Medium-Term Management Plan for Fiscal 2013 ~ 2015 For Recovery and Growth May 14, 2013 Sharp Corporation Agenda I. Summary of Financial Results for Fiscal 2012 II. Preconditions for Recovery and Growth III. Medium-Term Management Plan for Fiscal 2013 ~ 2015 1. Basic Strategy and Targeted Goals of the Medium-Term Management Plan 2. Actions for Fiscal 2013 3. 5 Major plans to Realize Recovery and Growth 4. Organization / Governance Innovation 5. For Sustainable Growth 1 1 I. Summary of Financial Results for Fiscal 2012 2 Summary of Financial Results for Fiscal 2012 - Net sales in second half increased by approx. 270 billion yen from the first half - Net sales and operating income surpassed the previous announced forecast, and net surplus was achieved in the second half in operating income basis - Meanwhile, net loss increased from the previous forecast due to additional restructuring charges (Billions of yen) FY2011 Full Year FY2012 1H 2H 3Q Net Sales Operating Income (Loss) 4Q Change from 1H Full Year Difference from previous forecast Change (Y on Y) Full Year Previous Forecast 2,455.8 1,104.1 678.2 696.1 1,374.4 +270.2 2,478.5 +18.5 +0.9% 2,460.0 -37.5 -168.8 2.6 19.9 22.6 +191.5 -146.2 +8.7 - -155.0 (-1.5%) (-15.3%) (0.4%) (2.9%) (1.6%) -376.0 -387.5 -36.7 -121.0 -157.7 -95.3 - -450.0 (-15.3%) (-35.1%) (-5.4%) (-17.4%) (-11.5%) (-5.9%) +229.8 -545.3 Net Income (Loss) (-22.0%) 3 2 Transition of Net Sales / Operating Income by Quarter (Billions of yen) 674.2 30.0 640.3 589.0 678.2 645.5 552.1 696.1 40040 458.6 500 5,000 19.9 3.5 20020 2.6 0 0 0 -20 -200 -500 -5,000 -24.4 -40 -400 -1,000 -10,000 Net Sales (left axis) 売上高 Operating Income (right axis) 営業利益 -1,500 -15,000 -46.6 -60 -600 -800 -80 -74.7 -94.1 -2,000 -20,000 Apr-Jun 4-6月 Jul-Sep 7-9月 Oct-Dec 10-12月 Apr-Jun 4-6月 Jan-Mar 1-3月 FY2011 -100 -1,000 Jul-Sep 7-9月 Oct-Dec 10-12月 Jan-Mar 1-3月 FY2012 4 Extraordinary Items in Other Expenses / Income Taxes, etc Recorded impairment loss and additional restructuring charges in corresponding to changes in the business environment such as the rapid depreciation of the yen and demand fluctuations in small-and medium-size LCDs. (Billions of Yen) FY2011 Full Year Operating Income Other Income (expenses) FY2012 1H 3Q 4Q 2H Full Year -37.5 -168.8 2.6 19.9 22.6 -146.2 -200.8 -153.9 -34.9 -131.0 -165.9 -319.9 Difference from previous forecast Full Year previous forecast +8.7 -155.0 -6.6 0.0 0.0 -47.3 -47.3 -47.3 -117.1 -98.6 -27.3 -17.3 -44.7 -143.3 Settlement package, etc. -18.8 -15.8 -2.0 -32.3 -34.3 -50.2 Others -58.2 -39.4 -5.5 -33.9 -39.4 -78.9 -137.6 -64.7 -4.5 -9.9 -14.4 -79.1 -115.9 -61.0 0.0 -4.5 -4.5 -65.5 -21.7 -3.6 -4.5 -5.4 -9.9 -13.6 Total -338.5 -218.6 -39.4 -140.9 -180.3 -399.0 -104.0 -295.0 Net Income -376.0 -387.5 -36.7 -121.0 -157.7 -545.3 -95.3 -450.0 Impairment loss Restructuring charges Income Taxes, etc. Reversal of deferred tax assets Others 5 3 Results of FY2012 Financial Structure Improvement Measures Overall 90% achievement against annual targets with the off-balance-sheet arrangements of large-size LCD business, optimizing inventory, and reduction of noncurrent assets etc. Annual Target (announced Aug.2) Annual Result (Billions of yen) Achievement rate Remarks Off-balance-sheet arrangements of large-size LCD business 110.0 110.0 100% - Partial Transfer of Shares of Sakai Display Products shares: 66 billion yen - Decrease in debt due to off-balance-sheet arrangements: 44 billion yen Issue new shares through third party allotment 66.9 15.2 23% - Payment from Qualcomm: 4.9 billion yen - Payment from Samsung: 10.3 billion yen Reduce inventories and noncurrent assets - Inventory reduction from Fiscal end of March, 2012: 133.4 billion yen 150.0 144.9 97% (Amount before applying inventory write-down) - Sales