Tamron Co., Ltd.TSE: 7740

FY2024 2Q Financial results briefing material

· Issued by Tamron Co., Ltd.

2nd Quarter 2024 Financial Results

August 8, 2024

Tamron Co., Ltd. (Code: 7740)

Contents

  1. 1st Half FY2024 Financial Results
    1. 1st Half FY2024 Summary
    2. 1st Half FY2024 Financial Results
    3. Factors Affecting Operating Income Variability
    4. 1st Half 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. Current progress of medium-term management plan "Value Creation 26"
    1. Positioning of the "Value Creation 26"
    2. Outline of the "Value Creation 26"
    3. Financial Strategy of the "Value Creation 26"
    4. Management with a focus on capital costs and stock prices
    5. ESG/Sustainability Strategy of the "Value Creation 26"

IV. 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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  • 1st Half FY2024 Financial Results

Ⅰ -1. 1st Half FY2024 Summary

Environment

Economy

Market

  • Moderate economic recovery despite some stagnation in overseas economies
  • Uncertainty continues due to geopolitical risks such as the prolonged situation in Russia 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 ¥17 and EUR depreciated by ¥19)
  • 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 10% in volume basis and approximately 25% in value basis.
  • In the surveillance sector, affected by efforts to optimize inventory levels at camera manufacturers.
  • The automotive camera market showed continually strong performance due to the popularization of Advanced Driving Assistant System (ADAS).

Company's Results

  • Net Sales and Operating Income showed double-digit or higher increase in all segments.
  • Net Sales significantly increased by approximately 1.4 times and Operating Income significantly increased by approximately 1.7 times YoY.
  • Achieved record high Net Sales and Operating Income for the 1st half of the year.
  • Achieved 1st half Operating Income of 10-billion-yen for the first time.
  • The Interim dividend was significantly increased from the initial forecast of 50 yen to 70 yen (double from previous year)

Topics

  • From Feb. to Mar.: Repurchase 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.

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Ⅰ -2. 1st Half FY2024 Financial Results

Sales of mainstay Photographic Products Segment increased by approximately 1.4 times, and sales of Mobility & Healthcare Products, Others Segment led by Automotive Lenses, increased by approximately 1.5 times, driven by overall Net Sales

  • Maintain gross profit margin at the same level as the previous year due to curtailment of materials costs, cost reductions, etc.
  • Gross profit increased due to a large increase in Net Sales, and SG&A expenses were kept to 10% of the increase, which was much lower than the rate of increase in Net Sales. Operating Income improved by about 4pt, to 20% or more.
  • Sales increased by approximately 10% and Operating Income increased by 30％ compared to the 1st half forecast revised significantly upward on April 26.

（millions of JPY）

FY23 1H

FY24 1H

FY24 1H

Inc/Dec（VS 2023）

Inc/Dec (VS Forecast)

Forecast

Actual

Actual

Amounts

Ratio

Amounts

Ratio

（As of Apr. 26）

Net Sales

32,752

41,000

44,853

12,101

36.9%

3,853

9.4%

Gross Profit

14,845

-

20,205

5,359

36.1%

-

-

(% of Sales)

45.3%

-

45.0%

(0.3)%

-

-

-

Operating Income

6,477

8,400

10,839

4,362

67.3%

2,439

29.0%

(% of Sales)

19.8%

20.5%

24.2%

4.4%

-

3.7%

-

Ordinary Income

6,891

8,400

10,954

4,062

59.0%

2,554

30.4%

(% of Sales)

21.0%

20.5%

24.4%

3.4%

-

3.9%

－

Net Income

5,329

6,300

8,038

2,709

50.8%

1,738

27.6%

(% of Sales)

16.3%

15.4%

17.9%

1.6%

-

2.5%

-

JPY - 1 USD

135.01

144.32

152.37

17.36

-

8.05

-

JPY - 1 EUR

145.99

156.69

164.75

18.76

-

8.06

-

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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 25% and Operating Income Increased by approximately 50% YoY)

（Millions of JPY）

6,477

FY2024 1H

Impact of exchange rate on Net Sales:

