Financial Results for FY2019
April 24, 2020
6807 Japan Aviation Electronics Industry, Ltd.
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AgendaTechnology to Inspire Innovation

I.

Financial Results for FY2019

II.

Prospects for FY2020

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2

Technology to Inspire Innovation

Ⅰ. Financial Results for FY2019(From April 1, 2019 to March 31, 2020)

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3

Net Sales and Profits
Technology to Inspire Innovation(JPY in 100millions)

1H

FY20182H

1H

FY20192HNet Sales

1,180

1,042

2,221

1,0081,073

Operating
Profit

94

79

173

72

70

142

7.9%

7.6%

7.8%

7.1%

6.5%

6.8%

10674

180

74

70

144

9.0%

7.1%

8.1%

7.3%

6.5%

6.9%

77

58

13559

53

111

to Net Sales

6.5%

5.6%

6.1%

5.8%

4.9%

5.4%

Average Exchange
Rate (JPY/USD)

110.3

111.6

110.9

108.6

108.8

108.7

Dividend（JPY）

15.0

20.0

35.0

20.0

20.0

40.0

to Net Sales

Ordinary
Profitto Net Sales

NetProfit

Year/Year
Change2,081 -140

94%

Projections(announcedOct, 2019)

2,030-3282%-3780%

140-2482%

105

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4

Sales by Market Segment
Technology to Inspire Innovation(JPY in 100millions)

FY20181H

2H

MobileDevices

582

466

Automotive

369

Industrial &Infrastructure
OthersTotal

FY2019Year/Year
ChangeProjections
announced
Oct, 2019

1H

2H

1,049

477

525

1,001

95%

940

360

729

343

361

704

97%

700

171

153

324

137

129

267

82%

280

57

63

120

51

58

109

91%

110

1,180

1,042

2,221

1,008

1,073

2,081

94%

2,030

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Net Sales and Profits By Business Segment
Technology to Inspire Innovation

FY2018（JPY in 100millions）

1H

2H

Sales

1,062917

Connector Segment Profit

105.7

to Net Sales

FY2019Projections
announcesOct, 2019Year/Year
Change

1H

2H

1,979

891945

1,836

-143

93%

87.3

193.0

85.0

88.9

173.9

-19.2

90%

10.0%

9.5%

9.8%

9.5%

9.4%

9.5%

Sales

4338

81

3951

90

8110%

Segment Profit

3.4

1.0

4.4

-1.9

-2.5

-4.4

-8.8

－to Net Sales

8.0%

2.5%

5.4%

-5.0%

-4.8%

-4.9%

Sales

7082

15275

73

149

-497%

Aerospace Segment Profit

7.0

11.4

18.310.2

3.9

14.1

-4.2

77%

to Net Sales

10.0%

13.8%

12.0%

13.6%

5.3%

9.5%

4484

37-1

83%

10Segment Profit

-22.6

-20.2

-42.7

-21.6

-20.5

-42.1

0.6

99%ー

Sales

1,180

1,042

2,221

1,008

1,073

2,081

-140

94%

2,030

Operation Profit

93.6

79.5

173.0

71.7

69.8

141.5

-31.5

82%

to Net Sales

7.9%

7.6%

7.8%

7.1%

6.5%

6.8%

UIS

Unallocatablecost/ Others

Total

Sales

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1,765－95ー160ー

1456

Connector Business［Quarterly Net Sales and Profit］
Technology to Inspire Innovation▶ Mobile Device: Sales remained high until 3Q due to strong demand for mobile phones in
China and launch in North America, but demand in 4Q decreased due to seasonality andnovel coronavirus (COVID-19) diseases.
▶ Automotive: Stagnation continues due to sluggish automobile sales worldwide.
▶ Industrial & Infrastructure: Lagging recovery due to sluggish demand in the worldwide
market.

