2nd Quarter of FY 2/2020

Financial Results Briefing Materials
October 11, 2019

Points to Note:

This document is a translation of the Japanese original. The Japanese original is authoritative.
The information listed in these materials reflect the Company’s future prospects as determined by management, based on theinformation available at the time of announcement, and include potential risks and uncertainties. It should be noted that the actual
results may differ substantially from these forecasts, due to these various elements.
The numerical values shown in these materials are the monetary amounts listed in the consolidated balance sheet, consolidated profitand-loss statement, consolidated statement of changes in shareholders’ equity, and notes to consolidated financial statements. Shownvalues of less than one unit are truncated, and ratios and other values are rounded off.
* “FY” in this material indicates the fiscal year ending February 28( 29 ) of the succeeding year.
** “2Q” in this material represents the three-month period beginning on June 1 and ending on August 31.
FURUNO ELECTRIC CO., LTD. All Rights Reserved.

Financial Summary for 2nd Quarter of FY 2/2020

 Net Sales: IncreaseSales increased for newly-built merchant vessels in Japan andAsia in the Marine Business.
Sales increased owing to strong sales of Wireless LAN Access
Point for schools in the Wireless LAN Systems.

 Profit: Decrease
Profit declined year over year as a result of increased costs ofgoods sold due to changes in the product mix, increased
elimination of unrealized income, foreign exchange effects, andother factors.

FURUNO ELECTRIC CO., LTD. All Rights Reserved.

2

FY 2/2020 2nd Quarterly Results Highlights
Unit: Millions of YenNet sales
Gross profit

FY 2/2019
2nd Quarter

FY 2/2020
2nd Quarter

Year-over-year( amount )Year-over-year( ratio )

41,15243,040+1,888+4.6%

16,893

15,557-1,336-7.9%(41.1%)(36.1%)(-4.9)

3,663

2,296

-1,367(8.9%)(5.3%)(-3.6)

3,853

2,430

-1,423(9.4%)(5.6%)(-3.7)

3,283

2,188

-1,095( Sales ratio )(8.0%)(5.1%)(-2.9)

R＆D expenses( Sales ratio )Capital investment
expenses( Sales ratio )Depreciation expenses( Sales ratio )2,305

2,234(5.2%)-71(-0.4)

-3.1%

1,215

1,028-187-15.4%(3.0%)(2.4%)(-0.6)]( Sales ratio )Operating income( Sales ratio )Ordinary income( Sales ratio )Profit attributable toowners of parent(5.6%)

1,513

1,563

-37.3%-36.9%-33.4%(3.6%)+50(-0.1)

+3.3%

109

111

+2+1.4%131124-7-5.2%(3.7%)

Unit: Yen, annual average exchange rate

1USD
1EUR
FURUNO ELECTRIC CO., LTD. All Rights Reserved.

3

Reference: 2nd Quarterly Comparison(Cumulative and Single-Quarter) over Three Years
Cumulative comparison
600

Single-quarter comparison
Unit: 100 Millions of Yen

Unit: 100 Millions of Yen

40300

20Net sales

Net sales

Operating income

Operating income

50030250

15400202001030010150520001000

FY 2/2018

FY 2/2019

FY 2/2020

2nd Quarter

2nd Quarter

2nd Quarter

FURUNO ELECTRIC CO., LTD. All Rights Reserved.

FY 2/2018

FY 2/2019

FY 2/2020

2nd Quarter

2nd Quarter

2nd Quarter
4

Analysis of Increase/Decrease in Net Sales
435

Unit: 100 Millions of Yen

430+ 12.3

NorthAmerica

415

- 3.9

Asia& GNSS Solutions,
Other- 0.5+ 12.1- 2.9Marine Business

410

400

Foreignexchange
effect Communications

Europe- 0.6

420- 0.2+ 0.4

Japan425405

Healthcare

Other412
FY 2/2019
2nd Quarter

FURUNO ELECTRIC CO., LTD. All Rights Reserved.

+17.4

WirelessLANSystems+ 2.1

431

Industrial
Business-0.8

FY 2/2020
2nd Quarter*Exchange Rate Sensitivity ( actual results as of February 28, 2019 )[USD] Net sales 1.2 100M yen, Operating income 0.5 100M yen[Euro] Net sales 1.4 100M yen, Operating income 0.6 100M yen

5Analysis of Increase/Decrease in Profit
Analysis of Increase/Decreasein Gross Profit on Sales
180

Unit: 100 Millions of Yen

40

Improved
production
efficiency

175

Changes in theproduct mix

170

Netsalesincrease+ 7.8

Increase ineliminationof unrealized
income30

Foreignexchange
effect

- 7.0- 2.9

160

Inventory andproductwarranty costs

168.9
150

Gross profit on sales-13.4

FY 2/2019
2nd Quarter

FURUNO ELECTRIC CO., LTD. All Rights Reserved.

