Slide 1: Business Results FY2019
(Securities code: 6728) Business Results FY2019 (July 2019 - Jun 2020) Aug. 12, 2020 ULVAC Inc. 1 FY194QPSN20200812E © 2020 ULVAC, Inc. | Confidential and Proprietary Information
Slide 2: Disclaimer regarding forward-looking statements
Disclaimer regarding forward-looking statements Forward-looking statements of the company in this presentation are based on information that was available at the time these documents were prepared. ULVAC’s customers in the flat-panel display (FPD), semiconductor, and electronic parts industries face
Slide 3: Overview of FY2019 Consolidated Business Results
Overview of FY2019 Consolidated Business Results 3 FY194QPSN20200812E © 2020 ULVAC, Inc. | Confidential and Proprietary Information
Slide 4: Business Result Summary
Business Result Summary Focused on reducing fixed costs in the situation of declining orders and sales due to the impact of the new coronavirus and reduced capital investment in FPDs Orders, sales and operating income all declined YoY, but exceeded the revised 3Q forecast. While orders for FPD-relat
Slide 5: Overview of FY2019 Consolidated Business Results
Overview of FY2019 Consolidated Business Results • Orders, sales and operating profit all declined YoY, but exceeded the revised 3Q forecast. Net sales and operating profit FY2018 FY2019 Y-o-Y (by semi-annual period) (Unit: ¥1 billion) (Unit: ¥1 billion) Result Plan Result （Changes) 150 Net sales Or
Slide 6: Orders received by segment
Overview of FY2019 Consolidated Business Results (Orders received by segment) Declined YoY, but exceeded the revised 3Q forecast by minimizing the impact of COVID-19. Orders Received 1. Semiconductor and electronic device (Unit: ¥1 billion) • Despite falling short of the initial plan due to a slow 2
Slide 7: Net Sales by segment
Overview of FY2019 Consolidated Business Results (Net Sales by segment) Net Sales (Unit: ¥1 billion) 220.7 1. Semiconductor and electronic device 18.6 205.0 198.0 • Exceeded the plan and YoY. 181.0 185.4 14.3 17.0 17.7 2. FPD 23.4 14.5 17.1 14.9 21.0 17.1 13.5 • The impact of the decline in orders w
Slide 8: Orders/Net Sales by segment
Overview of FY2019 Consolidated Business Results (Orders/Net Sales by segment) Quarterly change of Order received Quarterly change of Net Sales (Unit: ¥1 billion) (Unit: ¥1 billion) 81.0 77.7 3.7 4.0 4.3 3.8 64.9 8.5 65.4 64.3 5.5 60.9 4.1 59.1 61.7 55.1 5.0 5.2 52.1 8.0 3.2 3.1 3.5 51.8 48.9 47.7 1
Slide 9: Profit Margins
Overview of FY2019 Consolidated Business Results (Profit Margins) • Both the gross profit margin and the operating profit margin declined due to lower sales (Excluding the cancellation of contract, gross profit margin should have been 28.3%) Gross profit margin (Unit: %) Operating profit margin (Uni
Slide 10: 4Q FY2019 Consolidated Balance Sheet
Overview of 4Q FY2019 Business Results (Consolidated Balance Sheet) • Cash on hand and in banks increased by ¥22.1 billion, Interest-bearing debt increased by ¥14.3 billion • Net assets increased by ¥3.5billion, and the equity ratio improved to 54.6%. Assets (Unit: ¥1 billion) Liabilities and Net As
Slide 11: Our Response to COVID-19
Our Response to COVID-19 We are working to minimize the impact on our customers by taking measures to prevent the spread of infection. Ongoing health and hygiene management, shift schedules, telecommuting, staggered work hours, restrictions on business trips and meetings, etc. Impact・Response • Limi
Slide 12: FY194QPSN20200812E © 2020 ULVAC, Inc. | Confidential and Proprietary Information
12 FY194QPSN20200812E © 2020 ULVAC, Inc. | Confidential and Proprietary Information
Slide 13: Overview of the Previous Mid-term Management Plan
Overview of the Previous Mid-term Management Plan 13 FY194QPSN20200812E © 2020 ULVAC, Inc. | Confidential and Proprietary Information
Slide 14: Previous Mid-term Plan: Key Strategy
Overview of the Previous Mid-term Management Plan① Key Strategy Highly profitable corporate management by comprehensively utilizing vacuum technology, maximizing synergy effects among equipment, materials, deposition processing, analysis and services, and cooperating with global View business partne
Slide 15: Previous Mid-term Plan: Management Base
Overview of the Previous Mid-term Management Plan② Management Base ・Nurturing the next generation of leaders Human resources ・Promote globalization of the management team Development (increase of 3 foreign directors) Deeping relationship and ・2/3 turnover of the group's top management⇨Rejuvenation c
Slide 16: Previous Mid-term Plan: Results vs Targets
