earnings report for fiscal 2018 ending march 31, …...2019/05/22 · consolidated financial...

■ Consolidated financial results for fiscal 2018(April 1, 2018 to March 31, 2019)

■ Forecast of results for the fiscal 2019(April 1, 2019 to March 31, 2020)

■ Future measures

July 2019Tatsuya Ogawa, President

Earnings Report for Fiscal 2018

（Ending March 31, 2019）

The estimates referred in this report are based on the information available

as of the date of this release. The Actual results could significantly differ

from the estimates due to a variety of factors. For details on the conditions

that form the assumptions used for earnings forecasts ,please refer to the

notes as follows.

① Economic situation, consumption trends in major markets (Japan, Asia, etc.)

② Changes in industry trends, technology trends, etc. in the electronics industry

③ Rapid change of supply and demand in the main product market

④ Significant fluctuations in foreign exchange rates of foreign currencies($US etc.)

Caution with respect to forward-looking statements

1

Consolidated financial results for Fiscal 2018(April 1, 2018 to March 31, 2019)

2

Financial Summary in FY2018

● OA equipments related sales for both domestic and overseas markets keep steady growth.

● Industrial equipments related and communication equipment related sales decreased due to downturn of the Chinese market.

● Consumer Appliances related sales significantly decreased compared with the previous quarter/Half/Year? due to termination of the spot import business of the electronic smoking device.

● Automotive Electronics related sales decreased for major domestic customers, however keep steady growth on sales overseas. Therefor total sales slightly decreased compare with previous year.

● Amusement appliance related sales decreased approximately 10% compare with previous year even though some signs of recovery appeared from third quarter.

Sales, operating income, ordinary income and net income all decreased compared with the previous year

3

FY2018 Overview

0

100

200

300

400

500

600

2018/3 2019/3（100 million yen）

Sales composition by field (amount)

4

FY2018 Overview

万円

112,458

百万円

Sales composition ratio by field

Amusement14.9%

127,926Industry35.6%

Automotive33.6%

Communication3.6%

ＯＡ9.4%

Consumer 2.7%

Amusement14.9%

116,405Industry35.2%Automotive

36.7%

Communication2.0%

ＯＡ10.3%

Consumer0.9%

【2018/３】【2019/３】 (Unit: Million yen)

5

FY2018 Overview

Summary for FY2018 (Unit; Million yen)

2018/3Results

2019/3Results

GrowthRate YoY

Increase/Decrease（YoY）

Forecast（2019/1/31）

ration amount

Net Sales 127,926 116,405 91% △11,521 120,000 97% △3,595

Gross Profit 11,349 10,535 93% △814 - - -

Selling,general and administrative

expenses7,914 8,093 102% 179 - - -

Operating income 3,435 2,442 71% △993 2,200 111% 242

Ordinary income 3,592 2,299 64% △1,293 2,300 100% △1

Profit attributableto owners of parent 2,276 1,460 64% △816 1,500 97% △40

Net incomeper share ￥104.75 ￥72.28 - △￥32.47 ￥73.90 - △￥1.62

Dividend per share（Year）￥50.00 ￥55.00 - ￥5.00 ￥50.00 - -

6

Comparison ofperformance forecasts

FY2018 Overview

0

40,000

80,000

120,000

160,000

2015/3 2016/3 2017/3 2018/3 2019/3

Domestic Overseas

116,405

145,704

116,617112,458

127,926

（ million yen）

Sales Trend Domestic/Overseas

1US$ = （102.17）（112.68）（112.19）（106.24） (110.99)

7

FY2018 Overview

【2018/3】【2019/3】

DiscreteSemiconductors

11.2％

Electronic Equipment5.0％

OtherElectronic

Components12.5％

Circuit Parts

15.1％

LSIs,ICs37.8％

Assembly15.6％

127,926

Display Devices2.9％

8

DiscreteSemiconductors

11.1％

Electronic Equipment3.4％

OtherElectronic

Components14.1％

Display Devices2.9％

Circuit Parts14.1％

LSIs,Ics37.8％

Assembly16.6％

116,405

(Unit; Million yen)

Sales composition ratio by productFY2018 Overview

1,279

1,100

1,120

1,140

1,160

1,180

1,200

1,220

1,240

1,260

1,280

1,300

2018/3 2019/3

1,164

Circuit Devices (Lazer-Di etc.)

