Japan Display Inc. · TSE:6740
Japan Display — FY2017 Earnings Presentation
21 slides from Japan Display's earnings presentation, May 15, 2018
Slide 1: Financial Results Fourth Quarter & Full Year Fiscal 2017
Financial Results Fourth Quarter & Full Year Fiscal 2017 Japan Display Inc. May 15, 2018
Slide 2: 4Q-FY17 Results & FY18 Guidance
4Q-FY17 Results & FY 18 Guidance Takanobu Oshima Chief Financial Officer Copyright © 2018 Japan Display Inc. All Rights Reserved. 2
Slide 3: 4Q-FY17 Topics
4Q-FY17 Topics Due to lower demand for smartphone displays 4Q sales fell 37% YoY, full-year sales down 19% YoY. Lower gross profit on lower sales led to enlarged operating loss. Non-operating: Equity method losses of ¥4.1bn, forex losses of ¥3.3bn, depreciation costs of ¥3.3bn Extraordinary loss
Slide 4: Business Conditions
Business Conditions Mobile Category • 4Q sales: Large decline due to major customer adopting OLED, weak smartphone shipments in China, tougher competition in display mkt and seasonal factors. Biz • FY18 1H sales likely to remain weak but expect FULL ACTIVE™ shipments Condi- to quickly grow as of 2
Slide 5: Operating Results (3 mo. ended Mar. 31, 2018)
Operating Results (3 mo. ended Mar. 31, 2018) (Billion yen) Q4-FY17 Q4-FY16 YoY Chg. Q3-FY17 QoQ Chg. Net sales 151.9 240.2 (88.3) －36.8% 191.7 (39.8) －20.8% Cost of sales 159.9 220.0 (60.1) －27.3% 189.5 (29.6) －15.6% Gross profit (7.9) 20.2 (28.2) - 2.2 (10.2) - -5.2% 8.4% 1.2% SG&A 14.9 12.2 +2.7
Slide 6: FY 2017 Operating Results
FY 2017 Operating Results (Billion yen) FY2017 FY2016 YoY Chg. Net sales 717.5 884.4 (166.9) －18.9% Cost of sales 720.2 816.0 (95.9) －11.7% Gross profit (2.6) 68.4 (71.0) - -0.4% 7.7% SG&A 59.1 49.9 +9.2 ＋18.5% Operating income (61.7) 18.5 (80.3) - -8.6% 2.1% Net non-operating profit (loss) (31.9) (
Slide 7: Operating Income Change Factors
Operating Income Change Factors vs. Previous year (4Q-FY16） vs. Previous quarter (3Q-FY17) (billion yen) Sales 240.2 151.9 191.7 151.9 8.0 (32.4) (22.9) (12.1) (22.9) +10.7 (5.4) (6.0) 3.3 (6.5) (1.1) (2.7) (1.0) (0.6) Shipment Shipment 4Q volume & Mfg. fixed Inven- tory FX 4Q 3Q volume &Mfg. Inven-
Slide 8: Balance Sheet
Balance Sheet (Billion yen) 3/2018 12/2017 3/2017 Cash and deposits 80.9 60.4 82.2 Accounts receivable 82.9 100.7 128.6 Other receivables 42.8 62.7 92.0 Inventories 58.2 80.9 100.9 Others 6.4 7.8 14.4 Total current assets 271.0 312.5 418.2 Non-current assets 343.7 450.7 497.5 Total assets 614.7 763.
Slide 9: Cash Flows
Cash Flows ■Financial Report: JGAAP ■ Internal business administration (advance receipts are included in Operating CF) (advance receipts are regarded as long-term liabilities & included in CF) FY2017 FY2016 FY2017 FY2016 Income bef. income taxes Income bef. income taxes (237.4) (11.2) (237.4) (11.2)
Slide 10: Structural Reforms Results
Structural Reforms Results Structural reforms proceeded as planned. Contribution to operating profit improvement: approx. ¥50bn Reforms Main Results Costs & Effects Partial shutdown of Nomi Plant mfg shut down in Dec. 2017 (the plant will be used Structural reform Japan front-end line by JOLED) extr
Slide 11: FY 2018 Guidance
FY 2018 Guidance 1Q: Sales expected to fall approx. 30% QoQ; operating losses to shrink QoQ based on structural reforms lowering fixed costs & other cost improvements. Full-term sales to bottom in 1Q, sales jump in 2H to lift annual sales by 10-20% Higher sales & structural reform benefits to
Slide 12: Status of Business Reforms
Status of Business Reforms Nobuhiro Higashiiriki Chief Executive Officer & Chairman Copyright © 2018 Japan Display Inc. All Rights Reserved. 12
Slide 13: Today's Briefing
Today's Briefing Basic Policies of Business Reforms （Aug. 9 2017 briefing） FY 2017 Actions • CFT* 2017 earnings structure improvement actions • Strengthened Mobile business • Strengthened Growth businesses (Automotive & new business) FY 2018 Basic Policies *CFT (Cross Functional Team): Created
Slide 14: Founding of "New JDI"
Basic Policies of Business Reforms (Aug. 9, 2017 briefing) End the downward business spiral based on “Scrap & Build" with nothing off limit Scrap & Build Structural & Financial Reform Drastic reform of earnings structure Shift resources to growth areas OLED mfg. technology & commercializatio
Slide 15: FY 2017 Specific Actions
FY 2017 Specific Actions Simultaneously moved on structural reform (scrap) & transforming earnings structure (build) Tough structural and financial reforms Cut fixed costs by ¥50bn, optimized excess mfg capacity Capital procurement of ¥55bn from 3rd-party allotment & Nomi plant transfer CFT 2017
Slide 16: FY17 Action: CFT 2017 Earnings Reform Actions
FY17 Action: CFT 2017 Earnings Reform Actions CFT (Cross Functional Team) 2017 actions enabled major cost cuts CFT 2017 Actions Primary reform benefits* Organized 11 CFTs directly *Relative to company internal plan concerned with business issues Inventory reduction 1. Organizational streamlining Day
Slide 17: FY17 Action: Strengthened Mobile Business
FY17 Action: Strengthened Mobile Business Launch of FULL ACTIVE™ & evaporation OLED development proceeded as planned FULL ACTIVE™ Steady launch of FULL ACTIVE™ Quick ramp-up LCD Innovation （incl. cooperation with supply chain) Evaporation OLED Development verification Completed ⇒ Next: establishing
Slide 18: FY17 Action: Strengthened Automotive Business
FY17 Action: Strengthened Automotive Business Automotive display biz expanded further by injecting more resources JDI’s automotive display World’s No.1 share* Expanded sales exceeded ¥100bn Further growth targeted 19% 17% 16% 2015 2016 2017 2015 2016 2017 *Automotive Active FPD market share, value t
Slide 19: FY17 Action: Strengthened New Business
FY17 Action: Strengthened New Business Larger new product sales & rebuilding organization of new biz Wearables Sales up 100%（vs. FY2016） New Framework to enhance new business Aiming to not only make products but also create markets VR-HMD Marketing Innovation ＆ Communication High resolution LCD Mark
Slide 20: FY 2018 Basic Policies
FY 2018 Basic Policies Become profit-making company thru further earnings structural reforms & accelerated growth strategies FY 2018 Goals Sales (YoY) OPM Net income up 10-20% 2-3% Black Push growth strategy Boost Mobile biz competitiveness ・Ramp up FULL ACTIVE™ ・Further enhancement of LCD (incl.
Slide 21: Forward Looking Statement
Forward Looking Statement: 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, ex