Slide 1: Results Briefings for Fiscal 2014 Ended March 2015
ESMEC Securities ID code:6859 ESPEC CORP. Results Briefings for Fiscal 2014 Ended March 2015 May 21, 2015 WWW.eSpec.co.jp ESPEC CORP.
Slide 2: Table of Contents
Table of Contents Company Profile Financial Result for the Fiscal 2014 Ended March 31, 2015 Analysis per Segment for the Fiscal 2014 Ended March 31, 2015 Management Plan for the Fiscal Ending March 31, 2016 Priority Strategies for the Fiscal Ending March 31, 2016 Reference ESPEC CORP. 1
Slide 3: Company Profile
Company Profile Industry-leading manufacturer of environmental test chambers: 68th year since company was founded in Osaka a Name ESPEC CORP. Head Office 3-5-6, Tenjinbashi, Kita-ku, Osaka Represented By Masaaki Ishida i Established July 25,1947 Incorporated January 13,1954 Paid-up Capital ¥6,895Mil
Slide 4: Global Network
Global Network Global Network 4 3countries 3 Scompanies Consolidated Subsidiaries Business facilities in Japan:26 10 companies Domestic agencies in Japan:48 Ome 4 @ESPEC NORTH AMERICA, INC. ~# , AESPEC EUROPE GmbH ~“ i 457 € r £> _ @SHANGHAI ESPEC ENVIRONMENTAL ‘ ‘ TA . reeec EQUIPMENT CORP. ~~, = a
Slide 5: TOPICS
TOPICS Espec included in “Global Niche Top Companies Selection 100” of the Ministry of Economy, Trade and Industry (METI) Environmental Test Chambers AE Global market share 30% or more sa igdad s3? 47 847 uete otf RR TSIEG 858k : < + t ~ mK 4 maghiges: © mi beatin v WEEE | %& ioa\” *3eHA Testimonial
Slide 6: Summary of ESPEC Business (Per Market / Use)
Summary of ESPEC Business (Per Market / Use) Environmental Test Chambers Energy Device Equipment ssoulsng Juawdinby Semiconductor Equipment FPD Equipment Environmental Engineering Business New Business ssouisng souisng s Temperature & humidity chamber Walk-in type temperature & humidity chamber Ther
Slide 7: Financial Result for the Fiscal 2014 Ended March 31, 2015
Financial Result for the Fiscal 2014 Ended March 31, 2015 ESPEC CORP. 6
Slide 8: Financial Highlights
Financial Highlights WOrders received increased year on year in all business segments iNet sales increased year on year in both domestic and overseas markets «In Japan, highly versatile standard products sold strongly Customized products were unable to reach the level achieved in the previous fiscal
Slide 9: Summary of Profits and Losses
Summary of Profits and Losses (millions of yen) FY 2013 FY 2014 ate of hange Orders-Received 31,760 £36, 287 14.3% 32,099 33, 661 4.9% Cost of Net Sales aoe. an re de tea) 0.9% 10, 731 12, 094 12.7% 8, 654 9, 450 9.2% Operating income 2,077 2, 643 27.3% Ordinary income 2,370 3, 044 28.5% 1,570 2,118
Slide 10: Analysis of Operating Income
Analysis of Operating Income Increase and Decrease Factor (millions of yen) I | Equipment Business {| Service Business | Its —gg— ! (A247 Wi other Business + Elimination Be | A116 gt te, Ae 41 $52 8 S22 2 855) 1 2° =. 320 | 1 2 a a = | of o RB! Ee o ’3 0: @ | S as: ' 32 rT i i as oo : i : oo ae 577
Slide 11: Analysis of Assets and Liabilities
Analysis of Assets and Liabilities and Decrease Factor Increa (millions of yen) Liabilities and equity 46,792 2 oO ~ 2 n a Oo a o Noncurrent liabilities Other current liabilities a + " Notes and accounts [ payable-trade 43,031 46,792 Investment and other assets Intangible assets 447-1723) Noncurrent
Slide 12: Statement of Cash Flow
Statement of Cash Flow ) (millions of yen Increase in funds st = se) Effect of exchange rate change on cash and cash equivalents S Total financial cash flow < Other Cash dividends paid <1 flow Other Purchase of property, plant and equipment and intangible assets @ Net decrease in time deposits Total
Slide 13: Analysis per Segment for the Fiscal 2014
Analysis per Segment for the Fiscal 2014 Ended March 31, 2015 ESPEC CORP.
