Presentation Material with Note (PDF:297KB)

Consolidated Financial Results for
the Third Quarter Fiscal 2015
Ⅰ. Financial Results for 3Q Fiscal 2015
Financial Results Forecast for Fiscal
2015
Ⅱ. Information by Segment
Ⅲ. Supplementary Data
SHARP CORPORATION
February 4, 2016
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
performances 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 the 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.
Copyright © 2016 SHARP CORPORATION, all rights reserved.
Ⅰ. Financial Results for 3Q Fiscal 2015
Financial Results Forecast for Fiscal
2015
1
Financial Results for 3Q Fiscal 2015
・ Net sales in the 3Q of FY2015 were 663.3 billion yen, down 13.0% from the same period last year.
・ The downturn in Energy Solutions was offset by other product groups, resulting in sales as
forecasted.
・ Structural reforms are progressing steadily.
(Billions of Yen)
FY2014
3Q
Net Sales
Operating Income
(margin)
Net Income
Attributable to
Sharp Corporation
(margin)
FY2015
1Q
2Q
1Q to 3Q
Change
Accumulated
(Y on Y)
Total
Change
(Y on Y)
3Q
762.7
618.3
661.3
663.3
-13.0%
1,943.0
-7.1%
22.0
-28.7
3.5
-3.8
-
-29.0
-
(2.9%)
(-4.7%)
(0.5%)
(-0.6%)
-11.9
-33.9
-49.6
-24.7
(-1.6%)
(-5.5%)
(-7.5%)
(-3.7%)
(-1.5%)
-
-108.3
-
(-5.6%)
2
・ Net sales were 663.3 billion yen, down 13.0% year-on-year.
Operating loss was 3.8 billion yen.
Net loss attributable to Sharp Corporation was 24.7 billion yen.
・ In Energy Solutions, there was a revaluation of the price of polysilicon.
However, this was offset by other product groups, hence the overall financial results
were as forecasted.
We are also making steady progress with structural reforms.
Financial Results Forecast for Fiscal 2015
・ Based on results up to the 3Q, the current business environment, and future estimates, the forecast
for FY2015 remains unchanged.
・ The forecast for sales and operating income between segments was revised.
・ Sharp intends to announce the forecast for net income (loss) attributable to Sharp Corporation once it
becomes possible to make a reasonable estimate of the impact on consolidated financial statements
of the materialization of structural reforms currently under consideration or in progress.
(Billions of Yen)
FY2015
1Q to 3Q
Accumulated
Total
Net Sales
Operating Income
(margin)
Change
(Y on Y)
4Q
Forecast
Change
(Y on Y)
Fiscal Year
Forecast
Change
(Y on Y)
1,943.0
-7.1%
756.9
+8.8%
2,700.0
-3.1%
-29.0
-
+39.0
-
10.0
-
(-1.5%)
(5.2%)
(0.4%)
3
・ Considering results up to the third quarter, the current business environment, and
future estimates, we have revised sales between segments. Even so, we have left the
previous forecast for fiscal 2015 unchanged.
・ We intend to announce the forecast for net income (loss) attributable to Sharp
Corporation once it becomes possible to make a reasonable estimate of the impact
on consolidated financial statements of the materialization of structural reforms
currently under consideration or in progress.
Other Income (Expenses)
(Billions of Yen)
FY2015
1Q
2Q
1Q to 3Q
Accumulated
Total
Difference
(Y on Y)
3Q
Difference
(Y on Y)
-28.7
3.5
-3.8
-25.9
-29.0
-80.2
-1.5
-48.5
-14.2
+5.3
-64.3
-29.1
Equity in earnings of affiliates
+1.7
+1.3
-0.1
-0.8
+2.8
-1.8
Gain on sales of investment
securities
Reversal of provision for loss on
litigation
+1.7
+0.0
-0.0
-5.7
+1.8
-9.8
+2.0
-
-
-
+2.0
-17.1
Receipt of settlement package
+6.2
+0.8
+1.3
+1.3
+8.5
+8.5
Interest expense
-5.5
-4.4
-4.5
+1.1
-14.5
+2.9
Impairment loss
-6.5
-4.6
-2.7
-0.7
-13.8
-9.4
Restructuring charges
-
-35.3
-1.4
+7.5
-36.7
-22.0
Settlement
-
-
-
-
-
+14.3
-30.3
-44.9
-18.1
-20.5
-93.4
-109.4
-3.6
-4.7
-6.5
+7.7
-14.9
+8.2
-33.9
-49.6
-24.7
-12.8
-108.3
-101.1
Operating Income
Other Income (Expenses)
Pretax Income
Income Taxes, etc.
Net Income Attributable to Sharp
Corporation
4
・ Restructuring charges and an impairment loss were calculated as other expenses.
