Japan Display : Financial Results for the First Quarter of FY 2020 - Presentation Slides

First Quarter of FY 2020

Consolidated Financial Results

Japan Display Inc.

September 10, 2020

Healthier balance sheet

Highlights

• Equity finance from Ichigo Trust: Total of JPY 110.8bn (Note 1)

Issuance of Class B & Class D preferred shares, stock acquisition rights for Class E preferred shares

• • Capital improvement
  • Secure large-scale funding for a growth strategy as a going concern
• Hakusan Plant transfer: Total transfer price of JPY 71.3bn (Note 2)
• • Reduces costs - - - - - - - - - - - - - About JPY 8bn/year

 Reduces liabilities (advances received) - - - JPY 74.3bn  Disposes of non-operating assets - - - - - - JPY 50.2bn

• • Gains from transfer - - - - - - - - - - - - - - ≧ JPY 15.9 bn
• Production & sales conditions
• • Production: Significant recovery from the impact of coronavirus constraints
  • Sales: Sales of automotive products dropped sharply in 1Q, but demand is recovering steadily. 2H demand for smartphone displays requires caution.

(Note 1) Class B preferred shares were issued in March 2020. Class C preferred shares and the stock acquisition rights, the underlying shares of which are Class E preferred shares, were issued on August 2020. (Note 2) Base dates and FX rates related to the transfer are shown on page 7.

Copyright © 2020 Japan Display Inc. All Rights Reserved. 2

2020 First Quarter Summary

• Fell within range of June 30 estimates
• YoY comparison
• • Sales mostly unchanged
  • Based on structural reforms and cost reductions etc., achieved a gross profit turnaround, operating losses improved by JPY 20.1bn and EBITDA by JPY 17.0bn

										(Billion Yen)
			FY 19		FY 20		FY 20			FY 19
			1Q		1Q		Q1 (6/30 est.)			4Q
	Net sales		90.4		88.0		85.0-89.0			116.2
	Gross profit (loss)		(16.8)		1.0		-			3.4
	Operating income (loss)		(27.1)		(7.0)		(7.0)-(9.0)			(5.9)
	Net income (loss)		(78.9)		(16.3)		-			9.5
	EBITDA		(20.2)		(3.2)		-			(2.0)
							Copyright © 2020	Japan Display Inc. All Rights Reserved. 3

Quarterly Sales by Category

Quarterly net sales

(Billion yen)			Mobile（US/Euro）
			Mobile (China/other)
147.3	150.0		Non-Mobile
	Automotive

			116.2
90.4	65%	69%		88.0
42%			63%
				63%
18%	7%	5%	5%
12%	9%	8%
11%	7%
28%	19%	18%	21%	13%
17%
1Q-19	2Q-19	3Q-19	4Q-19	1Q-20

Sales by category

• Mobile (US/Europe: JPY 55.4bn,
  China/other: JPY 6.3bn, +15% YoY)

Sales were weak due to greater customer adoption of OLED & lower demand caused by coronavirus. Expect a QoQ sales increase in 2Q but requires caution for 2H demand.

• Automotive (JPY 14.8bn, -42% YoY)

Display demand fell due to a major adjustment in automobile production, causing an unprecedented sales decline, but expect recovery from 2Q.

• Non-mobile (JPY 11.5bn, +3% YoY)

Delayed recovery of back-end mfg & a sharp drop in display demand for digital still cameras were partially offset by strong demand for notebook PCs, wearables and VR. Expect improvement from 2Q on increase in wearables.

Copyright © 2020 Japan Display Inc. All Rights Reserved. 4