Slide 1: FY09/3 Q2 Financial Results
FY09/3 Q2 Financial Results Toshio Nakajima President and CEO October 29, 2008 NEC Electronics Corporation http://www.necel.com/ir/en/ 1
Slide 2: Executive Summary
Executive Summary ■ Despite the effects of considerable yen depreciation, in the first fiscal half ended September 30, 2008, net sales did not quite reach the level originally forecast. Operating profits were secured, though the profit margin was slimmer than had been estimated in the most recent fi
Slide 3: Agenda
Agenda I. FY09/3 Q2 Financial Results II. FY09/3 Forecasts 3
Slide 4: I. FY09/3 Q2 Financial Results
I. FY09/3 Q2 Financial Results II. FY09/3 Forecasts 4
Slide 5: Financial Snapshot
Financial Snapshot FY09/3 （B Yen） Q1, 6/30 Q2, 9/30 H1, 9/30 Actual Actual Actual YoY HoH Net Sales 166.3 167.3 333.6 -17.4 -3.2 Semiconductor Sales 159.2 159.2 318.4 -15.7 -0.8 Operating Income (Loss) 1.7 -0.5 1.2 -0.6 -2.0 Income (Loss) Before Income Taxes 0.3 -0.3 -0.0 -1.8 +5.1 Net Income (Loss)
Slide 6: Trends in Quarterly Results
Trends in Quarterly Results (B yen) 177.8 177.9 177.4 170.3 171.4 173.6 170.8 166.8 165.2 166.0 166.3 167.3 Net Sales 162.7 169.7 171.1 169.1 146.1 162.0 165.0 163.7 160.0 158.1 160.8 155.4 159.2 159.2 156.8 140.3 Semicon. Sales FY06/3 FY07/3 FY08/3 FY09/3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 O
Slide 7: Q2 Semiconductor Sales by Platform
Q2 Semiconductor Sales by Platform YoY -6% QoQ +0% (B yen) (B yen) Currency impact Approx. -5.5B yen 169.1 Currency impact 159.2 Approx. +2.0B yen 159.2 159.2 64.9 SoC -1% SoC ＋2% 64.5 63.3 64.5 ＋） LSIs for Blu-ray devices MCU ＋1% 46.1 MCU -2% ＋） Multipurpose MCUs 44.6 45.1 －） Automotive MCUs 45.1 D
Slide 8: Factors in Operating Income (Loss)
Factors in Operating Income (Loss) (B yen) YoY QoQ 169.1 Currency impact Approx. -5.5 (B yen) Currency impact Approx. +2.0 Semicon. 159.2 159.2 159.2 Sales Semicon. Sales +） Lower costs -) Lower sales (including currency impact) +） Higher utilization rates +） Lower depreciation （89%→91%） -） Higher d
Slide 9: Balance Sheets
Balance Sheets (B yen) As of As of As of Sep. 30, 2007 Mar. 31, 2008 Sep. 30, 2008 Cash and Cash Equivalents 191.4 165.5 158.0 Accounts Receivable 100.3 96.4 95.3 Inventories 80.2 75.8 82.0 PP&E 282.5 259.2 257.0 Other Assets 33.6 19.5 29.7 Total Assets 687.9 616.3 622.0 Accounts Payable 130.8 108.1
Slide 10: Cash Flows
Cash Flows FY08/3 FY09/3 (B yen) H1 Q1 Q2 H1 Cash Flows from Operating Activities 29.1 4.2 14.6 18.8 Cash Flows from -18.8 -10.9 -12.5 -23.4 Investing Activities Free Cash Flows 10.3 -6.7 2.1 -4.5 10
Slide 11: II. FY09/3 Forecasts
I. FY09/3 Q2 Financial Results II. FY09/3 Forecasts 11
Slide 12: FY09/3 Financial Forecasts
FY09/3 Financial Forecasts Targeting Targeting Second Second Half Half and and Full-year Full-year Operating Operating Profit Profit FY08/3 FY09/3 Full-Year H1 H2 Full-Year Initial Initial Forecasts as Initial Forecasts as Actual forecasts Actual Difference forecasts of October Difference forecasts
Slide 13: Trends in Amount of Orders
Trends in Amount of Orders Amount of Orders (3-months moving average) FY08/3 Average General weakness in LCD drivers and multi-purpose products, and slowdown appeared in automotive products as well Orders for advanced LSIs such as for Blu-ray applications were solid FY08/3 FY09/3 Apr May Jun Jul Aug
Slide 14: Semiconductor Sales by Platform (HoH Comparison)
Semiconductor Sales by Platform (HoH Comparison) ＨoＨ (B yen) 318.4 -3% Approx. 310.0 +/- Factors SoC + ＋） EMMA for digital AV applications SoC 127.8 low single digit pct. －） Some ASICs - MCU mid single MCU 89.7 －） Automotive and multipurpose digit pct. MCUs - Discrete & IC Discrete high single －） Ov
Slide 15: Factors Affecting H2 Op. Profit
Factors Affecting H2 Op. Profit (B yen) HoH +）Accelerated reorganization of manufacturing lines 318.4 +）Reduction of other fixed costs in Approx. manufacturing +）Reduced 310.0 procurement costs Semicon. +）Improved R&D Sales efficiency Lower GP* due to lower sales and utilization Cost reduction rates
Slide 16: Measures to Secure H2 Op. Profit
Measures to Secure H2 Op. Profit Cost Cost reductions reductions starting starting with with accelerated accelerated closure closure of of certain certain manufacturing manufacturing lines lines Accelerate Closure of Certain Manufacturing Lines – NEC Semiconductors Yamagata 8-inch line (Originally s
Slide 17: Major Operating Expenses and CAPEX
Major Operating Expenses and CAPEX 100 (B yen) R&D Expenses 100 SG&A Expenses (B yen) FY09/3 Approx. 111.0 B yen FY09/3 Approx. 57.7 83.0 B yen 56.7 54.6 54.0 42.7 42.0 41.7 41.0 0 0 FY08/H1 FY08/H2 FY09/H1 FY09/H2 FY08/H1 FY08/H2 FY09/H1 FY09/H2 100 CAPEX FY09/3 Approx. 100 Depreciation and Lease (
Slide 18: Summary
Summary Revised second half and full-year forecasts due to deteriorating economic situation Despite lower forecasts, plan to attain operating profits in second half and full year with additional cost-cutting measures ■ Considering additional cost-cutting measures in anticipation of further market de
Slide 19: Cautionary Statements
Cautionary Statements The statements in this presentation with respect to the plans, strategies and forecasts of NEC Electronics and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. We caution you in advance that actual results could
Slide 20: Appendix
Appendix 1. Business Highlights ¾ Collaboration in leading edge process technology ¾ Progress in strategic products 2. Semiconductor Sales by Application 20
Slide 21: Appendix: Business Highlights
Appendix: Business Highlights Collaboration Collaboration in in Leading Leading Edge Edge Process Process Technology Technology Collaborating with IBM on developing 32-nanometer process technology (announced September 17, 2008) ¾ Sharing of process and IP cores with global partners Progress Progress
Slide 22: Appendix: Semiconductor Sales by Application
Appendix: Semiconductor Sales by Application (B yen) 169.1 165.0 163.7 155.4 159.2 159.2 17.1 20.7 15.6 17.0 16.4 16.3 Communications 32.6 30.1 29.5 30.0 30.6 Computing & 27.1 Peripherals 34.5 35.3 33.0 31.7 32.1 31.9 Consumer Electronics 27.7 27.4 29.0 28.8 29.2 29.8 Auto & Industrial 22.6 24.9 21.