Presentation Material (PDF:570KB)

Consolidated Financial Results for
the First Quarter Fiscal 2014
Ⅰ. Financial Results for 1Q Fiscal 2014
Financial Results Forecast for Fiscal 2014
Ⅱ. Information by Product Group
Ⅲ. Supplementary Data
SHARP CORPORATION
August 1, 2014
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 © 2014 SHARP CORPORATION, All Rights Reserved.
Ⅰ. Financial Results for 1Q Fiscal 2014
Financial Results Forecast for Fiscal 2014
1
Financial Results for 1Q Fiscal 2014
・ Net sales were up 1.9% to 619.7 billion yen and operating income was up 55.0% to 4.6 billion yen
compared with 1Q FY2013
・ Net income improved significantly compared with 1Q FY2013
(Billions of Yen)
FY2013
FY2014
1Q
Net Sales
Operating Income
(margin)
Net Income
(margin)
Change
(Y on Y)
1Q
607.9
Difference
(Y on Y)
619.7
+1.9%
+11.8
3.0
4.6
+55.0%
+1.6
(0.5%)
(0.8%)
-
+16.1
-17.9
-1.7
(-3.0%)
(-0.3%)
2
Net Sales / Operating Income Transition Forecast by Quarter (Relist)
・ 1Q FY2014 is expected to see a decrease in net sales compared to 4Q FY2013 in addition to sluggish
operating income due to seasonal fluctuations and a backlash from the last-minute demand following
the hike in consumption tax
Net Sales
(%)
Operating Income
(Billions of Yen)
(Billions of Yen)
3,000
900
60
12.0
800
40
8.0
700
20
4.0
600
0
0.0
500
-20
-4.0
400
-40
-8.0
300
-60
-12.0
200
-80
-16.0
100
-100
-20.0
100
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY2012
FY2013
-120
-24.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY2014
(Forecast)
FY2012
FY2013
FY2014
(Forecast)
3
Other Income (Expenses)
・ Other income (expenses) improved
・Main items in other income (expenses):
-Reversal of provision for loss on litigation, due to the progress of civil lawsuits for TFT LCDs
-Settlement, which is expenses related to structural reform of thin-film solar cell business in Europe
(Billions of Yen)
FY2013
FY2014
1Q
Difference
(Y on Y)
1Q
3.0
4.6
+1.6
-16.8
-6.0
+10.8
Reversal of provision for loss on litigation
0.0
+19.2
+19.2
Settlement
0.0
-14.3
-14.3
-4.1
-0.4
+3.6
-17.9
-1.7
+16.1
Operating Income
Other Income (Expenses)
Income taxes, etc.
Net Income
4
Financial Results Forecast for Fiscal 2014
・ 1Q FY2014 results progressed smoothly, with forecast figures announced previously remaining
unchanged based on current business conditions and future outlook
(Billions of Yen)
FY2014
1H
2H
Change
2Q
Change
Change
Change Full Year Change
(Y on Y) Forecast (Y on Y) Forecast (Y on Y) Forecast (Y on Y) Forecast (Y on Y)
1Q
Net Sales
619.7
+1.9%
830.2
+13.1%
1,450.0
+8.0%
1,550.0
-2.2%
3,000.0
+2.5%
Operating Income
4.6
+55.0%
30.3
-1.5%
35.0
+3.5%
65.0
-13.0%
100.0
-7.9%
Net Income
-1.7
-
6.7
-50.3%
5.0
-
25.0
+57.3%
30.0
2.6-fold
5
Consolidated Balance Sheets
・ Inventory increased and cash and time deposits decreased due to seasonal factor
・ The equity ratio increased from 8.9% to 9.4% at end of Mar. 2014
(Billions of Yen)
FY2013
End of Jun.
2013
FY2013
FY2014
End of Mar.
2014
End of Jun.
