Marubun Corporation · TSE:7537

Marubun — Q2 FY3/2016 Earnings Presentation

42 slides from Marubun's earnings presentation, November 2015

1. Slide 1: Financial Results for the 2nd Quarter of Fiscal Year Ending March 31, 2016

   Financial Results for the 2 nd Quarter of Fiscal Year Ending March 31, 2016 November 2015 (Securities Code：7537 / TSE1st Section) Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

2. Slide 2: 1H FY3/16 Summary of Consolidated Financial Results

   1H FY3/16 Summary of Consolidated Financial Results Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

3. Slide 3: 1H FY3/16 Summary of Consolidated Financial Results

   1H FY3/16 Summary of Consolidated Financial Results Net sales increased by ¥24 billion (+19.9% YoY)  Electronic Devices Business Increased 20.5% as a result of robust sales of Special-Use ICs for communication modules and other ICs for automobile and projector  Electronic Systems Business Increase

4. Slide 4: Summary of Financial Results

   1H FY3/15 Summary of Financial Results (\ million) 1H FY3/15 1H FY3/16 YoY Changes FY3/16 Initial Forecasts Compositi Composition Composition Actual Actual Amount ％ 1H Ratio Ratio on Net sales 123,240 100.0% 147,803 100.0% 24,563 19.9% 137,000 100.0% Electronic Devices 107,538 87.3% 129,599 87.7% 22

5. Slide 5: Electronic Devices Business Net Sales Breakdown by Product

   1H FY3/15 Electronic Devices Business Net Sales Breakdown by Product 129,599 16,098 Electronic Components （¥ million） Increase for TV , PC and smartphone 107,538 5,687 Custom IC Decrease in ICs for consumer electronics 13,498 9,181 Special-Use IC 66,501 Increase in ICs for communication modules and

6. Slide 6: Electronic Devices Net Sales Breakdown by Application

   1H FY3/15 Electronic Devices Business Net Sales Breakdown by Product Application Market Trend Communication Equipment Increase in ICs for communication modules and infrastructure Consumer Electronics Decrease in ICs for game consoles and digital cameras Computers & OA Equipment Increase in ICs for p

7. Slide 7: Electronic Systems Business Net Sales Breakdown by Product

   1H FY3/15 Electronic Systems Business Net Sales Breakdown by Product （¥ million） 18,203 15,701 Medical Equipment Increase as a result of inclusion a consolidated subsidiary 7,450 5,379 Laser Equipment Increase in marking laser for industrial equipment 1,478 1,961 500 393 Scientific Equipment Decreas

8. Slide 8: Factors Affecting Ordinary Income

   1H FY3/15 Factors Affecting Ordinary Income Decrease in SG&A Expenses （¥ million） Decrease in foreign exchange losses Other Non-operating Income Increase in Gross Profit 29 & Losses 403 (291) 1,492 782 568 1H FY3/15 1 2 3 4 5 1H FY3/16 6 Gross Profit Increase of Net sales 1H FY3/15: ¥8,166million(6.

9. Slide 9: Summary of Balance Sheets

   End 1H FY3/15 Summary of Balance Sheets (\ million) FY3/15 End 1H FY3/16 End Changes in 6 m/s Actual Actual Amount Current assets 117,084 113,483 (3,601) Cash and deposits 21,725 14,459 (7,266) Notes and accounts receivable-trade 63,393 63,900 507 Inventories 28,818 31,266 2,448 Other 3,147 3,857 71

10. Slide 10: Summary of Statements of Cash Flows

    1H FY3/15 Summary of Statements of Cash Flows (\ million) 1H FY3/15 1H FY3/16 Actual Actual Net cash provided by (used in) operating 8,123 (1,332) activities Income before income taxes 564 1,431 Decrease (increase) in notes and 4,078 493 accounts receivable-trade Decrease (increase) in inventories (

11. Slide 11: Medium-Term Vision Strategies and Key Initiatives

    Medium-Term Vision Strategies and Key Initiatives Copyright © MARUBUN CORPORATION All Rights Reserved.

12. Slide 12: Summary of Medium-Term Vision

    Summary of Medium-Term Vision Transforming into a robust company Vision that can realize sustainable growth Slogan Think & Action（Ｔ＆Ａ） View structural changes as an opportunity, accelerate management reforms, and conduct positive management to make a breakthrough Electronic Devices Electronic System

13. Slide 13: Electronic Devices: Expand Fundamental Business

    Electric Devices Business: Four T & A (1) Expand fundamental business Supplier Customer Marubun  Systematically manage sales activities with Build a technical support system the SFA* Step up FAE* and  Measure the degree sales activities Shared strategy of achievement with Improve skills for KPIs*

14. Slide 14: Focus Markets

    Electric Devices Business: Four T & A (2) Step up actions for growth markets Focus attention on IoT* - Develop original evaluation boards and present different solutions to Communications move the cultivation of the market forward. Step up efforts related to ADAS* and other Focus Markets next-gen te

15. Slide 15: Promote Development of New Products

    Electric Devices Business: Four T & A (3) Promote development of new products Offering the latest technologies and products in form of solutions to at least 50 companies based mainly in the United States, Taiwan, and China conductor • OpenSilicon(ASIC) Semi- • Baysand(ASIC) • SanDisk(Flash/SSD) Bays