of business bases and securities: 11.5 billion yen Reduce capital investment 70.0 90.9 130% Total 400.0 361.0 90% - Depreciation and amortization : 173.3 billion yen - Capital investment: 82.4 billion yen 6 II. Preconditions for Recovery and Growth 7 4 Financing Activities June 2013 September 2013 Deadline of syndicated loan: 360 billion yen Needs for Finance Syndicated loan 360 billion yen Convertible bonds due for redemption: 200 billion yen March 2014 September 2014 Straight bond due for redemption: 100 billion yen Straight bond due for redemption: 30 billion yen Extension of syndicated loan (until FY2015) 360 billion yen (including unexecuted balance of 50 billion yen) Additional borrowing facility 150 billion yen Sustaining conditions for credit extension 更なる資金・資本政策の実行 Conduct further financing activities Improvement of cash flows by self-reliant efforts 8 Cleanup of Balance Sheet (Net Assets Section) Decreased capital for restoring fiscal health and exercising agile capital policy. No impact of this account classification process on total amount of net assets, total number of issued shares, etc. (Billions of yen) 500 (Non-Consolidated) 400 Common Stock 300 212.3 200 Capital Surplus (Consolidated) 100 Net Assets 134.8 276.1 0 -100 Treasury Stock, etc. -9.3 -200 Retained Earnings -300 -414.4 (Consolidated) (Non-Consolidated) 50.0 24.0 -9.3 Net Assets 134.8 Offset of retained earnings (retained loss) with common stock and capital surplus. -400 -500 FY2012 13/3月期 Decreased Capital 減資後 9 5 III. Medium-Term Management Plan for Fiscal 2013 ~ 2015 10 1. Basic Strategy and Targeted Goals of the Medium-Term Management Plan 11 6 Basic Strategy of Medium-Term Management Plan Bid a farewell to the past to create a new Sharp with the mindset to change everything other than our business philosophy represented with our creed “Sincerity and Creativity.” Restructuring stage Phase I Re-growth stage Phase II FY2012 2H FY2013 FY2014 FY2015 Operating income surplus (Accomplished) Net income surplus Strengthen profitability Operating income ratio 5% Basic Strategy (Changes implemented with the medium-term management plan) １ ２ ３ Recovery and Growth (Return to bond market ) Shift to “advantageous markets and fields” Exit closed innovation and aggressively utilize alliances Enforce executions by innovating governance system 12 Goals for the Medium-Term Management Plan Net income surplus in FY2013, and 5% operating income rate will be targeted in FY2015. FY2012 2H Result FY2013 Forecast FY2014 Plan FY2015 Plan Consolidated Net Sales (Year on Year) 1,374.4 billion yen (+20.4%) 2,700.0 billion yen (+8.9%) 2,820.0 billion yen (+4.4%) 3,000.0 billion yen (+6.4%) Operating Income (Ratio) 22.6 billion yen (1.6%) 80.0 billion yen (3.0%) 110.0 billion yen (3.9%) 150.0 billion yen （5.0％） (5.0%) Net Income (Ratio) -157.7 billion yen (-11.5%) 5.0 billion yen (0.2%) 40.0 billion yen (1.4%) 80.0 billion yen (2.7%) 13 7 Sales by Product Group Comparing FY2012 and FY2015 (Billions of yen) 12,000 1,200 FY2012 (Result) 2012年度 800 8,000 +7.4% FY2015 (Plan) 2015年度 1,000 10,000 (Annual average growth) +1.2% 600 6,000 760.0 400 4,000 +8.9% 1,050.0 +5.6% +10.0% -4.0% 2,000 200 846.8 400.0 732.6 259.9 00 Digital Information Equipment Health and Environmental Equipment 360.0 350.0 309.6 230.0 Solar Cells 270.6 296.9 Business Solutions LCDs Electronic Devices 14 Transition of Operating Income for FY2012 ~ FY2015 (Billions of yen) 2,000 200 150 1,500 100 1,000 プロダクトビジネスグループ Product Business Group デバイスビジネスグループ Device Business Group 全社計 Sharp Total 500 50 0 -50 -500 -100 -1,000 -150 -1,500 -200 -2,000 FY2012 Result (Reference) Total operating income (loss) rate 1H ２H FY2013 Forecast FY2014 Plan FY2015 Plan -15.3% 1.6% 3.0% 3.9% 5.0% 15 8 2. Actions for FY2013 16 