2014
Cash, time deposits
and restricted cash
154.6
379.5
358.9
Notes and accounts
receivable
516.0
568.8
517.1
Inventories
356.2
295.1
315.5
Other current assets
172.7
130.6
120.8
1,199.6
1,374.2
1,312.5
Plant and Equipment
554.2
519.7
510.6
Investments and Other
Asset
298.0
287.5
289.2
0.3
0.1
0.1
2,052.2
2,181.6
2,112.5
End of Jun.
2013
740.4
793.1
809.8
Notes and accounts payable
425.4
409.9
395.4
Other current liabilities
287.9
348.5
298.4
1,453.7
1,551.6
1,503.6
465.4
422.8
399.7
Liabilities
1,919.2
1,974.5
1,903.4
Net Assets
133.0
207.1
209.0
2,052.2
2,181.6
2,112.5
6.0%
8.9%
9.4%
Long-term Liabilities
Deferred Assets
Total assets
End of Jun.
2014
Short-term borrowings
Current Liabilities
Current Assets
FY2014
End of Mar.
2014
Total liabilities and
net assets
Equity Ratio
6
Transition of Interest-bearing Debt
・ Interest-bearing debt was 1,092.1 billion yen at end of Jun. 2014, decreased 1.3 billion yen from end of Mar.
2014, and the ratio vs. monthly sales has risen from 4.48 months to 5.29 months due to sales decrease from
seasonal fluctuations
・ Net interest-bearing debt* increased to 733.2 billion yen from 713.9 billion yen at end of Mar. 2014
(Billions of Yen)
(Months)
1,127.1
1,000
931.8
829.7
1,174.4
1,093.5
982.4
713.9
703.9
599.3
Interestbearing debt
500
315.1
8.00
847.2
820.1
5.51
492.8
3.57
Net interestbearing debt
2.47
5.69
471.7
3.50
1,092.1
733.2
5.29
4.00
4.48
3.36
Interest-bearing debt
on the ratio vs.
monthly sales
0
Net
D/E ratio
0.00
End Mar.
2008
End Mar.
2009
End Mar.
2010
End Mar.
2011
End Mar.
2012
End Mar.
2013
End Mar.
2014
End Jun.
2014
0.3
0.5
0.5
0.6
1.5
7.9
3.7
3.7
* Net interest-bearing debt: interest-bearing debt - cash, time deposits and restricted cash
7
Ⅱ. Information by Product Group
8
Sales by Product Group
(Billions of Yen)
FY2013
FY2014
Full Year
1Q
Revised
Full Year
Forecast
Change
(Y on Y)
1Q
FY2014
Previous Full
Year Forecast
Change
(Y on Y)
Digital Information
Equipment
158.9
733.3
168.6
+6.1%
780.0
+6.4%
780.0
Health and
Environmental Equipment
82.3
326.8
82.1
-0.3%
360.0
+10.1%
360.0
Energy Solutions
84.3
439.0
69.0
-18.1%
290.0
-33.9%
290.0
Business Solutions
77.6
318.8
79.2
+2.1%
340.0
+6.6%
340.0
403.3
1,818.1
399.1
-1.0%
1,770.0
-2.6%
1,770.0
LCDs
193.8
991.0
206.9
+6.8%
1,000.0
+0.9%
1,000.0
Electronic Devices
61.2
326.3
58.9
-3.8%
430.0
+31.7%
450.0
Device Business
255.0
1,317.4
265.9
+4.2%
1,430.0
+8.5%
1,450.0
Sub Total
658.3
3,135.6
665.0
+1.0%
3,200.0
+2.1%
3,220.0
Product Business
Adjustments
-50.4
-208.4
-45.3
-
-200.0
-
-220.0
Total
607.9
2,927.1
619.7
+1.9%
3,000.0
+2.5%
3,000.0
*Sales of each product group include internal sales between segments (Product Business / Device Business)