Sales by Market Segment・Segment Profit(JPY in 100 millions)

508

496
Sales376

437

395
290

284

Mobile DevicesAutomotiveIndustrial &Infrastructure
PC・LCD・TV Others

163

4Q/FY2018

235

192

Segment
159 Profit154
37 22.5
17

COVID-19 Impact
approx. -2.6 Billion Yen

3612163
29.5

1Q/FY2019371255.5

2Q/FY2019

165

50.8

39153Q/FY2019

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155
38.1
37114Q/FY2019

7

UIS Business［Quarterly Net Sales and Profit］
Technology to Inspire Innovation▶ Automotive: Production of new automotive touch sensor products (film sensors)
gradually started and sales increased in the second half of the fiscal year
▶ Industrial and Infrastructure: Sales remained almost unchanged within the fiscal
year due to continued sluggish demand
Sales by Market Segment・Segment Profit

COVID-19 Impact
approx. -0.1 Billion Yen

28(JPY in 100 millions)

Sales

19Automotive
Industrial &Infrastructure

1711723

21

20

10Segment
Profit0.3

7-0.4

4Q/FY2018

1Q/FY2019131687-1.6

2Q/FY201980.0-2.5
3Q/FY2019

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4Q/FY2019

8Aerospace Business［Quarterly Net Sales and Profit］
Technology to Inspire Innovation▶ Industrial and Infrastructure: Demand declined for oil field drilling sensors
due to the drop in crude oil prices
Sales of products for semiconductor manufacturing equipment (linearmotors, etc.) bottomed out, but did not show a full-fledged recovery
Sales by Market Segment・Segment Profit(JPY in 100 millions)

Sales

4341

Industrial &Infrastructure
and Automotive

38

37
31

29

13

5.4

4Q/FY2018

2224

Segment 29

21

ProfitDefense & SpaceCOVID-19 Impact
approx. -0.1 Billion Yen

7.2
91Q/FY2019

1321
3.02Q/FY2019

91.2

3Q/FY2019

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2.74Q/FY2019

9Capital Investment & Depreciation
Technology to Inspire Innovation(JPY in 100 millions)

176

222

245
734239188

CapitalInvestments
Depreciation
198

22184

7191219
FY2017(New Plant/Expansion)

Breakdown of
Increased Investment

 Expansion of facilities in response

11164

Investment in productive infrastructure

FY2018200

3204
FY2019to increased smartphone demand
due to 5G• Board-to-board connectors
 Introduction of new products toautomotive market• European standard compliant
airbag connectors• High-current connector for EV• Production increase of
automotive touch panel (filmsensor)
 New Products Launch for Industrial
and Infrastructure market• Board-to-Board connectors for
FA machine tool interior
Loss by scrappingof production facilities

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10

Technology to Inspire Innovation

Ⅱ. Prospects for FY2020

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11

Business Environment [Demand and Sales]▶ Business environment by market

Technology to Inspire Innovation

 Mobile and ICT devices• Outlook for final consumption is uncertain although market
recovery from later 1Q to 2Q is expected due to the launchof new products• Delay of customers’ overseas production resumption (India, etc.)
and that of new models’ productions are the risk factors• PC, tablets, and game machines exceeded expectations due toworldwide shifting to stay-at-home economy
 Automotive• Actual requirement exists to cater resumption of customers’
production in some areas, however, the demand from June
onward will be uncertain.
 Industrial and Infrastructure• Despite signs of a recovery in demand can be seen in someequipment (semiconductor-related)​ and regions (China), overall
recovery cannot be expected.
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Current Business Environment [Production]
Technology to Inspire Innovation▶ Operation status of the JAE Group's manufacturing sites
adversely affected by COVID-19 pandemic, as of April 24
 JAE Philippines: Suspended operation from March 17
Resuming operations in a limited scope, respecting theenhanced quarantine.
• Currently operating with approx. 20% of the usualworkforce• Quarantine period ends April 30
 JAE Tijuana：Suspended operation from April 14 according tothe Mexican Government’s Declaration of a National HealthEmergency.
• Shutdown other than essential activities are extended toend of May (original deadline: April 30).
 Alternative production for items produced in above 2
production sites, mainly automotive connectors​/harnesses​,
will be promoted in Japan and at other overseas sites, however
the supply will be limited to minimum amount.
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Prospects for FY2020
Technology to Inspire Innovation▶ The COVID-19 outbreak is expected to give significant
impact to our performance, such as• Operational restrictions on the Group's overseas
production sites,• Customers’ production cutbacks and shutdowns,• Sluggish final consumption in each markets.
▶ It is difficult at this point to forecast the scale andduration of the impact of the above. Therefore, wehave left our full-year projection undetermined.
▶ We will carefully assess the COVID-19 pandemic
impact and promptly announce the full-year forecast
when it becomes clearer.
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Current Situation (April – May Forecast)Technology to Inspire Innovation