Consolidated Business plan for FY2013 (Billions of yen) FY2012 Full Year Result Net Sales FY2013 1H Forecast Change against FY2012 1H 2H Forecast Change against FY2012 2H Full Year Forecast Change (Y on Y) 2,478.5 1,270.0 +15.0% 1,430.0 +4.0% 2,700.0 +8.9% Domestic 1,007.2 500.0 +9.7% 520.0 -5.7% 1,020.0 +1.3% Overseas 1,471.3 770.0 +18.7% 910.0 +10.6% 1,680.0 +14.2% Operating Income (Loss) -146.2 15.0 - 65.0 +187.2% 80.0 - Net Income (Loss) -545.3 -20.0 - 25.0 - 5.0 - 17 9 Transition of Net Sales / Operating Income (1H / 2H) (Billions of yen) 1,500 15,000 (Billions of yen) 1,374.4 13,744 13,145 1,314.5 11,411 1,141.2 1,430.0 14,300 300 3,000 1,270.0 12,700 1,104.1 11,041 1,000 10,000 200 2,000 5,000 500 65.0 650 33.5 335 226 22.6 100 1,000 15.0 150 0 0 -71.1 -711 -500 -5,000 Net Sales 売上高 Operating 営業利益 (left axis) Income (right axis) -168.8 -1,688 -1,000 -10,000 1H 上期 2H 下期 1H 上期 FY2011 Result -100 -1,000 -200 -2,000 2H 下期 FY2012 Result 1H 上期 2H 下期 FY2013 Forecast 18 Transition of Operating Income by Product Group (1H / 2H) (Billions of yen) 400 40 FY2013 1H Forecast FY2013 2H Forecast 0 FY2012 2H Result -40 -400 FY2012 1H Result -80 -800 -1,200 -120 Digital Information Equipment Health and Environmental Equipment Solar Cells Business Solutions LCDs Electronic Devices 19 10 Transition of Operating Income Increase and Decrease by Product Group (1H / 2H) FY2013 2H FY2013 1H FY2012 2H FY2013 2H Forecast Adjustments LCDs Electronic Devices Solar Cells Business Solutions Solar Cells Business Solutions LCDs Electronic Devices Adjustments FY2012 2H Result Health and Environmental Equipment Digital Information Equipment Solar Cells Business Solutions LCDs Electronic Devices Adjustments FY2013 1H Forecast Health and Environmental Equipment Digital Information Equipment 20 FY2012 1H Result Health and Environmental Equipment Digital Information Equipment -2,000 -200 15.0 150 22.6 65.0 650 1,000 100 (Billions of yen) 500 50 0 -50 -500 -1,000 -100 -1,500 -150 -168.8 3. 5 Major Plans to Realize Recovery and Growth 21 11 5 Major Plans to Realize Recovery and Growth １ Restructuring Business Portfolio 2 Improving Profitability of LCD Business 3 Expanding Overseas Businesses Focusing on the ASEAN Market 4 Reducing Fixed Costs by Reformation of Cost Structure 5 Improving Financial Position 22 Restructuring Business Portfolio (Competing in Advantageous Fields) Competition Product BtoC Business Global Scale-driven Market Global Value Market Regional Value Market Scale-driven competitiveness on a global basis is required Added value for each customer can be pursued on a global scale Local adaptation for each region is required Digital Information Equipment (Audio-Visual) Solar Cells Solar Cells BtoB Business Device Device Business Communication Systems Communication Systems Health and Environment Business Solutions Small-and mediumsize / large size LCDs Small-and mediumsize LCDs Electronic Devices Large Electronic Devices Fluctuation risk in profitability (Volatility) small 23 12 Directions of Innovation per Business Business Basic Policy Details businesses and areas - Focus on large-size LCD TVs - Improve profitability of TV business in Europe and blu-ray business Communication Systems Focusing on the domestic market - Maintain and enforce the No.1 domestic maker position by strengthening products Health and Environmental Equipment Concentrating resources overseas - Business expansion by shifting emphasis to ASEAN by forming the most powerful supply chain in the area Digital Information Equipment Focusing on profitable Product innovating business models - Shrink businesses in Europe and U.S. and focus on the domestic market - Shift to a energy solution business system Sustainable growth as a cash cow - Develop office solutions of MFP / display collaboration Implementing restructured and Solar Cells Business Solutions business Device Display Devices (LCDs) Electronic Devices Shift to a growing force driver Concentrating on No.1 categories including consideration of forming alliances - Stabilize profitability by enforcing relationships with major clients - Expand added value zones with higher profitability - Thorough concentration on camera module and sensor fields - Expand added values by built-in / systemization 24 5 Major Plans to Realize Recovery and Growth １ Restructuring Business Portfolio 2 Improving Profitability of LCD Business 3 Expanding Overseas Businesses Focusing on the ASEAN Market 4 Reducing Fixed Costs by Reformation of Cost Structure 5 Improving Financial Position 25 13 Improving Profitability of LCD Business (FY2012~FY2013) Reduce fluctuation risk in profitability and shift into a driving force of growth Transition of LCD Business profit for FY2012~FY2013 (Billions of yen) 50 +23.5 +46.4 -138.9 0 30.0 +53.2 -50 +45.8 -100 <Main countermeasures> (1) concentrate expansion on higher added value zones (2) expand sales by increasing transactions with stable accounts -150 FY2012 Operating Income Improvement of Marginal Profit SDP Off-balancing Others (fixed cost reduction including depreciation etc) Currency Impact FY2013 Operating Income 26 (1) Concentrate on Expanding Added Value Zone Place emphasis on high added value zones that best match our technologies and product lineup, and improve profitability with our strengths such as IGZO and high resolution touch panels etc. Low Profitability High Low Representative applications Profit volatility Direction of actions Representative applications Direction of actions LCD TVs (volume zone) Control volatility with strategic alliances with major accounts - Smartphones (high-end) - Industrial/car application Expand orders with our high resolution and high technology models Representative - Smartphones (volume zone) applications - Ultrabook™, Tablet PCs 差別化誘導ゾーン Contributes to differentiation of Direction of actions customers by swiftly corresponding to requests from concept-in High 27 14 Superiority of Sharp Display Technology Further evolution of LCDs ■ High resolution ■ Super low power consumption ■ Input device fusion MEMS application OLED application IGZO Super low power consumption Light alignment PSA High precision touch pen input SFR Super thin frame panel Super low reflection Moth-Eye MPC MEMS Flexible Display High resolution OLED Sharp’s Featured One-of-a-kind Platform Technology 28 (2) Sales Increase by Expanding Transactions with Stable Accounts Expanding business while reducing profit volatility is aimed through strategic alliances with major clients (Billions of yen) 1,200 12,000 LCD business sales Others 1,000 10,000 800 8,000 New major clients 600 6,000 4 clients 400 4,000 4 clients Current major clients 4 1 clients client 200 2,000 5 clients 5 5 clients 5 clients clients 00 FY2012 Result FY2013 Forecast FY2014 Plan FY2015 Plan 29 15 Overview of Strategic Alliances Partner Initial Target Hon Hai Qualcomm Samsung Current Status (achievements) • Off-balancing of Sakai Display Products / improvement of capacity utilization rate/ reinforcing cost competitiveness • 66.9 billion yen investment in Sharp • Surplus of SDP in FY2012 2H (more than 50 billion yen improvement compared to FY2012 1H) • Joint development of the next generation display (MEMS) utilizing IGZO technology (30 million US dollars payment for development fee) • 120 million US dollars investment in Sharp (split payment based on development status) • 60 million US dollars investment / 15 million US dollars development fee paid • MEMS development is under progress as scheduled aiming for the establishment of technology