Slide 1: Results Briefing for the Second Quarter of Fiscal Ending March 2019
Securities ID code:6859 ESPEC CORP. Results Briefing for The Second Quarter of Fiscal Ending March 2019 November 20, 2018 www.espec.co.jp
Slide 2: Table of Contents
Table of Contents Company Profile Financial Result for the Second Quarter of Fiscal Ending March 31, 2019 Analysis per Segment for the Second Quarter of Fiscal Ending March 31, 2019 Business Plan for the Fiscal Ending March 31, 2019 Reference 1
Slide 3: Company Profile
Company Profile World-leading manufacturer of environmental test chambers Name ESPEC CORP. Head Office 3-5-6, Tenjinbashi, Kita-ku, Osaka Represented By Masaaki Ishida Established July 25,1947 Incorporated January 13,1954 Paid-up Capital ¥6,895Million Shares Issued 23,781,394 Shares Head office Empl
Slide 4: Global Network
会社概要 Global Network Consolidated Subsidiaries Global Network 45 countries Business Facilities in Japan : 25 10 companies Domestic Agencies in Japan : 46 (Global 7 companies, Domestic 3 companies) 33 companies EUROPE U.S.A. △ESPEC EUROPE GmbH ●ESPEC NORTH AMERICA, INC △ESPEC IKLIM KABINLERＩ SATIS VE
Slide 5: Equipment Business
Summary of ESPEC Business (Per Market / Use) Sales composition Main Products Market Use (FY2018 2Q) ・Temperature & humidity chamber ・Electronic component ・Thermal shock chamber and equipment market ・For R & D ・Bench-top type temperature & humidity chamber ・Automobile market ・For credibility Environm
Slide 6: Equipment Business Topics: Increased production capacity
【Equipment Business】 ＴＯＰＩＣＳ （October 2018） Increased production capacity of temperature (& humidity) chambers by 1.6 times ・Responded to expansion of demand against backdrop of the increased electrification of automobiles and technological development of automation ・Integrated design, procurement, p
Slide 7: Equipment Business Topics: European market lineup
【Equipment Business】 ＴＯＰＩＣＳ （September 2018） Expanded product lineups for the European market ■Launched Environmental Stress Chamber AR series Rapid-Rate Temperature Cycle Type (5K/min) ・Complies with international IEC standards and German automobile industrial standard LV124 ・Uses European F-gas Re
Slide 8: HAST Wins 2018 Good Design Award
【Equipment Business】 ＴＯＰＩＣＳ （October 2018） Highly Accelerated Stress Test System (HAST) Wins 2018 Good Design Award ・This award marks ESPEC's 28th Good Design Award , and the fifth for the Highly Accelerated Stress Test System. ・A model redesign in November 2017 greatly increased the usability of th
Slide 9: Financial Result for the Second Quarter of Fiscal Ending March 31, 2019
Financial Result for the Second Quarter of Fiscal Ending March 31, 2019 8
Slide 10: Review of the First Half of Fiscal 2018
Review of the First Half of Fiscal 2018 External Environment Developments within ESPEC ・Foreign exchange (U.S. dollar/yen) is ・Orders with long delivery times increased at $1 to ¥105~113 ・Built system for increasing domestic production ・Active development of EV conversion in line with strengthening
Slide 11: Financial Highlights
Financial Highlights Sales and profit both increased year on year in the first half of fiscal 2018 Fell short of the initial plan Year on Year Initial plan ■Orders- The Equipment Business increased The Equipment Business increased ○ (especially environment test chambers) ○ (especially environment te
Slide 12: Summary of Profits and Losses
Summary of Profits and Losses (millions of yen) FY 2017 FY 2018 2Q FY 2018 Initial plan Year on Year 2Q (Initial plan) 2Q ratio Orders-Received ２２，８５０ ２３，０００ ２４，６８１ ８．０％ ７．３％ Net sales １８，３９６ ２０，５００ １９，０９２ ３．８％ -６．９％ Cost of Net Sales １１，７７０ １３，２６０ １２，０６２ ２．５％ -９．０％ (Cost of sales ratio) （６４．０％） （６４
