Slide 1: FY19/12 Q3 Presentation
FY19/12 Q3 PRESENTATION RENESAS ELECTRONICS CORPORATION NOVEMBER 7, 2019 © 2019 Renesas Electronics Corporation. All rights reserved.
Slide 2: Non-GAAP Basis Information
NON-GAAP BASIS INFORMATION In this section, Renesas Electronics Group (hereinafter “the Group”) applies Non- GAAP financial measures (hereinafter “Non-GAAP basis”) used for management’s decision making. The Group defines the Non-GAAP consolidated financial results as financial accounting figures (he
Slide 3: Disclaimer
DISCLAIMER Adoption of IFRS: With the outlook that the Group will continue to expand globally and to provide financial figures that can be compared on a global scale, the Group discloses its consolidated financial statements in accordance with the International Financial Reporting Standards (“IFRS
Slide 4: FY19/12 Q3 Financial Snapshot
Non-GAAP FY19/12 Q3 FINANCIAL SNAPSHOT IFRS, NON-GAAP BASIS *1*2 YoY and QoQ results as well as the changes from FCTs of the Revenue are rounded off to one decimal place. FY18/12 FY19/12 (B yen) Q3 Q3 Change 9 months Change Q3 9 months Q2 (Jul-Sep) (Jul-Sep) YoY QoQ from (Jan-Sep) YoY from (Jul-Sep)
Slide 5: Quarterly Revenue Trends
Non-GAAP QUARTERLY REVENUE TRENDS IFRS, NON-GAAP BASIS *1*2 (B yen) Automotive Industrial, Infrastructure, IoT Others 203.3 Revenue 185.6 192.6 YoY: +1.9% 5.3 187.7 183.4 200 179.9 4.6 QoQ: -4.8% 4.4 5.2 4.4 5.3 150.3 150 94.3 4.2 80.5 93.5 Industrial / Infrastructure / IoT 90.8 81.0 85.9 YoY: +6.0%
Slide 6: FY2019/12 Q3 Operating Margin
Non-GAAP FY2019/12 Q3 OPERATING MARGIN IFRS, NON-GAAP BASIS*1*2 QoQ +0.5pt FY18/12 Q3 FY19/12 Q2 FY19/12 Q3 FY19/12 Q3 Actual Actual Forecast Actual Currency impact (Jul-Sep 2018) (Apr-Jun 2019) (Jul-Sep 2019) (Jul-Sep 2019) Profit decrease from sales decrease Expense decrease 12.0％ 14.2％ 16.5％ 14.7
Slide 7: Gross Margin, Operating Margin and Opex Trajectory
Non-GAAP GROSS MARGIN, OPERATING MARGIN AND OPEX TRAJECTORY IFRS, NON-GAAP BASIS *1*2 Gross Margin (%) R&D Ratio (%) YoY: +1.1pts YoY: -0.5pt 20 50 QoQ: +0.1pt QoQ: +0.3pt 44.8 18 45 45.0 18.5 47.5 16 17.5 44.9 17.2 16.4 16.7 40 43.9 14 16.2 15.1 40.5 39.3 35 12 30 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q
Slide 8: Quarterly Revenue and Profit Trends by Segment
Non-GAAP QUARTERLY REVENUE AND PROFIT TRENDS BY SEGMENT IFRS, NON-GAAP BASIS *1*2 Automotive Industrial/Infrastructure/IoT (B yen) (B yen) 120 Revenue GM OM 60% 120 Revenue GM OM 60% 103.8 102.0 50% 94.3 50% 100 93.6 94.5 93.1 100 93.5 90.4 90.8 85.9 82.7 81.0 80.5 40% 40% 80 80 30% 63.3 30% 60 60 2
Slide 9: Inventory
