Financial Results for FY2018
and Prospects for FY2019
April 24, 2019
6807 Japan Aviation Electronics Industry, Ltd.
Copyright ©2019. Japan Aviation Electronics Industry. Ltd

AgendaTechnology to Inspire Innovation

I.

Financial Results for FY2018

II.

Prospects and Strategy for FY2019

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2

Technology to Inspire Innovation

Ⅰ. Financial Results for FY2018(From April 1, 2018 to March 31, 2019)

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3

Net Sales and Profits

Technology to Inspire Innovation(JPY in 100millions)

1H

FY20172H

1H

FY20182H

Net Sales

1,245

1,294

2,539

1,180

1,042

Operating
Profit

95

111

206

94

79

173

7.6%

8.6%

8.1%

7.9%

7.6%

7.8%

85

89

174

106

74

180

6.8%

6.9%

6.8%

9.0%

7.1%

8.1%

62

67

129

77

58

135

to Net Sales

5.0%

5.2%

5.1%

6.5%

5.6%

6.1%

Average Exchange
Rate (JPY/USD)

111.0

110.7

110.9

110.3

111.6

110.9

Dividend
（JPY）

15.0

15.0

30.0

15.0

20.0

35.0

to Net Sales

Ordinary
Profitto Net SalesNet
ProfitYear/Year
Change2,221 -318

87%

Projections(announced
Jan, 2019)

2,220

-33

84%

7

104%

175

6

104%

130

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172

4

Sales by Market Segment

Technology to Inspire Innovation▶ Market Environment worsened from later half of 3Q
Mobile devices: OEMs adjusted production
Automotive: Slowdown of European and Chinese market
Industrial & Infrastructure: Demand from Japanese manufactures decreased
due to restrained capital investment in China(JPY in 100 millions)

MobileDevices

677

617

385

301

562
264

618

604

318

304

438
163

Automotive

181

186

186

183

188

172

86

85

81

72

25

32

31

32

1Q/FY2018

2Q/FY2018

3Q/FY2018

4Q/FY2018

Industrial &Infrastructure

82

91

Others29

39

3Q/FY2017

4Q/FY2017

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Connector Business(JPY in 100 millions)

Mobile Devices

Technology to Inspire Innovation

Sales by Market Segment

2,316

1,379

Year/Year
Change

85%

1,979

86%

1,049

Automotive

644

105%

677

Industrial &(億円)
Infrastructure

214

76%

184

PC・LCD・TV
Others

80

2017

2018
Segment Profit

10.1%

70

Returnon Sales(Fiscal Year)Sales: 85% (of FY2018)▶ Mobile Devices• Sales to customers in the US significantly
decreased• Sales to Chinese smartphone OEMs
increased• Sales of products with built-in procured
components and USB Type-C “DX07series” decreased▶ Automotive• Sales mainly to Japanese OEMs increased▶ Industrial & Infrastructure• Demand of Japanese FA market shrunkfrom later half of the fiscal year

9.8%

Operating Profit: minus 4.0 billion yen
compared to previous year

233

193

2017

2018(Fiscal Year)▶ Impacted by decline in sales

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UIS Business(JPY in 100 millions)

Sales by Market Segment

86

Automotive

Technology to Inspire Innovation

47

Year/Year
Change

95%

96%

81

Sales: 95% (of FY2018)▶ Automotive (capacitive touch panel)• Slight decrease due to end of life ofseveral models although the productionof new film sensors models expanded

45▶ Industrial & infrastructure
Industrial &Infrastructure

39

93%

2017

36
2018 (Fiscal Year)

Segment Profit(JPY in 100 millions)

9.4%

8
2017

• Sales fall short of last year due tomarket decline

Operating Profit: minus 0.4 billion yen
compared to previous year

Returnon Sales5.4%▶ Development costs and depreciation
expenses related to capacitive touch
panel production expansion has increased

42018 (Fiscal Year)

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Aerospace BusinessTechnology to Inspire Innovation

Sales by Market Segment(JPY in 100 millions)

Industrial &Infrastructure
and Automotive

Year/Year
Change

129

118%

82

134%

152

110

Sales: 118% (of FY2018)▶ Industrial & Infrastructure andAutomotive• Sales of oil drilling sensors was strong
throughout the year

▶ Defense and Space
Defense &
Space

47

89%

2017

42
2018 (Fiscal Year)

Segment Profit(JPY in 100 millions)

Returnon Sales

5.7%
7
2017

12.0%
18

• Sales fell short from previous year
due to stagnation of defense budget
for domestic goods purchase

