financial results for fy2017 and prospects for fy2018 · · 2018-04-252018-04-25 · strategy to...

Copyright 2018. Japan Aviation Electronics Industry. Ltd

6807 Japan Aviation Electronics Industry, Ltd.

April 25, 2018

Financial Results for FY2017 and Prospects for FY2018

2

Technology to Inspire Innovation


Agenda

I. Financial Results for FY2017

II. Prospects and Strategy for FY2018

3



. Financial Results for FY2017 From April 1, 2017 to March 31, 2018

4



1H 2H 1H 2H

Net Sales 899 1,196 2,095 1,245 1,294 2,539 444 121% 2,500

OperatingSales 41 79 121 95 111 206 86 171%

to Net Sales 4.6% 6.6% 5.8% 7.6% 8.6% 8.1%OrdinaryIncome 26 65 92 85 89 174 82 190%

to Net Sales 2.9% 5.4% 4.4% 6.8% 6.9% 6.8%NetIncome 21 46 67 62 67 129 62 192%

to Net Sales 2.3% 3.9% 3.2% 5.0% 5.2% 5.1%

CapitalInvestment 120 97 217 86 89 176 -42

Depreciation 88 109 197 111 108 219 22Depreciation Include others)

AverageExchange RateJPY/USD

105.2 111.5 108.3 111.0 110.7 110.9

Amouts less than 100 million JPY are rounded off.

FY2016 Projections(announcedJan.2018)

FY2017 Year/YearChange

195

170

130

Net Sales and Incomes (JPY in 100millions)

FY2016FY2017Year/YearProjections (announced Jan.2018)

1H2H1H2HChange

Net Sales8991,1962,0951,2451,2942,539444121%2,500

Operating Sales41791219511120686171%195

to Net Sales4.6%6.6%5.8%7.6%8.6%8.1%

Ordinary Income266592858917482190%170

to Net Sales2.9%5.4%4.4%6.8%6.9%6.8%

Net Income214667626712962192%130

to Net Sales2.3%3.9%3.2%5.0%5.2%5.1%

Capital Investment120972178689176-42

Depreciation8810919711110821922

Depreciation Include others)

Average Exchange RateJPY/USD105.2111.5108.3111.0110.7110.9


5



Net Sales and Incomes

165

259

179

121

206

155

232

169

92

174

1,598 1,912 1,795

2,095 2,539

FY2013 FY2014 FY2015 FY2016 FY2017

JPY in 100millions Net Sales

Operating Income

Ordinary Income

Significantly recovered profits from previous years trend Recorded the second highest profits next to FY2014

6



Connector Business

73 80 171 214

597 644

1,052 1,379

1,893

2,316

0

1,000

2,000

FY2016 FY2017

JPY in 100 millions

others

Industrial & Infrastructure

Automotive

161 233

8.5%

10.1%

0

200

400

FY2016 FY2017

Operating Income Operating Margin

Sales by Market Segment

JPY in 100 millions

Mobile Devices

Year/Year Change 122%

131%

108%

125%

Sales122% (of FY2016) Mobile Devices

Significant growth in North American customers

Driven by USB Type-C DX07 series and certain complex products with built-in procured components

Automotive Double-digit growth in Japan,

China and European markets Industrial & Infrastructure

Significant growth by strong demand (factory automation sector in Japan)

Operating Income+ JPY 7.2 billion Higher sales and higher

productivity raised margin

7



Sales by Market Segment (Connector)

20 19 19 23 19 18 42 47 51 53 55 55

154 156 150 154 167 172

342 315 330 363 385 301

557 537 550 592

627

547

3Q/FY2016 4Q/FY2016 1Q/FY2017 2Q/FY2017 3Q/FY2017 4Q/FY2017

Mobile Devices

Automotive

Industry & Infrastructure

Others

JPY in 100million

Mobile Devices declined in 4Q due to seasonality and key customers production slow down

Automotive and Industrial & Infrastructure grew steadily through out the year

8



30 39

51 47

81 86

0

50

100

FY2016 FY2017

UIS Business

8 8

9.5% 9.4%

0

10

20

FY2016 FY2017

92%

130%


Automotive

Operating Margin


Operating Income

JPY in 100 millions

JPY in 100 millions


Sales 106% (of FY2016) Automotivecapacitive touch

panel) Slightly decreased due to EOL

of some models, despite of mass production start of new product (film sensor) in 2H

