Kyocera 6-K 2015
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934
For the month of April 2015
Commission File Number: 1-07952
6 Takeda Tobadono-cho, Fushimi-ku,
Kyoto 612-8501, Japan
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(1): __
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(7): __
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date : April 27, 2015
Information furnished on this form:
The consolidated financial information is prepared in accordance with accounting principles generally accepted in the United States of America.
1. Consolidated Financial Results for the Year Ended March 31, 2015 (Fiscal 2015)
(1) Consolidated results of operations
(% of change from previous year)
(Note) Comprehensive income:
352,446 million yen in the year ended March 31, 2015, 16.9% of change from previous year
301,582 million yen in the year ended March 31, 2014, 46.6% of change from previous year
(Reference) Equity in earnings (losses) of affiliates and an unconsolidated subsidiary:
332 million yen in the year ended March 31, 2015 (139) million yen in the year ended March 31, 2014
(2) Consolidated financial condition
(3) Consolidated cash flows
(Note) End of second quarter dividend per share of 80.00 yen for the year ended March 31, 2014 was calculated based on the number of shares before the stock split undertaken on October 1, 2013.
3. Consolidated Financial Forecast for the Year Ending March 31, 2016 (Fiscal 2016)
(% of change from the previous year)
(Note) Forecast of earnings per share attributable to shareholders of Kyocera Corporation is calculated based on the diluted average number of shares outstanding during the year ended March 31, 2015.
(1) Increase or decrease in significant subsidiaries during the year ended March 31, 2015: None.
(2) Changes in accounting policies:
(i) Changes due to adoption of new accounting standards: Please refer to the accompanying (5) Basis of Preparation of Consolidated Financial Statements on page 21.
(ii) Changes due to other than adoption of new accounting standards: None.
(3) Number of shares (common stock):
(Reference) Outline of Non-Consolidated Results for Kyocera Corporation
The non-consolidated financial information is prepared in accordance with accounting principles generally accepted in Japan.
1. Non-consolidated Financial Results for the Year Ended March 31, 2015:
(2) Non-consolidated financial condition
Presentation of Situation of Audit Procedure
The consolidated financial information included in this Form 6-K is out of scope of audit procedure under the Financial Instruments and Exchange Law of Japan. Audit procedure under the Financial Instruments and Exchange Law of Japan has not been completed at the date of submission of this Form 6-K.
Instruction for Forecasts and Other Notes
Cautionary Statement for Forecasts:
With regard to forecasts set forth above, please refer to the accompanying Forward-Looking Statements on page 10.
1. ANALYSIS OF BUSINESS RESULTS AND FINANCIAL CONDITION
(1) Analysis of Business Results
[Business Results for the Year Ended March 31, 2015]
Economic Situation and Business Environment
The Japanese economy in the year ended March 31, 2015 (fiscal 2015) stagnated on the whole due to a decline in personal consumption as a result of an increase in the consumption tax rate, despite an upward trend in exports and public investment. The European economy posted only moderate growth due to stagnation in capital investment, despite increasing personal consumption. The U.S. economy expanded due mainly to steady growth in personal consumption and housing investment while the Chinese economy also continued to post stable growth.
With regard to the principal markets for Kyocera Corporation and its subsidiaries (Kyocera Group or Kyocera), demand for smartphones grew in the digital consumer equipment market, and demand expanded in automotive market, mainly in the United States and China. Growth in the solar energy market in Japan slowed, however, due to the end of a government subsidy for introducing solar power generating systems for residential use and the impact of a halt in grid access applications by electric power companies.
Consolidated Financial Results
During fiscal 2015, Kyocera worked to strengthen production capabilities in Japan and overseas as well as cultivate new markets with the aim of boosting sales in existing businesses. In the Components Business, sales increased mainly in automotive related markets, smartphones, communications infrastructures and various industrial machinery markets. In the Equipment Business, sales increased in overseas markets in particular due to the launch of new products and efforts to secure new customers. As a result, consolidated net sales for fiscal 2015 amounted to ¥1,526,536 million, an increase of ¥79,167 million, or 5.5%, compared with the year ended March 31, 2014 (fiscal 2014). This result marked another record high following the record high posted in fiscal 2014.
Profit increased in the Fine Ceramic Parts Group, Semiconductor Parts Group, Electronic Device Group and Information Equipment Group due to higher sales and the effect of cost reductions. Nonetheless, profit from operations decreased by ¥27,154 million, or 22.5%, to ¥93,428 million compared with ¥120,582 million in fiscal 2014 and income before income taxes decreased by ¥24,406 million, or 16.7%, to ¥121,862 million compared with ¥146,268 million in fiscal 2014 due mainly to the recording of loss in line with a review of asset valuation in the Applied Ceramic Products Group and Telecommunications Equipment Group.
