Tamron Co., Ltd.TSE: 7740

3rd Quater FY2024 Financial results briefing material

· Issued by Tamron Co., Ltd.

3rd Quarter 2024 Financial Results

November 6, 2024

Tamron Co., Ltd. (Code: 7740)

Contents

  1. 3rd Quarter FY2024 Financial Results
    1. 3rd Quarter FY2024 Summary
    2. 3rd Quarter FY2024 Financial Results
    3. Factors Affecting Operating Income Variability
    4. 3rd Quarter FY2024 Results by Segment
      1. Photographic Products
      2. Surveillance & FA Lenses
      3. Mobility & Healthcare Products, Others
  1. Financial Forecast FY2024
    1. Financial Forecast FY2024
    2. Financial Forecast FY2024 by Segment
      1. Photographic Products
      2. Surveillance & FA Lenses
      3. Mobility & Healthcare Products, Others
  1. Reference Data
    1. Financial Summary
    2. Capital Investment, Depreciation, and R&D Expenses
    3. Cash Flow
    4. Cash Dividends Outlook and Key Performance Indicators
    5. Impact of Foreign Exchange Rate Fluctuations

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  • 3rd Quarter FY2024 Financial Results

Ⅰ -1. 3rd Quarter FY2024 Summary

Environment

Economy

Market

  • Moderate economic recovery despite some stagnation in overseas economies
  • Uncertainty continues due to geopolitical risks such as the prolonged Russia- Ukraine conflict and the tense situation in the Middle East, as well as the sluggish real estate market in China
  • Significant depreciation of JPY (compared to the previous year, USD depreciated by ¥13 and EUR depreciated by ¥14)
  • The interchangeable lens camera market grew by approximately 10% in both volume and value, driven by strong performance in mirrorless cameras.
  • The interchangeable lenses market grew by approximately 6% in volume basis and approximately 14% in value basis.
  • In the surveillance sector, camera manufacturers' effort to optimize inventory levels have almost come to an end.
  • The automotive camera market showed continually strong performance due to the popularization of Advanced Driving Assistant System (ADAS).

Company's Results

For the 3rd cumulative quarter,

  • Net Sales and Operating Income showed double-digit or higher increase in all segments.
  • Net Sales significantly increased by approximately 1.3 times and Operating Income significantly increased by approximately 1.6 times YoY.

As of the 3rd quarter of 2024,

  • Surpassed the record high full-year Net Operating Income achieved in 2023
  • Achieved Operating Income of the New medium-term plan "Value Creation 26" (target sales of 83 billion yen and target operating income of 15.3 billion yen) which have started in 2024 and will end in 2026.

Topics

  • From Feb. to Mar.: Repurchased treasury shares of ¥2 billion to enhance shareholder returns, improve capital efficiency, and implement flexible capital policies
  • Apr. : Announced development of our first model for Canon RF mounts, which will be launched within 2024
  • May : Cancelled of 400,000 treasury stocks, including those acquired from Feb. to Mar.
  • Jul.: Conducted a 2-for-1stock split of shares of common stock.
  • Aug.: Following the increase in the interim dividend in June, the year-enddividend forecast also has been increased.

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Ⅰ -2. 3rd Quarter FY2024 Financial Results

  • Significant YoY sales increases in all segments for the cumulative 3rd quarter;
  • Photographic Products Segment: approximately 1.3 times
  • Surveillance & FA Lenses Segment: approximately 1.2 times
  • Mobility & Healthcare Products, Others Segment: more than 1.3 times
  • Gross profit margin turned to increase in the cumulative 3rd quarter due to material cost containment and cost reductions, etc. , despite a slight YOY decrease during the 1st half.
  • Gross profit increased due to a large increase in Net Sales and an increase in gross profit margin, in addition, SG&A expenses were kept to 10% of the increase, which was much lower than the rate of increase in Net Sales, resulting in a significant improvement in Operating
    Income on net sales by approximately 5point YoY in the cumulative 3rd quarter.

