2017/3 1H. General Overview Business Strategy

Transcription

1 2017/3 1H Presentation Note:This document is a translation of the 2017/3 1H Presentation written in Japanese. In the event of any discrepancies in words, accounts, figures, or the like between this report and the original, the original Japanese version shall govern. 117J

2 AGENDA 1 Financial Results Ended 2017/3 1H Financial Results of 2017/3 1H Factors for Sales Changes in 1H YOY Comparison of OP in 1H Plan Ending 2017/3 Revised Plan of 2017/3 Factors for Sales Changes in 2017/3 YOY Comparison of OP in 2017/3 ROHM Strategy CAPEX Plan Returns s to Shareholders P J001A

3 Financial Results of 2017/3 1H (V.S. Initial Plan) 2 '17/3 1H '17/3 1H Initial plan Change from initial plan Amount Percentage Net sales % Operating income % (Ratio) (9.2%) (4.4%) - - Ordinary income % (Ratio) (4.8%) (5.1%) - - Net income % (Ratio) (4.7%) (3.3%) - - EBITDA % (Ratio) (20.0%) 0 (17.3%) - - Average rate ( /US$) ( ) ( ) P J02A

4 Financial Results of 2017/3 1H (YOY) 3 '17/3 1H '16/3 1H Change from previous year Amount Percentage Net sales % Operating income % (Ratio) (9.2%) (12.4%) - Ordinary income % (Ratio) (4.8%) (17.2%) - - Net income % (Ratio) (4.7%) (13.8%) - - EBITDA (Ratio) (20.0%) 0 (21.9%) - - Average rate ( /US$) ( ) ( ) P J003A

5 Positiv ve Factor rs Negative Factors General Overview Business Strategy Factors for Sales Changes Main Factors for Sales Changes in '17/3 4 V.S. plan YOY 1 Increased sales for auto power train & ADAS fields Increased sales of new smartphone models Increased sales for auto body control fields Decreased sales of drivers for large LCD panels Adjustment of production for wearable devices Shrinking of conventional car audio market Withdrawal from lighting equipment market Shrinking of gaming equipment market Shrinking of business equipment market Total Total (-0.2) (-17.8) P J04A

6 YOY Comparison of OP in 1H Major Factors Sales Decrease in marginal profits due to sales decline based on forex Decrease in marginal profits due to sales decline '16/3 1H '17/3 1H Difference Variable & Fixed Costs Cost reductions 3.7 Decrease in variable & fixed costs based on forex Increase in depreciation (excluding forex effects) Unrealized profits on inventories, fixed costs for inventories Other Total -7.7 P J005A

7 Revised Plan of 2017/3 (V.S. Initial Plan and YOY) 6 '17/3 Revised plan '17/3 Initial plan V.S Initial plan YOY Net sales Operating income (Ratio) (7.0%) (4.1%) Ordinary income (Ratio) (4.9%) (4.8%) ± Net income (Ratio) (3.6%) (2.9%) EBITDA (Ratio) (19.3%) (18.7%) Average rate ( /US$) ( ) (Full year ) (1H: , Oct.: , from Nov.: 100) P J006A

8 Factors for Sales Changes in 2017/3 (Planning comparison: V.S. initial and excluding forex effects) Forex correction Correction to assumed forex rate of 110 at time of initial planning 7 Positiv ve Factors Neg gative Fac ctors Main Factors for Sales Changes in '17/3 V.S. initial plan Comparison after forex correction billion) 1 Increased sales for auto power train & ADAS fields Increased sales for overseas home appliance field Increased sales for overall industrial market Recovery of AV equipment market Increased sales for auto body control fields Misestimation in smartphone planning Decreased sales of drivers for large LCD panels Shrinking of business equipment market Shrinking of camera market Total Total (-9.0) (+5.4) P J007A

9 Factors for Sales Changes in 2017/3 (Year on year comparison: Direct and excluding forex effects) Forex correction Correction to average forex rate of 120 for previous year s results Main Factors for Sales Changes in '17/3 8 YOY Comparison after forex correction Pos sitive Facto ors Negative Factors 1 Increased sales for auto power train & ADAS fields Increased sales of new smartphone models Increased sales for overall industrial market Increased sales for overseas home appliance field Increased sales for auto body control fields Decreased sales of drivers for large LCD panels Adjustment of production for wearable devices Withdrawal from lighting equipment market Total (excluding foundry business) Total (-18.3) (+18.1) 1) P J008A