Slide 14: Performance by Segment
Performance by Segment millions of yen Orders-Received 25, 271 29, 399 Equipment 25, 831 26, 992 4. 5% Business }------------ 1,625 2,178 34. 0% 5, 288 5, 589 5.7% Service 5,168 5,541 7. 2% Business }----------.- 504 430 A14. 6% 1, 375 1,527 11.1% Other 1, 267 1, 350 6. 5% Business }+------------ A5
Slide 15: FY 2014 Results by Business
FY 2014 Results and FY 2013 Applicable Products £1] Equipment Business ! | Service Business ij Other Business |_ Net Sales Operating income (millions of yen) = §2— 1 —A79—" 86 5 33,661 2,643 32,099 2,077 —_— ——~—— —_*~_> —_—_~— A562] FY 2013 | mm> FY 2014 FY 2013 | mm> FY 2014 © The Equipment Busine
Slide 16: Equipment Business
Equipment Business Environmental Test Chambers Hin the Japanese market, net sales increased «With highly versatile standard products, orders-received and net sales both increased from the previous fiscal year -With customized products, orders-received increased year on year but net sales were unable
Slide 17: Equipment Business
Equipment Business (millions of yen) Rate of Change 16. 3% FY 2013 Orders- Received 29, 399 26, 992 4.5% Operating Income 2,178 [Profit ratio (%) ] [8. 1%] 34.0% ESPEC CORP.
Slide 18: Service Business
Service Business (millions of yen) FY 2013 Rate of Change Orders— Received 5, 288 5, 589 5.7% 5, 168 5, 541 7.2% Operating Income 504 430 9 [Profit ratio (%) ] [9. 8%] [7. 8%] Ate Both orders-received and net sales were mostly unchanged The mainstay test consulting business saw growth in the automob
Slide 19: Other Business
Other Business (millions of yen) FY 2013 Rate of Change Orders- Received 1,375 1,527 11.1% iNet sales 1, 267 1, 360 6. 5% Operating Income A52 34 _ [Profit ratio (%) ] [A4. 1%] [2. 5%] Environmental Engineering and Plant Factory WEnvironmental engineering in reforestation (tree planting) and the pla
Slide 20: Breakdown of Sales by Market
Breakdown of Sales by Market Non-consolidated (Equipment business) 100% 11 12 10 10 10 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 oOther markets GO Automobile market OFlat panel display market Electronic device and equipment market OSemiconductor market ESPEC CORP.
Slide 21: Sales by Region
Sales by Region FY 2013 Overseas sales ratio:38. 2% 1. 3% 1. 3% Total: 32, O99million yen (Overseas sales:12, 252million yen) 14. 1% 3. 8% FY2013 14.5% 61. 8% 3.1% FY 2014 Overseas sales ratio: 40. 4% @ Taiwan ™ China ™ Korea MeEurope & America @ South East Asia ™ Other Japan 1. 8% 14. 1% 3. 5% FY20
Slide 22: Management Plan for the Fiscal Ending March 31, 2016
Management Plan for the Fiscal Ending March 31, 2016 ESPEC CORP.
Slide 23: Targets for Consolidated Revenues and Earnings
Targets for Consolidated Revenues and Earnings for the Fiscal Ending March 31, 2016 (millions of yen) FY 2014 Results FY 2015 Target Net Sales 33,661 35,000 Operating Income 2,643 2,800 Operating Income 7.9% 8.0% ESPEC CORP.
