Marubun Corporation · TSE:7537

Marubun — Q2 FY3/2015 Earnings Presentation

43 slides from Marubun's earnings presentation, November 2014

1. Slide 1: Financial Results for the 2nd Quarter of Fiscal Year Ending March 31, 2015

   Financial Results for the 2 nd Quarter of Fiscal Year Ending March 31, 2015 November 2014 (Securities Code：7537 / TSE1st Section) Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

2. Slide 2: 1H FY3/15 Summary of Consolidated Financial Results

   1H FY3/15 Summary of Consolidated Financial Results Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

3. Slide 3: 1H FY3/15 Summary of Consolidated Financial Results

   1H FY3/15 Summary of Consolidated Financial Results Net sales increased by ¥3,817 million (+3.2% YoY)  Electronic Devices Business Increased 2.4% as a result of robust sales of Special-Use ICs for communication modules and other ICs for OA equipment and industrial equipment  Electronic Systems Bus

4. Slide 4: 1H FY3/15 Summary of Financial Results

   1H FY3/15 Summary of Financial Results [Reference] (\ million) 1H 'FY3/14 1H FY3/15 YoY Changes FY3/15 Initial Forecasts Composition Composition Composition Actual Actual Amount ％ 1H Ratio Ratio Ratio Net sales 119,373 100.0% 123,190 100.0% 3,817 3.2% 114,000 100.0% Electronic Devices 104,950 87.9%

5. Slide 5: Electronic Devices Net Sales Breakdown by Product

   1H FY3/15 Electronic Devices Business Net Sales Breakdown by Product 13/3月期 1-2Q 14/3月期 1-2Q (¥ million) 107,488 104,950 13,467 Electronic Components 15,448 Decrease for digital steel cameras and smartphones 9,179 Custom IC 5,594 Increase in ICs for consumer electronics Special-Use IC Increase in IC

6. Slide 6: Electronic Devices Market Trend by Application

   1H FY3/15 Electronic Devices Business Market Trend by Application Application Market Trend Communication Equipment Increase in ICs for communication modules and infrastructure Consumer Electronics Decrease in ICs for digital cameras, increase for TVs and game consoles Computers & OA Equipment Increa

7. Slide 7: Electronic Systems Net Sales Breakdown by Product

   1H FY3/15 Electronic Systems Business Net Sales Breakdown by Product (¥ million) 15,701 14,423 Medical Equipment 5,379 Decrease in radiation therapy systems 5,963 1,478 Laser Equipment 500 Scientific Equipment 1,665 Increase in thin-film equipment for power semiconductor manufacturing 116 Measuremen

8. Slide 8: 1H FY3/15 Factors Affecting Ordinary Income

   1H FY3/15 Factors Affecting Ordinary Income （¥ million） Last fiscal year average in SG&A Expenses Decrease in Gross Profit Increase in Non-operating Expenses 1,173 (291) 37 (356) 563 1H FY3/14 1 2 3 4 1H FY3/15 5 Decrease in Gross Profit (Margin) Gross Profit 1H FY3/14: ¥8,448million(7.1%) ⇒ 1H FY3/

9. Slide 9: 1H End FY3/15 Summary of Balance Sheets

   1H End FY3/15 Summary of Balance Sheets (\ million) FY3/14 End 1H FY3/15 End Changes in 6 m/s Actual Actual Amount Current assets 99,510 107,359 7,849 Cash and deposits 19,151 23,652 4,501 Notes and accounts receivable-trade 60,944 56,574 (4,370) Inventories 16,931 22,944 6,013 Other 2,484 4,189 1,7

10. Slide 10: 1H FY3/15 Summary of Statements of Cash Flows

    1H FY3/15 Summary of Statements of Cash Flows (\ million) 1H FY3/14 1H FY3/15 Actual Actual Net cash provided by (used in) operating 2,114 8,110 activities Income before income taxes 1,139 558 Decrease (increase) in notes and accounts (3,179) 4,063 receivable-trade (146) (6,123) Decrease (increase)

11. Slide 11: Medium-Term Vision Progress of Business Strategies and Key Initiatives

    Medium-Term Vision Progress of Business Strategies and Key Initiatives Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

