*Amounts less than 100 million yen shown in this presentation material have been rounded down. Copyright 2011 SHARP CORPORATION, All Rights Reserved.

Transcription

1 Business Strategy for FY211 Ⅰ.. Forecast for FY211 Financial Results Ⅱ.. LCD Business Restructuring SHARP CORPORATION Mikio Katayama, President June 3, 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 (particularly various impacts arising from the Great East Japan Earthquake) (2) Sudden, rapid fluctuations in demand for Sharp s products and services, as well as intense price competition (3) Changes in exchangerates(particularly between the yen and the U.S. dollar, the euro and other currencies) (4) Sharp s ability to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products and services (5) Regulations such as trade restrictions in other countries (6) Litigation and other legal proceedings against Sharp *Amounts less than 1 million yen shown in this presentation material have been rounded down. Copyright 211 SHARP CORPORATION, All Rights Reserved. 2 1

2 Ⅰ. Forecast for FY211 Financial Results 3 Ⅰ. Forecast for FY211 Financial Results FY21 FY211 (Billions of yen) Results Change Forecast Change Net Sales 3, % 3,5. +.9% Operating Income % % Net Income % % Capital Investment % % Depreciation and % % Amortization R&D Expenditures % % Foreign Exchange Rates (Average) (Yen) US$ Euro

3 Focus of FY211 Financial Results Forecast -Steep profit decline in 1Q due mainly to suspension of the glass input at large-size LCD plants -Work to improve profit with 1Q as bottom by pushing ahead with LCD business restructuring 5 Forecast for FY211(1Q/2Q/1 st Half/2 nd Half) Forecast for FY211 (Billions of yen) 1Q 2Q 1 st Half Change (Y on Y) 2 nd Half Change (Y on Y) Net Sales , % 1, % Operating Income % % Net Income % 6 3

4 Extraordinary Items in Other Expenses Forecast for FY211 (Billions of yen) 1Q 2Q 1 st Half 2 nd Half Change from 1 st Half Restructuring charges (a) Operating loss in large-size LCDs (b) Total (a+b) Ⅱ. Information by Product Group Forecast for Main Products & Devices FY21 FY211 Results Change Forecast Change (Billions of Yen) Change LCD Color TVs % % (Millions of units) % % +.17 Mobile Phones % % (Millions of % 9 14% 14 units) % % -.14 LCDs * 1, % 1,2. -.7% -6.9 Solar Cells * % % (MW) 1, % 1, % +458 *Including internal sales between segments (Consumer/Information Products and Electronic Components). 8 4

5 Sales by Product Group FY21 FY211 Results Change Forecast Change (Billions of yen) Change Audio-Visual and Communication Equipment 1, % 1, % Health and Environmental Equipment % % +1.1 Information Equipment % % +6. Consumer/Information Products 1, % 1, % LCDs 1, % 1,2. -.7% -6.9 Solar Cells % % Other Electronic Devices % % Electronic Components 1, % 1, % Sub Total 3, % 3, % Adjustments Total 3, % 3,5. +.9% +28. Domestic Sales 1, % 1, % Overseas Sales 1, % 1, % Sales of each product group include internal sales between segments (Consumer/Information Products and Electronic Components). 9 FY211 Analysis of Sales Increase/Decrease Other electronic devices including LEDs, CCD/CMOS imagers Solar cells Increase 2,67 Overseas LCD TVs External sales of mobile LCDs Smartphonerelated sales Decrease Domestic LCD TVs External sales of large-size LCDs Mobile phones Others 1 5

6 Operating Income by Product Group Results FY21 Ratio to net sales Change Forecast FY211 Ratio to net sales Change (Billions of yen) Change Audio-Visual and Communication Equipment % % % -43.6% Health and Environmental Equipment % +22.7% % +25.3% +5. Information Equipment % -12.7% % +24.% +4.4 Consumer/Information Products % +49.3% % -1.4% -8.2 LCDs % -6.8% % +87.3% Solar Cells 2.1.8% -58.7% % +28.% +5.8 Other Electronic Devices % -1.% % +38.7% +4.4 Electronic Components % -12.4% % +82.2% Sub Total % +24.7% % +15.5% +17. Adjustments Total % +52.% % +22.9% Ⅱ. LCD Business Restructuring 12 6

7 Concept of LCD Business Restructuring Respond to change in LCD market -Shift to growing markets- While maximizing efficiency in use of management resources, how do we: -improve profit of large-size LCDs? -respond to growing small- and medium-size LCD demand? Optimize production framework Shift from large-size to small- and medium-size Create large-size LCD TV & non-tv market Shift to growing markets in large-size LCDs 13 Business Area Targeted by Sharp Added d Value For mobile devices Smartphones, tablet terminals, game devices, in-vehicle use For PCs For widespread- size TVs For large-size TVs & non-tvs Sharp s one-of of-a- kind technology Sharp s one-of of-a-kind technology 14 7

8 Strengthen Mobile LCDs Added d Value For mobile devices Smartphones, tablet terminals, game devices, in-vehicle use For PCs For widespread- size TVs For large-size TVs & non-tvs Sharp s one-of of-a- kind technology Sharp s one-of of-a-kind technology 15 Strengthen Mobile LCDs Produce small- and medium-size LCDs (mobile LCDs) at Kameyama Plants Kameyama No.1 Kameyama No

