Q4/FY2013 (54th)
Results Briefing

March 11, 2014

(Tokyo Stock Exchange‐8068)

http://www.ryoyo.co.jp

1Overview◆ Date of establishment ：February 27, 1961
◆ Capital ：13,672 million yen◆ Represented by ：Kenhachiro Ogawa – Chairman &CEO
Takayoshi Oouchi – President & COO◆ Sales by product （FY2013）
Electronic Domestic
devices, etc. 11%

11%
Computersystems &peripherals

39%

Semiconductors Overseas

50%

39%

◆ Number of employees （As of January 31, 2014） ：Consolidated：513, Whole Group：602◆ Business areas ：・Sales of semiconductors / devices
・Sales of ICT products （HW / SW）
・Sales of embedded devices
・Various engineering support
・Various services◆ ISO 9001 / 14001 / 27001 ：All offices and subsidiaries in Japan（excluding Takasaki satellite office）◆ Domestic network ：Sendai, Koriyama, Matsumoto,Takasaki, Omiya, Hachioji, Yokohama,
Kyoto, Osaka, Fukuoka◆ Overseas network ：Dalian, Shanghai, Shenzhen,
Hong Kong, Taipei, Bangkok,
Kuala Lumpur, Singapore, U.S.
◆ Domestic subsidiaries ：Ryoyo Semicon, Ryoyo Security Service2

FY2013 Business results3External environments◆ Japanese economy
 Following the recovery of the US economy, the bottoming out of the EU economy,
and the economic policy of the Japanese government, a sign of improvements inexport/production trends has been seen.

◆ Electronics industry
 The consumer product industry, mainly digital consumer electronics, has being
suffered decline in demand as well as structural slump due to price drop; and The industrial segment has being recovered, especially for PC-related products,
demands for which has being gone up in conjunction with the end of support for
Windows XP in the second half of the year (special demand).

◆ IT industry
 Investments by enterprises in IT, especially infrastructure, have remained stable;and Competition has become fierce increasingly, following a drop of prices and theshift to cloud computing.

4P/L: Higher sales and significant rise in profit, compared with the previous year

Recovered sales in both semiconductors and computer system, as a result of
which profit also went up significantly. A sharp rise in sales of Q4 contributed tothe better results than the plan.
（Unit: 100 million yen, %）FY2012（Actual）

FY2013（Plan）（Actual）

YoY

Diff from
plan

Sales

872

920

979

＋12.3%＋6.4%

Grpss profit

73.7

82.0

82.8

＋12.3%

＋1.0%

（％）

8.5%

8.9%

8.5%

SG&A

66.5
7.2
0.8%
1.9
9.1
1.0%
0.0
9.1
4.9
4.2
0.5%
16.41

66.0
16.0
1.7%
2.5
18.5
2.0%
0.2
18.7
7.2
11.5
1.3%
44.53

66.3
16.5
1.7%
4.3
20.8
2.1%
0.2
21.0
7.6
13.4
1.4%
52.17

(0.4%）―＋128.7%＋3.2%＋127.0%＋70.3%＋128.3%＋12.3%―＋130.6%＋2.3%＋12.2%＋55.4%＋4.9%＋216.8%＋16.8%

Operating income（％）
Non-operating income
Ordinary income（％）
Extraordinary income
Income before income taxes
Income taxes
Net profit（％）
ＥＰＳ（Yen）

Comments
Exceeding the previous year in both semiconductors andcomputer systems, and higher than the plan, supported a
sharp rise in Q4
The progressing depreciation of yen brought the benefit in H1,
but the ratio of large-scale orders became higher in H2, as aresult of which, the gross profit rate remains the same level
as the previous year. On an amount basis, higher sales
contributed to a considerable rise in profit
Ended with the almost same level as the previous year
Achieved the doubled amount compared to the previous year,
supported by a rise in sales
Increasing investment gains