12. Slide 12: Summary of Medium-Term Vision

    Summary of Medium-Term Vision Medium-Term Management Vision “Transforming into a robust company that can realize sustainable growth” Medium-Term Management Slogan “Think & Action” Electronic Devices Electronic Systems  Expand the base business  Enhance engineering services  Develop businesses in

13. Slide 13: Electronic Devices: Overview of Key Initiative 1

    Electronic Devices Business: Overview of Key Initiative ① ● Expand the base business Steady improvement in our share Increase of Field application engineers and strengthen follow- up actions for clients’ respective projects Develop key devices and propose Enhance the solutions for target application

14. Slide 14: Electronic Devices: Progress of Key Initiatives 2

    Electronic Devices Business: Progress of Key Initiatives ② ● Develop businesses in growing markets Strategic Markets Medical Industrial Telecommunications Car electronics equipment equipment Promote the development of key devices and solutions Specific measures Telecommunications area Car electronic

15. Slide 15: Electronic Devices: Overview of Key Initiative 3

    Electronic Devices Business: Overview of Key Initiative ③ ● Promote the development of new products Environment  Solar panels  Enhance sales channels for solar power facilities for farming “Solar Farming”  Added three major sales partners Industry Solar Farming  Connectors, industrial SSDs Enha

16. Slide 16: Electronic Devices: Overview of Key Initiative 4

    Electronic Devices Business: Overview of Key Initiative ④ ● Enhance global operations Nanjing, China MARUBUN USA CORPORATION MARUBUN/ARROW(SHANGHAI) CO., LTD MARUBNU/ARROW USA, LLC (Shanghai, China) (Headquarters: Santa Clara) Dalian, China MARUBUN CORPORATION Denver MARUBUN/ARROW (SHENZHEN) ELECTRO

17. Slide 17: Electronic Systems: Progress of Strategies and Key Initiatives

    Electronic Systems Business: Progress of Strategies and Key Initiatives Promote steady growth through sales activities mobilizing Group power Enhance engineering services Strengthen system Enrich product line-up integration capabilities Laser and • Focus on sales of semiconductor lasers for installa

18. Slide 18: FY3/15 Summary of Consolidated Financial Forecasts

    FY3/15 Summary of Consolidated Financial Forecasts Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

19. Slide 19: FY3/15 Summary of Financial Forecasts

    FY3/15 Summary of Financial Forecasts Net sales expected ¥263 billion (+1.0% YoY)  Electronic Devices Business Expecting an increase in Special-Use ICs for communication modules and expansion of customer  Electronic Systems Business Expecting a increase in Measurement & Inspection Equipment and Sc

20. Slide 20: FY3/15 Financial Forecasts

    FY3/15 Financial Forecasts (\ million) FY3/14 FY3/15 YoY Changes Composition Composition Actual Ratio Forcast Amount ％ Ratio Net sales 260,424 100.0% 263,000 100.0% 2,576 1.0% Electronic Devices 220,325 84.6% 223,500 85.0% 3,175 1.4% Electronic Systems 40,098 15.4% 39,500 15.0% (598) -1.5% Gross pro

21. Slide 21: FY3/15 Electronic Devices Net Sales Forecasts by Product

    FY3/15 Electronic Devices Business Net Sales Forecasts by Product (¥ million) 223,500 220,325 Electronic Components 35,725 35,485 14,339 Custom IC 11,688 Increase in ICs for consumer electronics Special-Use IC Increase in ICs for communication modules and OA equipment 89,255 91,154 Micro-Processor 1

22. Slide 22: FY3/15 Electronic Systems Net Sales Forecasts by Product

    FY3/15 Electronic Systems Business Net Sales Forecasts by Product (¥ million) 40,098 39,500 Medical Equipment Decrease in radiation therapy systems and diagnostic imaging 17,251 14,872 equipment Laser Equipment 3,738 Decrease in optical communications components 4,099 1,432 Scientific Equipment 341

