Slide 1: Results Briefings for Fiscal 2018 Ended March 2019
Securities ID code:6859 ESPEC CORP. Results Briefings for Fiscal 2018 Ended March 2019 May 23, 2019 www.espec.co.jp
Slide 2: Table of Contents
Table of Contents Company Profile Financial Result for the Fiscal 2018 Ended March 31, 2019 Analysis per Segment for the Fiscal 2018 Ended March 31, 2019 Business Plan for the Fiscal Ending March 31, 2020 Action Items for the Fiscal Ending March 31, 2020 Reference 1
Slide 3: Company Profile
Company Profile Industry-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
Slide 4: Global Network
会社概要 Global Network Consolidated Subsidiaries Global Network 10 companies 45 countries Business Facilities in Japan : 25 (Global 7 companies, Domestic Agencies in Japan : 46 Domestic 3 companies) 33 companies EUROPE U.S.A. △ESPEC EUROPE GmbH ●ESPEC NORTH AMERICA, INC △ESPEC IKLIM KABINLERＩ SATIS VE
Slide 5: Summary of ESPEC Business (Per Market / Use)
Summary of ESPEC Business (Per Market / Use) Sales composition Main Products Market Use (FY2018) ・Temperature & humidity chamber ・Electronic component ・Thermal shock chamber and equipment market ・For R & D ・Bench-top type temperature & humidity chamber ・Automobile market ・For credibility Environment
Slide 6: Equipment Business Topics (December 2018)
【Equipment Business】ＴＯＰＩＣＳ （December 2018） ESPEC ENGINEERING VIETNAM CO., LTD. established in Vietnam Company name：ESPEC ENGINEERING VIETNAM CO,LTD Address：Room 8, 9 th Floor, VIT Tower, 519 Kim Ma Street, Ngoc Khanh ward, Ba Dinh District, Hanoi, Vietnam Established: December 2018 Start of operatio
Slide 7: Equipment Business Topics (November 2018, February 2019)
【Equipment Business】ＴＯＰＩＣＳ （November 2018） （February 2019） Launched sales of evaluation Introduced hypoxic training systems for secondary batteries rooms at fitness clubs for the Chinese market ・Standard type secondary battery ・Recreated conditions simulating oxygen charge-discharge tester for autom
Slide 8: Financial Result for the Fiscal 2018 Ended March 31, 2019
Financial Result for the Fiscal 2018 Ended March 31, 2019 7
Slide 9: 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 10: Financial Result for the Fiscal 2018
Financial Result for the Fiscal 2018 （millions of yen） ＦＹ２０１８ (Revised Plan) ＦＹ２０１８ (Result) Reference: Regular year financial results period Reference: assuming a 12-month period for overseas Regular year consolidated subsidiaries FY 2017 financial results period assuming a Revised Plan Result 12-m
Slide 11: Financial Highlights
Financial Highlights Sales and profit both increased against revised plan for FY2018 Reference figures*1 also increased against the revised plan The Equipment Business significantly increased (especially Orders-Received environment test chambers) and Other Business also increased The Equipment Busin
Slide 12: Review of the Fiscal 2018
Review of the Fiscal 2018 External Environment Developments within ESPEC Largely as ESPEC expected Implemented policies as planned ・Foreign exchange (U.S. dollar/yen) is ・Built system for increasing domestic production at $1 to ¥108~113 ・Profitability improvement activities for ・Acceleration of EV c
Slide 13: Analysis of Operating Income Increase and Decrease Factor
Analysis of Operating Income Increase and Decrease Factor Equipment Business (millions of yen) Service Business Other Business 13 -0 -52 443 -237 72 43 -345 357 personnel expenses Selling, administrative, and expenses Research and development and administrative expenses Other selling, general overse
Slide 14: Statement of Assets and Liabilities
Statement of Assets and Liabilities (millions of yen) Assets Liabilities and equity 201 192 30 236 -106 2,173 107 -632 -135 2,144 949 364 327 449 Noncurrent assets Work in process Raw materials and supplies Other current assets Intangible assets Investment and other assets Merchandise and finished g
Slide 15: Statement of Cash Flow
（millions of yen） 14 965 Increase in funds Effect of exchange rate change -89 on cash and cash equivalents -1,399 Total financial cash flow -26 Other -1,372 Cash dividends paid -562 Total investment cash flow Other -3 Purchase of property, plant -558 and equipment and intangible assets 3,017 Total o
Slide 16: Analysis per Segment for the Fiscal 2018 Ended March 31, 2019
Analysis per Segment for the Fiscal 2018 Ended March 31, 2019 15
Slide 17: Equipment Business