FY23 3Q

FY24 3Q

Inc/Dec（VS 2023）

（millions of JPY）

Amounts

Ratio

Actual

Actual

Net Sales

19,031

23,602

4,571

24.0%

Gross Profit

8,372

10,938

2,565

30.6%

(% of Sales)

44.0%

46.3%

2.3%

-

Operating Income

3,704

5,892

2,188

59.1%

(% of Sales)

19.5%

25.0%

5.5%

-

Ordinary Income

3,623

5,718

2,095

57.8%

(% of Sales)

19.0%

24.2%

5.2%

-

Net Income

2,627

4,190

1,563

59.5%

(% of Sales)

13.8%

17.8%

4.0%

-

JPY - 1 USD

144.64

149.67

5.03

-

JPY - 1 EUR

157.38

164.28

6.90

-

FY23 1Q-3Q

FY24 1Q-3Q

Inc/Dec（VS 2023）

Amounts

Ratio

Actual

Actual

51,783

68,456

16,672

32.2%

23,218

31,144

7,925

34.1%

44.8%

45.5%

0.7%

-

10,182

16,732

6,550

64.3%

19.7%

24.4%

4.7%

-

10,515

16,673

6,157

58.6%

20.3%

24.4%

4.1%

-

7,956

12,228

4,272

53.7%

15.4%

17.9%

2.5%

-

138.26

151.45

13.19

-

149.83

164.59

14.76

-

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Ⅰ -3. Factors Affecting Operating Income Variability

Both of Net sales and Operating Income increased in double digit even without favorable foreign exchange effects

(Net Sales increased by approximately 20% and Operating Income Increased by approximately 50% YoY)

FY2024 1Q-3Q

（Millions of JPY）

Impact of exchange rate on Net Sales:

16,732

4,850 million JPY

850

10,182

5,300

(540)

(400)

1,340

FY23 1Q-3Q

R&D

SG&A Expenses

FX rate

Gross Profit

Gross profit

FY24 1Q-3Q

Actual

Expenses

(Expt. R&D)

Impact

from sales

margin improve

Actual

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Ⅰ -4. 3rd Quarter FY2024 Results by Segment

① Photographic Products

For the 3rd cumulative quarter,

  • Sales of Own-Brand products increased by double digits, due to the impact of new models launched through 2023 and the 3rd quarter of 2024, as well as strong performance in the domestic, Chinese, and other Asian markets.
  • More than a 1.6 times increased in the sales of OEM products due to strong performance from the 2nd half of the previous fiscal year.
  • Operating Income on net sales improved to 30%, and Operating Income increased significantly by approximately 1.5 times YoY.

FY23 3Q

FY24 3Q

Inc/Dec（VS 2023）

（millions of JPY）

Actual

Actual

Amount

Ratio

Net Sales

14,207

17,228

3,020

21.3%

Operating income

3,948

5,263

1,315

33.3%

(% of sales)