Net income attributable to shareholders of Kyocera Corporation increased by ¥27,119 million, or 30.6%, to ¥115,875 million compared with ¥88,756 million in fiscal 2014 due primarily to revaluation of deferred tax assets and liabilities in line with a revision of the tax system in Japan resulting in an increase of approximately ¥36,300 million in net income attributable to shareholders of Kyocera Corporation.
Average exchange rates for fiscal 2015 were ¥110 to the U.S. dollar, marking depreciation of ¥10 (10%) from ¥100 for fiscal 2014, and ¥139 to the Euro, marking depreciation of ¥5 (approximately 4%) from ¥134 for fiscal 2014.
Consolidated Results by Reporting Segment
1) Fine Ceramic Parts Group
Sales in this reporting segment increased compared with fiscal 2014 due to growth in sales of components for industrial machinery such as semiconductor processing equipment, sapphire substrates for LEDs and automotive parts, particularly automotive camera modules. Operating profit increased significantly compared with fiscal 2014 due to the effect of higher sales of core products and efforts to comprehensively reduce costs.
2) Semiconductor Parts Group
Sales in this reporting segment increased compared with fiscal 2014 due to an increase in sales of ceramic packages mainly for smartphones, communications infrastructures and LEDs coupled with contribution since the beginning of fiscal 2015 from a consolidated subsidiary that joined the Kyocera Group in October 2013. Operating profit increased compared with fiscal 2014 due to higher sales of ceramic packages and the effect of cost reductions despite an increase in expenses associated with the launch of a new factory for organic substrates and the impact of product price erosion.
3) Applied Ceramic Products Group
Sales in the solar energy business remained roughly unchanged compared with fiscal 2014 due primarily to efforts to expand and enhance the product lineup and proactive sales promotion despite a decline in the price of solar modules and the impact of a halt in grid access applications by electric power companies. In contrast, sales in the cutting tool business increased in line with expanded production in automotive related markets. As a result, sales in this reporting segment increased compared with fiscal 2014. Operating profit decreased compared with fiscal 2014, however, due to the impact of price erosion as well as the recording of loss associated with a review of asset valuation, particularly for inventories in the solar energy business.
4) Electronic Device Group
Sales in this reporting segment remained roughly on par with fiscal 2014 as a result of steady increases in sales mainly of capacitors and connectors for smartphones and printing devices for industrial equipment despite a decline in sales of display related products due to structural reforms implemented in fiscal 2014. Operating profit increased significantly compared with fiscal 2014, however, due primarily to the effect of cost reductions and structural reforms.
5) Telecommunications Equipment Group
Sales in this reporting segment increased compared with fiscal 2014 due mainly to sales growth in overseas markets as a result of the active introduction of new models and efforts to secure new customers. Operating profit decreased compared with fiscal 2014 and operating loss was posted, however, due primarily to the recording of impairment loss on goodwill as a result of a review of asset valuation.
6) Information Equipment Group
Sales in this reporting segment increased compared with fiscal 2014 as a result of an increase in sales mainly overseas following activities to expand sales of new products. Operating profit increased significantly compared with fiscal 2014 due to an increase in sales of consumables and other products as well as the effect of cost reductions, which included effective use of a factory in Vietnam.
Sales in this reporting segment remained roughly on par with fiscal 2014 despite the impact of a decline in demand in the telecommunications engineering business of Kyocera Communication Systems Co., Ltd., due to an increase in sales at other subsidiaries. Operating profit increased compared with fiscal 2014, however, due to the effect of cost reductions at respective subsidiaries.
Net Sales by Reporting Segment
Operating Profit (Loss) by Reporting Segment
* % to net sales of each corresponding segment
Net Sales by Geographic Area
Sales in Japan remained roughly on par with fiscal 2014. Sales increased in the Semiconductor Parts Group and Telecommunications Equipment Group despite a decrease in sales in the Electronic Device Group and solar energy business.
Sales in Asia increased compared with fiscal 2014 due to an increase in sales in the Components Business especially in the Semiconductor Parts Group and Electronic Device Group on the back of an increase in demand in the fields of smartphones, communications infrastructures and automotive related markets, in addition to sales growth in the Information Equipment Group.
Sales in Europe increased compared with fiscal 2014 due to an increase in sales in the Information Equipment Group and in the Electric Device Group.
iv) United States of America
Sales in the United States of America increased compared with fiscal 2014 due to sales growth in the Telecommunications Equipment Group and Information Equipment Group through efforts to secure new customers and activities to expand sales of new products.