▲29

Assembly

▲7

OtherElectronic

Devices

+4

ElectronicEquipment

▲24

LCD

▲2

（100 million yen）

Analysis on factor of increase / decrease in salesCompared with the previous year

Semiconductors(Tr,Di etc.)

▲14

ICs (MCU,LSI etc.)

▲43

9

FY2018 Overview

12,007

9,667 9,748

11,349 10,535

7,734 7,496 7,613 7,914 8,093

4,272

2,171 2,135

3,435

2,442

8.2 8.3 8.7 8.8 9.0

2.91.9 1.9

2.7 2.10.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

0

5,000

10,000

15,000

2015/3 2016/3 2017/3 2018/3 2019/3

Gross profit SG & A Operating income

Gross profit ratio Operating income ratio

（％）（million yen）

Gross profit / Gross profit ratio / SG & A Transition

10

FY2018 Overview

11

11,349

3,5923,435

2,276

116,405

10,535

2,442 2,299

1,460

127,926

Consolidated income statement

（Unit; Million yen）FY2017 FY2018

(2017/4/1～2018/3/31） (2018/4/1～2019/3/31）

NET

SALES NET

SALESGROSS

PROFIT GROSS

PROFIT

OPERATING

INCOME

OPERATING

INCOME

ORDINARY

INCOME

ORDINARY

INCOMENET

INCOMENET

INCOME

FY2018 Overview

(Unit; Million yen)

Analysis of major changes in non-operating profit /loss · extraordinary loss etc.

2018/3 2019/3Increase / decrease

Operating income 3,435 2,442 △993

Other income 157 △143 △300

Ordinary income 3592 2,299 △1,293

Special profit 5 2 △3

Special loss 172 3 △169

Income before income taxes andminority interests 3,425 2,297 △1,128

Income Taxes, etc. 1,110 810 △300

profit (loss) attributable to non-controlling interests 38 27 △11

profit (loss) attributable to owners of parent 2,276 1,460 △816

12

FY2018 Overview

（Unit; Million yen）

Summary Balance Sheet １


Total assets 76,373 75,295 △1,078

Current assets 69,939 69,404 △535

Cash and deposits 16,253 20,179 3,926

Notes and accounts receivable 23,964 24,016 52

Products 19,427 16,447 △2,980

Inventory assets 787 832 45

Accounts receivable 8,971 7,759 △1,212

Fixed assets 6,434 5,890 △544

Tangible fixed assets 846 799 △47

Investment securities 3,081 2,714 △367

13

FY2018 Overview

（Unit; Million yen）Summary Balance Sheet 2


Total liabilities 22,979 23,841 862

Current Liabilities 18,714 19,177 463

Trade notes and accounts payable 14,119 11,403 △2,716

Electronically recorded debt 1,046 3,441 2,395

Short-term debt 1,489 1,464 △25

Long-term borrowings to be repaid within one year - - 0

Fixed liabilities 4,264 4,664 400

Long-term debt 2,800 3,100 300

Total net assets 53,394 51,453 △1,941

Capital and capital surplus 19,234 19,289 55

an earned surplus 38,631 38,939 308

Treasury stock △6,277 △8,548 △2,271

Foreign currency translation adjustment account 364 570 206

Capital adequacy ratio 69.2% 67.6% -

14

FY2018 Overview

売上高

FY2017(2018/3/31) FY2018(2019/3/31） FY2017(2018/3/31) Fy2018(2019/3/31）

76,37376,373 75,295 75,295

51,45353,394

4,6644,26419,17718,714

5,8906,434

69,40469,939

Consolidated Balance Sheet（Unit; Million yen）

Total assetsTotal liabilities and

net assets

FixedAssets

FixedAssets

CurrentAssets

CurrentAssets

FixedLiabilities

CurrentLiabilities

CurrentLiabilities

Total NetAssets

Total NetAssets

FixedLiabilities

15

FY2018 Overview

（Unit; Million yen）

Cash Flows

2018/3 2019/3 Year to Year

Cash flow from operating activities

△ 3,899 6,768 10,667

Cash flow from investing activities

1,881 △102 △1,983

Cash flow from financing activities

△ 4,613 △3,071 1,542

Cash and cash equivalents at end of period 16,493 20,124 3,631

16

FY2018 Overview

Consolidated Cash Flow Statement

16,493

20,124

37

△3,071

△102

6,768

FY2018（2018/4/1～2019/3/31)

