Results Briefing FY2018 1Q

Transcription

1 Securities Code: 6770 Results Briefing FY2018 1Q Friday, July 27, 2018

2 Contents FY2018 1Q Consolidated Financial Results P FY2018 Consolidated Financial Results Forecast P Progress on the Business Integration Between Alps Electrics and Alpine Electronics P

3 FY2018 1Q Consolidated Financial Results

4 Key Points of FY2018 1Q Consolidated Financial Results Consolidated Year-on-year increases of net sales and operating income Net sales increased by 6.7% and operating income increased by 21.7% year on year. Electronic Components Segment Year-on-year decreases of net sales and operating income Net sales decreased by 0.5% and operating income decreased by 39.6% year on year. Steady increase of sales in Automotive market In-car devices had steady progress. Profitability was improved for in-car modules. Decrease of sales in Consumer market Sales of components for smartphones were weak. Automotive Infotainment Segment (Alpine Electronics, Inc.) Year-on-year increases of net sales and operating income Net sales increased by 21.3% and operating income increased by 961.0% year on year. Sales of commercial product remained unchanged Net sales of audio equipment and navigation systems remained unchanged year on year. Increase of sales of genuine products for automakers Sales of navigation systems increased due to strong sales of European cars. 4

5 Summary of Financial Results [Consolidated] [Unit: billion] NB: Here and subsequently amounts have been rounded down to the nearest 100 million. NB: Breakdown of sales shows composition, breakdown of operating income shows operating margin. 5

6 Change in Breakdown of Sales by Business Segment Electronic Components Segment Net sales Operating income [Unit: billion] Net sales (1Q) billion (down 0.5% year on year) Automotive market: 70.6 billion (up 6.0%) Sales of devices such as switches and sensors increased. As for modules, sales of instrument panels, door modules and keyless entry systems increased. Consumer market: 40.7 billion (down 10.1%) Regarding camera actuators, although sales for Chinese manufacturers remained unchanged, sales for major customers increased overall due to expansion of sales of high grade functional products. Sales of HAPTIC TM for game console remained strong. Sales of touch panels for smartphones decreased. Operating income (1Q) 4.3 billion (down 39.6% year on year) Operating margin: 3.9% Profitability was improved due to improved productivity for in-car modules. Depreciation expense relating to products for smartphones increased significantly. 6

7 Change in Breakdown of Sales by Business Segment Automotive Infotainment Segment(Alpine Electronics, Inc.) Net sales [Unit: billion] Net sales (1Q) 71.6 billion (up 21.3% year on year) Commercial products Sales of audio equipment decreased slightly in various regions. Sales of navigation systems increased in North America, and remained unchanged in Japan, Europe and Asia. Operating income Genuine products for automakers Sales of audio equipment increased in North America and Asia, and remained unchanged in Japan and Europe. Sales of navigation systems increased significantly in Europe and China due to strong sales by European automakers. Operating income (1Q) 4.0 billion (up 961.0% year on year) Operating margin: 5.6% Increase of sales of genuine products and streamlining of product development 7

8 Net Sales and Operating Income: Quarterly Change [Consolidated] [Unit: billion] Change in Quarterly Net Sales Annual total Change in Quarterly Operating Income (Forecast) 8

9 Quarterly Consolidated Financial Results (Change from the Preceding Quarter) [Consolidated] [Unit: billion] NB: Here and subsequently amounts have been rounded down to the nearest 100 million. NB: Breakdown of sales shows composition, breakdown of operating income shows operating margin. 9

10 Quarterly Consolidated Financial Results (Quarterly Change) [Consolidated] [Unit: billion] NB: Here and subsequently amounts have been rounded down to the nearest 100 million. NB: Breakdown of sales shows composition, breakdown of operating income shows operating margin. 10

11 Summary of Consolidated Balance Sheet [Consolidated] [Unit: billion] Inventories 98.7 billion (up 2.6 billion from previous year-end) Electronic components segment: up 0.8 billion (includes billion in exchange rate effect) Automotive infotainment segment: up 1.4 billion (includes billion in exchange rate effect) Property, plant and equipment billion (up 2.4 billion from previous year-end) Electronic components segment: up 1.6 billion (includes billion in exchange rate effect) Logistics segment: up 0.4 billion (includes billion in exchange rate effect) Automotive infotainment segment: up 0.3 billion (includes billion in exchange rate effect) Net assets billion (down 1.3 billion from previous year-end) Foreign currency translation adjustment: down 1.1 billion Equity ratio 44.9% (previous year-end: 45.0%) 11

