1 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Global Mizuho Investors Conference NY 2018
ULVAC Inc.Dec.3 - 4,2018
(Securities code: 6728)
2 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
1. Footsteps of ULVAC
3 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Ulvac:A Venture Established in 1952
Yoshijiro Ishikawa
Yoshio Osawa
First President ULVAC
President Osawa Shokai
AiichiroFujiyama
TamesaburoYamamoto
GenHirose
ChairmanChamber of
Commerce & Industry
PresidentAsahi Beer
President Nissay
Kohnosuke Matsushita
FounderPanasonic
The Six Founders (Angels) of ULVAC
4 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Business History
Smart Society1952
Vacuum Equipment business
Vacuum Application business
1960 1970
Ultra fine particleMaterial
1980 2000 2010
Equipmentcontrol
Surface Analysis
Metallurgy/Chemical
Coating business
Scientific Instruments
Small Flat PanelDisplay
1990
Hybrid EV
1952: 1st order evaporation system for automotive parts plating
Food ▽Barrier packaging ▽ Freezedry
1975: World 1st auto semiconductor equipment order from IBM
Semi-conductorElectrical device
Automotive
▽▽
Photo Voltaic
Pharmaceutical
Large Flat PanelTV
Future Display
Enhanced Info.
Process
EnergySave
Create
High resolution Display
New Energy
Advanced Electronics
Listed on TSE Restructure
5 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
2. ULVAC Today
6 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
• ULVAC Equipment Sales• ULVAC Techno• ULVAC KIKO• ULVAC Kyushu• Tigold• ULVAC Coating• ULVAC Cryogenics• ULVAC-PHI
• ULVAC Tohoku• Reliance Electric• Showa Shinku• Fine Surface Technology• ULVAC Human Relations• Shinku Ceramics• Nissin Seigyo
• ULVAC China Holding• ULVAC Suzhou• ULVAC Orient• ULVAC Automation Technology• ULVAC Vacuum Furnace• ULVAC Shanghai Trading• ULVAC Material• ULVAC Ningbo• ULVAC Tianma Electric• ULVAC Cryogenics Ningbo• ULVAC Nonferrous Metal• ULVAC Research Center Suzhou• Hong Kong ULVAC• ULVAC Vacuum Equipment• ULVAC Opto-electronics Thin Film Technology
• ULVAC GmbH • ULVAC Technologies• Physical Electronics USA
• ULVAC Taiwan• Ultra Clean Precision Technologies• ULCOAT Taiwan• ULVAC Automation Taiwan• ULVAC Software Creative Technology• ULVAC Materials Taiwan
• ULVAC Korea• ULVAC Korea Precision• Pure Surface Technology• ULVAC Cryogenics Korea• ULVAC Materials Korea• UF Tech
• ULVAC Singapore• ULVAC Malaysia• ULVAC Thailand• ULVAC India Branch
Japan
Japan
Germany
ChinaKorea
Taiwan
North America
Southeast Asia
ULVAC, Inc. siteGroup companiesSales and CS center
• ULVAC India BranchIndia
JapanJapan1616
ChinaChina1515
SEASEA33
KoreaKorea66
TaiwanTaiwan66
USAUSA22
4949
EUEU11
Total Employee6,439
Employee3,208
Employee1,757
Employee616
Employee551
Employee135
Employee156
Employee15
The 66th AnniversaryGlobal Network
As of June 30, 2018
7 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
ULVAC, leading the world in vacuum technology
The photos used here are for reference purposes only.
Automobiles Semiconductors Flat Panel TVs Solar Cells Food Products
Aircraft Biotechnology Smart Phones Electromagnetic Devices Consumer Electronics
Space Industry Healthcare & Pharmaceutical Wearable/VR Devices Power Devices MEMS Devices
Fiber-opticsBuilding Materials/ Smart Glass Flexible Devices Packaging Next-Generation Lighting
8 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
OLED
NVM3D Xpoint
PCRAM
PowerDevice
IOTDevice
Advanced Materials
Control & Software
Surface Analysis
Equipment /Components
Coating Business
Customer Support
MaterialService
FPDPV
Control / Analysis
Related Business
Vacuum Business
VacuumTechnology
ULVAC’s Product Portfolio
9 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
FPD・PV Equipment44%
Semiconductor & Advanced Electronics Equipment
21%
Components13%
Industrial Equipment
9%
Materials6%
Others7%
249.3JPY Billion
VacuumRelated
13%32.6Billion
Vacuum Equipment
87%216.7Billion
FY 2017(Jul. 2017-Jun. 2018) Sales by Segments
10 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
249.3JPY Billion
Overseas JapanJapan
30%
China38%
Korea15%
Taiwan7%
Other Asia3% EU, etc.
