Japan Display Inc. · TSE:6740

Japan Display — Q1 FY2025/3 Earnings Presentation

54 slides from Japan Display's earnings presentation, Aug 9, 2024

  1. Slide 1: FY25/3 Q1 Corporate Presentation

    FY25/3 Q1 Corporate Presentation August 9, 2024

  2. Slide 2: Sympathies for the Kyushu earthquake

    We would like to express our deepest sympathies to all those affected by the large earthquake in Kyushu yesterday, while extending our heartfelt hopes for the earliest possible recovery Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 2

  3. Slide 3: PersonalTech For A Better World

    PersonalTech For A Better World Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 3

  4. Slide 4: FY25/3 Q1 Overview

    |_| Japan Display Inc. _ JDI FY25/3 Qi Overview

  5. Slide 5: FY25/3 Q1 Overview ①

    FY25/3 Q1 Overview ① ◼ Rapid Progress in Game-Changing eLEAP Technology Development Launch of Mass Production in Dec 2024 ◼ Robust OLED & Automotive Demand Driving Sales Growth ◼ Strong Growth in Strategically Important OLED Business +41% YoY ◼ Halved Losses on Core Sales Growth, Improved Product Mi

  6. Slide 6: FY25/3 Q1 Overview ②

    FY25/3 Q1 Overview ② ◼ JDI’s Global No. 1 Technology Leadership Driving Development of Gamechanging Innovations that Extend Beyond Displays – 2 Vision Display (2VD): World’s first automotive grade Dual Touch 2VD – Ultra High-Resolution VR: World’s highest resolution (>2500 ppi) VR display deploying

  7. Slide 7: FY25/3 Q1 Overview | Automotive (Core)

    FY25/3 Q1 Overview｜Automotive (Core) Long-Term Growth Driver with Robust Stability due to Long-Term Automotive (JPY billion) Supply Contracts +16% 33.6 Ongoing Major Customer 26.9 29.1 Engagements for eLEAP, 2VD, & Other NextGen JDI Tech Robust Customer Demand FY23/3 Q1 FY24/3 Q1 FY25/3 Q1 +16% YOY

  8. Slide 8: FY25/3 Q1 Overview | Smartwatch/VR (Core)

    FY25/3 Q1 Overview｜Smartwatch/VR (Core) Smartwatch/VR (JPY billion) Diverse Product Portfolio Offers Both +4% Ongoing Growth & Stability 15.8 16.4 14.5 Strong Growth in Strategically Important OLED Business (+41% YoY) Offsets VR Decline FY23/3 Q1 FY24/3 Q1 FY25/3 Q1 Copyright 2024 Japan Display Inc.

  9. Slide 9: FY25/3 Q1 Overview | LCD Smartphone (Non-Core)

    FY25/3 Q1 Overview｜LCD Smartphone (Non-Core) LCD Smartphone US/Euro Exiting Commoditized Smartphone 10.1 (JPY billion) -16% Business to Focus Engineering 6.4 5.4 Resources on JDI Proprietary NextGen Tech FY23/3 Q1 FY24/3 Q1 FY25/3 Q1 -27% YoY LCD Smartphone China Will Re-enter Smartphones with 5.7 -

  10. Slide 10: FY25/3 Q1 Earnings Review

    |_| Japan Display Inc. _ JBI FY25/3 Q1 Earnings Review

  11. Slide 11: FY25/3 Q1 (3M) Earnings Summary

    FY25/3 Q1 (3M) Earnings Summary Significantly Shrunk Losses via Core Business Growth, Improved Product Mix, Fixed Cost Reductions, & Tighter Inventory Management EBITDA +51%, OP +49％, & NI +53％ Improvement FY24/3 FY25/3 (Units: JPY billion) Q1 Q1 YoY Sales 53.0 55.9 +6% Solid core Automotive & Smart

