Ferrotec Corporation Results for fiscal year ended March 31, 2008

Transcription

1 Ferrotec Corporation Results for fiscal year ended March 31, 28 June 2, 28 (JASDAQ 689) 1.This fiscal year results cover twelve months period from April to March of Ferrotec, and twelve months period from Jan. to Dec. of consolidated subsidiaries and affiliated companies included in investment profit loss in equity method. 2. These materials were prepared for the purpose of providing information regarding the company s results of operations for the fiscal year ended March 31, 28. These materials were prepared based on information available as of May 23, 28. All opinions, forecasts and other forward-looking statements are based on management s judgments in accordance with materials available at that time and may be changed without prior notice.

2 Sales by industry sector FY March 28 Sales 36.6 billion yen FY March 29(plan) Sales 4. billion yen In dustrial machinery and others 13% Semiconductor FPD 54% Industrial machinery and others 11% Semiconductor FPD 43% Electronic device 15% Electronic device 14% PV 17% PV 32% 2

3 Sales trend by segment Annual sales Sales 4, 23,946 32,517 36,625 4, Composition ratio in FY March 29(Plan) 3, 2, 8,879 11,459 5,286 11,847 5,68 15,1 5,6 CMS 37.8% Electronic device 14.% 1, 3,48 11,659 15,771 19,168 19,3 Equipment related 48.3% FY March 26 FY March 27 FY March 28 FY March 29(e) 3

4 Equipment related business : Sales by product OEM of Quartz Product is going well Sales 7,7 8,71 8,457 8,218 8,78 1,52 12, 1, 8, 6, 4, 1,148 1,93 2,43 1,182 1,426 2,93 1,377 1,753 3,563 1,298 1,758 3,651 1,34 1,956 2,727 1,86 2,244 3,273 Crystal Silicon Ingot EB-gun, others Quartz Product 2, 2,426 3,19 3,17 2,751 2,757 3,143 Vacuum feedthrough 27 1st. 27 2nd. 28 1st. 28 2nd. 29 1st. 29 2nd. (e) (e) 4

5 Status and Outlook for Vacuum Feedthroughs 6, 5, 4, 3, 2, 4,335 Annual sales 5,616 5,768 5,9 1. Status of FY March 28 Capital expenditure in Semiconductor Industry was strong in the 1st half but there was adjustment in the 2nd half. Asian companies resumed Capital expenditures for FPD equipment in the 2nd half. Started receiving orders of vacuum feedthroughs used in thin film equipment for solar panel application. Maintained the strength in US throughout the fiscal year. 1, Ferrotec Korea was established and began operations. 3,5 3, 2,5 2, 1,5 1, 5 FY March 26 3,17 FY March 27 FY March 28 2,751 2,757 FY March 29(e) 3, Outlook for FY March 29 Vacuum Feedthroughs for Solar Panel Application related sales in Japan and Asia will increase but decline in Semiconductor Industry. FPD related sales in Japan and Asia will increase. Vacuum feedthroughs for Ferrotec Single Crystal Silicon Growing Furnace is increasing and planning to expand production capacity. Chamber flanges and other vacuum components are going well. 5 1st FY March 28 2nd FY March 28 1st FY March 29(e) 2nd FY March 29(e)

6 Vacuum Feedthrough : Sales by Category FY March 27 Sales 5.6 b FY March 28 Sales 5.7 b Industrial 2% Others 9% Semiconductor 49% PV 15% Others 16% Semiconductor 49% FPD 22% Industrial 2% FPD 18% Industrial: Industrial Vacuum Equipment Others: Aero, Medical, Science etc 6