12 Amount of Effect from Exchange Rates [Unit: billion/month/per 1] USD EUR Net sales Consolidated Operating income Electronic components segment Net sales Operating income NB: The above amounts for the USD effect include other currencies linked to the USD (eg.: HKD, CNY). 12

13 FY2018 Consolidated Financial Results Forecast

14 FY2018 Consolidated Financial Results Forecast [Consolidated] FY2018 forecast is revised after review of 1H forecast. [Unit: billion] NB: Here and subsequently amounts have been rounded down to the nearest 100 million. NB: Breakdown of sales shows composition, breakdown of operating income shows operating margin. 14

15 FY2018 Consolidated Financial Results Forecast (Difference vs. 1H Previous Forecast) [Consolidated] [Unit: billion] NB: Here and subsequently amounts have been rounded down to the nearest 100 million. NB: Breakdown of sales shows composition, breakdown of operating income shows operating margin. 15

16 Progress on the Business Integration between Alps Electric and Alpine Feb Jun Nov Dec Jan. 1, 2019 Alps Electric and Alpine: change to the transaction structure of the business integration General meetings of shareholders; Completion of the review process by the relevant competition law authorities Execution of of the the basic agreement on on the the business collaboration (Excluding the the product product areas areas in which in which the the companies companies compete compete with each with each other) other) Expected completion of SEC s review of the Form F-4 Alpine: Extraordinary general meeting of shareholders to approve the share exchange Effective date of the share exchange; Establishment of ALPS ALPINE Seek steady realization of the business integration synergy effects by expanding the scope of business collaboration activities and accelerating the business collaboration schedule Sales & Marketing Development Production and Quality Assurance Procurement Administration Start joint promotion to customers common to the Companies Formulate a development roadmap and promote a joint development activities Facilitate mutual exploitation of resources at the Companies production sites across the globe Promote activities toward improved procurement capabilities through joint purchasing Expedite streamlining and standardizing of operations and processes for early realization of the integration of the administrative functions ITC101 Medium- to Long-Term Target Achieve net sales of 1 trillion yen and 10% operating income margin (during the term of the 2nd Medium- Term Plan) Realize a new business of 150 billion yen * The projects for which an NDA has been executed will be carried out in compliance with the terms of the NDA. For the product areas in which the companies compete with each other, independent business operations will be maintained until the consummation of the business integration. 16

17 Disclaimer Alps Electric Co., Ltd. ( Alps Electric ) may file a registration statement on Form F-4 ( Form F-4 ) with the U.S. Securities and Exchange Commission (the SEC ) in connection with the possible share exchange (the Share Exchange ) with Alpine Electronics, Inc. ( Alpine and, together with Alps Electric, the Companies ). The Form F-4 (if filed) will contain a prospectus and other documents. If a Form F-4 is filed and declared effective, the prospectus contained in the Form F-4 will be mailed to U.S. shareholders of Alpine prior to the shareholders meeting at which the Share Exchange will be voted upon. The Form F-4 and prospectus (if a Form F-4 is filed) will contain important information about the Companies, the Share Exchange and related matters. U.S. shareholders of Alpine are urged to read the Form F-4, the prospectus and other documents that may be filed with the SEC in connection with the Share Exchange carefully before they make any decision at the shareholders meeting with respect to the Share Exchange. Any documents filed with the SEC in connection with the Share Exchange will be made available when filed, free of charge, on the SEC s website at In addition, upon request, the documents will be mailed to shareholders for free of charge. To make a request, please refer to the following contact information. Company name: Alps Electric Co., Ltd. Address: 1-7, Yukigaya-otsukamachi, Otaku, Tokyo, Japan Department in charge: Junji Kobayashi, Senior Manager, Corporate Planning Office Telephone: (IR Direct) Company name: Alpine Electronics, Inc. Address: 1-7, Yukigaya-otsukamachi, Otaku, Tokyo Department in charge: Shinji Yamazaki, Senior Manager, Finance and Public Relations Department Telephone: (IR Direct) 17