7%
70%174.5 Billion
30%74.8 Billion
FY 2017(Jul. 2017-Jun. 2018) Sales by Region
11 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
ULVAC’s Value Creation
AdvancedTechnology Development
Realize a Spiritual rich & Safe living Environment
12 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
High-resolutionLTPS & IGZO
Flexible displayOLED
Large capacity & Low power memory for Big
data/IoT
Communication devices & sensors to
realize IoT
High speed information processing
High end Semiconductor
device
Next Gen.Display
Next Gen.Non Volatile
Memory
AdvancedElectronics,
MEMS
High DensityPackaging
Ultra fine Wiring
Priority Area:Advanced Information Society (IoT)
13 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
High PerformanceLow Power
LED
High-efficiencyPhoto Voltaic
EV, Hybrid Automobile Solid stateThin Film Li
Secondary Battery
Si, SiCTransportation,
Consumer Electronics
AdvancedLED
High-efficiencySolar cells
Next Gen.Automobile
SecondaryBattery Power Device
Priority Area:Energy Saving Society
14 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
3. Review of Medium-Term Plan
15 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
5G accelerates the development of a smart society
Ultra fast x100Ultra low latency x1/10Massive connectivity x100
Increase in multiple connection data
Higher capacity servers, high-speed processing, lower energy consumption
Devices that are multi-functional, environmentally tolerant, small, low-cost, self-powered, and use new energy
Sensors, communication devices, batteries
Cloud computing
Edge computing
Technical innovations required for a smart society
Review of Medium-Term Plan (Business Environment)
Big opportunity seen only once every few decades
16 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
High capacityHigh-speed processing
Low power consumption
Multifunctional, environmentally tolerantSmall, low cost
Self-powered, new energies
Next generation non-volatile
memoryNVM
3D-NAND
Logic
High frequency devices
Multi-bandSAW, BAW
Base stationGaN
RF devices
Multifunctional sensorsMEMS
Communication infrastructure
Fiber-optic waveguides
DRAM
High efficiency solar cells
Power storageTFB
Capacitors
Power devicesSiCGaN
High-precision displays, flexibleOLEDs
Imaging devices
Big opportunity seen only once every few decadesTrends in technical innovations
Review of Medium-Term Plan(Business Environment)
17 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
108.5 105.0
51.6 56.0
32.8 34.0
23.7 24.015.2 18.017.4 18.0
FY2019 net sales plan (Unit: ¥1 billion)Growth strategy• Semiconductors are poised to grow in
tandem with memory and logic.• Electronics are expected to grow owing
to the business opportunities in technical innovation presented by 5G.
• In FPDs, continued long-term investment is expected primarily in large-screen TVs and OLEDs.
• Growth in components, materials, and customer support (stable base).
• Growth in the China market
Review of FY2019 plan:Net sales of ¥265.0 billion (+¥15.0 billion), operating profit of ¥38.0 billion (+¥3.0 billion)• Review only the plan figures with no changes to the framework of the current medium-term plan.
2017
249.3 255.0
2018
265.0
Other
Materials
General industrial equipment
Components
Semiconductor and electronicdevice production equipment
FPD and PV production equipment
2019 (FY)
Review of Medium-Term Plan (FY2019 Plan)
18 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
110.9 108.5 105.0
36.4 51.6 56.0
31.832.8 34.0
21.523.7 24.014.615.2 18.016.717.4 18.0
2017 2018 20192016 (FY)
Net Sales: ¥1 billionOperating profit margin: %
Other
MaterialsGeneral industrial equipmentComponentsSemiconductor and electronic device production equipmentFPD and PV production equipment
231.8249.3 255.0 265.0
Aim for net sales of ¥300.0 billion and an operating profit margin of 16% in FY2022.• Growth based on multiple business lines with high profit margins, such as semiconductors (growth in logic
together with memory), electronic parts (growth due to development of smart equipment), and components
the current medium-term plan
300.0
2022
Review of Medium-Term Plan (Goals)
12.714.2 14.3 14.3
16.0
19 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
0
1,000
2,000
2016 2017 2018 2019 2020 2021 2022
OLED LCD
0
100
200
2016 2017 2018 2019 2020 2021 2022
OLED LCD
Continued long-term investment in FPDs is expected
• Continued investment in large-screen TVs
• OLED production equipment for smartphones Restraint in South Korea on near term investmentContinued capex in China
Future OLED market expected to use flexibility and expand to TVs, etc.