7 Status and Outlook for Quartz Products 7 8, 7, 6, 5, 4, 3, 2, 1, 4, 3,5 3, 2,5 2, 1,5 1, 5 4,86 FY March 26 3,563 1st FY March 28 Annual sales 5,36 FY March 27 3,651 2nd FY March 28 7,214 FY March 28 2,727 1st FY March 29(e) 6, FY March 29(e) 3,273 2nd FY March 29(e) 1. Status of FY March 28 Steady orders for 3mm products due to the continuation of large capital expenditures in Japan and US. Maintained strong sales of OEM products from US customers and further expansion in Chinese market. Ferrotec Taiwan started receiving orders from Taiwan foundries. 2. Outlook for FY March 29 Because of the decline in memory chip price and postponements and downsizing of 3mm capital expenditures, orders for 3mm products are decreasing rapidly. Steep drop in OEM orders from Japanese major company for TPS and cleaning equipment; Expecting recovery from the 2nd half Strategies: Promote more OEM products to US customers. Promote sales expansion in Taiwan foundry market. Promote sales channel expansion in solar panel application in Japan and China.

8 Quartz products : Sales by Region FY March 27 FY March 28 Sales 5.3 b Sales 7.2 b USA 23% AsiaChina 5% 3% China 9% Europe Asia 1% 6% Japan 69% USA 26% Japan 58% 8

9 Electronic device business : Sales by product Forecasting growth of thermo-electronic module sales in second half Sales 2,235 3,51 2,769 2,839 2,45 3,151 3,5 3, 2, FFB Ferrofluid, SMT, others 2, 328 1,5 1, 1,862 2,724 2,462 2,569 2,148 2,852 Theremoelectronic module 5 1st FY March 27 2nd FY Mrach 27 1st FY March 28 2nd FY Mrach 28 1st FY March 29(e) 2nd FY Mrach 29(e) 9

10 Status and Outlook for Thermoelectric Module Products 1 6, 5, 4, 3, 2, 1, 3, 2,5 2, 1,5 1, 5 2,623 FY March 26 2,462 1st FY March 28 Annual sales 4,586 FY March 27 2,569 2nd FY March 28 5,31 5, FY March 28 2,148 1st FY March 29(e) FY March 29(e) 2,852 2nd FY March 29(e) 1. Status of FY March 28 Automobile Seat Application(CCS TM: Climate Control Seat) Sales increased as 3 more European car models adopted the CCS Other applications For semiconductor, Bio and Medical markets are pulling the sales. Others for Industrial market is remaining firm. 2. Outlook for FY March 29 Automobile Seat Application(CCS TM: Climate Control Seat) Sales in Russia and China will increase but forecasting only single-digit sales growth due to the decline of SUV sales by the rise in the price of oil and US economic stagnation Other applications Received inquires from Medical, Bio, and home appliances which require high quality and high performance products, however, the large orders are postponed to 2 nd FY March 29. Strategies: Requesting to pass through the prices due to the rise in the price of raw material. Automation of assembly line is in progress.

11 Thermo-electric Modules : Sales by category Consumer 3% Science 3% Biochemical 5% Photology 9% Optical communicat ion 2% FY March 27 Others 11% Sales 4.5 b Automobile 58% Biochemical 5% Photology 5% Optical communication 4% Semiconductor 8% Science 3% Consumer 2% FY March 28 Sales 5. b Oters 4% Automobile 69% Semiconductor 9% 11

12 Car Model adopting Climate Control Seat TM (CCS TM ) CCS TM are adopted by American, Japanese and the European manufacturers. Car model adopting CCS TM (Source :AMERIGON HP, March 28) 12 Model 1 Lincoln Navigator SUV 2 Ford Expedition SUV 3 Lincoln Aviator SUV 4 Lincoln LS luxury sedan 5 Mercury Monterey minivan 6 Lincoln Zephyr luxury sedan 7 Cadillac XLR roadster 8 Cadillac Escalad 9 Cadillac Escalade EXT 1 Cadillac Escalade ESV 11 Cadilac DTS luxury sedan 12 Buick Lucerne luxury sedan 13 Hyndai Equus luxury sedan 14 Infinity M45 luxury sports sedan 15 Infinity Q45 luxury sedan 16 Nissan Cima luxury sedan 17 Nissan Fuga mid-sized sedan 18 Lexus LS 43 luxury sedan 19 Toyota Celsior luxury sedan 2 Toyota Century luxury limousine 21 Lexus LS 46 luxury sedan 22 Lexus LS 46L luxury sedan 23 Range Rover SUV 24 Jaguar XJ Luxury sedan 25 Lexus LS 6h L luxury hybrid sedan 26 Jaguar XF Mid-size sports sedan 27 Lincoln MKS 28 Hyndai Genesis 29 Lexus LX 57