  12. Slide 12: FY25/3 Q1 (3M) Sales by Segments

    FY25/3 Q1 (3M) Sales by Segments Core Business (Automotive, Smartwatch/VR) Growth Strategically Important OLED +41% YoY LCD Smartphone Down on Strategic Downsizing 50.0 44.9 (JPY billion) Automotive (YoY +15.5%) Core Businesses Growth on back of increased customer demand 29.1 33.6 Automotive and FX

  13. Slide 13: FY25/3 Q1 (3M) Operating Profit Change Breakdown (YoY)

    FY25/3 Q1 (3M) Operating Profit Change Breakdown (YoY) （JPY billion) FY24/3 Q1 (3M) FY25/3 Q1 (3M) (Actual) (Actual) Sales: 53.0 Sales: 55.9 -7.0 Fall-off of inventory -13.9 valuation losses USD/JPY 138→156 Operating Operating Loss Loss Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 13

  14. Slide 14: FY25/3 Q1 (3M) Operating Profit Breakdown (QoQ)

    FY25/3 Q1 (3M) Operating Profit Breakdown (QoQ) (JPY billion) FY24/3 Q4 (3M) FY25/3 Q1 (3M) (Actual) (Actual) Sales: 58.8 Sales: 55.9 -6.5 -7.0 USD/JPY 149→156 Operating Operating Loss Loss Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 14

  15. Slide 15: FY25/3 Forecast

    |_| Japan Display Inc. _ JDI FY25/3 Forecast

  16. Slide 16: FY25/3 Forecast (No change from FY24/3 full-year presentation)

    FY25/3 Forecast (No change from FY24/3 full-year presentation) Continue to Transform Business Portfolio & Drive Higher Earnings from Core Businesses While Shrinking Commoditized LCD Smartphone & Unprofitable Automotive Products EBITDA Positive in H2 (JPY billion) FY24/3 FY25/3 FCST FY24/3 FY25/3 FCS

  17. Slide 17: FY25/3 H1 → H2 Operating Profit Breakdown

    FY25/3 H1 → H2 Operating Profit Breakdown OP Improvement Driven by Higher LTPS Fab Utilization & eLEAP/HMO Licensing EBITDA Positive in H2 （JPY billion） FY25/3 H1 FY25/3 H2 (Forecast) (Forecast) eLEAP/HMO licensing USD/JPY 145 Operating Operating Loss Loss Copyright 2024 Japan Display Inc. All Right

  18. Slide 18: Business & METAGROWTH 2026 Update

    Business & METAGROWTH 2026 Update

  19. Slide 19: METAGROWTH in Value Creation

    METAGROWTH 2026 Growth Strategy Global No. 1 Technology Leadership to Best Serve Customers and Deliver PersonalTech For A Better World METAGROWTH in Value Creation Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 19

  20. Slide 20: META: Comprehensive, Overarching

    “Comprehensive, Overarching” META Underscores JDI’s Commitment to Transformational Growth Metaverse Also a JDI Growth Driver

  21. Slide 21: Core Strategy

    Core Strategy Displays are a foundational technology for modern society JDI has unmatched technological capabilities to deliver customer and social value and improve people’s lives 1 2 3 Market-Leading Global No. 1 Technology, GreenTech & Technology Transformational Sustainability Leadership Growth

  22. Slide 22: Core Strategy | Global No.1 Technology Leadership

    Core Strategy | Global No.1 Technology Leadership ▪ JDI has regained technology leadership in the global display industry with its Global No. 1 proprietary technologies, including eLEAP (NextGen OLED), HMO (High Mobility Oxide), Metaverse (Ultra High Resolution), 1 & Rælclear (Transparent Displays)

  23. Slide 23: Core Strategy | Market-Leading Tech, Transformational Growth

    Core Strategy | Market-Leading Tech, Transformational Growth ▪ The global display business is a technology industry. JDI is a technology company. So are its customers. Customers’ needs are superior technology & high cost performance ▪ Support JDI’s customers' value creation & competitive advantage b