Sales by Segment
(Billions of Yen)
FY2015
1Q
Consumer
Electronics
2Q
3Q
FY2015
1Q to 3Q
Accumulated
Total
Change
(Y on Y)
(2/4)
Fiscal Year
Forecast
Change
(Y on Y)
(10/30)
Fiscal Year
Forecast
Change
(Y on Y)
201.9
233.6
204.2
-24.8%
639.8
-16.5%
870.0
-11.5%
870.0
Energy
Solutions
36.8
41.8
34.5
-35.6%
113.3
-42.4%
170.0
-37.2%
180.0
Business
Solutions
80.6
91.7
88.8
+3.3%
261.2
+3.6%
360.0
+4.9%
350.0
Electronic
Components
and Devices
136.6
114.6
146.4
-10.4%
397.6
+23.1%
530.0
+13.6%
530.0
Display Devices
187.8
203.3
226.2
-5.0%
617.4
-11.7%
870.0
-4.1%
870.0
Subtotal
643.9
685.1
700.3
-13.8%
2,029.4
-9.3%
2,800.0
-5.7%
2,800.0
Adjustments
-25.6
-23.7
-36.9
-
-86.3
-
-100.0
-
-100.0
Total
618.3
661.3
663.3
-13.0%
1,943.0
-7.1%
2,700.0
-3.1%
2,700.0
*Sales include internal sales between segments.
・ We have revised the fiscal year sales forecasts for Energy Solutions and Business
Solutions.
5
Sales by Segment
(Billions of Yen)
300
Left bar : 3Q FY2014 Results
Right bar: 3Q FY2015 Results
250
200
150
100
50
0
Consumer Electronics
Energy Solutions
Business Solutions
Electronic
Components
and Devices
Display Devices
*Sales include internal sales between segments.
6
Operating Income by Segment
(Billions of Yen)
FY2015
1Q
Consumer
Electronics
2Q
-11.7
9.7
7.5
(-5.8%)
(4.2%)
(3.7%)
Energy
Solutions
-3.9
1.3
-5.0
(-10.7%)
(3.2%)
(-14.7%)
Business
Solutions
6.8
9.9
7.1
(8.4%)
(10.8%)
(8.0%)
Electronic
Components
and Devices
Display Devices
Subtotal
Adjustments
Total
1Q to 3Q
Accumulated
Total
Change
(Y on Y)
3Q
2.8
5.1
1.9
(2.1%)
(4.5%)
(1.4%)
-13.7
-12.7
-10.7
(-7.3%)
(-6.3%)
(-4.7%)
-15.9%
-7.0%
-24.2%
-
0.8
-9.0
-9.7
-4.7
-
-3.8
23.8
+1.2%
-97.0%
-5.4
3.0
-
38.0
(1.7%)
36.0
+21.4%
(10.3%)
18.0
18.0 26.6-fold
(3.4%)
-
-30.0
(3.4%)
-
39.0
-30.0
-
(-3.4%)
(-0.3%)
(-3.4%)
-
(1.4%)
-23.5
-
-29.0
-
(-1.5%)
-7.0
(1.8%)
(10.6%)
10.0 60.7-fold
-37.2
16.0
+4.8%
(-4.1%)
(-6.0%)
(0.1%)
(-0.6%)
-
(2.5%)
13.3
3.5
-7.7
20.0
(10/30)
Fiscal Year
Forecast
Change
(Y on Y)
(2.3%)
(9.1%)
(2.0%)
(0.5%)
-77.0%
(-6.8%)
-19.7
-28.7
5.5
(2/4)
Fiscal Year
Forecast
Change
(Y on Y)
(0.9%)
(-3.1%)
(-4.7%)
FY2015
43.0
(1.5%)
-29.0
-
10.0
-
(0.4%)
*Figures within parentheses indicate operating margin.
・ We have revised fiscal year operating income forecasts for Energy Solutions,
Business Solutions and Consumer Electronics.
・ We will explain the details of the sales and operating income of each segment
accordingly.
-33.0
10.0
(0.4%)
7
Operating Income by Segment
(Billions of Yen)
15
10
Left bar : 3Q FY2014 Results
Right bar: 3Q FY2015 Results
5
0
-5
-10
-15
Consumer Electronics
Energy Solutions
Business Solutions
Electronic
Components and
Devices
Display Devices
8
Consolidated Balance Sheets
・Cash, time deposits and restricted cash increased from 175.0 billion yen at the end of
September 2015 to 234.5 billion yen at the end of December 2015.
・The equity ratio decreased from 9.4% at the end of September 2015 to 8.6% at the end of
December.
(Billions of Yen)
FY2014
FY2015
FY2014
End of Mar.
2015
End of Sep.
2015
End of Dec.
