Slide 1: FY18/12 Q1 Presentation
FY18/12 Q1 PRESENTATION RENESAS ELECTRONICS CORPORATION MAY 11, 2018 © 2018 Renesas Electronics Corporation. All rights reserved.
Slide 2: Financial Targets and Strategy
FINANCIAL TARGETS AND STRATEGY Long-term Financial Targets*1 (Starting from CY16) Clear Path to Gross Margin Expansion Topline growth Topline Growth High Single-Digit CAGR Manufacturing Optimization Margin Improvement Better Product Mix 44% Adj. GM *2 : *4 50% Adj. OM : 12% *3 *4 Over 20% Intersil C
Slide 3: Steps to Improve Gross Margin
STEPS TO IMPROVE GROSS MARGIN Adjusted Gross Margin*1 (Illustrative) Intersil Better Consolidation 50% Manufacturing Product Mix Optimization Topline Growth Operating Leverage through Increased Scale 44% Organic Growth + Consolidation of Intersil CY16/12 Long Term Target *1: Non-GAAP figure, Gross M
Slide 4: Custom Approaches for Focused Industries
Organic Inorganic CUSTOM APPROACHES FOR FOCUSED INDUSTRIES Automotive Industrial Broad-Based and others Inorganic + Organic MCUs Intensive R&D Approaches SoCs Strategic Partnerships and Alliances Analog & Mixed Strategic Investments including Further Acquisitions Intersil Signal (Acquired for $ 3.2B
Slide 5: 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 6: 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. Following the completion of the purchase of Intersil in February 2017, Non-GAAP figures exclude amortization of goodwill, amortization of purchased intangible assets, costs relat
Slide 7: GAAP/Non-GAAP Reconciliation (FY17/12-)
GAAP/NON-GAAP*1 RECONCILIATION (FY17/12-) FY17/12 FY18/12 (B yen) Q2 Q1 Q2 Q3 Q4 Q1 (Forecast) Operating Profit (GAAP/After PPA) 22.1 9.4 25.0 21.9 20.6 14.4 PPA Effects*2（Net Sales/COGS*3） +3.1 +8.5 +0.3 +0.4 +0.3 +0.3 PPA Effects（R&D*4, SG＆A*5） +0.1 +0.2 +0.2 +0.2 +0.1 +0.1 Increase in depreciatio
Slide 8: GAAP/Non-GAAP Reconciliation (FY17/12-)
GAAP/NON-GAAP*1 RECONCILIATION (FY17/12-) FY17/12 FY18/12 (B yen) Q1 Q2 Q3 Q4 Q1 Q2 (Forecast) Net Profit Attributable to Shareholders of Parent Company 17.2 19.1 22.3 18.6 23.3 10.7 (GAAP/After PPA) Reconciliations in Operating +7.0 +19.6 +10.9 +12.2 +10.8 +10.7 Profit Level Reconciliations in Ordi
Slide 9: Q1 Financial Snapshot (Non-GAAP Basis)
Non-GAAP FY18/12 Q1 FINANCIAL SNAPSHOT (NON-GAAP BASIS*1) YoY and QoQ results as well as the changes from February 9 FCTs of the Net Sales and Semi Sales are rounded off to one decimal place. FY17/12 FY18/12 （B yen） Q1 Q1 Q1 Q4 Change from (Jan-Mar) (Jan-Mar) YoY QoQ (Jan-Mar) (Oct-Dec) Feb 9 FCT Fo
Slide 10: Q1 Semiconductor Sales (Non-GAAP Basis) YoY
Non-GAAP FY18/12 Q1 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) YoY +9.4 B yen (+5.5%) (B yen) Currency impact +9.4 +11.5 -2.1 Sales increase (Including Intersil 182.0 172.6 integration) *1: Non-GAAP Basis: Results excluding non-recurring and certain other items. Following the completion of the purchase
Slide 11: Q1 Semiconductor Sales (Non-GAAP Basis) QoQ
Non-GAAP FY18/12 Q1 SEMICONDUCTOR SALES (NON-GAAP BASIS*1) QoQ -24.4 B yen (-11.8%) (B yen) -3.7 Currency impact -24.4 -20.7 Sales decrease 206.4 182.0 FY17/12 Q4 *1: Non-GAAP Basis: Results excluding non-recurring and certain other items. Following the completion of the purchase of Intersil in Febr
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 206.4 206.4 194.3 QoQ: -11.8% 194.3 200 192.3 2.2 YoY: +5.5% 200 192.3 2.2 YoY: +0.3% 1.1 0.8 182.0 181.3 1.
