FY2019 Q2 Financial Results Briefing （ Securities Identification Code: 6787 ）
１ FY2019 2Q Results ２ Outlook for the current term 3 Technology Roadmap 2
FY2019 Q2 settlement highlights Net sales decreased 2,700 million yen to 5,910 million yen. Net ･ Automotive increased 2.6% year on year to 27,400 million yen sales ･ Smartphone decreased 23.8% year on year to 14,700 million yen ･ Sales in other fields increased 7.6% year on year to 17,000 million yen Operating income amounted to 3,400 million yen, down 2,300 million yen over previous year. Ordinary income totaled to 3,000 million yen, Profit down 3,300 million yen over previous year. Net income to owners of parent company amounted to 2,400 million yen, down 2,900 million yen over previous year. 3
FY2019 Q2 Consolidated Business Performance （ 100 million yen ） Year-on-year FY2018Q2 FY2019Q2 performance performance Increase % 618 591 -27 -4.3% N e t s a l e s 57 34 -23 -39.9% Operating income 9.2% 5.8% 63 30 -33 -52.4% Ordinary income 10.2% 5.1% 53 24 -29 -55.6% N e t i n c o m e 8.6% 4.0% Average Exchange 108.66 110.64 rate （ Yen/USD ） 4
Net sales, Operating income （ 100 million yen ） Operating Operating Operating Net sales income Margin Net Sales income 40 300 315 303 299 298 292 280 32 30 277 274 273 255 252 250 234 26 223 25 200 24 20 19 17 17 17 17 10.1% 16 15 15 8.7% 100 8.2% 8.5% 10 7.4% 6.8% 6.5% 9 6.2% 6.0% 5.9% 5.9% 5.7% 7 4.2% 2.5% 0 0 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 5
FY2019 Q2 Product Revenue （ 100 million yen ） FY2018 Q2 FY2019 Q2 Difference Operating Operating Operating Sales i n c o m e i n c o m e i n c o m e Sales Sales % % % % 19 15 7 -4 267 274 Automotive 7.1% 5.5% 2.6% -21.1% 29 14 -46 -15 193 147 Smartphone 14.5% 9.5% -23.8% -51.7% 9 5 12 -4 158 170 Others 5.9% 2.9% 7.6% -44.4% 57 34 -27 -23 618 591 Total 9.2% 5.8% -4.3% -39.9% 6
Analysis of operating income change FY2018 Q2 ➡ FY2019 Q2 （ 100 million yen ） Sales Variable Fixed -22 Exchange cost cost SG&A Rate FY2018Q2 performance FY2019Q2 performance Exchange Rate 110.64Yen/us$ Exchange Rate 108.66Yen/us$ 7
FY2019 Q2 Sales Performance by Product Application （ 100 million yen ） Automotive Smartphone Storage Office equipment Digital home appliance Industrial equipment Amusement IoT EMS 8 33 (1.4%) (5.6%) FY2019 591 22 274 147 14 36 Q2 (3.7%) (2.4%) (6.2 ％ ) (46.2%) (24.9%) 26 31 (4.4%) (5.2%) ＋ 7 -46 -27 ＋ 12 (2.6%) (-23.8%) (-4.3%) (7.6%) 11 18 (2.9%) (1.8%) FY2018 618 8 23 267 193 38 Q2 (1.3%) (6.2%) (3.7%) (43.2%) (31.2 ％ ) 27 33 (4.4%) (5.3%) 0 200 400 600 8
FY2019 Q2 Sales Performance by Product Specification （ 100 million yen ） Double-sided PCB Four-layer PCB Six layers or more HDI PCB High Dissipation PCB Flexible PCB EMS 9 (1.5%) FY2019 591 36 35 139 112 252 Q2 (6.2%) (5.9%) (19.0%) (42.6%) (23.4%) 8 (1.4%) +5 -27 -13 -16 (4.7%) (-4.3%) (-8.6%) (-6.0%) 10 (1.6%) FY2018 618 39 152 107 268 38 Q2 (17.3%) (24.6%) (43.4%) (6.3%) (6.2%) 4 (0.6%) 0 200 400 600 9
１ FY2019 2Q Results ２ Outlook for the current term 3 Technology Roadmap 10
Outlook for the current term ・ Automotive will remain at the same level as the first half Ocerview ・ Smartphone will remain at the same level as the first half ・ Sales in other fields, IoT and EMS will grow ・ Vietnam Plant#1 factory: we will invest in EMS and flexible ・ Vietnam Plant#2 factory: we will invest in an automotive factory Investment ・ Vietnam Plant#3 and Tang Long factory: we will make 5G upfront investment 11
FY2019 Full-year forecast （ 100 million yen ） FY2019 FY2019 FY2019 Q2 full-year plan results forecast 1,200 591 609 N e t S a l e s 75 34 41 O p e r a t i n g I n c o m e 6.3% 5.8 ％ 6.7% 63 30 33 O r d i n a r y I n c o m e 5.3% 5.1 ％ 5.4% 53 24 29 N e t i n c o m e 4.4% 4.0 ％ 4.7% E x c h a n g e r a t e 111.00 108.66 108.00 （ J P Y / U S D ） 12
Investment plan （ 100 million yen ） Domestic overseas Additional investment 150 150 125 25 120 115 115 30 10 10 FY2018 FY2019 Original plan FY2019 Revised plan 64 Depreciation Depreciation 68 68 13