Operating Profit: +1.1 billion yen
compared to previous year
▶ Sales increase of oil drilling sensors
contributed to margin improvement

2018 (Fiscal Year)

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Capital Investment & Depreciation

Technology to Inspire Innovation(JPY in 100 millions)

222

224

26

23

222

217
5

176
11

196

201

212

CapitalInvestments

164

34
188

Investment in productive
infrastructure(New Plant/Expansion)• B building of 2nd plantbuilt in JAE Philippines• New plant acquired in
JAE Taiwan• New plant built forrelocation in JAE Wuxi
• Expansion of molding
area at JAE Hirosaki

Depreciation
193
23

169
10

179

215
FY2014FY2015

193

198

4

22

197
FY2016219
FY2017184
7191

Loss by scrapping ofproduction facilities

FY2018

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9Technology to Inspire Innovation

Ⅱ. Prospects and Strategy for FY2019(From April 1, 2019 to March 31, 2020)

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FY2019 Environment and Strategy

Technology to Inspire Innovation▶ Business Environment (Market premises) Global Smartphone production to slightly decline from FY2019
 Worldwide automobile production to be flat.
In-vehicle electronic component market to expand stably byelectrification and popularization of ADAS
 Domestic industrial & infrastructure market to remain stringent▶ Improve profitability to maintain the same level of profit as
FY2018, in spite of sales decrease due to the severe market
conditions and demand decrease for specific products
 Maintain same level of sales and profit in 1st half as 2nd half of FY2018
 Improve profitability in 2nd half by not only new smartphone model
launches, increase in automobile demand, but also enhanced internal
manufacturing and productivity improvement
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Prospects for FY2019
Technology to Inspire Innovation(JPY in 100millons)

FY2018FY2019

1H

2H

Net Sales

1,180

1,042

2,221

1,030

-150

87%

2,150

-71

97%

Operating
Profit

94

79

173

77

-17

82%

185

12

107%

7.9%

7.6%

7.8%

7.5%

106

74

180

75

0

100%

9.0%

7.1%

8.1%

7.3%

77

58

135

56

0

100%

6.5%

5.6%

6.1%

5.4%

6.3%

110.3

111.6

110.9

110.0

110.0

to Net Sales

Ordinary
Profitto Net Sales

Net Profit
to Net Sales

Average
Exchange Rate
（JPY／USD）

Capital Investment

1H

FY2018
222

Year/Year Change Projections Year/Year Change

8.6%
-31

71%

180
8.4%

-21

73%

135

FY2019195

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Sales by Market Segment

Technology to Inspire Innovation▶ In the first half of FY2019, the same level of revenue as the previous half is expected due to themarket environment▶ In the second half, sales growth in the US smartphone customers, USB Type-C for mobile devices
and Japanese OEMs for automotive is expected. For industrial & infrastructure market, sales
growth mainly in aerospace business is expected(JPY in 100millons)

1,180

1,042
MobileDevices

582

Automotive

Industrial &Infrastructureothers

1,030

1,120

485

466

455

369

360

370

171

153

145

165

57

63

60

60

1H/FY2018

2H/FY2018

1H/FY2019
Projections

2H/FY2019
Projections

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Prospects for Sales by Business Segment

Technology to Inspire Innovation(JPY in 100millions)

FY2018FY20191H

1H

Year/Year Change Projections Year/Year Change

905 -157

1,875 -104

Connector 1,062

1,979

UIS

43

81

45

2

104%

100

19

123%

Aerospace

70

152

76

6

109%

165

13

108%

Others

4

8

4

0

91%

10

2

119%

Total

1,180

2,221

1,030 -150

87%

2,150

-71

97%

85%

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95%

14

Connector Business Strategy［Mobile Devices］
Market Premises for FY2019
 Sales of products with built-in procured
components continues to decrease Recovery expected for other products bylaunch of new models from later part of
1st half▶ Sales to Chinese SmartphoneOEMs Sales expected to increase from last year Customer base to expand
 Not only board-to-board connectors, but
expanding to other types of connecter
such as card connecters to expand

Technology to Inspire Innovation(JPY in 100millions)

582
466

455

485

1H/FY2018 2H/FY2018 1H/FY2019 2H/FY2019
Projections

Combo Type 3-in-2
Card Connector
ST19 Series

Projections

Waterproof
USB Type-C™
Receptacle▶ DX07 Series (USB Type-C) Put also focus on smartphone market
and recover to a growth path
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Connector Business Strategy［Automotive①］

Technology to Inspire Innovation

Strengthening efforts to Japanese and overseas customers
centering on CASE
Sales of automotive connector
by customer(car maker)(JPY in 100millions)

644

677

710

Others▶ Expanding Japanese OEM businesses Incorporate technology evolution ofconnected-cars, ADAS and Electric vehicle▶ Enhance products developed inEurope and expand into other regions
 Connectors for in-vehicle camera, AK squib
for air bags, waterproof FAKRA standard, etc.

