.7 PPA Effects*2（Net Sales/COGS*3） +3.1 +8.7 +0.4 +0.5 PPA Effects（SG＆A*4） Increase in depreciation of fixed assets, etc +0 +0.2 +0.1 +0.2 Stock-Based Compensation (COG
Slide 10: FY17/12 Q3 Financial Snapshot (Non-GAAP Basis)
Non-GAAP FY17/12 Q3 FINANCIAL SNAPSHOT (NON-GAAP BASIS*1) YoY and QoQ results as well as the changes from July 28 FCT of the Net Sales and Semi Sales are rounded off to one decimal place. CY16 CY17 (FY17/12) （B yen） 9 Months Apr-Jun Jul-Sep Jul-Sep Change from 9 Months Jul-Sep Cumulative (Q3) (Q3) Y
Slide 11: FY17/12 Q3 Semiconductor Sales (Non-GAAP Basis)
Non-GAAP FY17/12 Q3 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) YoY + 44.0 B yen (+29.6%) (B yen) Recovery from the Kumamoto Earthquake +28.1 Sales increase +44.0 +8.5 (Including Intersil +7.4 Currency impact integration) 192.3 148.3 0 0 0 *1: Results excluding non-recurring and certain other items. Non-
Slide 12: Quarterly Semiconductor Sales Trends
Non-GAAP QUARTERLY SEMICONDUCTOR SALES TRENDS (NON-GAAP BASIS*1) (B yen) Actual basis (B yen) Pro-forma basis*2 Automotive Industrial Broad-based Other Automotive Industrial Broad-based Other 200 194.3 192.3 QoQ: -1.1% YoY: +29.6% 200 194.3 192.3 YoY: +18.3% 1.1 0.8 181.3 1.1 0.8 178.2 176.6 172.6 1
Slide 13: Gross Margin, Operating Margin and Opex Trajectory
Non-GAAP GROSS MARGIN, OPERATING MARGIN AND OPEX TRAJECTORY (NON-GAAP BASIS*1) <R&D Ratio (%)> QoQ: -0.9 pts <Gross Margin (%)> YoY: -0.7 pts QoQ: +2.1 pts 20 50 YoY: +5.2 pts 16.2 16.1 16.7 16.9 45.8 45.6 47.7 15 16.9 45 45.5 45.7 14.9 15.2 16.0 42.2 14.2 44.3 44.3 10 13.1 40 42.5 11.6 41.5 42.1 42
Slide 14: FY17/12 Q3 Operating Income (QoQ)
Non-GAAP FY17/12 Q3 OPERATING INCOME (NON-GAAP BASIS*1) QoQ +6.9 B yen (B yen) Changes in volume and costs Currency (excluding currency impact) impact +3.9 +1.0 +0.4 +1.6 Decrease in R&D,SG&A Accounting Impact (excluding amortization of (Inventory revaluation, etc) goodwill) 35.9 29.0 0.0 0.0 0.0 *1
Slide 15: FY17/12 Q3 Operating Income (YoY)
Non-GAAP FY17/12 Q3 OPERATING INCOME (NON-GAAP BASIS*1) Increase in R&D,SG&A (B yen) YoY + 19.4 B yen (excluding amortization of goodwill) -9.0 +23.4 Accounting Impact Currency (Inventory revaluation, etc) impact +0.8 Changes in volume and costs +4.1 (excluding currency impact) 35.9 16.6 0.0 0.0 0.0
Slide 16: FY17/12 Q3 Operating Income (vs Forecast)
Non-GAAP FY17/12 Q3 OPERATING INCOME (NON-GAAP BASIS*1) vs FCT +5.4 B yen (B yen) Decrease in R&D,SG&A (excluding amortization of goodwill) Accounting Impact (Inventory revaluation, etc) +0.9 -0.8 +4.3 +1.0 Currency Changes in volume and costs impact (excluding currency 35.9 impact) 30.5 0.0 0.0 0.0
Slide 17: FY17/12 Full-Year Financial Forecasts
Non-GAAP FY17/12 FULL-YEAR FINANCIAL FORECASTS (NON-GAAP BASIS*1) YoY and QoQ forecasts of the Net Sales and Semiconductor Sales are rounded off to one decimal place. CY16 CY17 (FY17/12) 12 Months (B yen) 12 Months Q3 Q4 Forecast Cumulative Oct-Dec Cumulative YoY QoQ YoY (Jul-Sep) (Oct-Dec) Forecast
Slide 18: FY17/12 Q4 Operating Income Forecast (QoQ)
Non-GAAP FY17/12 Q4 OPERATING INCOME FORECAST (NON-GAAP BASIS*1) QoQ - 10.0 B yen (B yen) Currency Changes in volume and costs impact (excluding currency impact) +0.7 - -1.0 Accounting Impact -9.7 (Inventory revaluation, etc) 35.9 Increase in R&D,SG&A (excluding amortization of goodwill) 25.9 0.0 0.
