Value Creation Story Path of Growth
Creating new markets with cutting-edge technologies and products
The history of Kyocera began with the launch of the U-shaped Kelcima, an insulating part for Kyocera’s television electron guns, in 1959. Strengths Ever since then, Kyocera has succeeded in the development of various products by applying its 1.6 trillion yen fine ceramic technologies and is still exploring new markets. (3/2020) Kyocera will continue to create new markets and new businesses by exercising its comprehen- 2015 Nihon nter Electronics Corp. 1 joins the Kyocera roup sive capabilities through pursuit of group synergy and cooperation with external partners. 2010 Fine ceramic Kyocera acquires the Connectors F liquid crystal display technology Elco Corp. joins business at the Yasu the Kyocera roup 2003 facility of Sony obile Kinse i, Ltd. ● isplay Corporation Camera manufacturer Yashica Co., Ltd. 1989 becomes a wholly Power devices merges with Kyocera owned subsidiary of Kyocera Corporation Crystal devices Kyocera SLC echnologies Kyocera receives a 1983 ● ass production of multilayer Corp. is established large order of ceramic capacitors begins A substrates for general Organic multilayer packages purpose computers 1984 from B , U.S.A. 1973 Amorphous silicon a Si Kyocera Communi photoreceptor drums are cation Systems Co., Kyocera acquires the mobile phone successfully developed 1966 Ltd. is established business of Sanyo Electric Co., Ltd. 1995 2008 2 Wireless communication technology P K 1979 1984 1991 1999 2005 2017 Kyocera invests Kyocera establishes aini enden Kyocera develops its first Kyocera acquires the Kyocera enters the communication o Networ Sigfox 1959 capital in Cybernet Ki a u Co., Ltd. now K Corp. mobile phone and mobile phone business module business begins service in Electronics Corp. enters the mobile of ualcomm, U.S.A. Japan K C C phone business K C
● Japan Solar Energy Corp. JSEC is established and begins T P Feldm hle Kyocera Europa K Kyocera acquires the development of solar cells A GP Ele tronische Bauelemente mbH now power tools business of Ryobi Limited and Kyocera Fineceramics mbH is ● Crescent ert T established in cooperation with recrystalli ed D D KYOCERA ndustrial ools Feldm hle A in ermany gemstones are launched Corp. is established 3 1971 1975 2018 Wide-ranging business areas and global development 1969 1973 1978 1990 1995 2000 2011 KYOCERA nternational, Kyocera develops new Bioceram bioceramics A Corp. joins the ongguan Shilong ita Corp. KYOCERA ietnam nc. is established as ceramic tools named are launched Kyocera roup Kyocera Optics Co., Ltd. becomes Kyocera anagement Company KYOCERA s North Ceratip and enters the now ongguan Shilong ita Corp. and Limited now KYOCERA ’ Kyocera Co., Ltd. and American sales company cutting tool business joins the Kyocera ietnam Co., Ltd. is P Shanghai Kyocera roup established in ietnam Electronics Co., Ltd. are established in China Sales trends 1960 1970 1980 1990 2000 2010 2020
Diversification of businesses Creation of added value Horizontal deployment of technologies Business e pansion in global market E pansion of business fields Building new business models through M&A
KYOCERA INTEGRATED REPORT 2020 3 Value Creation Story Cultivated strengths
We build upon the solid foundation cultivated in the fine ceramics business since our founding to create unique technologies and 2 products in a wide range of fields, from wireless communication Wireless that supports the 5G era to energy. communication technology As a leader in the fine ceramics industry, Kyocera supplies products in a range of fields, including industrial The Kyocera Group is involved in several machinery, automobiles and energy. Leveraging these original ideas and technologies, we are also developing a business areas relating to wireless communication. In addition to communi- wide range of businesses around the world, including in fields relating to energy and wireless communications cation equipment such as mobile that support social infrastructure in the ICT age. phones, IoT communication modules, and wireless automotive modules, we are engaged in engineering businesses such as base station construction. As adoption of 5G networks becomes more widespread, wireless communication has become the basis for the creation of various new businesses that support social infrastructure in the information age. 1 Fine ceramic technology Wide-ranging3 business areas
Kyocera has worked in the fine ceramics and global industry since its founding and our long development history of technical innovation through constant improvement in this field The Kyocera Group operates in a wide continues to this day. The quality of our range of fields, including energy- large ceramic parts for semiconductor related businesses such as solar power processing equipment and industrial generation, document solutions, medical machinery is highly-regarded by our devices, industrial tools, and information customers. As the miniaturization of processing. In addition, we are expanding electronic components, semiconductors our production, sales and R&D activities and sensor packages continues, we are all over the world, in order to provide an industry leader in the develop-ment support to as many customers as of a wide range of products that meet possible in all regions of the world. customers’ needs. We support our customers on a global As a leader in the fine ceramics industry, scale while establishing roots in local we are expanding our range of products communities. in various fields ranging from industrial machinery to electronics, automobiles and energy.