(Million m2) (Million Units)TV panel demand forecast Mobile phone panel demand forecast
(Prepared using IHS Markit materials)
Review of Medium-Term Plan(FPD and PV Growth Strategy)
20 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Continued investment in large-screen TVs and OLEDs, more active investment in high efficiency solar cells as well in China
Large-screen TVs
• High productivity: G10.5 substrate compatible→maintain a share near 100%
• High precision: Particle strategy→magnetic suspension system
• Oxide semiconductors: Increase in sputtering→Higher demand for equipment and materials
Large-screen 4K/8K, low-cost, high-precision
OLED Flexible, high-precision
Solar cellsImprovement in conversion efficiency
Sputtering
Vacuum evaporationSputtering
P-CVD
Cat-CVDSputtering
• Process development: Including main units→Support system including processes
• High precision: Particle strategy→Thorough testing on in-house evaluation
equipment
• Capital investment in high-efficiency SHJ*Success in commercial mass production of the world's only SHJ in low-damage Cat-CVD
→Achieve conversion efficiency exceeding 23% by using SHJ
Review of Medium-Term Plan(FPD and PV Growth Strategy)
21 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Poised to grow in tandem with memory (NAND, DRAM, PcRAM) and logic
DRAM, NAND Provide equipment for wiring andrewiring to memory makers
Servers, edge computing, mobile
Next generation non-volatile
memory PcRAM
Deliveries of equipment for mass production are underway.Other memory makers are also thinking about entering the market → market expansion expected in the future
Servers, DIMM/SSD
Logic/foundryNew delivery on major logic lines aincrease share
*Advanced miniaturization process via EUV introduction
MPU/GPU
Wiring film deposition TSV/UBM/RDLNatural oxide layer stripping
MemoryCell film deposition
Wiring film depositionEUV generation MHM*
Review of Medium-Term Plan(Semiconductor and Electronic Parts Growth Strategy)
22 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Technical innovation accelerated by 5G a Expansion of business opportunities in electronic parts production equipment
Power devices
Energy efficiency→Energy saving, high efficiency, low loss
IGBT, SiC, GaN
Communi-cation
devices
Expansion of frequency bandsIncrease in base stations due to higher frequencies→Shift to multi-band
SAW, BAWRF devices
Sensors IoT expansion, installation in cars→ Smaller, higher-performance
MEMS sensors and infrared
sensors
High density packaging
High density packaging→ Smaller, higher-performance
WLP*PLP**
Smaller, more refined, higher density, higher capacity, energy-efficient electronic devicesa Provide an extensive equipment lineup with sputtering target materials and processes
Supporting equipmentSputteringVacuum evaporationCVDEtchingAshingIon implantation
Film deposition materials and processes
Review of Medium-Term Plan(Semiconductor and Electronic Parts Growth Strategy)
23 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
By using its characteristics as a vacuum manufacturer, ULVAC is developing diverse businesses in general industry a Globalization
Heat exchangersRadiators, EGR coolers, electronic parts cooling, etc.→ Vacuum brazing furnaces, vacuum leak
testing
Rare-earth magnets for electric motorsHV, EV, and similar vehiclesWind power, home appliances→ Vacuum sintering furnaces and melting
furnaces
High efficiency solar cellsFor high efficiency SHJ*→ Cat-CVD equipment
The world’s only commercial mass production facility
*Silicon heterojunction
High function filmsHigh efficiency capacitors in HV, EV, and similar vehicles→ Share of more than 90% in evaporation roll
coater
Drugs and foodGeneric drug manufacturingExtraction of high purity substances→ Vacuum freeze-drying equipment
Vacuum distillation equipment
Resin fuel tanks→ Vacuum leak testing
Review of Medium-Term Plan(Growth Strategy in Diverse Fields)
24 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Component growth strategy• Expansion of vacuum applications (general industry)• Expansion of refrigeration business (advanced
technology)• Demand due to expansion of device market in China• Expansion of production and sales due to group
synergies• Improved lineup by means of alliances
*Components: Components essential to vacuum equipmentVacuum pumps, vacuum gauges, vacuum valves, vacuum leak testers, gas analyzers, power supply for film formation, etc.Delivery to vacuum device makers, device customers, etc.
Cryo pumpsVacuum valves
Film deposition controllersDry pumps
Vacuum evaporation equipment for OLED
manufacturing
Medical MRI example
4K refrigerators for cooling superconductive magnets
Component* strengths• In-house manufacture of various equipment• Diverse lineup• High reliability by linking with vacuum equipment• Diverse customers• Production of vacuum pumps in China for more than
20 years
Liquid nitrogen generators that manufacture and store liquid nitrogen from airUse in research and medical settings
Review of Medium-Term Plan(Component Growth Strategy)
25 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Strengths in materials*• Production locations near customers (Japan, China, South
Korea, Taiwan)• Material development in conjunction with the deposition
process→Ultra-materials research lab
• Sampling system using mass production machines• Development of new materials and applications
Materials growth strategy• Meet the demand due to increased equipment operation in
China→Suzhou, China plant (FPDs, semiconductors, etc.)