23. Slide 23: FY3/15 Factors Affecting Ordinary Income (Forecasts)

    FY3/15 Factors Affecting Ordinary Income (Forcasts) （¥ million） Last fiscal year average in SG&A Expenses Last fiscal year average in Increase in Gross Profit Non-operating Income 258 4,000 3,944 (70) (133) FY 14/3 1 2 3 4 FY 515/3 Actual Forcasts Increase due to net sales increase Gross Profit FY3/

24. Slide 24: Return to Shareholders: Dividends Forecast

    Return to Shareholders  Dividends Forecast FY3/14 FY3/15 （\） Forecasts Annual Dividend per Share 19.00 20.00 Interim Dividend 6.00 7.00 Year-End Dividend 13.00 13.00 24 Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

25. Slide 25: Appendix

    Appendix Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

26. Slide 26: Corporate Outline

    Corporate Outline Net Sales  Establishment July 1947 Electronic Devices 84.6% Electronic Systems 15.4%  Capital ¥6,214 million  Activities Distribution of Cutting-edge Electronics Products FY3/14 Results  Headquarters Chuo-ku, Tokyo by Segment  Consolidated 260,424 million yen(FY3/14) Net Sales

27. Slide 27: History of Company Operations

    History of Company Operations Japan Over Seas 2013 2014 Business acquisition Hokushin Rika. Established subsidiary in Indonesia and Mexico. 2013 2007 Established subsidiary in Shenzhen, China. Business acquisition of Foresight Techno Co.,Ltd. 2005 2006 Established Marubun Semicon Corporation Establi

28. Slide 28: Trend of 10 years

    Trend of 10 years （¥ million） Net Sales Foreign Sales Ratio 300,000 50.0% 250,000 40.0% 200,000 30.0% 150,000 20.0% 100,000 10.0% 50,000 0 0.0% FY3/05 FY3/06 FY3/07 FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 28 Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

29. Slide 29: Domestic Offices

    Domestic Offices Operations IKEDA IRYOUDENNKI CO., LTD Branch (Head Office:Niigata) Sales Office MARUBUN TSUSHO CO., LTD.(Head Office:Kanazawa) Kanazawa Nanao Logistics Center Toyama Tama Affiliated Company Fukui Hakusan Center Matsumoto Tokyo HOKUSHIN RIKA Nagano Kofu (Head Office:Nagano) Omiya Mat

30. Slide 30: World-wide Sales Network

    World-wide Sales Network Marubun/Arrow (Shanghai) Co., Ltd （Shanghai） Marubun USA Corporation Chicago Nanjing,China Marubun/Arrow USA, LLC Dalian,China (Head Office：Santa Clara) Denver Detroit Marubun Corporation Reno Marubun/Arrow (Shenzhen) Electronic Products Consulting Co., Ltd. (Shenzhen,China)

31. Slide 31: Characteristic and Strength - Electronic Devices

    Characteristic and Strength -Electronic Devices- Electronic Devices  Wide Range of Products made by Leading Semiconductor Manufacturers  Global Sales Network in alliance with Arrow Electronics, Inc.  Broad Customer base. Broad Product Lineup Design Activity Marketing Order Order Customer Supplier

32. Slide 32: Affiliations - Electronic Devices

    Affiliations -Electronic Devices- Company Headquarters Establishment Shares Principal Business Electronic Devices Marubun Semicon Corporation Minato-ku, Tokyo Mar. 2005 100.0% Marubun Semicon (Shanghai) Co., Ltd. Shanghai, China Mar. 2005 100.0% Devices Business Marubun Semicon (H.K.) Ltd. Hong Kong

33. Slide 33: Main Products (by Application) - Electronic Devices

    Main Products (by Application) -Electronic Devices- Application Electronic Devices Computer & OA Communication Automobile Equipment Equipment Equipment Consumer Industrial Semiconductor Industrial Analog ● ● ● ● ● Analog IC Equipment & Discrete ● ● ● ● Automobile other Standard Logic IC ● ● ● ● ● 8.

