FY2013 Results. May 16, This is a translation of materials used for the analyst meeting held in Tokyo, Japan on May 16,2014

Transcription

1 FY213 Results (from April 1, 213 to March 31, 214) May 16, 214 This is a translation of materials used for the analyst meeting held in Tokyo, Japan on May 16,214 This document contains forward-looking statements that are based on management's expectations, estimates, projection and assumptions that were available and reasonable at the time of release. Actual future results and trends may differ materially from those in the forecasts due to a variety of factors.

2 Today s Summary of Financial Results for FY213 ( Ended March 31, 214) Forecast for FY214 ( End March 31, 215) Segment Information Priority issues/ratio of new products to total sales Capital Expenditure/Financial Condition

3 FY213 Consolidated Financial Results ( Bil.) Net Sales Operating Income Ordinary Income Net Income FY FY Growth ratio +22% +114% +18% +137% Announced in 1/214 Sales increased and operating income doubled compared with the previous year due to depreciating yen. Ceramics Demand for Automotive related products increased due to strong automobile sales in the US and Chinese markets and new emission regulations for trucks in China. Electronics Demand for SPE related products increased. Power Resumption of NAS battery shipments contributed to a reduced deficit. Extraordinary Impairment loss on fixed assets in the Insulators business (2Q, 3Q) loss Decided to resolute a subsidiary in China (4Q)

4 Change Analysis for FY213 Sales Op. Income ( Bil.) SPE related FX Rate +5.5 NAS battery +5. Insulators -6. Others NAS battery SPE related FX Rate Insulators -2.5 Others Automotive related Automotive related /213 3/214 3/213 3/214 FX Rate 3/ /USD 18 /EUR 3/214 1 /USD 134 /EUR

5 Forecasts for FY214 ( Bil.) Net Sales Operating Income Ordinary Income Net Income FY FY Growth ratio +1% +8% +9% +26% Forecasting higher sales and income compared with the previous year. Ceramics Although demand for Automotive related products may increase due to tighter emission regulations, income increase slightly because of fiercer competition and upfront costs of capital investment. Electronics Demand for SPE related products may increase due to expansion of the mobile device market. Power NAS battery sales may greatly increase due to overseas shipments. Restructuring of Insulators business may contribute to improved profitability.

6 Change Analysis for FY214 Sales Op. Income ( Bil.) 38.7 NAS battery Automotive related Insulators +3.1 SPE related +1.7 Others NAS battery +.6 Insulators Automotive related SPE related +.5 Others +1.1 Depreciation Increase /214 3/215 Est. 3/214 3/215 Est. FX Rate 3/214 1 /USD 134 /EUR 3/215 1 /USD 135 /EUR

7 Power Business <Insulators> 15 <NAS battery> 125 <After consolidation elimination> ( Bil.) <After consolidation elimination> 1 Domestic power companies maintain lower 3 capital expenditure. Improve profitability by securing replacement demand and further cost-cutting. Demand from Southeast Asia and Middle East remains strong. Sales increase due to deferred shipments from FY213. Project shipments for Italy and Abu Dhabi in FY214. Aim to acquire continuous orders by using subsidies 2 and improve income by cost-cutting design and manufacturing. ( Bil.) Sales Operating Income NAS battery Move into the black in FY Insulators /212 3/213 3/214 3/215 Est. -2 3/212 3/213 3/214 3/215 Est. Figures have not been retroacively adjusted.

8 Restructuring of Insulators Business Decided to resolute a Chinese subsidiary which manufactures substation insulators (NGK INSULATORS SUZHOU). Consolidate production to the Chita factory in Japan Improve profitability by securing domestic replacement demand and further cost-cutting. ( Bil.) Medium -term Sales Plan of Insulators 6 Domestic Replacement Demand 4 Japan Other Domestic Demand 2 Chinese Demand Overseas Overseas Demand 3/214 3/215 Est. 3/216 Est. 3/217 Est. 3/221 Est.

