Full-Year & Q4 Financial Results Fiscal Year 2009 (Ending March 2010)

Transcription

1 FullYear & Q4 Financial Results Fiscal Year 2009 (Ending March 2010) April 30, 2010 SEIKO EPSON CORPORATION All rights reserved.

2 Disclaimer regarding forwardlooking statements The foregoing statements regarding future results reflect the Company's expectations based on information available at the time of announcement. The information contains certain forwardlooking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, the competitive environment, market trends, general economic conditions, technological changes, exchange rate fluctuations and our ability to continue to timely introduce new products and services. Numerical values presented herein Numbers are rounded to the unit indicated. Percentages are rounded off to one decimal place. 1

3 Changes to business incubation projects included under "Other" segment From FY2009 In line with the structural reforms for the electronic device businesses announced in March 2009, corporate R&D on some of the business incubation projects that we plan to bring to market were charged to other segments instead of being allocated to the "Other" segment. This resulted in a change to the disclosed profit and loss figures for each segment in fiscal In the slides explaining fiscal 2009, fiscal 2008 segment profit and loss figures have been adjusted for the purpose of comparison. Changes to segment reporting based on new management approach From FY2010 Under our new management approach, Head Office expenses that were allocated to the various segments and business in proportion to their respective sales will be consolidated under the Corporate Segment from fiscal The functions of subsidiaries that provided services to the Epson Group and whose results were reported under the Other segment have been transferred to the various businesses. In the slides showing the fiscal 2010 outlook, fiscal 2009 segment profit and loss figures have been adjusted for the purpose of comparison. 2

4 1. Overview 2. Details 3

5 Financial Highlights (Full Year) (Billions of yen) Net Sales Operating Income Ordinary Income Net Income 1,122.4 FY2008 Actual % % 0.5% Net Income Before Income Taxes % 9.9% Previous Outlook FY % 1.3% 0 % % Actual 2.1% % 1.8% 1.4% 0.1% % Change (amount, %) Y/Y % % Vs. Prev. Outlook % % % EPS Exchange Rate USD EUR

6 FY2009 Financial Highlights Firsthalf Firsthalf income income hit hit hard hard by by effects effects of of global global recession, recession, especially especially in in enterprise enterprise sector sector Sharp Sharp improvement improvement in in second second half half income income due due to to economic economic recovery recovery and and various various initiatives initiatives to to improve improve earnings earnings Consistent Consistent efforts efforts to to reduce reduce fixed fixed costs costs Aggressively Aggressively expanded expanded sales sales of of inkjet inkjet printers printers to to achieve achieve a stronger stronger earnings earnings base base in in FY2010 FY2010 and and beyond beyond Operating Income (Billions of yen) HalfYearly Trend Operating income: Information equipment Operating income: Electronic devices Operating margin: Information equipment Operating margin: Electronic devices 5.7% 2.8% 1.5% 0.4% 7.9% Operating Margin 40% 30% 20% 8.5% 10% 0% % 10% % 20% Achieved our our original target target of of breakeveeven in in ordinary income for for the the full full year break year 3 H1 H2 H1 H2 FY08 FY09 30% 5 (*Adjusted)

7 FY2009 Financial Highlights InformationRelated Equipment Segment Despite the lingering effects of the recession and a fledgling recovery in the enterprise market, income showed improvement due to our ongoing efforts to make operations more efficient through cost reductions and other actions. Inkjet printers: Launched competitive products and strengthened moves into emerging markets and the commercial and industrial sectors, all of which promise growth. Business systems: Maintained and enhanced presence in POSrelated products and SIDM Projectors: Maintained top market share in volume zone and expanded into high brightness area Electronic Devices Segment Losses shrank significantly due to a secondhalf recovery in demand for products such as digital home electronics and mobile phones, combined with the effects of impairments recorded in the previous fiscal year and fixed cost reductions. Crystal devices, semiconductors: Took advantage of synergies resulting from making Epson Toyocom a wholly owned subsidiary, and pressed our advantage in sectors such as sensing devices. Small and mediumsized displays: Transferred part of the business assets of our amorphous silicon TFT LCD business to Sony as scheduled, in line with the midrange business plan 6

