Slide 1: FY2017 Financial Results
FY2017 Financial Results May 11, 2018 1
Slide 2: Agenda
Agenda 1 FY2017 Actual 2 FY2018 Outlook 3 Mid-Term Management Plan 2
Slide 3: FY2017 Highlights
FY2017 Highlights Consolidated Operating Profit increased by 24.5% compared to the previous year. INNOTECH parent originally estimated deficit but its business recovered in the second half and turned profitable. REGULUS and IT Access recovered their deficits in the first half and turned profitable.
Slide 4: FY2017 Actual
FY2017 Actual [mil. yen] Sanei GAIO STAr INNOTECH IT Access REGULUS Consolidated Hytechs TECHNOLOGY Technologies YoY Fiscal Year FY2017 FY2016 FY2017 FY2016 FY2017 FY2016 FY2017 FY2016 FY2017 FY2016 FY2017 FY2016 FY2017 FY2016 Net Sales 15,373 17,049 3,361 3,279 2,278 2,118 2,937 2,622 4,574 3,561 5
Slide 5: FY2017 Design and Development Solution Business
FY2017 Design and Development Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 20,000 4,847 4,926 5,000 15,000 3,270 3,347 4,000 440 444 Sanei Hytechs 三栄ハイテックス 2,106 2,240 REGULUS レグラス 3,000 IT Access アイティアクセス 10,000 2,235 2,124 組込システム Embedded System ガイオテクノロジー GAIO TECHNOLOGY 2,622 2,93
Slide 6: Design and Development Solution Business
Design and Development Solution Business EDA New customer base is expanding but difficult to compensate the adverse effect of large customers move-out: revenue declined. GAIO Remains strong; especially Engineering-Services business increased substantially thus achieved the highest profit ever. Embed
Slide 7: FY2017 Product Solution Business
FY2017 Product Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 15,000 3,229 3,464 3,000 620 732 10,000 4,476 2,831 2,000 Others その他 HDD HDD STAr STAｒ Tester テスター 4,537 5,000 3,515 Gross Profit 売上総利益 1,000 3,122 3,340 0 0 FY2016 17年3月期 FY2017 18年3月期 Total 11,733 11,440 7 （※） Rounded down
Slide 8: Product Solution Business
Product Solution Business Tester Shipment of NAND flash memory Testers increased in the second half; Shipment of ※MEMS Testers started and sales doubled in the second half compared to the first half. STAr Sales of probe cards and measurement instruments substantially increased; Increased both in rev
Slide 9: Expenses and Income
Major Expenses and Non-Operating Expenses and Income [mil. yen] FY2016 FY2017 Research & Development 960 950 Depreciation 546 600 Amortization of Goodwill 220 236 Major Items of Non-operating Expenses and Income Real Estate Rent 448 436 Rent Expenses on Real Estates 316 306 Foreign Exchange Gains 60
Slide 10: Cash Flow
Cash Flow [mil. yen] FY2016 FY2017 Profit Before Income Taxes 1,227 1,209 Depreciation and Amortization of Goodwill 767 836 Working Capital and Others 493 -36 Cash Flows from Operating Activities 2,487 2,009 Purchase of Investment Securities -233 -313 Purchase of Tangible Assets -410 -982 Proceeds f
Slide 11: Merger of BigValley by IT Access
Merger of BigValley by IT Access Securing development know-how and engineers for natural language processing and communication engine in the AI area 【Corporate Overview of BigValley Inc.】 Founded in : May, 1998 Sales: 292 million yen (FY2016) Capital: 10 million yen Business Overview: Software Desig
Slide 12: Agenda
アジェンダ 1 FY2017 Actual 2 FY2018 Outlook 3 Mid-Term Management Plan 12
Slide 13: FY2018 Highlights
FY2018 Highlights Consolidated ordinary profit is estimated to be 2 billion yen (65.5% increase). Hoping to attain the record highest sales for testers, mainly for memory products. GAIO TECHNOLOGY and STAr Technologies are expected to maintain their profitability; Progress on new business launch. Re
Slide 14: FY2018 Estimate
FY2018 Estimate [mil. yen] Sanei IT GAIO STAr INNOTECH TECHNOLOGY Technologies REGULUS Consolidated FY2017 YoY Hytechs Access Net Sales 15,600 3,400 2,900 3,000 4,600 700 30,000 28,735 4.4% Gross 4,500 840 700 1,420 2,030 280 9,300 8,390 10.8% Profit (26.0%) (24.7%) (24.1%) (47.3%) (44.1%) (40.0%) (
