Japan Display Inc. · TSE:6740

Japan Display — H1 FY2023 Earnings Presentation

34 slides from Japan Display's earnings presentation, Nov 10, 2022

  1. Slide 1: FY23/3 H1 Corporate Presentation

    FY23/3 H1 Corporate Presentation November 10, 2022

  2. Slide 2: PersonalTech For A Better World

    PersonalTech For A Better World Copyright 2022 Japan Display Inc. All Rights Reserved. Slide 2

  3. Slide 3: FY23/3 H1 Earnings Review

    |_| Japan Display Inc. _ JBI FY23/3 H1 Earnings Review

  4. Slide 4: FY23/3 H1 Key Points

    FY23/3 H1 Key Points ◼ H1 sales JPY 138.3B (JPY -16.4B vs. forecast), operating profit JPY -11.8B (JPY +4.9B vs. forecast) ◼ Sales came in at almost the same level as FY22/3 H1, with weak mobile demand (c. JPY -24.2B YOY) offset by strong automotive sales (c. JPY +21.8B YOY) & the positive effect of

  5. Slide 5: FY23/3 H1 Difference between Forecast & Actual Results

    FY23/3 H1 Difference between Forecast & Actual Results Despite below-forecast sales, losses shrank due to positive FX effects & reductions in fixed & variable costs (JPY billion) FY23/3 H1 FY23/3 H1 Explanation Diff FCST ACT Mobile US/Euro: Expanded market share Sales 154.7 138.3 -16.4 Mobile China/

  6. Slide 6: FY23/3 H1 YoY Comparison

    FY23/3 H1 YoY Comparison Despite cost cuts & price increases, net loss widened as unable to cover sharp rise in input costs (JPY billion) FY22/3 H1 FY23/3 H1 Explanation Diff ACT ACT Mobile US/Euro: Continuing downward trend Sales 137.9 138.3 +0.4 Mobile China/Other: Lower shipments due to customers

  7. Slide 7: FY23/3 H1 Operating Profit Breakdown

    FY23/3 H1 Operating Profit Breakdown Operating Profit Breakdown Operating Profit Breakdown (vs. Forecast） （YoY） （JPY billion） （JPY billion） FY23/3 H1 FY23/3 H1 FY22/3 H1 FY23/3 H1 FCST ACT ACT ACT Sales 154.7 Sales 138.3 Sales 137.9 Sales 138.3 Operating Operating Loss Loss Operating FX impact Opera

  8. Slide 8: Downward Revision of FY23/3 H2 & Full-Year Forecast

    Downward Revision of FY23/3 H2 & Full-Year Forecast Main drivers are negative effects of inflation on consumer demand, continued shortage of analog ICs on auto maker production, & increase in JDI input & transportation costs (JPY billion) FY23/3 Previous FCST FY23/3 Revised FCST Change Full Year Ful

  9. Slide 9: FY23/3 Full-Year Operating Profit Breakdown vs. Previous Forecast

    FY23/3 Full-Year Operating Profit Breakdown vs. Previous Forecast (May 13, 2022) （JPY billion） FY23/3 FY23/3 Previous FCST New FCST Sales 329.1 Sales 280.0 Operating Volume & Fixed Costs Other FX impact Operating Loss Product Mix Reduction (Mainly Inventory Loss Impact) Copyright 2022 Japan Display

  10. Slide 10: Business Environment

    Business Environment Significantly downsize commodity LCD smartphone business & concentrate JDI engineering resources on METAGROWTH 2026 growth drivers Business Environment Countermeasures • US/Euro: ongoing gradual decline in demand • Aggressively reduce commodity LCD Mobile • China/Other: customer

  11. Slide 11: METAGROWTH 2026 Progress Update

    METAGROWTH 2026 Progress Update

  12. Slide 12: METAGROWTH in Value Creation

    METAGROWTH 2026 Core Strategy Global No. 1 Technology Leadership to Best Serve Customers and Deliver PersonalTech For A Better World METAGROWTH in Value Creation Copyright 2022 Japan Display Inc. All Rights Reserved. Slide 12

  13. Slide 13: META

    “Comprehensive, Overarching” META Underscores JDI’s Commitment to Transformational Growth Metaverse Also a JDI Growth Driver