Industrial & Infrastructure Significant increase boosted

by growing market

Operating IncomeUnchanged Secured profit by higher sales

of Industrial & Infrastructure to offset higher development cost and depreciation for new touch panel product

9



53 47

61 82

114 129

0

50

100

150

FY2016 FY2017

-6

7

-4.9%

5.6%

-10

0

10

FY2016 FY2017

135%

89%



and Automotive

Defense & Space


Operating Margin

Operating Income

JPY in 100 millions

JPY in 100 millions

Aerospace Business Sales113% (of FY2016) Industrial & Infrastructure

and Automotive Oil drilling sensor and linear

motor for semiconductor lithography equipment grew steadily

Defense & Space Decreased due to stagnant

defense budget for domestic product procurement

Operating IncomeTurned into surplus Higher sales and improved

productivity of Industrial & Infrastructure attributed

10



. Prospects and Strategy for FY2018 From April 1, 2018 to March 31, 2019

11



FY2018 Environment and Strategy Business Environment

Uncertainty is expected to grow, although the global economy will continue to expand

Smartphone market growth is expected to slow down, but more in-vehicle electronics will be installed, and Industrial & Infrastructure market will continue to grow

Key Strategy Expand sales of key products for Mobile Devices and ICT

market (including Type-C connectors DX07and board-to-board connectors

Accelerate growth in Automotive market and sustain higher growth in Industrial & Infrastructure markets

Increase margin by further improvement of productivity Expand technology development and production system

for mid-to-long term perspective

12



Prospects for FY2018

1H 2H 1H Projections

Net Sales 1,245 1,294 2,539 1,165 -80 94% 2,400 -139 95%

OperatingIncome 95 111 206 95 0 100% 200 -6 97%

to Net Sales 7.6% 8.6% 8.1% 8.2% 8.3%OrdinaryIncome 85 89 174 85 1 101% 175 1 101%

to Net Sales 6.8% 6.9% 6.8% 7.3% 7.3%Net Income 62 67 129 63 1 101% 130 1 100%

to Net Sales 5.0% 5.2% 5.1% 5.4% 5.4%AverageExchange Rate(JPY/USD)

111.0 110.7 110.9 107.0 107.0

Capital InvestmentFY2018 220DepreciationFY2018 210

Depreciation includes loss on disposal of fixed assets

FY2017Year/Year ChangeYear/Year Change

FY2018(JPY in 100millions)

FY2017FY2018

1H2H1H Year/Year ChangeProjectionsYear/Year Change

Net Sales97109711,2451,2942,5391,165194120%0%-8094%2,400-13995%ERROR:#REF!ERROR:#REF!

Operating Income12401249511120695-2976%0%0100%200-697%ERROR:#REF!ERROR:#REF!

to Net Sales12.8%0.0%12.8%7.6%8.6%8.1%8.2%ERROR:#DIV/0!8.3%

Ordinary Income1150115858917485-3074%0%1101%1751101%ERROR:#REF!ERROR:#REF!

to Net Sales11.9%125.0%11.9%6.8%6.9%6.8%7.3%ERROR:#DIV/0!7.3%

Net Income85-085626712963-2374%0%1101%1301100%ERROR:#REF!ERROR:#REF!

to Net Sales8.8%-75.0%8.8%5.0%5.2%5.1%5.4%ERROR:#DIV/0!5.4%

1010202010101010201010

220

190

20161$=105

AverageExchange Rate(JPY/USD)111.0110.7110.9107.0107.0

Capital InvestmentFY2018220

DepreciationFY2018210

Depreciation includes loss on disposal of fixed assets


13




133 135 115 255 327 385

655 698 770

1,052

1,379 1,130

2,095

2,539 2,400

FY2016 FY2017 FY2018

1,025 1,155 Automotive + Industrial & Infrastructure 910

113%

JPY in 100millons

113%

Projections

others


Automotive

Mobile Devices

Maintain over JPY100 billion sales in Mobile Devices, although net sales is expected to decline due to weaker demand of certain product launched in FY2016