Slide 13: Performance by Segment
Performance by Segment (millions of yen) FY 2017 FY 2018 2Q FY 2018 Initial plan Segment Year on Year 2Q (Initial plan) 2Q ratio Orders-Received １９，２３０ １９，４００ ２０，８７４ ８．５％ ７．６％ Equipment Net Sales １５，３５５ １７，２００ １５，６３９ １．９％ -９．１％ Business Operating Income １，６２１ １，７００ １，４５７ -１０．１％ -１４．３％ Orders-Receive
Slide 14: Analysis of Operating Income
Analysis of Operating Income Increase and Decrease Factor Equipment Business (millions of yen) Service Business Other Business －5 －80 106 14 64 －187 personnel expenses administrative, and Selling, 120 －102 expenditures R&D 103 expenses and administrative Other selling, general 1,625 1,659 250 154 In
Slide 15: Statement of Assets and Liabilities
51,819 14 FY 2018 (millions of yen) 2Q Net assets －180 13 Liabilities and equity Noncurrent liabilities －621 －537－1,062 －2,388 Other current liabilities Electronically recorded monetary claims - operating Notes and accounts payable-trade FY 2017 54,208 51,819 FY 2018 2Q －617 453 547 －213 －32 －70－173
Slide 16: Statement of Cash Flow
15 849 Increase in funds (millions of yen) Effect of exchange rate change －71 on cash and cash equivalents －878 Total financial cash flow －12 Other －866 Cash dividends paid －229 Total investment cash flow Other 18 Purchase of property, －248 plant and equipment and intangible assets Statement of Cash
Slide 17: Analysis per Segment for the Second Quarter
Analysis per Segment for the Second Quarter of Fiscal Ending March 31, 2019 16
Slide 18: Equipment Business
Equipment Business Environmental Test Chambers ■Both orders-received and net sales increased year on year Orders-received exceeded the previous year, especially because of an increase in the customized products in Japan and overseas Net sales exceeded the previous year, especially because of increas
Slide 19: Equipment Business
Equipment Business (millions of yen) FY 2017 FY 2018 2Q FY 2018 Initial plan Year on Year 2Q (Initial plan) 2Q ratio Orders-Received １９，２３０ １９，４００ ２０，８７４ ８．５％ ７．６％ Net Sales １５，３５５ １７，２００ １５，６３９ １．９％ －９．１％ Operating Income １，６２１ １，７００ １，４５７ －１０．１％ －１４．３％ [Profit ratio(%)] [１０．６％] [９．９％] [９．３％] 18
Slide 20: Service Business
Service Business (millions of yen) FY 2017 FY 2018 2Q FY 2018 Initial plan Year on Year 2Q (Initial plan) 2Q ratio Orders-Received ３，０６１ ３，１００ ３，２３８ ５．８％ ４．５％ Net Sales ２，７０２ ２，９００ ３，０５６ １３．１％ ５．４％ Operating Income ８７ １５０ ２８４ ２２５．３％ ８９．３％ [Profit ratio(%)] [３．２％] [５．２％] [９．３％] After-sales Service an
Slide 21: Other Business
Other Business (millions of yen) FY 2017 FY 2018 2Q FY 2018 Initial plan Year on Year 2Q (Initial plan) 2Q ratio Orders-Received ６７４ ６００ ６７９ ０．７％ １３．２％ Net Sales ４３９ ５００ ４９９ １３．７％ －０．２％ Operating Income －８２ －５０ －８３ ー ー [Profit ratio(%)] [－１８．７％] [－１０．０％] [－１６．７％] The Forest Wetland and Greening Busi
Slide 22: Breakdown of Sales by Market
Breakdown of Sales by Market Non-consolidated (Equipment business) Other markets 100% Automobile market 24 29 27 30 30 Flat panel display 80% market Electronic device and 22 21 equipment market 60% 20 20 19 Semiconductor market 3 3 7 4 3 40% 40 39 36 36 41 20% 10 9 10 10 7 0% FY2014 FY2015 FY2016 FY
Slide 23: Sales by Region
Sales by Region FY 2017 2Q FY 2018 2Q Overseas sales ratio： ４６．２％ Overseas sales ratio： ４７．１％ 3.7% 3.1% 13.3% 16.8% Ta i wa n 5.2% Chi na Korea 4.2% FY2017 FY2018 Europe&A meri ca 2Q 2Q 53.8% South E a s t A s i a 52.9% 17.5% Other 16.2% J a pa n 5.6% 5.7% 0.8% 1.0% Total: １８，３９６million yen Total: １
Slide 24: Main Initiatives of the First Half of Fiscal 2018
