Slide 1: Results Briefings for Fiscal 2019 Ended March 2020
Securities ID code:6859 ESPEC CORP. Results Briefings for Fiscal 2019 Ended March 2020 May 26, 2020
Slide 2: Table of Contents
Table of Contents Company Profile Response to COVID-19 Financial Result for the Fiscal 2019 Ended March 31, 2020 Analysis per Segment for the Fiscal 2019 Ended March 31, 2020 Action Items for the Fiscal Ending March 31, 2021 Reference 1
Slide 3: Company Profile
Company Profile Industry-leading manufacturer of environmental test chambers Name ESPEC CORP. Head Office 3-5-6, Tenjinbashi, Kita-ku, Osaka Represented By Masaaki Ishida Established July 25, 1947 Incorporated January 13, 1954 Paid-up Capital ¥6,895 Million Shares Issued 23,781,394 Shares Head offic
Slide 4: Global Network
会社概要 Global Network Consolidated Subsidiaries Global Network 10 companies 46 countries Business Facilities in Japan : 25 (Global 7 companies, Domestic Agencies in Japan : 46 Domestic 3 companies) 42 companies EUROPE U.S.A. -ESPEC EUROPE GmbH ●ESPEC NORTH AMERICA, INC -ESPEC IKLIM KABINLERＩ SATIS VE
Slide 5: Summary of ESPEC Business (Per Market / Use)
Summary of ESPEC Business (Per Market / Use) Sales composition Main Products Market Use (FY2019) ・Temperature & humidity chamber ・Electronic component ・Thermal shock chamber and equipment market ・For R & D ・Bench-top type temperature & humidity chamber ・Automobile market ・For credibility Environment
Slide 6: Response to COVID-19
Response to COVID-19 ESPEC CORP. 5
Slide 7: Response to COVID-19
Response to COVID-19 ・In response to the spread of the novel coronavirus (COVID-19) in China, we have been working since late January to take measures to prevent the spread of infection and to maintain business continuity. ・We will continue rigorously implementing measures to prevent infection follo
Slide 8: Status of ESPEC CORP. and subsidiaries (Japan)
＜Reference＞Status of ESPEC CORP. and subsidiaries(Japan) As of May 26, 2020 ＜Statue of ESPEC CORP.＞ Company name Facilities Status ESPEC CORP. The Fukuchiyama Plant Continuing manufacturing while implementing (Kyoto) infection prevention countermeasures Sales and service Continuing operation by way
Slide 9: Status of subsidiaries (Overseas)
＜Reference＞Status of subsidiaries(Overseas) As of May 26, 2020 Company name Business details Status SHANGHAI ESPEC ENVIRONMENTAL Design and manufacturing of Business as usual as of the end of March EQUIPMENT CORP. environmental testing equipment ESPEC TEST EQUIPMENT Manufacturing and sales of Busine
Slide 10: Impact of COVID-19 on Earnings
Impact of COVID-19 on Earnings FY 2019 In China and other countries, some deliveries planned for March were delayed to the next fiscal year, but the impact on earnings was negligible. (We have achieved the revised plan targets for the most part) FY 2020 The global spread of coronavirus disease 2019
Slide 11: Financial Result for the Fiscal 2019 Ended March 31, 2020
Financial Result for the Fiscal 2019 Ended March 31, 2020 10
Slide 12: Unifying Fiscal Year-Ends and Postponing Adoption of IFRS
Unifying Fiscal Year-Ends and Postponing Adoption of IFRS ■ To unify the fiscal year end, overseas consolidated subsidiaries recorded a 15-month period of financial results of FY2018. However, FY2019 was a 12-month period for both domestic and overseas consolidated subsidiaries *Year on year changes
Slide 13: Financial Highlights
Financial Highlights In FY2019, orders-received for our mainstay environmental test chambers were weak due to a global economic slowdown. Profits and sales both decreased year on year, and we achieved the revised plan announced in October for the most part. Year on Year Against the revised plan Decr
Slide 14: Summary of Profits and Losses
Summary of Profits and Losses (millions of yen) Year on Year Initial plan FY 2018 FY 2018 FY 2019 FY 2019 ※Reference Results ※Reference Revised plan Results ratio ratio Orders-Received ５０，６９８ ４８，００８ ４３，０００ ４３，５７１ -９．２％ １．３％ Net sales ５０，５８０ ４７，０６０ ４２，５００ ４２，４４３ -９．８％ -０．１％ Cost of Net Sales ３２，４１７ ２
Slide 15: Review of the Fiscal 2019