2015
Cash, time deposits
and restricted cash
258.4
175.0
234.5
Notes and accounts
receivable
605.6
574.2
469.3
Inventories
338.3
294.2
299.0
96.7
106.4
97.9
1,299.1
1,149.8
1,100.8
Plant and Equipment
400.5
377.1
368.4
Investments and
Other Assets
262.0
259.8
261.9
Deferred Assets
0.0
0.0
0.0
1,961.9
1,787.0
1,731.3
Other current assets
End of Sep.
2015
End of Dec.
2015
Short-term borrowings
848.9
666.4
664.6
Notes and accounts
payable
468.0
422.7
404.6
Other current liabilities
369.9
324.9
310.2
1,686.9
1,414.1
1,379.6
230.4
191.9
191.4
1,917.3
1,606.1
1,571.0
44.5
180.9
160.2
1,961.9
1,787.0
1,731.3
1.5%
9.4%
8.6%
Current Liabilities
Current Assets
Total Assets
FY2015
End of Mar.
2015
Long-term Liabilities
Liabilities
Net Assets
Total Liabilities and Net
Assets
Equity Ratio
9
・ Net assets at the end of December 2015 were 160.2 billion yen, a 20.6 billion yen
decrease compared to the end of September 2015, due to factors including
restructuring charges and an impairment loss.
The equity ratio decreased from 9.4% to 8.6%.
Transition of Inventories
・ Inventory was 299.0 billion yen, up 4.8 billion yen compared to the end of September 2015, and the ratio vs.
monthly sales remained mostly unchanged.
(Months)
(Billions of Yen)
600
1.80
1.67
Ratio vs. monthly
sales
1.46
1.38
1.39
1.21
400
1.20
338.3
344.2
295.1
294.2
299.0
200
0.60
LCDs
0
0.00
End of Mar. 2014
End of Mar. 2015
End of Jun. 2015
End of Sep. 2015
End of Dec. 2015
10
・ Inventory was 299.0 billion yen, up 4.8 billion yen compared to the end of September
2015, and ratio vs. monthly sales remained mostly unchanged.
Transition of Interest-Bearing Debt
・ Interest-bearing debt at the end of December 2015 declined by 2.2 billion yen in comparison to
the end of September 2015. The ratio vs. monthly sales decreased from 3.56 months to 3.50 months.
・ Net interest-bearing debt* decreased from 583.6 billion yen at the end of September 2015 to 521.9 billion yen.
(Months)
(Billions of Yen)
1,127.1
1,000
931.8
1,174.4
713.9
5.51
500
0
Net D/E
ratio
974.2
982.4
Interest-bearing
debt on the ratio vs.
monthly sales
Left bar: Interest-bearing debt
Right bar: Net interest-bearing debt
1,093.5
8.00
774.6
715.7
560.4
5.69
4.48
4.20
3.76
End of Mar.
2012
End of Mar.
2013
End of Mar.
2014
End of Mar.
2015
End of Jun.
2015
1.5
7.9
3.7
23.7
2.4
758.7
756.4
583.6
521.9
3.50
3.56
End of Sept.
2015
4.00
End of Dec.
2015
3.5
0.00
3.5
*Net interest-bearing debt: interest-bearing debt – cash, time deposits, and restricted cash
11
・ Interest-bearing debt at the end of December 2015 was 756.4 billion yen, a decline of
2.2 billion yen in comparison to the end of September 2015.
The net interest-bearing debt decreased by 61.7 billion yen to 521.9 billion yen.
・ Through continuous optimization of inventories and a decrease in capital investment,
we will pursue improvement in our cash flow.
Implementation Status of Medium-Term Management Plan
Implementation of the three key strategies announced in the Medium-Term Management Plan is
currently making steady progress.
Medium-Term Management Plan Three Key Strategies
Current Implementation Status
Withdrew from TV production/sales; shifted to
brand license business in the Americas
Ⅰ
Restructure business portfolio
Review of the production structure of the
electronic device business
Fundamental restructuring of LCD business
Reduce fixed costs
Concluding a contract for sales transfer of the head
office, continuing to cut remunerations/salaries and
bonuses of board of directors and employees
Reorganize and strengthen
corporate/governance systems
Transition to virtual company system, promotion
of fundamental restructuring of personnel
system (flat & simple organization)
Ⅱ
Ⅲ
12
・ As shown in the chart, we are making steady progress on the three key strategies
announced in the medium-Term Management Plan.
・ We have been holding negotiations with several companies regarding our initiatives
for management reconstruction, such as fundamental structural reforms of our LCD
business.
As of today, we have narrowed down the candidates to two companies: Innovation
Network Corporation of Japan (INCJ) and Hon Hai Precision Industry Co., Ltd.