10,839

+3,980 million JPY

82

3,680

(270)

(370)

1,240

FY23 1H Actual R&D

SG&A Expenses

FX rate

Gross Profit

Others

Expenses

(Expt. R&D)

Impact

from sales

FY24 1H Actual

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Ⅰ -4. 1st Half FY2024 Results by Segment

① Photographic Products

  • Sales of Own-Brandproducts increased by double digits, even excluding favorable foreign exchange effects, due to the impact of the launch of new models last year and continued strong performance in the domestic and Chinese markets.
  • Sales of OEM products more than doubled due to strong performance from the second half of the previous fiscal year.
  • Significant increase in Sales led to approximately 1.5 times of Operating Income YoY, and Operating Income on Net Sales reached 30% level for the first time.

（Millions of JPY）

FY23 1H

Actual

Net Sales

23,425

Operating income

6,506

(% of sales)

27.8％

FY24 1H

FY24 1H

Inc/Dec

FX Impact

（VS 2023）

Forecast

Actual

Amount

Ratio

Amount

30,600

33,097

9,671

41.3%

2,780

8,300

9,979

3,473

53.4%

760

27.1％

30.2%

2.4%

-

-

Inc/Dec

（VS Forecast）

Amount Ratio

2,497 8.2%

1,679

20.2％

3.1%

-

Sales Breakdown

FY23 1H

FY24 1H

FY24 1H

Inc/Dec

Inc/Dec

（Billions of JPY）

（VS 2023）

（VS Forecast）

Actual

Forecast

Actual

Amount

Ratio

Amount

Ratio

Own-Brand

15.7

17.5

18.0

2.3

14.3%

0.5

2.6%

OEM

7.7

13.1

15.1

7.4

96.2%

2.0

15.6％

Market environment VS 2023

Quantity

Amount

SLR cameras

(18)％

(16)％

Mirrorless cameras

15％

15％

Interchangeable lens cameras total

8％

12％

Interchangeable lenses

9％

26％

OEM 33% Sales Own-Brand46% Composition 54%

67%

Inner circle: 2023

Outer circle: 2024

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②Surveillance & FA Lenses

  • Sales of Surveillance lenses decreased due to continued efforts to optimize inventory levels at camera manufacturers.
  • Sales of FA lenses continually increased driven by the expansion of the lineup.
  • Sales of Camera Module increased due to significant contribution of new models launched in last year.
  • Due in part to favorable foreign exchange effects, the forecast planned lower Sales and Operating Income YoY resulted double-

digit increases in Sales and Operating Income.

FY23 1H

FY24 1H

FY24 1H

Inc/Dec

FX Impact

Inc/Dec

（Millions of JPY）

（VS 2023）

（VS Forecast）

Actual

Forecast

Actual

Amount

Ratio

Amount

Amount

Ratio

Net Sales

5,432

5,300

6,011

579

10.7%

620

711

13.4%

Operating income

575

500

866

290

50.5％

280

366

73.2％

(% of sales)

10.6％

9.4％

14.4％

3.8%

-

-

5.0%

-

Sales Breakdown

FY23 1H

FY24 1H

FY24 1H

Inc/Dec

Inc/Dec

（Billions of JPY）

（VS 2023）

（VS Forecast）

Actual

Forecast

Actual

Amount

Ratio

Amount

Ratio

Surveillance lenses

3.4

2.6

2.9

(0.5)

(15.7)%

0.3

10.4%

FA lenses, etc.

0.8

1.1

1.4

0.6

69.3%

0.3

24.8%

TV conference lenses

0.7

0.8

0.7

0.0

0%

(0.1)

(5.1)%

Camera Module

0.5

0.8

1.0

0.5

119.6%

0.2

26.2%

Camera Module

17%

8%

14%

Surveillance

TV conference

Sales

lenses 48%

Composition

lenses 12%

15%

63%

FA lenses, etc.

23%

Inner circle: 2023

Outer circle: 2024

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③ Mobility ＆Healthcare, Others

  • Sales of Automotive lenses increased significantly by approximately 1.5 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 showed double-digitincrease driven by the expansion of the lineup.
  • While cultivating new fields, Operating Income doubled due to the strong sales of each product group, including mainstay automotive lenses.

