Oki Electric Industry Company, Limited · TSE:6703

Oki Electric Industry — 1H FY2016 Earnings Presentation

26 slides from Oki Electric Industry's earnings presentation, Oct 28, 2016

1. Slide 1: Financial Results for the First Half of FY ending March 31, 2017

   Financial Results for the First Half of FY ending March 31, 2017 October 28, 2016 Oki Electric Industry Co., Ltd. © Copyright 2016 Oki Electric Industry Co., Ltd. 1

2. Slide 2: Table of Contents

   Table of Contents I. Financial results for the 1H, FY ending Mar. 2017 1. Overview of 1H 2. Summary of Financial Results 3. Segment Information (Net sales) 4. Segment Information (Operating income) 5. Changing Factors of Operating Income 6. Balance Sheets 7. Cash Flows II. Full Year Projections for

3. Slide 3: Overview of 1H

   Overview of 1H  Summary of Business Domestic business was steady. In business overseas, sales and operating income failed to reach its original target due to the changes in business environment.  Appreciation of the yen Foreign exchange losses in non-operating expenses were recorded as the results

4. Slide 4: Summary of Financial Results

   Summary of Financial Results Net sales and operating income decreased year on year. Business performance fell short of its target. Foreign exchange losses in non-operating expenses of 8.1 B yen were recorded. Loss attributable to owners of parent was 13.5 B yen as a result of recording extraordinary

5. Slide 5: Segment Information (Net sales)

   Segment Information (Net sales) ICT : Sales were beyond its plan though sales for telecom carriers and fire- fighting digital wireless systems decreased. Mechatronics systems: ATM market in China is in a lull. Business in Brazil, other countries and Japan basically turned out as planned. Printers: D

6. Slide 6: Segment Information (Operating income/loss)

   Segment Information (Operating income/loss) Operating income totally worsened year on year due to the decline in sales volume and the impact of currency exchange. Profitability of ICT was improved compared with its plan due to the effect of reform of business structure. The drop in sales volume infl

7. Slide 7: Changing Factors of Operating Income (year on year)

   Changing Factors of Operating Income (year on year) Operating income decreased due to the drop in sales volume and the impact of currency exchange. (Billion yen) 3.6 (4.5) Impact of currency exchange (0.6) FY15 Changes in (2.0) +1.5 (1.5) +2.0 FY16 Results volume and product mix Results Changes Redu

8. Slide 8: Balance Sheets

   Balance Sheets Working capital was reduced due to correcting notes and accounts receivable and control the inventories. Levels of shareholders’ equity ratio and D/E ratio were maintained by squeezing the net assets. (Billion yen) Sep. 2016 Mar. 2016 Variance Current assets 237.4 277.6 (40.2) Fixed a

9. Slide 9: Cash Flows

   Cash Flows Cash flows from operating activities improved drastically mainly due to amelioration in working capital. Free Cash flows saw a net inflow of 12.8 B yen. FY end. FY end. March March Variance (Billion yen) 2017 2016 Ⅰ Cash flows from operating activities 21.0 (3.5) 24.5 Ⅱ Cash flows from in

10. Slide 10: Table of Contents

    Table of Contents I. Financial results for the 1H, FY ending Mar. 2017 1. Overview of 1H 2. Summary of Financial Results 3. Segment Information (Net sales) 4. Segment Information (Operating income) 5. Changing Factors of Operating Income 6. Balance Sheets 7. Cash Flows II. Full Year Projections for

11. Slide 11: Current Conditions

    Current Conditions  Summary of Business ATM market in China is expected to be in a lull in overseas business though domestic business remains steady. Competition in office printers business increasingly intensifies mainly in Europe and the U.S.  Appreciation of the yen Recent trend of strong yen c

12. Slide 12: Revision of Full Year Projections

    Revision of Full Year Projections Year-end dividend plan: 30 yen* per share (as planned) Currency exchange rate assumption in 2H : ¥105/USD, ¥115/EUR FY end. FY end. Mar.2017 Previous Variance Mar.2016 Variance (Revised on projections Oct. 28, 2016) (Results) (Billion yen) Net sales 465.0 500.0 (35.