Sharp will hold negotiations with each company, aiming to select a definitive partner in
around a month and conclude an agreement then.
Ⅱ. Information by Segment
13
Introduction to Virtual Company System and Vision
Company
Vision
Consumer
Electronics
Innovation by fusions of technology in
Japan and Asia as the main market
Energy
Solutions
Shift to local fit solution business
Current Measures & Achievements
•
•
•
•
Expanding share of 4K TVs in Japan (Oct-Dec 2014: 19.3%→ Oct-Dec 2015: 25.6%)
Proceeding with AIoT Cocoro Project (AI+IoT)
Creating Sharp one-of-a-kind new products (RoBoHoN, Healsio Hot Cook, etc.)
Sharp front load washing machine won the Energy Conservation Award
•
The industry’s first DC hybrid air conditioner, minimizing conversion loss between AC power and
DC power by combining with cloud storage battery, won the Energy Conservation Award
Solar power generation system (Black Solar and Roof-fit design maximizing usage of roof space)
won the Good Design Award
Expanding EPC business in Thailand with establishment of new company
•
•
Business
Solutions
Utilization of current product
line-up and customer basis
&
Global solution business expansion with
proactive investment increase
•
•
•
•
Electronic
Components
and Devices
Shift to value-added segment centered by
sensing business
Display
Devices
Gaining stable customers by utilizing the
technology advantage and expansion of
high-value-added panels
•
•
•
•
Sharp’s MFP caught the early demands for printing services in convenience stores by adopting a
system for Japan’s new social security card system
Expansion of line-up for large displays including 4K 80-inch displays
Aggressive promotions of new businesses, the future key segments; for example, presenting the
laser MEMS projector module at Wearable Expo in Tokyo
Establishment of a system for achieving stable profits by improving production efficiency and
reducing fixed costs
Shift to high-value-added fields with new devices
– Started sales in high potential fields for color night-vision camera
– Obtaining new customers of new sensor products for detecting dust, PM2.5, and
environmental factors
Shift towards highly profitable business structure to expand business in PC, automotive, and
medium-size display fields
Differentiating products from other competitors by one-of-a-kind technology and new product
expansion
Expansion of high-value-added panels (curved Free-Form Display won the Minister of Economy,
Trade and Industry Award in Good Design Awards)
14
・ We are making steady progress in restructuring our business portfolio in line with the
process outlined in our Medium-Term Management Plan.
Consumer Electronics
(Billions of Yen)
FY2015
1Q
Sales
Operating
Income
(margin)
2Q
Change
(Y on Y)
3Q
1Q to 3Q
Accumulated
Total
Change
(Y on Y)
Fiscal year
Forecast
Change
(Y on Y)
201.9
233.6
204.2
-24.8%
639.8
-16.5%
870.0
-11.5%
-11.7
9.7
7.5
-15.9%
5.5
-77.0%
20.0
+4.8%
(-5.8%)
(4.2%)
(3.7%)
(0.9%)
(2.3%)
*Sales include internal sales between segments
FY2015 3Q Results (Y on Y)
• Sales: 24.8% decrease
• Operating income: 1.4 billion yen decrease
Current
Measures &
Achievements
•
•
•
•
FY2015 Fiscal Year Forecast
(vs Oct. 30 Forecast)
• Sales: No change
• Operating income:Upturn to 4 billion yen
Expanding share of 4K TVs in Japan (Oct-Dec 2014: 19.3%→ Oct-Dec 2015: 25.6%*)
Proceeding with AIoT Cocoro Project (AI+IoT)
Creating Sharp one-of-a-kind new products (RoBoHoN, Healsio Hot Cook, etc.)
Sharp front load washing machine won the Energy Conservation Award
*Source: Gfk.
15
・ The Consumer Electronics was formed by integrating the Digital Information Equipment,
Communications, and Health and Environmental Equipment divisions.
・ Despite the strong sales in Japan of 4K TVs and Healsio series products like the Healsio Hot
Cook, overall sales declined due to the shift to a brand license business for the LCD TV
business in Europe. The sales result was down 24.8% year-on-year to 204.2 billion yen.
However, operating income returned to the black. While we went through ongoing aggressive
structural reforms in the LCD TV business, positive measures included benefits from last year’s
structural reforms and an improved model mix.
・ We are integrating AI and IoT in our “AIoT Cocoro Project”. This project aims to generate
products, such as our RoBoHoN, that incorporate proprietary technologies and as close
partners in people’s everyday lives.
・ We are upwardly adjusting our operating income forecast for fiscal 2015 to 20.0 billion yen.
Reasons include the potential of measures such as improving earnings through structural
reforms in the LCD TV business, coming out with new mobile phone models that help boost
sales, and increased sales of Plasmacluster-related products achieved through improvements
to the product mix.