8 SE15 LongRange Corporate Vision Epson Epson is is committed committed to to the the relentless relentless pursuit pursuit of of innovation innovation in in compact, compact, energyenergysaving, saving, highprecision highprecision technologies, technologies, and and through through the the formation formation of of groupwide groupwide platforms platforms will will become become aa community community of of robust robust businesses, businesses, creating, creating, producing, producing, and and delivering delivering products products and and services services that that emotionally emotionally engage engage customers customers worldwide. worldwide. 7

9 SE15 LongRange Corporate Vision & MidRange Business Plan (FY2009 FY2011) SE15 Financial Objectives (FY2015) Bar graph: Sales (Bil. of yen) Line chart: Operating margin ROS: 10%, ROE: Sustained 10% or greater (assuming net sales growth) SE15 & MidRange Business Plan (FY2009 FY2011) 1, , % FY2009: Aim to breakeven in ordinary income and to restructure the business foundations that underpin SE15 2.7% 1.8% 0.1% (FY) FY2010: Firmly establish a profitgenerating corporate structure FY2011: Set Epson on a new growth path aimed at fulfilling the SE15 LongRange Corporate Vision 8

10 FY2010 Business Outlook Yearoveryear (Billions of yen) FY2009 Total % Total FY2010 % Change Amount % Net Sales , % Operating Income % % % Ordinary Income % % % Net Income Before Income Taxes % % Net Income % EPS Exchange Rate USD EUR

11 FY2010 Initiatives Inkjet Printer Business Enhance and expand product lineup to provide products optimized to the needs of specific customer segments, including enterprise, emerging and consumer markets Projector Business Offer an extensive product lineup only possible with our No. 1 position Quartz Device & Sensor Business Expand our leading competitiveness with greater capacity and capitalize on synergies with our semiconductor operations 10

12 FY2010 Objectives In the second year of our midrange business plan (FY2009 FY2011), we will aim to set a profitgenerating corporate structure firmly in place. Aim for at least breakeven in net income Lay the groundwork to achieve the goals of the SE15 longrange corporate vision Bring business reorganization to completion In fiscal 2011, the final year of the midrange business plan, set Epson on a new growth path aimed at fulfilling the SE15 LongRange Corporate Vision. 11

13 1. Overview 2. Details 12

14 1) FY2009 Financial Results 2) FY2010 Business Outlook 13

15 Financial Highlights (Full Year) (Billions of yen) Net Sales Operating Income Ordinary Income Net Income 1,122.4 FY2008 Actual % % 0.5% Net Income Before Income Taxes % 9.9% Previous Outlook FY % 1.3% 0 % % Actual 2.1% % 1.8% 1.4% 0.1% % Change (amount, %) Y/Y % % Vs. Prev. Outlook % % % EPS Exchange Rate USD EUR

16 FY2009 Business Results By business segment (Billions of yen) 1,40 1,20 1, , Consolidated Total Net sales Op. income Eliminations Information Equipment Net sales 57.1 Op. income FY2008 Actual Net Sales FY2009 Actual FY2008 Actual 15 Adjusted Operating Income FY2009 Actual Electronic Devices Net sales 63.6 Op. income Precision Products Net sales 14.9 Op. income 1.6 Other Net sales 12.1 Op. income 2.6

17 Net Sales Comparison (Full Year) Information Equipment Segment (Billions of yen) PC, Other Y/Y FY2008 FY2009 Visual Instruments Y/Y +0 % sales FY08 FY09 PRJ 89% 89% Other 11% 11% Printers Y/Y 52.2 % sales FY08 FY09 IJP 65% 68% PP 12% 12% BS 18% 17% SCN, other 5% 3% Eliminations PRJ: Sustained strength, especially in business & education IJP: Hardware & consumables volume up and prices steady, but sales down on yen appreciation PP: Sales down on lower consumables, despite higher hardware volume BS: SIDM remained steady in China, but sales down on lower POSrelated products IJP PP BS POS SCN PRJ Inkjet printer Page printer Business systems Point of sales Scanner Projector

