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Kyocera's Environment Related Business Developments - Solar Energy - - PowerPoint PPT Presentation

Kyocera's Environment Related Business Developments - Solar Energy Business Strategies - MAKOTO KAWAMURA President and Representative Director February 2008 Today's Presentation 1. Kyocera's Business Developments 1. Kyocera's Business


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SLIDE 1

Kyocera's Environment Related Business Developments

  • Solar Energy Business Strategies -

February 2008 MAKOTO KAWAMURA

President and Representative Director

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SLIDE 2

1

  • 1. Kyocera's Business Developments
  • 1. Kyocera's Business Developments
  • 3. Kyocera's Environment Related Business Developments
  • 3. Kyocera's Environment Related Business Developments
  • 4. Solar Energy Business Strategies
  • 4. Solar Energy Business Strategies

Today's Presentation

  • 2. Consolidated Financial Forecast (Year Ending March 31, 2008)
  • 2. Consolidated Financial Forecast (Year Ending March 31, 2008)
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SLIDE 3

Certain of the statements made in this document are forward-looking statements (within the meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to: general economic conditions in our markets, which are primarily Japan, North America, Europe, and Asia, particularly including China; unexpected changes in economic, political and legal conditions in China; our ability to develop, launch and produce innovative products, including meeting quality and delivery standards, and our ability to otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components; manufacturing delays or defects resulting from outsourcing or internal manufacturing processes which may adversely affect

  • ur production yields and operating results; factors that may affect our exports, including a strong yen, political

and economic instability, difficulties in collection of accounts receivable, decrease in cost competitiveness of

  • ur products, increases in shipping and handling costs, difficulty in staffing and managing international
  • perations, and inadequate protection of our intellectual property; changes in exchange rates, particularly

between the yen and the U.S. dollar and euro, respectively, in which we make significant sales; inability to secure skilled employees, particularly engineering and technical personnel; insufficient protection of our trade secrets and patents; holding licenses to continue to manufacture and sell certain of its products, the expense of which may adversely affects its results of operations; future initiatives and in-process research and development may not produce the desired results; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases; the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located; and fluctuations in the value of, and impairment losses on, securities and other assets held by us, and changes in accounting principles. Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements

  • r financial position expressed or implied by these forward-looking statements. We undertake no obligation to

publicly update any forward-looking statements included in this document.

2

Forward-Looking Statements

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SLIDE 4

0.0 0.5 1.0 1.5

1960 70 80 90 2000

3

Kyocera Group's Business Developments and Sales Trends

08(E)

1959 Fine ceramic parts 1963 Semiconductor parts 1972 Electronic devices 1972 Cutting tools 1975 Jewelry and applied ceramic products 1979 Information equipment 1979 Telecommunications equipment 1978 Dental and orthopedic implants 1975 Solar energy products

Vertical integration of technologies Horizontal development of technologies

Please refer to accompanying note on page 2 and 22. Net sales (Unit: Yen in trillions)

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SLIDE 5

% to net sales Amount

Year ending March 31, 2008

4.9 5.9 6.1 - 7.7 12.5 11.4 100.0

% to net sales

4.8 5.5 5.4 - 8.3 12.2 10.5 100.0

% to net sales Amount

3.1 4.9 63,000

65,000 61,100

R&D expenses

8.3 5.9 76,000

79,000 70,155

Depreciation

15.9 6.3 81,000

81,000 69,896

Capital expenditures

  • 3.8

- 543.33

543.40 564.79

EPS (diluted - yen)

  • 3.3

8.0 103,000

103,000 106,504

Net income

156,540 135,102 1,283,897

Amount

Year ended March 31,2007

12.9 10.9 100.0 166,000 140,000 1,290,000

Revised forecast (January 2008) Previous forecast (October 2007)

6.0

166,000

Pre-tax income

3.6

151,000

Profit from operations

0.5

1,330,000

Net sales

% change

4

Consolidated Financial Forecast

  • Year Ending March 31, 2008 -

Euro:156 ¥2.5 billion ¥-3.7 billion US$:115 Euro:161 Euro:150 ¥15.7 billion ¥39.6 billion US$:117 US$:115 ¥7.2 billion ¥5.7 billion

pre-tax income net sales Foreign currency fluctuation effect on: Average exchange rate (yen) Please refer to accompanying note on page 2. (Unit: Yen in millions)

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SLIDE 6

5

Proportion of Sales and Operating Profit by Business Categories

  • Year ended March 31, 2007 -

50.7% 23.5% 71.8% 40.5%

MLCCs Mobile phone handsets Base stations

Please refer to accompanying note on page 2.

Net sales Operating profit

Sapphire substrates for LEDs Crystal devices ASICs packages Ceramic packages for surface mount devices Color MFP

Equipment business Components business

Commencing in FY 3/08, the "Optical Equipment Group," previously a separate reporting segment, has been reclassified into "Others."