Continue high growth in Automotive and Industrial & Infrastructure markets

14



Prospects for Sales by Business Segment

1H 1H

Connector 1,143 2,316 1,050 -93 92% 2,155 -161 93%

UIS 41 86 43 2 104% 89 3 104%

Aerospace 57 129 66 9 116% 144 15 112%

Others 4 9 6 2 146% 12 3 140%

Total 1,245 2,539 1,165 -80 94% 2,400 -139 95%

FY2017 FY2018 Projections

Year/Year ChangeYear/Year Change


(JPY in 100millions)

FY2017FY2018 Projections

1H1HYear/Year ChangeYear/Year Change

Connector1,1432,3161,050-9392%2,155-16193%

UIS4186432104%893104%

Aerospace57129669116%14415112%

Others4962146%123140%

Total1,2452,5391,165-8094%2,400-13995%


FY2014

1H Projections% of Previous YearFY2015 Projections% of Previous Year

Connector1,1432,3161,050ERROR:#REF!ERROR:#REF!2,1551012189%

UIS418643ERROR:#REF!ERROR:#REF!8948215%

Aerospace5712966ERROR:#REF!ERROR:#REF!14487252%

Others496ERROR:#REF!ERROR:#REF!128293%

Total1,2452,5391,165ERROR:#REF!ERROR:#REF!2,4001155193%

Amounts less than 100 million yen are rounded off

15



Connector Business StrategyMobile Devices Continuously promote DX07 and Board-to-Board connectors Expand sales of DX07 Series USB Type-C Connector

Keep and expand top class market share of receptacle connectors for notebook PC

Strengthen competitiveness by expanding high-performance product line-up - Waterproof type ( including water repellant coating), high speed

transmission, active cable, etc.

Launch and expand sales of Board-to-Board Connector for advanced and multifunctional smartphones Smaller size and lower height Meet new customer needs for

antenna and power terminal connector

Reinforce design-in activities to Chinese smartphone manufacturer

1.6

0.4

Connector width[mm]

Stacking Height [mm]

2.5

0.7 Pitch0.3

Pitch0.35

Pitch0.4

16



Connector Business StrategyAutomotive

FY2016 FY2017 FY2018

Japanese

644 595

JPY in 100millions

Chinese, Others

European

Sales for automotive connector

Projection

by customer(car maker)

Expand Japanese customer business Continue to focus on ICT projects

Commence mass-production of in-vehicle digital camera connectors

Increase sales to European and Chinese customers Europeexpand new models and

new parts

Chinastrengthen eco-friendly car models

Strategy to achieve FY2018 plan

Enhance product development, marketing and production system for further growth

17


Copyright 2018. Japan Aviation Electronics Industry. Ltd Projection

644

JPY in 100millions

Projection of automotive connector Growth Area


2017 2020

ADAS

Eco-friendly Car

Next-generation in-vehicle ICT

European standard

Strategy for further growth

Increase engineers up to 1.5 fold in 3 years

Capital investment planned annually at 150% level of FY2017 for next 3 years

Promote in-vehicle ICT segment business by our own high speed data transmission technology

Expand ADAS business with in-vehicle digital camera connectors

Increase product line-up for eco-friendly car (including high current connector

Increase European customers with expanded line-up of German standard connector

Existing Products

18



(2nd Plant imaginary drawing)

New Building


JAE Philippines will build a new building in 2nd Plant Expand total floor space by 1.5 fold for business expansion

mainly for automotive connector Construction started in February 2018 (Expected to complete in November 2018)

Key Manufacturing Products: Connectors and harnesses for

automotive (including ETC card connectors)

Harnesses for ICT connector (DX07 series USB Type-C) and Industrial & Infrastructure connectors

Increase production capability for automotive connectors and harnesses

19



171

214

FY2016 FY2017 FY2018

JPY in 100millions

Projection

Sales Distributor/ Standard Products

Communication, Railway, etc.

