Horiba, Ltd. · TSE:6856

Horiba — Investor Presentation (September 2019)

52 slides from Horiba's investor presentation, September 2019

1. Slide 1: Mid-Long Term Management Plan MLMAP2023

   Mid-Long Term Management Plan “MLMAP2023” HORIBA, Ltd. September, 2019 © 2019 HORIBA, Ltd. All rights reserved. 1

2. Slide 2: MLMAP2023 Agenda

   MLMAP2023 1. Looking back on the current plan (MLMAP2020) 2. Numerical Targets 3. Priority Measures 4. Segment Strategy 5. Regional Strategy 6. Capital Strategy © 2019 HORIBA, Ltd. All rights reserved. 2

3. Slide 3: 1. Looking back on the current plan (MLMAP2020)

   MLMAP2023 1. Looking back on the current plan (MLMAP2020) 2. Numerical Targets 3. Priority Measures 4. Segment Strategy 5. Regional Strategy 6. Capital Strategy © 2019 HORIBA, Ltd. All rights reserved. 3

4. Slide 4: 20-Year Operating Results and Progress of MLMAP2020

   20-Year Operating Results and Progress of MLMAP2020 Achieved continuous sales growth and high profitability グループ管理 through proactive investments with a long-term perspective 250.0 (Billions of yen) MLMAP2020 1.8 times sales growth in 8 years from 2010 210.5 213.0 Profit plan 30.0 28.8 Sales Operatin

5. Slide 5: Main Topics, 2016-2019 [M&A/Capital Investment]

   Main Topics, 2016-2019 ［M&A/Capital Investment］ Investing to expand business scale and areas at a time of drastic change in industrial structure New businesses acquired through M&As [DE]FuelCon AG [UK]MIRA Ltd. [US]MANTA Instruments, Inc. Micro-blood analysis Strengthening Strengthening Strengthenin

6. Slide 6: Main Topics, 2016-2019 [M&A/Capital Investment]

   Main Topics, 2016-2019 ［M&A/Capital Investment］ Investing to expand business scale and areas at a time of drastic change in industrial structure Strengthening development/production capabilities: ¥40bn invested in 3 years [US] Optical measurement [US]Support to a new [IN] HORIBA India [US] Process m

7. Slide 7: Background in Launching MLMAP2023

   Background in Launching MLMAP2023 Urgent need to respond to the accelerated changes in business environment Significant changes in the trend Accelerated advanced in Increasing interest of automotive industry technology development in solving social issues SDGs/ Electrification/ Environmental Worksty

8. Slide 8: MLMAP2023 Agenda

   MLMAP2023 1. Looking back on the current plan (MLMAP2020) 2. Numerical Targets 3. Priority Measures 4. Segment Strategy 5. Regional Strategy 6. Capital Strategy © 2019 HORIBA, Ltd. All rights reserved. 8

9. Slide 9: Numerical Targets of MLMAP2023

   Numerical Targets of MLMAP2023 Net sales ¥300.0bn Operating income ¥40.0bn Net income ¥30.0bn EPS ¥711 (Earnings Per Share) ROE 10% or more Total return ratio Target around 30% Foreign exchange rate assumptions: ¥110/US$, ¥125/Euro © 2019 HORIBA, Ltd. All rights reserved. 9

10. Slide 10: Numerical Targets of MLMAP2023

    Numerical Targets of MLMAP2023 (Billions of yen) Advancing to the next stage with continuous growth in sales and profit 300.0 1.5 times growth from 2018 40.0 CAGR Sales 210.5 213.0 20152018:7.2% 28.8 20182023:7.3% Sales Operating income Net income 170.8 170.0 Operating income 25.0 30.0 20152018:1

11. Slide 11: MLMAP2023 Agenda

    MLMAP2023 1. Looking back on the current plan (MLMAP2020) 2. Numerical Targets 3. Priority Measures 4. Segment Strategy 5. Regional Strategy 6. Capital Strategy © 2019 HORIBA, Ltd. All rights reserved. 11

12. Slide 12: Priority Measures of MLMAP2023

    Priority Measures of MLMAP2023 MLMAP2023 Slogan “ONE STAGE AHEAD” 1. Market Oriented Business To develop analysis and measurement solutions, utilizing HORIBA’s core technologies, in the leading three business fields of the mega trend 2. Solution Provider Beyond Life Cycle Management To support custo

