Japan Aviation Electronics Industry, Limited · TSE:6807

Japan Aviation Electronics Industry — 1H FY2018 Earnings Presentation

29 slides from Japan Aviation Electronics Industry's earnings presentation, Oct 26, 2018

1. Slide 1: Financial Results for 1H of FY2018 and Prospects for FY2018

   Financial Results for 1H of FY2018 and Prospects for FY2018 October 26, 2018 6807 Japan Aviation Electronics Industry, Ltd. Copyright ©2018. Japan Aviation Electronics Industry. Ltd

2. Slide 2: Agenda

   Agenda Technology to Inspire Innovation I. Financial Results for 1H of FY2018 II. Prospect and Strategy for FY2018 Copyright ©2018. Japan Aviation Electronics Industry. Ltd 2

3. Slide 3: I. Financial Results for 1H of FY2018

   Technology to Inspire Innovation I. Financial Results for 1H of FY2018 (From April 1, 2018 to September 30, 2018) ※ Total may not correspond to the total value of the items since amounts less than 100 million JPY are basically rounded off Copyright ©2018. Japan Aviation Electronics Industry. Ltd 3

4. Slide 4: Net Sales and Incomes

   Net Sales and Incomes Technology to Inspire Innovation (JPY in 100 millions) Year/Year vs. 1H 1H FY2018 FY2017 FY2018 Change FY2018 Projections 1H FY2018/ Projections anounced 1H 2H 1H 1H FY2017 Apr, 2018 Net Sales 1,245 1,294 1,180 -66 95% 15 101% 1,165 Operating 95 111 94 -1 99% -1 99% 95 Income (

5. Slide 5: Net Sales and Incomes

   Net Sales and Incomes Technology to Inspire Innovation ▶ In spite of the net sales decrease compared to 1H of FY2017, operating income maintained the same level and ordinary income increased 1,294 Net Sales 1,245 1,196 1,180 (JPY in 100 millions) 899 Operating Ordinary 111 94 106 Income Income 95 85

6. Slide 6: Net Sales by Market Segment

   Net Sales by Market Segment Technology to Inspire Innovation (JPY in 100 millions) Year/Year vs. 1H 1H FY2018 FY2017 FY2018 FY2018 Change Projections Projections 1H FY2018/ anounced 1H 2H 1H 1H FY2017 Apr, 2018 Component Ratio Mobile Devices 692 686 582 44% -110 84% 35 106% 547 Automotive 331 367 36

7. Slide 7: Net Sales by Business Segment

   Net Sales by Business Segment Technology to Inspire Innovation (JPY in 100 millions) Year/Year vs. 1H 2018 1H FY2018 FY2017 FY2018 Projections Change Projections 1H FY2018/ anounced 1H 2H 1H 1H FY2017 Apr, 2018 Component Ratio Connector 1,143 1,173 1,062 90% -80 93% 12 101% 1,050 UIS 41 45 43 4% 2 1

8. Slide 8: Connector Business

   Connector Business Technology to Inspire Innovation Sales by Market Segment (JPY in 100 millions)Year/Year Sales: 93% (of 1H FY2017) 1,143 Change ▶ Mobile Devices 93% 1,062 • Sales of products with built-in 1,000 procured components decreased significantly Mobile Devices 692 84% 582 • Sales to Chine

9. Slide 9: UIS Business

   UIS Business Technology to Inspire Innovation Sales by Market Segment (JPY in 100 millions) 50 Year/Year Change Sales: 104% (of 1H FY2017) 41 104% 43 ▶ Automotive (capacitive touch panel) • Full-scale mass production of film sensors was maintained 23 (Mass production started in 4Q of Automotive 23 1

10. Slide 10: Aerospace Business

    Aerospace Business Technology to Inspire Innovation Sales by Market Segment (JPY in 100 millions) 80 Year/Year Sales: 122% (of 1H FY2017) Change 70 122% ▶ Industrial & Infrastructure • Demand of oil drilling sensors 60 57 doubled due to rising crude oil prices • Linear motor for semiconductor lithog

11. Slide 11: Operating Profit by Business Segment

    Operating Profit by Business Segment Technology to Inspire Innovation (JPY in 100 millions) FY2017 FY2018 Year/Year Change 1H 2H 1H Connector 112 121 106 -6 9.8% 10.3% 10.0% UIS 4 4 3 -0.4 9.2% 9.6% 8.0% Aerospace 1 6 7 6 1.6% 8.9% 10.0% Others -22 -20 -23 -1 Total 95 111 94 -1 7.6% 8.6% 7.9% ※ Perc

12. Slide 12: II. Prospect and Strategy for FY2018

    Technology to Inspire Innovation II. Prospect and Strategy for FY2018 (From April 1, 2018 to March 31, 2019) Copyright ©2018. Japan Aviation Electronics Industry. Ltd 12

13. Slide 13: Prospects for FY2018

    Prospects for FY2018 Technology to Inspire Innovation (JPY in 100 millions) Year/Year vs. FY2018 FY2018 FY2017 FY2018 Change Projections Projections 2H FY2018 (announced 1H Projections Projections FY2018/FY2017 Apr, 2018) Net Sales 2,539 1,180 1,235 2,415 -125 95% 15 101% 2,400 Operating Income 206