9
Operating Income by Product Group
(Billions of Yen)
FY2013
1Q
FY2014
Full Year
Change
(Y on Y)
1Q
-
Digital Information
Equipment
Health and
Environmental Equipment
-1.3
(-0.9%)
6.4
(7.8%)
12.8
(1.8%)
21.0
(6.4%)
2.6
(1.6%)
3.1
(3.9%)
Energy Solutions
6.8
(8.1%)
7.5
(9.8%)
32.4
(7.4%)
30.5
(9.6%)
0.1
(0.3%)
7.7
(9.8%)
-97.3%
19.4
(4.8%)
-9.5
(-4.9%)
0.1
(0.2%)
-9.3
(-3.7%)
10.0
(1.5%)
-7.0
96.8
(5.3%)
41.5
(4.2%)
3.2
(1.0%)
44.8
(3.4%)
141.6
(4.5%)
-33.0
13.7
(3.4%)
2.1
(1.0%)
-3.5
(-5.9%)
-1.3
(-0.5%)
12.3
(1.9%)
-7.6
-29.6%
3.0
(0.5%)
108.5
(3.7%)
4.6
(0.8%)
Business Solutions
Product Business
LCDs
Electronic Devices
Device Business
Sub Total
Adjustments
Total
FY2014
Revised
Full Year
Forecast
-50.7%
+1.8%
+22.1%
+55.0%
Previous Full
Year Forecast
Change
(Y on Y)
20.0
(2.6%)
19.0
(5.3%)
+55.8%
3.0
(1.0%)
26.0
(7.6%)
-90.7%
68.0
(3.8%)
55.0
(5.5%)
7.0
(1.6%)
62.0
(4.3%)
130.0
(4.1%)
-30.0
-29.8%
100.0
(3.3%)
-9.6%
-14.9%
+32.2%
2.1-fold
+38.2%
-8.2%
-7.9%
20.0
(2.6%)
19.0
(5.3%)
-5.0
(-1.7%)
26.0
(7.6%)
60.0
(3.4%)
55.0
(5.5%)
15.0
(3.3%)
70.0
(4.8%)
130.0
(4.0%)
-30.0
100.0
(3.3%)
*The percentage figures noted in brackets show operating margin
10
Digital Information Equipment <Total>
(Billions of Yen)
FY2013
Full Year
1Q
Sales
FY2014
158.9
Operating Income
(margin)
733.3
Full Year
Forecast
Change
(Y on Y)
1Q
168.6
+6.1%
-
-1.3
12.8
2.6
(-0.9%)
(1.8%)
(1.6%)
Change
(Y on Y)
780.0
+6.4%
20.0
+55.8%
(2.6%)
*Sales of each product group include internal sales between segments (Product Business / Device Business)
[ 1Q FY2014 Results ]
・ Secured an improvement due to the expansion of LCD TV sales overseas and the increase in sales of tablet
terminals even though the units sold and amounts recorded for mobile phones were lower than 1Q FY2013
・ Put back into the black by introducing new products such as smartphones equipped with IGZO LCDs on the
market and reducing costs
[ Onward Actions ]
・ Strengthen the sales of large LCD TVs featuring high-definition capability and promote working with mobile
phone operators to introduce new distinctive models.
11
Digital Information Equipment
<LCD TVs, Mobile Phones>
(Billions of Yen; Millions of Units)
FY2013
FY2014
Full Year
1Q
Change
(Y on Y)
1Q
Full Year
Forecast
Change
(Y on Y)
Amt
80.3
413.8
85.7
+6.7%
440.0
+6.3%
Unit
1.56
7.81
1.73
+11.0%
8.20
+4.9%
Amt
50.2
205.5
49.6
-1.2%
220.0
+7.0%
Unit
1.31
5.51
1.23
-5.7%
6.30
+14.3%
LCD TVs
Mobile Phones
[ 1Q FY2014 Results ]
LCD TVs: Sales expanded overseas especially in China, although sales amount in Japan were below 1Q FY2013.
Exceeded both units sold and amounts recorded in 1Q FY2013.