  14. Slide 14: METAGROWTH 2026 Core Strategy

    METAGROWTH 2026 Core Strategy Displays are a foundational technology for modern society JDI has unmatched technological capabilities to deliver customer and social value and improve people’s lives 1 2 3 Market-Leading Global No. 1 Technology, GreenTech & Technology Transformational Sustainability Le

  15. Slide 15: METAGROWTH 2026 Six Proprietary Growth Drivers – Progress Update

    METAGROWTH 2026 Six Proprietary Growth Drivers – Progress Update eLEAP HMO Metaverse (NextGen OLED) （High Mobility Oxide） (Ultra High Resolution) • Sample shipments started in August • Open strategy to license & • Rise in inflation has reduced • Launched commercial commercialize broadly current dema

  16. Slide 16: METAGROWTH 2026 Six Proprietary Growth Drivers – Progress Update

    METAGROWTH 2026 Six Proprietary Growth Drivers – Progress Update Rælclear New Tech, Products, & AutoTech (Transparent Interface) Businesses • Despite the impact of • Received RFIs from major component shortages, US tech companies & in • Developed world’s first LED demand is strong due to low discuss

  17. Slide 17: New Tech, Products, & Businesses – World's First LED Free-Lighting LumiFree

    New Tech, Products, & Businesses – World's First LED Free-Lighting LumiFree JDI developed LumiFree to address important societal & user needs LumiFree allows for fully free & flexible control of light to improve how we experience illumination of people, places, & things & to tailor to diverse user n

  18. Slide 18: LumiFree Business Goals

    LumiFree Business Goals Create long-term value & drive business growth by serving diverse user & societal needs Phase 2: Business Expansion KPI: > JPY 10 billion sales Target Business Size Contribute to a more sustainable society – create indispensable solutions that serve all stakeholders Phase 1:

  19. Slide 19: World's First 3D Imaging Technology Deploying LCD Panels

    World’s First 3D Imaging Technology Deploying LCD Panels Enables unprecedented capture of both normal video & depth maps Optical information can be extracted from captured images & turned into location data to generate depth maps Configuration Depth Map Capture LCD Panel Image Sensor Object Depth Ma

  20. Slide 20: World's First 3D Imaging Technology: Comparison with Other 3D Sensor Technologies

    World’s First 3D Imaging Technology Deploying LCD Panels Comparison with Other 3D Sensor Technologies New 3D Stereo TOF Imaging Camera No. of Cameras/Sensors 1 2 1 Acquisition of Video & Color Data Possible Possible Impossible Depth Map Capture Possible Possible Possible New 3D Imaging Technology Ap

  21. Slide 21: Chinese Subsidiary Sale

    Chinese Subsidiary Sale Asset-Light, Lower Fixed Costs, Increase Competitiveness & Profitability ■Subsidiary Suzhou JDI Electronics Inc. ■ Buyer Suzhou Dongshan Precision Manufacturing Co., Ltd.（DSBJ） Higashiura Chinese LCD Module Manufacturer Fab Suzhou JDI Electronics Production-end ■ Schedule Mar

  22. Slide 22: METAGROWTH 2026 Financial Targets (KPI)

    METAGROWTH 2026 Financial Targets（KPI） Drive profitable growth by focusing on high-margin businesses where JDI has competitive advantages FY26 EBITDA JPY 104.4B Operating Profit JPY 83.3B 6,000 2400 2200 5,000 473.5 2000 418.2 1800 4,000 384.5 1600 280.0 319.2 1400 3,000 104.4 JPY1200 billion 83.3 1

  23. Slide 23: METAGROWTH 2026 FY24/3 Full-Year KPI Operating Profit Breakdown

    METAGROWTH 2026 FY24/3 Full-Year KPI Operating Profit Breakdown Sales down vs. May 13, 2022 plan, but OP up on fixed cost reductions & positive FX No change to FY24-26 plan （JPY billion） • VR, OLED, Auto YOY growth • Higashiura fab end (+) ✓ Accelerating cost reductions through Change • Mobara fab c

  24. Slide 24: Generate Structural Profitability via Radical Restructuring of Product Portfolio

    Generate Structural Profitability via Radical Restructuring of Product Portfolio Generate structural profitability by shrinking low-margin businesses & diversifying & strengthening high-margin product portfolio 100% Other 90% Transparent 80% 70% OLED 60% Metaverse 50% *1 40% 30% AutoTech 20% 10% 0%