Main Initiatives of The First Half of Fiscal 2018 Increased domestic production capacity 1. Newly built a production area of temperature (& humidity) chambers, and increased production capacity by 1.6 times 2. Newly built a production area for customized products 3. Transferred production to product
Slide 25: Business Plan for the Fiscal Ending March 31, 2019
Business Plan for the Fiscal Ending March 31, 2019 24
Slide 26: Equipment Business: Second Half Awareness of the Environment
FY 2018 Second half Awareness of the Environment Strong investment sentiment in the automobile market, both in Environmental Test ◎ Japan and overseas based on ongoing computerization, use of electronic components and development of automated driving. Chambers Equipment Business Investments continue
Slide 27: Making All Overseas Subsidiaries Share the Same Fiscal Year-End
Making All Overseas Subsidiaries Share the Same Fiscal Year-End From fiscal 2018, the fiscal years of overseas consolidated subsidiaries (previously December) will be made the same as the fiscal years for consolidated subsidiaries in Japan (March). To accommodate this change, the overseas consolidat
Slide 28: FY 2018 Assumed Exchange Rate
FY 2018 Assumed exchange rate ■Assumed exchange rate FY 2016 FY 2017 FY 2018 First half First half Results Results Assumed Results Results US$（yen） 108.81 112.34 112.17 108.68 110.00 Reference. FY 2018 Exchange rate sensitivity (for every appreciation of ¥1 against the U.S. dollar) Net Sales A decre
Slide 29: Business Plan for the Fiscal Ending March 31, 2019
Business Plan for the Fiscal Ending March 31,2019 （millions of yen） FY2017 FY2018 Reference: Plan for 12-month financial results Plan First half period for overseas consolidated subsidiaries Results (Results) Second half Second half Full Year Full Year Full Year （Revised） （Revised） (Initial Plan) Or
Slide 30: Equipment Business
Equipment Business （millions of yen） FY 2017 FY 2018 Reference: Plan for 12-month financial results Plan period for overseas consolidated subsidiaries First half Results (Results) Second half Second half Full Year Full Year Full Year （Revised） （Revised） (Initial Plan) Orders- ３７，０７６ ２０，８７４ １９，７７６ ４０
Slide 31: Service Business
Service Business （millions of yen） FY 2017 FY 2018 Reference: Plan for 12-month financial results Plan period for overseas consolidated subsidiaries First half Results (Results) Second half Second half Full Year Full Year Full Year （Revised） （Revised） (Initial Plan) Orders- ６，４８８ ３，２３８ ３，４１２ ６，６５０ ３
Slide 32: Other Business
Other Business （millions of yen） FY 2017 FY 2018 Reference: Plan for 12-month financial results Plan period for overseas consolidated subsidiaries First half Results (Results) Second half Second half Full Year Full Year Full Year （Revised） （Revised） (Initial Plan) Orders- １，４１６ ６７９ ７２１ １，４００ ７２１ １，４
Slide 33: Dividends
Dividends Dividend policy Recognizing that passing on profits to our shareholders is a key priority and that raising corporate value on a lasting basis is fundamental to raising shareholder value, dividends are decided taking into account sustainability and the dividend payout ratio. Dividend per sh
Slide 34: Quality is more than a word
Quality is more than a word ESOEC ESPEC CORP.
Slide 35: Forward-looking statements and inquiries
These materials contain forward-looking statements, including the Company’s present plans and forecasts of performance, that reflect the Company’s plans and forecasts based on the information presently available. These forward-looking statements are not guarantees of future performance, and plans, f
Slide 36: Reference
Reference ESPEC CORP.