Mobile Phones: Sold less units and recorded lower amounts than 1Q FY2013 due to increased competition with
overseas mobile phone manufacturers
[ Onward Actions ]
LCD TVs: Utilize a strategy to focus on large-size and high-definition LCD TVs such as 4K models and Quattron
Pros, while developing products with features tailored to regional characteristics and promoting
structural reform in Europe
Mobile Phones: Tap the demand for feature phones market and introduce distinctive smartphones to boost the
domestic market share
12
Health and Environmental Equipment
(Billions of Yen)
FY2013
Full Year
1Q
Sales
FY2014
82.3
Operating Income
(margin)
326.8
Full Year
Forecast
Change
(Y on Y)
1Q
82.1
-0.3%
-50.7%
6.4
21.0
3.1
(7.8%)
(6.4%)
(3.9%)
Change
(Y on Y)
360.0
+10.1%
19.0
-9.6%
(5.3%)
*Sales of each product group include internal sales between segments (Product Business / Device Business)
[ 1Q FY2014 Results ]
・ Secured sales similar to 1Q FY2013 despite a backlash from the last-minute demand generated by the
consumption tax increase
・ Deteriorated profitability of imported products due to the yen depreciation lowered operating margin
[ Onward Actions ]
・ Respond to slow demand due to the backlash from the consumption tax increase by creating products that
arouse new demand and introducing products with unique features on the market
・ Expand the business by enhancing sales structure and progressing local production for local consumption
centered on ASEAN
13
Energy Solutions
(Billions of Yen)
FY2013
Full Year
1Q
Sales
Operating
Income
(margin)
(Reference)
Volume (Solar Cells)
(MW)
FY2014
84.3
439.0
Change
(Y on Y)
1Q
69.0
-18.1%
-97.3%
6.8
32.4
0.1
(8.1%)
(7.4%)
(0.3%)
FY2014
Revised
Full Year
Forecast
Change
(Y on Y)
290.0
-33.9%
3.0
-90.7%
(1.0%)
Previous
Full Year
Forecast
290.0
-5.0
(-1.7%)
*Sales of each product group include internal sales between segments (Product Business / Device Business)
343
2,098
360
+4.8%
2,000
-4.7%
2,000
[ 1Q FY2014 Results ]
・ Favorable results for industrial applications including mega-solar power generation in Japan
・ Deteriorated earnings due to a significant drop in sales of domestic residential applications and decrease in
sales of overseas developer business
[ Onward Actions ]
・ Work to transform business models by expanding the EPC sales ratio and shift to IPP/O&M and other energy
solution business
・ Work to improve profit by steadily promoting structural reform in Europe
14
Business Solutions
(Billions of Yen)
FY2013
Full Year
1Q
Sales
77.6
Operating Income
(margin)
FY2014
Full Year
Forecast
Change
(Y on Y)
1Q
318.8
79.2
+2.1%
+1.8%
7.5
30.5
7.7
(9.8%)
(9.6%)
(9.8%)
Change
(Y on Y)
340.0
+6.6%
26.0
-14.9%
(7.6%)
*Sales of each product group include internal sales between segments (Product Business / Device Business)
[ 1Q FY2014 Results ]
・ In addition to expanding color MFPs overseas, information displays also had favorable results in Japan and
overseas
[ Onward Actions ]
