Japan Display Inc. · TSE:6740

Japan Display — FY2021 Earnings Presentation

33 slides from Japan Display's earnings presentation, May 14, 2021

Slide 1: FY21/3 Full Year Corporate Presentation
FY21/3 Full Year Corporate Presentation May 14, 2021 Japan Display Inc.
Slide 2: FY21/3 Overview
| Japan Display Inc. JDI FY21/3 Overview
Slide 3: FY21/3 Overview
FY21/3 Overview ✓ Managed through Covid Crisis, Maintaining Manufacturing Systems & Shipments ✓ Progressed New Technology R&D & Began Mass Production of 76 New Products (+9% vs. FY19/3 70 New Products) ✓ Cut Fixed & Variable Costs, Generated Positive Gross Profit, & Significantly Reduced Operating L
Slide 4: FY21/3 Business Overview
FY21/3 Business Overview Significant Cost Reductions, Business Transformation, & Robust New Product Development while Responding to Covid • Significant decrease in sales due to a drop in demand for smartphone LCD from a major customer Mobile • Significant cut in fixed costs, including the sale of Ha
Slide 5: FY21/3 Business Overview
FY21/3 Business Overview • Steady progress in development of JDI differentiated new technologies • Received the Minister of State for Science and Technology Policy Award R&D at the 3rd Japan Open Innovation Awards for the development of sheet- type image sensors that can simultaneously measure biome
Slide 6: Increased Cost Competitiveness
Increased Cost Competitiveness Driving Low-Cost, High-Profit Structure through Cost Reductions & Productivity Improvements ◼ Reduced Fixed Costs: FY21/3: JPY -27.5bn vs. FY20/3 Overall effects of restructuring + Additional measures – Power: Optimized energy use and contracts – Maintenance: Optimized
Slide 7: FY21/3 Business Reforms
FY21/3 Business Reforms Strengthened Governance & Completed TSE Improvement Submissions Strengthened Financial Base & Progressed Building New Businesses ◼ Completed submission of improvement status reports to TSE and implemented measures to prevent recurrence Strengthen ◼ Transitioned to stronger Bo
Slide 8: Strengthened Governance
Strengthened Governance TSE Improvement Submissions Complete Also Completed Implementation of Improvement Plan (1) Raise employee ・ Delivered senior management messages during compliance enhancement month. consciousness vis-à-vis Accounting Education and Hazard Prediction Training were also conducte
Slide 9: Hakusan Plant Sale (Completed Oct. 1, 2020)
Hakusan Plant Sale（Completed Oct. 1, 2020） Reduced Annual Costs by JPY 8bn & Strengthened Balance Sheet Continuing Manufacturing of High Value-Add Products at Mobara Plant 1. Lowered plant maintenance costs, fixed asset tax, & other costs. Total reduction of c. JPY 8bn annually (Improved P/L) Benefi
Slide 10: Ichigo Trust Equity Financing (Exercise of 12th stock acquisition rights)
Ichigo Trust Equity Financing (Exercise of 12th stock acquisition rights) Partial Exercise, Unexercised Amount JPY 36bn ◆Exercise Details ◆ Ichigo Trust Total amount JPY 55.4bn Outstanding Number of Shares Number of Ichigo Trust Voting rights Shares (unit: K) (unit: K) Ownership Exercise date 2021/3
Slide 11: 21/3 Earnings Review 22/3 Forecast
21/3 Earnings Review 22/3 Forecast
Slide 12: FY21/3 Financial Results Summary
FY21/3 Financial Results Summary Despite a significant decrease in sales, cost reductions helped turn a gross profit and reduced operating loss & EBITDA loss （JPY billion) FY20/3 FY21/3 YoY • Mobile sales dropped sharply due to lower demand for smartphone LCDs. Net sales 504.0 341.7 -162.3 • Non-Mob
Slide 13: FY21/3 Operating Income Change Factors (YoY)
FY21/3 Operating Income Change Factors（YoY） Decreased op. losses by reducing fixed mfg. costs (e.g., transferring the Hakusan Plant) and implementing other cost reductions FY20/3 FY21/3 （ JPY billion） Sales: 504.0 Sales: 341.7 (38.5) (26.2) +14.6 Operating loss Operating +6.1 loss (29.8) Other ✓ Dis
Slide 14: FY21/3 Q4 Operating Income Change Factors
FY21/3 Q4 Operating Income Change Factors vs. FY20/3 Q4 (YOY) vs. FY21/3 Q3 (QOQ) （JPY billion) FY20/3 Q4 FY21/3 Q4 FY21/3 Q3 FY21/3 Q4 Sales: 116.2 Sales: 69.2 Sales: 72.7 Sales: 69.2 (5.9) (7.6) (8.7) (7.6) Operating (4.3) (0.2) 0.1 0.2 loss 1.4 (0.1) Operating 1.0 1.3 loss Operating Shipment Mfg.