Energy Solutions
(Billions of Yen)
FY2015
1Q
2Q
1Q to 3Q
Change
(Y on Y)
3Q
Accumulated
Total
Change
(Y on Y)
Fiscal year
Forecast
Change
(Y on Y)
Sales
36.8
41.8
34.5
-35.6%
113.3
-42.4%
170.0
-37.2%
Operating
Income
-3.9
1.3
-5.0
-
-7.7
-
-7.0
-
(-10.7%)
(3.2%)
(-14.7%)
(margin)
FY2015 3Q Results (Y on Y)
• Sales: 35.6% decrease
• Operating income: 3.4 billion yen decrease
Current
Measures &
Achievements
(-6.8%)
(-4.1%)
*Sales include internal sales between segments
FY2015 Fiscal Year Forecast (vs Oct. 30 Forecast)
• Sales: Downturn by 10 billion yen
• Operating income:Downturn by 10 billion yen
• The industry’s first* DC hybrid air conditioner, minimizing conversion loss between AC
power and DC power by combining with cloud storage battery, won the Energy
Conservation Award
• Solar power generation system (Black Solar and Roof-fit design maximizing usage of
roof space) won the Good Design Award
• Expanding EPC business in Thailand with establishment of new company
*As of Nov. 27, 2015
16
・ Sales were down by 35.6% year-on-year to 34.5 billion yen. Contributing factors
included lower demand in the residential and industrial sectors in Japan.
・ Operating income was in the red, mainly due to a revaluation of the price of
polysilicon.
・ We will continue efforts on a number of fronts, shifting to solutions businesses as
mentioned in our Medium-Term Management Plan:
- Proceed to promote energy solutions that match the needs of regional markets
- Increase sales of storage batteries and HEMS
- Expand the EPC business in Japan and overseas, for example, through megasolar power plants that help revitalize local communities.
・ As for the fiscal year forecast, we have downwardly adjusted figures for both sales
and operating income due to lower demand in Japan, and to reflect a revaluation of
the price of polysilicon, which was not previously considered in the fiscal year forecast.
Business Solutions
(Billions of Yen)
FY2015
1Q
Sales
2Q
1Q to 3Q
Accumulated
Total
Change
(Y on Y)
Fiscal year
Forecast
Change
(Y on Y)
80.6
91.7
88.8
+3.3%
261.2
+3.6%
360.0
+4.9%
6.8
9.9
7.1
-7.0%
23.8
+1.2%
38.0
+21.4%
(8.4%)
(10.8%)
(8.0%)
Operating
Income
(margin)
Change
(Y on Y)
3Q
FY2015 3Q Results (Y on Y)
• Sales: 3.3% increase
• Operating income: 0.5 billion yen decrease
Current
Measures &
Achievements
(9.1%)
(10.6%)
*Sales include internal sales between segments
FY2015 Fiscal Year Forecast
(vs Oct. 30 Forecast)
• Sales:Upturn by 10 billion yen
• Operating income:Upturn by 2 billion yen
• Sharp’s MFP caught the early demands for printing services in convenience stores by
adopting a program for Japan’s new social security card system.
• Expansion of line-up for large displays including 4K 80-inch displays
• Aggressive promotions of new businesses, the future key segments; for example,
presenting the compact laser MEMS projector module at Wearable Expo in Tokyo
17
・ Sales were up 3.3% year-on-year to 88.8 billion yen. Operating income was down
7.0% to 7.1 billion yen, by reducing sell-in to optimize the channel inventories when
new colour MFP models were introduced. Nevertheless, we maintained steady
profitability.
・ We will continue to boost not just sales of hardware but also solutions and services as
we aim to increase earnings.
・ Looking to a new business that will drive further growth, we are launching products for
the robot business. Here, we are enjoying gradual success; for example, we have
released security robots, concierge robots, and commercial cleaning robots. We will
step up efforts in order to expand our profit base in this business.
・ Regarding the forecast for fiscal 2015, we have upwardly adjusted our sales to 360.0
billion yen and our operating income to 38.0 billion yen.
Sales expansion of supplies contribute to higher sales and earnings, from brisk sales
of new color MFPs—the first model change in three years—.
Additionally the new business to be the positive factor.
