1Q FY2016 (April 1, 2015 June 30, 2015) Financial Announcement

Transcription

1 FY216 (April 1, 215 June 3, 215) Financial Announcement Agenda: Introduction Tetsuro Higashi, Representative Director, President & CEO FY216 Consolidated Financial Summary Tetsuro Hori, Corporate Director, Senior Vice President & General Manager Business Environment and Revision of Financial Estimate Toshiki Kawai, Representative Director, Senior Executive Vice President & COO July 28, 215 Corp IR/July 28, 215

2 FY216 Consolidated Financial Summary FY216: April 1, June 3, 215 FY216: April 1, March 31, 216 Tetsuro Hori Corporate Director, Senior Vice President & General Manager July 28, 215 Corp IR/July 28, 215

3 FY216 Highlights 1. Announced Medium-term Management Plan New shareholder return policy to raise dividend payout ratio to 5% 2. Achieved 42% of gross profit margin and 19% of operating profit margin 3. Revised financial estimates to reflect market adjustment Corp IR/January 3, 215Corp IR/July 28, 215 2

4 Financial Summary FY215 FY216 2Q 3Q 4Q vs. FY215 Net sales % Gross profit % Gross profit margin 36.6% 36.4% 42.1% 42.7% 42.2% +5.6pts SG&A expenses % Operating income Operating margin 11.3% 9.1% 16.1% 19.8% 19.4% +8.1pts Income before income taxes Net income attributable to owners of parent (Billion Yen) R&D expenses % Capital expenditures % Depreciation and amortization % 1. In principle, export sales of Tokyo Electron s mainstay semiconductor and FPD production equipment are denominated in yen. While some settlements are denominated in dollars, exchange risk is hedged as forward exchange contracts are made individually at the time of booking. 2. Profit ratios are calculated using full amounts, before rounding. Corp IR/January 3, 215Corp IR/July 28, 215 3

5 Financial Performance (Billion Yen) % 42.2% 5% % % % 3% % 19.4% 2% 11.4% 11.3% % % -5 FY14 2Q 3Q 4Q 2Q 3Q 4Q Net sales Operating income Net income attributable to owners of parent Gross profit margin 28.9% 33.2% 36.4% 32.6% 36.6% 36.4% 42.1% 42.7% 42.2% Operating margin -9.3% 5.2% 6.6% 11.4% 11.3% 9.1% 16.1% 19.8% 19.4% -1% Corp IR/January 3, 215Corp IR/July 28, 215 4

6 Segment Information SPE (Semiconductor (Billion Yen) Production Equipment) (Billion Yen) 2 4% 2 Sales Segment income FPD (Flat Panel Display Production Equipment) Sales Segment income 4% 1% Composition of Net Sales Others FPD Segment profit margin Segment profit margin % % % 21.% 25.6% 24.2% 23.% 2% % 2% 5% SPE % % 1.3 % % -3.2%..2% -.7 % % 2Q 3Q 4Q 2Q 3Q 4Q -5 2Q 3Q 4Q -1% % 2Q 3Q 4Q -1% 1. Segment income is based on income before income taxes. 2. R&D expenses such as fundamental research and element research are not included in above reportable segments. 3. From FY216, due to its reduced importance the PV production equipment business has been excluded from segmental reporting. Corp IR/January 3, 215Corp IR/July 28, 215 5

7 SPE Sales by Region Japan U.S. Europe Korea (Billion Yen) (Billion Yen) (Billion Yen) (Billion Yen) Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q (Billion Yen) (Billion Yen) (Billion Yen) Taiwan China S.E. Asia, Others Region Composition Q 3Q 4Q Q 3Q 4Q Q 3Q 4Q 1% 5% % Q 3Q 4Q S.E. Asia, Others China Taiwan Korea Europe U.S. Japan Corp IR/January 3, 215Corp IR/July 28, 215 6

8 R&D, CAPEX and Depreciation Expenses (Billion Yen) FY14 2Q 3Q 4Q 2Q 3Q 4Q R&D Expenses CAPEX Depreciation and amortization Corp IR/January 3, 215Corp IR/July 28, 215 7

