Fourth quarter consolidated net sales were 210.2 billion yen, up 7.5% quarter-on-quarter and up 26.3% year-on-year. Fourth quarter semiconductor sales were 206.5 billion yen, up 7.4% quarter-on-quarter. On a year-on-year basis, semiconductor sales increased by 28.0%, which can be attributed mainly to: the solid growth of the Renesas standalone sales, which excludes the sales of Intersil from the entire Renesas Group sales; the integration of Intersil and the dissipation of the impact from the Kumamoto earthquake that occurred in 2016. Automotive sales increased by 14.7% year-on-year on a pro-forma basis, driven by strong demand for both Automotive Control and Automotive Information products. Industrial and Broad-based sales increased year-on-year on a pro-forma basis by 23.5% and 17.2%, respectively, mainly due to the strong demand for factory automation (FA), home appliance and analog semiconductor devices.
Non-GAAP gross margin in the fourth quarter was 47.9%, 1.6 points above the Company’s guidance, mainly due to inventory revaluation and increased sales. On a sequential basis, gross margin increased by 0.2 point and improved by 2.3 points year-on-year, benefiting from the significant increase in both sales and production as well as integration of Intersil.
Non-GAAP R&D (7) expenses in the fourth quarter were 34.3 billion yen, compared to 31.2 billion yen and 28.2 billion yen in the sequential and year-ago quarter. Fourth quarter R&D ratio to net sales was 16.3%.
Non-GAAP SG&A (8) expenses in the fourth quarter were 32.4 billion yen, compared to 26.2 billion yen and 24.9 billion yen in the sequential and year-ago quarter. Fourth quarter SG&A ratio to net sales was 15.4%.
Excluding seasonal headwinds, OPEX (Operating expenses such as R&D and SG&A) was kept under control within the range of long-term financial targets.
Non-GAAP operating income was 34.1 billion yen, equivalent to 16.2% of operating margin in the fourth quarter, showing a decrease of 1.9 billion yen (2.2 points) from the 35.9 billion yen and 18.4% of operating margin in the 2017 third quarter due to seasonal and temporary cost increases. On a year-on-year basis, non-GAAP operating income improved by 11.3 billion yen (2.5 points) mainly due to sales increases and continued OPEX discipline.
Non-GAAP net income attributable to shareholders of parent company in the fourth quarter was 30.3 billion yen.
Net cash provided by operating activities in the fourth quarter was 51.0 billion yen and net cash used in investing activities was 31.0 billion yen. These resulted in positive free cash flows of 20.0 billion yen.
Capital expenditures for property, plant, equipment (manufacturing equipment) and intangible assets, were 14.0 billion yen in the fourth quarter. These expenditures are based on the amount of investment decisions made and does not refer to the cash outlays in the cash flow statement.
Equity ratio was 47.7% as of December 31, 2017, against 46.5% as of September 30, 2017. Debt/equity ratio (gross) was 0.45 as of December 31, 2017.
| (7) | R&D: Research & Development | |
| (8) | SG&A: Selling, general and administrative expenses | |
Summary of Full Year 2017 Results (Non-GAAP Basis)
Full year consolidated net sales were 781.5 billion yen, up 22.3% year-on-year. Full year semiconductor sales were 765.7 billion yen. On a year-on-year basis, semiconductor sales increased by 23.4%, which can be attributed mainly to: the solid growth of the Renesas standalone sales, which excludes the sales of Intersil from the entire Renesas Group sales; the integration of Intersil and the dissipation of the impact from the Kumamoto earthquake that occurred in the same period a year ago. Automotive sales increased by 13.8% year-on-year on a pro-forma basis, driven by strong demand for both Automotive Control and Automotive Information products. Industrial and Broad-based sales increased year-on-year on a pro-forma basis by 15.7% and 12.9%, respectively, mainly due to the strong demand for FA, home appliance and analog semiconductor devices.
Non-GAAP gross margin in the full year was 46.7%, and increased by 3.1
points due to an increase in net sales and integration of Intersil.
