Slide 1: Results Briefings for Fiscal 2017 Ended March 2018
Securities ID code:6859 ESPEC CORP. Results Briefings for Fiscal 2017 Ended March 2018 May 23, 2018 www.espec.co.jp
Slide 2: Table of Contents
Table of Contents Company Profile Financial Result for the Fiscal 2017 Ended March 31, 2018 Analysis per Segment for the Fiscal 2017 Ended March 31, 2018 Business Plan for the Fiscal Ending March 31, 2019 "Progressive Plan 2021" Medium-term Management Plan 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 ¥6,895Million Shares Issued 23,781,394 Shares Head office E
Slide 4: Global Network
会社概要 Global Network Consolidated Subsidiaries Global Network 10 companies 45 countries Business Facilities in Japan : 25 (Global 7 companies, Domestic Agencies in Japan : 46 Domestic 3 companies) 33 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 (FY2017) ・Electronic component ・Temperature & humidity chamber and equipment market ・Thermal shock chamber ・For R & D ・Automobile market ・Bench-top type temperature & humidity chamber ・For credibility Environment
Slide 6: Equipment Business Topics: Low-GWP refrigerant products
【Equipment Business】 ＴＯＰＩＣＳ （in July 2017 and March 2018） ESPEC launches sales of low-GWP refrigerant products, the first chambers in Japan to be compliant with European F-gas Regulation* ・Environmental test chambers will be regulated from 2020 Similar regulations will start in Japan from 2025 ・We w
Slide 7: Equipment Business Topics: Examples of Products Delivered
【Equipment Business】 ＴＯＰＩＣＳ：Examples of Products Delivered （March 2018） Environmental test equipment installed at Saitama Industrial Technology Center Supporting development in advanced industry fields such as medical devices and robotics ■Saitama Industrial Technology Center（ＳＡＩＴＥＣ、Saitama Prefectu
Slide 8: Financial Result for the Fiscal 2017 Ended March 31, 2018
Financial Result for the Fiscal 2017 Ended March 31, 2018 7
Slide 9: Review of the Fiscal 2017
Review of the Fiscal 2017 External Environment Developments within ESPEC ・Foreign exchange (U.S. dollar/yen) is ・Effectively started a “ONE ESPEC Structure” at $1 to ¥104~114 in the Chinese market ・Acceleration of EV conversion in line ・Expanded product line for Europe with strengthening of environm
Slide 10: Financial Highlights
Financial Highlights Sales and profit both increased year on year and exceeded the revised plan in FY2017 Year on Year Against the revised plan The Equipment Business increased Investments continued to increase, against ■Orders- expectations both in Japan and ○ overseas (especially environment test
Slide 11: Summary of Profits and Losses
Summary of Profits and Losses (millions of yen) FY 2017 Against the FY 2016 FY 2017 Year on Year Revised Plan revised plan Orders-Received ４０，２８９ ４４，０００ ４４，７７５ １１．１％ １．８％ Net sales ３９，５０７ ４４，０００ ４４，０６９ １１．５％ ０．２％ Cost of Net Sales ２６，０５９ ２８，４９７ ２８，４８７ ９．３％ －０．０％ (Cost of sales ratio) （６６．０％） （６４．７％）
Slide 12: Performance by Segment
Performance by Segment (millions of yen) FY 2017 Against the Segment FY 2016 FY 2017 Year on Year Revised Plan revised plan Orders-Received ３３，１２４ ３６，８００ ３７，０７６ １１．９％ ０．８％ Equipment Net Sales ３２，３３４ ３６，８００ ３６，６０２ １３．２％ －０．５％ Business Operating Income ２，６３０ ３，８００ ４，０９２ ５５．６％ ７．７％ Orders-Received ６，０９
Slide 13: Analysis of Operating Income Increase and Decrease Factor
Analysis of Operating Income Increase and Decrease Factor Equipment Business (millions of yen) Service Business Other Business 21 －6 －334 606 －182 83 －０ －258 personnel expenses administrative, and Selling, Commission fee expenses and administrative Other selling, general 1,430 4,602 3,243 1,552 581
Slide 14: Statement of Assets and Liabilities
54,588 13 (millions of yen) FY２０１７ 368 2894 Net assets Liabilities and equity 負債・純資産の部 Noncurrent liabilities 575 1497 5,544 Other current liabilities Electronically recorded monetary claims - operating Notes and accounts 208 FY２０１６ payable-trade 54,58849,044 Statement of Assets and Liabilities FY２０
Slide 15: Statement of Cash Flow
2,709 14 Increase in funds (millions of yen) Effect of exchange rate change 31 on cash and cash equivalents －1019 Total financial cash flow －16 Other －1,002 Cash dividends paid －499 －69 －269 Total investment cash flow Other Purchase of property, plant and equipment and intangible assets 300 Net decr
Slide 16: Analysis per Segment for the Fiscal 2017 Ended March 31, 2018
Analysis per Segment for the Fiscal 2017 Ended March 31, 2018 15
Slide 17: Equipment Business