Slide 24: Business Plan for the Fiscal Ending March 31, 2016
Business Plan for the Fiscal Ending March 31, 2016 FY 2014 FY 2015 (Plan) (millions of yen) Orders-received Net sales Gross profit [Profit ratio (%) ] Operating income (loss) [Profit ratio (%) ] Ordinary income (loss) [Profit ratio (%) ] Net Income [Profit ratio (%) ] Capital expenditures Depreciati
Slide 25: Equipment Business
Equipment Business (millions of yen) FY 2014 FY 2015 (Plan) Fiscal ; Year on Year (Results) Second half Fiscal (%) Operating i mn 850 1, 450 2, 300 5. 6% [Profit ratio ( [6.6%] [9. 5%] [8. 2%] oe ESPEC CORP.
Slide 26: FY 2015 Plan by Business
FY 2014 FY 2015(Plan) Fiscal Fiscal 2Q Second half (Results) Year on Year (%) Orders-received Net sales Operating income [Profit ratio (%)] 25
Slide 27: FY 2015 Plan by Business
FY 2014 Fiscal Fiscal 2Q Second half Year on Year (Results) (%) Orders-received Net sales Operating income [Profit ratio (%)] 26
Slide 28: Dividends
*Consolidated dividend payout ratio in parentheses. 27
Slide 29: Priority Strategies for the Fiscal Ending March 31, 2016
Priority Strategies for the Fiscal Ending March 31, 2016 ESPEC CORP.
Slide 30: Priority Strategies for the Fiscal Ending March 31, 2016
Priority Strategies for the Fiscal Ending March 31, 2016 Priority Strategy 1 Priority Strategy 2 Strengthen Group alliances to increase sales in overseas Expand business domains targeting growing and markets centered on China strategic markets and ASEAN countries Investment of management resource MO
Slide 31: 1-1. Increase sales in overseas markets
1—1. Increase sales in overseas markets ASEAN countries Further cultivate the ASEAN market pace 4; by strengthening the technological os " ” o | support of the new Thai company _fsvec CORP. . 7 ' a uxk x At the new Thai company te Preparing to start commissioned ESPEC souty AK iia testing services i
Slide 32: 1-2. Global Support
1—2. Global Support Offer Japanese-language technical support for Japanese customers 2015~ ASEAN technical center (Thailand ) 2013~ ASEAN Support Desk BS Global Support Desk ASEAN Europe India Mexico ESPEC CORP.
Slide 33: 1-3. Expand sales in overseas markets
1—3. Expand sales in overseas markets 4 ; #*Strengthen production capacity and Ace: ENVIRONMENTAL EQUIPMENT 7, P expand sales of ESPEC TEST (SHANGHAI) CO.,LTD.(Sales) «© SHANGHAI ESPEC ENVIRONMENTAL @ - ; ©. ESPEC CORP. EQUIPMENT (GUANGDONG) Co., LTD EQUIPMENT al >, — rec esr Pua xExpand sales by re
Slide 34: 2-1. Expand business domains in growth strategy markets
2— 1. Expand business domains in growth strategy markets Aerospace <Existing Business> Mainly electronics or automotive Biomedicine Equipment for (training rooms, pharmaceuticals, etc. ) cosmetics and food Energy device Medical equipment equipment ABojouyde} UOI}ees9 je]UaWUOIIAUZ ESPEC CORP.
Slide 35: 2-2. Expand business domains in growth strategy markets
2—2. Expand business domains in growth strategy markets Energy Device Equipment Market: secondary batteries, power semiconductors, fuel cells, Solar battery *Expand the lineup of secondary battery evaluation equipment *Enhance commissioned test services *Expand commission testing services and verifi
Slide 36: 2-3. Business alliance with TUV SUD Japan
2—3. Business alliance with TUV SUD Japan Secondary batteries for eco cars at ESPEC’ s Energy Device Environmental Test Center One-stop provision of testing and verification services compliant with UN-agreed regulations Contract date: October 10, 2014 Start full-fledged operation : October 201 <a Si
Slide 37: 2-4. Expand business domains in growth strategy markets
2—4. Expand business domains in growth strategy markets Food and Drug markets Market: Pharmaceuticals, Cosmetics, Foods, medical equipment *Expand sales of stability test chambers and walk-in stability test chambers used for pharmaceuticals -Expand sales of low-temperature (&humidity) chambers suita
Slide 38: 2-5. Expand business domains in growth strategy markets
2—5. Expand business domains in growth strategy markets Aerospace related *Expand sales of customized products -Bolster commissioned testing services Replicating the changes in pressure, vibration Replicating the changes in pressure, vibration and temperature and temperature to control pressure Temp
Slide 39: 3. Win to survive in the domestic environmental testing business
3. Win to survive in the domestic environmental testing business Enhance customer value «Strengthen competitiveness through original products and services *Provide maintenance contracts, inspection, calibration & other general technological services Responding to customization needs Work on initiati
Slide 40: Quality is more than a word
Quality is more than a word ESOEC ESPEC CORP.
