Slide 1: INNOTECH CORPORATION FY2023 Financial Results
INNOTECH CORPORATION FY2023 Financial Results May 10, 2024
Slide 2: FY2023 Actual, FY2024 Outlook, New Mid-Term Management Plan
1 FY2023 Actual 2 FY2024 Outlook 3 New Mid-Term Management Plan
Slide 3: FY2023 Highlights
FY2023 Highlights Consolidated Net Sales increased by 7.1％ YoY; Consolidated operating profit decreased by 6.7％ YoY Strong System Service Business drives the overall group results; IT ACCESS and GAIO TECHNOLOGY achieved the record-high profits. Semiconductor market did not come back throughout the y
Slide 4: FY2023 Actual
FY2023 Actual (Unit: mil yen) Sanei IT GAIO STAr INNOTECH REGULUS MoDeCH Consolidated Hytechs Access Technology Technologies YoY Year FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 Net Sales 16,537 14,762 3,941 3,995 4,899 5,141 3,510
Slide 5: FY2023 Test Solution Business
FY2023 Test Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 19,000 7,000 6,174 5,679 15,200 5,600 11,400 4,200 Sales 売上 Gross 売上総利益 7,600 15,885 2,800 Profit 13,938 3,800 1,400 0 0 FY2022 23年/3月期 FY2023 24年/3月期 5
Slide 6: Test Solution Business
Test Solution Business Testers Burn-in boards, a new business, sold well but the tester business for NAND flash memory products largely declined as the market did not recover. STAr Strong sales of reliability testers mainly for China and Taiwan continued. Revenue increased and the results turned to
Slide 7: FY2023 Semiconductor Design-related Business
FY2023 Semiconductor Design-related Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 2,922 2,905 15,000 3,000 12,000 2,400 9,000 1,800 売上 Sales 13,287 12,884 Gross 売上総利益 6,000 1,200 Profit 3,000 600 0 0 FY2022 FY2023 7
Slide 8: Semiconductor Design-related Business
Semiconductor Design-related Business EDA Revenue increased by the record-high order amount in the past 20 years with major customers’ larger-amount contract renewals mainly for the core business. Sanei Hytechs Profit decreased by slowing down of Japan domestic analog business and prolonged economic
Slide 9: FY2023 System Service Business
FY2023 System Service Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 15,000 4,500 4,080 3,640 12,000 3,600 9,000 2,700 売上 Sales 12,589 Gross 売上総利益 6,000 1,800 Profit 11,404 3,000 900 0 0 FY2022 FY2023 9
Slide 10: System Service Business
System Service Business Embedded System Revenue increased as the business remained solid, mainly for internally-developed products for infrastructure and industrial applications as well as for products for the edge-computing market. IT Access Revenue and profit increased as the sales of settlement t
Slide 11: Major Expenses and Non-Operating Expenses and Income
Major Expenses and Non-Operating Expenses and Income 〔mil. yen〕 FY2022 FY2023 Research & Development 2,071 2,416 Depreciation 1,197 1,288 Amortization of Goodwill 232 230 Major Items of Non-operating Expenses and Income Real Estate Rent Income 447 480 Related Expenses for Real Estate Rent 336 353 Fo
Slide 12: Cash Flow
Cash Flow 〔mil. yen〕 FY2022 FY2023 Profit Before Income Taxes 2,482 2,349 Depreciation and Amortization of Goodwill 1,429 1,518 Working Capital and Others -2,232 -1,247 Cash Flow from Operating Activities 1,680 2,621 Purchase of Fixed Assets -1,569 -1,204 Purchase of Long-term Prepaid Expenses -116
Slide 13: Business Strategy
Review of Current Mid-term Management Plan Growth of Test Solution Business • Business dramatically expanded during the past five years ⇒Future challenge is to enrich resources and product line-up for general purposes Expansion of Sales of Internally-developed Products/Strengthening Manufacturing Fu
Slide 14: Growth of Test Solution Business and Internally-developed Products