Slide 15: Consolidated Balance Sheet
Consolidated Balance Sheet Reduced fixed assets and related liabilities thru Hakusan Plant transfer and streamlined B/S. Equity ratio increased 4.5 pts versus end of FY20/3 due to issuance of preferred shares etc. (JPY billion) FY20/3 Q4 FY21/3 Q3 FY21/3 Q4 Cash and deposits 66.7 54.2 55.7 Accounts
Slide 16: Consolidated Cash Flow
Consolidated Cash Flow FY21/3 free cash flow greatly improved due to a reduced net loss and improved working capital (JPY billion) FY20/3 FY21/3 Income before income taxes (98.4) (41.7) Dep. & Amort. 20.7 14.7 Working capital (36.1) 20.6 Advances received (12.8) (10.3) Structural reform cost 67.2 10
Slide 17: FY22/3 Forecast
FY22/3 Forecast Annual Sales FY21/3 FY22/3 ✓ Full year forecast: JPY254bn, (JPY billion) YoY (ACT) (FCST) Q1 forecast: JPY64bn Sales 341.7 254.0 -26% Mobile (US/Euro) 162.6 47.0 -71% ✓ Sales of LCDs for smartphones to EU/US Mobile (China/other) 34.9 34.0 -3% regions continue to decline, but sales Au
Slide 18: JDI Strategy
| Japan Display Inc. JDI JDI Strategy
Slide 22: JDI Strategy
JDI Strategy Strategic Focus KPI 1) Strengthen Existing Businesses ◼ Rethink, Reposition, & Rebuild JDI ✓ Delegate Authority, Move Quickly Strengthen Sales & Marketing ✓ ◼ EBITDA Positive in FY22/3 Q4 ◼ Massively Increase Profitability ✓ Strengthen Competitiveness by Radically Cutting Costs & Liquid
Slide 23: JDI Business Criteria
JDI Strategy: JDI Business Criteria 1. 3 Bigs Big Need, Big Market, Big Impact 2. JDI Is Different 3. Highly Profitable Business Model Copyright 2021 Japan Display Inc. All Rights Reserved. Slide 23
Slide 24: Robust Earnings Stability
JDI Strategy: Robust Earnings Stability More Diverse & More Stable Earnings Driven by Shift from Mobile to Automotive & Non-Mobile Sales Breakdown by Sector (Mobile, Automotive, Non-Mobile) 100% Mobile (US/Euro) 19% Mobile(China/Other) 80% Non-Mobile 55% 13% Automotive 60% 28% 40% 24% 20% 6% 41% 15%
Slide 25: FY22/3 Market Environment
JDI Strategy: FY22/3 Market Environment Upside Earnings Opportunities ✓ Higher OLED Sales Supported by FY22/3 H2 Back-End Expansion ✓ Improvements in Pricing & Product Mix ✓ Greater Pricing Power from Global Tightness in Display Supply Downside Earnings Risk ✓ Semiconductor Shortage Impact on Produc
Slide 26: Strengthen Existing Businesses
JDI Strategy: Strengthen Existing Businesses ◆OLED ◆Sensors • Significant improvement in profitability due • Build New Revenue Stream to scale expansion • Expand Value Chain • Maintain Technological Superiority in • Market Entry in System Solutions Existing-Generation OLED • Dominate Next-Generation
Slide 27: VR Market 27% CAGR – Maintain & Grow JDI Competitive Advantage
JDI Strategy: VR VR Market 27% CAGR – Maintain & Grow JDI Competitive Advantage in Ultra-High-Resolution LCD VR Displays VR VR Display Market Growth • Realizing Natural & Precise Video Representations • As VR Expands Beyond Current Applications, Building • Providing Real World-Like Experience & Insp
Slide 28: Next-Generation Ultra High-Brightness & Ultra-High-Resolution OLED
JDI Strategy: OLED GAME CHANGE JDI Next-Generation Ultra High-Brightness & Ultra-High- Resolution OLED – Far Superior to Existing-Generation OLED 2X Display High-Definition, Flexible, Brightness Integrated Sensors OR 50% Power Consumption Copyright 2021 Japan Display Inc. All Rights Reserved. Slide
Slide 29: Expand Businesses in Articles of Incorporation (AOI)
JDI Strategy: Expand Businesses in Articles of Incorporation (AOI) Deploy JDI Display Capabilities to Sensors, Solutions, Services Develop & Commercialize High Value-Add Technologies & Expand into New Business Domains Expand Businesses in AOI in Preparation for Future Business Expansion Note: Subjec
Slide 31: Appendix
[| Japan Display Inc. JDI Appendix
Slide 32: Consolidated Operating Results
Consolidated Operating Results FY20/3 FY21/3 FY21/3 YoY QoQ (JPY billion) FY20/3 FY21/3 Chg Q4 Q3 Q4 Chg Chg Net sales 504.0 341.7 -162.3 116.2 72.7 69.2 -47.1 -3.6 Cost of sales 505.4 336.6 -168.9 112.9 73.5 68.9 -44.0 -4.6 Gross profit (loss) (1.4) 5.1 ＋6.5 3.4 (0.8) 0.2 -3.1 ＋1.0 SG&A 37.1 31.4 -