Review of the Fiscal 2019 External Environment Status of ESPEC ・Sales decreased due to weak orders-received ・The trend of suppressed investment year on year for environmental test chambers continued from the start of the period in Japan and overseas due to a deterioration in the global business situ
Slide 16: Analysis of Operating Income Increase and Decrease Factor
Analysis of Operating Income Increase and Decrease Factor expenses Research and development Equipment Business (millions of yen) and personnel expenses Selling, administrative, Service Business Other Business -1,770 290 75 96 and administrative expenses Other selling, general -9 91 Commission fee -7
Slide 17: Statement of Assets and Liabilities
57,461 (millions of yen) FY 2019 16 643 Net assets Liabilities and equity -476 80 368 Noncurrent liabilities ＋101 Other current liabilities Electronically recorded obligations-operating -513 Notes and accounts payable-trade Statement of Assets and Liabilities FY 2019 FY 2018 57,46157,359 -42 -47 Inv
Slide 18: Statement of Cash Flow
(millions of yen) 1,850 17 Increase in funds -146 Effect of exchange rate change on cash and cash equivalents -931 Total financial cash flow 471 159 Other Proceeds from long-term borrowings -1,562 Cash dividends paid -1,942 Total investment cash flow -176 Other -1,765 Purchase of property, plant and
Slide 19: Analysis per Segment for the Fiscal 2019 Ended March 31, 2020
Analysis per Segment for the Fiscal 2019 Ended March 31, 2020 18
Slide 20: Performance by Segment
Performance by Segment (millions of yen) Year on Year FY 2018 FY 2018 FY 2019 FY 2019 Revised plan Segment Results Results ※Reference ratio ※Reference Revised plan ratio Orders-Received ４２，５８７ ３９，９７９ ３４，４００ ３４，６８２ -１３．３％ ０．８％ Equipment Business Net Sales ４２，６３８ ３９，２３６ ３４，５００ ３４，３６１ -１２．４％ -０．４％ Oper
Slide 21: Equipment Business
Equipment Business Environmental Test Chambers ■ In Japan, orders for versatile standardized products decreased in the second half of fiscal 2019, along with a decline in major projects for customized products. ■ Overseas, orders decreased year on year across all areas, with a particularly weak perf
Slide 22: Equipment Business
Equipment Business (millions of yen) Year on Year FY 2018 FY 2018 FY 2019 FY 2019 Revised plan ※Reference Result ※Reference Revised plan Result ratio ratio Orders-Received ４２，５８７ ３９，９７９ ３４，４００ ３４，６８２ -１３．３％ ０．８％ Net Sales ４２，６３８ ３９，２３６ ３４，５００ ３４，３６１ -１２．４％ -０．４％ Operating Income ５，１９３ ４，９０８ ２，９００ ３，
Slide 23: Service Business
Service Business (millions of yen) FY 2018 FY 2018 FY 2019 FY 2019 Year on Year Revised plan ※Reference Results ※Reference Revised plan Results ratio ratio Orders- ６，６１４ ６，５２４ ６，６００ ６，３７８ -２．２％ -３．４％ Received Net Sales ６，６１３ ６，４８６ ６，６００ ６，４５９ -０．４％ -２．１％ Operating ６２０ ５４８ ７００ ６４６ Income １７．９％ -７．７％
Slide 24: Other Business
Other Business (millions of yen) FY 2018 FY 2018 FY 2019 Revised plan Year on Year Results Revised plan Results ratio Orders-Received １，７０６ ２，２００ ２，７１５ ５９．１％ ２３．４％ Net Sales １，５４１ １，６００ １，８３１ １８．８％ １４．４％ Operating Income ９ ０ ４９ ４２８．７％ ー [Profit ratio(%)] [０．６％] [０．０％] [２．７％] *The Other Business segm
Slide 25: Breakdown of Sales by Market
Breakdown of Sales by Market Non-consolidated (Equipment business) Other markets 100% 25 26 26 27 27 Automobile market 80% Flat panel display market 24 25 24 24 60% 26 Electronic device and equipment market 3 5 3 5 2 Semiconductor market 40% 38 34 37 39 36 20% 9 10 9 7 9 0% FY2015 FY2016 FY2017 FY20
Slide 26: Sales by Region
Sales by Region FY 2018※ FY 2019 Overseas sales ratio： 47.5％ Overseas sales ratio： 43.9％ 2.7% 2.0% 18.6% 16.5% Taiwan China 3.7% 4.3% Korea FY 2018 Europe&America FY 2019 52.5% South East Asia 56.1% Other 15.8% 15.5% Japan 4.4% 1.4% 5.0% 1.5% Total: 47,060 million yen Total: 42,443 million yen （Over
Slide 27: Action Items for the Fiscal Ending March 31, 2021
Action Items for the Fiscal Ending March 31, 2021 26
Slide 28: Basic Views
Basic Views For FY2020, we envisage a significant decrease in orders-received, but we will continue to execute strategies in growth fields ・Control fixed costs and improve the cost ratio ・Strengthen initiatives in growth fields 5G and IoT are becoming increasingly necessary. Moreover, customers’ inv