  24. Slide 24: Core Strategy | GreenTech & Sustainability

    Core Strategy | GreenTech & Sustainability ▪ Address deeply important global environmental issues via JDI environment positive GreenTech such as eLEAP & HMO, which deliver significant value to JDI’s socially conscious customers ▪ Companies exist to serve society. JDI will 3 always run its business t

  25. Slide 25: JDI Global No. 1 Technology Leadership

    JDI Global No. 1 Technology Leadership JDI’s Global No. 1 Technology Leadership Driving Development of Gamechanging Innovations that Extend Beyond Displays 2 Vision ZINNSIA Display Sensors 5G Meta-Surface Ultra High-Res Reflector VR Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 25

  26. Slide 26: ZINNSIA Sensors

    JDI Global No. 1 Technology Leadership: ZINNSIA Sensors JDI’s World-Leading High-Precision Sensor Interface that Transforms a Broad Range of Materials into Sensors and Touch Controls ZINNSIA makes it possible to sense movements even on materials that were previously difficult to use as sensors Wood

  27. Slide 27: Ultra High-Res VR

    JDI Global No. 1 Technology Leadership: Ultra High-Res VR World’s Highest Resolution Ultra High-Resolution Display Deploying Low-Cost Glass Substrate for Unmatched Cost Performance JDI’s 2.15 inch, 2527 ppi ultra high-resolution display allows for a wide FOV within a compact 2-inch display and minim

  28. Slide 28: 2 Vision Display (2VD)

    JDI Global No. 1 Technology Leadership: 2 Vision Display (2VD) World’s First Automotive Grade Dual Touch 2VD that Simultaneously Displays Different Content to Driver and Passenger JDI has developed the world's first 2 Vision Display (2VD) technology that meets automotive grade image quality requirem

  29. Slide 29: 5G Meta-Surface Reflector

    JDI Global No. 1 Technology Leadership: 5G Meta-Surface Reflector World-Leading 5G Meta-Surface Reflector that Significantly Improves 5G Transmissions Infrastructure 5G Meta-Surface reflector technology applies JDI’s world-leading expertise in liquid crystals to optimize and significantly improve 5G

  30. Slide 30: Dramatically Strengthen Competitiveness via Fab Optimization

    Dramatically Strengthen Competitiveness via Fab Optimization Increase Core Profitability and Capital Efficiency through Fixed Cost Reductions & Asset-Light Execution Japan ▪ Mobara Fab (G6, Chiba） → LCD Smartphone Line Downsizing FY23 Q1 ▪ Ishikawa Fab (G4.5, Ishikawa) Hakusan Fab ▪ Tottori Fab (G4,

  31. Slide 31: Geopolitical Tensions & Global Supply Chain Reconfiguration ①

    Geopolitical Tensions & Global Supply Chain Reconfiguration ① Geopolitical Tensions Threatening Global Trade Environment & Driving Changes in Supply Chains US & European companies particularly focused on risk mitigation JDI Customers ▪ Supply chain reconfiguration ▪ Friendshoring Taking Significant

  32. Slide 32: Geopolitical Tensions & Global Supply Chain Reconfiguration ②

    Geopolitical Tensions & Global Supply Chain Reconfiguration ② Need to Counter Rising Geopolitical Risks Increased Importance of Japan as a Strategic Manufacturing Base Increased Importance of JDI Surge in JDI Customer Friendshoring Activity Copyright 2024 Japan Display Inc. All Rights Reserved. Slid

  33. Slide 33: eLEAP Launch

    |_| Japan Display Inc. _ JDI eLEAP Launch

  34. Slide 34: eLEAP (NextGen OLED)

    eLEAP (NextGen OLED) ▪ environment positive eLEAP ▪ Lithography with maskless deposition ▪ Extreme long life, low power, & high luminance ▪ Any shape Patterning Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 34