Japan Display — FY2021 Earnings Presentation on 6ix

Japan Display — FY2021 Earnings Presentation

Slide 1: FY21/3 Full Year Corporate Presentation

Slide 2: FY21/3 Overview

Slide 3: FY21/3 Overview

Slide 4: FY21/3 Business Overview

Slide 5: FY21/3 Business Overview

Slide 6: Increased Cost Competitiveness

Slide 7: FY21/3 Business Reforms

Slide 8: Strengthened Governance

Slide 9: Hakusan Plant Sale (Completed Oct. 1, 2020)

Slide 10: Ichigo Trust Equity Financing (Exercise of 12th stock acquisition rights)

Slide 11: 21/3 Earnings Review 22/3 Forecast

Slide 12: FY21/3 Financial Results Summary

Slide 13: FY21/3 Operating Income Change Factors (YoY)

Slide 14: FY21/3 Q4 Operating Income Change Factors

Slide 15: Consolidated Balance Sheet

Slide 16: Consolidated Cash Flow

Slide 17: FY22/3 Forecast

Slide 18: JDI Strategy

Slide 19: GAME CHANGE

Slide 20: JDI Is Different

Slide 21: PersonalTech

Slide 22: JDI Strategy

Slide 23: JDI Business Criteria

Slide 24: Robust Earnings Stability

Slide 25: FY22/3 Market Environment

Slide 26: Strengthen Existing Businesses

Slide 27: VR Market 27% CAGR – Maintain & Grow JDI Competitive Advantage

Slide 28: Next-Generation Ultra High-Brightness & Ultra-High-Resolution OLED

Slide 29: Expand Businesses in Articles of Incorporation (AOI)

Slide 30: PersonalTech For A Better World

Slide 31: Appendix

Slide 32: Consolidated Operating Results

Slide 33: THANK YOU