14. Slide 14: Prospect for Net Sales by Market Segment

    Prospect for Net Sales by Market Segment Technology to Inspire Innovation (JPY in 100 millions) Year/Year vs. FY2018 FY2018 FY2017 FY2018 Change Projections Projections 2H FY2018 (announced 1H FY2018/FY2017 Apr, 2018) Projections Projections Mobile 1,379 582 597 1,179 -200 86% 49 104% 1,130 Devices

15. Slide 15: Prospect for Net Sales by Business Segment

    Prospect for Net Sales by Business Segment Technology to Inspire Innovation (JPY in 100 millions) Year/Year vs. FY2018 FY2018 FY2017 FY2018 Change Projections Projections 2H FY2018 (announced 1H Projections Projections FY2018/FY2017 Apr, 2018) Connector 2,316 1,062 1,103 2,165 -151 93% 10 100% 2,155

16. Slide 16: Connector Business Strategy [Mobile Devices]① Board-to-Board Connectors

    Connector Business Strategy [Mobile Devices]① Technology to Inspire Innovation ▶ Board-to-Board Connectors  Increase market share and establish a de facto standard in Chinese Smartphone market Development Roadmap, Board-to-Board Connectors Contact Spacing Range 0.3mm Pitch 0.35mm Pitch 0.4mm Pitch

17. Slide 17: Connector Business Strategy [Mobile Devices]② DX07 Series USB Type-C Connector

    Connector Business Strategy [Mobile Devices]② Technology to Inspire Innovation ▶ “DX07 Series“ USB Type-C Connector  Expansion in high-value-added segment  Launched waterproof receptacle adopting JAE’s unique potting-less technology Waterproof receptacle  Strengthening new business areas (Enterin

18. Slide 18: Connector Business Strategy [Automotive]①

    Connector Business Strategy [Automotive]① Technology to Inspire Innovation ▶ Expand products compatible with high-speed data transmission  Expand onboard camera business to Japanese OEMs based on results in in European market  Develop connecters for next-generation MX55 Series connector for inform

19. Slide 19: Connector Business Strategy [Automotive]②

    Connector Business Strategy [Automotive]② Technology to Inspire Innovation ▶ Development of High current / High voltage products for EV  Develop and expand business of high current / high voltage connectors  Expand range of customers for service plug connectors for ECU monitoring battery High curr

20. Slide 20: Connector Business Strategy [Industrial & Infrastructure ①]

    Connector Business Strategy [Industrial & Infrastructure ①] Technology to Inspire Innovation ▶ High speed EV charging infrastructure  Adopting regional sales strategies considering market expansion  Already in use in Japan and North America  Expanding to Europe and China  CHAdeMO-type variation

21. Slide 21: Connector Business Strategy [Industrial & Infrastructure ②]

    Connector Business Strategy [Industrial & Infrastructure ②] Technology to Inspire Innovation ▶ Approach to Factory Automation and Robots  Expanding products for Robots (for Co-robots, overseas market, etc.) Connector lineup for robots JB10 for Small size servo motor (circular) Manipulator JN14 Rele

22. Slide 22: UIS Business Strategy

    UIS Business Strategy Technology to Inspire Innovation ▶ Approach to Automotive Market  Accelerate promotion for capacitive touch panel  Expansion of new adoption leading to sales increase in FY 2019 Glass type metal  Accelerate adoption to new car models for further growth mesh sensor  Producti

23. Slide 23: Aerospace Business Strategy

    Aerospace Business Strategy Technology to Inspire Innovation ▶ Sensor for Oil Drilling Sales for Oil drilling Market (JPY in 100 millions)  Strengthen sales and service operation coping to increasing 1.7 fold demand 50 (annual)  Enhance production capacity by Plan expanding production space and in

24. Slide 24: Strategy for New Products

    Strategy for New Products Technology to Inspire Innovation ▶ JAE and NEC jointly developed one of the world's smallest high performance antenna device  The surface mount type antenna was developed by combining NEC’s metamaterial ultra compact μSR ™ technology and JAE’s precision processing technolo

25. Slide 25: Direction for Mid-term Growth

    Direction for Mid-term Growth Technology to Inspire Innovation Pursue further growth in sales and profits by enhancing global marketing and productivity improvement  Maintain industry leading position for mobile devices market  Accelerate growth in Automotive and Industrial & Infrastructure market

26. Slide 26: Technology to Inspire Innovation

    Technology to Inspire Innovation

27. Slide 27: Cautionary Statement

    <Cautionary Statement> The plans, strategies & results forecasts and targets for our company and our consolidated affiliates (hereinafter JAE) noted in these materials are forecasts and targets as of October 26, 2018, and include risks and uncertainties. The targets noted in these materials are not

28. Slide 28: Reference

    Reference Technology to Inspire Innovation Copyright ©2018. Japan Aviation Electronics Industry. Ltd 28

29. Slide 29: Capital Investment & Depreciation

    Capital Investment & Depreciation Technology to Inspire Innovation (JPY in 100 millions) 217 176 220 120.1 Capital 109.6 97.1 86.2 89.3 Investments Depreciation 88.5 91.2 and others 108.5 111.1 108.3 197 219 200 1H FY2016 2H FY2016 1H FY2017 2H FY2017 1H FY2018 2H FY2018 Projections (Depreciation an

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