FY23 1H

FY24 1H

FY24 1H

Inc/Dec

FX Impact

（Millions of JPY）

(VS 2023)

Actual

Forecast

Actual

Amount

Ratio

Amount

Net Sales

3,894

5,100

5,744

1,850

47.5%

580

Operating income

669

900

1,359

690

103.1%

200

(% of sales)

17.2％

17.6％

23.7％

6.5%

-

-

Inc/Dec

(VS Forecast)

Amount Ratio

644 12.6%

459

51.1％

6.1%

-

DSC/VC, Drone, etc.

Healthcare

11%

components 6%

13%

Sales Breakdown

7%

FY23 1H

FY24 1H

FY24 1H

Inc/Dec

Inc/Dec

Sales

(Billions of JPY)

(VS 2023)

(VS Forecast)

Composition Automotive

Actual

Forecast

Actual

Amount

Ratio

Amount

Ratio

lenses 83%

Automotive lenses

3.1

4.2

4.8

1.7

53.1%

0.6

14.0%

80%

Healthcare components

0.26

0.3

0.3

0.1

22.9％

0.0

6.9％

DSC/VC, Drone, etc.

0.5

0.6

0.6

0.1

25.6％

0.0

5.7％

Inner circle: 2023

Outer circle: 2024

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Summary of revenue and operating income by segment

（Millions of JPY）

FY23 1Q

YoY (%)

FY23 2Q

YoY (%)

FY23 3Q

YoY (%)

Photographic

Net Sales

9,615

1.3

13,809

4.3

14,207

26.6

Products

Operating

2,666

20.0

3,839

8.3

3,948

30.0

Income

Surveillance & FA

Net Sales

3,215

24.5

2,216

(28.7)

2,312

(25.1)

Lenses

Operating

288

37.8

286

(39.4)

102

(78.8)

Income

Mobility &

Net Sales

1,690

(3.1)

2,203

44.8

2,510

47.0

Healthcare Products,

Operating

284

13.5

385

123.8

507

41.9

Others

Income

Total

Net Sales

14,521

5.1

18,230

2.0

19,031

18.8

Operating

2,630

26.4

3,847

7.1

3,704

18.9

Income

FY23 4Q

YoY (%)

FY24 1Q

YoY (%)

FY24 2Q

YoY (%)

15,399

33.2

13,944

45.0

19,152

38.7

3,553

51.0

4,019

50.8

5,960

55.2

2,041

(16.8)

2,939

(8.6)

3,072

38.6

37

(83.6)

428

48.4

437

52.6

2,202

28.5

2,935

73.6

2,809

27.5

314

12.0

729

156.3

630

63.8

19,642

24.9

19,819

36.5

25,034

37.3

3,425

52.2

4,547

72.9

6,292

63.6

Net Sales

Operating Income/ Operating Income ratio

（Billions of JPY）

（Billions of JPY）

30.0

25.0

25.0

20.0

17.9

18.2

19.0

19.6

19.8

16.0

13.8

15.7

14.5

15.0

19.2

13.2

13.8

14.2

15.4

13.9

10.0

11.2

11.6

9.6

9.5

5.0

3.1

3.2

2.2

2.3

2.0

2.9

3.1

2.6

3.1

2.5

2.9

2.8

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

8.0

28.8%

31.1%

35%

7.0

26.8%

27.1%

27.7% 27.8% 27.8%

23.1%

30%

24.8%

6.0

23.4%

22.4%

25%

20.9%

5.0

20.2%

16.8% 17.5%

20%

4.0

14.4% 15.2%

20.4%

6.0

14.3%

16.4%

12.9%

15%

3.0

4.0

15.7%

3.8

3.9

14.6% 14.2%

3.5

10%

2.0

11.3%

3.0

2.4

2.7

4.4%

3.6

2.2

9.4%

9.0%

5%

1.0

8.1%

1.9%

0.4

0.4

0.5

0.5

0.2

0.3

0.3

0.1

0.2

0.0

0.7

0.6

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

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