Growth of Test Solution Business and Trend of Sales Ratio of Internally-developed Products 【Test Solution Business Results】 【Sales Ratio of Internally-developed Products】 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 〔Sales: mil. yen〕 （％） 18,000 73.3 74.9 70.0 50,000 71.2 72.2 6,174 68.9 5,679 6,000 54
Slide 15: Trend of Overseas Business and New Business Deployment
Trend of Overseas Business and New Business Deployment Automated solution utilizing OSARO (mil. yen) 14,000 （百万円） Overseas Sales (Consolidated) Recognition and Control AI for industrial robotics 12,000 Edge face recognition for 10,000 industrial machinery 1. Various solutions become available using
Slide 16: FY2019-2023 Business Trend
FY2019～2023 Business Trend Operating Profit Sales 〔mil. yen〕 〔mil. yen〕 5,000 Sales 売上高 45,000 Operating 営業利益 Profit 41,358 40,000 4,000 38,629 37,238 35,000 31,161 32,536 30,000 3,000 25,000 2,585 20,000 2,000 2,319 2,474 1,954 15,000 1,670 1,000 10,000 5,000 0 0 FY2019 FY2020 FY2021 FY2022 FY2023
Slide 17: Cash Flow and Capital Structure
Cash Flow and Capital Structure FY2018～2022 30,000 80.0% (mi. yen) 74.3% 18,000 Others 70.0% 25,000 24,201 63.9% 23,605 22,213 15,000 Capital 21,009 55.5% 53.3% 54.8% 60.0% 20,094 Investment 20,000 19,416 54.1% Operating CF 50.0% 12,000 0.42 Investment 15,000 0.35 0.38 0.38 40.0% 9,000 Payment of 30
Slide 18: INNOTECH Approach on Cost of Capital
INNOTECH Approach on Cost of Capital Cost of capital is the investors’ expected ratio of return; cost of shareholders’ equity should be set as minimum 8%. As for the cost of capital, both the value based on the outside data (CAPM) and the value based on the assumption that the cost of shareholders’
Slide 19: ROE and ROIC Trends
ＲＯＥ and ＲＯＩＣ Trends ROE (Return on Equity) 12.0 10.4 10.0 7.8 7.3 8.0 6.6 5.8 6.1 6.0 3.6 3.4 3.2 3.4 4.0 3.0 2.4 2.3 2.4 2.0 0.0 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 ROIC (Return on Invested Capital) 8.0 6.7 5.6 6.0 5.0 4.5 4.7 4.7 4.0 3.
Slide 20: FY2023 Actual, FY2024 Outlook, New Mid-Term Management Plan
1 FY2023 Actual 2 FY2024 Outlook 3 New Mid-Term Management Plan
Slide 21: FY2024 Highlights
FY2024 Highlights Consolidated sales is estimated to increase by 5.2% YoY; consolidated operating profit is estimated to increase 1.0% YoY Environment for Japan domestic tester business is expected to remain tough; INNOTECH non-consolidated profit will decline. Profitability of STAr has improved; ot
Slide 22: FY2024 Estimate
FY2024 Estimate 〔mil. yen〕 Sanei GAIO STAr Consoli FY2023 INNOTECH IT ACCESS TECHNOLOGY Technologies REGULUS MoDeCH YoY Hytechs -dated Actual Net Sales 15,850 3,900 6,600 4,200 12,150 800 370 43,500 41,358 5.2% Gross 4,170 1,050 1,500 1,670 4,250 260 250 13,150 13,160 -0.1% Profit (26.3%) (26.9%) (2
Slide 23: FY2024 Outlook: Test Solution Business
FY2024 Outlook: T est S olution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 20,000 7,000 6,174 5,750 16,000 5,600 12,000 4,200 Sales 売上 Gross 売上総利益 Profit 8,000 15,885 16,050 2,800 4,000 1,400 0 0 FY2023 24年/3月期 FY2024 25年/3月期 (Estimate) 23
Slide 24: Test Solution Business
Test Solution Business Testers While sales increase of decoder boards for image sensors and demand recovery for testers for NAND flash memory products are expected, sales of burn-in boards will decline. STAr Reliability test equipment business for China and probe cards business for R&D application a
Slide 25: FY2024 Outlook: Semiconductor Design-related Business
FY2024 Outlook: Semiconductor Design-related Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 15,000 3,050 3,200 2,905 12,000 2,560 9,000 1,920 Sales 売上 Gross 12,884 13,050 6,000 1,280 売上総利益 Profit 3,000 640 0 0 FY2023 24年/3月期 FY2024 25年/3月期 (Estimate) 25
Slide 26: Semiconductor Design-related Business