Equipment Business Environmental Test Chambers ■Customized products performed strongly in Japan, and performed soundly in all areas overseas, with a particularly strong trend in China * Reference: Orders-received and net sales both increased year on year Energy Device Equipment ■Orders-received perf
Slide 18: Equipment Business
Equipment Business (millions of yen) FY 2018 FY 2017 Reference: Regular year financial results period assuming a 12-month period for Result overseas consolidated subsidiaries Result Year on Year Orders-Received ３７，０７６ ４２，５８７ ３９，９７９ ７．８％ Net Sales ３６，６０２ ４２，６３８ ３９，２３６ ７．２％ Operating Income ４，０９２ ５，１９
Slide 19: Service Business
Service Business (millions of yen) FY 2018 Reference: Regular year financial results period FY 2017 assuming a 12-month period for overseas Result consolidated subsidiaries Result Year on Year Orders-Received ６，４８８ ６，６１４ ６，５２４ ０．５％ Net Sales ６，２９２ ６，６１３ ６，４８６ ３．１％ Operating Income ５２４ ６２０ ５４８ ４．５％ [
Slide 20: Other Business
Other Business (millions of yen) FY 2018 FY 2017 Result Year on Year Orders-Received １，４１６ １，７０６ ２０．４％ Net Sales １，３７５ １，５４１ １２．０％ Operating Income △１５ ９ ー [Profit ratio(%)] [△１．１％] [０．６％] * The Other Business segment was not affected by the irregular fiscal period so a reference figure is omitted.
Slide 21: Breakdown of Sales by Market
Breakdown of Sales by Market Non-consolidated (Equipment business) Other markets 100% 23 25 26 26 27 Automobile market 80% Flat panel display 23 market 24 25 24 24 60% Electronic device and 3 equipment market 3 5 3 5 Semiconductor market 40% 40 38 37 34 39 20% 10 9 10 9 7 0% FY2014 FY2015 FY2016 FY2
Slide 22: Sales by Region
Sales by Region FY 2017 FY 2018＊ Overseas sales ratio： ４４．２％ Overseas sales ratio： ４７．５％ 2.4% 2.7% 15.6% 18.6% Ta i w a n Chi na 4.2% Korea FY2017 E urope&A meri ca FY2018 4.3% South E a s t A s i a 55.8% 16.3% Other 52.5% J a pa n 15.5% 5.0% 0.7% 5.0% 1.4% Total: ４４，０６９million yen Total: ４７,０６０mill
Slide 23: Management Plan for the Fiscal Ending March 31, 2020
Management Plan for the Fiscal Ending March 31, 2020 22
Slide 24: FY2019 Business Environment by Segment
FY 2019 Awareness of the Environment Strong investment sentiment in the automobile market, both in Environmental Test ◎ Japan and overseas based on use of electronic components and development of automated driving Chambers Equipment Business Strong investment sentiment in the electronics market, bot
Slide 25: FY 2019 Assumed exchange rate
FY 2019 Assumed exchange rate ■Assumed exchange rate FY 2017 FY 2018 FY 2019 First half Results Results Assumed Results US$（yen） 112.17 108.68 110.40 110.00 Reference. FY 2019 Exchange rate sensitivity (for every appreciation of ¥1 against the U.S. dollar) Net Sales A decrease of ¥131 million Operat
Slide 26: Business Plan for the Fiscal Ending March 31, 2020
Business Plan for the Fiscal Ending March 31, 2020 (millions of yen) FY 2018 FY 2019 Reference: Regular year financial Plan results period assuming a 12- Results month period for Year on Year overseas First half Second half Full Year (12 months consolidated reference) subsidiaries Orders-received ５０
Slide 27: Equipment Business
Equipment Business (millions of yen) FY 2018 FY 2019 Reference: Regular year financial Plan results period assuming a 12- Results month period for Year on Year overseas First half Second half Full Year (12 months consolidated reference) subsidiaries Orders-received ４２，５８７ ３９，９７９ １９，８００ １９，５００ ３９，３００
Slide 28: Service Business
Service Business (millions of yen) FY 2018 FY 2019 Reference: Regular year Plan financial results period assuming Results a 12-month Year on Year period for overseas First half Second half Full Year (12 months consolidated reference) subsidiaries Orders-received ６，６１４ ６，５２４ ３，２００ ３，７００ ６，９００ ５．８％ Ne
Slide 29: Other Business
Other Business (millions of yen) FY 2018 FY 2019 Plan Results Full year Year on First half Second half year(%) Orders-received １，７０６ ６００ ９００ １，５００ -１２．１％ Net sales １，５４１ ５００ １，０００ １，５００ -２．７％ Operating ９ -５０ ５０ ０ income [０．６％] [-１０．０％] [５．０％] [０．０％] [Profit ratio(%)] 28
Slide 30: 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 31: Long-Term Vision and Medium-Term Management Plan
Long-Term Vision and Medium-Term Management Plan （millions of yen） Medium-Term Management Plan Medium-Term Management Plan ESPEC Vision “Progressive Plan 2017” “Progressive Plan 2021” 2025 Net sales 60,000 60,000 Operating 52,000 50,580 50,580 52,000 incame 47,500 47,500 44,069 47,060 39,507 39,035
Slide 32: Action Items for the Fiscal Ending March 31, 2020
Action Items for the Fiscal Ending March 31, 2020 31
