Tamron Co., Ltd. · TSE:7740

Tamron — Q2 2015 Earnings Presentation

33 slides from Tamron's earnings presentation, Aug 7, 2015

1. Slide 1: 2nd Quarter FY2015 Financial Results

   2nd Quarter FY2015 Financial Results August 7, 2015 Tamron Co., Ltd. (Code: 7740)

2. Slide 2: Contents

   Contents Ⅰ. 2nd Quarter FY2015 Financial Results Ⅲ. Financial Situation 1. Business Briefing P.4 1. Financial Summary P.18 2. 1st Half FY2015 Summary P.5 2. Capital Investment / Depreciation P.19 3. 1st Half FY2015 Financial Results P.6 3. Research & Development P.20 4. Contributing Factors for Perf

3. Slide 3: Ⅰ. 2nd Quarter FY2015 Financial Results

   Ⅰ. 2nd Quarter FY2015 Financial Results 2nd Quarter Financial Results FY2015 3

4. Slide 4: Ⅰ-1. Business Briefing

   Ⅰ-１. Business Briefing Company Profile Business Segment  Total subsidiaries overseas : 9  Photographic Products  Domestic offices: 4 / Sales offices: 5 Interchangeable lenses for cameras  ISO9001, ISO14001 certified （SLR / MILC） ISO/TS16949 certified  Optical Components Camcorder lenses  Net s

5. Slide 5: Ⅰ-2. 1st Half FY2015 Summary

   Ⅰ-２. 1st Half FY2015 Summary Business Environment  Global economy had been recovering gradually despite of uncertainty of European market  Compared with last year JPY depreciated against USD, but appreciated against Euro  Digital camera market: unit sales of interchangeable lens cameras slightly

6. Slide 6: Ⅰ-3. 1st Half FY2015 Financial Results

   Ⅰ-3. 1st Half FY2015 Financial Results （Millions of yen） FX 1st H 1st H 1st H Change Change Impact vs. 1st H FY14 vs. Same Period vs. 1st H FY14 FY15*FCT FY15 Forecast FY14 Net Sales 32,770 36,200 35,235 2,464 107.5% (964) 97.3% +2,450 Operating 2,565 2,800 2,764 199 107.8% (35) 98.7% (650) Income (

7. Slide 7: Ⅰ-4. Contributing Factors for Performance

   Ⅰ-4. Contributing Factors for Performance vs. 1st H FY2014 （Millions of yen） 1st H FY14 1st H FY15 Change Change Factors (a) (b) (b)-(a) (b)/(a) Exchange gain ＋2,450 Sales ±0 Net Sales 32,770 35,235 2,464 107.5% --------------------------------------- ＋2,450 Exchange loss (650) Cost reduction ＋300 O

8. Slide 8: Ⅰ-5. 1st Half FY2015 Results by Segment

   Ⅰ-5. 1st Half FY2015 Results by Segment （Millions of yen） 1st H Change FX 1st H 1st H Change Impact FY15 vs. 1st H FY14 vs. Same vs. 1st H FY14 *FCT FY15 Period Forecast FY14 Net Sales 23,090 26,200 26,666 3,576 115.5% 466 101.8% 1,400 OperatingIncome 2,311 2,700 3,059 748 132.4% 359 113.3% (750) Ph

9. Slide 9: Ⅰ-6 FY2015 Quarterly Results by Segment

   Ⅰ-6 FY2015 Quarterly Results by Segment （Millions of yen） 1Q 2Q 1st H FY15 FY15 FY15 Net Sales 12,495 14,171 26,666 Photographic Operating Income 1,668 1,391 3,059 Products (% Sales) 13.4% 9.8% 11.5% Net Sales 1,080 1,168 2,249 Optical Operating Income 89 22 111 Components (% Sales) 8.2% 1.9% 5.0% N

10. Slide 10: Ⅱ. FY2015 Financial Forecast

    Ⅱ. FY2015 Financial Forecast 2nd Quarter Financial Results FY2015 10

11. Slide 11: Ⅱ-1. FY2015 Forecast

    Ⅱ-１. FY2015 Forecast （Millions of yen） 1st H 2nd H Change FY14 FY15*FCT FY15 FY15*FCT vs. FY14 Net Sales 73,621 35,235 43,264 78,500 4,878 106.6% Operating 6,076 2,764 3,835 6,600 523 108.6% Income (% Sales) 8.3% 7.8% 8.9% 8.4% 0.1% - Ordinary 6,200 2,819 3,580 6,400 199 103.2% Income (% Sales) 8.4%

12. Slide 12: Ⅱ-2. FY2015 Forecast (Net Sales / Operating Income)

    Ⅱ-２. FY2015 Forecast (Net Sales / Operating Income) （Millions of yen） Net Sales Operating Income 100,000 1st H 2nd H Op. Income Ratio 10,000 10.0% 78,500 73,621 8.3% 8.4% 80,000 68,452 8,000 7.6% 8.0% 6,600 60,000 6,076 2nd H 6,000 6.0% 2nd H 5,233 2nd H 2nd H 40,000 2nd H 4,000 2nd H 4.0% 20,000 1s