10 YOY Comparison of OP Major Factors Sales Decrease in marginal profits due to sales decline based on forex Increase in marginal profits due to sales increase Variable & Fixed Costs 9 '16/3 '17/3 estimate Difference Cost reductions Decrease in variable & fixed costs based on forex Increase in depreciation (excluding forex effects) Unrealized profits on inventories, i fixed costs for inventories Other Total P J009A

11 ROHM Strategy Market Reform Focusing on auto market Tapping industrial market Increasing sales ratio of overseas customers 2. Product Reform Focusing on Four Growth Solutions High performance Analog Solutions with digital control capabilities Power Solutions centering on SiC Sensor Solutions introducing MEMS/photonics Mobile Solutions providing ultra small-sized devices 3. Production Reform Aiming to Have World s No.1 Production Facilities Thoroughly enhancing RPS (ROHM Production System) Achieving i zero defects and dimproving i power of work sites in production facilities i P J010A

12 11 ROHM Strategy Four Year Trends in Sales by Market (V.S. 1H) 2, , , , , , % % +11% 1, % % +9% 1, % % +4% Boxes show YOY changes 1, % % -9% Japanese digital home appliances Other Japanese consumers 1, % % % +6% -16% % +4% -2% Overseas consumers Industrial % +4% +19% +4% 0 '14/3 '15/3 '16/3 '17/3 56 期上期 57 期上期 58 期上期 59 期上期 1H 1H 1H 1H 実績実績実績実績 Auto P J011A

13 12 ROHM Strategy Four Year Trends in Sales by Market (YOY) billion Boxes show YOY 四 内は前年 changes 4, , % 3, % 3, % 3, % % , % -11% % % -6% +13% -5% Japanese digital home appliances Other Japanese consumers Forex oe correction 為替補正 , % +3% +5% 2, % -4% -12% +19% 1, % -2% +3% +14% Overseas consumers Industrial % +11% Auto +1% +25% +13% +2% +10% '14/3 '15/3 '16/3 '17/3 '17/3 17/3 期 56 期 57 期 58 期 plan 59 期 59 plan 計画実績実績実績着地 込 (120 ( 120) 着地 込円 ) P. 12 (120 円 ver) 117J012A

14 13 ROHM Strategy Trends in Sales Composition Ratio by Market (2017/3 Plan) 100% 80% 36% Japanese digital home appliances TV, DVD Mobile phones AD Cameras Storage, etc. 10% 9% 9% 22% 21% 21% 60% 20% Other Japanese consumers Office equipment Lighting Home appliances Amusement, etc. 30% 30% 28% 40% 20% Industrial 16% 0% 28% 5% 11% Overseas consumers 11% 11% Auto 27% 29% 12% 30% '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17Q1 Plan 42% P J013A

15 14 ROHM Strategy Sales Ratios for Auto/Industrial and Overseas Customers Reaching 50% sales ratio for auto + industrial markets ASAP 37.6% 38.2% 39.7% 42.5% Consumer 62.4% Auto 26.5% Industrial 11.1% Consumer 61.8% Auto 27.2% Industrial 11.0% Consumer 60.3% Auto 28.6% Industrial 11.1% 1% Consumer 57.5% Auto 30.5% Industrial 12.0% '14/3 '15/3 '16/3 '17/3 plan Japanese 62.7% Reaching 50% sales ratio for overseas customers ASAP Overseas 37.3% Japanese 60.5% Overseas 39.5% Japanese 59.8% Overseas 40.2% Japanese 61.5% Overseas 38.5% Causes of fluctuations in overseas consumer ratio Decreased sales -78 of drivers for large LCDs Decreased sales of -46 wearable devices Increased sales for industrial market +8 '14/3 '15/3 '16/3 '17/3 plan Increased sales of smartphones P J014A