Cash Flows（Unit; Million yen）

Cash and cashequivalents

at end of period(2018/4/1）

Cash and cashequivalents

at end of period(2019/3/31）

Cash flow fromoperating activities

Cash flow frominvesting activities

Cash flow fromfinancing activities

Effect of exchange rate

change on cash and cash

equivalents

17

FY2018 Overview

◆Previous dividend policy: Consolidated payout ratio 50％

◆New dividend policy（Medium-and-long term policy）

In order to respond to the returns expected of our shareholders, we will focus on the returns to our shareholders and implement management base maintenance and sustainability with an awareness of the cost of capital.Therefore, based on the total shareholder return amount including dividends and share buybacks, we will return 100％ or more of total shareholder return ratio to shareholders during period of the current medium-term plan (from the fiscal year ending March 31, 2022) .

（note） Total shareholder return ratio ＝（ Dividends + Share buybacks）÷Consolidated net income ｘ 100

18

FY2018 Overview Notice Regarding Dividend policy change and Revision of Dividend Forecast (Dividend Increase)

Dividends

Payout Ratio

Dividends (¥55/share) ￥1,120,515,150

Consolidated net income ￥1,460,327,108

Payout ratio 76.1%

Total shareholder return ratio

Dividends ￥1,120,515,150

Share buyback ￥2,215,662,500

Total￥3,336,177,650

Consolidated net income ￥1,460,327,108

Shareholder return rate 228.5%

19

FY2018 Overview

Forecast of results for

the fiscal 2019

Earnings forecast for FY2019

20

Forecast of results for FY2019

• Earnings forecast for FY2019

• Medium-term plan

• Returning to shareholders

21






22


(Unit; Million yen)


2019/3Results

2020/3Forecast

Increase / decrease (ratio）

Increase / decrease

(amount）

Net sales 116,405 110,000 94% △ 6,405

Operating income

2,442 1,500 61% △ 942

Ordinary income 2,299 1,560 68% △ 739

Net income 1,460 1,000 68% △ 460

Net income per share

¥72.28 ¥51.97 ー △¥20.31

23


0

200

400

600

800

1,000

1,200

1,400

2017/3 2018/3 2019/3 2020/3

Automotive,Industry etc. Amusement

Forecast

1,100

（Forecast）

1,124

1,279

1,164

（100 million yen）

Earnings forecast for FY2019 (Sales)

24






25

medium-term plan

The 69th Medium-Term Business Plan (Numerical Target)

26

medium-term plan

Index

Earningsforecast

FY2019

Numerical target of medium-term planFY2021（the 69th

Period）

Sales 110 billion yen 140 billion yen

Net income 1 billion yen 2.8 billion yen

ROE （2.0%） 5.0%





27

● A dividend payout ratio of 105.8% scheduled for the fiscal year ending March 2020.

●Dividend per share

Returning to shareholders

2020/3 forecast

1H ￥２７.００

2H ￥２８.００

Annual ￥５５.００

29

Management philosophy

／Network system

We evolve with the changing environment

and aim to be a valuable provider centered on devices.

We provide “new opportunities” to the world

through electronics.30

Corporate philosophy and Vision

Device

Solutions

Design and

Development

Solutions

World-Wide

Network

EMS

Solutions

Embedded

Solutions

We provide solutions

best for our customers

Business FieldWe propose business solutions tailored to customer needs such as product offering, optimum logistics proposal, technical support, development support, EMS business, overseas expansion etc.

