Kyocera's Environment Related Business Developments

Transcription

1 Kyocera's Environment Related Business Developments - Solar Energy Business Strategies - February 2008 MAKOTO KAWAMURA President and Representative Director

2 Today's Presentation Kyocera's Business Developments Consolidated Financial Forecast (Year (Year Ending March March 31, 31, 2008) 2008) Kyocera's Environment Related Business Developments Solar Energy Business Strategies 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, particularly including China; unexpected changes in economic, political and legal conditions in China; our ability to develop, launch and produce innovative products, including meeting quality and delivery standards, and our ability to otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components; manufacturing delays or defects resulting from outsourcing or internal manufacturing processes which may adversely affect our production yields and operating results; factors that may affect our exports, including a strong yen, political and economic instability, difficulties in collection of accounts receivable, decrease in cost competitiveness of our products, increases in shipping and handling costs, difficulty in staffing and managing international operations, and inadequate protection of our intellectual property; changes in exchange rates, particularly between the yen and the U.S. dollar and euro, respectively, in which we make significant sales; inability to secure skilled employees, particularly engineering and technical personnel; insufficient protection of our trade secrets and patents; holding licenses to continue to manufacture and sell certain of its products, the expense of which may adversely affects its results of operations; future initiatives and in-process research and development may not produce the desired results; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases; the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located; and fluctuations in the value of, and impairment losses on, securities and other assets held by us, and changes in accounting principles. 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 Kyocera Group's Business Developments and Sales Trends 1.5 Horizontal development of technologies Net sales (Unit: Yen in trillions) Vertical integration of technologies 1979 Telecommunications equipment 1979 Information equipment Dental and orthopedic implants 1975 Solar energy products 1975 Jewelry and applied ceramic products 1972 Electronic devices Cutting tools 1963 Semiconductor parts 1959 Fine ceramic parts Please refer to accompanying note on page 2 and (E) 3

5 Net sales Profit from operations Pre-tax income Net income EPS (diluted - yen) Capital expenditures Depreciation R&D expenses Consolidated Financial Forecast - Year Ending March 31, Year ended March 31,2007 Amount 1,283, , , , ,896 70,155 61,100 % to net sales Year ending March 31, 2008 Previous forecast (October 2007) % to net Amount sales 1,330, , , , ,000 79,000 65, Revised forecast (January 2008) % to net Amount sales 1,290, , , , ,000 76,000 63, (Unit: Yen in millions) % change Average exchange rate (yen) Foreign currency fluctuation effect on: net sales pre-tax income US$:117 Euro: billion 15.7 billion US$:115 Euro: billion 2.5 billion US$:115 Euro: billion 7.2 billion 4

6 Proportion of Sales and Operating Profit by Business Categories - Year ended March 31, Net sales Color MFP Equipment business Operating profit 40.5% 23.5% 71.8% Components business 50.7% Sapphire substrates for LEDs MLCCs Crystal devices Mobile phone handsets ASICs packages Base stations Ceramic packages for surface mount devices Commencing in FY 3/08, the "Optical Equipment Group," previously a separate reporting segment, has been reclassified into "Others." 5

7 Pre-tax Income Ratio Trends - FY05 through FY08 (Forecast) (%) Components Business Equipment Business Kyocera Group Total FY3/05 FY3/06 FY3/07 FY3/08 (Forecast) Pre-tax Income has grown for three consecutive fiscal years (Forecast) Commencing in FY 3/08, the "Optical Equipment Group," previously a separate reporting segment, has been reclassified into "Others." Please refer to accompanying note on page 2 and 22. 6

8 Four Strategic Markets Promote development of new products and technologies in strategic markets Telecommunications Energy Information Automotive Handsets / Base Stations Color Printers Solar Energy and MFPs and Fuel Cells Intelligent Transport System (ITS) Hybrid Vehicles related products Efficient Utilization of Group-wide Management Resources 7

9 Kyocera's Environment Related Businesses Solar Photovoltaic Systems ECOSYS Printers and MFPs SOFCs Piezoelectric-Stacks Amorphous Silicon Drums Ceramics Glow Plugs Sapphire Substrates for LEDs 8

10 Growth Rate in Markets for Kyocera's Environment Related Components Yearly Market Growth Rate Ceramics Glow Plugs Approx. 45% Piezoelectric-Stacks Approx. 30% Sapphire Substrates for LEDs Approx. 15% cf. semiconductor chips 5~10% Kyocera forecasts 9

11 Size and Growth Rate in Markets for Kyocera's Environment Related Products Market Size (billion yen) Yearly Market Growth Rate Printers and MFPs Approx. 5,000 10% Solar Photovoltaic Systems Approx. 800* (in CY 06) 20%~40% *Daiwa Institute of Research Ltd estimate; others are Kyocera forecasts 10

12 Competitive Advantages of Kyocera's Solar Energy Business A leading company with with years of of experience World's first first mass producter of of currently most widely used multi-crystalline silicon solar cells* 1 1 Best conversion efficiency in in the the world of of 18.5%* 2 2 among multi-crystalline silicon cells Third in in the the world based on on production volume (CY2006) Vertically integrated production from silicon casting to to modules * 1 Casting method * 2 R&D phase; Kyocera's measurement 11