16 15 ROHM Strategy 1. Market Reform Focusing on Auto Market 1,500 1,000 Estimated Sales by Application ADAS 1,500 Estimated Sales by Product CAGR 30% CAGR 8% CAGR CAGR 8% 1,008 1,017 Power train CAGR 15% Body CAGR 11% 1,000 1,008 1,017 LSI CAGR 8% 500 Audio, infotainment 500 DM CAGR 3% CAGR 9% 0 '16/3 期 実績 '17/3 期 Plan 計画 '18/3期 Est. 込 '19/3期 込 Est. '20/3 '20/3 期 込 Est. 0 '16/3 期 '17/3 期 '18/3 期 '19/3 '19/3 期 '20/3 期 実績 計画 Plan 込 Est. 込 Est. 込 Est. Design-ins i of fanalog and power solutions for auto market will expand In infotainment, display audio will cover the weakening conventional audio from 2018 Sales for body, power train and ADAS fields will increase rapidly P J015A

17 16 ROHM Strategy Auto Market Examples of Expanded Adoption Audio & Infotainment Fields CAGR 3% Product Categories with Growing Adoption High resolution audio IC Display audio IC + DM 1, LSI DM Renesas CPU, reference power IC '16/3 期 '17/3期 ʼ18/3 '18/3期 '19/3期 '20/3 期実績 Plan 計画 Est. 込 Est. 込 込 Est. p p LCD panel control IC + power IC Shift development resources from TV panels to vehicles P J016A

18 17 ROHM Strategy Auto Market Examples of Expanded Adoption Body Control Fields CAGR 11% Product Categories with Growing Adoption LED driver IC + IPD On/Off switch Matrix LED driver Leveler motor IC LSI DM In-vehicle communication IC 0 '16/3 期実績 '17/3期 Plan 計画 ʼ18/3 '18/3 期 込 Est. '19/3期 込 Est. '20/3 期 込 Est. Multi-input surveillance IC Rectifier Di for reverse current prevention Increase market share for small signal TR/Di P J017A

19 18 ROHM Strategy Auto Market Examples of Expanded Adoption Power Train Field CAGR 15% Product Categories with Growing Adoption EV/HEV insulated gate driver IC + SiC Fully demonstrate special characteristics of SiC LSI DM SiC power module 0 '16/3 期 実績 '17/3期 Plan 計画 ʼ18/3 '18/3 期 込 Est. '19/3 期 込 Est. 20/3 '20/3 期 込 Est. Igniter IGBT High current detection resistor P J018A

20 19 ROHM Strategy Auto Market Examples of Expanded Adoption Driving Safety & ADAS Fields CAGR 30% Product Categories with Growing Adoption Sonar signal processing IC Camera power IC LSI DM 0 '16/3 期 '17/3期実績 Plan 計画 ʼ18/3 '18/3期 Est. 込 '19/3期 Est. 込 '20/3期 Est. 込 Radar module power IC System power designed for functional safety P J019A

21 20 ROHM Strategy Industrial Equipment Examples of Expanded Adoption FA & Energy Fields 400 CAGR 11% Product Categories with Growing Adoption Inverter power solutions Insulated DC/DC IC Insulated gate driver SiC LSI 100 DM Digital power IC 0 '16/3 期実績 '17/3期 Plan 計画 '18/3期 Est. 込 '19/3 期 込 Est. '20/3期 Est. 込 SiC power devices Design-in in of power solutions continues to advance P J020A

22 21 ROHM Strategy Industrial Equipment Examples of Expanded Adoption Product Categories with Growing Adoption IoT, Infrastructure & HEMS Wi-SUN modules (A & B routes) Fields Sensing devices CAGR 19% Motion sensors Environmental sensors LSI LAPIS 80% シェア 0 DM '16/3 期実績 '17/3期 Plan 計画 '18/3 期 込 Est. '19/3 期 込 Est. '20/3 期 込 Est. 80% share of LAPIS market Power companies A route Smart meters B route Rechargeable batteries HEMS/gateways Cloud Lighting, consumer white goods Design-in in of sensor solutions continues to advance Solar power generation Surveillance cameras EV/charging stands HAN: Home area network P J021A