34. Slide 34: Main Products (by Supplier) - Electronic Devices

    Main Products(by Supplier) -Electronic Devices- Electronic Devices Supplier Microdevices Instruments Seiko Epson International Asahi Kasei Broadcom Freescale Samsung Rectifier Triquint Maxim Texas Molex ISSI Semiconductor Analog ● ● ● ● ● Analog IC Discrete ● ● Standard Logic IC ● DRAM ● ● Memory IC

35. Slide 35: Characteristic and Strength - Electronic Systems

    Characteristic and Strength -Electronic Systems- Electronic Systems  Providing Unrivaled Products in High-end Markets  Value-added Technical Support (System Integration, Installation and Maintenance Services) Our Function  Marketing  Consultation Order Order  Technical support Customer Supplier

36. Slide 36: Affiliations - Electronic Systems

    Affiliations -Electronic Systems- Electronic Systems ■システム事業 Company Headquarters Establishment Shares Principal Business Marubun Tsusho Co.,Ltd. Kanazawa, Ishikawa Mar. 1961 100.0% Systems Business Hokushinrika Nagano, Nagano Nov. 1951 100.0% Systems Business Ikeda iryoudenki Co.,Ltd. * Niigata, Ni

37. Slide 37: Main Products - Electronic Systems

    Main Products -Electronic Systems- Electronic Systems Segment Main Products Major Supplier High-reliability Components, Tele Communication Systems、 Space and Sensors Plascore,Lavision Defense Avionics Test System, Space and Electronics CPI,L3 Communications Microwave Equipment Defense Measurement &

38. Slide 38: Trend in Net Sales/Gross Profit/SG&A expenses

    Trend in Net Sales/Gross Profit/SG&A expenses Net Sales Gross Profit margin SG&A expenses SGA ratio （¥ million） 4,005 （¥ million） 72,976 68,073 68,913 3,635 3,638 3,651 3,636 3,601 63,576 55,796 54,276 7.0% 7.1% 6.8% 7.9% 6.9% 6.4% 5.3% 5.5% 6.6% 1Q 2Q 3Q 4Q 1Q 2Q 6.5% 1Q 5.7% 2Q 5.4% 3Q 4Q 1Q 2Q FY

39. Slide 39: Trend in Orders/Sales

    Trend in Orders/Sales Orders Sales Electronic Devices Electronic Systems Electronic Devices Electronic Systems （¥ million） 72,976 （¥ million） 82,721 68,073 68,913 63,576 69,478 12,344 9,035 16,638 9,061 69,089 66,371 65,246 55,796 54,276 64,644 9,177 7,829 9,799 5,246 10,673 10,355 6,640 11,386 70,3

40. Slide 40: Trend in Sales of Electronic Devices by Products

    Trend in Sales of Electronic Devices by Products （¥ million） 59,038 59,852 56,337 54,399 Electronic Components 7,929 50,550 11,082 9,196 47,636 8,482 4,385 Custom IC 6,966 2,803 3,290 3,431 5,538 2,163 4,795 Special-Use IC 19,434 24,618 28,605 22,750 22,453 Micro-Processor 18,722 3,332 Memory IC 2,6

41. Slide 41: Trend in Sales of Electronic Devices by Applications

    Trend in Sales of Electronic Devices by Applications 6.7% 7.1% 7.0% 8.6% 10.1% 7.9% 9.0% 9.2% 7.2% Industrial 9.7% 8.8% 10.0% Equipment 15.5% 20.7% 16.3% 23.3% 16.4% Automobile 23.6% 22.5% 21.1% Computer & OA 19.8% 26.5% 25.2% 25.8% Consumer Equipment 46.3% 45.9% 40.6% 38.4% 38.3% Communication 32.4

42. Slide 42: Trend in Sales of Electronic Systems

    Trend in Sales of Electronic Systems 16,638 Medical Equipment （¥ million） 7,653 Laser Equipment 9,177 9,035 9,061 Scientific 1,628 6,640 3,161 Equipment 3,881 3,635 164 5,246 2,218 893 Measurement & 984 805 98 60 5,087 2,082 73 584 Inspection 402 681 3,310 3,870 Equipment 3,192 43 2,935 1,835 Space

43. Slide 43: Cautionary Statement

    Cautionary Statement Within the presentation, information on the future performance such as results forecasts is based on the data available at the time this presentation was prepared that the Company assumes reasonable. Actual performance depends on various important factors and may differ signific

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