13 Status and Outlook for CMS Business Annual sales CMS business content 16, 11,459 11,847 15,1 Contract manufacturing of Machine Tools, Single Crystal Silicon Growing Furnace, Wafer processing, etc 13 12, 8, 4, 8, 6, 4, 2, 3,467 2,194 5,798 1,631 1,518 2,278 1,894 1,257 3,269 3,525 2,775 5,547 FY March 27 FY March 28 1st FY 2nd FY March 28March 28 2,82 2,93 2,358 1st FY March 29(e) 4, 6,5 4,6 FY March 29(e) 5,427 6,42 7,37 7,73 1,918 3,57 2,242 2nd FY March 29(e) Various Type of CMS PV related Equipment. Silicon CMS Various Type of CMS PV related Equipment. Silicon CMS 1. Status of FY March 28 Silicon CMS Number of wafers processing declined due to the concentration on 6-inch wafers. Cleaning of equipment parts Strong sales in semiconductor and FPD foundries. Machine Tool Production Maintaining firm orders from Japanese machine tool companies. 2. Outlook for FY March 29 Silicon CMS Forecasting lower sales due the adjustment in semiconductor market. Equipment parts cleansing Forecasting flat sales. FPD will increase but Semiconductor will decrease. Machine Tool Production Withdraw from contract manufacturing product that have lower profitability.

14 Status and Outlook for PV Related Products 14 12, 8, 4, 6, 4, 2, ,194 1, ,775 FY March 27 FY March 28 2, ,68 1st FY March 28 3, ,77 2,54 2nd FY march 28 Annual sales 4,638 1, ,93 4,365 1st FY March 29(e) 2, 1,7 6,5 FY March 29(e) 5,835 1, ,57 2nd FY March 29(e) Silicon Crucible PV Equipment. Silicon Crucible PV Equipment. 1. Status of FY March 28 Equipment for Solar Panel Application Received large orders of Single Crystal Silicon Growing Furnace from Chinese major solar cell manufactures. -Additional orders have increased. -Continuation of strong demands. - -Product delivery went smoothly from the Second. Single Crystal Silicon Orders remained strong despite the shortage of raw materials. Crucibles Steady growth ;Increasing production capacity. 2. Outlook for FY March 29 Equipment for Solar Panel Application Started receiving orders of Multi-Crystal Silicon Ingot Growing Furnace. Expecting smooth delivery for Single Crystal Silicon Growing Furnace. Starting a Wire-saw business to meet customer demands Single Crystal Silicon Expecting increase in orders as raw material manufacturers increase output Crucibles Strong raise of production along with the increase of Single Crystal Silicon Growing Furnace delivery.

15 Single Crystal Silicon Growing Furnace Single Crystal Silicon Growing Furnace for Solar Panel Application Single Crystal Silicon Growing Single Crystal Silicon Ingot for Solar Panel Application Single Crystal Silicon Growing Furnace Business Increasing monthly production from 3 units to 4 units In addition to the 135kg charger for 8-inch wafers, planning to release 15kg charger in 28. Single Crystal Silicon Growing Furnace Support Business Production and delivery of crucibles (consumables) are strong Production and delivery of carbon parts (periodic replacement) Single Crystal Silicon Ingot business Contract manufacturing of Single Crystal Silicon Ingot using raw materials supplied by customers Planning to double production capacity for Single crystal silicon ingot. 15

