Slide 1: FY2019 1st Half Financial Results
FY2019 1st Half Financial Results November 8, 2019 1
Slide 2: Agenda
Agenda 1 FY2019 1H Actual 2 FY2019 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 2
Slide 3: FY2019 1H Highlights
FY2019 1H Highlights Business remained generally stable on a consolidated basis in the first half IT ACCESS substantially increased its revenue and profit mainly for the new business. GAIO and STAr results remained strong. INNOTECH revenue and profit declined mainly for the tester business due to th
Slide 4: FY2019 1H Actual
FY2019 1H Actual (Unit: mil yen) Sanei IT GAIO STAr INNOTECH REGULUS Consolidated Hytechs Access TECHNOLOGY Technologies YoY FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 FY2018 FY2019 年度 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H Net Sales 6,838 6,167 1,607 1,62
Slide 5: FY2019 1H Design and Development Solution Business
FY2019 1H Design and Development Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 2,504 2,752 10,000 2,500 1,623 1,602 453 2,000 7,500 三栄ハイテックス Sanei Hytechs 249 1,815 REGULUS レグラス 1,254 1,500 IT Access アイティアクセス 861 907 Embedded System 組込システム 5,000 ガイオテクノロジー GAIO TECHNOLOGY 1,778 1,000 1
Slide 6: Design and Development Solution Business
Design and Development Solution Business EDA New HW/IP core business is launched; revenue increased on a year-over-year basis. GAIO Verification service business remained strong. Tool business was also stable. Revenue and profit increased on a year-over-year basis. Embedded System Increased revenue
Slide 7: FY2019 1H Product Solution Business
FY2019 1H Product Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 2,000 1,815 5,000 1,660 500 1,500 780 その他 Others 2,082 1,000 STAr STAｒ Technologies Technologies 2,500 2,402 テスター Tester Gross Profit 売上総利益 500 2,239 1,133 0 0 FY2018 1H 18年9月期 FY2019 1H 19年9月期 Total 4,821 4,315 7 （※） Rou
Slide 8: Product Solution Business
Product Solution Business Testers • Major decline in revenue due to weak sales of testers along with the memory market recession. • Active participation in the Chinese market by allying with Z-CSET. STAr Increase in both revenue and profit as the business remained stable, such as probe cards sales t
Slide 9: Major Expenses and Non-Operating Expenses and Income
Major Expenses and Non-Operating Expenses and Income [mil. yen] FY2018 1H FY2019 1H Research & Development 464 519 Depreciation 358 385 Amortization of Goodwill 103 103 Major Items of Non-operating Expenses and Income Real Estate Rent Income 229 229 Related Expenses for Real Estate Rent 151 156 Fore
Slide 10: Cash Flow
Cash Flow [mil. yen] FY2018 1H FY2019 1H Profit Before Income Taxes 979 678 Depreciation and Amortization of Goodwill 462 489 Working Capital and Others -1,640 1,238 Cash Flows from Operating Activities -197 2,405 Purchase of Investment Securities -184 -427 Purchase of Fixed Assets -444 -485 Other I
Slide 11: Sponsorship Agreement with Yokohama F Marinos on e-Sports
Sponsorship Agreement with Yokohama F Marinos on “e-Sports” Yokohama F Marinos is a Japanese professional football team in Yokohama and actively engages in community activities and assistance programs for people with disabilities. INNOTECH is the “Gold Member” sponsor of the team and has been part
Slide 12: Agenda
Agenda 1 FY2019 1H Actual 2 FY2019 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 12
Slide 13: FY2019 Highlights
FY2019 Highlights No change in the estimate of the FY2019 Consolidated ordinary profit is estimated to be 1.7 billion 50 million yen (28.9% decrease). Hopefully the semiconductor market will recover for the tester business; but the original plan is likely to be unachieved. IT ACCESS, GAIO and STAr w
Slide 14: FY2019 Estimate
FY2019 Estimate [mil. yen] GAIO STAｒ INNOTEC Sanei IT Consolida TECHNOL Technolog REGULUS FY2018 YoY H Hytechs ACCESS ted OGY ies Net Sales 12,800 3,250 4,100 3,650 5,450 1,000 30,000 29,804 0.7% Gross 3,350 800 950 1,550 2,650 300 9,600 9,475 Profit 1.3% (26.2%) (24.6%) (23.2%) (42.5%) (48.6%) (30.