Slide 29: Recognition of the Current Environment
Recognition of the Current Environment 5G and IoT markets are set to recover quickly, while the automotive market is expected to prioritize investment in the fields of automated driving and electrification Japan ：Amid deteriorating corporate earnings, 5G, IoT, and automated driving and electrificati
Slide 30: Action Items for FY 2020 (1)
Action Items for FY 2020 (1) Cultivation of 5G-related markets ・Expand the digital infrastructure field (mobile phone base stations, data centers, etc.), as well as custom products for handsets and devices, etc. ・Global marketing and sales expansion through cooperation with Group companies Strengthe
Slide 31: Action Items for FY 2020 (2)
Action Items for FY 2020 (2) Strengthen response to new needs in the commissioned testing business ・Expand the scope of compliance with various international standards ・Respond to needs for developmental testing of stationary batteries and air-transport testing for vehicle batteries ・Respond to inte
Slide 32: Start Service Enabling Environmental Testing at Home
Start Service Enabling Environmental Testing at Home May 2020 start of “Home-based online service” Support continuity of customers’ development operations When using ESPEC products When using commissioned testing center Operate equipment and monitor samples All testing operations performed on behalf
Slide 33: Strengthen Technology Development Capability
Strengthen Technology Development Capability New technology development building completed Objective ：Strengthen technology development capabilities and promote preservation of biodiversity by encouraging open innovation Concepts : “Open innovation,” “Open communication,” and “Coexistence with the n
Slide 34: Investment and Dividends
Investment and Dividends Strategic investment ・Installation of all-weather laboratory (large-scale multipurpose environmental testing equipment) ・Conversion to smart production of custom products ・Development of a new service menu for after-sales service operations Main research and development ・Dev
Slide 35: Strengthen management foundation and promote ESG
Strengthen management foundation and promote ESG Under the corporate philosophy, THE ESPEC MIND, the Company is aiming for sustainable growth E（Environmental） (1)7th Mid-term Plan on the Environment (2)Contribute to reducing the environmental load through products (3)Promote biodiversity and natural
Slide 36: New Initiatives for E (Environment)
New Initiatives for E (Environment) Realization of 100% green electricity Promotion of biodiversity and natural for commissioned testing services environment preservation activities at Kariya Test Center In January 2020, we became the first Strengthen biodiversity preservation activities commissione
Slide 37: New Initiatives for S (Society)
New Initiatives for S(Society) Started an in-office telework system Osaka Prefectural Award for where employees can work together Companies Promoting Positive with their children Cooperation between Genders As a measure to respond to emergency closure Received the “Positive Gender of elementary scho
Slide 38: Finally
Finally ・The Company’s businesses support advanced technology development and contribute to the solution of social issues. We believe that demand will certainly return during the economic recovery period, and expand over the medium term. ・The Company will work to enhance its adaptability and take st
Slide 39: Quality is more than a word
Quality is more than a word ESOEC ESPEC CORP.
Slide 40: Forward-looking statements and inquiries
These materials contain forward-looking statements, including the Company’s present plans and forecasts of performance, that reflect the Company’s plans and forecasts based on the information presently available. These forward-looking statements are not guarantees of future performance, and plans, f
Slide 41: Reference
Reference ESPEC CORP.