Factory Automation

Sales for connector in Industrial & Infrastructure market

Connector Business Strategy

Sales Expansion in Factory Automation Expand market share of major

Japanese customers (connectors for servo motor, controller and battery

Increase sales in Asian and European markets

Capture growing demand and broaden target in Factory Automation market

Product Development for future growth Increase product line-up for

robot application

Accelerate product development for base station and data center for 5G network


Restated year-on-year growth figure of FY2018 Projection (as of May 7, 2018)

20



UIS Business Strategy

Industrys First

Industrys First

Start mass production of next generation product

Accelerate promotion for capacitive touch panel for automotive

Film type metal mesh sensor Glass type metal mesh sensor

Started mass-production in FY2017 for contribution to FY2018 sales

Start mass-production in September 2018

Enhance production system FY2017: Produced over 1.5 million

panels FY2019: Expand production line for

2 million panels at Akishima Plant

Film sensor production line

21



Aerospace Business Strategy

0

50

FY2016 FY2017 FY2018

0

50

FY2016 FY2017 FY2018

JPY in 100millions

Projection JPY in 100millions

Projection

Sales for Oil drilling sensor

Sales for Semiconductor/liquid crystal fabrication Equipment

280%

150%

111 126

Expand Oil Drilling Sensor and Semiconductor Fabrication Equipment business in the growing market trend

Oil Drilling Sensor Strengthen sales and service

operation in North America Expand sales of Digital

Directional Module for oil shale related project

Mass production of robust accelerometer for deeper and longer oil well

Semiconductor/Liquid Crystal Fabrication Equipment Increase linear motor production

for semiconductor exposure equipment

Expand scope and application with core technology(coil, linear motor control) such as equipment for liquid crystal exposure and semiconductor tester)

22



JPY in 100million Capital investment

Projection

176

220

2017 2018

Manufacturing Infrastructure

Manufacturing Equipment

Strategy for Productivity Improvement Enhance production system and expand

investment for rationalization Continue capital investment for production

infrastructure (JAE Philippines plant Increase capital investment for higher

productivity and more in-house production (high-speed stamping equipment and plating line

Innovation in production technology to lead industry Strengthen cost competitiveness by ultra-

high speed automated assembly machine Labor saving by robotic production for high-

mix low-volume product Promote automation and laborsaving for

automotive and ICT (USB Type-C DX07 series) harness products

23



Achieve FY 2018 target, set foundation for growth, and enhance development and marketing for mid-term business growth

Direction for Mid-term Growth

Pursue further growth in sales and profits by enhancing global marketing and productivity improvement

Maintain Mobile Device sales Accelerate growth in Automotive and Industrial &

Infrastructure markets Productivity improvement by manufacturing

technology innovation

25



The plans, strategies & results forecasts and targets for our company and our consolidated affiliates (hereinafter JAE) noted in these materials are forecasts and targets as of April 25, 2018, and include risks and uncertainties. The targets noted in these materials are not projections, and do not reflect current projections by the management team with regards to future results. Rather, these are targets to be attained by the management team through implementing business strategies. Note that actual results may differ greatly from forecasts and targets, etc. based on various factors. Major factors that affect actual business results, etc. are the political and economic situations in Japan, the US, Asia and so forth that involve regions where JAE conducts business operations, demand fluctuations for JAE products (including software products) in the market, deflationary pressures caused by severe competition, the ability to continue supplying over our competitors, the ability to expand business operations in overseas markets, changes to the laws and regulations concerning business activities, and their transparency, potential legal responsibilities, exchange rates, etc, and there may be other factors beyond the ones listed here. Actual results may differ from management targets and other forecasts due to a worsening global economy and the global financial situation, stagnation in the domestic and overseas stock markets, etc. Note that descriptions concerning projections are current as of that day. Although new risks and factors of uncertainty that occur at any anytime are evident, it is impossible to predict their occurrence or effects. In addition, details describing future predictions may not actually occur due to risk and uncertainties. Do not rely solely on these descriptions.