Equipment Business Environmental Test Chambers ■Both orders-received and net sales increased year on year Orders-received exceeded the previous year, including at overseas subsidiaries, especially because of increases of standardized products both in Japan and for exports Net sales exceeded the prev
Slide 18: Equipment Business
Equipment Business (millions of yen) FY 2017 Against the FY 2016 FY 2017 Year on Year Revised Plan revised plan Orders-Received ３３，１２４ ３６，８００ ３７，０７６ １１．９％ ０．８％ Net Sales ３２，３３４ ３６，８００ ３６，６０２ １３．２％ －０．５％ Operating Income ２，６３０ ３，８００ ４，０９２ ５５．６％ ７．７％ [８．１％] [１０．３％] [１１．２％] [Profit ratio(%)] 17
Slide 19: Service Business
Service Business (millions of yen) FY 2017 Against the FY 2016 FY 2017 Year on Year Revised Plan revised plan Orders-Received ６，０９６ ６，２００ ６，４８８ ６．４％ ４．６％ Net Sales ６，０６５ ６，２００ ６，２９２ ３．７％ １．５％ Operating Income ５９４ ６００ ５２４ －１１．７％ －１２．６％ [９．８％] [９．７％] [８．３％] [Profit ratio(%)] After-sales Service and En
Slide 20: Other Business
Other Business (millions of yen) FY 2017 Against the FY 2016 FY 2017 Year on Year (Revised Plan) revised plan Orders-Received １，３３１ １，３００ １，４１６ ６．４％ ８．９％ Net Sales １，３７８ １，３００ １，３７５ －０．２％ ５．８％ Operating Income １８ ０ －１５ ー ー [Profit ratio(%)] [１．３％] [０．０％] [－１．１％] The forest wetland and greening Busin
Slide 21: Breakdown of Sales by Market
Breakdown of Sales by Market Non-consolidated (Equipment business) 100% Other markets 24 23 25 26 26 Automobile market 80% Flat panel display market 22 23 24 25 24 Electronic device and 60% 5 3 equipment market 3 5 5 Semiconductor market 40% 39 40 38 34 37 20% 10 10 9 10 9 0% FY2013 FY2014 FY2015 FY
Slide 22: Sales by Region
Sales by Region FY 2016 FY 2017 Overseas sales ratio： ４２．２％ Overseas sales ratio： ４４．２％ 2.8% 2.4% 15.2% 15.6% Ta i w a n Chi na 4.1% Korea 4.2% E urope&A m eri ca FY2016 South E a s t A s i a FY2017 57.8% 14.4% Other 55.8% 16.3% J a pa n 4.9% 5.0% 0.8% 0.7% Total: ３９，５０７million yen Total: ４４，０６９mill
Slide 23: Management Plan for the Fiscal Ending March 31, 2019
Management Plan for the Fiscal Ending March 31, 2019 22
Slide 24: Business Environment by Segment for FY2018
FY 2018 Awareness of the Environment Strong investment sentiment in the automobile market, both in Environmental Test ◎ Japan and overseas based on ongoing computerization, use of electronic components and development of automated driving. Chambers Equipment Business Investments continued to be made
Slide 25: Making All Overseas Subsidiaries Share the Same Fiscal Year-End
Making All Overseas Subsidiaries Share the Same Fiscal Year-End From fiscal 2018, the fiscal years of overseas consolidated subsidiaries (previously December) will be made the same as the fiscal years for consolidated subsidiaries in Japan (March). To accommodate this change, the overseas consolidat
Slide 26: FY 2018 Assumed exchange rate
FY 2018 Assumed exchange rate ■Assumed exchange rate FY 2016 FY 2017 FY 2018 First half Results Results Assumed Results US$（yen） 108.81 112.34 112.17 110.00 Reference. FY 2018 Exchange rate sensitivity (for every appreciation of ¥1 against the U.S. dollar) Net Sales A decrease of ¥131 million Operat
Slide 27: Business Plan for the Fiscal Ending March 31, 2019
Business Plan for the Fiscal Ending March 31, 2019 (millions of yen) FY 2017 FY 2018 Reference: Plan for 12-month financial Plan results period for overseas consolidated subsidiaries Results Year on First half Second half Full Year Full Year Year(%) Orders-received ４４，７７５ ２３，０００ ２５，５００ ４８，５００ ４６，０００
Slide 28: Equipment Business
Equipment Business (millions of yen) FY 2017 FY 2018 Reference: Plan for 12-month Plan financial results period for overseas consolidated subsidiaries Results Year on First half Second half Full Year Full Year Year(%) Orders- ３７，０７６ １９，４００ ２１，２５０ ４０，６５０ ３８，２００ ３．０％ received Net sales ３６，６０２ １７，２００ ２
Slide 29: Service Business
Service Business (millions of yen) FY 2017 FY 2018 Reference: Plan for 12-month Plan financial results period for overseas consolidated subsidiaries Results Year on First half Second half Full Year Full Year Year(%) Orders- ６，４８８ ３，１００ ３，５５０ ６，６５０ ６，６００ １．７％ received Net sales ６，２９２ ２，９００ ３，６５０ ６，５５
Slide 30: Other Business
Other Business (millions of yen) FY 2017 FY 2018 Reference: Plan for 12-month Plan financial results period for overseas consolidated subsidiaries Results Year on First half Second half Full Year Full Year Year(%) Orders- １，４１６ ６００ ８００ １，４００ １，４００ －１．１％ received Net sales １，３７５ ５００ ９００ １，４００ １，４００ １