for practical use • Sign long term agreement for large-size LCDs • 10.4 billion yen investment in Sharp • Supply small-and medium-size LCDs and electronic devices for mobile appliances • Stable orders of large-size LCD panels (capacity utilization rate for Kameyama No.2 plant improved) • 10.4 billion yen investment paid • Expanded orders of electronic devices 30 Transition of Kameyama No. 2 Plant Capacity Utilization Rate Stable operations and improvement of profitability is to be realized by improving model combination ratio 100% 100% 100% Capacity Limit Large size 60% 60% 60% 40% 40% 40% Small-and medium-size capacity utilization rate 80% 80% 80% 20% 20% 20% 0%0%0% Oct-Dec Jan-Mar FY2012 2H (result) Main factors for mid-to small size LCD increase Apr-Jun Jul-Sep FY2013 1H (forecast) Startup of new models for tablet PCs / notebook PCs Oct-Dec Jan-Mar FY2013 2H (forecast) Progress in transactions with strategic clients 31 16 5 Major Plans to Realize Recovery and Growth １ Restructuring Business Portfolio 2 Improving Profitability of LCD Business 3 Expanding Overseas Businesses Focusing on the ASEAN Market 4 Reducing Fixed Costs by Reformation of Cost Structure 5 Improving Financial Position 32 Outline of Overseas Strategy by Region Resources will be allocated with modulation – emphasize on developing Asian market Asia Middle East / Africa China Americas Sales Configuration* 2012 2015 21％ 31％ 2012 2015 4％ 8％ 2012 2015 20％ 22％ 2012 2015 38％ 29％ 2012 2015 17％ 10％ Europe Regional Strategy (basic policy) - Targeted as a driving force, where resources will be concentrated thoroughly for business expansion. - The most powerful value chain will be structured based on production bases in Indonesia and Thailand -Targeted as a driving force following the Asian market. Business structures will be formed to match the characteristics of each region in the Middle East / North Africa / Sub-Sahara / CIS to expand business - Improve profitability by innovating distribution mix-up / product mix-up - Grasp the demands of each region and exploit mid-size cities of inland China - Shift to a business style emphasizing on profitability - Creating new development opportunities with new product categories and new sales routes Resource shift Area - Concentrate on growing areas and products efficiently - Structure a business promoting system to efficiently operate in all of Europe *sales configuration of product business by overseas region 33 17 Expansion of Indonesia Business Population ratio of ASEAN countries Sharp’s Position in Indonesian Market Refrigerators TVs (2011) Indonesia 40.5％ 30% Washing Machines 36% Air Conditioners 30% 20% (Internal Investigation; 2012 shares) Sharp’s Business Development in Indonesia ~ To structure the most powerful value chain for local production for local consumption~ Planning Development Indonesia-completing structure already in place (focusing on creating local-fit products) Production New Plant operation start (2013) Marketing Sales Strong relations with retailers Service No.1 service network - No.1 sales channel coverage (81%) in the industry - Unique marketing utilizing the top-class (352 bases) brand in the industry In Indonesia, the largest market in ASEAN, Sharp will continue to improve its strengths, and develop its business model for other countries and regions 34 5 Major Plans to Realize Recovery and Growth １ Restructuring Business Portfolio 2 Improving Profitability of LCD Business 3 Expanding Overseas Businesses Focusing on the ASEAN Market 4 Reducing Fixed Costs by Reformation of Cost Structure 5 Improving Financial Position 35 18 Lowering Break-Even Point with Thorough Cost Restructuring Fundamental cost restructuring out of conventional measures conducted considering the negative impact of the depreciation of the yen Main Measures １ Streamlined headquarters (small and strong headquarters) ２ Reduction plan of Fixed Costs Transition of Fixed Costs (Consolidated) (Billions of yen) 10,000 1,000 Fixed Costs（左軸） (left axis) 固定費 売上比 Sales ratio （右軸） (right axis) 37.3% 915.8 33.7% approx. 