Reduced tax burdens (lower tax rate)

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Sales by segment: Sales increase in all segments（Unit： 100 million yen, %）FY2012FY2013

YoY（Actual）（Plan）（Actual）

920
465

979
487

＋12.3%

Semiconductors(By application)

872
444

Communications

53

46

49

(7.8%)

Digital consumer electronics &Other home electronics

64

65

67

＋4.9%

Vehicle installations

53

60

64

＋21.1%

PC & peripherals

147

134

150

＋1.6%

Industrials & others
Computer systems & peripherals(By product)

127
340

160
360

157
386

＋23.5%

Total

Comments＋9.6%
Decline in products for high-frequency products forcellular phones
Products for TVs and Blu-ray are still in a slump, but
those for game machines are improving
Higher than the previous year for both electronicparts and car electronics
PCs for personal use is still in a slump, but special
demands immediately before the end of support for
Windows XP is currently contributing
Recovering since Q2 and continuously stable in H2＋13.5%
Ended with the higher results than both the previous
year and the plan, contributed by commitments tolarge-scale orders

PC/Server/LAN

130

150

155

＋19.1%

I/O equipment
Software/embedded devices
Electronic devices, etc.
(By supplier)

67
143

65
145

67
164

(0.5%)

No significant fluctuation from the previous year

＋14.9%

Rise in software for PCs and embedded devices

87

95

106

＋21.4%

Domestic

58

65

70

＋21.3%

Overseas

29

30

35

＋21.5%

For LC, continuously demonstrating stable sales forindustrial purposes, a new order for communications(smart phones) has also started
End of a spot order contributing to sales in theprevious year, but a rise in LC for communications

6

Quarterly change in sales: Sharp rise in Q4

In Q4/FY2013 (Nov 2013 - Jan 2014), achieved the highest sales for the last 3
years in all products. For semiconductors, sales went up in those for industrial
purposes as well as for PCs supported by the special demand. For computer
systems & peripherals, more orders for large system contributed.

Unit: 100 million yen

301

219

222

125

115

75

87

205

205

107

102

77

82

223

224

224
201

115

89

115

81

102

79

112

91

235

238

205
119

140

Semiconductors

128

Computersystems &peripherals
Electronic
devices andothers

123

105

80

89

90

20

20

20

21

19

27

20

21

20

27

25

33

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

FY2011FY2012FY2013

7

Segment information: Achieved higher sales in both Japan and Asia

Unit: 100
million yen

Japan: +11.2% over the previous year
Asia: +17.5% over the previous year
979
872

810

Japan

728

144

169

FY2012FY2013Asia

 Japan:For semiconductors, on the increasing
trend, supported by stable sales forindustrial devices as well the special
demand for those for PCs. For
computer systems & peripherals, asignificant rise in IT products (e.g.
servers).
 Asia (Singapore, Hong Kong, Shanghai):
Higher than the previous year,
supported by new orders for LC forcommunication devices as well as
stable sales in semiconductors forgame machines and industrial devices.

8

B/S: Continue to maintain the strong financial condition
Unit: 100 million yen

799
725

Notes andaccounts
receivable trade

132

89

130
38

22

Other
liabilities

Continue to maintain the healthyfinancial condition, in spite of larger
operating funds required following arise in sales

302
233

613

133

117

96

Fixed
assets129

155

Jan 2013

AssetsOther
current
assetsLiabilities andnet assets

113

AssetsInventories

631

Net
assets Notes and accounts
receivable/payable – trade andinventories:
Increased in conjunction with arecent sales growth Fixed assets:
Increase in investment securities

Liabilities andnet assets

Cash inhand atbanks

112

Notes andaccounts
payable trade Net assets:
Increase in foreign currencytranslation adjustment

Jan 2014

9

FY2014 Business plan10

Whole year plan (P/L)
Continuous increase in both sales and profit
Sales: 105 billion yen (+7.3%), Operating income: 2.2 billion yen (+33.2%)(Unit: 100 million yen）