9 Ceramics Business 45 <Automotive related> Sales of passenger cars in China and emerging countries remains strong. 14 Demand for LSH and NOx sensors increases due to tighter emission regulations for trucks in China and Europe, and for off-road vehicles in Japan, the US and Europe. Fiercer competition and upfront 4 investments cause a slight increase in earnings. Improve profitability by securing technological 12advantages for emission regulations and promoting cost reductions. 35 <Industrial Processing> Although domestic capital investment shows signs of recovery, progress still remains slow. Aim to promote streamlining and cut costs by restructuring. ( Bil.) ( 1 Bil.) 3 <After consolidation elimination> Sales /212 3/213 3/214 3/215 Est. Industrial Processing NOx sensors Honeycomb filters Cd-DPF/ LSH SiC-DPF % 33.3 Operating Income 18.% 26. Operating Income Margin Operating Income 23.6% % 46. 3/212 3/213 3/214 3/215 Est. Figures have not been retroacively adjusted.

10 Emission regulations & Demand trends (MUN) 1, Sales of passenger cars (MUN) Sales of Trucks subject to after treatment 3 8, China China 6, 4, 2, Emerging countries The US Europe Japan 3/213 3/214 3/215 3/216 3/ Emerging countries The US Europe Japan 3/213 3/214 3/215 3/216 3/217 Japan PNLT (PPNLT) Light Vehicle US Tier2/Bin5 ( Tier3) Europe Euro5 Euro6 ( Euro7) China Euro4 Euro5 ( Euro6) India Euro4(Cities),Euro3(Others) Euro4 Euro5 Japan PNLT (PPNLT) Truck US US1 ( US16) Bus Europe Euro Ⅴ Euro Ⅵ (Euro Ⅶ ) China Euro Ⅲ Euro Ⅳ (Euro Ⅴ ) India EuroⅣ(Cities),EuroⅢ(Others) Euro Ⅳ EuroⅤ Japan JP11 JP14 ( JP17) Off-Road US Tier4a Tier4b ( Tier5) Europe Step3 Step4 ( Step4b) Sales of Cd-DPF, LSH and NOx sensors increase, because of tighter emission regulations for trucks in China and Europe, and for off-road vehicles in Japan, the US and Europe.

11 Electronics Business ( Bil.) 8 <After consolidation elimination> ( Bil.) <Semiconductor Production Equipment related products (SPE)> Expansion of the mobile device market contributes to increase demand. Focus on technological development and cost-cutting. <Beryllium Copper (Metal related products)> 3 Chinese and Indian markets expand. Expand business through developing new markets and applications. <Electric related products> Expand wafer business and facilitate the commercialization of new products Sales Operating Income Soshin Operating Income Margin Electric Co. Operating Income Electric related % 5.3% 6.6% 1.9% SPE related 3/212 3/213 3/214 3/215 Est. Metal related /212 3/213 3/214 3/215 Est. Figures have not been retroacively adjusted.

12 New Wafer Products Bonded wafers Prospective products Sales target of new wafer products ( Bil.) Bonded wafers for SAW filters Wavelength conversion element Gallium Nitride (GaN) Wafer Bonded wafers Wavelength conversion element GaN wafers & others 2. Devices 4 inches Maintain stable filter function under temperature changes SAW filters Infrared light Optical wave guide Creates green laser light using wavelength conversion technology Green laser light Ultra small green lasers 4 inches Creates high-brightness LED light sources that can reduce energy consumption by more than 5% Ultra bright blue and green LEDs High-power blue and green lasers Next generation power semiconductor 1 5 3/ 15 Est. 3/ 16 Est. 3/ 17 Est. 3/ 18 Est. Final products Tablet devices Smart phones Laser microscopes Cinema projectors Projectors for business use Head lights Store illuminations Electric vehicles

13 Priority Issues 1. Further strengthen strong business from a medium to long-term perspective Accelerate company-wide Structural Innovation of Manufacturing Construct global production system in order to respond to demand expansion in emerging countries Steady implementation of restructuring (Insulators, Industrial Processing) 2. Creation of new products and business Challenge 3 Launch full-fledged expansion of wafer business Quickly commercialize prospective products Narrow down the priority fields of research and expand development themes

14 Target ratio of new products to total sales ( Bil.) <After Consolidation Elimination> 3% 4 New products ratio 15% 3 Electronics New Products 2 Ceramics Existing Products 1 Power /214 3/215 Est. 3/216 Est. 3/217 Est. 3/218 Est.