Semiconductor Design-related Business EDA Revenue will increase as the contract renewals with major customers mainly for the core business will go on and the increase of term-license orders from FY2023 will contribute to the FY2024 results as well. Sanei Hytechs Revenue and profit are likely to go d
Slide 27: FY2024 Outlook: System Service Business
FY2024 Outlook: System Service Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 4,350 16,000 4,500 4,080 12,800 3,600 9,600 2,700 Sales 売上 Gross 売上総利益 14,400 Profit 6,400 12,589 1,800 3,200 900 0 0 FY2023 24年/3月期 FY2024 25年/3月期 (Estimate) 27
Slide 28: System Service Business
System Service Business Embedded System Sales will remain the same level YoY due to decrease in demands in the industrial application market while some growth is expected mainly for internally-developed products for the infrastructure business. IT Access Profit will stay at the same level YoY due to
Slide 29: Dividends
Dividends Dividend As of 1H- As of FY- Full Year Payout end end Ratio FY2023 35 35 70 63.3% FY2024 (Outlook) 35 35 70 55.4% We intend our consolidated divided payout ratio not to be less than 30%. Our goal is to maintain around 50% level as long as there is no sudden change in our financial results.
Slide 30: FY2023 Actual, FY2024 Outlook, New Mid-Term Management Plan
1 FY2023 Actual 2 FY2024 Outlook 3 New Mid-Term Management Plan
Slide 31: New Mid-term Management Plan (FY2024-2026); Basic Policy
New Mid-term Management Plan (FY2024-2026); Basic Policy
Slide 32: Our Challenges; Development of Technology and Innovation
Our Challenges; Development of Technology and Innovation Realize INNOTECH-original solutions with cross-sectional efforts as an entire enterprise Thermal Fluid Analysis group, leveraging its element technology, to keep up with ML/AI technical evolution and new Model Based Design business areas, such
Slide 33: INNOTECH Changes the Future
Company-wide Management Strategy: Our Vision and Mission Our Vision INNOTECH Changes the Future ～ＩＮＮＯＶＡＴＩＯＮ ＴＥＣＨＮＯＬＯＧＹ～ Our Mission Connect cutting-edge technologies and people, and contribute to achieving more prosperous and comfortable future society Resolve customers’ challenges together, underst
Slide 34: Current Status: Assessment and Analysis
Current Status: Assessment and Analysis ＰＢＲ＝ＲＯＥ×ＰＥＲ １ ＰＥＲ＝ Cost of Capital - Expected Growth Rate As the capital structure significantly changed by acquisition of treasury shares and expansion of business, the return on capital index has dramatically increased while 8% or higher ROE has not been sta
Slide 35: Numerical Target
Numerical Target Basic Direction Both profitability (e.g., ROE) and growth (PER) must improve to increase share price and PBR Numerical Target Aim to achieve 10％ ROE (maintain minimum 8% or more) Aim to achieve 8% ROIC (maintain minimum 6% or more) Model Financial Results Marked the record highest c
Slide 36: Action to Implement Management Conscious of Cost of Capital and Stock Price
Action to Implement Management that is Conscious of Cost of Capital and Stock Price (Group-wide Business Policy) Basic Strategy to Improve ROE and PER (Enhance ROE, Reduce Cost of Capital, and Increase Expected Growth Rate) Expanding operating profit ・Grow and improve profitability of each business
Slide 37: Business Strategy (FY2024-2026)
Business Strategy (ＦＹ2024～2026） Test Solution Business Putting Products for CIS in addition to Products for NAND Flash Memory as the center of business Aiming to achieve stable profitability by test peripheral solutions, such as burn-in boards STAr is focusing on solutions for foundries and power IC
Slide 38: Test Solution Business: Enriching and Optimizing Product Portfolio
Test Solution Business ～Enriching and Optimizing Product Portfolio～
Slide 39: Test Solution Business: Enriching and Optimizing Product Portfolio
