Slide 1: FY2014 1st Half Financial Results
November 11, 2014 FY2014 1st Half Financial Results
Slide 2: Agenda
Agenda FY2014 1 st Half Results 1 2 FY2014 Outlook 3 Mid-range Management Plan 2
Slide 3: FY2014 1H Highlights
FY2014 1H Highlights 25% decline in ordinary profit but 50% achievement of FY2014 annual plan Increase in revenue and profit for Design Development Solution Busiess thanks to addition of Gaio Revenue increased for Product Solution Business but revenue and profit decreased for Tester Business Net pro
Slide 4: FY2014 1H Results
FY2014 1H Results 〔mil. yen〕 Sanei IT Gaio Innotech Regulus Consolidated YoY Hytechs ACCESS Technology FY2014 FY2013 FY2014 FY2013 FY2014 FY2013 FY2014 FY2013 FY2014 FY2013 FY2014 FY2013 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H Net Sales 9,533 8,744 1,340 1,298 1,095 1,178 1,062 - 148 113 13,138 11,314 1
Slide 5: FY2014 1H Design Development Solution Business
FY2014 1H Design Development Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 10,000 2,500 2,164 8,000 2,000 1,665 1,327 128 Sanei Hytechs 三栄ハイテックス 6,000 1,292 1,086 1,500 Regulus レグラス ITアクセス 81 818 IT ACCESS 1,192 1,062 組込システム Embedded System 4,000 1,000 ガイオテクノロジー Gaio Technology 568 ED
Slide 6: Design Development Solution Business
Design Development Solution Business EDA Revenue increased due to steady contract renewals for automotive and electronic components Gaio Strong business for automotive software and design consignment Embedded System Revenue increased due to growth in defense and infrastructure-related facility busin
Slide 7: FY2014 1H Product Solution Business
FY2014 1H Product Solution Business 〔Sales: mil. yen〕 〔Gross Profit: mil. yen〕 6,000 2,000 5,000 1,615 1,500 1,172 1,884 4,000 デバイス Devices 3,000 1,206 1,025 1,000 HDD HDD Tester テスター 1,895 2,000 Gross Profit 売上総利益 500 2,497 1,000 1,298 0 0 FY2013 1H 2013/9月 FY2014 1H 2014/9月 7 Total 4,876 5,077
Slide 8: Product Solution Business
Product Solution Business Tester Shipment continues constantly but not as strong as the last 1st half and revenue declined HDD OA business recovered but high-profitability entertainment business slowed down Devices HDMI chip business for TVs recovered and revenue increased 8
Slide 9: Cash Flows
Cash Flows [mil. Yen] FY2013 1H FY2014 1H Net Income Before Tax 622 627 Depreciation and Amortization 181 308 Working Capital and Others △ 1,768 △ 821 Cash Flows from Operating Activities △ 963 114 Purchase of Investment in Subsidiaries - △ 1,043 from Deposits Received Other Investments △ 402 △ 166
Slide 10: Agenda
Agenda 1 FY2014 1H Results 2 FY2014 Outlook 3 Mid-range Management Plan 10
Slide 11: FY2014 Highlights
FY2014 Highlights FY2014 Estimate remains the same Demands for testers and automotive will be key Still investigating the financial impact of acquiring STAr as our subsidiary 11
Slide 12: FY2014 Estimate
FY2014 Estimate (mil. yen) Sanei Gaio FY2013 Innotech IT ACCESS Regulus Consolidated YoY Hytechs Technology Actual Net Sales 18,500 2,750 2,400 1,950 400 26,000 23,585 10% 4,050 650 760 850 130 6,490 6,121 Gross Profit 6% 21.9% 23.6% 31.7% 43.6% 32.5% 25.0% 26.0% Operating 600 260 40 350 30 1,150 1,
Slide 13: FY2014 Design Development Solution Business
FY2014 Design Development Solution Business [Sales: mil. Yen] [Gross Profit: mil. Yen] 20,000 5,000 4,530 3,727 4,000 15,000 2,750 2,771 400 Sanei Hytechs 三栄ハイテックス 310 2,400 3,000 Regulus レグラス 10,000 2,411 1,800 ITアクセス IT ACCESS 組込システム 1,358 1,950 2,000 Embedded System 512 ガイオテクノロジー Gaio Technology
Slide 14: FY2014 Product Solution Business
FY2014 Product Solution Business [Sales: mil. Yen] [Gross Profit: mil. Yen] 10,000 3,000 2,393 8,000 2,900 2,590 1,960 2,000 6,000 デバイス Devices 2,918 HDD HDD 3,800 4,000 テスター Tester 1,000 売上総利益 Gross Profit 2,000 3,347 2,700 0 0 FY2013 2014/3月1H FY2014 2015/3月1H 14 Total 合計 8,855 9,400
Slide 15: Taiwan STAr Technologies as a Subsidiary
Taiwan STAr Technologies as a Subsidiary History May 2014 Enter into Basic Agreement (Press Release) July 2014 Execute Stock Purchase Agreement October 2014 Acquisition Completed Governance Shareholding Ratio 85.02% Officers 3 out of 5 are from Innotech Business Deployment • Develop overseas custome