13. Slide 13: HORIBA's Core Technologies

    HORIBA’s Core Technologies Infrared Spectroscopic Liquid analysis Gas flow control Particle analysis measurement analysis (Electrochemical analysis) Semiconductors Automotive Test Systems Process & Environmental Automotive Test Systems Scientific Process & Environmental Semiconductors Automotive Tes

14. Slide 14: Priority Measure 1: Market-Oriented Business

    Priority Measure 1: “Market-Oriented Business" To develop analysis and measurement solutions, utilizing HORIBA’s core technologies, in the leading three business fields of the mega trend Energy Materials Bio Market & & & Environment Semiconductor Healthcare Mobility, Power generation, Advanced mater

15. Slide 15: Priority Measure 2: Solution Provider Beyond Life Cycle Management

    Priority Measure 2: Becoming a “Solution Provider Beyond Life Cycle Management” To support customers’ businesses from all aspects, from installation to replacement Products/Solution Packages Support the efficient operation of Consulting with analysis technologies customers’ facilities Offer new valu

16. Slide 16: Priority Measure 3: HORIBA Core Values

    Priority Measure 3： “HORIBA Core Values” The next stage of the Super Dream Team BlackJack Project Stained Glass Project To bring about changes in our awareness and HORIBA’s diversity promotion project activities, the project has yielded a system for [Themes] sharing front-line operating information

17. Slide 17: Priority Measure 3: HORIBA Core Values

    Priority Measure 3: “HORIBA Core Values” Improve asset efficiency with HORIBA Premium Value Budgeting by using HORIBA’s unique KPI (subtracting “Cost of Approach for the enhancement of Capital” from “Operating Income”) that measures capital efficiency capital efficiency HORIBA Premium Value Operatin

18. Slide 18: MLMAP2023 Agenda

    MLMAP2023 1. Looking back on the current plan (MLMAP2020) 2. Numerical Targets 3. Priority Measures 4. Segment Strategy 5. Regional Strategy 6. Capital Strategy © 2019 HORIBA, Ltd. All rights reserved. 18

19. Slide 19: Vision of MLMAP2023: Application-driven business

    Vision of MLMAP2023 Application-driven business Provide the best applications in four business areas. Establish a position as an indispensable partner in the automotive development field. CAV: Connected/autonomous Emissions: Engine/exhaust gas Energy efficiency: Electrification driving system Enterp

20. Slide 20: Emissions: Strengthening the existing areas and challenging growth areas

    Emissions: Strengthening the existing areas and challenging growth areas Solutions for fuel efficiency and exhaust gas Optimal powertrains (Challenging growth areas) regulations (Strengthening the existing areas) Globally, continuing tighter regulations Electrification leads to an increase in system

21. Slide 21: Energy Efficiency: Maximize the electrification business

    Energy Efficiency： Maximize the electrification business Contribute to optimizing the development process of electric vehicles Establishment of the “CELL Zero” test facility for Objective of “Test in the Loop” evaluation of batteries for electric vehicles Proposal of a highly-efficient R&D environme

22. Slide 22: CAV: Acquisition of Initiatives in Advanced Technology

    CAV*: Acquisition of Initiatives in Advanced Technology * CAV: Connected and Autonomous Vehicle “Drive/Turn/Stop & Protect” - Support R&D from all directions (HORIBA MIRA’s initiatives) Drive/Turn/Stop Protect Multi-purpose tests for Test facilities to verify an Opened the Vehicle Resilience* autono

23. Slide 23: Enterprise Data Management for Development

    Enterprise Data Management for Development： Contributing to optimizing overall vehicle R&D Contributing to the front-loading of automotive development (reduction in man-hours from shorter development process) Core system that integrates and manages analysis and measurement data Knowledge in engineer

24. Slide 24: Vision of MLMAP2023

    Vision of MLMAP2023 HORIBA as a worldwide player who analyzes the entire earth Provide various solutions in the global market: ranging from approaches to environmental regulations, to raising production efficiency Business growth in Open up markets in developed countries Grow globally in the emergin

25. Slide 25: Global Trend and Growing Needs of Environmental Measures

    Global Trend and Growing Needs of Environmental Measures Increased awareness on global environmental preservation ⇒ contribution to productivity improvement Phase to improve industrial processes Phase for improving the environment Approaches to Demand 環境汚染～環境規制導入 environmental regulations Product sa