13. Slide 13: Segment Information (Full Year)

    Segment Information (Full Year) ICT: Operating income is expected to work out as planned though sales will decrease as a result of reviewing projects. Mechatronics Systems: ATM market in China is in a lull. Business in Japan, Brazil, and other countries goes approximately as planned. Printers: Sales

14. Slide 14: Reference

    Reference © Copyright 2016 Oki Electric Industry Co., Ltd. 14

15. Slide 15: Segment Information (Full-year Net Sales and Operating Income)

    Segment Information (Full-year Net Sales and Operating Income） Net Sales Operating Income © Copyright 2016 Oki Electric Industry Co., Ltd. 15

16. Slide 16: Quarterly Transition of Net Sales and Operating Income

    Quarterly Transition of Net Sales and Operating Income © Copyright 2016 Oki Electric Industry Co., Ltd. 16

17. Slide 17: Quarterly Transition of Net Sales and Operating Income (ICT)

    Quarterly Transition of Net Sales and Operating Income(ICT) © Copyright 2016 Oki Electric Industry Co., Ltd. 17

18. Slide 18: Quarterly Transition of Net Sales and Operating Income (Mechatronics Systems)

    Quarterly Transition of Net Sales and Operating Income(Mechatronics Systems) © Copyright 2016 Oki Electric Industry Co., Ltd. 18

19. Slide 19: Quarterly Transition of Net Sales and Operating Income (Printers)

    Quarterly Transition of Net Sales and Operating Income(Printers) © Copyright 2016 Oki Electric Industry Co., Ltd. 19

20. Slide 20: Quarterly Transition of Net Sales and Operating Income (EMS)

    Quarterly Transition of Net Sales and Operating Income(EMS) © Copyright 2016 Oki Electric Industry Co., Ltd. 20

21. Slide 21: Sales by Region

    Sales by Region © Copyright 2016 Oki Electric Industry Co., Ltd. 21

22. Slide 22: Quarterly Transition of Profit and Loss

    Quarterly Transition of Profit and Loss FY end. FY end. Mar. 31, FY end. Mar. 31, 2016 Mar. 31, 2017 2017 Results Full year 1Q 2Q 3Q 4Q 1Q 2Q （Billion yen） (Plan) Net sales 109.8 113.2 114.6 152.7 93.2 106.1 465.0 Operating income 3.5 0.1 3.9 11.1 0.7 (1.3) 15.0 Non-operating income & 2.4 (3.6) (2.5

23. Slide 23: Financial Highlights

    Financial Highlights FY end. Mar. 31, FY end. Mar. 31, 2016 2017 Results （Billion yen） 1Q 2Q 3Q 4Q 1Q 2Q Total assets 421.9 412.5 414.8 411.8 387.1 371.9 Net assets 119.8 113.6 110.6 107.4 99.2 93.1 Interest-bearing debt 109.5 114.8 118.3 122.1 118.7 107.8 Shareholders’ equity 118.8 112.8 110.3 106.

24. Slide 24: 1H Changing Factors of Operating Income (vs. original plan)

    1H Changing Factors of Operating Income(vs. original plan) Fixed costs are reduced against the drop in sales volume and the impact of currency exchange. Reduction in Changes in production and (Billion yen) volume and procurement 0 product mix costs FY16 (1.0) Impact of (0.6) 0 currency Original Plan

25. Slide 25: Capital Expenditure and R&D Expenses Projections

    Capital Expenditure and R&D Expenses Projections Property, Plant & Eqip. (Billion yen) R&D Expenses [Capital Expenditure] 11.7 11.5 13.3 13.0 Others 1.8 2.0 2.0 2.0 Others 0.9 1.0 EMS 2.4 2.0 2.7 3.0 Printers Printers 5.0 4.0 4.1 2.0 Mechatronics Mechatronics systems 3.5 ICT systems 2.2 5.0 3.9 ICT

26. Slide 26: Notice

    Notice • The projections and plans in this material are based on information currently available to OKI as of the date of publication and certain assumptions judged as rational, therefore actual results are subject to change depending upon the changes of business environments and other conditions. •

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