Fluctuationin gross
profit onsales- 13.425

Other,
Increase in
SG&A
expenses- 0.9

Other- 2.3
20- 1.8

155

Unit: 100 Millions of Yen

35- 9.8+ 2.6165

Analysis of Increase/Decreasein Operating Income

36.6

155.6
FY 2/2020
2nd Quarter

15

FY 2/2019
2nd Quarter

Increase inhumanresourcerelated
expenses- 0.6

Foreignexchangeeffect

+1.3

23.0
FY 2/2020
2nd Quarter*Foreign exchange effects on operating income: -1.6 100M yen

6

Overview of Marine Business“100M” in this material indicates 100 Million

Marine Business:

Net sales by Marine Business/Sales by Region
400

Japan300

Net sales 349 100M yen (+5.3% year on year)

Unit: 100 Millions of Yen

1683

North AmericaEurope

1586

Asia

Other1598

Segment Profit 15.5 100M yen (-12.9 100M yen)
⇒ Revenue rose in Japan and Asia
⇒ Profit declined due to changes in the productmix, increased elimination of unrealized income,foreign exchange effects, and other factors.

Japan: Net sales 105 100M yen (+13.3%)

 Revenue increased for newly-built merchant vessels

200

86

100

3896

4291
40

North America: Net sales 40 100M yen (-5.3%)
 Revenue from small-sized products declined.

Europe: Net sales 91 100M yen (-5.5%)

 Revenue decreased due to foreign exchange effects

Asia: Net sales 98 100M yen (+14.3%)

9593105

FY 2/2018
2nd Quarter

FY 2/2019
2nd Quarter

FY 2/2020
2nd Quarter Revenue increased for newly-built merchant vessels

0

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7

Overview of Industrial Business, Wireless LAN Systems“100M” in this material indicates 100 Million

Net sales by Industrial Business& Wireless LAN Access Point /Sales by Products
100Unit: 100 Millions of Yen
Wireless LAN Systems
Industrial Other
Healthcare
Communications & GNSS Solutions

8060

20740

200202278991830

FY 2/2018
2nd Quarter

4241

Industrial Business:

Net sales 57.9 100M yen (-1.3% year on year)

Segment Profit 1.7 100M yen (-2.4 100M yen)

⇒ Communications & GNSS Solutions reported aslight decline in contract business sales.
⇒ Healthcare recorded slightly less revenue due tosluggish sales of our machinery.
⇒ Profit decreased due to changes in the productmix and increased inventory-related costs.

Communications & GNSS Solutions:

Net sales 40.9 100M yen (-2.8%)
Healthcare: Net sales 9.1 100M yen (-2.0%)
Wireless LAN Systems:

Net sales 21.7 100M yen (+10.7% year on year)

Segment Profit 5.3 100M yen (+1.3 100M yen )FY 2/2019
2nd Quarter

FURUNO ELECTRIC CO., LTD. All Rights Reserved.

FY 2/2020
2nd Quarter⇒ Revenue and profit increased thanks tofavorable sales of Wireless LAN Access
Point.

8

Corporate Profile

FURUNO ELECTRIC CO., LTD. All Rights Reserved.

9Outline
Since commercializing the world's first fish finder in 1948, FURUNO has supplied many
types of products for the marine electronics market. By using its exclusive knowledge ofultrasonic and electronics technologies, FURUNO has developed a wide array ofproducts that have been world firsts and Japan firsts.

As of Feb 28, 2019

Company NameFURUNO ELECTRIC CO., LTD.

Headquarters

Nishinomiya City, Hyogo, Japan

Incorporated

May 23, 1951

Business

Manufacturing and sale of maritime andindustrial electronic products

Paid-in Capital

7,534 million yen

President

Yukio Furuno

Investor Relations⇒ http://www.furuno.co.jp/en/ir/
Products Site⇒ http://www.furuno.com/en/
Corporate Movie⇒ http://www.furuno.com/special/en/corporatemovie/
FURUNO ELECTRIC CO., LTD. All Rights Reserved.

10

FURUNO's Business Fields

GPS/GNSS
Disciplined
Oscillator

Automatic
Identification
System ( AIS )SatelliteCommunications
Equipment

GPS/GNSS
Displacement Continuous
Remote Monitoring
SystemMeteorological
Monitoring andAnalysing
SystemWireless
Access Points

Radar

GPS/GNSS
Receiver for Car
Navigation
SystemVoyage Data
Recorder( VDR )GPS Plotter

FishFinder/Sonar

FURUNO ELECTRIC CO., LTD. All Rights Reserved.

Multi Beam
Sonar

UltrasoundBone
Densitometer
ClinicalChemistry
Analyzer

ETC11