27.8%

30.6%

2.8%

-

FY23 1Q-3Q

FY24 1Q-3Q

Inc/Dec（VS 2023）

Actual

Actual

Amount

Ratio

37,633

50,325

12,692

33.7%

10,454

15,243

4,788

45.8%

27.8%

30.3%

2.5%

-

FX Impact

Amount

3,410

830

-

Sales Breakdown

FY23 3Q

FY24 3Q

Inc/Dec（VS 2023）

（Billions of JPY）

Actual

Actual

Amount

Ratio

Own-Brand

7.7

8.8

1.1

14.2%

OEM

6.5

8.4

1.9

29.7%

FY23 1Q-3Q

FY24 1Q-3Q

Inc/Dec（VS 2023）

Actual

Actual

Amount

Ratio

23.4

26.7

3.3

14.3%

14.2

23.6

9.4

65.8%

3Q Market environment VS 2023

Quantity

Amount

SLR cameras

(25)%

(24)%

Mirrorless cameras

13%

12%

Interchangeable lens cameras total

6%

8%

Interchangeable lenses

(0)%

(3)%

1Q-3Q Market environment VS 2023

Quantity

Amount

SLR cameras

(21)%

(20)%

Mirrorless cameras

14%

14%

Interchangeable lens cameras total

7%

11%

Interchangeable lenses

6%

14%

OEM

3Q Sales

Own-Brand

OEM

38%

51%

1Q-3Q SalesOwn-Brand

49%

Composition

47%

Composition 53%

46%

54%

62%

Inner circle: 2023

Inner circle: 2023

Outer circle: 2024

Outer circle: 2024

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②Surveillance & FA Lenses

For the 3rd cumulative quarter,

  • The impact of inventory optimization at customers almost come to an end, sales of Surveillance lenses recovered to the same level as the previous year.
  • Sales of FA lenses continually increased driven by the expansion of the lineup.
  • Sales of Camera Module increased significantly by approximately 3 times due to the large contribution of new models launched in 2023 and in the 3rd quarter of 2024.
  • Operating Income on net sales improved to double digits and Operating Income doubled due to increased gross profit from increased sales, improved product mix, and SG&A expense reductions.

FY23 3Q

FY24 3Q

Inc/Dec（VS 2023）

（Millions of JPY）

Actual

Actual

Amount

Ratio

Net Sales

2,312

3,403

1,090

47.2%

Operating income

102

578

475

462.2%

(% of sales)

4.4%

17.0%

12.6%

-

FY23 1Q-3Q

FY24 1Q-3Q

Inc/Dec（VS 2023）

Actual

Actual

Amount

Ratio

7,744

9,414

1,669

21.6%

678

1,444

766

112.9%

8.8%

15.3%

6.5%

-

FX Impact

Amount

720

260

-

Sales Breakdown

FY23 3Q

FY24 3Q

Inc/Dec（VS 2023）

（Billions of JPY）

Actual

Actual

Amount

Ratio

Surveillance

1.4

1.8

0.4

35.7%

lenses

FA lenses, etc.

0.3

0.6

0.3

94.4%

TV conference

0.5

0.2

(0.3)

(65.8)%

lenses

Camera Module

0.1

0.8

0.7

440.5%

FY23 1Q-3Q

FY24 1Q-3Q

Inc/Dec（VS 2023）

Actual

Actual

Amount

Ratio

4.8

4.7

(0.1)

(1.0)%

1.1

2.0

0.9

76.3%

1.2

0.9

(0.3)

(25.8)%

0.6

1.8

1.2

195.8%

Camera Module

Camera Module

19%

23%

6%

8%

21%

Surveillance

16%

Surveillance

TV conference

3Q Sales

TV conference

1Q-3Q Sales lenses 50%

lenses 54%

lenses 5%

Composition

lenses 10%

Composition

14%

59%

14%

62%

FA lenses, etc.

FA lenses, etc.

18%

Inner circle: 2023

21%

Inner circle: 2023

Outer circle: 2024

Outer circle: 2024

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③ Mobility ＆Healthcare Products, Others

For the 3rd cumulative quarter,

  • Sales of Automotive lenses increased significantly by approximately 1.4 times YoY because of strong demand mainly for sensing applications due to the popularization of Advanced Driving Assistant System (ADAS).
  • Sales of Healthcare components in the cultivation field increased approximately 1.4 times YoY driven by the expansion of the lineup.
  • While cultivating new fields, Operating Income on net sales improved to 20% range, and Operating Income increased significantly by approximately 1.8 times YoY.

FY23 3Q

FY24 3Q

Inc/Dec（VS 2023）

（Millions of JPY）

Actual

Actual

Amount

Ratio

Net Sales

2,510

2,970

460

18.3%

Operating income

507

745

237

46.8%

(% of sales)

20.2%

25.1%

4.9%

-

FY23 3Q

FY24 3Q

Inc/Dec（VS 2023）

（Billions of JPY）

Actual

Actual

Amount

Ratio

Automotive

2.1

2.6

0.5

19.9%

lenses

Healthcare

0.1

0.2

0.1

100.4%

components

DSC/VC, Drone,

0.3

0.2

(0.1)

(18.8)%

etc.