9 Balance Sheet Assets (Billion Yen) Liabilities & Net Assets (Billion Yen) Cash & cash equivalents* Other liabilities Trade notes, accounts receivables Inventories Tangible assets Other current assets Intangible assets Investment & other assets Net assets 2Q 3Q 4Q 2Q 3Q 4Q *Cash and cash equivalents: Cash and deposits + Short-term investments, etc. (Securities in B/S). Corp IR/January 3, 215Corp IR/July 28, 215 8

10 Inventory Turnover and AR Turnover (Billion Yen) (Days) Net sales Inventory turnover Accounts receivable turnover FY14 2Q 3Q 4Q 2Q 3Q 4Q Turnover days = Inventory or AR at the end of each quarter / last 12 months sales x 365 Corp IR/January 3, 215Corp IR/July 28, 215 9

11 Cash Flow (Billion Yen) Share repurchase Q 3Q 4Q 2Q 3Q 4Q FY14 Cash flow from operating activities Cash flow from investing activities* Cash flow from financing activities Free cash flow** Cash on hand*** *Cash flow from investing activities excludes changes in deposits with periods to maturity of over 3 months. **Free cash flow = cash flow from operating activities + cash flow from investing activities excluding changes in deposits with periods to maturity of over 3 months. ***Cash on hand includes the total of cash + deposits with periods to maturity of over 3 months Corp IR/January 3, 215Corp IR/July 28, 215 1

12 Share Repurchase Status Cumulative total of shares repurchased (as of June 3, 215) (1) Total number of shares acquired: 3,111,9 shares (2) Total cost of acquisition: 23,838,423,989 yen Details of announcement on April 27, 215 Type of shares to be acquired: Shares of common stock Total number of shares to be acquired: Up to 15.4 million shares (Equivalent to 8.59% of outstanding shares excluding treasury stock) Total cost of acquisition: Up to 12 billion yen Period of acquisition: From May 14, 215 to May 13, 216 Corp IR/January 3, 215Corp IR/July 28,

13 Business Environment and Revision of Financial Estimates Toshiki Kawai Representative Director, Senior Executive Vice President & COO July 28, 215 Corp IR/July 28, 215

14 Business Environment SPE Capex CY215 WFE capex is expected to increase slightly YonY driven by demand from the enterprise server and mobile device markets DRAM/NAND: Increase YonY due to investment in increased production Foundry: Continued investment in 1X generation cutting-edge logic Logic: Server and image sensor demand strong but PC demand weakening, overall logic expected to show YonY decline FPD Capex CY215 demand for LCD panel manufacturing equipment forecast to increase 2% YonY due to increase in capex for large panels and the start of investment in small/medium panels for mobile devices. OLED TV market expected to develop from 217 (Outlook as of July 215) The semiconductor production process can be divided into two sequential sub-processes referred to as front-end (wafer fabrication) and back-end (assembly and test) production. WFE (wafer fabrication equipment) is used in the front-end production process. Corp IR/January 3, 215Corp IR/July 28,

15 Quarterly Orders (Billion Yen) 3 25 SPE Orders FPD Orders PVE Orders April-June 215 SPE (-13%) FPD 11.8 (-7%) Total (-11%) ( ): change from January-March 215 % is calculated using full amounts / / / From the April-June 215 quarter, due to its reduced importance the PVE business has been excluded from segmental reporting. Corp IR/January 3, 215Corp IR/July 28,

16 Composition of SPE Orders by Application: Equipment only 1% 8% 6% 4% 2% % / / / Logic & others (MPU, AP, Others) Logic foundry Flash memory DRAM Corp IR/January 3, 215Corp IR/July 28,

17 SPE Orders by Region (Billion Yen) / / / Japan U.S Europe Korea Taiwan China S.E. Asia, Others Corp IR/January 3, 215Corp IR/July 28,

18 Orders, Order Backlog (Billion Yen) / / / SPE Orders FPD Orders SPE Order backlog FPD Order backlog From the 215/4-6 quarter, due to its reduced importance the PVE business has been excluded from segmental reporting. Corp IR/January 3, 215Corp IR/July 28,