Slide 31: Dividends
Dividends Dividend policy Recognizing that passing on profits to our shareholders is a key priority and that raising corporate value on a lasting basis is fundamental to raising shareholder value, dividends are decided taking into account sustainability and the dividend payout ratio. Dividend per sh
Slide 32: Medium-Term Management Plan Progressive Plan 2021 (FY 2018 to FY 2021)
Medium-Term Management Plan “Progressive Plan 2021” (FY 2018 to FY 2021) 31
Slide 33: Review of Progressive Plan 2017: Results
Review of Medium-Term Management Plan “Progressive Plan 2017” ① Results：Net sales ¥44,069 million, Operating income ¥4,602 million, and an operating income ratio 10.4％ plan ：Net sales of over ¥40,000 million, operating income of ¥4,000 million or more, and an operating income ratio of at least 10% N
Slide 34: Review of Progressive Plan 2017: Three directions for growth
Review of Medium-Term Management Plan “Progressive Plan 2017” ② Three directions Results Issues to be addressed for growth ・Expanded earnings by rebuilding the China business under the ONE ESPEC system Strengthen Group ・Further expand business in ・Strengthened sales and after-sales service alliances
Slide 35: ESPEC Vision 2025 Stage II
Medium-Term Management Plan“Progressive Plan 2021” ESPEC Vision 2025 StageⅡ Stable sustainable growth through strategic investment and steady improvement of quality Targets achieved Medium-Term Medium-Term ESPEC Vision 2025 Management Plan Management Plan Medium-Term FY 2025 target PROGRESSIVE Manag
Slide 36: Basic Policy and Plan Composition
Medium-Term Management Plan “Progressive Plan 2021” composition Basic Policy －Stable sustainable growth through strategic investment and steady “improvement of quality”－ ・Promotion of globalization targeting growth areas and improvement of customization capabilities ・Lessening of fluctuations in bus
Slide 37: Main Targets
Main Targets Automotive market Development of automated driving and electrification along with globalization of automobile suppliers has increased demand for environmental testing, such as testing standards and safety testing <Automated driving> Semiconductors, sensors, telecommunications equipment,
Slide 38: Medium-term management targets
Medium-term management targets (millions of yen) FY 2017 Results FY 2021 Targets Rate of change Orders-received ４４，０６９ Over ５２，０００ １８．０％ Net sales ４，６０２ Over ５，２００ １３．０％ Operating income １０．４％ Over １０．０％ ― [Profit ratio (%)] ROE（％） ８．６％ Over ８．５％ ― Overseas sales ４４．２％ ５０％ ― ratio Exchange rate １１２
Slide 39: Medium-term management targets per Segment
Medium-term management targets／ per Segment (millions of yen) Segment FY 2017 Results FY 2021 Targets Rate of change Equipment Business ３６，６０２ ４３，０００ １７．５％ Service Business ６，２９２ ７，７００ ２２．４％ Net sales Other Business １，３７５ １，６００ １６．３％ Elimination －２０１ －３００ ― Total ４４，０６９ ５２，０００ １８．０％ ４，０９２ ４，４７０ Equi
Slide 40: Equipment Business strategy and targets
Business strategy and medium-term management targets in the Equipment Business segment Business strategy １ Expand revenues by strengthening customization capabilities that target automobile and IoT fields Respond to diversifying and increasingly sophisticated test needs by expanding environmental fa
Slide 41: Service Business strategy and targets
Business strategy and medium-term management targets in the Service Business segment Business strategy Develop a service menu that anticipates the potential needs of customers and expand the test consulting business (millions of yen) Medium-term management targets FY 2017 Results FY 2021 Targets Rat
Slide 42: Global strategy and targets
Global strategy and medium-term management targets Global strategy １ Develop global marketing with Europe and the ASEAN region (including India) as core expansion areas and continue expansion in China and Korea ２ Build an optimal worldwide manufacturing system FY 2017 Results FY 2021 Targets Oversea
Slide 43: 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） ①7th Mid-term Plan on the Environment ②Contribute to reducing the environmental load through products ③Promote biodiversity and natural envir
Slide 44: E (Environmental)
E（Environmental） ①7th Mid-term Plan on the Environment ・Promote environmental management in line with the ESPEC Environmental Basic Policies and the Mid-term Plan on the Environment ②Contribute to reducing the environmental load through products ・Sell energy-saving products and low-GWP refrigerant p
Slide 45: S (Social)