DeviceSolutions

Shinko ShojiＮＴSales

Overseas collaborationBusiness partnership

World-WideNetwork

SIer Biz

Materials, equipment, building materials Biz

Elemental technology/IP Biz

collaboration

ODMAIplayM&A

Co-Creation Biz

Solution TechnologyDesign andDevelopment Solutions

Shinko ShojiLSI Design Center

ＥＭＳSolutions


EmbeddedSolutions

Novalux Japan


31

We provide solutions

best for our customers

Overseas subsidiary company

32

Shinko Shoji LSI Design Center

Matsumoto branch

Kofu branch

Shiojiri logistics center

Osaka branch

Hiroshima branch

Shinko Shoji LSI Design CenterHyogo office

Nagoya branch

Hamamatsu branch

Shinko Shoji LSI Design Center

Tokyo office

Kawasaki logistics center

Utsunomiya branch

Saitama branch

Sendai branch

Headquarters（Tokyo）

Branch

Logistics center

Design center

9

2

3

NT Sales Co., Ltd.

Novalux Japan Co., Ltd.

Affiliated Companies

Shinko Shoji LSIDesign center Co., Ltd.

Domestic Bases and Affiliated Companies

Domestic Affiliated Companies①

Plan, Develop, Product and Sale apparatus / system

Professional provider of Analog technology

Passive components businessSystem development

【Capacitor】

【Sensor】

【Relay、Reed switch】

【Noise Countermeasure 】

【Partners】

NEC Fujitsu EIZO JVCKENWOOD

AAEON CONTEC Interface

Gateway BOX type

PC for medical

examination

equipment

#Case of development

- OBD diagnosis tool

- High current control board

- 2.7inch e-Paper(Electronical paper)

control board

- Support NMEA2000

Ship CAN remote controller

33

NT Sales

【Topics】

- AUTOSAR

- MBD(MATLAB、TargetLINK、HILS)

- A-SPICE LEVEL3

- Xilinx Alliance Member

Embedded software development & LSI design business

Perform a wide range of system development tasks from embedded

software to LSI design.

34

Domestic Affiliated Companies②

Shinko Shoji LSI Design Center Co., Ltd

Automotive s/w development Model-based development

Motor control LSI design

35

Europe（Spain）Novalux Europe, S.A.

America（Atlanta）Novalux America Inc.

Detroit office

India Delhi office

India Pune office

India Chennai office

Thailand（Bangkok）Novalux（Thailand）Co., Ltd.

Malaysia（Kuala Lumpur）

Novalux Malaysia Sdn. Bhd.

SingaporeShinko（Pte）Ltd.

China（Shanghai）Novalux Shanghai

Electronics Ltd.

Hong KongNovalux Hong Kong

Electronics Ltd.

China（Shenzhen）Novalux Shenzhen

Electronics Ltd.

China（Shenzhen）Shinko Assembly China Co., Ltd.

Taiwan（Taipei）Novalux Taiwan

Electronics Ltd.

Dalian

Tianjin

Suzhou

Wuhan

Xiamen

Chongqing

Dongguan QA

Subsidiaries

BranchRepresentative office

９

10

EMS factoryQA office

2

Headquarters（Tokyo）

Overseas Bases and Affiliated Companies

36

Future measures

■Renesas Electronics Business

■Core Market Updates

• Automotive Electronics

• Industrial Field

• Amusement appliance Field

37

Renesas Electronics Business

We have many customers in the automotive market

and the industrial equipment market.

So we believe that our core business domain is

compatible with that of Renesas to a high degree.

Although the semiconductor market condition is

challenging now, Renesas is the most important

supplier for us so we will continue to expand Renesas

business further.

38


367347 344 332

291

252215 197 227

198

0

200

400

600

800

2015/3 2016/3 2017/3 2018/3 2019/3

Domestic Overseas


39

（ 100 million yen ）

【Renesas products Sales】

620562 541 559

今後の施策

489

260

117

10

8316

【Sales composition ratio by field 】

【2019/3】

40

【2018/3】

489billion yen

OA

16.9%

Communication

2.0%

Industry

23.9%

Automotive

53.2%

Amusement

3.3%

今後の施策

273

132

45

8819

OA

15.8%

Communication

8.0%

Industry

23.6%

Automotive

48.8%559billion yen

Amusement

3.4%


Core Market Updates

Automotive Electronics

41

Source : Marklines

Automotive Business Key Activities

To be Mobility Provider, Car manufacturing to have big change under CASE new concept and Automotive Electronics also keep attractive growth.