• Meet the increasingly sophisticated demand for FPD and semiconductor manufacturing processes→High definition (wiring material AL→Cu, thicker film)→Increased mobility (a-Si→oxide IGZO, etc.)→Foldability
• Provide support for high-tech applications→(Nb materials, etc. for high-performance accelerators)
Target used in sputtering
Acceleration cavity for high-performance accelerators
(Use high-purity Nb materials)Sputtering systems for
large-screen TV manufacturing
*Materials businessUse in sputtering, i.e., the main method of vacuum depositionDevelop business based primarily on targeted materialsWork also on developing and manufacturing function materials
Sputtering systems for semiconductor manufacturingTarget used
in sputtering
Review of Medium-Term Plan(Materials Growth Strategy)
26 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Field support (maintenance)
Parts sales
Cleaning and surface
treatment
Sales of refurbished
used machines
Modification/improvement
Growth strategy in the customer support business• Global deployment• Upgrading and expansion of the field support
system• Maintenance of products made by other companies• Expansion of used machine sales business• Expansion of proposals for
modification/improvement
(Strengths in the customer support business)• Support throughout the life cycle• Domestic/overseas network (near customers)
71 locations in 14 countries(33 in Japan, 15 in China)
• Comprehensive maintenance including components• Continuous improvement including processes,
proposals for change
Before refurbishing
After refurbishing
Review of Medium-Term Plan(Growth Strategy in the Customer Support Business)
27 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Shenyang
DalianBeijing
Xian
Chengdu
HefeiNingbo
JingjiangSuzhou
Shanghai
Shenzhen
Hong Kong
0%
20%
40%
60%
80%
100%
2005 2010 2015 2017
日本 台湾 韓国中国 その他アジア 欧米
Percentage of sales to China
• Revitalization of investment in FPDs (large-screen TVs and OLEDs), semiconductors, and electronics due to policies advocating domestic production
• Increase in demand for components, materials, and customer support
Strengths of the China market• Network
→Approximately 1,600 employees in 15 companies• Supply chain
→Local production of G8.5 sputtering equipment• Local management
Growth strategy• Reinforcement of the sales and production system• Growth in FPDs, semiconductors, and electronics• Expansion of the component, material, and customer
support business in tandem with an increase in delivery equipment
Service locationsMajor manufacturing locations
# of employees
Guangzhou
Amoy
WuhanChongqing
Ordos
15Group companies
in China
1,588
13Manufacturing locations
in China
15Service locations
in China
# of employees
Japan
China
Taiwan KoreaOther Asian N. A. & EU
Review of Medium-Term Plan(Growth Strategy in the China Market)
28 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Strengths in production and procurement• Production locations and supply chains have been built
in Japan, China, and Taiwan(1) Flexible coordination of production among locations(2) Engineers at each location respond across borders
a Increase in sales, response to delivery requests
Growth strategy• Production near customers• Collaborative manufacturing among our facilities• Further expansion of local suppliers
Kagoshima, Kyushu
Fuji Susono
Hachinohe, Tohoku
Suzhou, China
Pyeongtaek, South Korea
Tainan, Taiwan
Major production locations
ChigasakiHeadquarters
and Plant
Mega factory
Review of Medium-Term Plan(Strengths of the Production System)
29 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
4. Review of FY2017 (Jul.2017-Jun.2018) Consolidated Business Results
30 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
June '17
Result Plan*1 Revised*2 Result
Ordersreceived 235.5 245.0 265.0 243.0 7.5 3.2%
Orders back-log 106.3 - - 100.0 - -
Net Sales 231.8 239.0 250.0 249.3 17.4 7.5%
OperatingProfit 29.5 31.0 35.5 35.4 5.9 20.0%
Ratio 12.7% 13.0% 14.2% 14.2% + 1.5 pt
Net Income 24.5 25.5 30.5 35.9 11.4 46.7%
Ratio 10.6% 10.7% 12.2% 14.4% + 3.8 pt
June '18 Y-o-Y
(Change)
(Unit: ¥1 billion)
• Orders received, net sales, and profits were up year-on-year• The operating profit margin also increased 1.5 points year-on-year, owing to semiconductor and
electronic parts production equipment etc.• Net profit increased by 47% due to deferred tax assets and gains on sales of stocks
*2: Figures published in February 2018*1: Figures published in August 2017
112.0 119.8 125.3 124.0
14.4 15.1 18.7
16.7
0
15
30
45
0
50
100
150
Operating profit
Net sales
1H FY2016
Net sales and operating profits (by semi-annual period)
2H 1H 2H FY2017
Summary of FY2017 Consolidated Business Results
31 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Highest sales ever, record-breaking profits for three consecutive termsOrders received: ¥243.0 billion (+3% year-on-year)- Owing to an increase in capital expenditures for memory, orders for semiconductor and
electronic parts increased significantly, and orders for components were higher year-on-year.
Net Sales: ¥249.3 billion (+8% year-on-year)- Net sales of semiconductors and electronic parts were up year-on-year.
Operating Profit: ¥35.4 billion (+20% year-on-year)- Operating profit was up year-on-year, with all profit categories at high levels.
