Kyocera Corporation · TSE:6971
Kyocera — FY2019 Earnings Presentation
34 slides from Kyocera's earnings presentation, Apr 26, 2019
Slide 1: Financial Presentation (Year Ended March 31, 2019)
April 26, 2019 Financial Presentation (Year Ended March 31, 2019) Hideo Tanimoto President and Representative Director This is an English translation of the Japanese original of Financial Presentation (Year Ended March 31, 2019). The translation is prepared solely for the reference and convenience o
Slide 2: 1. Financial Results for the Year Ended March 31, 2019
1. Financial Results for the Year Ended March 31, 2019 Note: Commencing from the beginning of its fiscal year ended March 31, 2019 (FY3/2019), Kyocera has adopted the International Financial Reporting Standards (“IFRS”) in lieu of the Generally Accepted Accounting Principles of the United States of
Slide 3: Financial Results for the Year Ended March 31, 2019
Financial Results for the Year Ended March 31, 2019 (Unit: Yen in millions) Years ended March 31, Change 2018 2019 % to sales % to sales Amount revenue Amount revenue Amount % Sales revenue 1,577,039 100.0% 1,623,710 100.0% 46,671 3.0% Operating profit 90,699 5.8% 94,823 5.8% 4,124 4.5% Profit befor
Slide 4: Sales Revenue by Reporting Segment for the Year Ended March 31, 2019
Sales Revenue by Reporting Segment for the Year Ended March 31, 2019 - Compared with the Year Ended March 31, 2018 - (Unit: Yen in millions) Years ended March 31, Change 2018 2019 % of sales % of sales Amount revenue Amount revenue Amount % Industrial & Automotive Components Group 287,620 18.2% 314,
Slide 5: Business Profit (Loss) by Reporting Segment for the Year Ended March 31, 2019
Business Profit (Loss) by Reporting Segment for the Year Ended March 31, 2019 - Compared with the Year Ended March 31, 2018 - (Unit: Yen in millions) Years ended March 31, Change 2018 2019 % to sales % to sale s Amount revenue Amount reve nue Amount % Industrial & Automotive Components Group 31,400
Slide 6: Summary of Financial Results for the Year Ended March 31, 2019
Summary of Financial Results for the Year Ended March 31, 2019 1. Sales and profit up in buoyant divisions due to proactive investment and cost reductions Industrial & Automotive Components Group, Electronic Devices Group, Document Solutions Group 2. Improved profitability through structural reform
Slide 7: 2. Financial Forecasts for the Year Ending March 31, 2020
2. Financial Forecasts for the Year Ending March 31, 2020 6
Slide 8: Financial Forecasts for the Year Ending March 31, 2020
Financial Forecasts for the Year Ending March 31, 2020 (Unit: Yen in millions) Year ended March 31, Year ending March 31, Change 2019 2020 % to sales % to sales Amount revenue Amount revenue Amount % Sales revenue 1,623,710 100.0% 1,700,000 100.0% 76,290 4.7% Operating profit 94,823 5.8% 140,000 8.2
Slide 9: Sales Revenue Forecast by Reporting Segment for the Year Ending March 31, 2020
Sales Revenue Forecast by Reporting Segment for the Year Ending March 31, 2020 - Compared with the Year Ended March 31, 2019- (Unit: Yen in millions) Year ended March 31, Year ending March 31, Change 2019 2020 % of sales % of sales Amount revenue Amount revenue Amount % Industrial & Automotive Compo
Slide 10: Business Profit (Loss) Forecast by Reporting Segment for the Year Ending March 31, 2020
Business Profit (Loss) Forecast by Reporting Segment for the Year Ending March 31, 2020 - Compared with the Year Ended March 31, 2019 - (Unit: Yen in millions) Year ended March 31, Year ending March 31, Change 2019 2020 % to sales % to sales Amount revenue Amount revenue Amount % Industrial & Automo
Slide 11: Key Points to Financial Forecasts for the Year Ending March 31, 2020
Key Points to Financial Forecasts for the Year Ending March 31, 2020 1. Respond to changes in market environment (1) Softening of smartphone market Increased demand ahead of commercialization of 5G service (2) Demand for components used in ADAS set to continue rising 2. Improve profitability in orga