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SLIDE 7

6

(%)

10 20

Pre-tax Income Ratio Trends

  • FY05 through FY08 (Forecast) -

(Forecast)

Pre Pre-

  • tax Income has grown for three consecutive fiscal years (Forecas

tax Income has grown for three consecutive fiscal years (Forecast) t)

Commencing in FY 3/08, the "Optical Equipment Group," previously a separate reporting segment, has been reclassified into "Others." Please refer to accompanying note on page 2 and 22.

14.6 13.4 16.1 4.3 5.2 6.6 8.9 10.0 12.2 14.2 8.6 12.9

FY3/05 FY3/06 FY3/07 FY3/08

Components Business Equipment Business Kyocera Group Total

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SLIDE 8

Telecommunications Telecommunications Energy Energy

7

Four Strategic Markets

Promote development of new products and Promote development of new products and technologies in strategic markets technologies in strategic markets

Color Printers and MFPs Color Printers and MFPs Handsets / Base Stations Handsets / Base Stations

Automotive Automotive

Intelligent Transport System (ITS) Hybrid Vehicles related products Intelligent Transport System (ITS) Hybrid Vehicles related products

Efficient Utilization of Group-wide Management Resources

Solar Energy and Fuel Cells Solar Energy and Fuel Cells

Please refer to accompanying note on page 2.

Information Information

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SLIDE 9

Solar Photovoltaic Systems Solar Photovoltaic Systems

SOFCs SOFCs

8

Kyocera's Environment Related Businesses

ECOSYS Printers and MFPs ECOSYS Printers and MFPs

Sapphire Substrates for LEDs Sapphire Substrates for LEDs Amorphous Silicon Drums Amorphous Silicon Drums

Please refer to accompanying note on page 2.

Piezoelectric-Stacks Piezoelectric-Stacks Ceramics Glow Plugs Ceramics Glow Plugs

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SLIDE 10

Growth Rate in Markets for Kyocera's Environment Related Components

9

5~10%

  • cf. semiconductor chips
  • Approx. 15%

Sapphire Substrates for LEDs

  • Approx. 30%

Piezoelectric-Stacks

  • Approx. 45%

Ceramics Glow Plugs Yearly Market Growth Rate

Kyocera forecasts

Please refer to accompanying note on page 2.

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SLIDE 11

Size and Growth Rate in Markets for Kyocera's Environment Related Products

10

  • Approx. 800*

(in CY 06)

  • Approx. 5,000

Market Size

(billion yen)

20%~40%

Solar Photovoltaic Systems

10%

Printers and MFPs Yearly Market Growth Rate

Please refer to accompanying note on page 2.

*Daiwa Institute of Research Ltd estimate; others are Kyocera forecasts

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SLIDE 12

Competitive Advantages of Kyocera's Solar Energy Business

A leading company with 30 years of experience A leading company with 30 years of experience World's first mass producter of currently most widely used multi-crystalline silicon solar cells*1 World's first mass producter of currently most widely used multi-crystalline silicon solar cells*1 Best conversion efficiency in the world of 18.5%*2 among multi-crystalline silicon cells Best conversion efficiency in the world of 18.5%*2 among multi-crystalline silicon cells Third in the world based on production volume (CY2006) Third in the world based on production volume (CY2006) Vertically integrated production from silicon casting to modules Vertically integrated production from silicon casting to modules

11

*2 R&D phase; Kyocera's measurement

Please refer to accompanying note on page 2.

*1 Casting method

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SLIDE 13

50 100 150 200 250

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

FY

MW

12

Production Volume Trend in PV Systems

EEG in Germany Amendment to EEG in Germany California Solar Initiatives Residential subsidies in Japan (until FY06) Mexico plant Tianjin, China plant

Plan Please refer to accompanying note on page 2.

Yokaichi, Japan new plant (Possible production volume:500MW) Czech Republic plant

  • approx. 200MW
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SLIDE 14

0.3

GW

0.8

GW 0.4 GW

1,3

GW

2,9

GW

1 2 3 4

3.6

GW

1.4

GW

3.1

GW

0.9

GW

2 4 6 8 10 12 14 EU

EU Japan Japan

2010(E) 2016(E) 2010(E) 2016(E)

2.9

GW

1.3

GW

0.4

GW

0.5

GW

0.14

GW

1 2 3 4 USA

USA

0.1

GW

0.5

GW 0.2 GW

0.5

GW

1.1 GW

1 2 Asia

Asia

2006 2010 2016

5.6GW 22.0GW

3.0GW

9.6GW

1.5GW

Market outlook with incentive by governmental policy Conservative outlook

World market size

Estimate by Kyocera Corp.

GW GW GW

Left: Outlook with incentive by governmental policy Right: Conservative outlook

approx.14× approx.11× approx.20×

  • approx. 18×

16× 7× 4× 2×

12.0

GW

Principal Market Outlook

2006

2006

2006 2010(E) 2016(E) 2006

GW

(E) (E)

2010(E) 2016(E)

CY CY CY CY

CY

Please refer to accompanying note on page 2.

13

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50 100 150 200 01 02 03 04 05 06 07 08 09 10 11 12 1

3 14 15 16 CY Kton 13

Calculation by Kyocera Corp.

