Group Business Strategies and Management Policy

Transcription

1 Kyocera Corporation Investor Meeting in Hong Kong Kyocera 2006 Group Business Strategies and Management Policy Vice Chairman and Representative Director Masahiro Umemura November 30, 2006

2 Presentation Outline Introduction to to the Kyocera Group Consolidated Financial Results (Six (Six Months Months ended ended September September 30, 30, 2006) 2006) Overview and Strategy: Components Business Overview and Strategy: Equipment Business Consolidated Financial Forecast (Year (Year ending ending March March 31, 31, 2007) 2007) Management Policy 1

3 Forward-Looking Statements Certain of the statements made in this document are forward-looking statements (within the meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to: general economic conditions in our markets, which are primarily Japan, North America, Europe, and Asia, including in particular China; changes in exchange rates, particularly between the yen and the U.S. dollar and euro, respectively, in which we make significant sales; our ability to launch innovative products and otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components; and the extent and pace of future growth or contraction in information technologyrelated markets around the world, including those for communications and personal computers; fluctuations in the value of securities and other assets held by us and changes in accounting principles; business performance of other companies with which we maintain business alliances; laws and regulations relating to taxation, and to manufacturing and trade; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of disease; and the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located. Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document. 2

4 History of Kyocera Group Equipment Business Components Business Sales (Unit: Yen in trillions) 1963 Semiconductor parts 1959 Fine ceramic parts 1975 Jewelry and applied ceramic products 1972 Electronic devices 1972 Cutting tools 1983 Optical equipment 1979 Telecommunications equipment 1979 Information equipment 1978 Dental and orthopedic implants 1975 Solar energy products Vertical integration of technologies Horizontal development of technologies 0.0 3/ (FY) 3

5 Kyocera Group Business Development Ceramic / Organic Components Group Kyocera Chemical Corp. Flat Panel Display Group Kyocera Display Institute Co., Ltd. Kyocera SLC Technologies Corp. Cutting Tools Group Kyocera Precision Tools Korea Co., Ltd. Solar Energy Group Kyocera Tycom Group Kyocera Solar, Inc. Kyocera America, Inc Semiconductor Parts Telecommunication Devices LEDs Fine Ceramics LCDs Thin-Film Devices Automotive Components Cutting Tools Electronic Devices Electronic Device Group AVX Group Kyocera Kinseki Group Kyocera Solar Corp. Solar Energy Information Equipment Shanghai Kyocera Electronics Co., Ltd. Kyocera (Tianjin) Solar Energy Co., Ltd. Dental & Orthopedic Implants Telecommunications Equipment Jewelry & Applied Ceramics Optical Equipment Kyocera Elco Group Kyocera Mita Group Information Equipment Group Kyocera Communication Systems Group Dongguan Shilong Kyocera Optics Co., Ltd. Kyocera Wireless Corp. Kyocera Zhenhua Communication Equipment Co., Ltd. Kyocera Optec Co., Ltd. Telecommunications Equipment Group Optical Equipment Group 4

6 Net sales Profit from operations Pre-tax income Net income EPS (diluted-yen) Capital expenditures Depreciation R&D expenses Consolidated Financial Results (1) Six Months ended September 30, 2006 Amount Six months ended Sep % to net sales 2006 Amount 615,390 63,128 72,385 53, ,239 33,682 30,257 % to net sales (Unit: Yen in millions) % change Six months ended Sep. 30 Average exchange rate (yen) US$ 115 Euro 146 Please refer to accompanying note on page 22. Foreign currency fluctuation effect (Compared to H1-FY3/06) net sales 21.8 billion pre-tax income 8.2 billion 5

7 Consolidated Financial Results (2) Six Months ended September 30, 2006 (Unit: Yen in millions) Six months ended Sep % change Net Sales 277, , % Components Business Operating profit 32,564 49, % Operating profit margin (%) 11.7% 15.6% Net Sales 217, , % Equipment Business Operating profit ,576 In the black Operating profit margin (%) 5.5% 6

8 Consolidated Net Sales and Pre-tax Income Trends Net sales H1-FY3/05 to H1-FY3/07 Pre-tax income (Unit: Yen in billions) Pre-tax income ratio (%) H1 H2 FY3/05 Please refer to accompanying note on page 22. H1 H2 H1 FY3/06 FY3/07 7

9 Ceramic capacitors Tantalum capacitors Timing devices Connectors Electronic Device Group 44% 43% Components Business: Breakdown of Net Sales and Operating Profit Six Months ended September 30, 2006 Net Sales 18% Fine Ceramic Parts Group 12% Operating Profit 15% Semiconductor Parts Group 24% Semiconductor fabrication equipment components LCD fabrication equipment components Sapphire substrates Automotive & ITS related components 24% Ceramic packages for surface mount devices Metallized products Optical communication device packages and components Organic multilayer packages Solar cells and modules Residential & industrial photovoltaic generating systems Cutting tools Dental & orthopedic implants Applied Ceramic Products Group 20% Net Sales: Billion Operating Profit: 49.8 Billion 8

10 Net sales Components Business: Net Sales and Operating Profit Trends (1) H1-FY3/05 to H1-FY3/07 Operating profit (Unit: Yen in billions) Operating profit ratio (%) H1 FY3/05 H2 H1 H2 H1 FY3/06 FY3/07 9

11 Outlook and Challenges for Key Segments (1) Semiconductor Parts Group FY3/07 First Half Second Half Ceramic packages Expand sales of surface-mount device packages for electronic components; image-sensor packages; and optical communication device packages Image-sensor packages Improve profitability through enhanced capacity utilization ratio and cost reductions at Chinese plants Organic packages Expand sales of SiP substrates for digital cameras and mobile phone handsets Slow sales of packages for game consoles SiP substrates Enhance high-quality mass-production technologies Please refer to accompanying note on page 2. 10