Electronic Components and Devices
(Billions of Yen)
FY2015
1Q
Sales
Change
(Y on Y)
3Q
1Q to 3Q
Accumulated
Total
Change
(Y on Y)
Fiscal year
Forecast
Change
(Y on Y)
136.6
114.6
146.4
-10.4%
397.6
+23.1%
530.0
+13.6%
2.8
5.1
1.9
-24.2%
10.0
60.7-fold
18.0
26.6-fold
(2.1%)
(4.5%)
(1.4%)
Operating
Income
(margin)
2Q
FY2015 3Q Results (Y on Y)
• Sales: 10.4% decrease
• Operating income: 0.6 billion yen decrease
Current
Measures &
Achievements
(2.5%)
(3.4%)
*Sales include internal sales between segments
FY2015 Fiscal Year Forecast (vs Oct. 30 Forecast)
• Sales: No change
• Operating income: No change
• Establishment of a system for achieving stable profits by improving production
efficiency and reducing fixed costs
• Shift to high-value-added fields with new devices
– Started sales in high potential fields for color night-vision camera
– Obtaining new customers of new sensor products for detecting dust, PM2.5, and
environmental factors
18
・ Sales decreased by 10.4% year-on-year to 146.4 billion yen.
Operating income was down by 24.2% to 1.9 billion yen. Nevertheless, the effects of
structural reforms starting last year resulted in achieving steady earnings.
・ We are making steady progress regarding our shift to value-added fields centered on the
sensing device business, which we mentioned in our Medium-Term Management Plan.
We are getting more orders from customers in the sensor device field to design-in our
devices—for example, in automotive cameras, security cameras, and proximity sensors.
・ We will continue to expand our flagship business of camera modules, as well as expand
growth areas such new devices and high-value-added devices.
・ Our fiscal 2015 forecast for sales and operating income remains unchanged.
While camera modules sales will decline, we are improving the earnings through sales
expansion of high-value-added sensor devices.
Display Devices
(Billions of Yen)
FY2015
1Q
2Q
3Q
1Q to 3Q
Change
(Y on Y)
Accumulated
Total
Change
(Y on Y)
Fiscal year
Forecast
Change
(Y on Y)
Sales
187.8
203.3
226.2
-5.0%
617.4
-11.7%
870.0
-4.1%
Operating
Income
-13.7
-12.7
-10.7
-
-37.2
-
-30.0
-
(-7.3%)
(-6.3%)
(-4.7%)
(margin)
(-6.0%)
(-3.4%)
*Sales include internal sales between segments
FY2015 3Q Results (Y on Y)
• Sales: 5.0% decrease
• Operating income: 22.2 billion yen decrease
Current
Measures &
Achievements
FY2015 Fiscal Year Forecast (vs Oct. 30 Forecast)
• Sales: No change
• Operating income: No change
• Shift towards highly profitable business structure to expand business in PC, automotive,
and medium-size display fields
• Differentiating products from other competitors by one-of-a-kind technology and
new product expansion
• Expansion of high-value-added panels (curved Free-Form Display won the Minister of
Economy, Trade and Industry Award in Good Design Awards)
19
・ Sales were down by 5.0% year-on-year to 226.2 billion yen. Despite strong sales to large
smartphone customers, there was a decrease in sales and prices of smartphone panels
to China and of TV panels.
・ The operating loss was 10.7 billion yen. This was the result of a decline in sales,
continuous adjustments in utilization rates in plants, and delays in the timing of costreduction measures.
・ Although there was a slight delay in approaching profitability for products made for
Chinese smartphone manufacturers, we are making steady progress in shifting to highvalue-added medium-size LCD panels for tablets and notebook PCs.
・ For fiscal year 2015, our forecasts for sales and operating income remain unchanged,
considering results up to the third quarter. For the fourth quarter, we expect to improve
earnings through an improved product mix with higher sales of in-cell touchscreens and
medium-size LCD panels, a higher factory utilization rate, and cost reductions.
Display Devices
Inadequate product appeal
and cost competitiveness
Sales decline of
Smartphone LCDs
Progress in Profitability Improvement Measures for FY2015 2H
Measures to Improve Earnings in 2H
Progress and Prospects
• Shift away from omnidirectional customer strategy
– Rearrange customer portfolio by focusing resources on priority
customers
– Strengthen user support system centered on new local sales
company in Shenzhen (dedicated support system for each
priority customer)
(No. of models developed: 1.8 times vs. 1H)
• Projects changes due to the Chinese smartphone market
change
• Focusing the resource to medium-size displays from
smartphone panels of highly volatile Chinese manufacturers
(No. of models developed in 2H: 1.3 times vs. 1H)
• Shift to high-value-added areas centered on medium-size displays,
such as notebook PCs and industrial appliances
– Enhance lineup of high-resolution, narrow-bezel, low-powerconsumption models
(Medium-size LCD sales: 1.6 times vs. 1H)
(Market share increase for notebook PCs/Tablets:
1H 14%→2H 25%)
• Strong growth in tablets and automotive applications, but
stagnant in notebook PCs and game consoles
• Strengthen system by shifting resources from smartphone
field
(Medium-size LCD sales in 2H :1.3 times vs. 1H))
• Expansion of medium-size displays and advancement of
new model developments
(Market share increase for notebook PCs/Tablets:
1H 14%→2H 19%)
• Implement thorough structural reforms related to costs across
entire supply chain (Cost reduction ratio: Double vs. 1H)
– Material and processing cost reduction through strategic
development and procurement
– Implement joint cost-reduction projects with priority users
– Strengthen support system for in-cell customers in joint effort
with manufacturers of touchscreen controllers
(No. of in-cell display equipped models:
4 times vs. 1H)
• Cost reduction by generalizing and commonalizing the parts,
despite the smartphone orders decline effect.