Slide 12: Basic Policy for Business Growth
Basic Policy for Business Growth FY3/21 Target: Sales revenue 2 trillion yen Profit before income taxes ratio 15％ Information Automotive Environment Medical & & & Communication Related Energy Health Care Double productivity, Accelerate internal synergies and Process innovation external collaboration
Slide 13: Key Measures to Achieve FY3/21 Targets
Key Measures to Achieve FY3/21 Targets 1. Actively continue investing to expand business 2. Further promote project to double productivity 3. Change solar energy business model Please refer to “Cautionary Statements with respect to Forward-Looking Statements” on the last page. 12
Slide 14: Actively Continue Investing to Expand Business (1): Proactive M&A in Core Fields
1. Actively Continue Investing to Expand Business (1) Proactive M&A in core fields Reporting Segment （Particular business / subsidiary） Main M&A projects implemented or decided in FY3/19 Industrial & Automotive （Germany） ・Expand product lineup and H.C. Starck Ceramics : strengthen technological Comp
Slide 15: Actively Continue Investing to Expand Business (2)
１．Actively Continue Investing to Expand Business (2) Significantly increase capital expenditures and R&D expenses in the most recent three years <Trend of capital expenditures and R&D Expenses> (Unit: Yen in billions) 200.0 186.9 144.8 80.0 69.9 127.7 123.2 R&D Expenses 58.3 Capital Expenditures 58.
Slide 16: Actively Continue Investing to Expand Business (3)
1. Actively Continue Investing to Expand Business (3) Make investment in response to increasing demand over the medium term and to double productivity Plan to start Start operation in operation in April 2019 SMD ceramic Ceramic packages August 2019 packages for image sensors MFP Printer Boost produc
Slide 17: Actively Continue Investing to Expand Business (4)
1. Actively Continue Investing to Expand Business (4) Restructure R&D system for software and materials/devices Minato Mirai Start operation Keihanna April 2019 Research Center* from May 2019 Research Center Change name and （Yokohama） onward (Plan) （Kyoto） reorganized Software Material/Devices Commu
Slide 18: Further Promote Project to Double Productivity (1)
2. Further Promote Project to Double Productivity (1) FY3/19 FY3/20 Fine Ceramic Parts Create model line using Apply to other components automation and AI businesses Reduce headcount via automation: One-fifth vs. before Electronic Components Increase operating ratio through AI: 1.5 times vs. before
Slide 19: Further Promote Project to Double Productivity (2)
2. Further Promote Project to Double Productivity (2) Establish new site for development and production of Kyocera equipment Shiga Yasu Plant New Facility (29th facility) Start operation from April 2020 (plan) Osaka Daito Office Shiga Yokaichi Plant Development of production Production of proprietar
Slide 20: Change Solar Energy Business Model
3. Change Solar Energy Business Model Develop new service business based on self-consumption Residential Support introduction of solar power Industrial Provide service supporting introduction of generation systems without initial expense renewable energy at companies Kyocera Kanden Energy LLP.* Sell
Slide 21: 3. Enhance Corporate Value
3. Enhance Corporate Value 20
Slide 22: Initiatives to Enhance Corporate Governance (1)
Initiatives to Enhance Corporate Governance (1) Toward better corporate management Before revision After revision 1. Increasing transparency Establish Nominating and Remuneration Committee Make decisions at Board of (end of 2018) Directors based on advice Advisory body for nominating and remuneratin
Slide 23: Initiatives to Enhance Corporate Governance (2)
Initiatives to Enhance Corporate Governance (2) Further enhance corporate value Before revision After revision 1. Enhance shareholder return (1) Increase payout ratio to (1) Payout ratio of around 50% from FY3/20 around 40% In addition to item at left (2) Shareholder return policy: (2) Conduct repur
