Results Briefing FY2018 3Q Tuesday, January 29, 2019
2 Contents FY2018 3Q Consolidated Financial Results P3 12 FY2018 Consolidated Financial Results Forecast P13 15 Acquisition of Own Shares P16 17
FY2018 3Q Consolidated Financial Results
Key Points of FY2018 3Q Consolidated Financial Results 4 Consolidated Net sales remained unchanged year on year; decrease of operating income Net sales remained unchanged year on year and operating income decreased by 17.5% year on year. Electronic Components Segment Year-on-year decreases of net sales and operating income Net sales decreased by 8.1% and operating income decreased by 30.8% year on year. Sales in Automotive market remained unchanged year on year Some in-car devices decreased due to the effect of the diesel emissions problem. Profitability was improved for in-car modules. Decrease of sales in Consumer market Sales of camera actuators decreased due to the effect of the deceleration of sales of smartphones. Some other products decreased due to in-house production by the customers. Automotive Infotainment Segment Year-on-year increases of net sales and operating income Net sales increased by 15.6% and operating income increased by 32.2% year on year. Steady increase of sales of commercial products Net sales of audio equipment and navigation systems increased year on year. Increase of sales of genuine products for automakers Sales of navigation systems increased significantly in Japan.
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
Change in Breakdown of Sales by Business Segment Electronic Components Segment Net sales Operating income [Unit: billion] Net sales (3Q accumulated) 363.3 billion (down 8.1% year on year) Automotive market: 209.2 billion (down 0.1%) Sales of devices such as switches and sensors increased, but communication units decreased due to the effect of the diesel emissions problem. Overall sales of modules remained unchanged year on year due to steady sales of instrument panels, door modules and keyless entry systems. Consumer market: 154.0 billion (down 17.1%) Sales of camera actuators decreased due to the effect of the deceleration of sales of smartphones. Sales of touch panels decreased due to in-house production by the customers. Operating income (3Q accumulated) 32.1 billion (down 30.8% year on year) Operating margin: 8.8% Profitability was improved due to improved productivity for in-car modules, but operating income decreased due to the deceleration of sales of products for smartphones. 6
Change in Breakdown of Sales by Business Segment Automotive Infotainment Segment Net sales Operating income [Unit: billion] Net sales (3Q accumulated) 221.5 billion (up 15.6% year on year) Commercial products Sales of audio equipment increased due to steady sales in Japan and Asia. Sales of navigation systems increased overall due to strong sales in all regions. Genuine products for automakers Sales of audio equipment increased in all regions with the exception of Asia. Sales of navigation systems increased significantly in Japan and remained strong in Europe and Asia. Operating income (3Q accumulated) 12.2 billion (up 32.2% year on year) Operating margin: 5.5% Increase of sales of genuine products and streamlining of product development 7
Net Sales and Operating Income: Quarterly Change [Consolidated] [Unit: billion] Change in Quarterly Net Sales Annual total Change in Quarterly Operating Income 28.5 53.5 52.3 44.3 71.9 50.0 (Forecast) 8
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
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
Summary of Consolidated Balance Sheet [Consolidated] [Unit: billion] Inventories 109.6 billion (up 13.4 billion from previous year-end) Electronic components segment: up 7.4 billion (including - 0.6 billion in exchange rate effect) Automotive infotainment segment: up 5.9 billion (including - 0.3 billion in exchange rate effect) Property, plant and equipment 190.4 billion (up 4.5 billion from previous year-end) Electronic components segment: up 0.8 billion (including - 1.6 billion in exchange rate effect) Automotive infotainment segment: up 2.1 billion (including - 0.1 billion in exchange rate effect) Logistics segment: up 1.5 billion (including - 0.0 billion in exchange rate effect) Net assets 428.8 billion (up 13.0 billion from previous year-end) Retained earnings: up 18.3 billion Equity ratio 46.4% (previous year-end: 45.0%) 11
Amount of Effect from Exchange Rates [Unit: billion/month/per 1] USD EUR Consolidated Net sales Operating income 0.38 0.12 0.03 0.02 Electronic components segment Net sales Operating income 0.27 0.09 0.02 0.01 Automotive infotainment segment Net sales Operating income 0.10 0.03 0.01 0.01 NB: The above amounts for the USD effect include other currencies linked to the USD (eg.: HKD, CNY). 12
FY2018 Consolidated Financial Results Forecast
FY2018 Consolidated Financial Results 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. 14
FY2018 Consolidated Financial Results Forecast (Difference vs. 2H 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
Acquisition of Own Shares
Acquisition of Own Shares ALPS ALPINE CO., LTD. Decision on Acquisition of Own Shares 1. Reasons for the acquisition of own shares The Company has decided to implement a share buyback with the aim of improving capital efficiency and responding to dilution that may occur due to the business integration and share exchange between Alps Electric Co., Ltd. and Alpine Electronics, Inc. 2. Contents of acquisition 1 Class of shares to be acquired Common stock of the Company 2 Total number of shares to be acquired 20,000,000 shares (maximum) (The percentage compared to the total number of shares outstanding (excluding treasury shares): 9.14%) 3 Aggregate amount of acquisition cost 28,400,000,000 (maximum) 4 Period of acquisition From January 30, 2019 to June 28, 2019 5 Method of acquisition Purchase on the floor of the Tokyo Stock Exchange As per requests by Alpine shareholders for Alpine to purchase their shares as part of the business integration and share exchange between the Company and Alpine, Alpine will pay approximately 11.6 billion to the shareholders in accordance with Article 786, paragraph 5 of the Companies Act. The maximum aggregate amount of the acquisition cost was calculated by deducting this amount from the 40.0 billion, as stated in Notice Regarding the Management Policy under the Holding Company Structure, including the Basic Policy on Shareholder Returns on November 26, 2018. For details, please refer to the announcement, ALPS ALPINE CO., LTD. Announces Acquisition of Own Shares, disclosed on January 29, 2019. 17
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.