Dividends- Dividend (per share): ¥95 (+¥45 year-on-year)
Summary of FY2017 Consolidated Business Results Highlights
32 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
• Because of an increase in the weight of semiconductor and electronic parts production equipment, which has high profit margins, both the gross profit margin and operating profit margin rose.
24.5 24.3
26.627.5
29.3
20
25
30
35
Gross profit margin(Unit: %)
FY2017FY2016FY2015FY2014FY2013
6.9 6.2
9.3
12.7
14.2
5
10
15
20
Operating profit margin(Unit: %)
FY2017FY2016FY2015FY2014FY2013
Summary of FY2017 Consolidated Business Results Highlights(Profit Margins)
33 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
0
50
100
150
200
250
110.9 108.5
36.4 51.6
31.832.8
21.523.714.615.216.717.4231.8249.3
0
50
100
150
200
250
113.7 93.0
37.654.1
31.1 33.1
22.7 29.415.1 15.415.3 18.0235.5
243.0
FY2017
Other
Materials
General industrial equipment
Components
Semiconductor and electronicparts production equipment
FPD and PVproduction equipment
FY2016 FY2017FY2016
(Unit: ¥1 billion) (Unit: ¥1 billion)Orders Received Net Sales
• FPD and PV production equipment: Investment in LCDs for large-screen TVs and OLEDs for smart phones, particularly in China, remains high
• Semiconductor and electronic parts production equipment: Backed by strong server demand, there was an increase in production equipment for memory (NAND, DRAM, next generation non-volatile memory). Up significantly year-on-year
Summary of FY2017 Consolidated Business Results(Orders Received and Net Sales by Segment)
34 © 2018 ULVAC, Inc. | Confidential and Proprietary InformationOtherMaterialsGeneral industrial equipment
ComponentsSemiconductor and electronic parts production equipmentFPD and PV production equipment
• Net sales continued to perform at a high level.• Orders received: Sales negotiations are expected to be concentrated in the 1Q more than initially planned
(1H ¥140.0 billion, 2H ¥105.0 billion).• Large deals expected in June ended up sliding to the next term, which caused a temporary decline (expected
to recover in 1Q of the next term).
0
20
40
60
80
100
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
28.8 20.6
40.8
21.2 22.7 30.9 27.3
32.8
47.5
17.3 11.9 16.2
7.5
8.0
8.5
7.4 8.2
10.6 8.9
9.8
9.3
23.1
13.3 8.4
6.6
6.3
7.5
7.7 6.7
7.4 9.1
7.8
8.0
7.9
8.7 8.5
5.0
5.3
4.8
5.4 5.1
5.2 7.0
5.5
8.5
7.0
7.9 6.0
4.4
4.6
3.5
3.3 3.7
4.2 3.4 3.8
4.0
5.0
3.3 3.1
4.2
4.7
4.1
3.4 3.6
3.4 3.7 4.6
3.7
5.0
3.8 5.5
Orders Received (Unit: ¥1 billion)
FY2015 FY2016 FY2017
0
20
40
60
80
100
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
20.6 24.1 20.4 17.8 22.7 29.4 29.4 29.4 28.9 28.1 28.3
23.2
9.1 8.0
8.15.7
8.2
9.6 9.5 9.1 10.9 13.4 14.9
12.46.3 6.4
6.66.8
7.2
8.5 8.8 7.3 8.6 7.8 8.2
8.36.0 5.4 5.3
4.1
4.2
6.0 5.4 5.9 5.3 5.6 6.3
6.54.2 4.1
3.43.4
3.8
4.0 3.4 3.4 4.0 4.3 3.1
3.84.0 4.7
4.33.9
3.9
4.5 3.8 4.4 3.2 5.2 4.14.9
Net Sales (Unit: ¥1 billion)
FY2015 FY2016 FY2017
Summary of FY2017 Consolidated Business Results(Orders Received and Net Sales by Segment: Quarterly)
35 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
• Total assets increased due to increases in orders received and net sales, but net assets also increased by ¥49.2 billion and the equity ratio improved to 49.5% due to increases in net profit and in the market valuation of investment securities.
• Interest-bearing debt decreased by ¥7.0 billion, and net cash improved to ¥21.4 billion.
78.0 104.9
154.1 12.1
11.9
10.7
31.4
36.9
41.7
62.7
42.7
35.7 35.3
48.8
55.6
0
100
200
300Notes and accountspayable, trade
Interest-bearingdebt
Other currentliabilities
Other long-termliabilities
Net assets
(Unit: ¥1 billion)Liabilities and Net Assets
FY2015 FY2016 FY201715.6 15.3
36.4
60.4 60.3 64.3
10.5 12.5
13.6 29.5 30.2
39.1 58.0 70.5
87.3 45.7 56.4
57.1
0
100
200
300Cash on hand and inbanks
Notes and accountsreceivable, trade
Inventories
Other current assets
Property, plant andequipment
Investment securities,etc.