Slide 37: History of Environmental Test
History of Environmental Test What is Environmental Test Test to analyze and evaluate effects of environmental factors such as temperature, humidity, pressure, and light on various industrial products like electronic components in order to ensure product quality. <1950s> <1970s–1990s> <Today> The en
Slide 38: Transition in Business
Transition in Business Expanding business based on the “environmental creation technology” refined during the course of developing environmental test chambers large scale integration Automated driving Integrated circuit IoT Eco cars such as EVs, HVs, and PHVs surface mount package ＬＣＤ storage of ele
Slide 39: Usage Case with Environmental Test Chambers
[Equipment Business] Usage Case with Environmental Test Chambers 38
Slide 40: Main New Products
[Equipment Business] Main New Products Release Date Name of product Features ・Conforms to IEC standards and a German automobile industry Environmental Stress Chamber AR series standard Oct. 2018 Rapid-Rate Temperature Cycle Type (5K/min) ・Uses European F-gas Regulation-compliant low-GWP refrigerant
Slide 41: Examples of Products Delivered
[Equipment Business] TOPICS：Examples of Products Delivered (Delivered in July 2018) ■Delivery examples of temperature (& humidity) chambers, test chambers for use for building materials Uses Reproduce the environment inside apartments (temperature and humidity) and outdoors (weather such as rain, sn
Slide 42: Examples of Products Delivered
[Equipment Business] TOPICS：Examples of Products Delivered (Delivered in March 2016) ■Smart System Research Facility, ■National Laboratory for advanced energy storage Fukushima Renewable Energy Institute, AIST technologies (NLAB), National Institute of Technology (Koriyama city, Fukushima) and Evalu
Slide 43: Usage Case with Energy Device Equipment
[Equipment Business] Usage Case with Energy Device Equipment Charge-discharge Cycle Evaluation Equipment Equipment for ensuring the reliability and safety of lithium-ion secondary batteries for next-generation vehicles (e.g., hybrid and electric vehicles) Secondary Batteries Charge- discharge cycle
Slide 44: Usage Case with Semiconductor Equipment
[Equipment Business] Usage Case with Semiconductor Equipment Screening Eliminate defective products to maintain initial-period quality at the final inspection stage of semiconductor device manufacturing Semiconductors × Heat load × × Burn-in chamber Elimination of latent early failures Reliability E
Slide 45: Service Business
[Service Business] After–sales Service and Engineering Preventive maintenance of products, maintenance service, and the upgrading/improvement and installation/relocation of products ■ Speedy response via one of the most extensive networks in Japan ■ Launching new services by utilizing the network fu
Slide 46: New Services Using Networks
[Service Business] New Services Using Networks Industry’s first new services using networks 「ESPEC ONLINE SERIES」 * Services started in November 2013 ■ESPEC online support Trouble notification and recovery service enabling peace of mind when using the Company’s products ■ESPEC OnlineCore A centraliz
Slide 47: Service Business Topics: Battery Safety Certification Center
[Service Business] TOPICS ESPEC provides commissioned tests and certification application services compliant with United Nations regulations at the world’s first Battery Safety Certification Center Providing a one-stop service to support the implementation of 9 safety tests and applications for cert
Slide 48: Environmental Engineering Business
[Other Business] Environmental Engineering Business The forest wetland and greening Business ■Reforestation (Tree planting) Recovery of local forest by selecting species and planting out seedlings using potential natural vegetation data. ■Waterfront biotope restoration Reconstruction of natural envi
Slide 49: Other Business Topics: Examples of Products Delivered
[Other Business] TOPICS：Examples of Products Delivered (Delivered in March 2016) ■Arid Land Research Center, Tottori University Products delivered: Experimental System for Analyzing Responses of Dryland plants to Climate Changes(2 units) (Simulates the climates of arid lands, including high temperat
Slide 50: Other Business Topics
[Other Business] TOPICS Produced a high value-added vegetables using deep-seawater Established in March 2016 near Haneda Airport at a plant factory*, Production and sales of vegetables high in minerals with the use of deep sea water. * Joint research with DHC Corporation and Kyoto University Interio
Slide 51: Initiatives tackling environmental problems
Initiatives tackling environmental problems Achieved 71th place in the Nikkei Environmental Management Survey Forest preservation activity - Kehara Forest Creation Program In March 2018, designated as an affiliated business of the Japan Committee for United Nations Decade on Biodiversity Since 2007,
Slide 52: Initiatives tackling environmental problems
Initiatives tackling environmental problems （March 2018） Designated as affiliated businesses of the Kebara Forest Creation Program: Creating a Mountain Full of Treasures—The Kyoto Model Forest Project, and The Japan Committee for the United Nations Decade on Biodiversity ・The Kebara Forest Creation
Slide 53: To a company where employees can be more active
To a company where employees can be more active Employee Education System Initiatives to promote women's success Enhancement ・Implement a Global Trainee Program aimed at developing human resources who are capable of working in international settings ・Enhance the education program to support From the