18 Net Sales Comparison (Full Year) Electronic Devices Segment (Billions of yen) Displays Y/Y 54.9 % sales FY08 FY09 atft, other 80% 74% HTPS 20% 26% Semiconductors Y/Y 10.5 HTPS: Volume up, but sales down on lower ASPs atft/ltps: Volume down Volume down, forex impact Quartz Devices Y/Y +0.5 Steady demand in mobile phone & digital equipment, ASPs down, volume up FY2008 FY2009 Eliminations atft LTPS HTPS Amorphoussilicon TFT Lowtemperature polysilicon TFT Hightemperature polysilicon TFT

19 Statistics of Balance Sheet Items (Billions of yen) Total assets 1,50 1, , , , Inventories

20 Statistics of Balance Sheet Items (Billions of yen) Interestbearing liabilities & ratio of interestbearing liabilities % 31.5% 3% 38.3% 35.8% Shareholders' equity & equity ratio % 36.6% 39.3% % 32.3% *Starting from FY2008, lease obligations were included in interestbearing liabilities *Shareholder equity = total net assets minority interests in subsidiaries

21 Financial Highlights (Fourth Quarter) FY2008 FY2009 Change (Billions of yen) Q4 Actual % Q4 Actual % Amount % Net Sales % Operating Income % % Ordinary Income % % Net Income Before Income Taxes % % Quarterly Net Income % % EPS Exchange Rate USD EUR

22 Quarterly Net Sales By business segment (Billions of yen) Consolidated Total Y/Y Other Y/Y 4.9 Precision Products Y/Y +2.3 Electronic Devices Y/Y Information Equipment Y/Y /Q4 2009/Q1 2009/Q2 2009/Q3 2009/Q4 Eliminations 21

23 Quarterly Net Sales Comparison Information Equipment Segment (Billions of yen) PC, Other Y/Y /Q4 2009/Q4 Visual Instruments Y/Y +8.1 % sales 08/4Q FY09 PRJ 85% 90% Other 15% 10% Printers Y/Y % sales 08/4Q 09/4Q IJP 64% 65% PP 13% 14% BS 17% 18% SCN, other 6% 3% Eliminations Front PRJ: Sustained strength, especially in business & education IJP: Hardware & consumables volume up PP: Hardware & consumables volume up BS: POSrelated products remained steady in China, sales up on increased unit shipments to retailers IJP PP BS POS SCN PRJ Inkjet printer Page printer Business systems Point of sales Scanner Projector

24 23 Quarterly Net Sales Comparison Electronic Devices Segment (Billions of yen) /Q4 2009/Q4 Displays Y/Y +2.3 % sales 08/4Q 09/4Q atft, other83% 74% HTPS 17% 26% Semiconductors Y/Y +4.2 Quartz Devices Y/Y +5.6 Eliminations HTPS: ASPs down, but sales up on higher volume atft/ltps: Sales flat on lower volume and steady prices Silicon foundry, LCDDr volumes up Steady demand in mobile phone & digital equipment, ASPs down, volume up atft LTPS HTPS LCDDr Amorphoussilicon TFT Lowtemperature polysilicon TFT Hightemperature polysilicon TFT LCD Driver

25 Quarterly Selling, General and Administrative Expenses (Billions of yen) % 26.3% (% sales) 25.3% % % Other Other: Includes R&D expenses, etc. Y/Y Advertising Y/Y 1.5 Sales Promotions Y/Y /Q4 2009/Q1 2009/Q2 2009/Q3 2009/Q4 Salaries & Wages Y/Y