・ Continue to maintain profit stability even though operating income is anticipated to decrease due to
competitive environment intensification
・ Expand convenience store print services and introduce new services
・ Expand high-speed MFPs in developed countries and strengthen sales of color MFPs in emerging countries
・ Increase the lineup of digital signage mostly in large-size models
・ Develop new customers by offering solution proposals through combinations of MFPs and displays
15
LCDs
(Billions of Yen)
FY2013
Full Year
1Q
Sales
193.8
Operating Income
(margin)
FY2014
991.0
Full Year
Forecast
Change
(Y on Y)
1Q
206.9
+6.8%
-
-9.5
41.5
2.1
(-4.9%)
(4.2%)
(1.0%)
Change
(Y on Y)
1,000.0
+0.9%
55.0
+32.2%
(5.5%)
*Sales of each product group include internal sales between segments (Product Business / Device Business)
[ 1Q FY2014 Results ]
・ Expanded small- and medium-size LCDs for smartphones, especially for major clients
・ Increased the small- and medium-size LCD production ratio at the Kameyama No.2 Plant from 28% in 4Q
FY2013 to 35%
・ Secured being in the black by increasing the mixed sales ratio of high-margin small- and medium-size LCDs
and reducing costs
[ Onward Actions ]
・ Expand the small- and medium-size LCD production ratio at the Kameyama No.2 Plant and increase the inch
size of large LCD panels
・ Work towards the strong demands of Chinese clients and promote design activities
・ Propose solutions through combinations of electronic devices and LCDs that meet customer needs
16
Electronic Devices
(Billions of Yen)
FY2013
Full Year
1Q
Sales
61.2
Operating Income
(margin)
FY2014
326.3
Revised Full
Year Forecast
Change
(Y on Y)
1Q
58.9
-3.8%
-
0.1
3.2
-3.5
(0.2%)
(1.0%)
(-5.9%)
FY2014
Change
(Y on Y)
430.0
+31.7%
7.0
2.1-fold
(1.6%)
Previous
Full Year
Forecast
450.0
15.0
(3.3%)
*Sales of each product group include internal sales between segments (Product Business / Device Business)
[ 1Q FY2014 Results ]
・ Reduced sales of LED devices and ICs for major clients
・ Recorded in the red due mainly to mix deterioration of clients and models
[ Onward Actions ]
・Use the following measures to improve profitability
- Strengthen offering solution proposals through combinations of LCDs and electronic devices in order to
expand sales of camera modules and proximity and luminance sensors for mobile devices
- Strengthen sales of device features such as LED devices and touchscreen systems
- Enhance application development of sensing devices to be applied in home, monitoring (security), in-vehicle
and medical fields, etc.
17
Conclusion
・1Q FY2014 results progressed smoothly and the
Medium-Term Management Plan is going on track
・No uncertainty about a 100 billion yen straight bond
redemption arriving in September
・We plan to stay on the offensive and fulfill the
Medium-Term Management Plan, to move toward
realizing "Recovery and Growth"
18
Ⅲ. Supplementary Data
19
Sales by Product Group
(Billions of Yen)
FY2013
1Q
Digital Information
Equipment
Health and
Environmental Equipment
2Q
FY2014
3Q
4Q
1Q
Change
(Q on Q)
Change