Slide 33: Business strategy in the Equipment Business segment
Business strategy in the Equipment Business segment Environmental Test Chambers ・Advance customization process innovation ・Expand product lineup for the automobile market Energy Device Equipment ・Expand sales in the Chinese secondary battery market New field ・Advance new business development Medical
Slide 34: Business strategy in the Service Business segment
Business strategy in the Service Business segment Support for After-sales Service remote operations * Scheduled to start in FY2019 ・Expand sales by proposing a new service menu Maintenance support utilizing smart glasses Commissioned Tests ・Secure new customers through a specification testing consul
Slide 35: Global strategy
Global strategy Core expansion areas Europe ・Expand business through an expanded lineup ・Strengthen the technical support framework ASEAN ・Expand sales by consolidating Thai and Vietnamese subsidiaries 34
Slide 36: Strengthen management foundation and promote ESG
Strengthen management foundation and promote ESG Under the corporate philosophy, THE ESPEC MIND, the Company is aiming for sustainable growth E（Environmental） ①7th Mid-term Plan on the Environment ②Contribute to reducing the environmental load through products ③Promote biodiversity and natural envir
Slide 37: Investment plan
Investment plan Strategic R&D 1.6 billion yen 1.2 billion yen investment expenditures Ordinary 1 billion yen investment Total 2.6 billion yen Main Capital Investments ・Construct new building at Kobe R&D Center ・Expand commissioned testing services ・Expand ENA Colorado business site Image of the new
Slide 38: Quality is more than a word
Quality is more than a word €SOEC ESPEC CORP. 3
Slide 39: 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 40: Reference
Reference ESPEC CORP.
Slide 41: 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 42: 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 Integrated circuit Automated driving, the IoT and AI Eco cars such as EVs, HVs, and PHVs surface mount package ＬＣＤ st
Slide 43: Usage Case with Environmental Test Chambers
[Equipment Business] Usage Case with Environmental Test Chambers 42
Slide 44: Main New Products
[Equipment Business] Main New Products Release Date Name of product Features ・There is no temperature rise due to defrosting, and long-term continuous operation of high humidity environment is possible Dec. 2018 Aging Cabinet while maintaining below 5℃ ・Equipped with sterilization mode Standard type
Slide 45: Examples of Products Delivered
[Equipment Business] 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, snow, and
Slide 46: Examples of Products Delivered
[Equipment Business] 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 Evaluation (
Slide 47: 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 48: 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 49: 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 50: New services using networks ESPEC ONLINE SERIES
[Service Business] [First in Industry]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 centralized management system enablin
Slide 51: Battery Safety Certification Center
[Service Business] [First in world] ESPEC provides commissioned tests and certification application services compliant with United Nations regulations at Battery Safety Certification Center Providing a one-stop service to support the implementation of 9 safety tests and applications for certificatio
Slide 52: Other Business
[Other 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 environment, １ development of vegetativ
Slide 53: Other Business: deep-seawater vegetables
[Other Business] 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 Interior of th
Slide 54: Other Business Examples of Products Delivered
[Other Business]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 temperature, low
Slide 55: Initiatives Tackling Environmental Problems
Initiatives Tackling Environmental Problems Achieved 71th place in the Nikkei Environmental Management Survey(FY2017) 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 Sin
Slide 56: Initiatives Tackling Biodiversity
Initiatives Tackling Biodiversity （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 Program is
Slide 57: 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 ・Implementation of training aimed at sharing corporate philosophy ・Implement a Global Trainee Program aimed at developing human resources who are capable of working in interna