Slide 1: Results Briefing for the Second Quarter of Fiscal Ending March 2016
ESMEC Securities ID code:6859 ESPEC CORP. Results Briefing for The Second Quarter of Fiscal Ending March 2016 November 16, 2015 WWW.eSpec.co.jp ESPEC CORP.
Slide 2: Table of Contents
Table of Contents Company Profile Financial Result for the Second Quarter of Fiscal Ending March 31, 2016 Analysis per Segment for the Second Quarter of Fiscal Ending March 31, 2016 Business Plan for the Fiscal Ending March 31, 2016 Main Initiatives in the Second Quarter of Fiscal 2015 Ending March
Slide 3: Company Profile
Company Profile Industry-leading manufacturer of environmental test chambers: 68th year since company was founded in Osaka a Name ESPEC CORP. Head Office 3-5-6, Tenjinbashi, Kita-ku, Osaka Represented By Masaaki Ishida i Established July 25,1947 Incorporated January 13,1954 Paid-up Capital ¥6,895Mil
Slide 4: Global Network
Global Network Global Network 4 3countries 3 Scompanies Consolidated Subsidiaries Business facilities in Japan:26 11 companies Domestic agencies in Japan:48 Om 4 ae @ESPEC NORTH AMERICA, INC. ~# , AESPEC EUROPE GmbH ~“ i 437 coy £s _ @SHANGHAI ESPEC ENVIRONMENTAL a ‘ TA pice EQUIPMENT CORP. ~~, a uf
Slide 5: TOPICS
TOPICS Opened the world’ s first “Battery Safety Certification Center” ESPEC will contribute to the advancement of Japan’ s automotive industry by supporting the compatibility of batteries for automobiles with global standards. Battery Safety Certification Center Opening Ceremony (in Utsunomiya Tech
Slide 6: Summary of ESPEC Business (Per Market / Use)
Summary of ESPEC Business (Per Market / Use) BS —{__ Main Products | Market | Use __fezvannaniong Temperature & humidity chamber Walk-in type temperature & humidity chamber +Electronic component and equipment market Automobile market *ForR &D +For credibility Environmental Test Chambers “Wei shock a
Slide 7: Financial Result for the Second Quarter
Financial Result for the Second Quarter of Fiscal Ending March 31, 2016 ESPEC CORP. 6
Slide 8: Financial Highlights
Financial Highlights WMOrders received increased year on year in all business segments. iNet sales increased year on year in both domestic and overseas markets. +In Japan, highly versatile standard products sold strongly. Customized products increased year on year. *Overseas, exports to China and ot
Slide 9: Summary of Profits and Losses
Summary of Profits and Losses (millions of yen) 17,418 20, 764 19.2%} 18,000 ES 14,196 16, 136 13.7% | 16, 000 8,981 10,392 15.7% 10, 260 (63.3%) (64.4%) (-1.1pt) (64.1%) 5, 215 5, 743 10. 1% 5, 740 4,377 4, 609 5. 3% 4,740 837 1,133 35. 4% 1, 000 953 1,274 33. 7% 1, 100 590 802 35. 9% 750 ESPEC COR
Slide 10: Analysis of Operating Income
Analysis of Operating Income Increase and Decrease Factor (millions of yen) 7 a Ai 29 f} Equipment Business ! | Service Business ASCH mtr | 9 1) [ij Other Business + Elimination 2 ; ‘32H (A84) ' ‘ae lassi (os2 oO Onn: : ‘372 o xSo | : ‘32 3 oa) : ‘Bs 5 ys) ! '@o a a22e | f ‘36 2. 2B: 3. S P32: ! ' ‘
Slide 11: Analysis of Assets and Liabilities
ities Analysis of Assets and Liab Increase and Decrease Factor (millions of yen) Liabilities and equity 7H weion A27 45,913 Net assets Noncurrent liabilities a Other current liabilities “A105. Notes and accounts payable-trade 46,792 A878 3 3 I en Psd] moa ~ A209 4 x 45,91 Investment and other assets
Slide 12: Statement of Cash Flow
Statement of Cash Flow (millions of yen) LO S Increase in funds Effect of exchange rate change on cash and cash equivalents 9. = Total financial = cash flow Other Cash dividends paid Total investment cash flow A458 Other Purchase of property, plant and equipment and intangible assets Net decrease (i
Slide 13: Analysis per Segment for the Second Quarter
Analysis per Segment for the Second Quarter of Fiscal Ending March 31, 2016 ESPEC CORP.