European▶ Strengthen engineering andproduction system Enhance in-vehicle engineering resources
and reorganize technical division to copewith new areas of in-vehicle equipment

Japanese Construction of B building of 2nd plant in
JAE Philippines completed
FY2017FY2018FY2019Projections

AK: German Automotive Connector Evaluation Standard
FAKRA: Coaxial connector compatible to German FAKRA standard

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Connector Business Strategy［Automotive②］▶ADAS (Advanced Driver Assistance System) The number of on-board cameras andsensors tends to increase due to thepenetration of ADAS and automated driving
 Expand customers bases by utilizing prior
results in European and Japanese OEMs

Technology to Inspire Innovation

Sales of ADAS Camera(JPY in 100millions)

200

Approx. 3.5 folds

1000FY2018TargetSurround monitor camera

Connection by connectors
Side view
camera(rear-view)(side mirror)

Surround monitor camera(side-view)

Surround monitor camera(Front-view)

MirrorMonitorSurroundmonitor
ECU

Locator Camera: Camera for position measurement

Rear view
camera(back mirror)

Electric Mirror
ECU
MirrorMonitorADAS
ECU

Back guide camera

Rear view
mirrorcameraNavigation
Monitor

Anti-collision
support camera
Locator Camera

FY2023

Side view
camera(side mirror)

Surround monitor camera(side-view)

ECU : Electronic Control Unit

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Connector Business Strategy［Automotive③］▶EV (Electric Vehicle)

Products for EV

Connector for Battery
Monitoring ECU

 Increase businesses based on
results from service plug andbattery monitoring ECU
 Development of 400A class highcurrent technology

Service Plug:ECU
Invertor

Service PlugHigh current, high voltage connector

Plug to shut off high voltage circuit to protect workers fromelectric shock during maintenance work

Motor

Technology to Inspire Innovation

On-board
Charger
AC/DC
DC/DC

Standard
charging
inlet
Rapid
charging
inletHigh current, highvoltage line
SignalBattery

Driving/
Regenerative
brakes energy【Potential for connectors】

Transmission

Service
Plug

Battery
Monitoring
ECU

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High current, highvoltage connector
Signal connector

18Connector Business Strategy ［Industrial & Infrastructure］

Technology to Inspire Innovation

Pave the way for the growth after market recovery
Sales of connector in
Industrial & Infrastructure market(JPY in 100millions )

104

90
80

▶ Factory Automation Components

 Focus on internal connectors in
addition to external I/O connectors▶ Communications infrastructure Start shipping connectors for 5G
base stations
 Expand sales of high-speedtransmission and power connectors
for data centers

80▶ Global Expansion of EV charging
plug connector

1H/FY2018 2H/FY2018 1H/FY2019 2H/FY2019
Projections

Projections

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UIS Business Strategy

Technology to Inspire Innovation

Return to growth focusing on touch panel
Sales of UIS Business
100(JPY in 100millions )86

81▶ Increase the range of new models
to expand the automotive touch
panel business Substantially increase film sensor
sales by launching new models
 Enhance production line for film
sensors

Automotive▶ Expand electrostatic touch panel toindustrial & infrastructure market
for future growth Adopted to several models in FY2018

Industrial &Infrastructure⇒ Aim for expanding adopted
equipment and customers
FY2017FY2018FY2019Projections

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Aerospace Business Strategy

Technology to Inspire Innovation

Continue to expand oil drilling business where the▶ Sensors for Oil Drillingmarket is strong
Sales of Oil drilling sensor(JPY in 100millions)
50

109%
173%

1H
FY2017FY2018FY2019Projections

Sales of Semiconductor/liquid crystal
fabrication Equipment95%(JPY40in 100millions) 119%
30
20
10
0

 Expand sales of DDM to major drillingcompanies in addition to mid-market
drilling companies(DDM: Digital Directional Module)

2H
0 Continue solid growth in FY2019 due tostrong oil drilling business

105%

2H

FY2017FY2018▶ Sensor for semiconductor and LCD
panel manufacturing equipment
 Market condition will continue to be severein the first half of FY2019, but is expected toshow recovery from the second half