16. Slide 16: Enhance Global Operations

    Electric Devices Business: Four T & A (4) Enhance global operations Further build up overseas support capabilities through the use of Arrow’s wide-ranging products, bases, and distribution data infrastructure Marubun/Arrow ９ countries, 23 bases Arrow Electronics 56 countries, 460 bases MARUBUN USA C

17. Slide 17: Electronic Systems Business: Three T&A

    Electric Systems Business: Three T & A Market-In & Customer-In concept Move ahead with differentiation by offering services and solutions that answer the varying needs of each individual customer Strengthen Enhance (1) engineering (2) system (3) Enrich product integration line-up services capabiliti

18. Slide 18: Medium-Term Vision Progress of Business Strategies

    Medium-Term Vision Progress of Business Strategies Copyright © MARUBUN CORPORATION All Rights Reserved.

19. Slide 19: FY3/16 Summary of Consolidated Financial Forecasts

    FY3/16 Summary of Consolidated Financial Forecasts Copyright © MARUBUN CORPORATION All Rights Reserved.

20. Slide 20: FY3/16 Summary of Financial Forecasts

    FY3/16 Summary of Financial Forecasts Net sales expected ¥284 billion (+3.8% YoY)  Electronic Devices Business Increase in ICs for automobile , industrial equipment and telecommunications infrastructure  Electronic Systems Business Increase in medical equipment , inclusion a consolidated subsidiar

21. Slide 21: FY3/16 Financial Forecasts

    FY3/16 Financial Forecasts (\ million) FY3/15 FY3/16 YoY Changes Composition Composition Actual Ratio Forcast Amount ％ Ratio Net sales 273,683 100.0% 284,000 100.0% 10,317 3.8% Electronic Devices 234,428 85.7% 237,000 83.5% 2,572 1.1% Electronic Systems 39,254 14.3% 47,000 16.5% 7,746 19.7% Gross pr

22. Slide 22: Electronic Devices Net Sales Forecasts by Product

    FY3/16 Electronic Devices Business Net Sales Forecasts by Product 234,428 237,000 Electronic Components 28,014 31,139 Increase in PV panels, Connector and PCB (million) 10,905 Custom IC 14,587 Decrease in ICs for consumer electronics 105,658 Special-Use IC 107,105 Decrease in ICs for communication m

23. Slide 23: Electronic Systems Net Sales Forecasts by Product

    FY3/16 Electronic Systems Business Net Sales Forecasts by Product 47,000 (million) 39,254 20,080 Medical Equipment Increase in diagnostic imaging equipment and inclusion a consolidated subsidiary 14,582 Laser Equipment 4,982 Increase in marking laser and network equipment 3,822 797 Scientific Equipm

24. Slide 24: FY3/16 Factors Affecting Ordinary Income (Forecasts)

    FY3/16 Factors Affecting Ordinary Income (Forcasts) Increase in Decrease in foreign exchange （¥ million） SG&A Expenses losses Other Non-operating Increase in Gross Profit Income and losses (288) 4,500 904 854 (856) 3,886 FY 3/15 1 2 3 4 5 FY 3/16 6 Actual Forcast Increase by expansion of net sales G

25. Slide 25: Return to Shareholders

    Return to Shareholders  Change in a dividend policy The greater, 25% or more(consolidated) Dividend or 30% or more(non-consolidated) Payout Ratio 30% or more(consolidated)  Dividends Forecast FY 3/16 （\） FY 3/15 （Forcasts） Annual Dividend per Share 20.00 30.00 ¥10 Interim Dividend 7.00 12.00 UP Ye

26. Slide 26: Appendix

    Appendix Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

27. Slide 27: Corporate Outline

    Corporate Outline Net Sales  Establishment July 1947 Electronic Devices 85.7% Electronic Systems 14.3%  Capital ¥6,214 million  Activities Distribution of Cutting-edge Electronics Products FY3/15 Results  Headquarters Chuo-ku, Tokyo by Segment  Consolidated 273,683 million yen(FY3/15) Net Sales

28. Slide 28: History of Company Operations

    History of Company Operations Japan Over Seas 2013 2014 Business acquisition Hokushin Rika. Established subsidiary in Indonesia and Mexico. 2013 2007 Established subsidiary in Shenzhen, China. Business acquisition of Foresight Techno Co.,Ltd. 2005 2006 Established Marubun Semicon Corporation Establi

29. Slide 29: Trend of 10 years

    Trend of 10 years （¥ million） Net Sales Foreign Sales Ratio 300,000 60.0% 250,000 50.0% 200,000 40.0% 150,000 30.0% 100,000 20.0% 50,000 10.0% 0 0.0% FY3/05 FY3/06 FY3/07 FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 29 Copyright © 2002-2014 MARUBUN CORPORATION All Rights Reserved.

