Slide 1: Q1 FY07/3 Financial Results and Outlook
Q1 FY07/3 Financial Results and Outlook July 26, 2006 NEC Electronics Corporation http://www.necel.com/ir/en/ 1
Slide 2: 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 coul
Slide 3: Agenda
Agenda I. Q1 FY07/3 Financial Results II. FY07/3 Forecasts III. Progress on Measures to Improve Performance 3
Slide 4: A Financial Snapshot
A Financial Snapshot FY06/3 FY07/3 (JPY Bn) Q1 Q4 Q1 QoQ YoY Net Sales 146.1 170.3 165.2 -5.1 +19.1 Semiconductor Sales 140.3 162.0 158.1 -4.0 +17.7 Operating Income -9.8 -16.5 -5.8 +10.7 +4.0 (Loss) Operating Margin -6.7% -9.7% -3.5% +6.2% points +3.2% points EBT -10.8 -24.3 -4.8 +19.5 +6.0 Net Los
Slide 5: Year-on-Year Semiconductor Sales
Year-on-Year Semiconductor Sales (JPY Bn) Platform Application 158.1 158.1 140.3 140.3 28.5 SoC Platform 59.0 Communications 24.3 55.9 30.3 Computing & 27.2 Peripherals 23.4 40.8 Consumer Electronics 21.4 MCU Platform 37.4 26.3 Auto & 25.3 Industrial Components Display Driver Multi-Market ICs 20.9 I
Slide 6: Trends in Quarterly Results
Trends in Quarterly Results (JPY Bn) 191.2 188.6 185.6 178.3 175.3 9.7 10.0 Net Sales 169.7 6.5 170.3 8.5 165.3 165.9 166.8 165.2 8.6 162.7 6.8 8.3 Other 13.6 4.6 7.2 5.9 7.1 181.2 146.1 162.0 179.1 160.0 156.8 158.1 178.9 160.7 158.7 5.8 169.9 166.7 156.2 140.3 Semiconductor Sales 8.9% 8.2% 8.1% 7.
Slide 7: Changes in Q4-Q1 Sales by Platform
Changes in Q4-Q1 Sales by Platform (JPY Bn) 200 Semiconductor Sales 162.0 -2% Reasons for changes in Q4-Q1 Sales 158.1 160 SoC Platform •A decline in sales of digital baseband LSIs due to production adjustments for mobile handsets in the 64.4 59.0 Japanese market 120 •A decline in sales of memories
Slide 8: Changes in Q4-Q1 Sales by Application
Changes in Q4-Q1 Sales by Application (JPY Bn) Semiconductor 162.0 -2% Sales 158.1 Reasons for changes in Q4-Q1 Sales • Sales of digital baseband LSIs for mobile handsets 30.6 -7% decreased due to production adjustments Communications 28.5 • Sales of LCD drivers ICs for mobile handsets increased due
Slide 9: Analysis of Changes in Q4-Q1 Profits
Analysis of Changes in Q4-Q1 Profits (JPY Bn) 162.0 158.1 - Approx.4.0 •Cost cutting effects, upsurge in utilization rate (approx. 3.5 ) •Decreased depreciation & •Seasonal price decline (approx. 6.0) lease expense (approx. 5.5) •Lower GP due to sales decline •A decrease in SG&A expenses (approx. 1.
Slide 10: Balance Sheet
Balance Sheet (JPY Bn) 05/6 06/3 06/6 Cash and Cash Equivalents 203.0 211.1 204.8 Accounts Receivable 97.7 113.9 106.5 Inventories 72.2 72.5 76.1 PP&E 332.0 302.1 309.5 Other Assets 82.7 45.7 45.6 Total Assets 787.5 745.3 742.6 Accounts Payable 110.7 122.9 137.5 Debt Payable 151.9 148.3 146.6 Other
Slide 11: Cash Flows
Cash Flows FY06/3 FY07/3 (JPY Bn) Q1 Q4 Full Year Q1 Cash Flows from 1.5 -0.5 49.9 7.8 Operating Activities Cash Flows from -20.3 -19.2 -54.7 -12.4 Investing Activities Free Cash Flows -18.8 -19.7 -4.8 -4.6 11
Slide 12: Agenda
Agenda I. Q1 FY07/3 Financial Results II. FY07/3 Forecasts III. Progress on Measures to Improve Performance 12
Slide 13: Forecast of Q2 Semiconductor Sales by Platform
Forecast of Q2 Semiconductor Sales by Platform (JPY Bn) 200 Semiconductor Sales +/- Factors 160 158.1 SoC Platform (+) Launching shipments of LSIs for a new game console, with a ramp-up in capacity for UP: Close to 20% 300mm line in Yamagata 59.0 (+) Expanding sales of LSIs for printers due to seaso
Slide 14: Order Trends (9 quarterly periods)
Order Trends (9 quarterly periods) An upward trend, especially in MCUs and discrete; however, adjustments may occur in consumer electronic and PC related areas in 2H FY07/3 MCUs Total Semiconductors Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY05/3 FY06/3 FY07/3 FY05/3 FY06/3 FY07/3 Large
Slide 15: FY07/3 Forecasts
FY07/3 Forecasts No change from previous announcements made on April 25th (JPY Bn) FY06/3 FY07/3 Half Year Full Year YoY Forecasts Forecasts Net Sales 646.0 345.0 705.0 +9.1% Semiconductor Sales 619.1 330.0 680.0 +9.8% Operating Income (loss) -35.7 -5.0 5.0 +40.7 Operating Margin -5.5% -1.4% 0.7% +6
Slide 16: Agenda
Agenda I. Q1 FY07/3 Financial Results II. FY07/3 Forecasts III. Progress on Measures to Improve Performance 16
Slide 17: Measuring Our Progress
Measuring Our Progress Expanding orders and sales Lower cost to sales ratio with capacity increase and higher utilization rate 2nd Half FY07/3 Develop Stronger Products and Recover Profitability 17
Slide 18: NEC Electronics Corporation
NEC © NEC Electronics Corporation NEC ELECTRONICS NEC 18