19 Revision of FY216 Financial Estimates Corp IR/July 28, 215

20 Revision of FY216 Financial Estimates Revised estimates to reflect market adjustment FY215 New estimates FY216 (Estimate) 1 st half 2 nd half Full year New estimates New estimates Adjustments* Adjustments* Adjustments* YonY change Net sales % SPE % FPD % Operating income Lower line: OP margin % % pts % pts % pts pts Income before income taxes Net income attributable to owners of parent *Adjustments:changes from the figures announced on April 27, 215. SPE: semiconductor production equipment FPD: flat panel display production equipment (Billion Yen) Corp IR/January 3, 215Corp IR/July 28,

21 FY216 Dividend Forecast New shareholder return policy: Raise dividend payout ratio to 5%, plan to pay high dividend of 188 yen (Yen) 2 1 Dividend per share (Estimate) Interim Year-end Year Total 15 yen 83 yen 188 yen 143 FY FY216 (Revised estimate) Our previous dividend policy since FY211 year-end dividend was performance-linked payout ratio of around 35%. Corp IR/January 3, 215Corp IR/July 28, 215 2

22 Medium-term Management Plan Highlights Corp IR/July 28, 215

23 Financial Model (toward FY22) Aiming for global-level profitability FY216 (Estimate) FY22 (Medium-term plan) WFE $33B WFE $3B WFE $37B Net sales Gross profit margin 38% 42% 44% SG&A expenses SG&A expense ratio % % (Billion Yen) % 2% 25% Operating margin 15% 2% 25% 15% 2% ROE 15% 2% The semiconductor production process can be divided into two sequential sub-processes referred to as front-end (wafer fabrication) and back-end (assembly and test) production. WFE (wafer fabrication equipment) is used in the front-end production process. Corp IR/January 3, 215Corp IR/July 28,

24 Medium-term Plan: Basic Strategy 1. Outperform market growth Focus on SPE growth areas: Etching, ALD and Cleaning Strengthen Field Solutions business 2. Pursue operational efficiency Raise efficiency of development and manufacturing Reduce SG&A expense/sales ratio Increase market share and profitability by providing high value added products. Grow sales while limiting associated cost increases Corp IR/January 3, 215Corp IR/July 28,

25 Medium-term Market Outlook 1. Internet of Things (IoT) will expand semiconductor applications and markets 2. At technological inflection points, extensive new technologies will drive semiconductor evolution Advanced patterning technologies 3D devices, new materials and new structure New memory (STT-MRAM) WFE market expected to grow in medium-term STT-MRAM: Spin Transfer Torque-Magnetoresistive Random Access Memory Corp IR/January 3, 215Corp IR/July 28,

26 Medium-term Main Scenario (WFE $37B) Net sales 9 billion yen (+4%) Gross profit margin 44% (+6%pts) SG&A expense ratio 19% (-4%pts) Operating margin 25% (+1%pts) ( ): comparison between FY216 financial estimates and each target in medium-term plan. Corp IR/January 3, 215Corp IR/July 28,

27 Disclaimer regarding forward-looking statement Forecast of TEL s performance and future prospects and other sort of information published are made based on information available at the time of publication. Actual performance and results may differ significantly from the forecast described here due to changes in various external and internal factors, including the economic situation, semiconductor/fpd/pv market conditions, intensification of sales competition, safety and product quality management, and intellectual property-related risks. Processing of numbers For the amount listed, because fractions are rounded down, there may be the cases where the total for certain account titles does not correspond to the sum of the respective figures for account titles. Percentages are calculated using full amounts, before rounding. Exchange Risk In principle, export sales of Tokyo Electron s mainstay semiconductor and FPD/PV panel production equipment are denominated in yen. While some settlements are denominated in dollars, exchange risk is hedged as forward exchange contracts are made individually at the time of booking. Accordingly, the effect of exchange rates on profits is negligible. FPD/PV: Flat panel display/photovoltaic Corp IR/January 3, 215Corp IR/July 28,

28 Corp IR/January 3, 215Corp IR/July 28,