Vietnam factory strategy High frequency Smartphone module 5G Smartphone Automotive developed products Meiko-T owada Vietnam EMS Vietnam Plant #3 MSAP ・ Automotive developed products Vietnam Plant #3 Vietnam Plant #1 Automotive Flexible PCB/EMS T ang Long Plant Longcheer MLB Flexible PCB High frequency module Joint Venture IoT HDI 5Gmodule Smartphone / AI Appliance 14
１ FY2019 2Q Results ２ Outlook for the current term 3 Technology Roadmap 15
Transformation brought about by 5G 5G Assign a dedicated signal to each one Conventional Source: Website of Softbank Three features and innovation in each industrial field Smartphone Base Stations Servers IoT Increase in macro cells/small cells Ultra-high speed: Big data volume: 15 ZB (Increase in storage capacity) Maximum of 10 Gbps Ethernet speed: 400 GbE (Increase in optical communication) Conventional + 5G communications compatible Automatic driving Increase in communication modules Main requirements Increase in passive components of 5G High-density PCBs Multiple simultaneous connections: Ultra-low delay: 1 million units/km2 connections 5G Around 1 msec. Features Vast number of Acceleration in automatic driving level 4 Cars sensors and terminals Increase in connected cars Acceleration in electrification (xEV) New markets for printed wiring boards (PCB) will be created in 5G and the existing market will expand Source: Ministry of Internal Affairs and Communications 16
5G market trends (sales volume) Smartphone Storage xEV IoT devices Connected car （ 100 Million units ） （ 100 Million units ） （ 100 Million units ） （ Million units ） （ Million units ） Conventional HDD 16.76 EV PHV HV 5G 800 SSD 6,000 55 15 6 1,500 15 13.5 3.4 4,000 4 10 1,000 500 2.7 29 350 5.25 5.23 2,000 5 2 500 2.7 2.0 0.37 0 0 0 0 0 FY2019 FY2023 FY2019 FY2025 FY2019 FY2023 FY2019 FY2025 FY2019 FY2025 Source ： Canalys Source:Fuji Keizai Group Source:Fuji Keizai Group Source:HIS Markit Source ： Techno System Research ■ 5G smartphones have become popular, SSDs have increased due to the increase in big data volume ■ The number of connected cars supporting 5G increases, xEV significantly increases ■ IoT equipment continues to grow steadily ■ Demand for higher-density build-up boards and boards for vehicles will increase 17
Technology development roadmap for 5G 700MHz 3.6GHz 6GHz 28GHz Millimeter-wave Communications Conventional Communications 5G Communications System Macro cell/Small cell/High-frequency module (Multilayer high-frequency board) (High-frequency board) Base stations servers Server SSD Data center SSD (10 layers) (16-layer high-frequency board) Main board Main board (L/S=50/50um) (MSAP L/S=30/30um⇒25/25um) Smartphone IoT Communication module Communication module (L/S=35/35um) (MSAP L/S=25/25um) Milli-wave radar TCU/V2X communication module (MSAP high-frequency board) (12-layer any-layer) Automatic driving Electrification Connected cars IVI (Infotainment) Vehicle computer Power device (3-stage build-up) (3-stage build-up) (Copper inlay thick copper board) Level 2 Level 3 Level 4 Automatic driving 2019 2020 2025 18
5G development example Unit TCU / V2X communication module for connected cars Using a mobile communication system, two-way communication application between the car and cloud servers, infrastructure, and other cars High-density printed wiring board on which feature 5G communication chip is mounted Communication module High-density PCB 19
This presentation contains forward-looking statements concerning Meiko Group’s future plans, strategies and performance. However, Meiko does not publish this presentation as a disclosure document based on the Financial Instruments and Exchange Act of Japan. These forward-looking statements are not historical facts, rather they represent assumptions and beliefs based on comprehensive data currently available. Furthermore, the Printed Circuit Board business is subject to a number of risks and uncertainties that relate to raw material price, conditions of customers’ market, technological trends, change of foreign exchange , change of tax rules and regulations, disasters, international conflicts and other factors. Meiko therefore wishes to caution that actual results may differ materially from our expectations.
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