Sales in Others increased compared with fiscal 2014 due to an increase in sales in the Information Equipment Group.
[Consolidated Forecasts for the Year Ending March 31, 2016]
In the year ending March 31, 2016 (fiscal 2016), the Japanese economy is expected to head toward recovery as personal consumption and private capital investment rebound. Overseas, the European economy is expected to continue expanding moderately while the U.S. economy is forecast to continue growing steadily.
With regard to Kyoceras core markets, in the information and communications market, demand for smartphones is projected to continue increasing and there are expectations for infrastructure development too such as telecommunications base stations on the back of an increase in demand for data transmission. As a result, component demand is forecast to increase in this market. In automotive related markets, Kyocera forecasts an increase in demand for electronic components and devices in particular following growth in automobile production volume and efforts to enhance safety and environmental performance. In the environment and energy market, demand for the Home Energy Management System (HEMS) and the battery storage unit is forecast to continue increasing despite expectations of contraction in the solar energy market in Japan.
Kyocera will strive to expand sales in growing markets and to strengthen production capacity in both the Components Business and Equipment Business with the aim of posting record high sales for the third year in a row next fiscal year. In addition, efforts will be made to boost profitability through comprehensive cost reductions in order to achieve full-year consolidated financial forecasts.
Note: Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the year ended March 31, 2015.
Net sales and operating profit forecasts by reporting segment are as follows.
Net Sales by Reporting Segment
Operating Profit (Loss) by Reporting Segment
* % to net sales of each corresponding segment
Note: Forward-Looking Statements
Certain of the statements made in this document are forward-looking statements (within the meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to the following:
Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial condition to be materially different from any future results, performance, achievements or financial condition expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.
(2) Analysis of Financial Condition
Consolidated Cash Flows
Cash and cash equivalents at March 31, 2015 increased by ¥16,189 million to ¥351,363 million from ¥335,174 million at March 31, 2014.
i) Cash flows from operating activities
Net cash provided by operating activities for fiscal 2015 decreased by ¥18,374 million to ¥130,767 million from ¥149,141 million for fiscal 2014. This was mainly because cash flow adjustment related to receivables exceeded an increase in net income.
ii) Cash flows from investing activities
Net cash used in investing activities for fiscal 2015 decreased by ¥7,533 million to ¥93,608 million from ¥101,141 million for fiscal 2014. This mainly reflected that an increase in proceeds from maturities of held-to-maturity securities exceeded an increase in payments for purchases of held-to-maturity securities.
iii) Cash flows from financing activities
Net cash used in financing activities for fiscal 2015 increased by ¥7,187 million to ¥39,992 million from ¥32,805 million for fiscal 2014. This was due mainly to increases in dividends paid and in purchases of noncontrolling interests.
Consolidated Cash Flows
(3) Basic Profit Distribution Policy and Dividends for the Year Ended March 31, 2015 and for the Year Ending March 31, 2016
i) Basic profit distribution policy
Kyocera believes that the best way to increase corporate value and meet shareholders expectations is to improve future consolidated performance on an ongoing basis. Kyocera therefore has adopted a principal guideline that dividend amounts within a range based on net income attributable to shareholders of Kyocera Corporation on a consolidated basis, and has set its consolidated dividend policy to maintain a consolidated payout ratio of 30% or more of consolidated net income attributable to shareholders of Kyocera Corporation. In addition, Kyocera determines dividend amounts based on an overall assessment, taking into account various factors including the amount of capital expenditures necessary for medium-to-long-term corporate growth.
Kyocera also has adopted policies to ensure a sound financial basis, and, for such purpose, it sets aside other general reserves in preparation for the creation of new businesses, cultivation of new markets, development of new technologies and acquisition of outside management resources necessary to achieve sustainable corporate growth.
ii) Dividends for the year ended March 31, 2015
Pursuant to i) Basic profit distribution policy set forth above and based on full-year performance for the year ended March 31, 2015, Kyocera will distribute a year-end dividend for the year ended March 31, 2015 in the amount of 60 yen per share. When aggregated with the interim dividend in the amount of 40 yen per share, the total annual dividend will be 100 yen per share. This means an increase of 20 yen per share compared with 80 yen per share (based on the number of shares after the stock split undertaken on October 1, 2013) for the year ended March 31, 2014.
iii) Dividend forecast for the year ending March 31, 2016
Dividend amounts for the year ending March 31, 2016 will be decided pursuant to i) Basic profit distribution policy set forth above. At present, Kyocera forecasts a total annual dividend in the amount of 100 yen per share, based on its financial forecast for the year ending March 31, 2016.