  25. Slide 25: Growth Roadmap

    Growth Roadmap FY22 FY23 FY24 H2 H1 H2 H1 H2 eLEAP/HMO Licensing Technical Support & Licensing Business Launch Agreements eLEAP Mass Production (MP) HMO MP Growth Metaverse: More immersive + Higher Definition (FY25 2000ppi) Drivers AutoTech: Next-Gen HUD, Integrated Cockpit Rælclear (12") MP Rælclea

  26. Slide 26: Appendix

    |_| Japan Display Inc. _ JDI Appendix

  27. Slide 27: Quarterly Sales Breakdown by Product Category

    Quarterly Sales Breakdown by Product Category （JPY billion） 86.4 81.2 71.9 71.7 18.6 66.0 18.8 14.2 11.0 57.1 22.0 3.4 21.4 11.7 10.1 Mobile (US/Euro) 10.0 5.7 8.7 35.7 39.7 Mobile (China/Other) 26.4 20.9 23.9 26.9 Automotive Non-Mobile 16.0 19.4 21.1 19.3 15.0 14.5 FY22/3 FY22/3 FY22/3 FY22/3 FY23/

  28. Slide 28: Consolidated B/S

    Consolidated B/S (JPY billion) FY22/3 FY22/3 FY23/3 YoY QoQ Q2 Q4 Q2 Cash and deposits 49.3 52.2 47.7 -1.7 -4.6 Accounts receivable - trade 29.9 56.3 50.8 ＋20.9 -5.5 Accounts receivable - other 19.7 23.5 27.3 ＋7.5 ＋3.8 Inventories 49.5 49.1 70.9 ＋21.4 ＋21.9 Other 4.6 5.4 5.5 ＋0.8 ＋0.1 Total current

  29. Slide 29: Consolidated P&L

    Consolidated P&L (JPY billion) FY22/3 FY23/3 FY23/3 YoY QoQ Q2 Q1 Q2 Sales 71.9 57.1 81.2 ＋9.3 ＋24.1 EBITDA 1.0 -4.7 -2.8 -3.7 ＋1.9 Operating Profit -1.2 -6.9 -4.9 -3.7 ＋2.0 Non-Operating Income 0.7 3.2 1.8 ＋1.1 -1.3 Non-Operating Expenses -0.8 -0.6 -1.0 -0.2 -0.4 Recurring Profit -1.2 -4.3 -4.1 -2.

  30. Slide 30: Consolidated Cash Flow Statement

    Consolidated Cash Flow Statement (JPY billion) FY23/3 FY23/3 FY22/3 FY23/3 YoY Q1 Q2 H1 H1 Income before income taxes -4.4 -4.2 -8.0 -8.6 -0.6 Depreciation & Amortization 2.2 2.1 4.3 4.3 ＋0.0 Working capital -0.3 -8.2 -7.6 -8.5 -0.9 Advances received -0.6 0.9 4.6 0.3 -4.3 Other -8.2 6.4 -0.1 -1.8 -1

  31. Slide 31: FY23/3 Q2 Difference between Forecast and Actual Results

    FY23/3 Q2 Difference between Forecast and Actual Results Sharp drop in non-mobile demand. Op. profit fell short of forecast despite FX effect Explanation (JPY billion) FY23/3 Q2 FY23/3 Q2 Diff Mobile US/Euro: Expanded market share FCST ACT Mobile China/Other: Customers’ further inventory Sales 92.3

  32. Slide 32: FY23/3 Q2 YoY Comparison

    FY23/3 Q2 YoY Comparison Sales driven up by weakening yen, profit driven down by increased input costs Explanation (JPY billion) FY22/3 Q2 FY23/3 Q2 Mobile US/Euro: Continuing downward trend Chg ACT ACT Mobile China/Other: Lower shipments due to customers’ inventory adjustments & lower smartphone Sa

  33. Slide 33: FY23/3 Q2 Operating Income Breakdown

    FY23/3 Q2 Operating Income Breakdown Operating Income Breakdown（YoY） Operating Income Breakdown (QoQ） （JPY billion） （JPY billion） FY22/3 Q2 FY23/3 Q2 FY23/3 Q1 FY23/3 Q2 Sales 71.9 Sales 81.2 Sales 57.1 Sales 81.2 Fixed Cost Operating Increase Loss Volume & Product Mix Operating Operating Loss Loss

  34. Slide 34: Thank You!

    Thank You! 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, expectation or oth

Japan Display — H1 FY2023 Earnings Presentation on 6ix