Kyocera Group Strategies

Transcription

1 Kyocera Group Strategies November/December, 2004

2 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; the extent and pace of future growth or contraction in information technology-related markets around the world, including those for communications and personal computers; and events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases such as SARS. 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 forwardlooking statements. We undertake no obligation to publicly update any forward-looking statements included in this document. 1

3 Presentation Table of Contents Kyocera Group Strategy FY3/05 Consolidated Financial Forecast Management Strategy: Promote "High-Value-Added Diversification" CY05 Macroeconomic and Market Outlook Capture New Business Opportunities by by Promoting "High-Value-Added Diversification" 2

4 Consolidated Financial Forecast - Year Ending March 31, (Unit: Millions of yen) Net sales Year ending Mar. 31, 2005 % to net Amount sales 1,260, Year ended Mar. 31, 2004 Amount 1,140,814 % to net sales Percentage change 10.4 Profit from operations 135, , Pre-tax income 140, , Net income 85, , EPS (diluted-yen) Capital expenditures 62, , Depreciation 65, , R&D expenses 51, , Average exchange rates: U.S. dollar (Yen) Euro (Yen)

5 Sales and Profit Forecast by Operating Segment - FY3/05 vs. FY3/04 - (Unit: Billions of yen) 1,500 1,000 1, Net sales 1, (Unit: Billions of yen) Pre-tax income '3/04 '3/05(Forecast) 0 '3/04 '3/05(Forecast) Fine Ceramics Group Electronic Device Group Equipment Group Others Corporate and Others 4

6 Management Strategy: Promote "High-Value Value-Added Diversification" Aiming to to be be a creative company that continues to to grow in in the 21st century Create New Businesses Develop new products Cultivate new markets Strengthen Existing Businesses Bolster strong businesses Improve weak businesses Introduce external management resources Strengthen internal management resources Pursue higher productivity: Enhance process technology development (100% yields; realize ultra rationalization ) Reduce production costs 5

7 Definition of a High-Value-Added Businesses" Criterion: Pre-tax income ratio must exceed 15% If this goal cannot be attained: Withdraw or downsize business and concentrate resources Examples: Withdrawal Cordless home phones PCs Hard disk drives Audio equipment Cartridge printers Example: Downsize Camera business (in FY3/05) Concentrate management resources: CDMA handsets PHS related products Non-cartridge printers, digital MFPs Focus on optical component business 6

8 CY05 Global Economic Outlook [%] 10 Slowdown in in global economic growth rate in in CY05 8 Real GDP Growth Rate Japan Apr. 04 Sep. 04 Results CY'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 ' Forecast (Source: International Monetary Fund) US Europe Asia Global 7

9 CY05 Semiconductor Market Forecast Slowdown in in semiconductor market growth rate in in CY05 Amount (Billions of US dollars) Annual Growth Rate 300 Amount Annual growth rate 60% % % % % 50-40% 0 CY 96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 Results Forecast -60% (Source: WSTS released in Nov 2004) 8

10 Capture New Business Opportunities by Promoting "High-Value Value-Added Diversification" Expand sales and profits in in FY3/06 despite slowdown in in macroeconomic and market growth rates New business opportunities Sustainable growth in digital consumer products and ubiquitous network equipment Rapid expansion of alternative energy market due to growing concerns about environmental issues More complex and sophisticated document equipment Expansion of medical materials market Organic packages Wireless communication systems Solar energy products Copiers, printers, MFPs Medical materials Maximize opportunities through "high-value-added added diversification" 9

11 Digital Consumer and Ubiquitous Network Equipment Markets Trends in Package Specifications / Markets Growth Catalysts Market Needs 1990s~2000 Package Specifications PCs Higher speed Switch from ceramic to organic Towards a Ubiquitous Network Era After 2000 Bloom of digital technologies Mobile phones Compact/light Color LCD Higher pixel count DSCs DVD Games Higher pixel count Thinner Eco-friendly High density recording Advanced high-per per- formance multi- functional Digital TVs Bright Thin Determine optimum specifications (materials/structure) for components used in digital consumer equipment by collaborating among equipment, semiconductor and package manufacturers 10