Test Solution Business ～Enriching and Optimizing Product Portfolio～ Winning a new market and customers by enriching tester business product line-up Expanding product line-up in addition to Products for NAND Flash Memory as a core; • Increasing solutions for other devices such as CMOS image sensors;
Slide 40: Optimizing STAr Product Portfolio
Test Solution Business ～Enriching and Optimizing Product Portfolio～ Optimizing STAr Product Portfolio Concentrate management resources on reliability testers and probe cards for foundries; Deploy to areas with high growth potentials, such as RF, compound, and power ICs Taurus Instruments Virgo Prima
Slide 41: Semiconductor Design-related Business
Semiconductor Design-related Business ～Stable Profit-maker to Solidify INNOTECH Group Management Basis～
Slide 42: Semiconductor Design-related Business: Stable Profit-maker
Semiconductor Design-related Business ～Stable Profit-maker to Solidify INNOTECH Group Management Basis～ LSI Packaging Print Circuit Board システム解析 System Analysis Structural Analysis Area of Development Chip Package Module System PCB Thermal Solution Design Verification Design Verification Design Veri
Slide 43: System Service Business: Mass Customization
System Service Business ～Mass Customization～
Slide 44: System Service Business: Mass Customization
System Service Business ～Mass Customization～ Plan to release the “INNINGS EDGE FACE”, which is edge face Develop a system with human detection and stop recognition for industrial machinery applications (Add-on to the manufacturing facility and machine tools) control for construction machines and for
Slide 45: Synergy Effects Beyond Multiple Business Segments
Synergy Effects Beyond Multiple Business Segments ～Leveraging Simulation Platforms～
Slide 46: Synergy Effects: Leveraging Simulation Platforms
Synergy Effects Beyond Multiple Business Segments ～Leveraging Simulation Platforms～ Provide INNOTECH-unique solutions leveraging INNOTECH Group inside and outside element technologies System System Validation System Specification Test Simulation Conformity Test Control Combined Specification Test Si
Slide 47: Policy on Investment for Growth
Policy on Investment for Growth Ｍ＆Ａ ・Acquisition is a priority when investing in companies (majority investment) Globalization ・Active overseas customer development ・Taking full account on geopolitical risks System Validation System System Specification Test Simulation Control Specification Conformi
Slide 48: INNOTECH Financial Strategy (FY2024-2026)
INNOTECH Financial Strategy (FY2024～2026) Actual Measures For the New Mid-term Management Plan Maximum 0.5 times of D/E ratio in order to maintain financial soundness and to take an agile investment approach for growth Effective utilization of a debt capacity Appropriate level of cash reserve to be
Slide 49: Strategy for Growth and Capital Allocation
Financial Strategy (ＦＹ2024～2026) INNOTECH Strategy for Growth and Capital Allocation Focusing on Shareholder Returns （100 mil. yen） 120 Possible Range of Debt Capacity New Investment 90 3-4 billion yen for Growth 4 billion yen Capital Investment for 60 Existing Businesses (including software) Operat
Slide 50: INNOTECH Efforts on Sustainability; Identifying Materiality
INNOTECH Efforts on Sustainability; Identifying Materiality and Continuing to Enhance Corporate Value Materiality Key Theme ＫＰＩ • Securing and nurturing human resources, Knowledge management • Ratio of female management: 5% in 2025, 10% in 2030 (Japan) • Diversity and Inclusion • Hiring ratio of fem
Slide 51: Efforts on Sustainability
Efforts on Sustainability Employee Questionnaire and Engagement Survey Employee Questionnaire Engagement Survey (HR Committee) Management + Continue Human Capital Management Management Unit Chief Instruction for Research HR Group • Improve employee engagement Request for Reply Employees • Securing a
Slide 52: 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