FY2013(Actual)Sales
Gross Profit（％）
SG&A
Operating income（％）
Non-operating income
Ordinary income（％）
Extraordinary income
Income before income taxes
Income taxes
Net profit（％）
EPS（Yen)

979
82.8
8.5%
66.3
16.5
1.7%
4.3
20.8
2.1%
0.2
21.0
7.6
13.4
1.4%
52.17

FY2014(Plan)
YoY
H1

H2

Total

515
45.5
8.8%
35.5
10.0
1.9%
1.5
11.5
2.2%
0.0
11.5
4.5
7.0
1.4%
27.75

535
48.5
9.1%
36.5
12.0
2.2%
1.5
13.5
2.5%
0.0
13.5
5.5
8.0
1.5%
31.71

1,050
94.0
9.0%
72.0
22.0
2.1%
3.0
25.0
2.4%
0.0
25.0
10.0
15.0
1.4%
59.46

＋7.3%
＋13.5%＋8.6%＋33.2%(29.5%)＋20.3%―＋19.2%＋32.4%＋11.7%

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Sales by product
Unit: 100
million yen

1,050

Semiconductors/Devices: +6.9%
ICT/Solutions: +7.9%

630

 Semiconductors/Devices:
Target higher sales than FY2013
through the start of new orders and the
expansion of trade rights

979

590

Semiconductors/
Devices ICT/Solutions:
Expecting a continuous growth inbusiness for enterprises
389

420

(Actual)(Plan)FY2013

FY2014

ICT/Solutions*The figures of FY2013 (actual) have been modified based on the
new categorization applicable in FY2014 onward.

12

Semiconductors/Devices (Sales by application)
Unit: 100
million yen+4 billion yen over FY2013 by growing
sales for communications andindustrials

630
590
120

Communications

77

81

Digital consumer
electronics and other
home electronics

64

44

80

176

175

Vehicle installations

 Communications:
Growing business for smart phones aswell as the start of new orders forfacilities

PC and peripherals

 Vehicle installations:
Weakening due to business transfer,
despite the continuous stable market
situation

192

210

(Actual)(Plan)FY2013

FY2014

Industrials and others

 Industrials and others:Continuing to be stable, mainly in
products for FA and heavy electric*The figures of FY2013 (actual) have been modified based on the
new categorization applicable in FY2014 onward.

13

ICT/Solutions (Sales by product)
Unit: 100
million yen

420+3.1 billion yen over FY2013, driven bybusiness for enterprises

389

141

67

168

PC/Server/LAN

67

I/O equipment PC/Server/LAN:In business for enterprises, a focusedarea since FY2013, targeting contribution
for the whole year as well as a further
growth in sales

Software/
Embedded
devices

 Software/Embedded devices:
To compensate the downward reactionof the special demand following the endof support for Windows XP withembedded devices-related businesses

181

185

(Actual)(Plan)FY2013

FY2014*The figures of FY2013 (actual) have been modified based on the
new categorization applicable in FY2014 onward.

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Return to shareholders

 Return to shareholders:
Dividend per share

FY2014

Estimate

Payout ratio

Share
repurchaseUnknown

InterimYear-endTotal

15 yen15 yen30 yen50.5%

15 yen30 yen57.5%

Estimate
FY2013
FY2012

Actual15 yenActual15 yen600K shares
15 yen30 yen182.8%― Dividend policy:
Allocation of profit earning through our business activity is one of our mostimportant matters. While we seek to maintain the stable management base andexpand business, we also seek a return for shareholders based on our financial
condition and business performance.
We will maintain the current dividend level (30 yen per share per year) for a few years
ahead, which will be reviewed in accordance with the profit level on a medium-termbasis.
15

Medium-term management plan16

Outline of medium-term management plan
Management
policy“Creating Value in Tune with the Times”

