Slide 1: FY2018 1st Half Financial Results
FY2018 1st Half Financial Results November 9, 2018 1
Slide 2: Agenda
Agenda 1 FY2018 1H Actual 2 FY2018 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: FY2018 1H Highlights
FY2018 1H Highlights Consolidated operating profit has doubled from the first half of FY2017. Revenue decreased due to withdrawal from the electronic devices trading business; but profit increased substantially. Major revenue increase for testers, mainly for memory products. Business of GAIO TECHNOL
Slide 4: FY2018 1H Actual
FY2018 1H Actual [mil. yen] Sanei IT GAIO STAr INNOTECH REGULUS Consolidated Hytechs Access TECHNOLOGY Technologies YoY FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 Fiscal Year 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H Net Sales 8,135 6,838 1,617
Slide 5: FY2018 1H Design and Development Solution Business
FY2018 1H Design and Development Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 10,000 2,504 2,500 2,225 1,602 2,000 7,500 1,612 249 128 Sanei Hytechs 三栄ハイテックス 986 1,254 REGULUS レグラス 1,500 IT Access アイティアクセス 5,000 1,231 861 Embedded System 組込システム GAIO TECHNOLOGY ガイオテクノロジー 1,620 1,000 E
Slide 6: 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 New customers are successfully acquired and revenue increased significantly compared to the first half of FY2017. GAIO Tool sales grew more than expected; both revenue and profit increased compared to the first half of FY2017. Embed
Slide 7: FY2018 1H Product Solution Business
FY2018 1H Product Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 2,000 7,500 1,815 1,623 395 1,500 その他 5,000 Others 2,257 500 HDD HDD 1,000 STAr STAｒ Technologies 2,082 Technologies テスター Tester 2,500 Gross Profit 売上総利益 2,179 500 2,239 1,198 0 0 FY2017 1H 17年9月期 FY2018 1H 18年9月期 Total 6
Slide 8: Product Solution Business
Product Solution Business Testers Memory products for testers sell well; substantial increase in revenue compared to the first half of FY2017. STAr Maintain strong sales of probe cards to large-scale customers. 8
Slide 9: Major Expenses and Non-Operating Expenses and Income
Major Expenses and Non-Operating Expenses and Income [mil. yen] FY2017 1H FY2018 1H Research & Development 434 464 Depreciation 283 358 Amortization of Goodwill 109 103 Major Items of Non-operating Expenses and Income Real Estate Rent 212 229 Rent Expenses on Real Estates 156 151 Foreign Exchange Ga
Slide 10: Cash Flow
Cash Flow [mil. yen] FY2017 1H FY2018 1H Profit Before Income Taxes 448 979 Depreciation and Amortization of Goodwill 393 462 Working Capital and Others -295 -1,640 Cash Flows from Operating Activities 546 -197 Purchase of Investment Securities -847 -184 Purchase of Tangible Assets -541 -444 Other I
Slide 11: Balance Sheet Trends
Balance Sheet Trends Profit return to shareholders and execution of flexible capital management policy 10 billion yen decrease in shareholders’ equity by dividend increase and acquisition of treasury shares Increase in interest-bearing debt from 500 million yen to 2 billion yen. 自 己資 Trends 80
Slide 12: Agenda
Agenda 1 FY2018 1H Actual 2 FY2018 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: FY2018 Highlights
FY2018 Highlights Estimate throughout the year remains unchanged Consolidated operating profit is estimated to be 2 billion yen (65.5% increase). Hoping to attain the record highest sales for testers. GAIO TECHNOLOGY and STAr Technologies are 13 expected to maintain their high-level profitability.
Slide 14: FY2018 Estimate
FY2018 Estimate [mil. yen] GAIO STAｒ Sanei IT INNOTECH TECHNOL Technolog REGULUS Consolidated FY2015 YoY Hytechs ACCESS OGY ies Net Sales 15,600 3,300 2,900 3,000 4,700 700 30,000 28,735 4.4% Gross 4,500 810 700 1,420 2,060 280 9,300 8,390 Profit 10.8% (28.8%) (24.5%) (24.1%) (47.3%) (43.8%) (40.0%)
Slide 15: FY2018 Outlook: Design and Development Solution Business
FY2018 Outlook:Design and Development Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 20,000 5,100 4,926 5,000 3,347 3,300 4,000 15,000 444 650 Sanei Hytechs 2,240 2,900 三栄ハイテックス 3,000 REGULUS レグラス 10,000 2,124 1,500 IT Access アイティアクセス Embedded Systems 組込システム 2,936 3,000 2,000 ガイオテクノロジー
Slide 16: Design and Development Solution Business
Design and Development Solution Business EDA Sales recovered thanks to steady contract renewals with major customers; business remains solid. GAIO Business is stable; revenue and profit grew while R&D expenses increased. Embedded System Box products sell well for infrastructure and FA. IT ACCESS Sub
Slide 17: FY2018 Outlook: Product Solution Business
FY2018 Outlook: Product Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 15,000 4,200 4,000 3,464 1,200 732 10,000 3,000 2,831 4,650 その他 Others HDD 2,000 STAr STAｒTechnologies 4,537 Tester テスター 5,000 Gross Profit 売上総利益 6,400 1,000 3,340 0 0 18年3月期 FY2017 19年3月期 FY2018 Total 11,440 12,250
Slide 18: Product Solution Business