Demand for Solar Products Demand for

Semiconductors CY2016

Solar 22GW

Demand for Materials for Semiconductor + Solar Products

New material manufacturers Existing materials manufactures

Materials Shortage

Comparison between Expansion Plan of Materials Manufacturers and Market Demand

Forecast Please refer to accompanying note on page 2.

14

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Market Conditions: Overview

Europe, US, Korea, etc. ⇒ Continuous market growth Increase in production volume by existing manufacturers + new entrants ⇒ Stability in supply and price Sudden increase in number of manufacturers

EEG* in Germany: reexamination of buyback price of feed-in tariff annual

decrease rate 5% to 7~9% Spread of subsidies Increase in production of materials

200~300 Companies

+ =

Beginning of "intense competition era" Beginning of "intense competition era" Gain comprehensive competitive advantages: Gain comprehensive competitive advantages: "technologies, cost competitiveness, and quality" "technologies, cost competitiveness, and quality"

*EEG= Erneuerbare-Energien-Gesetz

15

Please refer to accompanying note on page 2.

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SLIDE 17

○ ○ ○ ○

Cost Competitiveness: Improvement of conversion efficiencies

Casting Cutting Wafer slicing Solar cells Solar modules

Silicon Vertical integration Vertical integration ⇒ ⇒ Aims to maximize conversion efficiencies with Aims to maximize conversion efficiencies with

  • ptimization in all pro
  • ptimization in all production phases

duction phases

Improvement

  • f conversion

efficiencies

Improvement of crystalline quality Impurity contamination measures Optimization of slicing condition Thinner wafers Improvement wires awing process Passivation Reactive Ion Etching (RIE) technology High sheet resistance emitters Improvement

  • f contact metal

Optimization of module materials Optimization of module fabrication process

16

Please refer to accompanying note on page 2.

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SLIDE 18

Back

Contact

Cell Current: 3BB

FY09 FY05 2BB 3BB

Back Contact

FY09 target 18.5%

3.86W/cell

17.5% 16.5% 16.5% 15.7%

4.50W/cell 3.67W/cell 4.06W/cell 4.26W/cell

Lager Cell (156□)

Higher efficiencies for Back Contact

  • Approx. 17%

improvement from current power output 2BB

Conversion efficiencies Power

  • utput

Technologies

Cost Competitiveness: Productivity

  • 1. Higher cell efficiencies
  • 2. Thinner cell

08

180μm 240 / 200μm

Further advancement of thinner wafer

100% achievement

FY05 06 07

Productivity improvement of approx. 40% compared to FY05

09・・・

17

Please refer to accompanying note on page 2.

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SLIDE 19

Development of Differential Products

Annual average temperature map

Snow resistance Snow resistance High temperature resistance High temperature resistance Design oriented Design oriented Building unifiable Compact style with self power source Compact style with self power source Compact style with self power source Snow resistance / weighting durability High temperature resistance / heat durability Design oriented / black back sheets Building unifiable / frame-less Compact style with self power source / small size

Black Back sheets Compact style with self power source

Frame-less High temperature resistance

18

Please refer to accompanying note on page 2.

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Evaluation for High Quality

Received best evaluation in general consumer product test (Germany) ! 【Evaluation criteria】 Power Output Durability Reliability Installation Quality is the key to differentiation → "Kyocera Quality"

.

No.1 Quality

Number of Manufacturers: 15

Score (Good Point): 1.9

(1.0=Highest Possible, 6.0=Low est Possible)

19

Please refer to accompanying note on page 2.

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SLIDE 21

Czech Republic Mexico Tianjin Germany Brazil Australia Singapore Beijing

ASIA USA EUROPE

Japan Kyocera

7 sales bases worldwide 4 production bases worldwide

Czech Republic China Japan / Ise Japan / Yokaichi Mexico Germany Singapore China Japan USA Brazil Australia

(Planned)

FY07

25MW

FY11

150MW

FY07

30MW

FY11

90MW

FY07

100MW

FY11

110MW

FY07

25MW

FY11

150MW

Ise Yokaichi (Cell) USA

(Planned) (Planned)

FY07

180MW

FY11

500MW (Planned)

(Planned)

20

Please refer to accompanying note on page 2.

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100 200 300 400 500 600

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

500MW

FY

400MW

MW

21

Planned Production Volume Expansion in PV Systems

300MW 13.8MW Salamanca - Spain

AEON Kagoshima: 140kW Total

Plan Please refer to accompanying note on page 2.

Soccer Stadium Switzerland 1.35MW

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During fiscal year ended March 31, 2007, Kyocera sold its shares in Kyocera Leasing Co., Ltd., a subsidiary engaged in financing services. For this reason, business results of Kyocera Leasing Co., Ltd. and profit on sales of the shares in Kyocera Leasing Co., Ltd. have been recorded as income from discontinued operations in conformity with accounting principles generally accepted in the U.S. Consequently, some figures for the fiscal years from 2003 to 2006 have been retrospectively reclassified.

Notes for Consolidated Financial Results

22

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