(Cost reduction ratio in 2H : Same as 1H)
• Major users newly adapted Sharp’s in-cell display
• Accelerating the business of the new competitive in-cell
display
(No. of in-cell display equipped models in 2H:
3 times vs. 1H)
20
・ One effort we are focusing on is a change in our business portfolio through a shift
from small panels for smartphones and large panels for TVs, which are both lowearnings areas, to medium-size panels for products such as PCs, automotive devices,
and industrial appliances.
To this end, as we announced in the press release today, we will conduct a capital
investment in order to increase production capacity and further improve the
performance of small- medium-size high-value added LCD panels at its Kameyama
Plant No. 2.
・ We will also proceed with cost reductions and carry out structural reforms with the
goal of staying in the black long-term.
Ⅲ. Supplementary Data
21
・ Sharp has been in a difficult business environment for some time now, but we will
accelerate our structural reform efforts and work towards achieving the targets we
have announced for fiscal 2015.
Sales and Operating Income by Segment
(Billions of Yen)
1H
Consumer
Electronics
FY2015
Sales
Fiscal
2H
Year
Forecast
Forecast
Change
(Y on Y)
1H
FY2015
Operating Income
Fiscal
2H
Change
Year
Forecast
(Y on Y)
Forecast
435.5
434.4
870.0
-11.5%
Consumer
Electronics
-1.9
(-0.5%)
21.9
(5.1%)
20.0
(2.3%)
+4.8%
Energy
Solutions
78.7
91.2
170.0
-37.2%
Energy
Solutions
-2.6
(-3.4%)
-4.3
(-4.8%)
-7.0
(-4.1%)
-
Business
Solutions
172.3
187.6
360.0
+4.9%
Business
Solutions
16.7
(9.7%)
21.2
(11.3%)
38.0
(10.6%)
+21.4%
Electronic
Components
and Devices
251.2
278.7
530.0
+13.6%
Electronic
Components
and Devices
8.0
(3.2%)
9.9
(3.6%)
Display
Devices
391.2
478.7
870.0
-4.1%
-26.4
(-6.8%)
-3.5
(-0.7%)
-30.0
(-3.4%)
-
Subtotal
1,329.0
1,470.9
2,800.0
-5.7%
-6.3
(-0.5%)
45.3
(3.1%)
39.0
(1.4%)
-
-49.3
-50.6
-100.0
-
-18.8
-10.1
-29.0
1,279.6
1,420.3
2,700.0
-3.1%
-25.1
(-2.0%)
35.1
(2.5%)
10.0
(0.4%)
Adjustments
Total
Display Devices
Subtotal
Adjustments
Total
18.0 26.6-fold
(3.4%)
-
*Figures within parentheses indicate operating margin.
22
Quarterly Sales and Operating Income by Segment
(Billions of Yen)
FY2015
Sales
1Q
Consumer
Electronics
2Q
FY2015
Operating Income
3Q
4Q
Forecast
1Q
Consumer
Electronics
4Q
Forecast
2Q
3Q
-11.7
(-5.8%)
9.7
(4.2%)
7.5
(3.7%)
14.4
(6.3%)
201.9
233.6
204.2
230.1
Energy
Solutions
36.8
41.8
34.5
56.7
Energy
Solutions
-3.9
(-10.7%)
1.3
(3.2%)
-5.0
(-14.7%)
0.7
(1.3%)
Business
Solutions
80.6
91.7
88.8
98.7
Business
Solutions
6.8
(8.4%)
9.9
(10.8%)
7.1
(8.0%)
14.1
(14.3%)
Electronic
Components
and Devices
136.6
114.6
146.4
132.3
Electronic
Components
and Devices
2.8
(2.1%)
5.1
(4.5%)
1.9
(1.4%)
7.9
(6.0%)
Display
Devices
187.8
203.3
226.2
252.5
Display Devices
-13.7
(-7.3%)
-12.7
(-6.3%)
-10.7
(-4.7%)
7.2
(2.9%)
Subtotal
643.9
685.1
700.3
770.5
Subtotal
-19.7
(-3.1%)
13.3
(2.0%)
0.8
(0.1%)
44.4
(5.8%)
Adjustments
-25.6
-23.7
-36.9
-13.6
Adjustments
-9.0
-9.7
-4.7
-5.4
Total
618.3
661.3
663.3
756.9
Total
-28.7
(-4.7%)
3.5
(0.5%)
-3.8
(-0.6%)
39.0
(5.2%)
*Figures within parentheses indicate operating margin.