Overview of the Previous Mid-term Management Plan➂ • FY2017：Net sales and Operating profit (margin) were almost in line with FY2019 target. ⇒FY19 target was revised upward • FY2018,2019：Net sales and Operating profit (margin) were lower than expectations due to a sharp decline in FPD sales, a reacti
Slide 17: Breakthrough 2022
Breakthrough 2022 New Mid-term Management Plan 17 FY194QPSN20200812E © 2020 ULVAC, Inc. | Confidential and Proprietary Information
Slide 18: Technological Innovation for a Smart Society
Technological Innovation for a Smart Society ⇨ Expected to grow 1.6 times in three years Technical innovations required for a Increase in smart society multiple ⇨Leveraging ULVAC's strengths to connection data make contributions through thin film technology Logic IC Higher capacity Memory servers, h
Slide 19: Technological innovation for smart society and low power consumption
Technological innovation for the smart society realization and low power consumption Smart society realization Low power consumption Smart Society⇒Solving Social Problems Communicating Memory Logic IC Sensor Device Battery Miniaturization High performance Low power consumption Sputtering Component V
Slide 20: Leveraging ULVAC's Advantages for Growth
Leveraging ULVAC's Advantages for Growth Integration of a wide range of fields and diverse technologies Component (Equipment) Sputtering Evaporation Materials CVD Etcher etc. Customer Support Ability to respond to Strong Networks in East Asia technological innovation Wide customer base Vacuum Thin F
Slide 21: Key Points of the New Medium-Term Management Plan
Key Points of the New Medium-Term Management Plan ・Investment in Development for Growth Basic Policy (Selection and Concentration) ・Profit-oriented management through structural change ・Expanding investment for the growth in semiconductors and １．Strengthening the Growing electronics Business ・Enhanc
Slide 22: Numerical Targets of the Medium-Term Management Plan
Numerical Targets of the Medium-Term Management Plan Results Targets （FY2019） （FY2022） Net Sales ¥185.4 billion ¥210 billion Gross Profit Margin 27.3％ 35％ or above Operating Profit Margin 8.6％ 16％ or above ROE 7.1％ 13％ or above Operating CF ¥18.7 billion ¥29 billion 22 FY194QPSN20200812E © 2020 ULVA
Slide 23: Target for FY2022 Net Sales ¥210 billion
New Medium-Term Management Plan Target for FY2022 Net Sales ¥210 billion OP Margin 16% or above Sales and profits will grow steadily toward the end of the next three years, despite a temporary drop in FY2020 due to a decline in orders received in the previous fiscal year (decrease in order backlog).
Slide 24: Strengthening the Growing Business
１．Strengthening the Growing Business ・New entry into the logic miniaturization process Semiconductor ⇨Growing by hiring other processes and companies ・Resumption of memory investment and entry into new processes ・Expansion of proposed equipment through modularization Electronics Device ・Strengthenin
Slide 25: Semiconductor growth strategy
Semiconductor • Logic：Highly commended for EUV-based miniaturization process ⇨Accelerate growth by entering other processes and adoption by other companies (secure a second vendor position) • DRAM：Increased installation of data centers and smartphones, etc. ⇨Resumption of investment and expansion of
Slide 26: Logic
①Logic Aiming to Double Market Share with Our sales forecast 2019 2022 ¥4.9billion⇨¥10billion 2.0x State-of-the-Art Processes (EUV) Logic PVD Market Forecast ※ TAM(2019）¥110 billion TAM CAGR 1.1％ （単位：億円） 120 Target FY2019 FY2022 Share Share 8% market share 4％ 8％ 4% 90 EUV-related 【Market Growth】 inv
Slide 27: Memory
②Memory Aiming to increase market share 1.7x through market recovery and entry into new processes 2019 2022 ※ ¥14.7 billion⇨¥22 billion 1.5x Memory PVD Equipment Market Forecast TAM(2019）¥110 billion TAM CAGR 3.0％ （Unit:¥1 billion） Share Target FY2019 FY2022 17% 120 Share 10% market share 10％ 17％ 90
Slide 28: Electronics
Aiming for growth in China's increasingly 2019 2022 Electronics domesticized economy ※ ¥25.6 billion⇨¥41 billion 1.6x • Development of smart society⇨Demand for electronic devices⇨Expanding business opportunities through market expansion and technological innovations such as 5G-oriented miniaturizati
Slide 29: China Electronics Market
A rapid increase in business negotiations due to the China Electronics Market nationalization policy Ultimate in Vacuum since 1952 (China Growth Strategies) Liaoning（5） ●●●●★☆☆☆ ★ • Domestic production policy in the electronics ●★★★★★ ☆ ★★☆☆ Beijing（21） ☆☆ sector ⇒A surge in electronic-related ☆☆☆ ☆
Slide 30: Power Device
Expanding our experience in Japan to global ①Power Device 2019 2022 markets such as China, Taiwan and Europe ※¥9.1 billion ⇨ ¥13 billion 1.4x ※ 【Market Growth】 EV/HEV Power Device Market Forecast （Unit：Million US$） • Technological innovations for higher efficiency and lower power 3,000 consumption i