Slide 15: FY2019 Outlook: Design and Development Solution Business
FY2019 Outlook:Design and Development Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 5,780 6,000 20,000 5,231 3,240 5,000 3,444 970 15,000 629 4,000 4,070 Sanei Hytechs 三栄ハイテックス 2,830 REGULUS レグラス 1,742 1,800 3,000 IT Access アイティアクセス 10,000 組込システム Embedded System 3,312 3,650 ガイオテクノロジー
Slide 16: Design and Development Solution Business
D e s i g n a n d D e ve l o p m e n t S o l u t i o n Business EDA Working to diversify the income sources by further collaborating with new vendors. GAIO Verification service business going strong; Continue to develop new Embedded System tools and expand business. Infrastructure-related business i
Slide 17: FY2019 Outlook: Product Solution Business
FY2019 Outlook: Product Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 15,000 4,243 3,820 4,000 1,125 10,000 3,000 1,200 Others その他 5,073 STAr Technologies STAｒ 2,000 Tester テスター 5,370 5,000 Gross Profit 売上総利益 1,000 5,210 3,050 0 0 19年3月期 FY2018 20年3月期 FY2019 (Est) Total 11,408 9,620 1
Slide 18: Product Solution Business
Product Solution Business Testers Major decrease in revenue due to continued weak Japanese market. STAr Businesses will remain strong for Taiwan domestic, China and Korea. 18
Slide 19: Semiconductor Market Trends (Market Size by IC Product Category)
Semiconductor Market Trends (Market Size by IC Product Category) (USD mil.) (YoY Growth （対前年成長率） Rate) 450,000 80.0% 400,000 60.0% 350,000 300,000 40.0% 250,000 20.0% 200,000 150,000 0.0% 100,000 -20.0% 50,000 0 -40.0% 2017年実績 FY2017 Actual 2018年実績 FY2018 Actual 2019年予測 FY2019 Estimate 2020年予測 FY202
Slide 20: EBITDA Trends
EBITDA Trends [mil. yen] 3,233 EBITDA下期 EBITDA 2H 3,000 2,773 EBITDA上期 EBITDA 1H Operating 2,500 営業利益 Profit 1,790 1,978 1,994 2,046 2,000 1,955 1,600 589 739 1,600 1,500 1,204 1,000 1,244 1,012 999 1,388 1,442 500 1,255 1,173 842 0 16年3月期 FY2015 17年3月期 FY2016 FY2016 18年3月期 FY2017 19年3月期 FY2018 FY20
Slide 21: Dividends
Dividends Dividend As of 1H- As of FY- Full Year Payout end end Ratio FY2018 20 yen 20 yen 40 yen 42.8% FY2019 (Outlook) 20 yen 20 yen 40 yen 53.5% 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 22: Agenda
Agenda 1 FY2019 1H Actual 2 FY2019 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 22
Slide 23: Mid-Term Management Plan
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 24: Mid-term Management Plan: Progress of Profit Planning
Mid-term Management Plan: Progress of Profit Planning ROE 8.0% Mid-term Management Plan 6.6% 5.0% ROE Target: +8% In order to achieve the target: • Operating Profit：3-3.5 bil yen level FY2018 FY2018 FY2019 FY2019通期 ... FY2023FY2023（計画） (Plan) Aim to renew the record of the （前期実績） Mid-term Management
Slide 25: Tester Business in China
Tester Business in China Business alliance with V-TECHNOLOGY to make capital participation in Z-CSET, which is the joint venture of V-TECHNOLOGY and a Chinese local fund (INNOTECH investment ratio: 10%). INNOTECH provides Z-CSET with technical assistance and components to realize products and Z-
Slide 26: Start Mass Production of Regulus AI Camera System for Family-Robot
Start Mass Production of Regulus AI Camera System for Family-Robot Regulus AI camera system EigerⅡ was adopted for the “LOVOTTM” of GROOVE X, Inc. Final products will be shipped from December 2019. Prepare for mass production from the 2nd half. “LOVOTTM” of GROOVE X, Inc. Regulus AI Camera Syste
Slide 27: Develop/sell/provide services for the Cloud Settlement System
Develop/sell/provide services for the Cloud Settlement System Cashless settlement market is expanding in Japan as the cashless point kick- back programs becoming popular after the increase of consumption tax, the Olympic games being hosted in Tokyo in 2020, and the number of foreign tourists visit
Slide 28: Start collaboration with Cognata, an Israeli Start-up
Start collaboration with Cognata, an Israeli Start-up IT ACCESS starts collaboration with an Israeli start-up, Cognata, which develops autonomous driving simulation systems. Cognata provides a large-scale automotive simulation for the Advances Driving Assistance Systems (ADAS) and to the autonom
Slide 29: Capital Management Policy: Our current numerical goals
Capital Management Policy: Our current numerical goals 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-bearing debt, such as loans, th
Slide 30: Acquisition of Treasury Shares
A c q u i s i t i o n o f Tr e a s u r y S h a r e s Resolution was made to acquire more shares Number of Shares: 400,000 shares (Maximum) Amount: 500 million yen (Maximum) Acquisition Period: November 11, 2019～May 31, 2020 In the Capital Management Policy which we announced in February 2018,
Slide 31: 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