16 Multi Crystal Silicon Growing Furnace Multi Crystal Silicon Growing Furnace for solar panel application Casting method Multi Crystal Silicon Growing Furnace Business Expecting this business to become a growth driver for 28 Increasing production capacity to 1 units per month within this Fiscal year. Manufacturing and selling two models: 27kg and 45kg charger. Larger equipment is the mainstream. Single Crystal Silicon customers are starting to produce Multi Crystal Silicon. -Includes Ferrotec produced hot zone. Polycrystal Silicon 16

17 Wire-Saw Wire-Saw Wire Saw Businesses Slice single crystal and multi crystal silicon ingots Slices ingots using a high-speed ultra-fine wire with slurry. Alliance with Tokyo Rope Manufacturing Co., Ltd. Raise production capacity to 1 units per month. Start receiving orders from July 28. One wire-saw is needed for every 3 single crystal silicon growing furnace. One wire-saw is needed for every each multi crystal silicon growing furnace. 17

18 Sales Strategy in PV sector Growing Slicing Cell Module Panel Single-Crystal Si Material Impurity Diffusion Diffusion furnace Electrode formation Poly-Crystal Si Material Impurity Diffusion Electrode formation Diffusion furnace Thin-film 18

19 Reference Material for PV industry Annual market Scenario Further growth is expected in China (Unit:MWp) (Million Euro) Pessimistic scenario Optimistic scenario Source:EPIA Market Value China East Asia South Asia Source:EPIA 19

20 Business performance(fy March 28 vs. 29) 2 FY March 28 FY March 29(e) Amount (%) Amount (%) Change (%) Sales 36, , 1. 3, Vacuum feedthrough 5, , Quartz 7, , 15. 1, EB-gun others 2, , Crucible , , Silicon crystal ingot 2, , Equipment related 19, , Theremo module 5, , Ferrofluid,SMT, others Electronic device 5, , CMS 11, , , (Silicon CMS) 5, , (PV Equipment) 2, , , Gross Profits 1, , SG&A 7, , Operating Profits 3, , Ordinary Profits 2, , Net income 1, , Capital investment 2,449-2, Depreciation 2,144-2,

21 Business performance(fy March 29 1 st. half vs. 2 nd. half) FY March 29 1st. FY March 29 2nd. Amount (%) Amount (%) Change (%) Sales 18, ,4 1. 2, Vacuum feedthrough 2, , Quartz 2, , EB-gun others 1, , Crucible Silicon crystal ingot 1, , Equipment related 8, , , Theremo module 2, , Ferrofluid,SMT, others Electronic device 2, , CMS 5, , , (Silicon CMS) 2, , (PV Equipment) 7, , , Gross Profits 5, , SG&A 3, , Operating Profits 1, , Ordinary Profits 1, , Net income

22 Amount of Capital Expenditure / Depreciation Expense Graph (3/3-9-3) 4, 3, 2, 1, 3,263 3,128 2,449 2,5 2,74 2,136 2,73 2,144 2,2 1,87 1,67 1,359 1,11 1, (e) 22 Amount of Capital Expenditure Depreciation

23 Operating Margin by Business Segment Equipment-related segment continues to perform well Both the electronic devices & CMS are recovering Operating profit margin (%) (CMS) (CMS) st. 24 2nd. 25 1st. 25 2nd st. 26 2nd. 27 1st. Equipment related Electronic device CMS 27 2nd. 28 1st. 28 2nd. 23

24 Sales and Growth of Ferrotec Group 45, 4, 35, 1999 Sales 5.6 b Acquired ex-parent, FFC(US) by TOB FY March 29(e) 4 billion yens 3, 25, 2, 15, 1, 5, 1987 Sales 2.4 b MBO from FFC(US) 1996 Sales 3.6 b IPO on JASDAQ