KYOCERA INTEGRATED REPORT 2020 4
Value Creation Story At a Glance
Information & AutomotiveEnvironment Related Medical& & Communication Energy Healthcare Business Summary Principal Product and Business Main Markets
Sales revenue (Yen in millions) Business profit (Yen in millions) Sales revenue increased compared with FY3/2019. Kyocera Group provides various kinds of fine ceramic Industrial & Automotive ■ ■ Components Business 8, Although sales of automotive parts, such as displays, components, camera modules and liquid crystal displays Components Group , 341,093 28 , 2 , decreased, sales of industrial tools increased as a result to the industrial machinery and automotive-related 2 ,22 of the contribution of M&A. Business profit decreased markets. We also provide industrial tools such as cutting 22, 2 due to decreased sales in the industrial machinery and tools and pneumatic and power tools to the automotive, 15,813 automotive-related markets as well as an increased general industrial and construction markets. depreciation charge resulting from capital expenditures Main products / businesses for FY3/2019. ● Fine ceramic components, automotive components, 2 2 8 2 2 2 2 2 8 2 2 2 liquid crystal displays, industrial tools
Semiconductor Sales revenue (Yen in millions) Business profit (Yen in millions) Sales revenue remained almost flat compared with Kyocera Group provides packages for protecting ■ ■ FY3/2019. Business profit increased due to improved electronic components and ICs as well as high-density Components Group 2 ,2 2 , 2 2 ,2 247,228 , 30,511 profitability in the organic materials business, which organic multilayer printed wiring boards for assembly of 2 , became profitable, in addition to the absence of an Y 2020 such components to the information & communication impairment loss in the amount of approximately 16.2 and automotive-related markets. billion yen recorded in FY3/2019. , 2 Main products / businesses billion yen ● 912.4 Ceramic packages, organic multilayer substrate D 2 2 8 2 2 2 2 2 8 2 2 2 and boards
Electronic Devices Group Sales revenue (Yen in millions) Business profit (Yen in millions) Sales revenue decreased compared with FY3/2019. Sales Kyocera Group provides various electronic components ■ ■ ,82 , 2 in AVX Corporation, a U.S. subsidiary, decreased due to and devices for diverse fields from familiar products continued inventory adjustments at the distributor and , 324,113 such as smartphones to industrial machines. sluggish demand in the automotive-related industry as 2 , 8 , 2 well as the slowdown of the global economy resulting , 8 31,744 from the spread of COVID-19. Business profit decreased Main products / businesses due to the decrease in sales as well as the recording of a ● one-time charge in the amount of approximately 10 billion Various electronic components (capacitors, yen mainly relating to litigation at AVX Corporation. crystal devices, connectors, power semiconductor 2 2 8 2 2 2 2 2 8 2 2 2 devices, etc.), printing devices
Communications Group Sales revenue (Yen in millions) Business profit (Yen in millions) Sales revenue remained flat compared with FY3/2019. Kyocera Group provides communications modules that support Equipment & ■ ■ Despite a slight increase in sales in the information system in-vehicle installation and IoT in addition to mobile phones 2 2, 2 , 2 2, 11,450 embedded with unique functionality such as exceptional durability 252,062 , and telecommunication services business due mainly to higher sales in the ICT solutions business, sales in the and features specifically for senior users, as well as ICT solutions Systems Business 8, 28 that support a company’s management and information and telecommunications equipment business decreased slightly communication services that support communication infrastructure. , due to a re-examination of the line-up of handset models for overseas markets. Business profit increased due to Main products / businesses ● improved margins in the telecommunications equipment Smartphones, mobile phones, communication business resulting from cost reductions. modules (telematics, IoT), information systems and 2 2 8 2 2 2 2 2 8 2 2 2 telecommunication services
Document Solutions Sales revenue (Yen in millions) Business profit (Yen in millions) Sales revenue and business profit decreased compared Kyocera Group provides a diverse lineup of printers, ■ ■ , 8 , with FY3/2019. These decreases were due to the effect MFPs and commercial inkjet printers featuring out- Group 359,915 ,8 , 28 2 , 2 of foreign currency fluctuation as well as lower demand standing environmental performance as well as solu- 34,489 caused by the slowdown of the global economy resulting 28, 8 tions that resolve document-related issues. Y 2020 from the spread of COVID-19.