26



[Reference]

27




Year/Year

1H 2H 1H 2HMobileDevices 395 657 1,052 692 686 1,379 131% 1,350

Automotive 315 340 655 331 367 698 107% 690

Industry &Infrastructure 123 132 255 154 173 327 128% 320

Others 65 68 133 67 68 135 102% 140

Total 899 1,196 2,095 1,245 1,294 2,539 121% 2,500

ProjectionsannoucedJan. 2018Change

FY2017FY2016



FY2016FY2017 Year /YearProjections annouced Jan. 2018

1H2H1H2HChange

Mobile Devices3956571,05250%6926861,37954%327131%1,350

Automotive31534065531%33136769828%43107%690

Industry & Infrastructure12313225512%15417332713%72128%320

Others65681336%67681355%2102%140

Total8991,1962,095100%1,2451,2942,539100%444121%2,500


28



Overseas Sales Growth

506 550 551 528 569 654

790 1,048

1,361 1,267 1,526

1,885 1,296

1,598

1,912 1,795

2,095

2,539

61%

66%

71% 71% 73% 74%

0

1,000

2,000

3,000

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Domestic

Overseas Sales Ratio

Overseas

JPY in 100millions

29



1H 2H 1H 2H

Connector 799 1,093 1,893 1,143 1,173 2,316 122% 2,276

UIS 37 44 81 41 45 86 106% 86

Aerospace 59 56 114 57 72 129 113% 130

Others 3 4 7 4 4 9 122% 8

Total 899 1,196 2,095 1,245 1,294 2,539 121% 2,500


ProjectionsannouncedJan.2018

Year/Year

Change

FY2016 FY2017

Sales by Business Segment (JPY in 100millions)

FY2016FY2017Year /YearProjections announcedJan.2018

1H2H1H2HChange

Connector7991,0931,89390%1,1431,1732,31691%423122%2,276

UIS3744814%4145863%5106%86

Aerospace59561145%57721295%15113%130

Others3470%4490%2122%8

Total8991,1962,095100%1,2451,2942,539100%444121%2,500


30



Operating Income by Business Segment

Year/Year

1H 2H 1H 2H Change

64 97 161 112 121 233 728.0% 8.9% 8.5% 9.8% 10.3% 10.1%

4 4 8 4 4 8 09.8% 9.3% 9.5% 9.2% 9.7% 9.4%

-4 -2 -6 1 6 7 13-6.8% -2.8% -4.9% 1.6% 8.9% 5.7%

Unallocatablecost/Others -22 -20 -42 -22 -20 -42 0

41 79 121 95 111 206 864.6% 6.6% 5.8% 7.6% 8.6% 8.1%

Percentages(%) for FY2016FY2017 indicate Operating Income to Net Sales Ratios. Percentages(%) for Year/Year Change indicate Growth Rate. Amounts less than 100 million yen are rounded off.

Aerospace

Total

FY2016 FY2017

Connector

UIS


FY2016FY2017Year/Year

1H2H1H2HChange

Connector649716111212123372

8.0%8.9%8.5%9.8%10.3%10.1%

UIS4484480

9.8%9.3%9.5%9.2%9.7%9.4%

Aerospace-4-2-616713

-6.8%-2.8%-4.9%1.6%8.9%5.7%

Unallocatable cost/Others-22-20-42-22-20-420

Total41791219511120686

4.6%6.6%5.8%7.6%8.6%8.1%

Percentages(%) for FY2016FY2017 indicate Operating Income to Net Sales Ratios.

Percentages(%) for Year/Year Change indicate Growth Rate.

Amounts less than 100 million yen are rounded off.

31



Prospects for Sales by Market Segment

1H 1H Projections

MobileDevices 692 1,379 547 -145 79% 1,130 -249 82%

Automotive 331 698 378 47 114% 770 72 110%

Industry &Infrastructure 154 327 185 31 120% 385 58 118%

Others 67 135 55 -12 82% 115 -20 85%

Total 1,245 2,539 1,165 -80 94% 2,400 -139 95%


FY2017 FY2018Year/Year ChangeYear/Year Change


2013 2014

1,5981,912314120%

16510.3%25913.5%94157%

1559.7%23212.1%77150%

1066.6%1588.2%52149%

/US$ 100.17109.76

FY2013FY2014% of Previous Year

Sales1,5981,912314120%

Operating Income16510.3%25913.5%94157%

Ordinary Income1559.7%23212.1%77150%

Net Income1066.6%1588.2%52149%

Average Exchange RateJPY/USD100.17109.76

Amounts less than 100 million yen are rounded off.