150 billion yen reduction 836.1 Reduction of labor cost 800 8,000 30% 28.1% ３ Domestic / overseas bases restructure 40% 27.2% 26.1% 600 6,000 20% FY2011 Result FY2012 Result FY2013 Forecast FY2014 Plan FY2015 Plan 36 Details to Cut Down Fixed Costs Measures １ Streamlined headquarters (small and strong headquarters) ２ Reduction of labor charge ３ Domestic / overseas bases restructure Details ■Propelling outsourcing Stock transfer of IT service trust corporation (SI Solutions Inc.) (completed) ■Specialize headquarters as a strategic force ■Voluntary retirement program (completed) ■Natural decrease in personnel ■Controlling new employment ■Cost reduction including overtime work fees ■Concentration / sell out of domestic and overseas freight transport bases ■Additional cost reduction of overseas bases 37 19 5 Major Plans to Realize Recovery and Growth １ Restructuring Business Portfolio 2 Improving Profitability of LCD Business 3 Expanding Overseas Businesses Focusing on the ASEAN Market 4 Reducing Fixed Costs by Reformation of Cost Structure 5 Improving Financial Position 38 Cutting Down on Inventory Improve financial efficiency by optimizing inventory level Transition of Inventory for FY2011~FY2015 (Billions of yen) (months) 600 6,000 3 527.4 Inventory asset (left axis) 棚卸資産（左軸） 2.58 Ratio vs. monthly sales (right axis) 月商比（右軸） 400 4,000 2 310.7 1.50 1.40 200 2,000 1.28 1.24 End of FY2014 Plan End of FY2015 Plan 00 1 0 End of FY2011 Result End of FY2012 Result End of FY2013 Forecast 39 20 Reduction of Capital Investment Reduction in total capital investment costs by controlling LCD investments (continuing investment in non-LCD areas) Accelerating investment shift from plants to human resources / technology / marketing Transition of capital investment for FY2011~FY2015 (Billions of yen) 1,500 150 6% LCD related investments (Left axis) 液晶関連投資 （左軸） Non-LCD related investments (Left axis) 非液晶関連投資 （左軸） Capital investment対売上比（右軸） against sales ratio 設備投資 118.8 4.8% 100 1,000 5% (Right axis) 4% 82.4 3.3% 3% 3.0% 2.8% 2.7% 50 500 2% 1% 00 FY2011 Result FY2012 Result FY2013 Forecast FY2014 Plan FY2015 Plan 0% 40 Cutting Down on Interest-Bearing Debt Shift from direct financing to indirect financing Interest-bearing debt will be cut down with the end of FY2012 as its peak Transition of Interest-Bearing Debt for FY2011~FY2015 (Billions of yen) 12,000 1,200 1,127.1 1,174.4 Straight Bonds 9,000 900 Convertible Bonds 600 6,000 Commercial Paper 3,000 300 Loan from monetary institutions 0 End of FY2011 2011年度末実績 End of FY2012 2012年度末実績 End of FY2013 2013年度末計画 Result Result forecast End of FY2014 2014年度末計画 Plan End of FY2015 2015年度末計画 Plan 41 21 4. Organization / Governance Innovation 42 Strengthening Governance Structure Measures １ ２ ３ Actions Introduction of Business Group System ■Transformation into a one-stop quick responding organization from the customers’ viewpoint ■Thorough and precise management based on business characteristics Introducing Corporate Management Group and Structural Reform Group ■Strengthening headquarters control / governance function ■Strengthening action forces to complete the medium-term management plan Management Participation from 2 Main Banks ■Strengthening management reconstruction together with 2 main banks 43 22 5. For Sustainable Growth 44 Future Development Strategy and Main Business Areas With our strengths in manufacturing, we will accelerate “development of current areas” and exploit “5 new business areas” utilizing