MissionWe shall strive to always be a corporate groupthat grows with stakeholders

VisionRyoyo group will act as a solution-providing partnerthat leaves an impression on the intrinsically interconnected“smart society.”Basicstrategy I

Medium-term
management
plan

Basic
strategy II

Basicstrategy III

Reinforce and expand the baseof core businesses

Develop high-value added
businesses

Strategic alliance with
non-group companies
Reinforced
management baseAccelerate global strategies

17Basic strategy I: Reinforce and expand the base of core businesses

Semiconductors/Devices
59 billion yen (FY2013) => 73 billion yen (FY2015)● Enhance introduction to target markets ->Vehicle installations, smart phones/tablets,
industrial● Optimize the product portfolio● Promote cross-marketing between
semiconductors and devices● Reinforce support to overseas businesses

ICT/Solutions
38.9 billion yen (FY2013) => 47 billion yen (FY2015)● Further expand business for enterprises andimprove profitability● Develop security solutions● Promote overseas ICT business● Reinforce collaboration with alliancepartners

18

Basic strategy II: Develop high-value added businesses

Smart phones

PC/Tables

Energy-saving

M2M

Semiconductors/ Integration
Devices

ICT

Derivation

Next-generation vehicle

OA equipment
Medical/Healthcare

Accumulated
technologicalcapabilities/know-how

Industries/FA

Synergetic/ stimulated
effects to core businesses
Higher profit margins

19

Basic strategy II: Develop high-value added businesses (cont’d)

Cover as out core business

IoT

O2O

(Internet of Things)(Online to Offline)

M2M(Machine to Machine)

Dig out customers’ needs from perspectives ofboth semiconductors and ICT
Reinforce relationships withcustomers

Create new businesses

Interactivity
Enhance our value

Improve profitability

20Basic strategy III: Accelerate global strategies

Japan

Collaboration

Asia- Reinforce in-housebusinesses (Explore local customers)(Develop local products)(Promote ICT business)(Expand commissioned
business)

Take in growth potential ofoverseas markets

U.S.
- Research state-of-art
technologies - Gather update industrial
information - Explore new products (Resumed operation in
November 2013)21

FY2015 Targets

Set a roadmap to achieve sustainable growth throughthe medium-term management plan
FY2013(Actual)

FY2014(Plan)FY2015(Plan)

Sales

97.9 billion yen

105 billion yen

120 billion yen

Operating income

1.65 billion yen

2.2 billion yen

4 billion yen

Ordinary income

2.08 billion yen

2.5 billion yen

4.3 billion yen

Net profit

1.34 billion yen

1.5 billion yen

2.6 billion yen

2.2%

2.4%

4.1%

ROE*

*The ROEs of FY2014 and FY2015 are estimate.

Speed
ChangeChallenge22Summary<FY2013 Business results>
Higher sales and profit than the previous year, and exceeding theplan (announced on August 26)

Improving sales since H2 in both semiconductors and computer
systems.

<FY2014 Business plan>
The overall order situation is currently good, and focusing on
improvement of profitability
Targeting 105 billion yen of sales and 2.2 billion yen of operating
income (higher sales and profit)<Medium-term management plan>
Promote three basic strategies with the vision of “Ryoyo group will
act as a solution-providing partner that leaves an impression on the
intrinsically interconnected “smart society”
FY2015 Targets:• Sales: 120 billion yen, Operating profit: 4 billion yen• Higher ROE by making the best of funds23About this report Notice
The business forecast and other forecasts contained in thisreport are based on certain assumptions, which we deemed
reasonable at the time of release, and the actual results may
differ due to the economic environment or various otherfactors.
 Contact
Saotome / Uno
Corporate Planning Dept.
Ryoyo Electro Corporation
Tel: +81-3-3546-5088
URL: http://www.ryoyo.co.jp
e-mail: irmanager@ryoyo.co.jp

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