Hirose Electric Co., Ltd. · TSE:6806
Hirose Electric — FY2020 Earnings Presentation
29 slides from Hirose Electric's earnings presentation, May 7, 2021
Slide 1: Business Results for FY2020
Hirose Electric Business Results for FY2020 Business Results for FY2020 May 7, 2021 Hirose Electric Co., Ltd. 〔6806〕
Slide 2: Cautionary Statement
Cautionary Statement In this material, there are descriptions based on current estimation by Hirose Electric. Hirose cautions you that a number of important risks, uncertainties and others could cause actual results to differ materially from those discussed in the *forward-looking statements. Thank
Slide 3: Summary of the business results (FY2020 April 2020 to March 2021)
Summary of the business results (FY2020 From April, 2020 to March, 2021) HS @ In FY2020, the sales for consumer and mobile equipment increased and the sales for automotive has been recovering from the second half. As a result, orders and sales of FY2020 was record high. Sales increased by 9.7% compa
Slide 4: Changes in sales and operating profit (FY2019.1Q-FY2020.4Q)
HS Changes in sales and operating profit (FY2019.1Q-FY2020.4Q / Consolidated basis) magSales Operating profit -O-Operating profit ratio (Yen in hundred millions) 374.4 19.1Q 19.2Q 19.3Q 19.4Q 20.1Q 20.2Q 20.3Q 20.4Q
Slide 5: Business Results for FY2020
Business Results for FY2020 HS FY2019 FY2020 (FY ended Mar 31, 2021) Increase Increase / Decrease / Decrease Ratio (Yen in hundred millions) (RICHES Ss 22) (YoY) (YoY) Sales 1,217.6 1,300.0 1,335.4 +117.7 +9.7% COGS Ratio 57.8% 58.2% 57.6% A0.2 SGA Ratio 25.0% 22.7% 22.6% A2.4 Operating Profit 203.6
Slide 6: FY2020 Major Changes
FY2020 Major Changes HS Sales 117.7 hundred million yen Increased (1,217.6 > 1,335.4) (Yen in hundred millions) Non consolidated Hirose: +85.5 Subsidiaries: +32.2 COGS Ratio 0.2pt Improved Depreciation Ratio: 10.5% > 9.9% (57.8% > 57.6%) Labor-cost Ratio: 6.8% > 6.8% SGA Ratio 2.4pt Improved (25.0%
Slide 7: FY2020 YoY Variation Analysis
FY2020 YoY Variation Analysis Operating Earnings before (Yen in hundred millions) Sales Profit (%) income tax (%) FY2019 Actual 1,217.6 203.6 16.7% 212.1 17.4% Exchange rate ‐8.6 ‐9.1 ‐11.0 Depreciation cost increase ‐8.6 ‐8.6 Labor cost increase ‐12.5 ‐12.5 Increase in freightage and packing expens
Slide 8: Changes in operating profit excluding temporary factors
HS Changes in operating profit excluding temporary factors (FY2019.1Q-FY2020.4Q) Operating profit -O-Operating profit ratio — (Yenin hundred millions) 83.5 70.0 66.4 62.0 56.8 15.9% 14.8% 16.1% 19.1Q 19.2Q 19.3Q 19.4Q 20.1Q 20.2Q 20.3Q 20.4Q (Yen in hundred millions) Operating Profit 53.4 62.0 46.7
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet HS sjassy (Yen in hundred millions) Increase / Account Mar 31, 2020 Mar 31, 2021 D Remark ecrease = Mainly because expenditure for capital Cash and cash 505.6 578.4 investment decreased and headquarters did equivalents not do interim payment Due to the sales increase in Ma
Slide 10: Consolidated Balance Sheet
Consolidated Balance Sheet HS (Yen in hundred millions) Account Mar 31, 2020 | \VWETsesiylepal eee Remark Decrease : Accounts payable increased because of : Payables and other debt 167.5 195.1 ncrease ip eurrent production — : Lease liabilities 44.9 44.0 9: 7 ao! emporarily increased because we were
Slide 11: Changes in Capital Investment and Depreciation
HS Changes in Capital Investment and Depreciation "Capital Investment Mi Depreciation (Yen in hundred millions) ~O-Capital Investment Ratio -O- Depreciation Ratio (%) 186 170 159 ee 123% 120% FY2017 FY2018 FY2019 FY2020 FY2021 Forecast (*Excluded: Investment in land, building, software) 11
Slide 12: Overseas production and sales ratio
Overseas production and sales ratio a 76% 71% 71% 72% we —O ° o- “O— 48% 45% 46% o- 43% 42% oO ° ~O-Overseas Sales Ratio -O-Overseas Production Ratio FY2016 FY2017 FY2018 FY2019 FY2020 12
Slide 13: Number of Employees (Financial Report Basis)
Number of Employees ( Financial Report Basis ) (Number of employees) | Overseas i Domestic Mar, 2017 Mar, 2018 Mar, 2019 Mar, 2020 Mar, 2021 13
Slide 14: Distribution of Shareholders
Distribution of Shareholders sha [2,904 | (People) 5.32% 13.05% 12.92% 4.70% 4.15% 4.09% 46.08% 43.04% 41.30% Mar, 2017 Mar, 2018 Mar, 2019 5.51% 4.95% 4.44% 3.94% Treasury Stocks 41.26% 43.18% Individual and Others Foreign Corporation ™ Other Corporation @ Securities Firm @ Financial Institution 33
Slide 15: Sales by Application_General Industrial
a Sales by Application_General Industrial (Yen in hundred millions) 179 91 103 373 198 97 109 404 +8% Sales @ FY2020 Composition ratio @ Changes in quarterly sales 103 103 95 97 109 93 86 91 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 @ The recovery of demand related FA market supported our sales and the