Slide 19: FY17/12 Q4 Operating Income Forecast (YoY)
Non-GAAP FY17/12 Q4 OPERATING INCOME FORECAST (NON-GAAP BASIS*1) YoY + 3.1 B yen Increase in R&D,SG&A (excluding amortization of goodwill) (B yen) -14.0 Accounting Impact +16.2 (Inventory revaluation, etc) +3.1 -2.2 Currency Changes in volume and costs impact (excluding currency impact) 25.9 22.8 0.
Slide 20: FY17/12 Full-Year Operating Income Forecast
Non-GAAP FY17/12 FULL-YEAR OPERATING INCOME FORECAST (NON-GAAP BASIS*1) YoY + 41.9 B yen Increase in R&D,SG&A (excluding (B yen) amortization of goodwill) -36.9 Accounting Impact +80.8 (Inventory revaluation, etc) +4.3 -6.2 Currency impact Changes in volume and costs (excluding currency impact) 120.
Slide 21: 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 21 BIG IDEAS FOR EVERY SPACE
Slide 22: 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
Slide 23: FY17/12 Q3 Financial Snapshot (GAAP)
FY17/12 Q3 FINANCIAL SNAPSHOT YoY and QoQ results as well as the changes from Jul 28 FCT of the Net Sales and Semi Sales are rounded off to one decimal place. CY16 CY17 (FY17/12) (B yen) Jul-Sep Jul-Sep 9 Months 9 Months Apr-Jun*1 Change from Jul-Sep (Q3) (Q3) YoY QoQ Cumulative*1 YoY Cumulative (Q2
Slide 24: Balance Sheets
BALANCE SHEETS*1 As of Sep. 30, As of Dec. 31, As of Mar. 31, As of Jun. 30, As of Sep 30, (B Yen) 2016 2016 2017 2017 2017 Total Assets 758.2 823.1 995.5 1,015.6 1,020.6 Cash and Cash Equivalents *2 326.2 354.3 101.0 126.6 124.4 Inventories 92.1 97.3 113.9 109.0 120.6 Liabilities 376.2 400.7 565.6
Slide 25: EBITDA and Cash Flows
EBITDA*1 AND CASH FLOWS*2 Insurance income: +10.5 Acquisition-related payments: -16.0 <EBITDA (B yen)> <Cash Flows (B yen)> 60 Cash flows from operating activities 59.5 54.1 Cash flows from investing activities 50 45.1 Free cash flows*3 44.0 50 47.7 46.3 35.8 31.5 32.6 32.6 31.4 41.0 42.5 27.5 30 38
Slide 26: FY17/12 Full-Year Financial Forecasts (GAAP)
FY17/12 FULL-YEAR FINANCIAL FORECASTS YoY and QoQ forecasts of the Net Sales and Semiconductor Sales are rounded off to one decimal place CY16 CY17 (FY17/12) (B yen) 12 Months Full-year Q3 Q4 Forecast Oct-Dec Cumulative YoY QoQ Forecast YoY (Jul-Sep) (Oct-Dec) (Jan-Dec) （Jan-Dec） Net Sales 166.4 638
Slide 27: 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