Slide 16: Outlook on Dividends
Outlook on Dividends FY2014 1H Actual: 7 yen FY2014 Estimate: 14 yen Dividends Dividend 1H 2H FY Payout Ratio FY2013 7 yen 7 yen 14 yen 46.6% FY2014 (Estimate) 7 yen 7 yen 14 yen 35.1% Our dividend payout ratio is targeted to be more than 30% on a consolidated basis. 16
Slide 17: Agenda
Agenda 1 FY2014 1H Results 2 FY2014 Outlook 3 Mid-range management Plan 17
Slide 18: Structural Reform
Resolutely Carrying out the Business Structural Reform Current Status Since the Lehman crash, business environment surrounding Innotech has drastically changed; we are reaching to our growth limit with our business model as an electronic component distributor. Our Moves We have invested 2.4 billion
Slide 19: Vision for the Structural Reform
Vision for the Structural Reform Transform the business portfolio Innotech to evolve to a solution vendor from a component distributor （leave the distribution and territorial businesses behind) Actively pursue overseas customers Nurture global solution business (Commit to the overseas growing market
Slide 20: Challenges for Growth
Policies and Measures of Structural Reform Challenges for Growth Execute structural reform in order to cope with the changing environment and put businesses on a growing track. Following measures will be taken for such purposes; (1) Deploy 4 solution businesses to commit to the IoT era. Model-base
Slide 21: Organization to Accelerate Solution Businesses
Organization to Accelerate Solution Businesses Business Unit-based Organization; Consolidated Management of Group Companies Solution BU Innotech Group Companies Verification ICS-BU EDA Gaio Technology Embedded Design ISS-BU Embedded System IT ACCESS Solutions Development Solution Image IPS Business
Slide 22: Committing to Support the Growth of IoT Market by Our Solutions
Committing to Support the Growth of IoT Market by Our Solutions Growing IoT Market Social Semiconductor Automotive Medical Tests Infrastructure Industrial Robotics Innotech Differentiating Solutions Model-based verification (tools/services) Test (probe cards/testers/analysis software) Image Pr
Slide 23: Model-based Verification Solution
Model-based Verification Solution V-shaped System Specification Test Design Process （Actual Machine） Railway Process Industry IEC 62278 IEC 61511 (RAMS) Automotive System Consolidates Design Test Nuclear power ISO 26262 IEC 61513 (1) Functional Detailed Individual Industrial Safety Medical Design IE
Slide 24: Gaio Technology (Verification Tools/Service)
Gaio Technology (Verification Tools/Service) New Market Tackling the automotive area➝Horizontal deployment to the IoT market (Medical, infrastructure, and so on) New Business Tool as well as service businesses for software/hardware model-based verification Technology to Differentiate Highly competit
Slide 25: Core Business for Growth (Test Solutions)
Core Business for Growth (Test Solutions) Innotech TS STAr Department Merge the expertise and experience of Innotech and STAr to expand our business Challenge Measures Vision Expand the • Deployment to Chinese, Japan only geographical area Taiwanese, and Korean markets Increase • Major test houses C
Slide 26: STAr (Test Solutions)
STAr (Test Solutions) New Market Penetrating Taiwanese/Chinese/Korean major foundries and major test houses New Business Expansion of product portfolio to cover testers for sensors (CIS), reliability tests, and 3D tests Technology to Differentiate Total solutions spanning from probe cards to analysi
Slide 27: Overview: Mid-range Management Plan
Overview: Mid-range Management Plan (Background) New mid-range management plan was devised, taking the environmental changes in the industry, M&A, and execution of structural reform into consideration (Strategy) Focus on 4 growing areas (solution businesses) Active overseas deployment and invest
Slide 28: 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