image: Bunsei Kure

To Our Shareholders

Please allow me to begin by extending my heartfelt gratitude for your continued support.

Due to weakening demand for focused applications including Automotive and Industrial from increasing uncertainties in the global economy, as well as the impacts from the channel inventory build-up which occurred last year, consolidated sales for the year ended December 31, 2018 (J-GAAP basis) were 757.4 billion yen, a 2.9% decrease year on year. In addition, operating income for the year ended December 31, 2018 were 66.8 billion yen, a 11.6 billion yen decrease year on year. Therefore, net income attributable to shareholders of parent company was 54.6 billion yen.

The Group recorded a consolidated net income for the year ended December 31, 2018; however, the Group decided to forgo dividend payment for the period. The Group will divert its retained earnings for strategic investment opportunities that will enable the Group to respond to rapid environmental changes to thrive into the global marketplace and will aim to increase shareholder profit by improving corporate value. In addition, the Group aims to realize stable and sustained growth in profits and intends to resume dividend payments.

Although the Group was able to establish a stable financial base clearly into view, in order to thrive in the rapidly changing, fiercely competitive semiconductor industry, the Group believes it must make continuous improvements of product mix and maintain further growth with expanding earnings to meet the expectations of all stakeholders. To achieve this goal, the Group will implement efforts of “Expanding and Strengthening of Business Portfolio to Accelerate the Leap to the Growth Stage” and “Continuous Optimization of the Manufacturing Structure”. In addition, the Group completed the acquisition of the US analog semiconductor company, Integrated Device Technology, Inc., as of March 30, 2019, and are advancing in the “Expanding and Strengthening of Business Portfolio to Accelerate the Leap to the Growth Stage” theme with the integration.

The Group continues to dedicate further improvements in profitability and stabilizing earnings in order to meet our shareholders’ expectations. We express our sincere appreciation for your unwavering support and understanding.

March 2019

Bunsei Kure, Representative Director, President and CEO,
Renesas Electronics Corporation