INVENTORY MANAGERIAL ACCOUNTING BASIS, BILLON YEN Inventory Change Sales Channel Inventory *1 (by application) (Work in Process + Finished Goods) 1,000 100 200 Automotive 500 50 150 Non-Automotive 0 0 *2 *2 *2 17/12 18/3 18/6 18/9 18/12 19/3 19/6 19/9 100 Sales Channel Inventory (by product) Finishe
Slide 10: Monthly Changes in Front-End Wafer Input Quantity and Purchase Volume from Foundries
MONTHLY CHANGES IN FRONT-END WAFER INPUT QUANTITY AND PURCHASE VOLUME FROM FOUNDRIES 8-INCH EQUIVALENT (1,000 wafers/month) 350 Purchase Volume from Foundries Front End Wafer Input Quantity 300 250 200 150 100 50 0 *1 1 7 / Q 11 7 / Q 21 7 / Q 31 7 / Q 4 1 8 / 1 1 8 / 2 1 8 / 3 1 8 / 4 1 8 / 5 1 8 /
Slide 11: Quarterly Trends in Front-End Utilization Rate
QUARTERLY TRENDS IN FRONT-END UTILIZATION RATE WAFER INPUT BASIS Total 6-inch line 8-inch line 12-inch line 100% 80% 60% 40% 20% 0% *1 FY17/Q1 FY17/Q2 FY17/Q3 FY17/Q4 FY18/Q1 FY18/Q2 FY18/Q3 FY18/Q4 FY19/Q1 FY19/Q2 FY19/Q3 *1: The utilization rate of the 6-inch line was revised from the FY19/12 Q1 e
Slide 12: Quarter-End Order Backlog and Subsequent Quarters' Revenue
QUARTER-END ORDER BACKLOG AND SUBSEQUENT QUARTERS’ REVENUE ORDER BACKLOG: AMOUNT OF CUSTOMER ORDERS DUE EVERY SUBSEQUENT QUARTER Order Backlog (requested amount for the following quarter) *1 Revenue for the subsequent quarter *1, 2, 3 (B 250 yen) 210.2 197.3 203.3 195.5 192.6 200 185.6 187.7 183.4 1
Slide 13: FY19/12 Q4 and Full Year Forecast
Non-GAAP FY19/12 Q4 AND FULL YEAR FORECAST IFRS, NON-GAAP BASIS*1*2 YoY and QoQ results of the Revenue are rounded off to one decimal place. FY18/12 FY19/12 (B yen) Q4 Full year Q4 Full year Q3 (Oct-Dec) YoY QoQ (Jan-Dec) YoY (Oct-Dec) (Jan-Dec) (Jul-Sep) Forecast Forecast 182.5 -2.8% -0.5％ 708.7 -6
Slide 14: Appendix
APPENDIX The figures in this section are mainly based on GAAP (IFRS) stated on a financial reporting basis and are provided as additional information. © 2019 Renesas Electronics Corporation. All rights reserved.
Slide 15: Sales Revenue and Operating Profit by Segment
Non-GAAP SALES REVENUE AND OPERATING PROFIT BY SEGMENT NON-GAAP BASIS *1 FY18/12 FY19/12 (B yen) Q1 Q2 Q3 9 months Q4 Q1 Q2 Q3 9 months YoY QoQ YoY (Jan-Mar) (Apr-Jun) (Jul-Sep) (Jan-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) (Jan-Sep) Revenue 185.6 203.3 179.9 568.8 187.7 150.3 192.6 183.4 +1.9%
Slide 16: Renesas Breakdown of Revenue (1)
RENESAS BREAKDOWN OF REVENUE (1) BREAKDOWN ADJUSTED FOLLOWING THE START OF SEGMENT DISCLOSURE (B yen) 192.6 192.6 192.6 52 5.2 Others*1 4.6 Infrastructure/IoT Industrial/ IDT IDT Infrastructure 25.1 Approx. 25％ Broad-Based Broad-Based IoT Approx. 35％ 30.7 Industrial Industrial Industrial Approx. 40％
Slide 17: Renesas Breakdown of Revenue (2)