9 Advantage of Sharp s Mobile LCDs CG Silicon LCDs B ight & high resolution as gravure printing Super-high resolution(3ppi) & light weight Smartphones Tenri (Fab1), Mie No.3 (Fab2) Kameyama No.1 (plan) (Millions Market for smartphones of units) 5 25ppi Less than 以下 25ppi ppi 28ppi Over 28ppi 以上 年 211年 212年 (Source: Canalys & DisplaySearch) Feature Main Application Production line IGZO LCDs Introduce new material (IGZO) at cutting-edge lines (Millions of units) 12 1 High resolution, high picture quality & super low power consumption Tablet terminals Kameyama No.2 (plan) Market for tablet terminals 21 年 211年 212 年 (Source: Gartner) 17 Introduce CG Silicon Technology at Kameyama No.1 Production of CG Silicon LCDs G3.5 5 Fab mm Tenri (Fab1) 4 G4.5 G6 3 2 Fab mm Mie No.3 (Fab2) 1,5 1,8mm Kameyama No.1 (Fab3) Fab1 1 上期 1/ 下期 11/ 上期 11/ 下期 12/ 上期 12 下期 FY21 FY211 FY

10 Introduce IGZO Technology at Kameyama No.2 -Introduce new material IGZO at cutting-edge production lines -Produce high-resolution, high-picture-quality, super-low-power-consumption mobile LCDs High resolution & high picture quality Super low power consumption 19 Expansion of IGZO at Kameyama No.2 3,5 3, 2,5 2, 1,5 Capacity decline due to preparation for production line conversion LCDs for TVs Capacity decline due to production line conversion (Decline in input capacity due to change in production items and equipment) Mobile LCDs (IGZO) 1, 5 21/4 21/1 FY21 211/4 211/1 FY /4 FY

11 Expand Production of Mobile LCDs 2, 1,5 Tablet terminals IGZO 1, 5 CG Silicon a-si Smartphones Games In-vehicle/IA/ Amusement 1 上期 FY21 1/ 下期 11/ 上期 FY211 11/ 下期 FY212 12/ 上期 21 Strengthen Large-size LCDs for TVs & Non-TVs Added d Value For mobile devices Smartphones, tablet terminals, game devices, in-vehicle use For PCs For widespread- size TVs For large-size TVs & non-tvs Sharp s one-of of-a- kind technology Sharp s one-of of-a-kind technology 22 11

12 Decline in Production of LCDs for TVs (Smaller Than 4 ) at Kameyama No.2 3,5 3, 2,5 2, 1,5 Capacity decline due to preparation for production line conversion LCDs for TVs vs. maximum input capacity: 4% decline Capacity decline due to production line conversion (Decline in input capacity due to change in production items and equipment) Mobile LCDs (IGZO) 1, 5 vs. maximum input capacity: 8% decline 21/4 21/1 FY21 211/4 211/1 FY /4 FY Sakai Plant, The Only One in The World to Employ G1 G ass Substrates Sections shown in dashed lines and rooftop solar panels are an artist s impression of the completed complex 24 12

13 Advantage of Sharp s Large-size LCDs Highly-effective production of & 7 LCD panels at Sakai (G1) G1 glass substrate UV 2 A technology 7% larger G8 G8.5 G1 Energy-saving 2,1 2,4mm 2,2 2,5mm 2,88 3,13mm UV 2 A Kameyama No.2 Sakai Number of panel cut Number of 7 panel cut Energy-saving UV 2 A 25 Create Large-size LCD TV & Non-TV Market Market trend for large-size TVs over 5 Demand forecast for large-size FPD Rear-projection TV market over 5 (Millions of units) (Millions of units) Other Europe North America China Other Europe 8 North America 6 4 Japan 2 China 4 FY4 年度 5 FY5 年度 6 FY6 年度 7 FY7 年度 8 FY8 年度 9 年度 FY91 FY1 年度 FY7 FY8 FY9 FY1 FY11 FY12 FY13 (Source: DisplaySearch ) ( Source : DisplaySearch ) 26 13

14 Sales of Large-size LCD TVs in North America Sharp s sales of large-size TVs over Electronics retail stores Sharp Sharp TV 7 TV Sharp TV Sharp 7 TV FY7 FY8 FY9 FY1 FY11 27 Expansion of Non-TV & IDP Market Digital signage Electronic blackboard Video conference (thousands of units) 9, 8, 7, 6, 5, 4, 3, 2, 1, Expansion of digital signage market (CY) (Source: DisplaySearch) 28 14

15 Production Capacity for Large-size LCDs Input capacity/percentage of production by size (Area base) 35 3 Conversion to IGZO (Shift to mobile LCDs) 25 2 Kameyama No Sakai Smaller than Over < Sharp LCD TV sales volume 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q FY21 FY211 FY Business Area Where Sharp Promotes Local Production for Local Consumption and Develops Engineering Business -Increase purchase from partners with technology licensing (G6 plant in Nanjing & Taiwanese panel makers) Added d Value For mobile device Smartphone, tablet terminal, game device, in-vehicle use For PC For widespread- size TV For large-size TV & non-tv Sharp s one-of of-a- kind technology Purchase from alliance partner Sharp s one-of of-a-kind technology 3 15

16 Business Area Targeted by Sharp Added d Value For mobile device Smartphone, tablet terminal, game device, in-vehicle use For PC For widespread- size TV For large-size TV & non-tv CG silicon IGZO Purchase from alliance partner Plant in Sakai (1G) UV 2 A