26. Slide 26: Growth in Emerging Countries/Developed Countries

    Growth in Emerging Countries/Developed Countries Emerging Countries (Southeast Asia, etc.) Developed Countries Needs Approaches to environmental regulations Approaches to env. reg.＋ Industrial process improvement Improve Respond to local needs Higher productivity in the petro- air Enhance Industrial

27. Slide 27: Global Growth in the Water Measurement Business

    Global Growth in the Water Measurement Business Process & Sales expansion in the tap water monitoring market Environmental Semiconductor Scientific Kuala Lumpur(Malaysia) Sao Paulo(Brazil) Water measurement business Tap water Monitoring of quality water discharge monitoring in the tap water Integrat

28. Slide 28: Vision of MLMAP2023: To be a Preferred Partner

    Vision of MLMAP2023 To be a Preferred Partner Expand product portfolio from small to large scale analyzers. Accelerate global business expansion. Enhancing strength Entering the large-scale Capturing emerging Sales development in the small- and market markets medium-sized market Access to the hospit

29. Slide 29: Expand Business Domains

    Expand Business Domains Use of proprietary technologies and Enhance strength in alliances for further expansion the small- to medium-sized market Test Category Hematology Clinical Immunology Coagulation Business environment Chemistry • Increase in testing in the background of the aging society Marke

30. Slide 30: Entering Large-scale Markets and Focusing on Particular Markets

    Entering Large-scale Markets and Focusing on Particular Markets Expand business in large-scale markets Strengthen global network/supply chain Business environment • European market: centralization of testing at France France Japan US large-scale laboratories and productivity China improvement India

31. Slide 31: Vision of MLMAP2023: Shape the market, sell the solution

    Vision of MLMAP2023 Shape the market, sell the solution Evolve the company into a comprehensive supplier that provides high-value-added solutions in all semiconductor manufacturing processes, from R&D to aftermarket services Enhance the existing fields Extend coverage Taking up challenges in new fie

32. Slide 32: Semiconductor Market Projection and HORIBA's Market Share in MFC

    Semiconductor Market Projection and HORIBA’s Market Share in Mass Flow Controllers (MFC) US$1bn 700 HORIBA’s global market share in MFC(RH) 70% Market size by semi. device type(LH) 60% 604 600 60% Others 500 Analog 486 50% Discrete and Opto Electronics Flash Memory 400 40% DRAM 347 Logic 300 30% 200

33. Slide 33: Extend Coverage and Take up the Challenges of New Fields

    Extend Coverage and Take up the Challenges of New Fields Provide high-value-added solutions in semiconductor manufacturing processes Wet/Lithograph Challenge to add R&D CVD/Etching process process new value Contribute to  Deal with micro particles, evaluation/analysis of  Increase in processes due

34. Slide 34: Establish a Solid R&D Network and Supply Chain

    Establish a Solid R&D Network and Supply Chain Global R&D system Enhance supply capacity Enhance R&D operations in Kyoto and Production system in Japan Fukuchiyama (Japan), and Reno(US) Accelerate local engineering in China Reflect customers’ needs in R&D Aim to gain higher market share Increase pro

35. Slide 35: Vision of MLMAP2023: Core Technology Provider

    Vision of MLMAP2023 Core Technology Provider Apply the technology cultivated as a founding business in the megatrend market. Leading “HORIBA in Technology” in cooperation with each segment Advanced materials Bio Energy, Semiconductor, Water Customized technology to meet all customer needs; Local eng

36. Slide 36: Advanced Materials and Bio Field

    Advanced Materials and Bio Field Maximize synergies by effectively using resources from three global bases HORIBA FRANCE(France) HORIBA(Japan) HORIBA INSTRUMENTS (US)  A leading company in  Utilizing various technologies as a  Deploy applications that satisfy spectroscopic analysis “headquarter o

37. Slide 37: Energy, Semiconductor, and Water

    Energy, Semiconductor, and Water Collaborate with other segments to realize business expansion by using their sales channels Energy and automotive industry Profit from electrification in China  Increase in demand for secondary battery material analysis Increase in demand for battery Raman spectrome