  35. Slide 35: OLED Is The Winning Display Technology ①

    OLED Is The Winning Display Technology ① Due to its superior performance & continuing cost reductions, OLED is positioned to become the overwhelming display market leader Display Market Share OLED Is The Winning Display Technology LCD And eLEAP Is The Winning OLED Technology OLED Copyright 2024 Japa

  36. Slide 36: OLED Is The Winning Display Technology ②

    OLED Is The Winning Display Technology ② Unlike LCDs that require backlighting, OLED displays have self- illuminating, organic pixels, offering unparalleled viewing experience Superb Video Beautiful, Fully Ultra-Wide Performance Natural Organic Viewing (Extraordinarily Color Palette Angles Fast Refr

  37. Slide 37: OLED Is The Winning Display Technology ③

    OLED Is The Winning Display Technology ③ Across Smartphones, Automotive, and Notebook PCs (and also other market segments), the market leaders have all begun the shift from LCD to OLED in order to deliver best-in-class display performance for their customers The major global smartphone Leading Europ

  38. Slide 38: OLED Dominates Alternative Technologies: MicroLED & MicroOLED

    OLED Dominates Alternative Technologies: MicroLED & MicroOLED Customer product roadmaps strongly suggest that OLED will continue to prevail over MicroLED & MicroOLED as the superior display technology that best matches consumers’ mass market needs for outstanding display performance at an affordable

  39. Slide 39: OLED Massive Growth Upside

    OLED Massive Growth Upside As OLED continues to replace LCD and take market share, the growth upside is massive 100% 100% 100% Growth Upside USD 41B TAM USD 12B TAM USD 21B TAM 2024 Market Share 54% 1% 3% Smartphones Automotive Notebook PCs Copyright 2024 Japan Display Inc. All Rights Reserved. 2024

  40. Slide 40: eLEAP Is The Winning OLED Technology

    eLEAP Is The Winning OLED Technology Despite Its Superb Performance, OLED Has ! Short Lifetime Inherent Issues These issues make OLED dysfunctional ! High Production Cost for a wide variety of display applications eLEAP Powerfully Moves OLED Forward eLEAP keeps all of OLED’s advantages while solving

  41. Slide 41: eLEAP's Unprecedented Customer Value ①

    eLEAP’s Unprecedented Customer Value ① High Long Brightness (2X) Lifetime (3X) Lifetime New After 1yr After 3yrs After 5yrs Comparison 0h 1000h 3000h 5000h Conventional OLED eLEAP 28% 60% Conventional eLEAP OLED Brightness, vividness & free shapes unimaginable with existing technology eLEAP ※ Image

  42. Slide 42: eLEAP's Unprecedented Customer Value ②

    eLEAP’s Unprecedented Customer Value ② Using eLEAP’s lithography with maskless deposition process instead of conventional OLED’s FMM (fine metal masks) will reduce OLED production costs by c. 30% eLEAP Panel Cost Reduction ◼ No FMM purchasing costs or cleaning costs (chemical & water usage) ◼ No FMM

  43. Slide 43: eLEAP's Unprecedented Environmental Value

    eLEAP’s Unprecedented Environmental Value Maskless OLED deposition is a breakthrough, environment positive production process that eliminates mask cleaning chemicals 150k tons p.a. of CO2 emission reduction via deployment at JDI Mobara 150k tons of yearly CO2 emissions = CO2 Cedar forest Absorption

  44. Slide 44: eLEAP Development Advancing at Tremendous Speed ①

    eLEAP Development Advancing at Tremendous Speed ① eLEAP 14” Prototype Display Area eLEAP 1.4” Prototype 58X First Customer Samples: July 2023 Specs & performance surpass customer expectations. First Customer At DIC2023, eLEAP wins Special Technology Prize, the highest Samples: Sep 2022 award Copyrig

  45. Slide 45: eLEAP Development Advancing at Tremendous Speed ②

    eLEAP Development Advancing at Tremendous Speed ② JDI has developed an ultra-high brightness 14-inch eLEAP display that achieves a peak brightness of 1600 nits using a single stack ▪ The 14-inch eLEAP display uses a single-stack structure to deliver 1600 nits brightness of 1600 nits ▪ For convention