Product Solution Business Testers Sales of testers for memory products in the second half is expected to exceed the results of the first half substantially. STAr In addition to strong domestic sales in Taiwan, sales in China and in Korea is expanding as well. 18
Slide 19: EBITDA Trends
EBITDA Trends [mil. yen] 3,000 2,860 EBITDA下期 EBITDA 2H 2,500 EBITDA上期 EBITDA 1H Operating 営業利益 Profit 1,978 1,994 2,046 1,418 2,000 1,900 1,576 589 739 1,204 1,500 640 1,244 1,000 1,012 999 722 1,388 1,442 500 1,255 936 842 0 15年3月期 FY2014 16年3月期 FY2015 17年3月期 FY2016 18年3月期 FY2017 19年3月期 FY2018 （※）
Slide 20: Dividends
Dividends Dividend As of 1H- As of FY- Full Year Payout end end Ratio FY2017 10 yen 20 yen 30 yen 73.1% FY2018 (Outlook) 20 yen 20 yen 40 yen 52.4% We intend our consolidated divided payout ratio not to be less than 30%. Our goal is to maintain around 50% level as long as our business remains stable
Slide 21: Agenda
Agenda 1 FY2018 1H Actual 2 FY2018 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 21
Slide 22: Overview: Mid-Term Management Plan
Overview: Mid-Term Management Plan (Announced in November 2014) （Background） Changes in industry environment, realization of M&A, implementation of business structure reform （Strategy） Focus on 4 growth areas (Test, MBD, Image Processing, Embedded Solutions ) Active overseas expansion and invest
Slide 23: Mid-Term Management Plan: Numerical Goals
Mid-Term Management Plan: Numerical Goals [mil. yen] [mil. yen] 40,000 4,000 Sales 売上高（左軸） Operating 営業利益（右軸） Profit Gap with the plan (left axis) (right axis) 35,000 3,500 HDD Business Transfer Early Cadence contract renewals 30,000 3,000 Delay in development of new 25,000 2,500 testers for image s
Slide 24: Achievements from the Mid-Term Management Plan
Achievements from the Mid-Term Management Plan Current Mid-Term Management Plan Pursued the business structural reform and transformed our business portfolio, including our withdrawal from the device trading business. Focused on the four growing areas, and STAr expanded its test business. Testers fo
Slide 25: Transformation of Business Portfolio (1992)
Transformation of Business Portfolio 1 (1992) Software and Service Trading Company Manufacturer （Venders’ Products） (In-house Products) 25 Hardware Hardware
Slide 26: Transformation of Business Portfolio (2018)
Transformation of Business Portfolio 2 (2018) Software and Service Trading Company Manufacturer (Venders’ Products) (In-house Products) 26 Hardware
Slide 27: Alliance on the Tester Business in China: Capital Participation 1
Alliance on the Tester Business in China: Capital Participation 1 Business alliance with V-Technology Co. Ltd. Agreed on capital participation in Z-CSET. Aim to enter into the semiconductor market in China which is rapidly expanding. (Announced on November 8) Content of Capital Participation:
Slide 28: Alliance on the Tester Business in China: Capital Participation 2
Alliance on the Tester Business in China: Capital Participation 2 Planned content of the alliance: INNOTECH provides Z-CSET with technical assistance and components to realize products and Z-CSET will assemble, sell, and provide support service for the products. Components from INNOTECH will be supp
Slide 29: STAr's Focus on Probe Business; Setting Up the US Office
STAr’s Focus on Probe Business; Setting Up the US Office Acquired business of a probe card design and manufacturing company, Probe-Logic, Inc. (Reorganization as “STAr-EDGE Technologies, Inc.”) Transformed its business strategy from the traditional approach of going through distributors to the U
Slide 30: IT ACCESS: IoT Infrastructure-ZETA Alliance
IT ACCESS: IoT Infrastructure-ZETA Alliance Collaboration on development of the platform composing the ZETA to accelerate the business deployment. LPWA low power consumption mesh network realizes the “Super Smart” society. Announcement on June 4 Participants: 32 companies Toppan Printing, Qtnet,
Slide 31: Capital Management Policy: Capital Amount
Capital Management Policy: Capital Amount Aiming to achieve around 20 billion level under the status quo of ROE being less than 5% Current Measures Within the next two years, reduce the amount of our equity capital on a consolidated-basis to 20 billion yen level by share repurchase (flexibly determi
Slide 32: 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 Completed the goal set in February Number of shares acquired: 1,509,800 shares (1,999,896,225 yen) Resolution was made to acquire more shares Number of Shares:1,500,000 Amount: 2,500,000,000 yen Acquisition Period: November 9, 2018 to July
Slide 33: Next Mid-term Management Plan
Next Mid-term Management Plan Capital Management Policy Assessment of achievement level / factor analysis of the current mid-term plan Consideration of a new mid-term vision and a mid-term management plan (Structural Reform → Growth Strategy) 33
Slide 34: 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