Slide 42: History of Environmental Test
History of Environmental Test What is Environmental Test Test to analyze and evaluate effects of environmental factors such as temperature, humidity, pressure, and light on various industrial products like electronic components in order to ensure product quality. <1950s> <1970s–1990s> <Today> The en
Slide 43: Transition in Business
Transition in Business Expanding business based on the “environmental creation technology” refined during the course of developing environmental test chambers large scale integration Integrated 5G, IoT and circuit automated driving, Eco cars such as EVs, HVs, and PHVs surface mount package ＬＣＤ stora
Slide 44: Usage Case with Environmental Test Chambers
[Equipment Business] Usage Case with Environmental Test Chambers 43
Slide 45: Main New Products
[Equipment Business] Main New Products Release Date Name of product Features ・Recreates transport environments for pharmaceuticals and medical devices Mar. 2020 Transportation Evaluation System Applications in biopharmaceutical R&D and medical equipment quality control Walk-In Type Temperature(&Humi
Slide 46: New Product Introduction (1)
[Equipment Business] New Product Introduction (1) （Released in Feb. 2020） （Released in Dec. 2019） ■Walk-In Type ■ Walk-In Type Temperature(&Humidity) Chamber Temperature(&Humidity) Chamber for High-Power Series for Drive-In Series <Features> <Features> ・Complies with international IEC standards and
Slide 47: New Product Introduction (2)
[Equipment Business] New Product Introduction (2) For the medical field （Released in Feb. 2020） For material field （Released in Dec. 2019） ■ Transportation Evaluation System ■ Thermal Air Test System ＜Features＞ ＜Features＞ ・Enables simultaneous recreation of ・Can be combined with various materials te
Slide 48: Examples of Products Delivered
[Equipment Business] Examples of Products Delivered (Delivered in July 2018) ■Delivery examples of temperature (& humidity) chambers, test chambers for use for building materials Uses Reproduce the environment inside apartments (temperature and humidity) and outdoors (weather such as rain, snow, and
Slide 49: Examples of Products Delivered
[Equipment Business] Examples of Products Delivered (Delivered in March 2016) ■Smart System Research Facility, ■National Laboratory for advanced energy storage Fukushima Renewable Energy Institute, AIST technologies (NLAB), National Institute of Technology (Koriyama city, Fukushima) and Evaluation (
Slide 50: Usage Case with Energy Device Equipment
[Equipment Business] Usage Case with Energy Device Equipment Charge-discharge Cycle Evaluation Equipment Equipment for ensuring the reliability and safety of lithium-ion secondary batteries for next-generation vehicles (e.g., hybrid and electric vehicles) socket test system Secondary battery Batteri
Slide 51: Usage Case with Semiconductor Equipment
[Equipment Business] Usage Case with Semiconductor Equipment Screening Eliminate defective products to maintain initial-period quality at the final inspection stage of semiconductor device manufacturing Semiconductors × Heat load × Burn-in chamber Elimination of latent early failures Reliability Eva
Slide 52: Service Business
[Service Business] After–sales Service and Engineering Preventive maintenance of products, maintenance service, and the upgrading/improvement and installation/relocation of products ■ Speedy response via one of the most extensive networks in Japan ■ Launching new services by utilizing the network fu
Slide 53: Service Business
[Service Business] Renovated the Toyota Test Center World’s first First testing facility in Japan to address Battery Safety Certification Center the German Automotive Manufacturer compliant with United Nations regulations Testing Standards Providing a one-stop service to support the implementation S
Slide 54: Other Business
[Other Business] Environmental Preservation ■Reforestation (Tree planting) Recovery of local forest by selecting species and planting out seedlings using potential natural vegetation data. ■Waterfront biotope restoration Reconstruction of natural environment, １ development of vegetative revetments,
Slide 55: Other Business
[Other Business] Produced a high value-added vegetables using deep-seawater At a plant factory* near Haneda Airport, production and sales of vegetables high in minerals with the use of deep sea water. * Joint research with DHC Corporation and Kyoto University Interior of the plant factory and Factor
Slide 56: Other Business Examples of Products Delivered
[Other Business]Examples of Products Delivered (Delivered in March 2016) ■Arid Land Research Center, Tottori University Products delivered: Experimental System for Analyzing Responses of Dryland plants to Climate Changes(2 units) (Simulates the climates of arid lands, including high temperature, low
Slide 57: ESPEC Identity Corporate Philosophy
ESPEC Identity Corporate Philosophy Our important values that have been passed on since our inception “THE ESPEC MIND” （Excerpt） To engage in a higher level of value exchange The Origin as a public institution Provide more certain Seikankyo (living environment) via Mission environmental creation tec
Slide 58: ESPEC Business and SDGs
ESPEC Business and SDGs Equipment Business Service Business Contribute to the development of cutting-edge technologies through the supply of products and services that harness “Environmental Creation Technology” ・Supply products and services that contribute to the development of cutting-edge technol
Slide 59: ESPEC Business and SDGs
ESPEC Business and SDGs Environmental （E） ・Contribute to global warming mitigation ・Reduce environmental impact ・Eco-site and eco-operation ・Prevent pollution ・Preserve biodiversity Social （S） ・Improve customer satisfaction and ensure product safety ・Supply chain management ・Respect human rights and
Slide 60: Initiatives tackling environmental problems
Initiatives tackling environmental problems Environmental management in line with the Mid-term Plan on the Environment Aim to contribute to the realization of a sustainable society through business activities Currently we are implementing the 7th Mid-term Plan on the Environment (planned implementat
Slide 61: Initiatives tackling environmental problems
Initiatives tackling environmental problems （March 2018） Designated as affiliated businesses of the Kebara Forest Creation Program: Creating a Mountain Full of Treasures—The Kyoto Model Forest Project, and The Japan Committee for the United Nations Decade on Biodiversity ・The Kebara Forest Creation
Slide 62: To a company where employees can be more active
To a company where employees can be more active Employee Education System Initiatives to promote women's success Enhancement ・Implement a Global Trainee Program aimed at developing human resources who are capable of working in international settings ・Enhance the education program to support From the