Main products / businesses ● billion yen Printers / multifunctional products, commercial inkjet 698.7 printers, document solution services D 2 2 2 8 2 2 2 2 2 8 2 2 2
Life & Environment Sales revenue (Yen in millions) Business profit (Yen in millions) Sales revenue increased compared with FY3/2019 due Kyocera Group provides products related to life and ■ ■ mainly to increased sales in the solar energy business. environment such as solar energy products, medical Group Business loss decreased due to improved profitability , , products, jewelry, and kitchen tools. resulting from cost reductions achieved through the ,2 progress of structural reforms, in addition to the 2,2 2 (11,198) absence of settlement expenses recorded in FY3/2019 8 , 86,691 in the amount of approximately 52.3 billion yen relating , 2 Main products / businesses to long-term purchase agreements for procurement of ● , Solar power generating system related products, polysilicon material in the solar energy business. medical devices, jewelry and ceramic knives 2 2 8 2 2 2 2 2 8 2 2 2
Kyocera Group has adopted IFRS in lieu of U.S. GAAP from the year ended March 31, 2019 (FY3/2019). Accordingly, financial results for the year ended March 31, 2018 (FY3/2018) ・ have been reclassified in accordance with IFRS. Amounts and ratios (%) are rounded to the nearest unit. ・ KYOCERA INTEGRATED REPORT 2020 5 Percentages are computed based on amounts rounded to the nearest million yen. ・
35000 30000 25000 20000 15000 10000 5000 0 -5000 -10000 -15000 -20000 -25000 -30000 -35000 -40000 -45000 -50000 -55000 -60000 -65000 -70000 Value Creation Story Global Business Development
Striving for new business expansion and strengthening Promoting global business expansion through proactive investment the business foundation
Kyocera is promoting a global investment strategy that includes M&A. Japan Ratio of sales In addition to incorporating the world's best technologies, we are working to further expand Sales revenue (FY3/2020) revenue by region the business domains, production sites and sales channels. 598.1 billion yen M&A We have strengthened our business Strengthening the business foundation through M&A 37.4% foundation for the creation of new businesses and technologies through measures such as Ratio of sales Europe the commencement of full-scale operations Sales revenue (FY3/2020) at the Minatomirai Research Center, in revenue by region addition to establishing a joint venture for the Built new plant : ceramic filter business with Ube Industries, Ltd. The research center brings together U.S.A.: SouthernCarlson, Inc. billion yen Expanded production capacity approximately 700 employees, mainly in R&D, % 306.3 with the aim to promote open innovation 19.2 and further improve software development. Kyocera has acquired Germany-based H.C. Starck Production capacity is also being expanded Ceramics GmbH and the ceramics business for products that are expected to see growth of Friatec GmbH. These acquisitions give us in demand. A new plant building has been our first fine ceramic manufacturing facility constructed at the Kagoshima Sendai Plant in Europe and have enabled us to strengthen to increase production of ceramic packages, our business foundation by pursuing global while a new plant building to increase synergies in sales, technology and production. production of fine ceramic products has been Expanding business domains In the document solution business, we have Malaysia : New facility at AVX in Malaysia built at the Kokubu Plant in Kagoshima. acquired French ECM solutions provider Ever and creating greater group Team Software SAS and German ECM solutions Built New R&D center synergy provider OPTIMAL SYSTEMS in order to develop Ratio of sales new avenues for growth through the leveraging revenue by region Unites States of America of ECM solutions expertise and advanced Sales revenue (FY3/2020) technologies such as artificial intelligence and natural language processing. 17.3% billion yen M&A Increased electronic component production capacity 276.0 Kyocera acquired SouthernCarlson, Inc., a North American distributor in the pneumatics Ratio of sales Asia and power tools industry with more than revenue by region 150 locations across the U.S.A., in an effort Sales revenue (FY3/2020) to expand business as a comprehensive tool manufacturer. AVX has also become a wholly Minatomirai Research Center owned subsidiary with the aim of pursuing (1F, 3F, 4F, 5F, 6F, 9F and 13F in further synergies in the electronic components business. Going forward, we intend to billion yen OCEAN GATE MINATO MIRAI) % 358.9 increase market share as a comprehensive Germany: H.C. Starck Ceramics GmbH 22.4 AVX is a leading manufacturer of products with electronic components manufacturer through advanced technologies including electronic AVX’s higher capabilities in marketing outside components, connectors and sensors. Its of Japan, particularly in the automotive M&A and medical industries, and in overseas Malaysia plant is one of the leading production production sites management as well as sites for multilayer ceramic capacitors (MLCC) Built new plants: Expanded production capacity Kyocera’s competitive capacity and production in the region. The site expanded in 2019 and technology in the communication-related now offers 450,000 square feet of state-of-the- market. art design, manufacturing, testing, storage and distribution space. We aim to further expand the plant as the largest MLCC production site Other Ratio of sales at AVX in the future. In addition to AVX, Kyocera revenue by region Sales revenue (FY3/2020) Group also has major Asian production sites in China and Vietnam. We are working to increase Germany: Friatec GmbH production capacity in each location and 3.7% diversify risk through the operation of multiple The new building at the Kagoshima Sendai Plant The new building at the Kagoshima Kokubu Plant billion yen sites. 59.7 Sales revenue in each reporting region are rounded to the nearest unit.