RENESAS BREAKDOWN OF REVENUE (2) YOY AND QOQ COMPARISON UNDER THE NEW SEGMENTS (B yen) 192.6 YoY: +1.9% 179.9 4.6 183.4 QoQ: -4.8% Infrastructure/IoT Industrial/ 4.4 5.3 Others*1 Infrastructure/IoT Industrial/ Approx. 25% Infrastructure/IoT Industrial/ Infrastructure Approx. 25% Approx. 25% IoT Appr
Slide 18: GAAP (IFRS) / Non-GAAP Reconciliation
GAAP (IFRS) / NON-GAAP RECONCILIATION FY18/12- *1 Non-GAAP Basis: Non-GAAP figures are calculated by adjusting or removing non-recurring items and other adjustments from GAAP figures following a certain set of rules. The Group believe non-GAAP measures provide useful information in understanding a
Slide 19: GAAP (IFRS) / Non-GAAP Reconciliation
GAAP (IFRS) / NON-GAAP*1 RECONCILIATION FY18/12- *2 FY18/12 FY19/12 (B yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Operating Profit (GAAP/After PPA) 23.4 32.8 13.1 -1.1 -1.3 -10.9 7.9 Reconciliations in Gross Profit Level +1.4 +0.5 -0.0 +0.0 +1.9 +11.0 +1.0 PPA Effects*3 (Amortization of Intangible Assets: SG&A*4) +4
Slide 20: GAAP (IFRS) / Non-GAAP Reconciliation
GAAP (IFRS) / NON-GAAP*1 RECONCILIATION FY18/12- *2 FY18/12 FY19/12 (B yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net Profit (GAAP/After PPA) 18.6 31.6 11.8 -10.9 -1.8 -9.3 3.8 Reconciliations in Operating Profit Level +6.7 +0.3 +8.4 +20.5 +8.5 +38.3 +19.0 PPA Effects*3 (Tax Impacts from PPA Effects) - - - - - -0.9
Slide 21: PPA Effects on the Balance Sheet from the Acquisition of IDT
PPA (PURCHASE PRICE ALLOCATION) EFFECTS*1 *2 ON THE BALANCE SHEET FROM THE ACQUISITION OF IDT As of March 31, 2019 Inventory (B yen) +1.7 -11.3 -8.8 Intangible assets Property, plant and equipment Others (Deferred tax -302.8 liabilities, etc.) As of September 30, 2019 893.0 +46.7 616.8 Goodwill amou
Slide 22: PPA Effects on the Profit/Loss Statement from the Acquisition of IDT
PPA (PURCHASE PRICE ALLOCATION) EFFECTS*1 ON THE PROFIT/LOSS STATEMENT FROM THE ACQUISITION OF IDT GAAP (IFRS) FY19/12 (B yen) Q1 Q2 Q3 Q3 Cumulative Revenue (Before PPA) 150.3 192.6 183.4 526.2 PPA Effects (Sales Revenue) - - - - Revenue (After PPA) 150.3 192.6 183.4 526.2 Gross Profit (GAAP/Before
Slide 23: FY19/12 Q3 Financial Snapshot (GAAP)
GAAP IFRS FY19/12 Q3 FINANCIAL SNAPSHOT GAAP (IFRS) *1*2 YoY and QoQ results of the Revenue are rounded off to one decimal place. FY18/12 FY19/12 (B yen) Q3 9 months Q3 9 months Q2 (Jul-Sep) YoY QoQ (Jan-Sep) YoY (Jul-Sep) (Jan-Sep) (Apr-Jun) Actual Actual Revenue 179.9 568.8 192.6 183.4 +1.9% -4.8%
Slide 24: FY2019/12 Q2 and Q3 Operating Profit/Loss
FY2019/12 Q2 AND Q3 OPERATING PROFIT/LOSS Q2 Operating Profit/Loss Before PPA*1 Q2 Operating Profit/Loss After PPA Q3 Operating Profit/Loss After PPA （GAAP → Non-GAAP*2） （GAAP → Non-GAAP） （GAAP → Non-GAAP） PPA effects PPA effects (Depreciation / （B yen） (Amortization of 27.4 amortization of 27.4 26.