strategic alliances. Product Business & Device Business Current Areas Engineering assets as our driving forces Customer oriented Display Movie / Picture Processing （IGZO, light alignment, super thin frame) (8K, picture recognition) (Touch panel, XMDF, voice recognition) Sensing Energy Conversion Compound Semiconductor (light / sound / touch / gas / organic) (solar, HMS, power device) (IGZO, GaN, GaAs、 GaAlN) Nature Technology Clean Technology Equipment Connection / Communication (Moth-eye, fan application) (Plasmacluster, cyclone, micro nano-bubble) (LTE, IrSS, cloud) One-of-a-kind Mechatronics Light Control Functional Organic Material (micros toner, LCD material) ・・・ (copiers, washing machines, manufacturing robots) (backlight, LED lighting) User Interface × Life-adapting × Region-adapting Alliance with Strategic Partners New Areas Healthcare / Medical Services 5 Main Business Areas (Industry Solution Businesses) Robotics Smart Home / Mobility Safety and Security of Food / Water / Air (including car appliances) / Office Education 45 23 Actions for New Business Areas Utilizing Featured Technology Immediate Target Main applied technologies Healthcare / Medical Services High sensitive sensors for Initial diagnosis in healthcare Compound Semiconductor Robotics Robot marketing reducing workload Partners / Collaborators Sensing Foods Chemical Smart Home / Mobility (including car appliances) / Office Safety and Security of Food / Water / Air Education Information services utilizing Sharp products (power saving / observation etc) Plant factories and environmental sensors to support safe and secure lifestyles Tablet PCs and BIG PAD to promote IT solutions in the education field Mechatronics Automotive Parts Movie / Picture Processing Energy Conversion DIY × Home Facilities Medical Equipment Device Connection / Communication Clean Technology Communication Infrastructure Transportation Real Estate Light Control Display User Interface University / Hospital ・ ・ 46 Key Concept Defined in the Medium-Term Management Plan To continue to deliver new values and joy to people around the world Refine Technology with Customers First Technology to Customers Sharp will absolutely accomplish recovery and growth. 47 24 Forward-Looking Statements This presentation material contains certain statements describing the future plans, strategies and performance of Sharp Corporation and its consolidated subsidiaries (hereinafter “Sharp”). These statements are not based on historical or present fact, but rather assumptions and estimates based on information currently available. These future plans, strategies and performance are subject to known and unknown risks, uncertainties and other factors. Sharp’s actual performance, business activities and financial position may differ materially from the assumptions and estimates provided on account of such risks, uncertainties and other factors. Sharp is under no obligation to update these forward-looking statements in light of new information, future events or any other factors. The risks, uncertainties and other factors that could affect actual results include, but are not limited to: (1) The economic situation in which Sharp operates (2) Sudden, rapid fluctuations in demand for Sharp’s products and services, as well as intense price competition (3) Changes in exchange rates (particularly between the yen and the U.S. dollar, the euro and other currencies) (4) Regulations such as trade restrictions in other countries (5) The progress of collaborations and alliances with other companies (6) Litigation and other legal proceedings against Sharp (7) Rapid technological changes in products and services, etc. *Amounts less than 100 million yen shown in this presentation material have been rounded down. 25