12 Outlook and Challenges for Key Segments (2) Electronic Device Group FY3/07 First Half Second Half Solid orders in Asia; Expand production capacity Capacitors (Ceramic/tantalum) Expand sales of high-value-added products Improve productivity in overseas plants (China and Czech Republic) Expand variety of products manufactured at Chinese plants Crystal Devices Kyocera Kinseki Expand sales of crystal units and TCXOs Improve productivity of Japanese plants Focus on 2520-sized crystal units and TCXOs Please refer to accompanying note on page 2. 11

13 Net sales Components Business: Net Sales and Operating Profit Trends (2) FY3/05 through FY3/07 Forecast Operating profit (Unit: Yen in billions) Operating profit ratio (%) H1 H2 H1 H2 H1 H2 (Forecast) FY3/05 FY3/06 FY3/07 Please refer to accompanying note on page 2. 12

14 Medium-term Strategy for Components Business Maximize Core Competencies to Expand Business 1. Strengthen new product development by further advancing materials technologies Fine ceramics: Organic materials: Crystal materials: Polycrystalline silicon: Automotive and environment-related industries High-speed telecommunications infrastructure Wireless communication and automotive industries Solar energy systems 2. Exploit market position to launch new products and gain market share Fine ceramic parts: Semiconductor parts: Electronic devices: Semiconductor fabrication equipment components Medical equipment industry Expand variety in use of thin-film devices; advanced products of AVX 3. Increase cost competitiveness through global production system Shanghai, China plant: Increase product variety Global production bases of Kyocera group companies: Optimize worldwide production system for such products as capacitors Please refer to accompanying note on page 2. 13

15 Equipment Business: Breakdown of Net Sales Six Months ended September 30, 2006 Net Sales Optical Equipment Group 3% CDMA mobile phone handsets PHS-related products (handsets, base stations, high-speed wireless data transmission systems) Information Equipment Group 50% Telecommunications Equipment Group 47% W42K W44K Net Sales: Billion ECOSYS printers Digital, network-ready multifunctional products Operating Profit: 13.6 Billion 14

16 Net sales Equipment Business: Net Sales and Operating Profit Trends (1) H1-FY3/05 to H1-FY3/07 Operating profit (Unit: Yen in billions) Operating profit ratio (%) H1 H2 H1 H2 H1 FY3/05 FY3/06 FY3/07 15

17 Outlook and Challenges for Key Segments (3) Telecommunications Equipment Group, Outside Japan FY3/07 First Half Second Half Q1: Operating loss Q2: Achieved operating profit Increase sales by focusing on mass consumers KWC Strobe K320 K130 K120 PHS handsets/ base stations Delayed introduction of packet service in China Commencement of commercialized packet service Sell base stations and handsets with packet capability iburst TM Cultivate high-potential markets such as Russia, India, U.S. and others iburst TM is a trade mark ok of ArrayComm, Inc. (U.S.A) Please refer to accompanying note on page 2. 16

18 Net sales Equipment Business: Net Sales and Operating Profit Trends (2) FY3/05 through FY3/07 Forecast Operating profit (Unit: Yen in billions) Operating profit ratio (%) H1 H2 H1 H2 H1 H2 (Forecast) FY3/05 FY3/06 FY3/07 Please refer to accompanying note on page 2. 17

19 Medium-term Strategy for Equipment Business Integrate Management Resources to Expand Business 1. Expand businesses through collaboration with Japanese telecom carriers Expand hardware business Support development of invested companies 2. Expand markets by enhancing technological integration of equipment and components businesses for product differentiation Create synergy between Electronic Device Group and Information Equipment Group 3. Telecommunications Equipment: Enhance business efficiency and accelerate product development by integrating management resources between Japanese and non-japanese operations Consolidate Japanese mobile phone handset business and PHS-related business Pursue synergy between mobile phone handset business in Japan, U.S. and India Strengthen R&D and increase raw materials purchasing power Focus on strategic markets and customers Please refer to accompanying note on page 2. 18

20 Consolidated Net Sales, Pre-tax Income and EPS Trends FY3/05 to FY3/07 Forecast Net sales (Unit: Yen in billions) Pre-tax income Pre-tax income ratio (%) 1,250.0 EPS (yen) 1, , , , FY3/03 FY3/04 FY3/05 FY3/06 FY3/07(Forecast) Please refer to accompanying note on page 2 and

21 Boost Asset Efficiency to Raise Corporate Value Manage added value per hour Practice Kyocera Accounting Principles Utilize Amoeba Management System Please refer to accompanying note on page 2. Faster collection of trade receivables Optimize inventory volumes Increase efficiency of fixed assets, including capital expenditures Raise Corporate Value Become a creative company that continues to grow 20

22 Kyocera Group Management Strategy 1. Practice the customer-first principle 2. Promote global management 3. Build highly profitable operations: Improve profitability, and boost efficient use of assets Set goals and manage profit at the smallgroup level Clarify management challenges Make timely and accurate management decisions Promote profit awareness Stimulate ability to achieve goals Maximize revenues; minimize expenses Please refer to accompanying note on page 2. 21

23 Note on Consolidated Financial Results Kyocera Corporation sold Kyocera Leasing Co., Ltd., a subsidiary engaged in the financing business. As a result, operating results and gain on sales of Kyocera Leasing Co., Ltd. for the six months ended September 30, 2006 have been recorded as income from discontinued operations in accordance with accounting principles generally accepted in the U.S. Some figures for the years from 2003 to 2006 have been retrospectively reclassified. 22

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