(Y on Y)
158.9
175.6
216.9
181.8
168.6
-7.2%
+6.1%
82.3
77.5
82.1
84.9
82.1
-3.3%
-0.3%
Energy Solutions
84.3
83.9
108.5
162.1
69.0
-57.4%
-18.1%
Business Solutions
77.6
80.7
77.1
83.3
79.2
-4.8%
+2.1%
403.3
417.9
484.7
512.2
399.1
-22.1%
-1.0%
LCDs
193.8
284.7
277.5
234.9
206.9
-11.9%
+6.8%
Electronic Devices
61.2
86.5
106.4
72.0
58.9
-18.2%
-3.8%
Device Business
255.0
371.3
384.0
307.0
265.9
-13.4%
+4.2%
Product Business
Sub Total
658.3
789.2
868.7
819.2
665.0
-18.8%
+1.0%
Adjustments
-50.4
-55.1
-53.4
-49.3
-45.3
-
-
Total
607.9
734.1
815.2
769.8
619.7
-19.5%
+1.9%
*Sales of each product group include internal sales between segments (Product Business / Device Business)
20
Operating Income by Product Group
(Billions of Yen)
FY2013
Digital Information
Equipment
Health and
Environmental Equipment
Energy Solutions
Business Solutions
Product Business
LCDs
Electronic Devices
Device Business
Sub Total
Adjustments
Total
1Q
2Q
-1.3
(-0.9%)
6.4
(7.8%)
6.8
(8.1%)
7.5
(9.8%)
19.4
(4.8%)
-9.5
(-4.9%)
0.1
(0.2%)
-9.3
(-3.7%)
10.0
(1.5%)
-7.0
3.0
(0.5%)
2.2
(1.3%)
3.2
(4.2%)
3.0
(3.7%)
8.3
(10.3%)
16.8
(4.0%)
18.1
(6.4%)
5.1
(5.9%)
23.3
(6.3%)
40.1
(5.1%)
-9.3
30.8
(4.2%)
FY2014
3Q
8.4
(3.9%)
5.6
(6.9%)
5.9
(5.5%)
6.1
(8.0%)
26.2
(5.4%)
26.0
(9.4%)
4.2
(4.0%)
30.2
(7.9%)
56.4
(6.5%)
-8.8
47.6
(5.8%)
Change
(Q on Q)
4Q
1Q
3.4
(1.9%)
5.6
(6.7%)
16.5
(10.2%)
8.4
(10.2%)
34.1
(6.7%)
6.9
(2.9%)
-6.1
(-8.6%)
0.7
(0.2%)
34.8
(4.3%)
-7.8
27.0
(3.5%)
2.6
(1.6%)
3.1
(3.9%)
0.1
(0.3%)
7.7
(9.8%)
13.7
(3.4%)
2.1
(1.0%)
-3.5
(-5.9%)
-1.3
(-0.5%)
12.3
(1.9%)
-7.6
4.6
(0.8%)
Change
(Y on Y)
-24.7%
-
-44.0%
-50.7%
-98.9%
-97.3%
-8.7%
+1.8%
-59.9%
-29.6%
-69.4%
-
-
-
-
-
-64.7%
+22.1%
-82.8%
+55.0%
*The percentage figures noted in brackets show operating margin
21
Sales of Main Products
(Billions of Yen)
FY2013
1Q
LCD TVs
2Q
3Q
FY2014
4Q
Full Year
1Q
Change
(Y on Y)
Full Year
Forecast
Change
(Y on Y)
80.3
113.7
118.8
100.9
413.8
85.7
+6.7%
440.0
+6.3%
Unit (million units)
1.56
2.12
2.18
1.94
7.81
1.73
+11.0%
8.20
+4.9%
Mobile Phones
50.2
37.2
69.2
48.8
205.5
49.6
-1.2%
220.0
+7.0%
Unit (million units)
1.31
1.11
1.77
1.30
5.51
1.23
-5.7%
6.30
+14.3%
Refrigerators
22.9
24.6
23.2
24.9
95.7
23.9
+4.4%
106.0
+10.7%
Air Conditioners
26.1
16.4
10.9
15.4
68.9
23.6
-9.4%
75.0
+8.8%
Copiers / Printers
36.4
29.8
31.6
36.5
134.4
34.3
-5.7%
147.0
+9.4%
CCD / CMOS
Imagers
34.8
49.6
84.2
49.3
218.1
38.8
+11.3%
310.0
+42.1%
22
Other
(Billions of Yen)
FY2013
1Q
Capital
Investment
2Q
3Q
FY2014
4Q
Full Year
Change
(Y on Y)
1Q
Full Year
Forecast
Change
(Y on Y)
10.5
10.9
11.2
16.6
49.4
14.5
+38.1%
80.0
+61.8%
4.3
3.9
5.2
9.9
23.5
5.7
+32.1%
35.0
+48.7%
Depreciation
and
Amortization
29.9
28.7
27.7
28.1
114.6
24.4
-18.3%
120.0
+4.7%
R&D
Expenditures
35.4
30.0
35.9
30.6
132.1
34.4
-2.7%
140.0
+6.0%
LCDs
Exchange Rate
FY2013
FY2014
1Q
2Q
3Q
4Q
Full Year
U.S. Dollar
¥97.76
¥97.96
¥99.46
¥101.78
¥99.24
¥101.16
¥104.00
Euro
¥127.46
¥129.57
¥135.20
¥139.29
¥132.88
¥138.56
¥138.00
1Q
Full Year Forecast
23