12 Digital Consumer and Ubiquitous Network Equipment Markets Develop Organic Packages Business Mass produce packages for next-generation processors Kagoshima Sendai Plant New KST Ayabe Plant Commence production in June 2005 Most advanced plant Total capital expenditures: 17.0 billion Kagoshima Kokubu Plant FC-BGA Ultra mass-production site Test production/ mass-production site KST Head Office / Yasu Plant / R&D center KST: Kyocera SLC Technologies Corporation 11

13 Digital Consumer and Ubiquitous Network Equipment Markets Develop Communication Systems Equipment Business Provide PHS technology from infrastructure to to the last one mile Kyocera s s PHS Base Station Technology Adaptive Array Antenna Space Division Multiple Access (SDMA) Frame Synchronization by GPS Transmission Speed Wireless Internet Downlink: Max. 1Mbps Bandwidth 8 channels (5/10MHz) Portability Always-on connection IP based network connection Fixed Wireless Network WLL System Approx. 3,400 households receive phone service from one base station High traffic capacity: Wireless Internet System Max. 155 channels/base station Broad coverage: Line of sight up to max. 15km Mobile Network PHS System High voice quality (32kbps ADPCM) High-speed data transmission 64 kbps (PIAFS), 128 kbps (Packet communication) Low-output handset (Average 10mW) Mobility 12

14 Expand Communication Systems Equipment Business Japan China Expand business for data communications / / IP IP networks 2H FY3/05 Digital Consumer and Ubiquitous Network Equipment Markets FY3/06 and onward From high-speed data communications to IP networks Expand full browser terminal Promote tie-up with Willcom, Inc. (new PHS company) Introduce base stations and terminals for high speed data communications Expand packet communication and high-data data-rate communication markets Introduce new PHS engine Expand card terminal for packet service Other Cultivate wireless Internet system (iburst TM ) market Cultivate new markets with low-system-cost advantage (Vietnam, India, etc.) iburst TM is a trademark of ArrayComm, Inc. 13

15 Alternative energy market Global Production Volume of Solar Cells and Modules MW 1,000 Production volume to to increase 30~40% in in CY '00 '01 '02 '03 '04E (CY) (Source: PV News) 14

16 Expand Solar Energy Business Increase sales by by establishing global production framework employing four production bases Czech Republic Commence production in 1H FY3/06 Japan Yokaichi: cell production Ise: module production Alternative energy market China Commence production in November 2003 Mexico Commence production in November 2004 Achieve world's highest conversion efficiency Reduce costs through lean production methods Enhance production capacity 150MW/year by March MW/year by March 2006 Establish valuable solar energy business 15

17 Document Equipment Market Integrate Technologies for Information Equipment and Components (MFPs) Long-life Technology based on on ECOSYS Concept Information Equipment Printers Long-life Network Higher image quality Controller High-Speed Color MFP ideal for IT era Thin-Film Devices Compact Reuse, recycle Higher speeds and Image quality Common platforms LED Printheads (Advanced Beam Array) Copiers High-speed Image processing High-speed paper handling Digitization Lower operating and service costs through ECOSYS concept Develop customer satisfaction Amorphous Silicon Drums High degree of hardness Abrasion resistant Quick response Stable electrical characteristics 16

18 Medical Materials Market Medical Materials Business Strategy Strengthen R&D, manufacturing and marketing of of medical and dental implants business through newly established JMM Japan s s Biomedical Materials Market (Billions of yen) 0 CY Up four-fold '02 '20 (Forecast) (Source: Yano Research Institute Ltd., Nihon Keizai Shimbun Inc.) Provide wide range of of products by by integrating technologies for titanium alloys and ceramics Reduce production costs and realize quick delivery by by optimizing production structure JMM: Japan Medical Materials Corporation 17

19 (Billions of yen) 15 Kyocera Group Sales Forecast Management Strategy: Promote "High-Value Value-Added Diversification" Aiming Aiming to to be be a a creative creative company company that that continues continues to to grow grow in in the the 21st 21st century century 10 Create New Businesses Develop new products Cultivate new markets Strengthen Existing Businesses Bolster strong businesses Improve weak businesses 5 Introduce external resources Strengthen internal resources Pursue higher productivity: Enhance process technology development (100% yields; realize ultra rationalization ) Reduce production costs (Forecast) 18

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