FY2017FY2018

1H1H Year/Year ChangeProjectionsYear/Year Change

Mobile Devices6921,379547ERROR:#REF!ERROR:#REF!-14579%1,130-24982%ERROR:#REF!ERROR:#REF!ERROR:#REF!583ERROR:#REF!

Automotive331698378ERROR:#REF!ERROR:#REF!47114%77072110%ERROR:#REF!ERROR:#REF!ERROR:#REF!392ERROR:#REF!

Industry & Infrastructure154327185ERROR:#REF!ERROR:#REF!31120%38558118%ERROR:#REF!ERROR:#REF!ERROR:#REF!200ERROR:#REF!

Others6713555ERROR:#REF!ERROR:#REF!-1282%115-2085%ERROR:#REF!ERROR:#REF!ERROR:#REF!60ERROR:#REF!

Total1,2452,5391,165ERROR:#REF!ERROR:#REF!0-8094%2,400-13995%ERROR:#REF!ERROR:#REF!ERROR:#REF!1,235ERROR:#REF!


32



Type-C Usage and JAEs Product Lineup Type-C Usage

Steady adoption in PC installation over 60% in 2018 (JAE forecast)

Installation exceeded 30% for smartphone and tablet

Not fully installed in TV or DSC (digital camera)

DX07 Series Product Lineup

Meet customer needs by wider product variations

Expand high performance product in line with USB standardization

33



Connectors for Eco-friendly Vehicle

high current terminal

motor/inverter docking connector

high current high voltage

high current connector

charger(battery)

ECU connector for BMS(Battery

Management System)

quick charger plug

Focus on connection for Battery, Motor & Inverter/Converter

34



Connectors for Robot

Controller

Manipulator

DF02 (rectangular)

JB10(circular)

for Small size Servo motor

JN14 (low profile)

Released in CY2017

N01 (rectangular)

N02 (small

rectangular)

HB01 (waterproof

cable-to-cable)

HB03 (ultra small

cable-to-cable)

Released in CY2017

for Middle/Large size Servo motor

JL04(circular)

JL10(circular)

JN1/JN2/JN2V (circular)

Released in CY2018

Enhanced in CY2017

35



UIS: Touch Panels for Automobile

Glass Film Standard Type

(ITO) Full Pellucidity

Type (ITO) Metal Mesh

Sensor Metal Mesh

Sensor

Visual

Features Adopted in Plentiful Models Invisible Metal

Wiring on The Outer Flame

High Sensitive High Rigidity

for Bigger Panel

High Flexibility High Sensitive Slim/Light-

Weight

Maximum Size About to 10 inches About to 20 inches

Industrys First Industrys First Industrys First

36



Aerospace: Key Products for Industrial Use for Oil Drilling Equipment

for Semiconductor Production Equipment Accelerometer

Linear Motor

Optical Filter/Laser Mirror

Digital DM Harsh Environments Accelerometer

s

Analog DM Geomagnetic

Sensor

Sensor Sensor Package

Extremely high Temperatures

Vibration, Shock

JAE Products are adopted at drilling

sites globally

Financial Results for FY2017and Prospects for FY2018Agenda. Financial Results for FY2017From April 1, 2017 to March 31, 2018Net Sales and IncomesNet Sales and IncomesConnector BusinessSales by Market Segment (Connector)UIS Business 9. Prospects and Strategy for FY2018 From April 1, 2018 to March 31, 2019FY2018 Environment and StrategyProspects for FY2018Sales by Market Segment Prospects for Sales by Business Segment 15Connector Business StrategyAutomotive 17Connector Business StrategyAutomotiveConnector Business StrategyUIS Business StrategyAerospace Business StrategyStrategy for Productivity ImprovementDirection for Mid-term Growth 24 25[Reference]Sales by Market SegmentOverseas Sales GrowthSales by Business SegmentOperating Income by Business SegmentProspects for Sales by Market SegmentType-C Usage and JAEs Product LineupConnectors for Eco-friendly VehicleConnectors for RobotUIS: Touch Panels for AutomobileAerospace: Key Products for Industrial Use

financial results for fy2017 and prospects for fy2018 · · 2018-04-252018-04-25 · strategy to...

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