(Unit: ¥1 billion)
FY2015
Assets
FY2016 FY2017
Summary of FY2017 Consolidated Business Results(Consolidated Balance Sheet)
36 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
5.FY2018 (Jul.2018-Jun.2019) Consolidated Earnings Forecast
37 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
• Orders received, net sales, and operating profit are expected to increase year-on-year• Net profit is expected to decrease in reaction to the posting of deferred tax assets last year
125.3 124.0 125.5 129.5
18.7 16.7
19.5 17.0
0
15
30
45
0
50
100
150Forecast
Operating profit
Net sales
1H FY2017
Net sales and operating profits (by semi-annual period)
2H 1H 2H FY2018
FY2018 Forecast
1H Full Year ChangesY-o-Y17.0
+7.0%
Orders back-log 100.0 94.5 105.0
5.7+2.3%
1.1+3.3%
Ratio 14.2% 15.5% 14.3%▲ 10.4
-29.0%
FY2017Results
Net Income
Ordersreceived
Net Sales
Operating profit
14.0 25.5
243.0
249.3
35.4
35.9
120.0 260.0
125.5 255.0
19.5 36.5
(Unit: ¥1 billion)
FY2018 Consolidated Earnings Forecast
38 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
0
50
100
150
200
250
300
66.7
111.4 113.793.0 106.0
35.9
31.4 37.654.1
55.526.2
28.131.1 33.1
35.0
23.9
20.422.7 29.4
26.5
13.1
15.815.1 15.4
19.5
16.8
16.415.3 18.0
17.5
(Unit: ¥1 billion)
2014 2015 2016 2017
Forecast
2018
182.7
223.6235.5
243.0260.0
Other
MaterialsGeneral industrial equipmentComponents
Semiconductor and electronicparts production equipment
FPD and PVproduction equipment
Orders Received
FY
• FPD and PV manufacturing equipment orders received and net sales are expected to continue at the ¥100.0 billion level
• Almost all other product categories, including semiconductor and electronic parts production equipment and components, are expected to exceed last year's performance
0
50
100
150
200
250
300
59.782.8
110.9 108.5 105.0
36.0
30.9
36.4 51.6 56.0
26.526.0
31.832.8 34.0
25.520.7
21.523.7 24.0
14.415.1
14.615.2 18.0
17.116.9
16.717.4 18.0
(Unit: ¥1 billion) Forecast
179.2192.4
231.8249.3 255.0
Net Sales
2014 2015 2016 2017 2018FY
FY2018 Consolidated Earnings Forecast(Orders Received and Net Sales by Segment)
39 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
24.3
26.627.5
29.3 29.6
20
25
30
35
Progression of gross profit margin
(Unit: %)
FY2018FY2017FY2016FY2015FY2014
Forecast
6.2
9.3
12.7
14.2 14.3
5
10
15
20
Progression of operating profit margin
(Unit: %)
Forecast
FY2018FY2017FY2016FY2015FY2014
• Gross profit margins and operating profit margins are expected to remain at high levels
FY2018 Consolidated Earnings Forecast(Profit Margins)
40 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
• R&D investments (capital expenditures for R&D + R&D expenses) are expected to continue increasing• Active development is expected to lead to future growth, along with efforts in next generation
displays/logic, next generation non-volatile memory
0
5
10
5.66.3
6.9
8.3
9.7
(Actual and forecast R&D expenses)
Forecast
FY2014 FY2015 FY2016 FY2017 FY2018
(Unit: ¥1 billion)
0.0
5.0
10.0
15.0
20.0
3.9 4.1 4.1
7.2 9.6
7.6 6.9 6.4 6.5 7.6
Depreciation
R&D
Building, Repair etc.
6.7
8.37.0
12.9
15.6
(Actual and forecast capital expenditures)
FY2014 FY2015 FY2016 FY2017 FY2018
(Unit: ¥1 billion)
Forecast
Total Investment
FY2018 Consolidated Earnings Forecast(Progression of Capital Expenditures and R&D Expenses)
41 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
(¥)
The dividend payout ratio (actual) is calculated based on profit after deducting additional deferred tax assets and gains from sales of stocks
Dividends are implemented giving full consideration to factors such as expansion of the financial base for further investment in growth, consolidated performance each year, and dividend payout ratio.