26 Quarterly Operating Income By business segment (Billions of yen) Information Equipment Y/Y /Q4 2009/Q1 2009/Q2 2009/Q3 2009/Q4 (*Adjusted) Electronic Devices Y/Y Precision Products Y/Y +1.1 Other Y/Y

27 Operating Income Fluctuation Cause Analysis (Billions of yen) Cost fluctuations Other S.G.A. decrease 34.2 Impact of exchange rate fluctuations Change in sales volume Price fluctuations Operating Income 2008/Q billion increase Operating Income 2009/Q4 26

28 1) FY2009 Financial Results 2) FY2010 Business Outlook Caution: Caution: There There are are changes changes to to segment segment reporting reporting based based on on the the new new "management "management approach. approach. Please Please refer refer to to slide slide 2 2 for for details details on on the the changes. changes. 27

29 FY2010 Business Outlook Yearoveryear FY2009 FY2010 Change (Billions of yen) Total % Total % Amount % Net Sales , % Operating Income % % % Ordinary Income % % % Net Income Before Income Taxes % % Net Income % EPS Exchange Rate USD EUR

30 FY2010 Business Outlook (Net Sales) By business segment 1,20 1, (Billions of yen) ,013.0 Other Y/Y 0.4 Precision Products Y/Y +8.2 Electronic Devices Y/Y Information Equipment Y/Y FY2009 Actual 31.0 Net Sales FY2010 Outlook Eliminations HalfYearly Net Sales FY2010 FY2010 H1 Outlook H2 Outlook

31 Net Sales Outlook by Business Information Equipment Segment Other 45 Y/Y Visual 35 Instruments Y/Y (Billions of yen) Printers Y/Y Net Sales FY2009 FY2010 Actual Outlook Eliminations HalfYearly Net Sales FY2010 FY2010 H1 Outlook H2 Outlook

32 Net Sales Outlook by Business Printer Business (Billions of yen) % 17% 12% 2% 18% 12% Scanners, Other Business Systems SIDM: Steadily expand in Chinese & Asian markets POSrelated products: Seize business opportunities Page Printers % 18% 12% 3% 18% 11% % 68% Further strengthen measures aimed at boosting sales Inkjet Printers % 68% FY2009 Actual Net Sales FY2010 Outlook Expand volume of hardware & consumables Launch competitive products designed to match characteristics of particular markets 5 5 HalfYearly Net Sales FY2010 FY2010 H1 Outlook H2 Outlook

33 Net Sales Outlook by Business Electronic Devices Segment (Billions of yen) Displays Y/Y Semiconductors Y/Y Quartz Devices Y/Y Eliminations, Other Net Sales FY2009 FY2010 Actual Outlook 50 HalfYearly Net Sales FY2010 FY2010 1H Outlook 2H Outlook

34 FY2010 Business Outlook (Operating Income) By business segment (Billions of yen) Precision Products Y/Y +2.3 Electronic Devices Y/Y Information Equipment Y/Y Other Y/Y Corporate FY2009 Actual (*Adjusted) FY2010 Outlook 2 FY2010 FY2010 1H Outlook 2H Outlook

35 Outlook for Capital Expenditure and Depreciation & Amortization Expenses (Billions of yen) 20 Capital expenditures Depreciation and amortization FY2006 FY2007 FY2008 FY2009 FY2010 Actual Outlook Breakdown by segment Information Equipment Electronic Devices Precision Products Corporate/Other FY2009 Actual Cap. Ex. D&A FY2010 Outlook Cap. Ex. D&A

36 Free Cash Flow Outlook (Billions of yen) Cash flow from investing activities Cash flow from operating activities Free cash flow FY2006 FY2007 FY2008 FY2009 FY2010 Actual Outlook

37 Main Management Indicators (%) ROA: Ordinary income/total assets (avg. balance) ROS: Ordinary income/net sales ROE: Net income/shareholders' equity (avg. balance) 29.7 FY2006 FY2007 FY2008 FY2009 FY2010 Actual Outlook

38 37