84%

1H

 Differentiate by demonstrating
comprehensive responsiveness by
presenting unitization and repair services in
addition to accelerometer and geomagnetic
sensors itself

FY2019Projections

 Promote deployment to devises other than
exposure equipment

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Strategy for Productivity Improvement
Increase internal
manufacturing

Cost reduction by increasing
in-house manufacturing▶ Increase production capacity• B building of 2nd plant in JAE Philippines,
completed in March 2019 with floor area of
1.5 folds▶ Enhance in-house production capabilityof molding dies
• Expand molding die area of JAE Hirosaki▶ Expand main factory for industrial &infrastructure market• New plant in JAE Taiwan
Operations commence in 2H of 2019
• Enhancement of in-house verticallyintegrated production system forindustrial & infrastructure products

Realize the results of capital investment
implemented in 2018

Technology to Inspire Innovation

Production &business innovation

Business innovation by
utilizing IoT and Robots▶ Speed-up operation improvement bymonitoring of production machineutilizing IoT▶ Increase introduction of collaboration
robots▶ Productivity improvement throughthorough automated production of
automotive cable harnesses▶ Carryout company-wide businessreformation activities• Speed-up management by businessprocess innovation from orderacceptance to shipping• Increase efficiency of indirect operation
by RPA introduction

Reform to lean corporate structure to improve profitability
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Strengthen R&D for mid-term growthTechnology to Inspire Innovation

Realizing the next-generation mobility and IoT society connectedwith 5G by continuously developing technology of "connecting
information" and "connecting people and devices"▶ Formed an alliance with the Institute of Industrial Science at
the University of Tokyo by concluding industrial and academic
cooperation agreement to accelerate next-generation
elemental technology development［Research Theme］

 Ultra-compact,
high-density connector
 Wearable device/ sensor related technology
 Advanced HMI for ADAS
(Human Machine Interface)
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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, 2019, and include risks anduncertainties.
The targets noted in these materials are not projections, and do not reflect current projections by the
management 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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25

Sales by Market Segment

Technology to Inspire Innovation(JPY in 100millions)

FY2017
1H

2H

MobileDevices692

686

Automotive

331

Industrial &Infrastructure
OthresTotal

FY2018Year/Year
ChangeProjections
announced
Jan, 2019

1H

2H

1,379

582

466

1,049

76%

1,046

367

698

369

360

729

104%

736

154

173

327

171

153

324

99%

319

67

68

135

57

64

120

89%

119

1,245

1,196

2,539

1,180

1,043

2,221

87%

2,220

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Sales by Business Segment

Technology to Inspire Innovation(JPY in 100millions)

FY2017
1H

2H

1,143

1,173

UIS

41

Aerospace

FY2018Year/Year
ChangeProjections
announced
Jan, 2019

1H

2H

2,316

1,062

917

1,979

85%

1,976

45

86

43

38

81

95%

82

57

72

129

70

82

152

118%

152

Others

4

4

9

4

4

8

98%

10

Total

1,245

1,294

2,539

1,180

1,042

2,221

87%

2,220

Connector

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27

Operating Profit by Business Segment

Technology to Inspire Innovation(JPY in 100millions)

FY2017FY2018

1H

2H

112

121

233

106

87

193

9.8%

10.3%

10.1%

10.0%

9.5%

9.8%

4

4

8

3

1

4

9.2%

9.7%

9.4%

8.0%

2.6%

5.4%

1

6

7

7

11

18

1.6%

8.9%

5.7%

10.0%

13.7%

12.0%

Unallocatablecost/ Others

-22

-20

-42

-23

-20

-43

-1

Total

95

111

206

94

79

173

-33

7.6%

8.6%

8.1%

7.9%

7.6%

7.8%

Connector
UIS
Aerospace

1H

Year/Year
Change※ Percentages(%) for FY2017、FY2018 indicate Operating Profit to Net Sales Ratios.

2H

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-4
11

28

Prospects for Sales by Market Segment
FY2018

Technology to Inspire Innovation

FY20191H

1H

Year/Year Change

Projections

Year/Year Change

MobileDevices

582

1,049

455

-127

78%

940

-109

90%

Automotive

369

729

370

1

100%

780

51

107%

Industrial &Infrastructure

171

324

145

-26

85%

305

-19

94%

Others

57

120

60

3

105%

125

5

104%

1,180

2,221

1,030

-150

87%

2,150

-71

97%

Total

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