Healthcare

DSC/VC, Drone,

etc. 7%

components 6%

11%

3%

3Q Sales

Composition

Automotive lenses

87%

86%

Inner circle: 2023

Outer circle: 2024

FY23 1Q-3Q

FY24 1Q-3Q

Inc/Dec（VS 2023）

FX Impact

Actual

Actual

Amount

Ratio

Amount

6,405

8,715

2,310

36.1%

720

1,177

2,105

927

78.8%

250

18.4%

24.2%

5.8%

-

-

FY23 1Q-3Q

FY24 1Q-3Q

Inc/Dec（VS 2023）

Actual

Actual

Amount

Ratio

5.3

7.3

2.0

39.6%

0.3

0.5

0.2

41.9%

0.8

0.9

0.1

9.7%

DSC/VC, Drone,

Healthcare

etc. 10%

components 6%

12%

6%

1Q-3Q Sales

Composition

Automotive lenses

84%

82%

Inner circle: 2023

Outer circle: 2024

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Summary of revenue and operating income by segment

FY23

YoY

FY23

YoY

FY23

YoY

FY23

YoY

FY24

YoY

FY24

YoY

FY24

YoY

(Millions of JPY)

1Q

(%)

2Q

(%)

3Q

(%)

4Q

(%)

1Q

(%)

2Q

(%)

3Q

(%)

Photographic

Net Sales

9,615

1.3

13,809

4.3

14,207

26.6

15,399

33.2

13,944

45.0

19,152

38.7

17,228

21.3

Products

Operating

2,666

20.0

3,839

8.3

3,948

30.0

3,553

51.0

4,019

50.8

5,960

55.2

5,263

33.3

Income

Surveillance &

Net Sales

3,215

24.5

2,216

(28.7)

2,312

(25.1)

2,041

(16.8)

2,939

(8.6)

3,072

38.6

3,403

47.2

FA Lenses

Operating

288

37.8

286

(39.4)

102

(78.8)

37

(83.6)

428

48.4

437

52.6

578

462.2

Income

Mobility &

Net Sales

1,690

(3.1)

2,203

44.8

2,510

47.0

2,202

28.5

2,935

73.6

2,809

27.5

2,970

18.3

Healthcare

Operating

284

13.5

385

123.8

507

41.9

314

12.0

729

156.3

630

63.8

745

46.8

Products, Others

Income

Total

Net Sales

14,521

5.1

18,230

2.0

19,031

18.8

19,642

24.9

19,819

36.5

25,034

37.3

23,602

24.0

Operating

2,630

26.4

3,847

7.1

3,704

18.9

3,425

52.2

4,547

72.9

6,292

63.6

5,892

59.1

Income

Net Sales

（Billions of JPY）

30.0

25.0

25.0

23.6

20.0

17.9

18.2

19.0

19.6

19.8

16.0

13.8

15.7

14.5

15.0

19.2

17.2

13.2

13.8

14.2

15.4

13.9

10.0

11.2

11.6

9.6

9.5

5.0

2.6

3.1

3.1

2.5

3.2

2.2

2.3

2.0

2.9

3.1

3.4

2.9

2.8

3.0

0.0

1.7

1.5

1.7

1.7

1.7

2.2

2.5

2.2

22/1Q

22/2Q

22/3Q

22/4Q

23/1Q

23/2Q

23/3Q

23/4Q

24/1Q

24/2Q

24/3Q

Operating Income/ Operating Income ratio

（Billions of JPY）

8.0

31.1%

30.6%

35%

7.0

28.8%

26.8%

27.1%

27.7% 27.8% 27.8%

30%

23.1%

24.8%

25.1%

6.0

23.4%

22.4%

25%

20.9%

5.0

20.2%

20%

4.0

15.2%

20.4%

16.8% 17.5%

6.0

17.0%

14.4%

14.3%14.6%

5.3

16.4%

12.9%

14.2%

15%

3.0

15.7%

4.0

3.8

3.9

3.5

3.0

10%

2.0

11.3%

2.7

4.4%

3.6

2.2

2.4

9.0%

9.4%

5%

1.0

8.1%

1.9%

0.4

0.4

0.6

0.5

0.5

0.2

0.3

0.3

0.1

0.2

0.0

0.7

0.6

0.7

0.0

0.4

0%

0.3

0.2

0.3

0.3

0.4

0.5

0.3

22/1Q

22/2Q

22/3Q

22/4Q

23/1Q

23/2Q

23/3Q

23/4Q

24/1Q

24/2Q

24/3Q

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