15 Quick commercialization of new products Fuel cell system Ceramic fuel cell* module *Solid oxide fuel cell (SOFC) Ceramic membrane filter (DDR membrane) Filtering area of 12m 2 /monolith(equivalent to 6 tubular membranes of φ 1XL1) Cross section Enlarged image Features Uses Highly efficient and durable power generation component This component creates a chemical reaction using gas to generate electricity and heat, which is then used to heat water and contribute to energy conservation. Residential use (Power 1kW) Industrial use (Power 1kW) Smart houses (fuel cell for residential use) SOFC module Functional layer with molecule-size pores Ceramic membrane that has molecule-size pores This filter enables removal and recovery of specific constituents by separating mixed gases and liquids. Natural gas and biogas purification (CO2 removal) Purification of chemicals like acetic acid (dehydration) Chemical plants (dehydration) Examples of final products Progress Under evaluation at large fuel cell system companies for commercialization Started several field tests

16 Chip type ceramic secondary battery NGK developed chip type ceramic secondary batteries which are ultra-slim, high energy dense and operable under high temperatures. Features Usages Plan The positive electrode plate made by NGK s original crystalline orientation technology enables batteries to be ultra-thin and have an high energy density of above 3Wh/l. Operable under high temperatures (12 degrees Celsius), since every component is made from solid materials. The battery enables adjacent mounting with semiconductor components (IC, memory, diode) on the circuit board and contributes to reducing the size of electronic devices. Wearable devices Smart cards Batteries for memory backup Solar watches Design project-specific batteries and establish mass production technology. Aim to commercialize in FY216.

17 R&D Input 2. ( Bil.) Consolidated R&D Consolidated R&D/Sales Ratio % 4.6% 4.5% 3.9% 4.% Corporate 3. Electronics Power 5. Ceramics. 3/211 3/212 3/213 3/214 3/215 Est.

18 Capital Expenditure 7 ( Bil.) Ceramics Power Electronics Corporate Depreciation&Amortization 6 5 Estimated impact on change of depreciation method /211 3/212 1~3/212 3/213 3/214 3/215 Est. Capex overseas during the difference of FY

19 Summary of Consolidated Cash Flow 3/213 3/214 3/215Est. O p e r a t i n g A c t i v i t i e s I n v e s t i n g A c t i v i t i e s F i n a n c i n g A c t i v i t i e s Effect of exchange rate change N e t C h a n g e i n C a s h & E q Effect of changing the FY period (1~3 / 12 ) Cash & Eq-. at the End of Year ( Bil.)

20 Total Assets & ROE / EPS & Dividends 7 6 ( Bil.) ( ) Other liabilities Interest-bearing liabilities Net assets EPS Dividends /211 3/212 3/213 3/214 3/215Est. ROE 8.% -12.6% 4.2% 8.6% 9.7% Payout Ratio 3/211 3/212 3/213 3/214 3/215Est. 26.7% % 26.6% 23.1%

21 Sales by Product (annual) <After consolidation elimination> 3/ 212 3/ 213 3/ 214 3/ 215 Est. ( Bil.) Insulators NAS battery Power Business Honeycomb Filters SiC-DPF Cd-DPF / LSH NOx Sensors Industrial Processing Ceramics Business Metal related SPE related Electric related Soshin Electric Co Electronics Business Total Table figures have not been retroactively adjusted.

22 <After consolidation elimination> Sales by Product (semi-annual) 3/ 214 3/ 215 Est. ( Bil.) 1 st Half 2 nd Half 1 st Half 2 nd Half Insulators NAS battery Power Business Honeycomb Filters SiC-DPF Cd-DPF / LSH NOx Sensors Industrial Processing Ceramics Business Metal related SPE related Electric related Soshin Electric Co Electronics Business Total

23 The purpose of this brief is information disclosure for better understanding of NGK Group s policies, projections and financial condition. This brief does not solicit buying and selling of NGK s shares. The figures included in this brief, including the business performance targets and figures, are all projected data based on the information currently available to the NGK Group, and are subject to variable factors such as economic conditions, competitive environments and future demands. Accordingly, please be advised that the actual results of business performance may differ substantially from the projections described here.

24 2-56, Suda-cho, Mizuho-ku, Nagoya , Japan Finance & Accounting Department Tel. : Fax. : ir-office@ngk.co.jp NGK Website (English Version) :