30. Slide 30: Domestic Offices

    Domestic Offices Operations IKEDA IRYOUDENNKI CO., LTD Branch (Head Office:Niigata) Sales Office MARUBUN TSUSHO CO., LTD.(Head Office:Kanazawa) Kanazawa Nanao Logistics Center Toyama Hakusan Center Affiliated Company Fukui Tokyo Matsumoto Kofu HOKUSHIN RIKA Nagano (Head Office:Nagano) Omiya Matsumot

31. Slide 31: World-wide Sales Network

    World-wide Sales Network Marubun/Arrow (Shanghai) Co., Ltd （Shanghai） Marubun USA Corporation Chicago Nanjing,China Marubun/Arrow USA, LLC Dalian,China (Head Office：Santa Clara) Denver Detroit Marubun Corporation Reno Marubun/Arrow (Shenzhen) Electronic Products Consulting Co., Ltd. (Shenzhen,China)

32. Slide 32: Characteristic and Strength - Electronic Devices

    Characteristic and Strength -Electronic Devices- Electronic Devices  Wide Range of Products made by Leading Semiconductor Manufacturers  Global Sales Network in alliance with Arrow Electronics, Inc.  Suggesting Solutions by high technology skill  Broad Customer base Broad Product Lineup Design A

33. Slide 33: Affiliations - Electronic Devices

    Affiliations -Electronic Devices- Electronic Devices Company Headquarters Establishment Shares Principal Business Marubun Semicon Corporation Minato-ku, Tokyo Mar. 2005 100.0% Marubun Semicon (Shanghai) Co., Ltd. Shanghai, China Mar. 2005 100.0% Devices Business Marubun Semicon (H.K.) Ltd. Hong Kong

34. Slide 34: Main Products (by Application) - Electronic Devices

    Main Products (by Application) -Electronic Devices- Application Electronic Devices Computer & OA Communication Automobile Equipment Equipment Equipment Consumer Industrial Semiconductor Analog ● ● ● ● ● Industrial Analog IC Discrete ● ● ● ● Equipment & Standard Logic IC ● ● ● ● ● Other DRAM ● ● ● ●

35. Slide 35: Main Products (by Supplier) - Electronic Devices

    Main Products(by Supplier) -Electronic Devices- Electronic Devices Supplier Microdevices Open Silicon Instruments Seiko Epson Asahi Kasei Broadcom Unimicron Freescale Samsung Baysand SanDisk Maxim Qorvo Texes Molex Etron APCB ISSI Semiconductor Analog ● ● ● ● ● Analog IC Discrete ● Standard Logic IC

36. Slide 36: Characteristic and Strength - Electronic Systems

    Characteristic and Strength -Electronic Systems- Electronic Systems  Providing Unrivaled Products in High-end Markets  Value-added Technical Support (System Integration, Installation and Maintenance Services) Our Function  Marketing  Consultation Order Order  Technical support Customer Supplier

37. Slide 37: Affiliations - Electronic Systems

    Affiliations -Electronic Systems- Electronic Systems Company Headquarters Establishment Shares Principal Business Marubun Tsusho Co.,Ltd. Kanazawa, Ishikawa Mar. 1961 100.0% Systems Business Hokushinrika Nagano, Nagano Nov. 1951 100.0% Systems Business Ikeda iryoudenki Co.,Ltd. Niigata, Niigata Aug.

38. Slide 38: Main Products - Electronic Systems

    Main Products -Electronic Systems- Electronic Systems Segment Main Products Major Supplier High-reliability Components, Tele Communication Systems、 Space and Space and Sensors Plascore,Lavision Defense Defense Avionics Test System, Electronics CPI,L3 Communications Electronics Microwave Equipment Me

39. Slide 39: Trend in Orders/Sales

    Trend in Orders/Sales Orders Sales Electronic Devices Electronic Systems Electronic Devices Electronic Systems 82,764 79,502 78,633 （¥million） 77,508 75,147 78,586 72,935 12,345 10,168 10,385 （¥million） 68,956 69,169 69,096 13,334 13,991 9,561 12,848 60,225 9,061 8,035 9,800 54,283 8,962 6,640 70,41

40. Slide 40: Trend in Sales of Electronic Devices by Products

    Trend in Sales of Electronic Devices by Products 68,465 （¥million） 63,373 7,960 63,516 61,133 2,962 59,895 7,740 6,775 Electronic 8,138 7,962 2,677 2,730 Components 2,724 Custom IC 4,387 47,643 5,537 36,711 31,329 28,415 Special-Use IC 4,794 29,790 28,638 Micro-Processor 18,723 10,453 10,033 9,787 9

41. Slide 41: Trend in Sales of Electronic Systems

    Trend in Sales of Electronic Systems Medical Equipment Laser （¥million） Equipment 5,291 Scientific 3,651 Equipment 1,583 3,161 3,912 494 3,799 909 Measurement & 2,218 893 762 321 98 324 Inspection 584 4,784 402 1,053 Equipment 3,869 72 4,057 3,289 Space and 2,935 2,569 Defense 1,276 1,839 1,039 1,23

42. Slide 42: Cautionary Statement

    Cautionary Statement Within the presentation, information on the future performance such as results forecasts is based on the data available at the time this presentation was prepared that the Company assumes reasonable. Actual performance depends on various important factors and may differ signific

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