13 MW 250 Production Volume Trend in PV Systems California Solar Initiatives 200 Yokaichi, Japan new plant (Possible production volume:500mw) Czech Republic plant approx. 200MW 150 Amendment to EEG in Germany Mexico plant 100 EEG in Germany Tianjin, China plant 50 Residential subsidies in Japan (until FY06) 0 FY Plan 12

14 EU CY EU approx (E) Principal Market Outlook (E) Asia approx CY (E) CY (E) Japan approx (E) 2,9 1,3 2016(E) 4 USA CY 0.14 Left: Outlook with incentive by governmental policy Right: Conservative outlook approx (E) (E) World market size CY (E) 2016 (E) Market outlook with incentive by governmental policy Conservative outlook Estimate by Kyocera Corp. 13

15 Kton 200 Comparison between Expansion Plan of Materials Manufacturers and Market Demand Demand for Materials for Semiconductor + Solar Products New material manufacturers CY2016 Solar Materials Shortage Demand for Solar Products Demand for Semiconductors Existing materials manufactures 0 CY Forecast 13 Calculation by Kyocera Corp. 14

16 Market Conditions: Overview Spread of subsidies + Increase in production of materials = Sudden increase in number of manufacturers Europe, US, Korea, etc. Continuous market growth Increase in production volume by existing manufacturers + new entrants Stability in supply and price 200~300 Companies EEG* in Germany: reexamination of buyback price of feed-in tariff annual decrease rate 5% to 7~9% *EEG= Erneuerbare-Energien-Gesetz Beginning of "intense competition era" Gain comprehensive competitive advantages: "technologies, cost competitiveness, and quality" 15

17 Cost Competitiveness: Improvement of conversion efficiencies Silicon Casting Cutting Wafer slicing Solar cells Solar modules Improvement of conversion efficiencies Improvement of crystalline quality Impurity contamination measures Optimization of slicing condition Thinner wafers Improvement wires awing process Passivation Reactive Ion Etching (RIE) technology High sheet resistance emitters Improvement of contact metal Optimization of module materials Optimization of module fabrication process Vertical integration Aims to maximize conversion efficiencies with optimization in all production phases 16

18 Cost Competitiveness: Productivity 1. Higher cell efficiencies 2BB Current: 3BB Back Contact Cell Approx. 17% improvement from current power output Conversion efficiencies Power output Technologies 15.7% FY % FY % 17.5% 3.67W/cell 3.86W/cell 4.06W/cell 4.26W/cell 2BB 3BB Back Contact 2. Thinner cell FY Lager Cell (156 ) FY09 target 18.5% 4.50W/cell Higher efficiencies for Back Contact 240 / 200μm 180μm Further advancement of thinner wafer Productivity improvement of approx. 40% compared to FY05 100% achievement 17

19 Development of Differential Products Snow resistance Building unifiable High temperature resistance Compact style with self power source Design oriented Snow resistance Design oriented High temperature resistance Compact style with self power source Snow resistance / weighting durability High temperature resistance / heat durability Design oriented / black back sheets Building unifiable / frame-less Compact style with self power source / small size Black Back sheets Frame-less High temperature resistance Compact style with self power source Annual average temperature map Compact style with self power source 18

20 Evaluation for High Quality Received best evaluation in general consumer product test (Germany)!. No.1 Quality Number of Manufacturers: 15 Score (Good Point): 1.9 (1.0=Highest Possible, 6.0=Lowest Possible) Evaluation criteria Power Output Durability Reliability Installation Quality is the key to differentiation "Kyocera Quality" 19

21 Czech Republic China Japan / Ise Japan / Yokaichi Mexico 4 production bases worldwide Germany EUROPE Czech Republic FY07 FY11 25MW 150MW (Planned) 30MW ASIA 7 sales bases worldwide FY07 FY11 Ise 90MW (Planned) Beijing 100MW 110MW Tianjin Singapore FY07 FY11 Kyocera Japan Yokaichi (Cell) FY07 180MW Australia FY11 (Planned) 500MW (Planned) USA USA Mexico FY07 FY11 25MW 150MW Brazil (Planned) Germany Singapore China Japan USA Brazil Australia 20

22 MW 600 Planned Production Volume Expansion in PV Systems MW MW Salamanca - Spain AEON Kagoshima: 140kW Total Soccer Stadium Switzerland 1.35MW 300MW 400MW FY Plan 21

23 Notes for Consolidated Financial Results During fiscal year ended March 31, 2007, Kyocera sold its shares in Kyocera Leasing Co., Ltd., a subsidiary engaged in financing services. For this reason, business results of Kyocera Leasing Co., Ltd. and profit on sales of the shares in Kyocera Leasing Co., Ltd. have been recorded as income from discontinued operations in conformity with accounting principles generally accepted in the U.S. Consequently, some figures for the fiscal years from 2003 to 2006 have been retrospectively reclassified. 22

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