Outlook for June and beyond is uncertain, since it is very hard todetermine when our factories affected will resume operations andhow final demand will ramp up▶ Mobile Device: Difficult to predict when customers will resume production or when
new products will be launched▶ Automotive: There is a gap with trends in final consumption despite the latest
requirements following the resumption of production at the customer's China plant.
Resumption of production at our factories are uncertain.
▶ Industrial and Infrastructure: The situation is unpredictable, although someequipment and areas are recovering.
Sales
vs. Plan
Total 20% drop

Total 10% drop

10% drop

roughly in linewith plan

30% drop

20% drop

20% drop

10% drop

ActualInitial Forecast
Plan

Initial Forecast
PlanMarAprMay

Mobile Devices

Automotive
Industrial &Infrastructure
PC・LCD・TV Others※Initial plan isinternal plan asof early Marchvs. Plan

Initial Forecast
Plan

Copyright ©2020. Japan Aviation Electronics Industry. LtdJun15

Progress of Mid-Term Growth Initiatives（Mobile Device）
Technology to Inspire Innovation

Capturing business opportunities for 5G ecosystem
Smart Phone
Base Station▶ In FY2019, 24% year-on-year sales
growth was achieved for Chinese
smartphones, owing to a market sharegain▶ Expansion of production capacity wasmade in FY2019. It was for expecteddemand increase of internal connectors
in coming years due to smartphones
with higher-functionality and 5G; thus
continue to aim for market share
increase▶ Promote internal board-to-board
connectors for high-frequency products,
high-current compatibilities and spacesavings

0.3mm Pitch
Board-to-board connectors

Rapid charging high current
Board-to-board connectors▶ Products for domestic base station
manufacturers launched and sales of
new products, such as optical interface
connectors and millimeter-wave coaxialconnectors, increased in FY2019▶ Acquire businesses triggered by basestation increase due to expanding 5G
coverage area

Optical interface connectors

Interior coaxial connectors

Connectors for fan docking

Environmen​tal-resist​ant
round connectors for power
supplyCopyright ©2020. Japan Aviation Electronics Industry. Ltd16

Progress of Mid-Term Growth Initiatives（Automotive）
Technology to Inspire Innovation

Focus on CASE driven Automotive Markets
ADAS/Connected
EV/Others▶ High-current, high-voltage connectors for EV▶ ADAS
 For Cameras
Expanding mainly to Japanese makers▶ Connected For multimedia applications (carnavigation systems) of Japanese OEMs,
design-wins of coaxial connectors
connected to antenna, Ethernet
connectors for in-vehicle networks, highspeed transmission connectors for imagetransmission, and in-vehicle USB areincreasing.

 Started mass production for European
manufacturers
Expand adoption to European and Japanesecustomers▶ Connectors for EV charging
 Sales grew due to launch of new products for
the European market▶ Squib connectors for airbags
 In addition to European OEMs, number ofcustomers adopting our squib connectors anddesign-wins are increasing among NorthAmerican OEMs.
EV Fast Charging
Type-2 CCS

Connector for in-vehicle
cameraHSD-compatible Connectors for Highspeed Transmission

High-current,
high-voltage connectors

Copyright ©2020. Japan Aviation Electronics Industry. LtdSquib connectors
for in-vehicle airbags

17

［Reference］Sales by Market Segment［5 years trend］
Technology to Inspire Innovation▶ Mobile device: Sales decreased for the specific products with built-in procured
components peaked out in FY2017▶ Automotive: Both Japanese and European customers were sluggish in FY2019 due tostagnant global automobile sales.
▶ Industrial and Infrastructure: Slow recovery due to continued slump in the final demandin Japan and overseas from the second half of FY2018
Sales by Market Segment(JPY in 100 millions)
COVID-19 Impact
approx. -2.8 Billion Yen
2,539
2,221

2,095
1,795

1,379
1,052

MobileDevices

707

Automotive

684

655

Industrial &Infrastructure
Others246
158
FY2015

1,049

2,081
1,001

698

729

704

255
133

327
135

324
120

267
109

FY2016FY2017FY2018FY2019Copyright ©2020. Japan Aviation Electronics Industry. Ltd19