2. MANAGEMENT POLICIES
(1) Basic Policy
Kyocera aims to be respected by society as The Company from the perspective of corporate ethics, while maintaining continuous sales growth and high profitability. It has been pursuing this objective since the companys earliest days through implementation of the Kyocera Philosophy, a corporate philosophy placing peoples hearts at its core, as well as the Amoeba Management System, a management system unique to Kyocera which has been developed to implement our corporate philosophy.
Kyoceras management policy is to be a high-growth, highly profitable company. To realize this policy, Kyocera aims to increase corporate value by further enhancing performance through strengthening existing businesses, creating new businesses and thorough cost reduction.
(2) Management Target
To be a high-growth, highly profitable company, Kyocera aims to achieve continuous sales growth and a consolidated pre-tax income ratio of 10% or higher.
(3) Medium-term Management Strategy and Management Challenges
Kyocera has a wide range of management resources within the Kyocera Group, from materials technologies such as ceramics to components, devices, equipment, systems and services. Kyocera will strive to increase the sophistication of technologies accumulated over the years, enhance new product development, expand sales by making the best use of sales networks and further reinforce management foundations by exploiting the collective capabilities of the Kyocera Group, which includes bolstering ties between businesses and Group companies. By doing so, Kyocera aims to be a high-growth, highly profitable company. Kyocera will focus on the following challenges:
i) Expand business in key markets
Kyocera views the information and communications market, the environment and energy market, automotive related market and the medical and healthcare market as key markets and will strive to increase profitability by expanding existing businesses and creating new businesses in these markets.
In the information and communications market, Kyocera forecasts further proliferation and more advanced performance in digital consumer equipment, which includes smartphones and tablets, as well as an increase in demand primarily for high capacity and high-speed transmission in each industrial market. In line with these market trends, Kyocera will work to develop and expand sales of small, slim high-value-added products that meet needs as a means to increase sales and profit. In addition, efforts will be made to increase sales by releasing new products and cultivating new markets for telecommunications and information equipment that incorporate unique technologies and differentiate from the competition.
In the environment and energy market, Kyocera will push ahead with broad business development, from energy creating business through solar power generating systems to energy storage business through the supply of electricity storage units and energy saving business that seeks to enhance efficiency of power consumption through an energy management system. Additionally, Kyocera will aim to increase sales through initiatives to cultivate new markets and develop new products, which includes expanding application of LED lighting and developing fuel cell power generating systems.
In the automotive related market, Kyocera will seek to secure new business opportunities through a strategic project system in which market trends are viewed as opportunities for growth, namely the increased use of electrical systems and equipment in automobiles, environmental responsiveness and proliferation of automated driving. Group management resources will be combined on development, production and sales fronts and efforts will be made to increase market share by expanding application of existing products and cultivating customers and to accelerate new product development with the aim of boosting sales.
In the medical and healthcare market, Kyocera will expand the medical materials business, which includes artificial joints, and pursue synergies in materials, components and device technology in an effort to strengthen the development of new healthcare related products and expand this business domain. By doing so, Kyocera seeks to boost sales.
ii) Enhance management foundations
While working to overcome global competition, Kyocera will strive to expand production volume and production items in Vietnam as well as pursue comprehensive production cost reductions in order to strengthen the service system in the Asia region, which holds major production sites of customers. In Japan, Kyocera will work to further increase sophistication of production technology and expand production of high-value-added products. In addition, Kyocera will strive to strengthen existing businesses and create new businesses by making investment in business toward future growth aggressively, which includes the utilization of external management resources through M&As. The aim of these endeavors is to be a high-growth, highly profitable company.
3. BASIC RATIONALE FOR SELECTION OF ACCOUNTING STANDARD
Kyocera has disclosed its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for long periods since it registered its common stock and American Depositary Share with the U.S. Securities and Exchange Commission in 1975. Kyocera continues to adopt U.S. GAAP as it considers being consistent with the past consolidated financial statements will contribute to benefits for the users of Kyoceras consolidated financial statements.
4. CONSOLIDATED FINANCIAL STATEMENTS
(1) Consolidated Balance Sheets
Note: Accumulated other comprehensive income is as follows:
(2) Consolidated Statements of Income
Basic earnings per share attributable to shareholders of Kyocera Corporation was computed based on the average number of shares of common stock outstanding during each period, and diluted earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number of shares of stock outstanding during each period.
Consolidated Statements of Comprehensive Income
(3) Consolidated Statements of Equity