  46. Slide 46: 2024 – The Year of eLEAP

    2024 – The Year of eLEAP eLEAP 2024 The World’s Most Advanced OLED Current Production Yield: >70% JDI Mass Production Launch: December 2024 Copyright 2024 Japan Display Inc. All Rights Reserved. Slide 46

  47. Slide 47: eLEAP Completes the 3rd Display Revolution

    eLEAP Completes the 3 rd Display Tech Revolution 3 rd Revolution 2nd 1st Revolution eLEAP Revolution Liquid Crystal OLED Cathode Ray (LCD) The 2.5 Tube (CRT) Evolution World's First Maskless Deposition + Lithographic OLED Gorgeous, fast, & Compact, energy-efficient & Higher Performance Moving images

  48. Slide 48: Strategic Direction: JDI = The Undisputed Global OLED Leader

    Strategic Direction: JDI = The Undisputed Global OLED Leader ◼ eLEAP is a Gamechanger for Global Display Tech ◼ eLEAP Combines Unmatched Performance, Low Cost, & the Ability to Scale Across All Display Sizes & Applications ◼ eLEAP’s Total Addressable Market (TAM) is thus the total Global Display Mar

  49. Slide 49: Appendix

    |_| Japan Display Inc. _ JDI Appendix

  50. Slide 50: Quarterly Sales Breakdown by Segments

    Quarterly Sales Breakdown by Segments 59.0 58.2 （JPY billion） 51.7 51.9 50.0 47.4 47.3 44.9 Core Businesses 41.4 39.7 34.0 Automotive 35.2 34.9 33.6 33.1 34.9 29.1 26.9 Smartwatch/VR 24.3 14.5 19.3 15.8 16.5 16.9 16.4 14.3 12.4 Non-Core Businesses 22.2 22.3 15.7 15.4 LCD Smartphone - US/Euro 18.8 17

  51. Slide 51: Consolidated B/S

    Consolidated B/S (JPY billion) FY24/3 FY25/3 Q1 vs. FY24/3 Cash and deposits 29.3 33.9 ＋4.6 Accounts receivable 29.3 25.9 -3.3 Accounts receivable (EMS) 17.9 14.3 -3.7 Inventories 64.0 61.4 -2.6 Other 11.5 9.3 -2.2 Total Current Assets 152.0 144.8 -7.2 Total Fixed Assets 72.0 67.2 -4.8 Total Assets

  52. Slide 52: Consolidated P&L

    Consolidated P&L (JPY billion) FY24/3 Q1 FY25/3 Q1 YoY Sales 53.0 55.9 ＋2.9 EBITDA -12.2 -6.0 ＋6.2 Operating Profit -13.9 -7.0 ＋6.8 Non-Operating Income 2.7 0.6 -2.1 Non-Operating Expenses -0.9 -1.4 -0.5 Recurring Profit -12.1 -7.9 ＋4.2 Extraordinary Income 0.0 1.7 ＋1.7 Extraordinary Losses 0.0 -0.1

  53. Slide 53: Consolidated Cash Flow Statement

    Consolidated Cash Flow Statement (JPY billion) FY24/3 Q1 FY25/3 Q1 YoY Income before income taxes -12.1 -6.2 ＋5.9 Depreciation & amortization 1.7 1.0 -0.7 Change in working capital 3.2 8.3 ＋5.2 Other -2.5 -3.3 -0.8 Cash Flow from Operating Activities -9.7 -0.1 ＋9.6 Purchase of fixed assets -7.0 -1.9

  54. Slide 54: Thank You!

    Thank You! Any information related to market trends or industries mentioned in this document is based on information available at present and JDI does not guarantee that this information is accurate or complete. Any plan, estimation, calculation, quotation, evaluation, prediction, expectation or oth

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