18 Forward-Looking Statements This document includes forward-looking statements that reflect the plans and expectations of Alps Electric and Alpine in relation to, and the benefits resulting from, their business integration described above. To the extent that statements in this document do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Companies in light of the information currently available to them, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the actual results, performance, achievements or financial position of one or both of the Companies (or the integrated group) to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. The Companies undertake no obligation to publicly update any forward-looking statements after the date of this document. Investors are advised to consult any further disclosures by the Companies (or the integrated group) in their subsequent domestic filings in Japan and filings with the U.S. Securities and Exchange Commission. The risks, uncertainties and other factors referred to above include, but are not limited to: (1) economic and business conditions in and outside Japan; (2) changes in demand for and material prices of automobiles, smart phones and consumer electrical equipment and machines, which are the main markets of the Companies products, and changes in exchange rates; (3) changes in the competitive landscape, including the changes in the competition environment and the relationship with major customers; (4) further intensified competition in the electronic components business, automotive infotainment business and logistics business; (5) increased instability of the supply system of a certain important components; (6) change in the product strategies or other similar matters, cancellation of a large-quantity order, or bankruptcy, of the major customers; (7) costs and expenses, as well as adverse impact to the group s reputation, resulting from any product defects; (8) suspension of licenses provided by other companies of material intellectual property rights; (9) changes in interest rates on loans and other indebtedness of the Companies, as well as changes in financial markets; (10) adverse impact to liquidity due to acceleration of indebtedness; (11) changes in the value of assets (including pension assets) such as securities and investment securities; (12) changes in laws and regulations (including environmental regulations) relating to the Companies business activities; (13) increases in tariffs, imposition of import controls and other developments in the Companies main overseas markets; (14) unfavorable political factors, terrorism, war and other social disorder; (15) interruptions in or restrictions on business activities due to natural disasters, accidents and other causes; (16) environmental pollution countermeasures costs; (17) violation of laws or regulations, or the filing of a lawsuit; (18) the Companies being unable to complete the business integration due to reasons such as the Companies are not able to implement the necessary procedures including approval of the agreement with regard to the business integration by the shareholders meetings of the Companies, and any other reasons; (19) delays in the review process by the relevant competition law authorities or the clearance of the relevant competition law authorities or other necessary approvals being unable to be obtained; and (20) inability or difficulty of realizing synergies or added values by the business integration by the integrated group. 18

19 The business results forecasts and future predictions included in these materials are based on the judgment of the Company at the time of preparation of the materials, and are inherently subject to risks and uncertainties. As a result, actual business results and outcomes may differ significantly due to a variety of factors.

20 Consolidated Financial Results FY2018 1Q (April June 2018) Basic Data July 2018 Alps Electric Co., Ltd.

21 1.Outline (Unit:100 million Yen) FY2018 1Q 2Q 3Q 4Q Total 1Q 2Q 1H(Fcst) Total(Fcst) Net Sales 1,895 2,206 2,341 2,140 8,583 2,022-4,210 8,790 Domestic , Overseas 1,515 1,821 1,950 1,730 7,018 1, Operating Income Ordinary Income Profit attributable to owners of parent Net Sales (by segments) (Unit:100 million Yen) FY2018 1Q 2Q 3Q 4Q Total 1Q 2Q 1H(Fcst) Total(Fcst) Electronic Components 1,119 1,383 1,449 1,187 5,140 1,114-2,385 5,105 Automotive market , ,430 3,010 Consumer market , ,095 Automotive Infotainment , ,433 2,877 Logistics Others Total 1,895 2,206 2,341 2,140 8,583 2,022-4,210 8,790 3.Operating Income (Unit:100 million Yen) FY2018 1Q 2Q 3Q 4Q Total 1Q 2Q 1H(Fcst) Total(Fcst) Electronic Components Automotive Infotainment Logistics Others / Eliminations Total Capital Expenditures (Unit:100 million Yen) FY2018 1Q 2Q 3Q 4Q Total 1Q 2Q 1H(Fcst) Total(Fcst) Electronic Components Automotive Infotainment Logistics Others Eliminations Total (Ref.) Estimate booked on the basis of order forecast including lease. 5.Depreciation Expenses FY2017 FY2017 FY2017 FY2017 FY2017 (Unit:100 million Yen) FY2018 1Q 2Q 3Q 4Q Total 1Q 2Q 1H(Fcst) Total(Fcst) Electronic Components Automotive Infotainment Logistics Others Eliminations Total R & D Expenses (Unit:100 million Yen) FY2017 FY2018 1Q 2Q 3Q 4Q Total 1Q 2Q 1H(Fcst) Total(Fcst) Electronic Components Automotive Infotainment Logistics Others Total Inventories (Unit:100 million Yen) 2017/6 2017/9 2017/ /3 2018/6 0 Electronic Components Automotive Infotainment Logistics Others Eliminations Total 985 1,026 1, Employees (Unit:Person) 2017/6 2017/9 2017/ /3 2018/6 Electronic Components 22,612 22,407 22,305 22,260 21,968 Automotive Infotainment 13,369 13,640 13,013 13,175 13,036 Logistics 5,464 5,513 5,585 5,710 5,849 Others 1,103 1,128 1,120 1,144 1,184 Total 42,548 42,688 42,023 42,289 42,037 (Non Consolidated) 5,728 5,659 5,653 5,590 5,797 (Ref.) The number of employees represents the number of persons in employment. (Exclude individuals seconded from the Alps to outside.)