Slide 41: 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,
Slide 42: Reference
Reference ESPEC CORP.
Slide 43: 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 44: Business expansion timeline
1982 1986 1994 2011 Launching the FPD Launching the expansion Launching the Launching Business semiconductor Equipment business evaluation system equipment business business the energy device equipment business 43
Slide 45: Equipment Business: Usage Case with Environmental Test Chambers
[Equipment Business] Usage Case with Environmental Test Chambers Car Navigation (GPS) i | ——oee| econdary Cell Vehicle Sensor LED : ECU Representative Examples ehicle for Environmental Testing ensor Device Process/Test Condition Our Products [Power Device] Thermal shocktest: 40°C | 125°C Thermal sho
Slide 46: Equipment Business: Introduction of New Products
[Equipment Business] Introduction of New Products Release Name of product Features Date 2015/2 2014/11 2014/11 2014/11 2014/7 2014/7 2014/5 2013/11 2012/12 Low Temperature (&Humidity) Chamber Thermal Shock Chamber TSA series Advanced Safety Tester Advanced Battery Chamber Next Constant Climate Cabin
Slide 47: Equipment Business TOPICS: Good Design Award
[Equipment Business] TOPICS Bench-top Type Temperature (and Humidity) Chamber wins 2014 Good Design Award The Bench-top Type Temperature (and Humidity) < GOOD DESIGN Chamber has followed on from the Platinous J series of Jd AWARD 2014 temperature and humidity chambers and won a Good Design Award. De
Slide 48: 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 discharge cycle load Che
Slide 49: Usage Case with Semiconductor Equipment
[Equipment Business] Usage Case with Semiconductor Equipment Eliminate defective products to maintain initial-period quality at the final inspection stage of semiconductor device manufacturing Elimination of latent early failures Burn-in chamber Reliability Evaluation Used to evaluate basic failure
Slide 50: Usage Case with FPD Equipment
ipment Business] Usage Case with FPD Equipment [Equ {Cell Process] Lamination) Orientation film baking process — Drying/Anneal Transparent electrode formation process Protection film formation process S Pre bake /Post bake { Color Filter Process ] R,G,B Process BM Process Source Glass {Single Loadin
Slide 51: Service Business
[Service Business] Preventive maintenance of products, maintenance service, and the upgrading/improvement and installation/relocation of products I Speedy response via one of the most extensive networks in Japan I Launching new services by utilizing the network function mounted in the equipment i Ex
Slide 52: Service Business TOPICS: 5-year Product Guarantee
[Service Business] TOPICS Start the industry-first "5-year Product Guarantee” In January 2015, ESPEC started a free 5-year product guarantee service based on the two key concepts of Sf “making connections” and “reliability” to build even stronger relationships of trust with our customers i @Applicab
Slide 53: Service Business TOPICS: Energy Device Environmental Test Center
[Service Business] TOPICS The Energy Device Environmental Test Center was established with the latest “first-in-the-world” equipment developed in-house. In November 2013, the test center was established at the Utsunomiya Test Center. This commissioned test center specializes in reliability and safet
Slide 54: Other Business: Environmental Engineering
[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. MiWaterfront biotope restoration Reconstruction of natural environmen
Slide 55: Other Business TOPICS: Kawauchi Plant Growth Facility
[Other Business] TOPICS Toward the reconstruction of areas affected by the earthquake Kawauchi Highlands Agricultural Plant Growth Facility started operation in Kawauchi Village, Fukushima Prefecture. The plant growth facility (100% artificial lighting type) was delivered by ESPEC MIC CORP. in colla