Slide 15: FY2018 Outlook: Design and Development Solution Business
FY2018 Outlook:Design and Development Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 20,000 5,160 4,926 5,000 3,347 3,400 15,000 4,000 444 650 2,240 2,900 三栄ハイテックス Sanei Hytechs 3,000 レグラス REGULUS 10,000 2,124 1,500 IT Access アイティアクセス 組込システム Embedded Systems 2,936 3,000 2,000 ガイオテクノロジー
Slide 16: FY2018 Design and Development Solution Business
FY2018 Design and Development Solution Business EDA Steady contract renewals with major customers puts hold on declining trend in sales. GAIO Engineering-Services business is expected to grow continuously. Embedded System While withdrawal from chip distribution business affects throughout the year,
Slide 17: FY2018 Outlook: Product Solution Business
FY2018 Outlook: Product Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 15,000 4,140 4,000 3,464 732 1,200 10,000 3,000 2,831 4,550 Others その他 HDD HDD 2,000 STAｒ STAr 4,537 テスター Tester 5,000 Gross Profit 売上総利益 6,400 1,000 3,340 0 0 FY2017 18年3月期 FY2018 19年3月期 Total 11,440 12,150 17 （※）
Slide 18: FY2018 Product Solution Business
FY2018 Product Solution Business Tester Sales of testers for memory products is expected to increase dramatically; development continues for new model testers for image sensor products. STAr Probe card business remains strong; Sales in China is expected to grow as well. Others Seeking for new busine
Slide 19: Expansion of Test Solutions Business
Expansion of Test Solutions Business [mil. yen] 7,000 Aiming to highest ever 6,400 INNOTECH Parent: Sales Trends of Testers sales record 6,000 5,414 5,000 Record Highest 4,000 3,602 3,347 3,366 3,122 3,000 2,031 2,000 1,686 1,000 0 2012年 FY2011 2013年 FY2012 FY2012 2014年 FY2013 2015年 FY2014 2016年 FY2
Slide 20: EBITDA Trends
EBITDA Trends [mil. yen] EBITDA 2,860 2,500 Operating 営業利益 Profit 2,000 2,046 1,900 1,978 1,994 1,500 1,576 1,244 1,000 1,012 999 722 500 0 FY2014 15年3月期 FY2015 16年3月期 FY2016 17年3月期 FY2017 18年3月期 FY2018 (Est) 19年3月期 Depreciation: 653 mil. yen Amortization of Good Will: 207 mil. yen 20 （※） EBITDA= Pr
Slide 21: Dividends
Dividends Dividend As of 1H- As of FY- Full Year Payout end end Ratio FY2017 10 yen 20 yen 30 yen 73.1% FY2018 20 yen 20 yen 40 yen 55.5% (Outlook) On May 10, 2018, INNOTECH has announced that our dividends for the year- end of the fiscal year 2017 has been increased from 10 yen to 20 yen, thus our
Slide 22: Agenda
Agenda 1 FY2017 Actual 2 FY2018 Outlook 3 Mid-Term Management Plan 22
Slide 23: Overview: Mid-Term Management Plan
Overview: Mid-Term Management Plan (Announced in November 2014) （Background） Changes in industry environment, realization of M&A, implementation of business structure reform （Strategy） Focus on 4 growth areas (Test, MBD, Image Processing, Embedded Solutions ) Active overseas expansion and invest
Slide 24: Gap between the mid-term management plan and the FY2018 earnings forecast
Gap between the mid-term management plan and the FY2018 earnings forecast [mil. yen] [mil. yen] 40,000 4,000 売上高（左軸） Sales (left axis) Operating Profit 営業利益（右軸） Gap with the plan (right axis) 35,000 3,500 HDD Business Transfer Early Cadence contract renewals 30,000 3,000 Delay in development of new
Slide 25: Embedded Systems: Future Measures and Deployment
Embedded Systems: Future Measures and Deployment “Edge Rich” Support Edge Rich Computing Image Machine Rule Edge Computing Processing Learning Engine (INNOTECH current business arena) Intelligent Deep FPGA Processing Learning Targeting the market with higher functionality and higher reliability (sma
Slide 26: Our Efforts and Progress on Test Solutions