Drive intensive promotion activities by appropriate solution proposal to HEV/EV, ADAS arena.

18% 17%

A

S

C

E

Connectivity

Autonomous

Share/Service

Electric

CASE : New concept

CAGR2015-2020

42

Automotive Electronics Market Trend

Trends of Electrical Vehicle popularization Trends of ADAS / Autonomous popularization

xEV and Driver Assistant Systems keep high growth rate.

The key to growth is attractive business proposal to both arena by appropriate solutions

0

10

20

30

40

50

60

70

80

90

CY2018 CY2020 CY2023 CY2025 CY2030

High Automation/Full Automation(Level4,5)

Conditional Automation(Level3)

Partial Automation(Level2)

Driver Assistance(Level1)

（1M/unit）

ADAS area

Autonomous area

0

10

20

30

40

50

60

CY2018 CY2019 CY2020 CY2021 CY2022 CY2023

Fuel Cell Vehicle

Eelectric Vehicle

Plag-in Hybrid Electric Vehicle

Hybrid Vehicle

Mild-Hybrid Vehicle

(1M/unit)

Engine + Motor drive

Motor drive

※Created by us based on the materials such as Marklines

43

Connected car to be a service platform of the mobility related services,

Shinko to propose New Edge Computing solution to up-coming the mobility

service‘s development activities.

Solution to Automotive Edge Computing

H/W & S/W

PlatformInterface

Camera

Distribution

Display

＜Operation the screen with voice＞

<Target Automotive Systems>

Cockpit, Infotainment ADAS

Automotive Business Activities（xDAS）

＜Shinko’s Original Board＞

Supporting customer development activity with design know-

how on automotive SoC + High speed I/F circuit design &

solutions in which implement automotive grade S/W.

＜Software＞

＜Content example＞

A SC E

Provide a working solutions

with automotive S/W

44

Application(Sample)

Middleware

OS(QNX/Linux)

Solutions to Automotive Edge Computing

-45-

Automotive Business Activities(xEV)

xEV developments more accelerated toward further Co2 reduction and

zero emission realization．Shinko to promote appropriate and latest motor control solutions to

WW xEV development activities.

EOP

EWP

FAN

Traction motor inverter

development kit proposal Reference design proposal

Inverter

Board

Pump/Fan(Low voltage)

A SC E

Motor control to automotive pump

45

Traction Motor Control(High voltage)*Under developing

(Image)

Traction inverter development kit.

MCU

RH850/C1M-A1

(RENESAS)

Power supply IC

Digital

IGBT

Gate

Driver

IGBT

Module

PowerTraction

Motor

TMR

angle

sensor

MCU

RL78/F14

(RENESAS)

Power supply

FET built-in

Pre-Dr

Motor

Motor position (Signal)

Attended Renesas Automotive Roadshow(Co-sponsored)Developed India Local business by Low-voltage motor control solutions in which utilizes

Renesas Strategic Devices.

Keep contacting by local staff to multiple customers who asked us visiting.

Solutions to low voltage motor control (Proposal to Electrical)- TMR sensing (Realize more accurate position control)

- 120deg/150deg trapezoidal sensor less(BEMF) control

Cabin Innovation (Proposal to ADAS, Cockpit）- Image distribution & voice recognition based on R-Car

Actively promoted our solutions in India

Automotive Roadshow 2019 in Delhi（5/15）

ie) Foreign Biz Development Activity (India)

Proceed the local business by solution proposal

at the system level cooperated with Renesas and

domestic partner.

Shinko Shoji

Management on

Solution business

Partner(Japan)

S/W support

Renesas India

H/W support

Indian motor

customers

(6 companies)

Some businesses

are in progress

46

Technical support

- Motor tuning

- S/W development support

- Sample circuit design

- Sample BOM list

Sales revenue are expected to decline in FY2019 due to the market slowdown in the US and China,

However ADAS toward to autonomous driving and HEV / EV related to environmental measures are

steadily growing. So that we expect to sales increase in FY2021.