13. Slide 13: Ⅱ-3. FY2015 Forecast by Segment

    Ⅱ-３. FY2015 Forecast by Segment （Millions of yen） Change Change FY15 FY15 vs. FY14 vs. Previous Forecast FY14 Previous Current (a) Forecast Forecast (c)-(a) (c)/(a) (c)-(b) (c)/(b) (b) (c) NetSales 53,932 56,900 59,500 5,567 110.3% 2,600 104.6% Photographic OperatingIncome 5,853 6,400 7,200 1,346 12

14. Slide 14: Ⅱ-4. FY2015 Forecast by Segment: Photographic Products

    Ⅱ-４. FY2015 Forecast by Segment 1) Photographic Products （Millions of yen） Net Sales Operating Income 80,000 1st H 2nd H Op. Income Ratio 10,000 15.0% 59,500 12.1% 53,932 8,000 10.9% 12.0% 60,000 48,492 7,200 8.8% 5,853 6,000 9.0% 2nd H 40,000 2nd H 2nd H 2nd H 4,280 4,000 2nd H 6.0% 2nd H 20,000 2,

15. Slide 15: Ⅱ-4. FY2015 Forecast by Segment: Optical Components

    Ⅱ-４. FY2015 Forecast by Segment 2) Optical Components （Millions of yen） Net Sales Operating Income 10,000 1st H 2nd H Op. Income Ratio 1,500 15.0% 12.3% 7,629 8,000 7,032 1,200 12.0% 938 9.4% 6,000 2nd H 4,700 900 9.0% 2nd H 2nd H 664 6.4% 4,000 600 6.0% 2nd H 2nd H 300 2,000 1st H 300 1st H 3.0% 1s

16. Slide 16: Ⅱ-4. FY2015 Forecast by Segment: Commercial / Industrial-use Optics

    Ⅱ-４. FY2015 Forecast by Segment 3) Commercial / Industrial-use Optics （Millions of yen） Net Sales Operating Income 18,000 1st H 2nd H Op. Income Ratio 4,000 20.0% 15,000 14,300 19.7% 12,330 12,656 17.3% 3,000 15.0% 12,000 2,429 11.9% 2nd H 2,190 2nd H 9,000 2nd H 2,000 10.0% 1,700 2nd H 2nd H 6,000

17. Slide 17: Ⅲ. Financial Situation

    Ⅲ. Financial Situation 2nd Quarter Financial Results FY2015 17

18. Slide 18: Ⅲ-1. Financial Summary

    Ⅲ-１. Financial Summary （Millions of yen） Jun 30, Dec 31, Jun 30, Change Remarks 2014 2014 2015 vs. Dec 31, 2014 Cash and Deposits 16,947 15,915 17,875 1,959 Notes and Accounts Receivable 14,164 18,653 13,962 (4,690) Seasonal trend Inventories 9,725 10,536 11,260 724 Other Current Assets 1,429 1,849

19. Slide 19: Ⅲ-2. Capital Investment & Depreciation

    Ⅲ-２. Capital Investment & Depreciation （Millions of yen） 10,000 8,000 Depreciation Capital Investment 4,100 6,130 6,000 Depreciation Depreciation 3,182 3,812 Depreciation Capital Investment 3,440 Capital Investment 4,000 3,656 2,429 Capital Investment 2,800 2,000 Net Income Net Income 3,894 Net Inco

20. Slide 20: Ⅲ-3. Research & Development

    Ⅲ-３. Research & Development （Millions of yen） （％） 4,000 8.0 3,000 5.4 6.0 5.0 4.7 4.7 2,000 4.0 3,492 3,699 3,700 3,217 1,000 2.0 0 FY12(A) FY13(A) FY14(A) FY15(F) 0.0 R&D 3,492 3,217 3,699 3,700 Ratio 5.4 4.7 5.0 4.7 R&D cost/Net sales ratio (A):Actual (F):Forecast 2nd Quarter Financial Results F

21. Slide 21: Ⅲ-4. Inventories / Liabilities with Interests

    Ⅲ-４. Inventories / Liabilities with Interests Inventories Liabilities with Interests （Millions of yen） (Month) （Millions of yen） （％） 12,000 2.5 7,000 15.0 6,000 10,000 1.9 1.8 2.0 12.0 5,000 9.1 8,000 1.5 1.5 9.0 4,000 6.8 6,000 5.9 11,260 3,000 10,536 5,836 6.0 9,725 1.0 4,000 4,565 2,000 4,098 3.0