Slide 14: Performance by Segment
Performance by Segment millions of yen Rate of Change | (Beginning of the | seomet f | YZ 2Q period : Orders-Received 14, 004 17, 156 22.5% 14, 600 Equipment }-----<------- 7, L-—Net Sales____| 11, 166 12, 909 15.6% 12, 900 Business 698 887 27.1% 850 : 2, 860 2,944 2.9% 2, 900 Service [-"iet'Sales 2
Slide 15: Equipment Business
Equipment Business | Environmental Test Chambers _| Test Chambers Hiln the Japanese market, net sales increased With highly versatile standard products, orders-received and net sales both increased from the previous fiscal year «Customized products saw brisk orders and sales exceeding the same perio
Slide 16: Equipment Business
Equipment Business (millions of yen) Plan FY 2014 20 (Beginning of the Rate of Change period) Orders- Received 14, 004 11, 166 12, 900 Operating Income 698 850 [Profit ratio (%) ] [6. 3%] [6. 6%] ESPEC CORP.
Slide 17: Service Business
Service Business (millions of yen) Plan FY 2014 2Q Orders- Received 2, 860 (Beginning of the Rate of Change period) 2, 944 2.9% 2, 900 2,594 2,615 0. 8% 2, 700 Operating Income 186 215 15. 5% 200 [Profit ratio (%) ] [7. 2%] [8. 2%] ~ [7. 4%] Both orders-received and net sales were mostly unchanged C
Slide 18: Other Business
Other Business Orders- Received 678 808 553 733 Operating Income A47 32 [Profit ratio (%) ] [A8. 6%] [4.4%] (millions of yen) FY 2014 i . (Beginning of the 2Q Rate of Change period) 19. 3% 600 32. 6% 500 _ A40 [A8. 0%] Environmental Engineering and Plant Factory HEnvironmental engineering in refores
Slide 19: Orders by market
Semiconductor market Other markets Automobile market Flat panel display market Electronic device and equipment market FY2011 2Q FY2012 2Q FY2013 2Q FY2014 2Q FY2015 2Q 18
Slide 20: Sales by Region
Sales by Region FY 2014 2Q FY 2015 2Q Overseas sales ratio:43. 3% Overseas sales ratio:44,. 2% 1.4% 13 @ Taiwan China ™ Korea mM Europe&America FY2014 7% 4.2% 17.2% Other 0% 20 South East Asia 56.7% Japan 4. 2.8% Total: 14, 196million yen Total: 16, 136million yen (Overseas sales:6, 142million yen)
Slide 21: Business Plan for the Fiscal Ending March 31, 2016
Business Plan for the Fiscal Ending March 31, 2016 ESPEC CORP.
Slide 22: Business Plan for the Fiscal Ending March 31, 2016
Business Plan for the Fiscal Ending March 31, 2016 36, 287 33, 661 12, 094 (35. 9%) 2,643 (7. 9%) 3, 044 (9.0%) 2,118 (6. 3%) Capital expenditures 954 637 R&D expenditures 1,013 Profit Per Share (yen) 91,19 20, 764 16, 136 5, 743 [35. 6%] 1,133 [7. 0%] 1,274 [7.9%] 802 [5.0%] 620 368 413 34, 70 17,
Slide 23: Equipment Business
Equipment Business (millions of yen) | Fy 2014 | 2014 FY 2015 (Revised Plan) Fiscal Reus) 2Q ak ‘a pea Year a i oe ores-receved | received 17, 156 13, 845 31, 000 5.4% 29, 500 — 12,909 15, 291 28, 200 4.5% 28, 200 Operating income 887 1,413 2, 300 5. 6% 2, 300 [Profit ratio (%) ] [6. 9%] [9. 2%] [8.
Slide 24: Service Business
Service Business (millions of yen) FY 2014 FY 2015 (Unrevised) Fiscal Second half (Results) Year on Year (%) 3, 056 6, 000 7.4% Operating income 430 215 285 500 [Profit ratio (%) ] [7. 8%] [8. 2%] [8. 9%] [8.6%] 16.3% ESPEC CORP.
Slide 25: FY 2014 Fiscal (Results)
FY 2014 Unrevised Fiscal Fiscal 2Q Second half Year on Year (Results) (%) Orders-received Net sales Operating income [Profit ratio (%)] 24
Slide 26: Dividends
*Consolidated dividend payout ratio in parentheses. 25
Slide 27: Main Initiatives in the Second Quarter of Fiscal 2015
Main Initiatives in the Second Quarter of Fiscal 2015 Ending March 31, 2016 ESPEC CORP.
Slide 28: Reconstructed the sales and production system in China
Main Initiatives in the Second Quarter of Fiscal 2015 Ending March 31, 2016 Reconstructed the sales and production system in China yy, o o- as a 100% subsidiary July 2015 Manufacturing subsidiary (Established 1985) ( Established 2013) Cc SHANGHAI ESPEC ESPEC TEST EQUIPMENT ESPEC ENVIRONMENTAL EQUIPM
Slide 29: Establishment of ESPEC ENGINEERING (THAILAND)
Main Initiatives in the Second Quarter of Fiscal 2015 Ending March 31, 2016 Establishment of ESPEC ENGINEERING (THAILAND) CO. , LTD. Opening of ASEAN Technical Support Center ESPEC ENGINEERING (THAILAND) CO. , LTD. ESPEC CORP.
Slide 30: Expanded and enhanced global support desks
Main Initiatives in the Second Quarter of Fiscal 2015 Ending March 31, 2016 Expanded and enhanced global support desks throughout the world io x India Support Desk Mexico Support Desk Ct a — ASEAN Support Desk = v' te, ASEAN Technical Support Center i X. » 4 - Mi< ESPEC ENGINEERING (THAILAND) CO., L
Slide 31: 5-year Product Guarantee and expanded product lineup
Main Initiatives in the Second Quarter of Fiscal 2015 Ending March 31, 2016 The industry-first Expanded and enhanced " 0" the product lineup for 5-year Product Guarantee ehemanianomiveanare |5 BaGSE Temperature & Humidity Chamber Platinous J Series Thermal Shock Chamber Bench-Top Type Fuel Cells Eva
Slide 32: Quality is more than a word
Quality is more than a word ESOEC ESPEC CORP.
Slide 33: 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,
Slide 34: Reference
Reference ESPEC CORP.
Slide 35: 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 36: Business expansion timeline
1982 1986 1994 2011 Launching the FPD Launching the expansion Launching the Launching Business semiconductor Equipment business evaluation system equipment business business the energy device equipment business 35
Slide 37: Usage Case with Environmental Test Chambers
[Equipment Business] Usage Case with Environmental Test Chambers Car Navigation (GPS) i | ——oee| econdary Cell Vehicle Sensor LED : ECU Representative Examples ehicle for Environmental Testing ensor Device Process/Test Condition Our Products [Power Device] Thermal shocktest: 40°C | 125°C Thermal sho
Slide 38: Introduction of New Products
[Equipment Business] Introduction of New Products Release Name of product Features Date 2015/2 2014/11 2014/11 2014/11 2014/7 2014/7 2014/5 2013/11 2012/12 Low Temperature (&Humidity) Chamber Thermal Shock Chamber TSA series Advanced Safety Tester Advanced Battery Chamber Next Constant Climate Cabin
Slide 39: Bench-top Chamber wins 2014 Good Design Award
[Equipment Business] TOPICS Bench-top Type Temperature (and Humidity) Chamber wins 2014 Good Design Award The Bench-top Type Temperature (and Humidity) < GOOD DESIGN Chamber has followed on from the Platinous J series of Jd AWARD 2014 temperature and humidity chambers and won a Good Design Award. De
Slide 40: Start the industry-first 5-year Product Guarantee
[Service Business] TOPICS Start the industry-first "5-year Product Guarantee” In January 2015, ESPEC started a free 5-year product guarantee service based on the two key concepts of Sf “making connections” and “reliability” to build even stronger relationships of trust with our customers i @Applicab
Slide 41: 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 discharge cycle load Che
Slide 42: Usage Case with Semiconductor Equipment
[Equipment Business] Usage Case with Semiconductor Equipment Eliminate defective products to maintain initial-period quality at the final inspection stage of semiconductor device manufacturing Elimination of latent early failures Burn-in chamber Reliability Evaluation Used to evaluate basic failure
Slide 43: After-sales Service and Engineering
[Service Business] After-sales Service and Engineering Preventive maintenance of products, maintenance service, and the upgrading/improvement and installation/relocation of products I Speedy response via one of the most extensive networks in Japan I Launching new services by utilizing the network fu
Slide 44: Battery Safety Certification Center
[Service Business] TOPICS Opened the world’ s first Battery Safety Certification Center The facility was opened within the Utsunomiya Technocomplex in September 2015. Applicationying for testing and certification compatible with the United Nations Economic Commission for Europe (UN ECE)’ s R110-2. P
Slide 45: Environmental Engineering Business
[Other Business] Environmental Engineering Business Environmental Engineering Business Reforestation (Tree planting) Recovery of local forest by selecting species and planting out seedlings using potential natural vegetation data. MiWaterfront biotope restoration Reconstruction of natural environmen
Slide 46: Phyto-toron systems delivered
[Service Business] TOPICS Contribute to the development of technologies protecting agricultural crops from high-temperature damage. Delivered Phyto-toron systems to the Research Institute of Environment, Agriculture and Fisheries. Delivered Phyto-toron systems to the Research Institute of Environmen