25 Growth in Production Capacity in China Third Shanghai factory (3, m2 ) 14, 12, 1, 8, 6, 4, Floor area( m2 ) Hangzhou Sales Second Shanghai factory (2, m2 ) Second Hangzhou factory (3, m2 ) Third Hangzhou factory (4, m2 ) S a l e s (1 m \ )Shanghai , FY. Mar FY Mar.9(e) 25

26 Cash Flow trend 3, Swiss franc CB issue (about 1.9 b ) Redemption of 99.7% (March 28) Public placement 2.2 b 2,892 Stock repurchase 1.1 b 2, , 1, -1, -2, -3, ,573-1, st ,254-2, nd , st ,297 1, nd st. 1, , nd. 1, , st. -2, nd. 1, st. -2, nd -1,164-1,465 Operating C/F Investment C/F Financing C/F 28 1st , nd

27 Sales by region Sales in each area is growing Sales by region 1, 8, 6, 4, 2, 8,868 4,976 4,881 Japan Asia Europe and USA 25 1st. 25 2nd. 26 1st. 26 2nd. 27 1st. 27 2nd. 28 1st. 28 2nd. 27

28 Strategies for M&A and Alliances Past M&A and alliances ---- Acquisition of companies with manufacturing technologies and alliances to enlarge business operations Time Company acquired/alliance partner Description May. 28 Business cooperation of Wire-Saw and establishment of joint venture for trading Wire-Saw outside Japan with Tokyo Rope Manufacturing Co., Ltd Tokyo Rope Group and Ferrotec Group agreed to form an alliance to manufacture and establish a joint venture to distribute wire saws in countries other than Japan. Mar. 28 Acquisition of Sumikin Ceramics and Quartz Corporation Agreed to purchase a 9% equity stake by the end of September 28 in the company formed through the spin-off of all businesses of Sumikin Ceramics & Quartz other than its ceramics operations Dec. 27 Jointly established an assembly sales company in Korea. Established "CMC Ferrotec" with the local company for the manufacture of solar cell manufacturing equipment. April, 27 Established a joint venture Manufacturing Corporation in Korea Established joint venture corporation Ferrotec Korea Co.Ltd with Korean Company(KSMC Corp) for manufacturing Vacuum Feedthrough. Nov. 26 Merger and liquidation Merged with Ferrotec Precision, which produces Vacuum feedthrough. Liquidated two subsidiaries.(dec.). Sep. 26 Established a joint venture in Taiwan Established Ferrotec Taiwan jointly with a local partner to sell vacuum feedthroughs and offer maintenance services Dec. 25 Established a joint venture with LTD Ceramics Inc. (USA) Established joint venture in China to manufacture ceramics July 25 Acquired NORD Co., Ltd.(Russia) Acquired company that manufactures and sells Peltier (thermoelectric) devices in order to increase share of global market May 25 Business alliance with KSM Inc.(Korea) Alliance for mutual sales of vacuum feedthroughs and products associated with semiconductor manufacturing equipment Oct. 24 Acquired trade right from Advanced Fluid Systems(U.K.) Purchased rights from this company for the European vacuum feedthrough business July 24 Exclusive contract with Applied Films(Germany) Gave this company exclusive rights to purchase Ferrotec vacuum feedthroughs Oct. 23 Business and financial alliance with Aliontek Technology alliance with ALIONTEK CORPORATION, which has technology for the grinding of quartz products, strengthened manufacturing technology for quartz products in China July 22 Established a joint venture Diacelltec Corporation with Mitsubishi Cable Industries, Ltd Established jointly owned company to manufacture and sell lithium-ion batteries and take over the lithiumion battery business of Mitsubishi Cable Feb. 22 Business alliance with Toshiba Ceramics and Mitsui Co. for wafer production by commissioning Ferrotec silicon wafer production equipment moved to China factory to conduct a CMS business, and manufacturing is outsourced to this factory 28 Feb. 22 Acquired control of Ferrotec Silicon through exchange of shares Group acquires manufacturing technology and operating rights for silicon crystal ingots