[Reference] Impact by the COVID-19 outbreak（FY2019）Technology to Inspire Innovation▶ Impact on production
 JAE Wuxi (connector) & JAE Wujiang (connector/UIS/Aerospace)
Operations were suspended after the Chinese New Yearholiday season until February 9, and resumed on February 10
 JAE Philippines (mainly connectors and cable harnesses forautomotive)
Operations were suspended from March 17
 Delayed availability of some components▶ Demand-side effects
 Demand decreased mainly for mobile devices due to theshutdown of customers' production sites in China sinceFebruary
Impact on financial results for 4Q of FY2019
Sales: Approx. 2.8 billion yenOperating income: Approx. 0.7 billion yen
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［Reference］Connector Business［annual performance］
Technology to Inspire Innovation(JPY in 100 millions)

Sales by Market Segment

1,979

Year/Year
Change93%

1,836

Mobile Devices

1,049

95%

Automotive

677

94%

637

184
70
2018

81%

148
50
2019

Industrial &(億円)
Infrastructure
PC・LCD・TV
Others

1,001(Fiscal Year)

Segment Profit（億円）

9.8%

193
2018

Returnon Sales

9.5%

Net sales: 93%, year/year▶ Mobile devices• Solid sales to customers in NorthAmerica• Gained market share for smartphonecustomers in China• Sales of USB Type-C™ DX07 series
remained at the same level as theprevious fiscal year
• Specific products with built-in procured
components decreased▶ Automotive
Demand decreased both in Japan andoverseas▶ Industrial and Infrastructure
Demand continues to decline, mainly inthe domestic FA market

Operating income: minus 1.9 billion
yen from the previous year
2019 (Fiscal Year)▶ Profit decreased due to lower sales
174

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［Reference］UIS Business［annual performance］
Technology to Inspire Innovation(JPY in 100 millions)

Sales by Market Segment

81Year/Year
Change90110%

Automotive

45132%

59

Industrial &Infrastructure

3684%

31

2018

2019 (Fiscal Year)
Segment Profit(JPY in 100 millions)

5.4%
42018

Net sales: 110%, year/year▶ Automotive (Capacitive Touch Panels)
Significant increase due toexpanding models adopting new
products (film sensors)▶ Industrial and Infrastructure
Decreased from the previous year
due to the continued sluggish
marketReturnon Sales

Operating income: minus 0.9 billion yen
0 the previous yearfrom▶ Profit deteriorated due to the delay
0in cost improvement of newly-4launched automotive touch panels
and the sales decrease in industrial-4.9%
2019 (Fiscal Year) & infrastructure market

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22

［Reference］Aerospace Business［annual performance］
Technology to Inspire Innovation

Sales by Market Segment(JPY in 100 millions)152

Year/Year
Change97%

Industrial &Infrastructureand Automotive

11087%

Defense &Space42125%

2018

149

9652

2019 (Fiscal Year)
Segment Profit(JPY in 100 millions)12.0%

Net sales: 97%, year/year▶ Industrial & infrastructure, andAutomotive
Sales decreased from the 2H dueto sluggish demand for sensors foroil drilling▶ Defense & Space
Recovered to the normal-yearlevel, after the transition period ofprojects in the previous fiscal year

Returnon Sales

9.5%

Operating income: minus 0.4 billion
yen from the previous year
▶ Profit ratio decreased due to thesignificant impact of lower salesof sensors for oil drilling

18142018

2019 (Fiscal Year)

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Technology to Inspire Innovation<Cautionary Statement>
The plans, strategies & results forecasts and targets for our company and our consolidated affiliates(hereinafter JAE) noted in these materials are forecasts and targets as of April 24, 2020, and include risks anduncertainties.
The targets noted in these materials are not projections, and do not reflect current projections by themanagement team with regards to future results. Rather, these are targets to be attained by the management
team through implementing business strategies.
Note that actual results may differ greatly from forecasts and targets, etc. based on various factors. Major
factors that affect actual business results, etc. are the political and economic situations in Japan, the US, Asiaand so forth that involve regions where JAE conducts business operations, demand fluctuations for JAE
products (including software products) in the market, deflationary pressures caused by severe competition,
the ability to continue supplying over our competitors, the ability to expand business operations in overseas
markets, changes to the laws and regulations concerning business activities, and their transparency, potential
legal responsibilities, exchange rates, etc, and there may be other factors beyond the ones listed here. Actual
results may differ from management targets and other forecasts due to a worsening global economy and theglobal financial situation, stagnation in the domestic and overseas stock markets, etc. Note that descriptions
concerning projections are current as of that day.
Although new risks and factors of uncertainty that occur at any anytime are evident, it is impossible topredict their occurrence or effects. In addition, details describing future predictions may not actually occur
due to risk and uncertainties. Do not rely solely on these descriptions.
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