• The FY2017 dividend is ¥95 per share, in line with the forecast• The dividend is forecast to increase by ¥10 to ¥105 in FY2018• Since the recovery in FY2014, the dividend has continued to increase
(¥)
FY2016 FY2017(Plan)
FY2018(Forecast)
Dividend per share(vs. last year)
¥50(+¥20)
¥95(+¥45)
¥105(+¥10)
10 3050
95 10513.0%
5.8%
8.9%10.1%
16.4%20.3%
0%
6%
12%
18%
24%
0
30
60
90
120
FY2014 FY2015 FY2016 FY2017(Plan)
FY2018(Forecast)
Dividend per share Payout ratio Payout ratio (actual)
*
FY2018 Consolidated Earnings Forecast(Year-end Dividend)
42 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
6.Business Results of 1Q FY2018(July-September 2018)
43 FY181QPSN20181109E© 2018 ULVAC, Inc. | Confidential and Proprietary Information
Orders Received: ¥77.7 billion (-4% year-on-year, +63% vs. 4Q FY2017)- Incoming orders were sluggish at one point in the second half of last year, but they
recovered in the current quarter.
Net Sales: ¥61.7 billion (+1% year-on-year, +4% vs. 4Q FY2017)- Net sales continue at a high level.
Operating Profit: ¥8.7 billion (-3% year-on-year, +56% vs. 4Q FY2017)- Operating profit recovered after a temporary decline in the previous quarter.
Earnings forecasts for the year ending June 2019 remain unchanged from the figures released in August.
Highlights of First Quarter FY2018 Business Results
44 FY181QPSN20181109E© 2018 ULVAC, Inc. | Confidential and Proprietary Information
FY2017 1Q
Results Results Y-o-Y (Changes)
Orders Received 81.0 77.7 -4.0%
Net Sales 60.9 61.7 1.3%
Operating Profit 8.9 8.7 -2.6%
Ratio 14.6% 14.0%
Net Income 6.3 6.1 -4.0%
Ratio 10.4% 9.9%
FY2018 1Q60.9
64.3 64.9 59.1 61.7
8.99.8
11.1
5.6
8.7
0
5
10
15
20
0
20
40
60
80(Unit: ¥1 billion)
• Orders received were flat compared with the same period last year due to large orders for FPD production equipment.• Net sales were flat compared with the same period last year due to contributions from semiconductor and electronic
device production equipment.• Operating profit recovered to the level of the same period last year.
Operating profit
Net sales
Progression of net sales and operating profit (quarterly)
1Q 2Q 3Q 4Q 1Q
FY2017 FY2018
Overview of First Quarter FY2018 Business Results
45 FY181QPSN20181109E© 2018 ULVAC, Inc. | Confidential and Proprietary Information
0
50
100
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
22.7 30.9 27.3
32.8
47.5
17.3 11.9 16.2
42.4 8.2
10.6 8.9
9.8
9.3
23.1
13.3 8.4
11.3
6.7
7.4 9.1
7.8
8.0
7.9
8.7 8.5
10.5
5.1
5.2 7.0
5.5
8.5
7.0
7.9 6.0
5.5
3.7
4.2 3.4 3.8
4.0
5.0
3.3 3.1
3.8
3.6
3.4 3.7
4.6
3.7
5.0
3.8 5.5
4.3
50.0
61.8 59.4 64.3
81.0
65.4
48.9 47.7
77.7
0
50
100
47.5 42.4
9.311.3
8.0 10.5
8.5 5.54.0
3.83.7
4.3
81.0 77.7
FY20181Q
Other
MaterialsGeneral industrial equipmentComponents
Semiconductor and electronic device production equipmentFPD and PV production equipment
FY20171Q
(Unit: ¥1 billion)Vs. same period last year
• FPD and PV production equipment: Orders received were at a high level due to large orders of large-screen LCD production equipment for China• Semiconductor and electronic device production equipment:
Overview of First Quarter FY2018 Business Results (Orders received by segment)
Quarterly change (Unit: ¥1 billion)
FY2016 FY2017 FY2018
Semiconductor production equipment orders for memory and logic contributed, and orders for telecom devices and power semiconductors were also strong.
46 FY181QPSN20181109E© 2018 ULVAC, Inc. | Confidential and Proprietary Information
0
50
100
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
22.7 29.4 29.4 29.4 28.9 28.1 28.3 23.2 26.4
8.2
9.6 9.5 9.1 10.9 13.4 14.912.4
12.77.2
8.5 8.8 7.3 8.6 7.8 8.2
8.39.4
4.2
6.0 5.4 5.9 5.3 5.6 6.3
6.56.0
3.8
4.0 3.4 3.4 4.0 4.3 3.1
3.83.8
3.9
4.5 3.8 4.4 3.2 5.2 4.14.9
3.550.1
61.9 60.4 59.5 60.964.3 64.9
59.161.7
Other
MaterialsGeneral industrial equipmentComponentsSemiconductor and electronic device production equipment:FPD and PV production equipment
(Unit: ¥1 billion)
• FPD and PV production equipment: LCD production equipment for large-screen TVs and OLED production equipment for smartphones contributed.
• Semiconductor and electronic device production equipment: Mainly equipment for memory and telecom devices performed at high levels.