38. Slide 38: One-to-One Customization & Global Engineering

    One-to-One Customization & Global Engineering Accelerate product development Strengthen uniqueness in for customer needs global engineering One to One Customization Founding Global Customization & Engineering Technology Engineering Inline/online measurement  Propose products for customers based on

39. Slide 39: © 2019 HORIBA, Ltd. All rights reserved.

    © 2019 HORIBA, Ltd. All rights reserved. 39

40. Slide 40: MLMAP2023 Agenda

    MLMAP2023 1. Looking back on the current plan (MLMAP2020) 2. Numerical Targets 3. Priority Measures 4. Segment Strategy 5. Regional Strategy 6. Capital Strategy © 2019 HORIBA, Ltd. All rights reserved. 40

41. Slide 41: Vision of MLMAP2023: India - Think Big. Grow Bigger.

    India Vision of MLMAP2023 Think Big. Grow Bigger. Strengthen sales and the service network, rooted in the local society Provide high-value-added analysis/measurement technologies Enhance engineering/facility capability 2023 plan Sales of ¥13.0bn  Establish local bases to strengthen engineering capa

42. Slide 42: China: Current Status and Changes in China Market

    China Current Status and Changes in China Market China: Rapid growth and changes in the market Growth and technological improvement of local companies HORIBA: Invest aggressively and realize further growth in China at the time of changing trends in technology 1. Strengthen “production capacity” Plan

43. Slide 43: MLMAP2023 Agenda

    MLMAP2023 1. Looking back on the current plan (MLMAP2020) 2. Numerical Targets 3. Priority Measures 4. Segment Strategy 5. Regional Strategy 6. Capital Strategy © 2019 HORIBA, Ltd. All rights reserved. 43

44. Slide 44: Shareholder Return and Financial/Investment Strategy

    Shareholder Return and Financial/Investment Strategy Shareholder return policy Financial/investment strategy  Dividend payment + Share buyback = 30% of 1. Invest effectively from a long-term perspective consolidated net profit* to be targeted 2. Utilize intra-group financing  Retained earnings wil

45. Slide 45: Thoughts on ESG investment and SDGs

    Thoughts on ESG investment and SDGs [Basic Policy] We contribute to realizing the sustainable G: Governance society advocated by SDGs* by offering S: Social analyze and measurement technologies Automotive Test E: Environment which lead technology innovation that supports security, safety, and health

46. Slide 46: Symbol for MLMAP2023: Hawk

    Symbol for MLMAP2023: Hawk Find the targets from a heightened perspective Accomplish the objectives at the fastest speed © 2019 HORIBA, Ltd. All rights reserved. 46

47. Slide 47: © 2019 HORIBA, Ltd. All rights reserved.

    © 2019 HORIBA, Ltd. All rights reserved. 47

48. Slide 48: References

    References © 2019 HORIBA, Ltd. All rights reserved. 48

49. Slide 49: Numerical targets (vs 2018, vs 2019)

    Numerical targets (vs 2018, vs 2019) (Billions of yen) 2018 2019 MLMAP2020 MLMAP2023 Results Forecast Plan Plan vs.2018 vs.2019 Sales 210.5 213.0 250.0 300.0 +42% +41% Operating income 28.8 25.0 30.0 40.0 +39% +60% Operating income% 13.7% 11.7% 12.0% 13.3% -0.4p +1.6p Net income 22.3 17.5 20.0 30.0

50. Slide 50: Numerical targets (by Segment)

    Numerical targets (by Segment) (Billions of yen) Sales Operating income 2018 2019 MLMAP2020 MLMAP2023 vs. vs. 2018 2019 MLMAP2020 MLMAP2023 vs. vs. Results Forecast Plan Plan 2018 2019 Results Forecast Plan Plan 2018 2019 Auto 79.6 85.0 100.0 120.0 +51% +41% 7.7 8.0 10.0 12.0 +56% +50% P&E 19.3 20.0

51. Slide 51: Transition of Symbol

    Transition of Symbol © 2019 HORIBA, Ltd. All rights reserved. 51

52. Slide 52: Thank you

    Thank you Cảm ơn 감사합니다 ありがとうございました Dziękuję Grazie धन्यवाद நன்ற Merci 谢谢 ขอบคุณคร ับ Obrigado Σας ευχαριστούμε Tack ska ni ha Большое спасибо Danke Gracias © 2019 HORIBA, Ltd. All rights reserved. 52

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