Slide 25: Balance Sheets
GAAP IFRS BALANCE SHEETS IFRS*1*2 As of Mar 31, As of Jun 30, As of Sep 30, As of Dec 31, As of Mar 31, As of Jun 30, As of Sep 30, (B yen) *8 *8 *8 2018 2018 2018 2018 2019 2019 2019 Total Assets 1,085.7 1,119.7 1,125.3 1,055.2 1,876.7 1,697.7 1,666.0 *3 Cash and Cash Equivalents 124.3 160.3 184.5
Slide 26: Non-GAAP EBITDA and IFRS Cash Flows
Non-GAAP (EBITDA) GAAP IFRS (Cash Flows) NON-GAAP*1 EBITDA*2 AND IFRS*3 CASH FLOWS Non-GAAP EBITⅮA (B yen) IFRS Cash Flows (B yen) 60 57.1 Cash flows from operating activities 53.7 53.2 Cash flows from investing activities 51.8 70 Free cash flows *4 61.2 50 45.5 60 54.4 43.4 48.1 47.8 50 44.5 45.1 4
Slide 27: Capital Expenditures
CAPITAL EXPENDITURES *1 (B yen) Capital Expenditures Sales Ratio 8 3.0% 7 2.4% 2.4% 2.3% 2.5% 2.2% 6 5.0 2.0% 5 *2 4.4 1.6% 1.5% 4.1 4.1 1.4% 4 1.5% 1.2% 2.9 2.9 3 2.7 1.0% 1.9 2 0.5% 1 0 0.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Forecast FY18/12 FY19/12 *1: The figures are investment decision basis of tangible
Slide 28: Major Announcements Since July 2019
MAJOR ANNOUNCEMENTS SINCE JULY 2019 Corporate Administrative units were dissolved and returned to their individual division-level structures and operations as of August 1, 2019. In addition, Shuhei Shinkai was appointed CFO, with Jason Hall as CLO, and Shinichi Yoshioka as CTO. Expanded access t
Slide 29: Strategy Update Progress
STRATEGY UPDATE PROGRESS RENESAS ELECTRONICS CORPORATION NOVEMBER 7, 2019 © 2019 Renesas Electronics Corporation. All rights reserved.
Slide 30: Strategy Tree
STRATEGY TREE Balanced growth through diversification Diversification: Product Corporate strategy Market People Common thread: Unit strategy Reliability Stickiness Constant innovation Division strategy © 2019 Renesas Electronics Corporation. All rights reserved. Page 30
Slide 31: Corporate Strategy Matrix
CORPORATE STRATEGY MATRIX Organic Inorganic Automotive Industrial Infrastructure IoT Inorganic + Organic MCUs Intensive R&D Approaches SoCs Intensive R&D Analog & Mixed Strategic Investments including Further Acquisitions Intersil: Acquired for $ 3.2B in Feb 2017 Signal IDT: Acquired for $ 6.3B in M
Slide 32: Business Unit as Profit Center
BUSINESS UNIT AS PROFIT CENTER Before From now on Financials One model Two models Authority Corporate approvals More BU discretion Accountability Insufficient accountability Clearer accountability Segment disclosure © 2019 Renesas Electronics Corporation. All rights reserved. Page 32
Slide 33: Business Unit Strategy
BUSINESS UNIT STRATEGY Automotive Solution Business Unit IoT and Infrastructure Business Unit Enabling advancement / innovation of mobility Enabling data-centric economy Examples of deep-dive explorations include: Examples of deep-dive explorations include: Radar NB-IoT Lidar RA MCU Family
Slide 34: IDT Integration Synergy Update
IDT INTEGRATION SYNERGY UPDATE Integration initiatives progressing on track Combined business operations started July 2019, followed by fully consolidated organization to be effective January 2020 (IDT Inc. merges with Renesas America) Cost savings reaching above target Q3 FY19 resulted in +3.6%
Slide 35: Timeline
TIMELINE Q3 FY19 Analyst day Earnings Earnings Year November 2020 February March Strategy update / Strategy update progress new mid-term plan © 2019 Renesas Electronics Corporation. All rights reserved. Page 35
Slide 36: Renesas.com (Forward-Looking Statements)
Renesas.com (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- looking statem