Slide 13: Gross Margin, Operating Margin and Opex Trajectories
Non-GAAP GROSS MARGIN, OPERATING MARGIN AND OPEX TRAJECTORIES (NON-GAAP BASIS*1) QoQ: +0.1pts QoQ: +0.9pts YoY: +2.6pts YoY: +2.0pts < Gross Margin (%)> 20 <R&D Ratio (%)> 16.9 17.2 50 48.0 16.216.1 16.7 45.8 45.6 45.7 15 47.7 47.9 16.9 45 45.5 14.9 15.2 16.0 16.3 42.2 14.2 44.3 44.3 10 13.1 40 42.1
Slide 14: Q1 Operating Income YoY
Non-GAAP FY18/12 Q1 OPERATING INCOME (NON-GAAP BASIS*1) (B yen) YoY +2.3 B yen Impact from changes in production volume, etc. Increase in R&D,SG&A (excluding amortization -3.9 +1.0 of goodwill, etc.) +7.5 Currency Improvement in -6.2 impact Sales increase product +4.1 (excluding currency profitabili
Slide 15: Q1 Operating Income QoQ
Non-GAAP FY18/12 Q1 OPERATING INCOME (NON-GAAP BASIS*1) QoQ -2.7 B yen (B yen) Decrease in Currency Sales decrease R&D,SG&A (excluding impact (excluding currency amortization of +1.0 impact) goodwill, etc.) -1.5 Accounting Impact (inventory -13.5 Improvement in +8.8 revaluation, etc.) product profit
Slide 16: Q1 Operating Income vs Forecast
Non-GAAP FY18/12 Q1 OPERATING INCOME (NON-GAAP BASIS*1) vs FCT +10.8 B yen （B yen) Decrease in R&D,SG&A (excluding amortization of Impact from goodwill, etc.) changes in +1.4 Accounting Impact production volume, +0.6 (inventory revaluation, etc. etc.) +1.3 +5.2 Improvement +1.6 in product +0.7 profi
Slide 17: Q2 Financial Forecasts
Non-GAAP FY18/12 Q2 FINANCIAL FORECASTS (NON-GAAP BASIS*1) YoY and QoQ forecasts of the Net Sales and Semi Sales are rounded off to one decimal place. FY17/12 FY18/12 (B yen) Q2 1H Q1 Q2 Forecast 1H Forecast YoY QoQ YoY (Apr-Jun) (Jan-Jun) (Jan-Mar) (Apr-Jun) (Jan-Jun) Net Sales 198.1 375.8 185.9 19
Slide 18: Q2 Semiconductor Sales Forecast YoY
Non-GAAP FY18/12 Q2 SEMICONDUCTOR SALES FORECAST (NON-GAAP BASIS*1) (B yen) YoY -1.6 B yen (-0.8%) Currency impact -3.5 -1.6 +1.9 Sales increase 194.3 192.7 *1: Non-GAAP Basis: Results excluding non-recurring and certain other items. Following the completion of the purchase of Intersil in FY17/12 Q2
Slide 19: Q2 Semiconductor Sales Forecast QoQ
Non-GAAP FY18/12 Q2 SEMICONDUCTOR SALES FORECAST (NON-GAAP BASIS*1) QoQ +10.7 B yen (+5.9%) (B yen) Currency impact +10.7 -3.6 +14.3 Sales increase 192.7 182.0 FY18/12 Q1 *1: Non-GAAP Basis: Results excluding non-recurring and certain other items. Following the completion of the purchase of Intersil
Slide 20: Q2 Operating Income Forecast YoY
Non-GAAP FY18/12 Q2 OPERATING INCOME FORECAST (NON-GAAP BASIS*1) (B yen) YoY -4.0 B yen Impact from changes in production volume, etc. +0.8 Currency Decrease in impact R&D,SG&A (excluding Sales -5.8 amortization of -1.0 +1.7 increase goodwill, etc.) Accounting (excluding Impact (inventory currency +
Slide 21: Q2 Operating Income Forecast QoQ
Non-GAAP FY18/12 Q2 OPERATING INCOME FORECAST (NON-GAAP BASIS*1) Impact from changes in (B yen) QoQ -6.3 B yen production volume, etc. Currency Accounting impact Impact (inventory -6.9 -1.8 revaluation, etc.) +8.1 -2.5 -3.2 Sales 31.4 increase (excluding Increase in R&D,SG&A (excluding currency amor
Slide 22: 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. © 2018 Renesas Electronics Corporation. All rights reserved. Page 22 BIG IDEAS FOR EVERY SPACE
Slide 23: 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 24: FY18/12 Q1 Financial Snapshot
FY18/12 Q1 FINANCIAL SNAPSHOT YoY and QoQ results as well as the changes from February 9 FCTs of the Net Sales and Semi Sales are rounded off to one decimal place. FY17/12 FY18/12 (B yen) Q1 Q1 Q1 Q4 Change from (Jan-Mar) (Jan-Mar) YoY QoQ (Jan-Mar) (Oct-Dec) Feb 9 FCT Forecast Actual Net Sales 177.
Slide 25: Balance Sheets
BALANCE SHEETS*1 As of Mar. 31, As of Jun. 30, As of Sept. 30, As of Dec. 31, As of Mar. 31, (B yen) 2017 2017 2017 2017 2018 Total Assets 995.3 1,018.5 1,023.7 1,062.7 1,016.2 Cash and Cash Equivalents *2 101.0 126.6 124.4 139.5 124.3 Inventories 113.9 109.0 120.6 126.6 138.8 Liabilities 565.3 566.
Slide 26: EBITDA and Cash Flows
EBITDA*1 AND CASH FLOWS*2 Insurance income: +10.5 Acquisition-related <Cash Flows (B yen)> payments: -16.0 <EBITDA (B yen)> Cash flows from operating activities 60 59.5 *3 Cash flows from investing activities 54.1 52.6 Free cash flows 51.0 52.3 50 45.1 *3 44.0 50 47.7 46.3 35.8 31.5 32.6 32.6 31.4 4
Slide 27: FY18/12 Q2 Financial Forecasts
FY18/12 Q2 FINANCIAL FORECASTS YoY and QoQ forecasts of the Net Sales and Semi Sales are rounded off to one decimal place. *1 FY17/12 FY18/12 (B yen) Q2 Q1 Q2 Forecast 1H H1 YoY QoQ (Jan-Jun) YoY （Apr-Jun） （Jan-Jun） (Jan-Mar) (Apr-Jun) Forecast Net Sales 197.3 374.5 185.9 196.1 -0.6% +5.5% 382.0 +2.
Slide 28: 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