23
Sales of Main Products
(Billions of Yen)
FY2014
1H
FY2015
Fiscal Year
2H
1H
2H Forecast
Fiscal Year
Forecast
Change
(Y on Y)
189.1
180.8
370.0
154.6
155.3
310.0
-16.2%
3.60
3.43
7.03
2.99
2.90
5.90
-16.2%
85.9
107.6
193.6
83.5
76.4
160.0
-17.4%
2.41
3.15
5.56
2.26
1.73
4.00
-28.1%
Refrigerators
47.9
45.6
93.5
48.2
48.7
97.0
+3.7%
Air Conditioners
42.1
21.3
63.5
36.0
27.9
64.0
+0.7%
Copiers / Printers
73.4
78.5
152.0
78.2
81.7
160.0
+5.2%
103.5
235.5
339.1
198.9
231.0
430.0
+26.8%
LCD TVs
Unit (million units)
Mobile Phones
Unit (million units)
CCD / CMOS Imagers
24
Sales of Main Products by Quarter
(Billions of Yen)
FY2014
1Q
FY2015
3Q
85.7
103.3
104.3
76.5
64.1
90.5
81.8
73.5
1.73
1.86
1.74
1.68
1.41
1.58
1.72
1.17
49.6
36.2
64.1
43.5
44.1
39.4
27.4
48.9
1.23
1.17
1.79
1.35
1.01
1.25
0.54
1.18
Refrigerators
23.9
24.0
22.1
23.4
23.0
25.1
21.1
27.5
Air Conditioners
23.6
18.4
8.0
13.3
20.6
15.3
8.2
19.7
Copiers / Printers
34.3
39.1
38.2
40.3
37.2
40.9
25.0
56.7
CCD / CMOS Imagers
38.8
64.7
129.3
106.2
110.8
88.0
122.5
108.4
LCD TVs
Unit (million units)
Mobile Phones
Unit (million units)
4Q
1Q
2Q
4Q
Forecast
2Q
3Q
25
Capital Investment and Depreciation, etc.
(Billions of Yen)
FY2014
1H
FY2015
2H
1H
Fiscal Year
2H Forecast
Fiscal Year
Forecast
Change
(Y on Y)
Capital
Investment
31.2
31.3
62.6
20.9
39.0
60.0
-4.2%
LCDs
12.9
19.0
31.9
8.9
19.0
28.0
-12.4%
49.9
52.6
102.6
33.7
46.2
80.0
-22.0%
65.8
75.1
141.0
68.6
71.3
140.0
-0.7%
Depreciation
and
Amortization
R&D
Expenditures
(Yen)
Exchange Rate
FY2014
1H
FY2015
2H
1H
Fiscal Year
2H Forecast
US Dollar
102.05
115.83
108.94
120.80
120.00
Euro
137.41
137.14
137.28
133.57
135.00
26
Capital Investment and Depreciation, etc. by Quarter
(Billions of Yen)
FY2014
1Q
Capital
Investment
3Q
4Q
1Q
2Q
4Q
Forecast
3Q
14.5
16.6
9.3
22.0
9.7
11.1
8.2
30.8
5.7
7.1
4.3
14.7
3.8
5.1
4.9
14.1
24.4
25.5
26.5
26.0
18.0
15.7
17.0
29.2
34.4
31.4
38.1
37.0
36.3
32.3
33.5
37.8
LCDs
Depreciation
and
Amortization
R&D
Expenditures
2Q
FY2015
(Yen)
Exchange
Rate
FY2014
FY2015
1Q
2Q
3Q
4Q
1Q
2Q
3Q
US Dollar
101.16
102.93
113.55
118.10
120.37
121.24
120.51
Euro
138.56
136.26
141.59
132.68
132.66
134.48
131.46
27
Overseas Sales by Region
Top: Sales (Billions of yen)
Bottom: Composition ratio (%)
FY2014
1H
2H
FY2015
Fiscal Year
1H
165.6
19.9%
155.2
15.8%
320.9
17.7%
160.0
18.0%
71.4
8.6%
71.0
7.2%
142.5
7.8%
69.9
7.8%
China
487.8
58.6%
653.0
66.3%
1,140.8
62.8%
554.3
62.2%
Other
107.7
12.9%
105.6
10.7%
213.4
11.7%
106.4
12.0%
Total
832.7
100.0%
985.1
100.0%
1,817.8
100.0%
890.7
100.0%
The
Americas
Europe
28