23 22 ROHM Strategy Overseas Consumers Examples of Expanded Adoption Product Categories with Growing Adoption Color sensors Smartphone Field Proximity & ambient light sensor modules Controller IC for CAGR 9% wireless charging systems LSI DM '16/3 期実績 '17/3期 Plan 計画 '18/3期 Est. 込 '19/3期 込 Est. '20/3 期 込 Est. Camera modules Image stabilization driver IC Hall devices RASMID Customer adoption is growing Adoption of sensor and mobile solutions continues to expand P J022A

24 23 ROHM Strategy Overseas Consumers Examples of Expanded Adoption Overseas Home Appliance Field 400 CAGR 9% Product Categories with Growing Adoption Power solutions for home appliances Energy saving effectiveness is recognized globally AC/DC, DC/DC control IC High voltage MOS-FET, IGBT, FRD High current detection resistor LSI DM General purpose devices Motor drive solutions 0 '16/3 期実績 '17/3期 Plan 計画 '18/3期 Est. 込 '19/3期 込 Est. '20/3 期 込 Est. Motor driver IC Medium voltage MOS-FET Design-in of power solutions continues to advance P J023A

25 billion 5, General Overview Business Strategy 2. Product Reform 24 ROHM Strategy Sales Trends of Four Growth Solutions Forex correction 為替補正 4, , , , , , , ,704 2, ,862 64% ,046 62% , ,027 59% 58% ,858 56% Current products ,061 YOY 56% +2% 前年 +2% 1, Analog solutions 44% % 42% 44% % 1, , , Power 1,643 1, solutions YOY Sensor +10% 17.3 solutions Mobile solutions '17/3 '13/3 '14/3 '15/3 '16/3 '17/3 plan plan ( 120) 17/3 期計画 (120 円 ) 前年 +10% P J024A

26 25 ROHM Strategy 3. Production Reform Strengthening of Production System to Promote Future Growth Continue quality investment targeting all production facilities Fully apply RPS (ROHM Production System) to drive production reform Eliminate the three wastes Reduce costs and achieve higher quality Develop human resources + Aim to halve production lead time based on RPS methods Aim to achieve zero defects and improve power of work sites in production facilities Aim for zero defects by minimizing variations Development of model IoT-based facility is underway P J025A

27 CAPEX Plan 26 Reduce non-essential investment and focus on fields that lead to future growth Enhance Reduce Power device-related areas Postponement of local land New package product-related areas acquisition Startup of new factory in Malaysia Postponement of construction of new factory in Philippines Total Capacity increase Land, building New products Quality Others '16/ '17/3 Initial plan '17/3 Revised plan Revised plan P J026A

28 Returns to Shareholders /3 annual divided will be 100/share as planned. (Payout ratio of 88%) 2. We will strive to emphasize shareholder returns by continuing to improve our performance. Thus, we will return 100% of free cash flow and maintain payout ratio of 30% or more '16/3 Calculation of FCF '17/3 Calculation of FCF Net income* Depreciation CAPEX Net income* Depreciation CAPEX Acquisition of PV -8.6 Net -1.3 Net Free cash flow 17.0 Share buyback Retired in May 2016 Payout ratio of 54% 13.7 Payout ratio of 88% Dividend 配当 (50) -5 Annual dividends per share '14/3 期 '15/3 期 '16/3 '16/3 期 [ 予定 ] '17/3 '17/3 期 [ 計画 plan 予定 ] (Interim dividend of 65, Year-end dividend of 65) 100 (Interim dividend of 50, Year-end dividend of 50) * Profit attributable to owners of parent is defined as net income in this presentation. P J027A

29 General Overview Business 23 Strategy Note Regarding Future Forecasts The forecast statements in this report are based on information currently available and deemed by ROHM Group as reasonable, and therefore, are not intended to guarantee to be achieved by ROHM Group, and actual results may differ materially by various factors. ROHM Group does not bear responsibility to update and disclose any future forecasts in this report. Also, since the purpose of this report is to provide an outline of business performance, many figures are shown in unit of a billion yen, therefore, totals and differences of figures may appear inaccurate. Please refer to our Financial i Report for detailed figures. P E1109H

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