Our Efforts and Progress on Test Solutions For NAND For Sensors Outside Environment CIS MEMS Next generation Development Heavy demand from data model will be ready complete, centers and so on within the year shipment starts in FY 2017 Customers are accelerating their Preparation for investment overs
Slide 27: Efforts on MBD
Efforts on MBD Design Manufacturing Verification Define External Internal Stand- Overall Design Development System Test Requirements Design alone Test Test (Traditionally) Customers Verification from here Provision of tools ADAS・Autonomous Customers problems driving ・Risks from increased cost Reques
Slide 28: Efforts on Image Processing Solution
Efforts on Image Processing Solution “HawkEye/EagleEye “ is adopted by one of major construction companies; safety surveillance system for construction machinery, leveraging the REGULUS-made AI Camera System “EigerⅡ” Problem ・Traditional safety surveillance system was not capable of accurately detec
Slide 29: Progress on Our Partnership with CVP
Progress on Our Partnership with CVP Plan to establish a joint venture Prepare to contact Chinese major automobile makers Acquisition of 9.09% of INNOTECH shares As of February 5, 2018 Tester and Other CVP INNOTECH Group Original Brand Products 29
Slide 30: ESG
ESG New Management Structure ・Mr. Sumita: Chairman and CEO→Chairman of the Board ・10 Directors of the Board→Reduced to 8 ‐More than 1/3 of the board members including corporate auditors become independent officers Voluntary advisory committee is established ・Strengthen independence, objectiveness, a
Slide 31: Capital Management Policy: Background
Capital Management Policy: Background November 2014 As a structural reform: ・Focus on growing areas Mid-term ・CF-emphasized products ・Active overseas deployment and Management Plan investment Completed withdrawal from electronic November 2017 device trading business HDD Business ・Improving signs of
Slide 32: Capital Management Policy: The Basics
Capital Management Policy: The Basics ・Capital cost-aware management Enhance Our ・Improve ROE and ROIC Corporate Value ※Expand the ROIC-WACC spread ・Expand operating cash flow ・Equity capital amount which meets our business scale Improve Efficiency ・Well-balanced asset and liability structure Our Ba
Slide 33: Capital Management Policy: Our current numerical goals
Capital Management Policy: Our current numerical goals ROE • Attain 5% which is the short-term goal of the current mid-term management plan as early as possible; mid-term and long-term goal is 8-10%. ROIC (Return on Invested Capital) • Aiming at 8-10% in the future; expand the ROIC - WACC spread. D/
Slide 34: Capital Management Policy: Current Measures
Capital Management Policy: Current Measures Within the next two years, reduce the amount of our equity capital on a consolidated-basis to 20 billion yen level by share repurchase (flexibly determine based on our ROE level) Started share repurchase from Feb. 2018 Ownership ratio of treasury shares sh
Slide 35: Capital Management Policy: Schedule
Capital Management Policy: Schedule (Still on the Planning Stage) Year 2018 2019 2020 Feb. 7 May Nov. Feb. May Mar. Full-year Q2 3Q Full-year Announcement Earnings Results Results Earnings of Capital Management Policy Start share repurchase Continue share repurchase until we Financial Strategy （～Nov
Slide 36: Next Mid-term Management Plan
Next Mid-term Management Plan Capital Management Policy Assessment of achievement level / factor analysis of the current mid-term plan Consideration of a new mid-term vision and a mid-term management plan (Structural Reform → Growth Strategy) 36
Slide 37: Note for Forward Looking Statements
Note for Forward Looking Statements The information provided in this presentation includes forward looking statements based on current expectations, forecasts or beliefs. Such forward looking statements include a number of preliminary assumptions about future events that are subject to factors and u