Slide 1: FY2019 Financial Results
FY2019 Financial Results May 12, 2020 1
Slide 2: Condolences regarding COVID-19
We, INNOTECH Group, express our sincerest condolences to people who have passed away due to COVID-19. For those who are currently suffering from it, we wish their fast recovery. We truly hope that this situation will be resolved as soon as possible and we continue to pray for your health and safety.
Slide 3: COVID-19: Our Measures
COVID-19: Our Measures In order to minimize the spread of COVID-19, INNOTECH has been encouraging its employees to avoid peak rush hours while commuting and to take a break time separately from others since March, and to work from home since April. Upon declaration of a state of emergency by the Jap
Slide 4: Agenda
Agenda 1 FY2019 Actual 2 FY2020 Outlook 3 M i d -Te r m a n d L o n g -Te r m S t ra t e g y 4
Slide 5: FY2019 Actual
FY2019 Actual (Unit: mil yen) Sanei IT GAIO STAr INNOTECH REGULUS Consolidated Hytechs Access TECHNOLOGY Technologies YoY Year FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 Net Sales 14,630 12,863 3,449 3,548 2,831 4,518 3,314 3,665 5,131 5,793 679
Slide 6: FY2019 Highlights
FY2019 Highlights Operating Profit decreased by 14.6% but the target announced in the beginning of FY2019 was achieved Settlement terminal business of IT ACCESS grew substantially Business of STAr remains strong; both revenue and profit increased Revenue of tester business largely declined due to sl
Slide 7: FY2019 Design and Development Solution Business
FY2019 Design and Development Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 25,000 6,000 5,231 5,715 5,000 20,000 3,543 3,444 943 4,000 Sanei Hytechs 三栄ハイテックス REGULUS レグラス 15,000 629 4,518 IT Access アイティアクセス 2,830 3,000 Embedded 組込システム System 1,742 1,733 ガイオテクノロジー GAIO TECHNOLOGY 10,0
Slide 8: Design and Development Solution Business
D e s i g n a n d D e ve l o p m e n t Solution Business EDA Revenue grew by newly added products and increase of new customers. GAIO Tool sales slightly declined but verification service business remained strong. Embedded System Business remained stable mainly for social infrastructure and public s
Slide 9: FY2019 Product Solution Business
FY2019 Product Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 15,000 5,000 4,243 12,500 3,880 4,000 1,125 10,000 Others その他 1,265 3,000 STAr STAｒ Technologies 7,500 5,073 Technologies Tester テスター 5,749 2,000 5,000 Gross Profit 売上総利益 5,210 1,000 2,500 2,962 0 0 FY2018 19/3月期 FY2019 20/3
Slide 10: Product Solution Business
Product Solution Business Tester Sales of testers declined along with the falling demand of semiconductor memory. STAr Both revenue and profit increased as the probe card business and test equipment business went well. 10
Slide 11: Major Expenses and Non-Operating Expenses and Income
Major Expenses and Non-Operating Expenses and Income [mil. yen] FY2018 FY2019 Research & Development 1,079 1,236 Depreciation 768 985 Amortization of Goodwill 207 207 Major Items of Non-operating Expenses and Income Real Estate Rent Income 458 464 Related Expenses for Real Estate Rent 307 302 Foreig
Slide 12: Cash Flow
Cash Flow [mil. yen] FY2018 FY2019 Profit Before Income Taxes 2,256 1,895 Depreciation and Amortization of Goodwill 976 1,193 Working Capital and Others -2,123 27 Cash Flows from Operating Activities 1,109 3,116 Purchase of Investment Securities -391 -470 Purchase of Fixed Assets -1,047 -1,152 Other
Slide 13: Termination of Partnership with CVP in Hong Kong
Termination of Partnership with CVP in Hong Kong August 2017 Entered into a capital and business partnership with CVP Holdings Limited in Hong Kong (“CVP”) in order to deploy INNOTECH business in China; Nihon Toushi K.K., which is an affiliate of CVP, has become the INNOETCH top shareholder. Decembe
Slide 14: Acquisition and Cancellation of Treasury Shares
A c q u i s i t i o n a n d C a n c e l l a t i o n o f Tr e a s u r y S h a r e s Acquisition (fiscal year of 2019) Number of Shares: 2,000,000 shares Amount: 2,201,137,500 yen As a result of this acquisition, equity capital level on a consolidated basis became 19 billion 416 million yen, which
Slide 15: Agenda
Agenda 1 FY2019 Actual 2 FY2020 Outlook 3 M i d -Te r m a n d L o n g -Te r m S t ra t e g y 15
Slide 16: FY2020 Estimate
FY2020 Estimate [mil. yen] GAIO STAｒ INNOTEC Sanei IT Consolida TECHNOL Technolog REGULUS FY2019 YoY H Hytechs ACCESS ted OGY ies Net Sales 14,600 3,350 4,400 3,500 5,600 750 32,000 31,161 2.7% Gross 3,900 910 1,020 1,320 2,650 250 9,950 9,595 Profit 3.7% (26.7%) (27.2%) (23.2%) (37.7%) (47.3%) (33.
Slide 17: FY2020 Highlights
FY2020 Highlights Take the impact of COVID-19 into consideration; operating profit is expected to stay flat. COVID-19 is assumed to affect every business until the second quarter of 2020 in general. Impact on semiconductor-related business is expected to be relatively small. Business for automobile
Slide 18: Implications for Business of COVID-19 Outbreak
Implications for Business of COVID-19 Outbreak Implications for Sales Activities Loss of opportunities for business discussions and negotiations due to called off trade shows Delay of business projects due to prohibition of overseas business trips Implications for Product Supplies and Provision of
Slide 19: FY2020 Outlook: Design and Development Solution Business
FY2020 Outlook:Design and Development Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 25,000 5,715 6,000 5,510 20,000 5,000 3,543 3,340 943 730 4,000 Sanei Hytechs 三栄ハイテックス 15,000 4,518 REGULUS レグラス 4,390 IT Access 3,000 アイティアクセス Embedded System 1,733 1,600 組込システム 10,000 ガイオテクノロジー GAIO
Slide 20: Design and Development Solution Business
Design and Development Solution Business EDA Revenue will remain stable with long-term contracts. GAIO Growth will be stagnated due to slow down of the automobile industry. Embedded System Expect to have a solid demand for social infrastructure while there may be a 資源効率などSDGsに対応した高品質ソリューションを提供し成長を図る
Slide 21: FY2020 Outlook: Product Solution Business
FY2020 Outlook: Product Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 15,000 4,440 3,880 4,000 980 10,000 3,000 1,265 Others その他 5,550 STAr STAｒ Technologies 2,000 Tester テスター 5,749 Gross Profit 5,000 売上総利益 1,000 5,200 2,962 0 0 FY2019 20/3月期 FY2020 (Estimate) 21/3月期 Total 9,976 11,73
Slide 22: Product Solution Business
Product Solution Business Tester Demand for semiconductor memory will recover and expect to have substantial increase in revenue. Minimizing the risk for procurement of parts caused by the COVID-19 outbreak will be the key. STAr Rapid recovery of semiconductor markets in China and Taiwan is expected
Slide 23: EBITDA Trends
EBITDA Trends [mil. yen] 3,000 EBITDA 3,233 Operating 3,102 3,112 2,500 Profit 営業利益 2,000 1,994 2,046 1,955 1,650 1,500 1,670 1,000 1,244 999 500 0 FY2016 17年3月期 FY2017 18年3月期 FY2018 19年3月期 FY2019 FY2020 FY2019 21年3月期（予） 20年3月期 （※） EBITDA= Earnings before interest, tax, depreciation and amortization
Slide 24: Dividends
Dividends Dividend As of 1H- As of FY- Full Year Payout end end Ratio FY2019 20 yen 20 yen 40 yen 49.4% FY2020 (Outlook) 20 yen 20 yen 40 yen 46.2% We intend our consolidated divided payout ratio not to be less than 30%. Our goal is to maintain around 50% level as long as our business remains stable
Slide 25: Agenda
Agenda 1 FY2019 Actual 2 FY2020 Outlook 3 M i d -Te r m a n d L o n g -Te r m S t ra t e g y 25
Slide 26: Mid-Term Management Plan (Announced in February 2019)
Mid-Term Management Plan (Announced in February 2019) (Background) • Changes in the industry environment • Active overseas expansion and investment • Improvement of capital efficiency in the INNOTECH Group (Five Strategies) • Expansion of test solution business • Increase sales of internally-develop
Slide 27: Mid-term Management Plan: Progress of Profit Planning
Mid-term Management Plan: Progress of Profit Planning ROE 8.0% Mid-term Management Plan 5.8% 5.6% ROE Target: Over 8% In order to achieve the target: FY2019 FY2019 FY2020 FY2020通期 ... FY2023FY2023（計画） (Plan) • Operating Profit：3-3.5 bil yen level （前期実績） (Actual) （見通し） (Estimate) Mid-term Plan Manage
Slide 28: Capital Management Policy: Our current numerical goals
Capital Management Policy: Our current numerical goals (Announced in February 2018) ROE • Mid-term and long-term goal is 8-10%. ROIC (Return on Invested Capital) • Aiming at 8-10% in the future; expand the ROIC - WACC spread. D/E Ratio (Debt Equity Ratio) • In the event of fundraising by interest-be
Slide 29: STAr Acquisition of Accel-RF
STAr Acquisition of Accel-RF Accel-RF, since its establishment in 2003, has engaged in the research and development activities as a pioneer of compound semiconductor reliability testing methods. High-reliability test systems for RF, optical, and power devices of Accel- RF will be added to STAr’s
Slide 30: MoDeCH Became Our Subsidiary
MoDeCH Became Our Subsidiary Acquired MoDeCH, known for the state-of-the-art device modeling technologies. MoDeCH is a specialist group providing device modeling of the on-wafer devices or on-board electronic components and consulting services for many major companies. Also providing on-demand
Slide 31: Settlement Service: Profit Structure and New Market Deployment
Ｓｅｔｔｌｅｍｅｎｔ Ｓｅｒｖｉｃｅ: Ｐｒｏｆｉｔ Ｓｔｒｕｃｔｕｒｅ ａｎｄ Ｎｅｗ Ｍａｒｋｅｔ Ｄｅｐｌｏｙｍｅｎt Stable profitability by turning sales/terminal operational information, settlement processing, and maintenance into the subscription-model business Settlement Infrastructure IT Access By Money Sales of Terminals Member Type Providers Set
Slide 32: Note for Forward Looking Statements
Note for Forward Looking Statements The information provided in this presentation includes forward looking statements based on current expectations, forecasts or beliefs. Such forward looking statements include a number of preliminary assumptions about future events that are subject to factors and u