Slide 16: Sales by Application_Smartphone
a Sales by Application_Smartphone (Yen in hundred millions) FY2020 / 153 75 72 299 146 =100 7. Sif +6% Sales @ FY2020 Composition ratio @ Changes in quarterly sales 100 85 89 75 68 72 71 57 24% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 ™@ Higher specification for new models compatible 5G contributed to
Slide 17: Sales by Application_Automotive/Mobility-related
Sales by Application_Automotive/Mobility-related a (Yen in hundred millions) FY2019 FY2020 FY2020 / 116 61 54 232 91 75 72 = ~=238 YoY Sales +3% @ FY2020 Composition ratio @ Changes in quarterly sales 75 72 60 61 56 54 52 39 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 ™ Due tothe recovery of demand starti
Slide 18: Sales by Application_Consumer/Mobile Equipment
HS (Yen in hundred millions) FY2019 FY2020 FY2020 / 3Q 4Q FY19 Sales 97 51 45 194 Sales by Application_Consumer/Mobile Equipment @ FY2020 Composition ratio @ Changes in quarterly sales 52051 51 45 45 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2019 FY2020 @ Remote working became more popular and the demand for person
Slide 19: Sales by Application_Telecommunications infrastructure equipment / OA equipment
Fr: Sales by Application_Telecommunications infrastructure equipment / OA equipment (Yen in hundred millions) FY2019 FY2020 | vor | FY2020 / FY19 FY20 FY2019 Telecommunications infrastructure -3% equipment OA equipment 13 8 6 27 10 5 6 21 -22% @ FY2020 Composition ratio @ Changes in quarterly sales
Slide 20: Annual sales forecast by applications
Annual sales forecast by applications (round number) HS FY2020 FY2021 FY2020 FY2021 FY2020 FY2021 Actual Forecast Actual Forecast Actual Forecast General Automotive / Smartph Industrial bia alle Mobility related @ General Industrial +8% @ Smartphone -2% @ Automotive / Mobility-related +10% @ Consume
Slide 21: Business Forecast for the Year Ending March 31, 2022 (Consolidated)
HS Business Forecast for the Year Ending March 31, 2022 (Consolidated) (Yen in hundred millions) First Half Over the For the Year Over the FY2020 (FY ended March 31, FY2021 (FY ending March 31, . P 2021) Actual 2022) Forecast Previous Actual Previous Aetual First Half For the Year First Half For the
Slide 22: Medium-term capital policy-1 Shareholder Return
Medium-term capital policy-1 Shareholder Return 1. Dividend 2. Treasury Shares v Basic policy: from FY2021 to FY2024 dividend payout ratio: 50% vIn FY2021, the annual dividend will be increased 20 yen Vv Interim dividend 130 yen (€120) Annual dividend 260 yen (€240) v Carry out share buyback (up to
Slide 23: Medium-term capital policy-2 Cash flow from FY2021 to FY2024
Medium-term capital policy-2 Cash flow from FY2021 to FY2024 Use of operating cash flow (image) 1,500 Free cash flow Strategic investment Operating cash flow Capital investment 0 (Yen in hundred millions) Use of free cash flow (image) 300 Free cash flow Dividend 300 Share buyback (Yen in hundred mil
Slide 24: Medium-term capital policy-3 The forecast of ROE
HS Medium-term capital policy-3_ The forecast of ROE We will improve capital efficiency by our new shareholder returns from FY2021 to FY2024 and improve profitability, and strive to achieve our ROE target, 8%. Ca%)) The shareholder’s equity cost: 5.8%-6.4% 2019 2020 2021 2022 2023 2024 (FY) 24
Slide 25: Medium-term capital policy-4 For our stakeholders
HS Medium-term capital policy-4 For our stakeholders Provide a stable supply of high added value and high quality products *Supply for a lump sum target award *New personnel system and review of evaluation and compensation system HEeEAS } k \ i eecHer cate stir ct Continue doing fair business with :
Slide 26: Executive appointment associated with the transition to a company with audit & supervisory committee
HS Executive appointment associated with the transition to a company with audit & supervisory committee Purpose of establishment of audit & supervisory committee We will establish Audit & Supervisory Committee which the majority of the committee members consists of outside directors, and grant direc
Slide 27: Change in Personnel (On and After Jun 25th 2021)
Change in Personnel (On and After Jun 25** 2021) President Kazunori Ishii (Reappointed) Group President, Engineering Group and in charge of Production Senior Managing Director Mitsuo Nakamura (Reappointed) Group Director Group President, Production Group Yukio Kiriya (Reappointed) Director Group Pre
Slide 28: Appendix
Appendix
Slide 29: Sales by Applications round number (quarterly basis)
HS Sales by Applications round number (quarterly basis) (Yen in hundred millions) FY2019 FY2020 FY2020 —~ Composition 12 22 #32 4Q@ #«1Q +«©2Q ~~ 3a ee General Industrial 86 93 91 103 103 95 97 Smartphone 68 85 75 72 57 89 Automotive / Mobility-related 56 60 61 94 39 32 Consumer / Mobile Device 45 5