22. Slide 22: Ⅲ-5. Cash Flow Statement

    Ⅲ-５. Cash Flow Statement （Millions of yen） Operating CF 1st H FY14 FY14 1st H FY15 Investing CF 10,000 Free CF 8,000 6,807 Financing CF 6,208 5,552 6,000 4,927 3,627 3,856 4,000 2,000 0 (2,000) (1,300) (675) (1,255) (4,000) (2,351) (3,009) (4,051) (6,000) 1st H FY14 FY14 1st H FY15 Cash Flow from Op

23. Slide 23: Ⅲ-6. Cancellation of Treasury stock

    Ⅲ-６. Cancellation of Treasury stock  Acquired 1,529,826 shares of treasury stock through merger of Kouyu Kosan Co., Ltd.  Enhanced shareholder value and capital efficiency with cancellation of treasury stock acquired Acquired stock of Kouyu Kosan Co., Ltd. (Acquisition in line with the procedures

24. Slide 24: Ⅲ-7. Outlook for Cash Dividends

    Ⅲ-7. Outlook for Cash Dividends Provided ¥25 as interim dividend and currently estimating ¥55 as annual dividend （Yen） FY12 FY13 FY14 FY15*FCT Interim 20.00 20.00 20.00 25.00 Year End 30.00 30.00 30.00 30.00 Total 50.00 50.00 50.00 55.00 Dividend Payout Ratio 35.2% 42.9% 35.7% 29.8% （Consolidated） 2

25. Slide 25: Ⅲ-8. Referential Data: Key Performance Index

    Ⅲ-８. Referential Data 1)Key Performance Index （Yen） （％） 200.00 12.0 10.1 9.2 9.4 9.8 8.5 150.00 9.3 9.0 7.8 100.00 7.3 6.0 184.45 141.86 140.14 50.00 116.48 3.0 0.00 0.0 FY12(A) FY13(A) FY14(A) FY15(F) EPS 141.86 116.48 140.14 184.45 ROE 10.1 7.3 7.8 9.4 ROA 9.8 8.5 9.2 9.3 ROE＝Net Income/Net asset

26. Slide 26: Ⅲ-8. Referential Data: Impact of Currency Rate Fluctuations

    Ⅲ-８. Referential Data 2) Impact of Currency Rate Fluctuations 1st Half FY2015 Exchange rate Effect (Yen) (Million yen) 1st H FY14 1st H FY15 Net Sales Operating Income USD 102.46 120.31 ＋2,600 (250) EURO 140.44 134.14 (350) (300) Others - - ＋200 (100) Total - - ＋2,450 (650) (Impact on FY2014 Actual

27. Slide 27: Ⅳ. Mid-Term Strategy

    Ⅳ. Mid-Term Strategy 2nd Quarter Financial Results FY2015 27

28. Slide 28: Ⅳ-1. Corporate Tagline / Ⅳ-2. Mid-Term Management Goals for FY2017

    Ⅳ-１. Corporate Tagline Ⅳ‐２. Mid-Term Management Goals for FY2017 Net Sales：¥95.0 billion Operating Income：¥9.5 billion （Operating Income Ratio 10%） ROE：10％ or more 2nd Quarter Financial Results FY2015 28

29. Slide 29: Ⅳ-3. Strategy Towards FY2017 by Segment: Photographic Products

    Ⅳ-３. Strategy Towards FY2017 by Segment 1) Photographic Products Target ： ¥68.0 billion （71.6% of Total Net Sales） 2017  Continuous timely launches of epoch-making products as our own-branded lens line-ups Mid-  Establish further efficient development processes of new products Term  Enhance local

30. Slide 30: Ⅳ-3. Strategy Towards FY2017 by Segment: Optical Components

    Ⅳ-３. Strategy Towards FY2017 by Segment 2) Optical Components Target: 4.5 billion yen (4.7% of Total Net Sales) 2017  Focus on value-added products and secure profits with avoiding price competition Mid-  Take advantage of our own advantages in optical technology fields and create new markets Term

31. Slide 31: Ⅳ-3. Strategy Towards FY2017 by Segment: Commercial / Industrial-use Optics

    Ⅳ-３. Strategy Towards FY2017 by Segment 3) Commercial / Industrial-use Optics Target: 22.5 billion yen (23.7% of Total Net Sales) 2017  Increase sales globally with technological innovation of surveillance camera lens  Create new business through collaboration with other companies Mid-  Enhance b

32. Slide 32: Ⅳ-4. Enhanced Production System

    Ⅳ-４. Enhanced Production System Vietnam – steadily increase production and gain cost competitiveness Category Current situation Number of 200 (July, 2013) ⇒ 1,114 (Aug, 2015) Employee Processing Lens Element, Metal, Assembly Production Surveillance camera lenses from the latter half of 2014, in Capa

33. Slide 33: Disclaimer

    Disclaimer 1. The purpose of this material is to provide information on the “FY2015 Financial Results” and future business strategies. It is not an offer or a solicitation of an offer to buy or sell securities. 2. This material and the information provided verbally in our presentation are based on t

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