Slide 24: Enhance Shareholder Return (1): Revise Dividend Policy
Enhance Shareholder Return (1) Revise Dividend Policy Increase dividend payout ratio Dividend Policy (based on payout ratio) Around 50% Around 40% from FY3/17 from FY3/20 20-25% from Over 30% from FY3/14 FY3/05 55.8% 49.1% 46.4% 38.9% 33.1% 33.1% 31.7% 33.6% Commemoration dividend of 20 yen 160 yen
Slide 25: Enhance Shareholder Return (2): Repurchase of Own Shares
Enhance Shareholder Return (2) Repurchase of Own Shares Idea of repurchase of own shares 【Previous】 Utilize the treasury stock to swiftly execute its future-oriented capital strategies, such as stock swaps Use share repurchase in addition to conventional dividends as a powerful mechanism of sharehol
Slide 26: Boost ROE
Boost ROE Aim to increase ROE by enhancing performance and strengthening shareholder return Medium-term Target Over 8% FY3/21 Target ROE (%) FY3/20 Target 6%~8% 5.6% 5.4% 4.8% 4.5% 4.5% 3.4% As a new method of shareholder return Conduct repurchase of own shares as appropriate [Shareholder return] In
Slide 27: 4. Appendix: Financial Forecasts by Reporting Segment
4. Appendix: Financial Forecasts by Reporting Segment 26
Slide 28: Financial Forecasts for FY3/20 by Reporting Segment (1): Industrial & Automotive Components Group
Financial Forecasts for FY3/20 by Reporting Segment (1) - Industrial & Automotive Components Group - <Trend of Financial Results> <Major Factors for Changes> (Unit: Yen in billions) FY3/20 Forecast vs. FY3/19 Result 314.3（+9%） 324.6 （+3%） Increase in sales in industrial tools and fine ceramic part
Slide 29: Financial Forecasts for FY3/20 by Reporting Segment (2): Semiconductor Components Group
Financial Forecasts for FY3/20 by Reporting Segment (2) - Semiconductor Components Group - <Trend of Financial Results> <Major Factors for Changes> (Unit: Yen in billions) FY3/20 Forecast vs. FY3/19 Result 257.2 251.1（+1%） 249.2（-3%） Ceramic packages for optical communications will gradually recov
Slide 30: Financial Forecasts for FY3/20 by Reporting Segment (3): Electronic Devices Group
Financial Forecasts for FY3/20 by Reporting Segment (3) - Electronic Devices Group - <Trend of Financial Results> <Major Factors for Changes> (Unit: Yen in billions) 381.6（+5%） FY3/20 Forecast vs. FY3/19 Result 364.8（+20%） Increase in sales of electronic components for 5G base 305.1 18.3% 17.2% st
Slide 31: Financial Forecasts for FY3/20 by Reporting Segment (4): Communications Group
Financial Forecasts for FY3/20 by Reporting Segment (4) - Communications Group - <Trend of Financial Results> <Major Factors for Changes> (Unit: Yen in billions) 257.6 （+2%） FY3/20 Forecast vs. FY3/19 Result 255.5 252.1（-1%） Increase in sales due to higher sales in information and communications s
Slide 32: Financial Forecasts for FY3/20 by Reporting Segment (5): Document Solutions Group
Financial Forecasts for FY3/20 by Reporting Segment (5) - Document Solutions Group - 500 <Trend of Financial Results> <Major Factors for Changes> (Unit: Yen in billions) FY3/20 Forecast vs. FY3/19 Result 400.0（+7%） 371.1 375.1（+1%） Seek for higher equipment sales though expansion of product line-u
Slide 33: Financial Forecasts for FY3/20 by Reporting Segment (6): Life & Environment Group
Financial Forecasts for FY3/20 by Reporting Segment (6) - Life & Environment Group - <Trend of Financial Results> <Major Factors for Changes> (Unit: Yen in billions) FY3/20 Forecast vs. FY3/19 Result 112.2 Increase in sales in the solar energy business for new 94.3（+18%） demand based on self-consu
Slide 34: Cautionary Statements with respect to Forward-Looking Statements
Cautionary Statements with respect to Forward-Looking Statements Certain of the statements made in this document are forward-looking statements, which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve know