Slide 1: Results Briefing for the Fiscal Year Ended March 31, 2022
Securities ID code:6859 Results Briefing for the Fiscal Year Ended March 31, 2022 ESPEC CORP. May 25, 2022
Slide 2: Financial Result for the Fiscal Year Ended March 31, 2022
Financial Result for the Fiscal Year Ended March 31, 2022 Orders received ware strong mainly in electronics-related products and reached record highs. Net sales failed to grow due to an electronic component shortage, and profit decreased due to procurement costs and selling, general and administrati
Slide 3: Summary of Profits and Losses
Summary of Profits and Losses (Millions of yen) FY 2020 FY2021 FY 2021 Forecast Year on Year Against forecast Results (February, 2022) Results Orders Received 37,580 50,800 51,303 +36.5% +1.0% Net Sales 38,668 42,200 41,852 +8.2% -0.8% Cost of Net Sales 25,255 27,900 27,849 +10.3% -0.2% Cost Ratio 6
Slide 4: Performance by Segment
Performance by Segment (Millions of yen) FY 2020 FY2021 FY 2021 Segment Forecast Year on Year Against forecast Results (February, 2022) Results Orders Received 30,755 43,450 43,535 +41.6% +0.2% Equipment Business Net Sales 30,669 35,000 34,518 +12.6% -1.4% Operating Profit 2,062 1,920 1,370 -33.5% -
Slide 5: Orders Received in FY2021
<Investigation> Orders Received in FY2021 ■Orders received reached record highs partly because of a rebound effect from FY2020 Orders Received (Consolidated) 60,000 51,303 50,000 +13,722 Rebound effect* -5,991 assumed to be approx. ¥3.0 billion 43,571 （Millions of yen） 40,000 37,580 30,000 Assumed t
Slide 6: Net Sales in FY2021
<Investigation> Net Sales in FY2021 ■Prolonging of production lead times due to electronic component procurement difficulties. Due to a global shortage of semiconductors and electronic components, production could not be completed. ESPEC strengthened its procurement capabilities, selected alternativ
Slide 7: Operating Profit in FY 2021
Operating Profit in FY 2021 ■Reasons why operating profit decreased greatly despite an increase in sales Surging prices Surging prices of electronic components and component of procured materials materials, costs of making design changes to alternatives Decline in productivity Changed production pro
Slide 8: Analysis of Operating Profit Increase and Decrease Factor
Analysis of Operating Profit Increase and Decrease Factor Equipment Business Service Business (Millions of yen) development expenses Research and Other Business Packing and freight costs allowances Salaries and 127 Commission fee -219 1,341 -859 100 Other 101 450 258 155 -266 596 2,572 1,104 -513 -1
Slide 9: Statement of Assets and Liabilities
61,922 8 End of FY2021 (Millions of yen) 607 Net assets Liabilities and Net assets -60 Noncurrent liabilities 1,700 +3,314 Other current liabilities 333 Electronically recorded obligations End of FY2020 Notes and accounts 733 payable-trade 58,607 61,922 End of FY2021 Statement of Assets and Liabilit
Slide 10: Statements of Cash Flows
9 -1,144 Increase (decrease) (Millions of yen) in funds Effect of exchange rate change 600 on cash and cash equivalents -2,830 Total financial cash flow -417 Other -1,066 Purchase of treasury shares -1,346 Dividends paid -932 Total investment cash flow -49 Other Purchase of shares of subsidiaries -8
Slide 11: Equipment Business
Equipment Business (Millions of yen) FY2021 FY 2020 results Forecast FY 2021 Results Year on Year Against forecast （February, 2022） Orders Received 30,755 43,450 43,535 +41.6% +0.2% Net Sales 30,669 35,000 34,518 +12.6% -1.4% Operating Profit 2,062 1,920 1,370 -33.5% -28.6% Profit Ratio(%) 6.7% 5.5%
Slide 12: Service Business
Service Business (Millions of yen) FY2021 FY 2020 results Forecast FY 2021 Results Year on Year Against forecast (February, 2022) Orders Received 6,153 6,450 6,771 +10.0% +5.0% Net Sales 6,063 6,400 6,407 +5.7% +0.1% Operating Profit 446 550 618 +38.5% +12.4% Profit Ratio(%) 7.4% 8.6% 9.7% After-Sal
Slide 13: Other Business
Other Business (Millions of yen) FY2021 FY 2020 results Forecast FY 2021 Results Year on Year Against forecast （February, 2022） Orders Received 976 1,200 1,265 +29.6% +5.4% Net Sales 2,241 1,100 1,188 -47.0% +8.0% Operating Profit 60 -70 -23 - - Profit Ratio(%) 2.7% -6.4% -2.0% Environmental Preserv
Slide 14: Sales by Market
Sales by Market Non-consolidated (Equipment business) Electromic device and equipment market Automobile market Semiconductor market Research institute Other markets 100% 80% 42 42 38 40 38 60% 17 17 24 26 24 40% 16 15 9 7 9 8 6 8 7 6 20% 20 20 19 23 18 0% 2017年度 FY 2017 2018年度 FY 2018 2019年度 FY 2019
Slide 15: Sales by Region
Sales by Region FY 2020 FY 2021 Overseas sales ratio: 46.1% Overseas sales ratio: 50.4% 2.8% 1.8% Taiwan 18.9% 21.7% China South Korea 3.8% FY 2020 FY 2021 3.7% 53.9% Europe 49.6% & North America 13.2% South East Asia 15.9% 5.9% Other 1.5% 1.0% 6.2% Total: 38,668 million yen Total: 41,852 million ye
Slide 16: FY2022 Plan
FY2022 Plan Although the business environment will remain uncertain and difficult to predict, we will make a full commitment to normalizing product delivery times, and achieve profitability of strong orders received. 15
Slide 17: Forecasts for Fiscal 2022
Forecasts for Fiscal 2022 (Millions of yen) FY 2021 FY 2022 Full Year First half Second half Full year Year on Year Results forecasts forecasts forecasts Orders-received 51,303 24,000 26,000 50,000 -2.5% Net sales 41,852 23,500 26,500 50,000 +19.5% Gross profit 14,003 8,350 9,650 18,000 +28.5% Profi
Slide 18: Equipment Business: Recognition of the Operating Environment
Recognition of the Operating Environment ・ Predicts that orders will continue to be strong, mainly in cutting-edge technology fields like IoT and next-generation automobiles. ・ Electronic component shortages and the prolonging of lockdowns in China are a cause for concern. Japan: Investment is activ
Slide 19: Segment Financial Forecasts
Segment Financial Forecasts (Millions of yen) FY 2021 FY 2022 Full Year First half Second half Full year Year on Year Results forecasts forecasts forecasts Orders-Received 43,535 20,200 21,700 41,900 -3.8% Equipment Business Net sales 34,518 20,000 22,100 42,100 +22.0% Operating profit 1,370 1,850 2
Slide 20: Main Initiatives in FY2022
Main Initiatives in FY2022 Equipment Business ・Enhance product lineup to address testing demand in cutting-edge technology fields ・Globally develop customized products through overseas market launch of large-scale products ・Launch products for the European market ・Strengthen sales with a focus on gl
Slide 21: Main Initiatives for ESG in FY2022
Main Initiatives for ESG in FY2022 ■E (Environment) ・Promote the 8th Medium-term Plan on the Environment (FY2022-2025) ・Global warming countermeasure: Change to low-GWP refrigerant Reduce CO2 emissions in business activities such as manufacturing ・Biodiversity conservation activities: Contributions
Slide 22: Investment Plans in FY2022
Investment Plans in FY2022 Strategic investment 340 million yen R&D 1,330 million yen expenditures Ordinary investment 1,500 million yen Total 1,840 million yen Main investments ・Increasing production capacity and further efficiency ・Expanding laboratory testing equipment ・System overhaul of after-s
Slide 23: FY 2022 Dividend Forecast
FY 2022 Dividend Forecast Basic policy on profit distribution Our basic policy is to determine dividends taking into account sustainability and the dividend payout ratio, and we revised our basic dividend policy as below at the Board of Directors meeting on May 13, 2022. ・In addition to a dividend p
Slide 24: Basic Dividend Policy
Basic Dividend Policy Our basic policy is to determine dividends taking into account sustainability and the dividend payout ratio. In addition to a dividend payout ratio of 30%, we will add dividends with 1/3 of the excess amount of scheduled necessary funds as a baseline. While taking into account
Slide 25: Progressive Plan 2025
Medium-term management plan “Progressive Plan 2025” Plan Implementation Period FY2022-FY2025 24
Slide 26: Looking Back on Progressive Plan 2021
Looking Back on “Progressive Plan 2021” Basic Policy Stable sustainable growth through strategic investment and steady "improvement of quality“ ・Promotion of globalization targeting growth areas and improvement of customization capabilities ・Lessening of fluctuations in business performance and deve
Slide 27: Management Targets and Actual Results in Progressive Plan 2021
Management Targets and Actual Results in “Progressive Plan 2021” (Millions of yen) Medium-term management plan Medium-term management plan 2021 2017 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2021 Results Results Results Results Results Initial Target Net sales 44,069 50,580 42,443 38,668 41,852 52,
Slide 28: Results and Management Issues in Progressive Plan 2021
Results and Management Issues in “Progressive Plan 2021” In the target market of cutting-edge technology fields, we increased orders received and net sales, and were able to build a business foundation on which to grow toward digitalization and a decarbonized society. One issue was strengthening our
Slide 29: Positioning of Progressive Plan 2025
Positioning of “Progressive Plan 2025” In order to achieve “ESPEC Vision 2025,” we have formulated and implemented medium-term management plans in cycles of four years for Stage I-III The new medium-term management plan that begins in FY2022 is the final stage. We will steadily implement strategies
Slide 30: Overall Structure of Progressive Plan 2025
Overall Structure of “Progressive Plan 2025” Basic Policy Breaking through the inertia and the habits of individuals and workplaces and contributing to the practical application of advanced technologies. ・Aggressive investment in growth fields to provide products and services that contribute to the
Slide 31: Management Targets in Progressive Plan 2025
Management Targets in “Progressive Plan 2025” FY 2021 FY 2025 Results Targets Rate of Increase Net sales 41.8 billion yen 55 billion yen +30% Operating Profit 1.9 billion yen 7 billion yen +260% Operating Profit Ratio 4.7% 12.7% +8pt ROE 4.2% 10% +5.8pt Reference Exchange rate (USD) Actual FY2021 ra
Slide 32: Management Targets by Business Segment
Management Targets by Business Segment (Millions of yen) FY2021 FY 2025 Item Business Segment Targets Rate of Increase Results Equipment Business 34,518 45,900 +30% Service Business 6,407 7,700 +20% Net Sales Other Business 1,188 1,800 +50% Elimination -261 -400 - Total 41,852 55,000 +30% Equipment
Slide 33: Digitalization and Decarbonization
Key Markets (Cutting-Edge Technology Fields) IoT field For complete coordination of environmental tests! Capture demand for tests that are becoming more sophisticated through High-speed data transmission equipment, services and technology Handheld devices, base stations Digitalization and Decarboniz
Slide 34: Environmental Testing Business Strategy: Equipment Business
1. Environmental Testing Business Strategy Equipment Business Segment Equipment Business An essential presence for global cutting-edge technologies! 1 Expand product lineup in core cutting-edge technology fields (IoT, next-generation automobiles) 2 Strengthen competitiveness in customized products g
Slide 35: Environmental Testing Business Strategy: Service Business
1. Environmental Testing Business Strategy Service Business Segment Service Business Helping to relieve customers’ troubles! 1 Transition to a full technical support business that solves customers’ concerns 2 Expansion of tests for cutting-edge technology fields and sophistication of test technology
Slide 36: Global Strategy
2. Global Strategy Global Business Contribute to the development of the world’s cutting-edge technology fields! 1 Enhance marketing in China, South Korea, and Europe FY2021 FY2025 Results Rate of Increase Targets China 9 billion yen +50% South Korea 1.5 billion yen +100% Europe 1.8 billion yen +50%
Slide 37: New Business Strategy
3. New Business Strategy New Business Establish new business pillars! 1 Establish a foundation for new business and venture into new fields Pharmaceutical cold Food machinery chain business business Thermal solutions Biodiversity business business 36
Slide 38: Monozukuri Reform and DX Strategy
4. Monozukuri (Manufacturing) Reform and DX Strategy Monozukuri (Manufacturing) Reform Manufacturing that will capture new demand before competitors! 1 Cutting-edge, customized manufacturing through digital technology DX Strategy Transformation of business models! 1 Strengthening customer connection
Slide 39: Organizational Development and Management Base Strengthening Strategy
5. Organizational Development and Human Resources Development Strategy 6. Management Base Strengthening Strategy Organizational Development and Human Resources Development Becoming a growth company overflowing with creativity and vitality! 1 Promote the corporate philosophy internally and create an
Slide 40: Financial Strategy and Shareholder Returns
Financial Strategy and Shareholder Returns ■We will strive to improve profitability and efficiency, and actively conduct growth investments (including M&A) aimed at sustainable growth ■Aim to improve the stability of the financial base and capital efficiency Target: ROE of 10% ■While taking into acc
Slide 41: The 8th Mid-Term Plan on the Environment (FY2022-FY2025)
The 8th Mid-Term Plan on the Environment (FY2022-FY2025) Basic Policy Make contributions through business to customers who are developing green technology Strengthen initiatives mainly through global warming countermeasures and biodiversity conservation activities FY2025 Targets: ■ SCOPE3 Reduce CO2
Slide 42: Investment Plan
Investment Plan FY2018-2021 FY2022-2025 Rate of increase Results Targets Strategic investment 4.35 billion yen 6.0-6.5 billion yen +40-50% Ordinary investment 1.8 billion yen 3.0-3.5 billion yen +70-90% Total 6.15 billion yen 9-10 billion yen +50-60% R&D expenditures 4.8 billion yen 6 billion yen +2
Slide 43: 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