（億円）

0

10

20

30

40

50

60

Mar/16 Mar/17 Mar/18 Mar/19 Mar/20 Mar/22

Domestic Foreign

42.7Forecast

40.1

Target

50.0

43.041.0

Sales plan on Automotive Electronics Field

43.0

47

¥billion

Core Market Updates

Industrial Field

48

24.0

21.9

30.8

13.613.8

-0.4

8.7

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

0 20 40 60 80 100 120 140 160

Highly expected attractive market growth on industrial IoT

Industrial IoT device volumes and growth forecast（2017-2020）

(％）

Source：IHS Technology

Automotive

Medical

Industry Use

Military / Space / Aviation

Consumer Electronics

Computer

Communication

IoT Device Volume(100Mio) in 2017

IoT D

evic

e V

olu

me C

AG

R(2

01

7-2

02

0)

49

IoT environment control :

Evolved Wildlife Damage Prevention with LoRa

LoRaWAN™ Network

built-in server

Gateway Cloud/Application

【IoT trap package solution for regional municipality 】

Wildlife Damage Prevention solution

by LoRaWAN™ Private

LoRa enable to catch the current condition of each trap to Hunter by email

Low cost and East to install

Communication DeviceTrap

Wmm,,, Traps are installed, Have it ?

Really frustrated to see if all traps

conditions.

Arriving email when Wildlife is captured

50

※Introduced 28 municipality

High Secure embedded “Personal Authentication” solution

Cloudless 2-stepPersonal Authentication

General Purpose Cameras

Target application

Entry/Exit System、Public Locker、

Reception、Operation management:

Apartment, Factry

×Not required !

SENSORY TrulySecure(*) Face/Voice Authentication Middle ware on Renesas SoC:RZ/G family

※Certified by FIDO alliance.

High cost benefits !Other Authentication not required

Showing up at CEATEC2019!

51

Face Authentication Voice Authentication

General Purpose Mics

0

100

200

300

400

500

600

Mar/16 Mar/17 Mar/18 Mar/19 Mar/20 Mar/22

455410386

（100Mio）

425

Sales Plan on Industry and Communications field

Forecast

414

Target

500

52

Sales revenue at Industry and communication business are expected to decline in FY2019 due to the

market slowdown especially in China,

However IoT related, Social infrastructures development related and New service development

related business are steadily growing. So that we expect to sales increase in FY2021.

Core Market Updates

Amusement appliance Field

53

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2900 2760 2310 1980 1860 2020 1930 2170 1740 1790 1710 1,660 1,450 1,580 1,720 1,670 1,260 1,110 970 1,150 1,070 940 900

0

500

1000

1500

2000

2500

3000 Participating population

Amusement market trend

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

sales 30.9 30.1 28.4 28 28.5 28.9 29.2 30.4 32.4 33.9 34.9 33.6 30.2 28.8 28.2 26 25.5 25.7 25 24.5 23.2 20.4 19.5

0

5

10

15

20

25

30

35 Market size

※Source：Yano Research Institute Ltd

unit：Ten thousand people

In comparison with 1995

participating population is 1/3

The participating population is 1/3 compared to 24 years ago (1995), but the market size remains 2/3.

We plan and propose solutions for appealing to players to entertainment equipment manufacturers.

54

In comparison with 1995

market size is 2/3

unit：trillion yen.

Solutions for amusement

Lenticular lens

mounted 3D naked eye displaySheet-like lens

The pattern changes depending on the viewing angle

3D effect display!

55

Slot machine reel unitState-of-the-art motor control

technology

Achieves high revolution mode and high precision stop control!

Shinko Shoji Co.,Ltd

Director Shuji Isshiki

Tel: (81)-3-6361-8062

Fax: (81)-3-5437-8481

e-mail: shuji.isshiki @st.shinko-sj.co.jp

Head Office: Art Village Osaki Central Tower 13F

1-2-2 Osaki Shinagawa-ku Tokyo 141-8540 Japan

HP: http://www. shinko-sj.co.jp

Contact Information

earnings report for fiscal 2018 ending march 31, …...2019/05/22 · consolidated financial...

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