Overview of First Quarter FY2018 Business Results (Net sales by segment)
(Unit: ¥1 billion)
FY2018FY2016 FY2017
Vs. same period last yearQuarterly change
FY20181Q
FY20171Q
0
50
100
28.9 26.4
10.9 12.7
8.6 9.45.3 6.04.0 3.83.2 3.5
60.9 61.7
47 FY181QPSN20181109E© 2018 ULVAC, Inc. | Confidential and Proprietary Information
23.924.6
26.326.9 27.627.2
29.6 29.731.0
26.9
28.7
15
25
35
Gross profit margin Operating profit margin(Unit: %) (Unit: %)
• Profit margins recovered after declining at one point in the previous quarter due to an increase in research and development expenses.
FY2018FY2017FY2016
1H 1Q 2Q 3Q 4Q2H 1H 2H 1H 2H 1Q
FY2014 FY2015 FY2018FY2017FY2016
1H 1Q 2Q 3Q 4Q2H 1H 2H 1H 2H 1Q
FY2014 FY2015
5.86.5
10.48.7
12.9
12.6
14.615.2
17.1
9.4
14.0
0
10
20
Overview of First Quarter FY2018 Business Results (profit margins)
48 FY181QPSN20181109E© 2018 ULVAC, Inc. | Confidential and Proprietary Information
154.1 151.2
10.4 10.2
41.7 38.8
35.7 33.7
55.6 56.5
0
100
200
300
Note and accountspayable, trade
Interest-bearing debt
Other current liabilities
Other long-termliabilities
Net Assets
41.1 35.9
64.3 64.1
8.6 6.4
39.1 41.6
87.3 84.6
57.1 57.9
0
100
200
300
Cash on hand and inbanks
Notes and accountsreceivable, trade
Inventories
Other current assets
Property, plant andequipment
Investment securities,etc.
Overview of First Quarter FY2018 Business Results (consolidated balance sheet)
(Unit: ¥1 billion) (Unit: ¥1 billion)
FY2017
Assets Liabilities and Net Assets
FY20181Q
• Notes and accounts receivable plunged by ¥2.6 billion, while inventory assets grew by ¥2.5 billion, and interest-bearing debt was reduced by ¥2.0 billion.
• The equity ratio improved to 49.9% and net cash to ¥24.2 billion.
FY2017 FY20181Q
“Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, Feb. 16, 2018) was adopted at the beginning of the first quarter. Figures for the prior consolidated fiscal year were restated after retrospective application of said accounting standard.
49 FY181QPSN20181109E© 2018 ULVAC, Inc. | Confidential and Proprietary Information
Topic “Stronger Corporate Governance”Introduction of New Directors• We now have four external directors serving on the board, which exceeds one-third of the 10 directors.• Three directors each were appointed from development, production, and sales.
Yoshimi Nakajima
New directors and managing executive officers
Dr. Choong Ryul Paik (General Manager, R&D
Headquarters)
Shigemitsu Sato (General Manager,
Advanced Manufacturing Division)
Masahiko Ishiguro (General Manager, Corporate Sales & Marketing Division)
New director (independent external)
50 FY181QPSN20181109E© 2018 ULVAC, Inc. | Confidential and Proprietary Information
Topic “Industry-Academia Collaboration: Opening a Lab in Osaka University”• The ULVAC-Osaka University Joint Research Laboratory for Future Technology opened on November 1, 2018 on the
campus of Osaka University.• Through a collaboration between industry and academia, ULVAC and Osaka University will exchange researchers and
build an R&D network, as well as develop scholarly work in the medical and bio-engineering field, solve technical issues, and contribute to the training of innovative university personnel.
• ULVAC will be positioned as a place for basic research, with an eye on investigating next-generation FPD applications based on ULVAC’s pioneering technology and on creation of semiconductor quantum dots for artificial photosynthesis, along with their enabling mass production technologies, and as a place for generating new value in areas such as medical applications (cell preservation) for ultra high-speed freeze drying technology.
Overview of the ULVAC-Osaka University Joint Research Laboratory for Future TechnologyName: ULVAC-Osaka University Joint Research Laboratory for Future Technology
(ULVAC Future Technology Research Laboratory, Osaka Research Division)
Location: Osaka University, Suita Campus, Suita Welfare Center, 4th Floor
Organization: Lab Director - Takao Yamamoto(Professor, Osaka University, Graduate School of Engineering)
Deputy Director - Hirohiko Murakami(Head and Senior Fellow, ULVAC Future Technology Research Laboratory)
Including the above, there will be 11 faculty and researchers (including adjuncts)
Osaka University, Suita Campus, Suita Welfare Center
51 FY181QPSN20181109E© 2018 ULVAC, Inc. | Confidential and Proprietary Information
ULVAC, leading the world in vacuum technology
52 © 2018 ULVAC, Inc. | Confidential and Proprietary Information
Leading the World
In Vacuum Technology