KYOCERA INTEGRATED REPORT 2020 6 Value Creation Story Financial/Non-financial Highlights (from FY3/2016 to FY3/2020)
Sales revenue billion yen Profit before income taxes billion yen Number of employees Number of female managers Profit before income taxes to sales revenue Kyocera Corporation he Kyocera roup Ratio of female managers ( ) 1 Kyocera Corporation
2 0 0 0 2 0 22 0 22 0 0
2 2 0 2 2 2
20 20 20 20 2020 20 20 20 20 2020 20 20 20 20 2020 20 20 20 20 2020
2 3 EPS ‒ Diluted yen Cash dividends per share yen Total assets billion yen Ratio of equity attributable Greenhouse gas emissions (Scope 1 2) , tons CO2 Greenhouse gas emissions (Scope 1 2 3 ) , tons CO2 to owners of the parent to total assets
2 2 2 2 2 0 0 0 2 2 2 0 2 2 2 0 02 2 2 2 2 2 0 0 0 20 00
20 20 20 20 2020 20 20 20 20 2020 20 20 20 20 2020 20 20 20 20 2020
Capital expenditures billion yen R&D expenses billion yen Water consumption , m / Lost time accident rate*4 Per net sales m2 million yen Kyocera roup in Japan
0 0 0 0 2 2 0 0 2 2 0 0 0 0 0 0
0 0 0 0 2 0 2 0 22
20 20 20 20 2020 20 20 20 20 2020 20 20 20 20 2020 20 20 20 20 2020
Amounts and ratios are rounded to the nearest unit. Percentages are computed based on amounts rounded to the nearest million yen. Number of female managers total number of managers Number of afflicted persons million hours he number of days of missed wor ・ Kyocera roup has adopted FRS in lieu of U.S. AAP from the year ended arch , 2 FY 2 . Accordingly, financial results for the year ended arch , 2 8 FY 2 8 have been 2, Scope : irect emissions from Kyocera plants and offices is as per inistry of Health, Labour and Welfare standards. ・ reclassified in accordance with FRS. Account titles are also presented in accordance with FRS. Scope 2: ndirect emissions associated with consumption of electric power "Cash dividends per share" in FY 2 includes the th anniversary commemoration dividend in the amount of 2 yen per share. or heat purchased from outside the company ・ Scope : ndirect emissions other than Scope or 2 ncluding procurement of raw materials, transport, and use and disposal of products, as well as employee commuting and business trips
KYOCERA INTEGRATED REPORT 2020 7 Value Creation Story Kyocera Group's Value Creation Model
R I P E R Realization of our Management Rationale Social To provide opportunities for the material and intellectual growth of all our employees, issues and through our joint efforts, contribute to the advancement of society and humankind.
Input (strengths) Business Activities Outcomes
Improved Value provided to society Firm management philosophy corporate value Components Business
Strong financial foundation Industrial & Information & Communication Automotive Aim to realize a society where Components Group IoT people can feel higher sense Aim to achieve of satisfaction Cultivated strengths Semiconductor Components Amoeba Management sustained growth of Group consolidated Energy sales revenue Contraction 1 Electronic E pansion Devices Combination Fine ceramic technology Group Kyocera Automotive-related E Robotics Equipment & Philosophy Aim to achieve Create a safe comfortable Division Absorption Systems Business sustained growth of and environmentally friendly profit before motorized society Separation income taxes Communications Collaboration Group Medical 2 Merger (M&A) Wireless communication technology Document Solutions Group E Mobility Aim to increase Environment & Energy Return on Equity Contribute to the creation of Life & an environmentally friendly I T Environment Group society
3
Wide-ranging business areas Strengthening the management foundation Medical & Healthcare and global development Creating a Human comfortable Action for a Occupational Contribute to improvement of E working environ- Promoting Strengthening Promoting Startup resource decarbon- health and Supply chain uality of Life ( OL) and the R D M&A R&D digitization Program ment and promot- management development ing diversity and ized society safety efforts development of medicine inclusion P 21 P 22 P 23 P 24 P 25 P 26 P 27 P 28 P 29
KYOCERA INTEGRATED REPORT 2020 8