Slide 31: Electronics Device (MEMS)・Optical-device
Responding to market growth and ②Electronics Device(MEMS)・Optical-device increased performance 2019 2022 ※ ¥8.7 billion ⇨ ¥18 billion 2.1x Thin film piezo Market Forecast 【Market Growth】 （Unit：Billion US$） • Development of 5G and IoT ⇨ Necessity of Sensors and MEMS Technology ⇨ 6 Expanding Markets b
Slide 32: Communication Device
➂Communication Device Responding to technological innovation and market 2019 2022 ※ ¥5.6 billion ⇨ ¥7 billion 1.3x expansion in conjunction with the development of 5G 【Market Growth】 Communication Device Market Forecast • Expansion of 5G⇨Market Growth of Communication Device such as SAW・ （Unit：Billi
Slide 33: FPD
Conversion from LCD to OLED will reduce sales, ＦＰＤ but aim to increase profit 2019 2020 2022 ※ ¥61.2 billion ⇨ ¥43 billion⇨¥48 billion LCD・OLED Equipment Market （Evaporation・Sputtering） TAM(2019）¥70 billion※※ TAMCAGR 18.8％ （Unit:¥1 billion） 160.0 Target market share FY2019 FY2022 OLED (OLED Equipmen
Slide 34: Stable base business (Component・Materials・Customer Support)
Stable base business（Component・Materials・Customer Support） 【Growth Strategies linked to the Equipment Business】 Expanding sales of the semiconductor and electronics fields in addition to the FPD industry Growth in parallel with sales of equipment to China, which is promoting domestic production in t
Slide 35: Strengthening Research and Development
２．Strengthening Research and Development Semiconductor and Electronics：FPD Strengthening product development in response 5.5：4.5 6：4 ７：３ to technological innovation in growing markets Logic（MHM）・PCRAM Selection and Concentration Shifting focus to product development High-density mounting ashing 1)Sh
Slide 36: Enhancing manufacturing capabilities
３．Enhancing manufacturing capabilities ⇒Improved profitability by improving productivity Enhancement of Man hour：50％ down manufacturing capabilities manufacturing lead time：50% down Procurement cost reduction Technical Design Reform Procurement Reform Improving the completeness of technical drawings
Slide 37: Enhancing Group Management Efficiency
４．Enhancing Group Management Efficiency ・Business Unit Management Promotion ・Strengthening the management of group companies that have their own products ULVAC CRYOGENICS ULVAC COATING ULVAC-PHI Manufacture and sale of cryogenic Manufacture and sale of mask blanks Manufacture and sale of analytical
Slide 38: Strengthening of the management base
Strengthening of the management base Business and organizational transformation ⇨Growth realization Goals Measures, etc. ・Cultivating human resources who are Human Resource constantly challenging to change ・Nurturing the next generation of leaders Development and ・Creating a framework and ・Visualiza
Slide 39: FY2020 Consolidated Earnings Forecast
FY2020 Consolidated Earnings Forecast 39 FY194QPSN20200812E © 2020 ULVAC, Inc. | Confidential and Proprietary Information
Slide 40: FY2020 Consolidated Earnings Forecast
FY2020 Consolidated Earnings Forecast • Although sales in 1H decreased due to a decline in orders received and the order backlog in the previous fiscal year, sales growth in the semiconductor electronics business leads to a recovery in 2H of the fiscal year. • Orders are expected to increase YoY, ma
Slide 41: FY2020 Forecast: Orders Received and Net Sales by Segment
FY2020 Consolidated Earnings Forecast(Orders Received and Net Sales by Segment) • Although net sales are expected to decline, orders are expected to increase mainly in the semiconductor, electronics and FPD industries. • Semiconductor Electronics will be the largest segment in terms of sales. (Unit:
Slide 42: FY2020 Forecast: Profit Margins
FY2020 Consolidated Earnings Forecast (Profit Margins) • Gross profit margin and operating income margin are expected to improve due to the improvement of profit margins from manufacturing reforms and an improved mix of products in line with increased sales of semiconductors and electronics. (Unit:
Slide 43: FY2020 Forecast: Capital Expenditures and R&D Expenses
FY2020 Consolidated Earnings Forecast (Progression of Capital Expenditures and R&D Expenses) • We plan to invest ¥50 billion in R&D (capital investment in R&D equipment and R&D expenses) over three-year period (¥16.9 billion this fiscal year), mainly in the growing field of semiconductor electronics
Slide 44: ULVAC vacuum technology contributes to many industries and applications
ULVAC vacuum technology contributes to many industries and applications 44 FY194QPSN20200812E © 2020 ULVAC, Inc. | Confidential and Proprietary Information Battery バッテリー