S（Social） ①Support human resource development and growth ・Enhance the global trainee and executive training programs and other self-development programs such as language learning ②Promote diversity ・Promote women’s advancement ・Promote employment of senior employees ③Contribution to society through
Slide 46: G (Governance)
G（Governance） ①Further reforms in line with the Corporate Governance Code ・Enhance the effectiveness of the Board of Directors ・Enhance training for newly appointed directors ②Strengthen Group company governance to assist medium- to long-term growth ・Share and ensure penetration of the corporate phi
Slide 47: Investment plan
Investment plan (millions of yen) FY2014 to FY2017 FY2018 to FY2021 Rate of change Strategic ４，０００ ６，６００ ６５．０％ investment Ordinary ２，４００ ２，４００ ０．０％ investment Total ６，４００ ９，０００ ４０．６％ R&D ４，０００ ５，０００ ２５．０％ expenditures Main investments: Expansion of plants and testing facilities, building a new R&D w
Slide 48: Dividends
Dividends ■Dividend policy Recognizing that passing on profits to our shareholders is a key priority and that raising corporate value on a lasting basis is fundamental to raising shareholder value, dividends are decided taking into account sustainability and the dividend payout ratio. ■Conduct stabl
Slide 49: Quality is more than a word
Quality is more than a word ESOEC ESPEC CORP.
Slide 50: 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 51: Reference
Reference ESPEC CORP.
Slide 52: 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 53: 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 circuit Eco cars such as EVs, HVs, and PHVs surface mount package ＬＣＤ storage of electricity generation of
Slide 54: Usage Case with Environmental Test Chambers
[Equipment Business] Usage Case with Environmental Test Chambers 53
Slide 55: Main New Products
[Equipment Business] Main New Products Release Date Name of product Features Environmental Stress Chamber AR Series ・Second F-gas Regulation-compliant low-GWP refrigerant Mar.2018 Rapid-Rate Temperature Cycle Type (R449) environmental testing chamber ・Added four models with new 220 L and 390 L chamb
Slide 56: 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 57: Examples of Products Delivered
[Equipment Business] :Examples of Products Delivered (Delivered in February 2016) ■Sangenjaya Campus, College of Sports Sciences, Nihon University (Newly established in April 2016) Products delivered: Hypoxic training room, Hypoxic swimming pool chamber Uses: Improve cardiovascular and respiratory p
Slide 58: 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) Secondary Batteries Charge- discharge cycle
Slide 59: 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 E
Slide 60: 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 61: New Services Using Networks
[Service Business] New Services Using Networks Industry’s first new services using networks 「ESPEC ONLINE SERIES」 * Services started in November 2013 ■ESPEC online support Trouble notification and recovery service enabling peace of mind when using the Company’s products ■ESPEC OnlineCore A centraliz
Slide 62: Battery Safety Certification Center
[Service Business] Battery Safety Certification Center ESPEC provides commissioned tests and certification application services compliant with United Nations regulations at the world’s first Battery Safety Certification Center Providing a one-stop service to support the implementation of 9 safety te
Slide 63: Environmental Engineering Business
[Other Business] Environmental Engineering Business Environmental Engineering Business ■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 environmen
Slide 64: 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, lo
Slide 65: Other Business Plant factory
[Other Business] Plant factory Produced a high value-added vegetables using deep-seawater Established in March 2016 near Haneda Airport at a plant factory*, Production and sales of vegetables high in minerals with the use of deep sea water. * Joint research with DHC Corporation and Kyoto University
Slide 66: Initiatives tackling environmental problems
Initiatives tackling environmental problems Forest preservation activity - Kehara Forest Creation Program In March 2018, designated as an affiliated business of the Japan Committee for United Nations Decade on Biodiversity Since 2007, the Company’s employee volunteers have increased to over 1,000 pa
Slide 67: 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