Q3/FY2015 (56th)
Results Briefing

December 1, 2015

(Tokyo Stock Exchange‐8068)

http://www.ryoyo.co.jp

1Overview

Date ofestablishment: February 27, 1961

Domesticnetwork: Sendai, Koriyama, Matsumoto,Takasaki, Omiya, Hachioji,
Yokohama, Nagoya, Kyoto, Osaka,
Fukuoka

Capital: 13.672 million yen

Represented by : Kenhachiro Ogawa– Chairman & CEO
Takayoshi Oouchi– President & COO

Overseas
network: Dalian, Shanghai, Shenzhen, HongKong, Taipei, Bangkok, Kuala
Lumpur, Singapore, Silicon Valley

Number ofemployees: (As at October 31, 2015)
Consolidated: 521
Non-consolidated: 460*Whole group: 611

Domestic: Ryoyo Semicon,subsidiaries
Ryoyo Security ServiceBusiness 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)Sales by product (Q3/FY2015)

35%
65%
Semiconductors/Devices
ICT/Solution

2

Q3/FY2015 Business results3

P/L: Higher sales but lower gross profit, operating income and net profit(Unit: 100 million yen, %)FY2014
Q1-Q3

FY2015
Q1-Q3Sales

809

847+37+4.6%

Gross profit

63.6

56.3(7)(11.5% )

(%)

7.9%

6.7%

SG&A

49.7

52.4+3+5.4%

Operating income

13.9

3.9(10)(71.7% )

(%)

1.7%

0.5%

Non-operating income

2.8

3.0+0+5.8%

Ordinary income

16.8

6.9(10)(58.6% )

(%)

2.1%

0.8%

Extraordinary income

0.9

1.3+0+34.4%

Income before income taxes

17.78.2(10)(53.7% )Income taxes

6.4

3.0(3)(53.4% )Net quarterly profit

11.3

5.2(6)(53.8% )

(%)

1.4%

0.6%

Diff.

YoY

Comments
Higher than the previous year
Recognized loss on abandoned inventory and loss
on inventory revaluation in Q3
An increase in labor cost due to higher sales,
logistics expenses, etc.
After reaching over 130% of the previous year, turned
to decrease due to lower gross profit

Recognized gain/loss on sale of investment
securities and loss on fixed assets revaluation

4

Sales by segment:
Strong sales in semiconductors/devices, compensating a decrease in ICT(Unit: 100 million yen, %)FY2014(Q1-Q3)

FY2015(Q1-Q3)809

847+37+4.6%

Semiconductors/Devices

494

549+56+11.3%

Communications

87123+36+41.7%

Increased in the contract manufacturing businessfor communication devices

Digital consumer electronics andother home electronics

6481+16+25.0%

Increased mainly in products for TVs

Vehicle installation

2829+1+3.9%

No significant change from the previous year

PC and peripherals

163156(8)(4.7% ) previous year, but continuously stable in those forBy application

TotalDiffComments

YoY

Lower sales in products for printers than theperipherals

161+10+6.6%

316298(18)(5.8% )

PC/Server/Network

10485(19)(18.3% )In a slump for large-volume orders which we havebeen focusing on

I/O equipment

4753+5+11.7%

Contributed by the start of new orders

Software/Embedded devices

165

160

(5)

ICT/Solution

By productHigher than the previous year with less effects ofslowdown of the Chinese economy than expected

151

Industries and others(2.9% ) Decreased in software for PCs

5Quarterly change in sales:
Affected by decreased large-volume orders Semiconductors/Devices:
Decreased in the contract manufacturing business of LCD for communication
devices which was a key driver of increasing sales for this period
 ICT/Solution:
In a slump in large-volume orders which we have been focusing on(Unit: JPY100M)

301
277
235

263

299

270

287
260

238

205

172

146

292

159

147

188

195

161

173

102

96

104

105

Q2

Q3

Q4

Q1

185

170

Semiconductors/Devices

10290

ICT/ Solution

Q2

Q3

125

129
80

90

91

Q1

Q2

Q3

FY2013

Q4118

Q1FY2014

FY2015

6

Segment information (sales by region)(Unit: 100 million yen)

847

Higher sales than the previous year
in both Japan and Asia

809

668

683

Japan

 Japan:Increased in LCD for communicationdevices

 Asia (Singapore, Hong Kong, Shanghai):
Increased in semiconductors for TVs
and LCD for communication devices

142

164

FY2014FY2015

Q1-Q3

Q1-Q3

Asia

7

B/S: Change from FY2014 (as at January 31, 2015)

Continue to maintain the strong
financial position(Unit: JPY100M)

829
Cash in handand at banks

116

801

128

127

46

122
37

Notes andaccounts
receivable trade344

Inventories

145

Other current
assets46

Fixed assets

178

155

Assets Liabilities
and netassets

Assets Liabilities
and netassets

As of Jan 2015

As of Oct 2015

Notes andaccouns payable trade

Other liabilities

322656642
15048

 Accounts receivable:
Decreased in line with the current
sales trend
 Fixed assets:
Investment securities (e.g. euroyen bonds) being redeemed

Net assets

 Net assets:
Implemented payback(600,000 shares)
 Equity ratio:
80.0%

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FY2015 Business plan9

P/L (Plan): Downward revision for both sales and profits
Sales considerably decreased in Q3 for several temporary factors- Despite the revised whole year plan, expected to turn a profit n Q4  Sales:
Downward revision from the original plan, but sales will still exceed theprevious year Gross profit, operating profit, net profit:
Revised the whole year plan downward due to loss on abandoned inventory,
loss on inventory revaluation and extraordinary loss in Q3(Unit: 100 million yen, %)FY2015FY2014Whole(Actual)

H1(Actual)

Diff

Q3

Q4

H2

Whole

(Actual)(Estimate)(Estimate)(Revised plan)

Originalplan

YoY
AmountRatio

Sales

1,101587260

283

543

1,130

1,220(90)(7.4%)

Gross profit

88.0

46.2

10.1

20.2

30.3

76.5

98.0(22) (21.9%) (13.1%)

(%)

8.0%

7.9%

3.9%

7.1%

5.6%

6.8%

8.0%

SG&A

67.5

35.0

17.3

18.6

36.0

71.0

73.0

(2)

Operating income

20.5

11.2

(7.3)

1.6(5.7)

5.5

25.0(20) (78.0%) (73.2%)

(%)

1.9%

1.9%

―0.6%

―

0.5%

2.0%

Ordinary income

25.0

14.4(7.4)

2.1(5.4)

9.0

29.0(20) (69.0%) (64.0%)

Net profit

16.8

11.0(5.8)

1.3(4.5)

6.5

19.0(13) (65.8%) (61.4%)

(%)

1.5%

1.9%

―

0.5%

―

0.6%

1.6%

(ROE)

2.6%

1.0%

2.9%

(2.7%)

+2.6%

+5.2%

10

Semiconductors/Devices (sales by application)
Revised downward by 2,500 million
yen on a whole year basis from theoriginal plan

(Unit: 100 million yen)

750

725

681
165

155

Communications

110

Digital consumer
electronics and other
home electronics

135
100
87
37

217

40

220

40

Vehicle installations

205

PC and peripherals Communications:
Revised conservatively the forecasts on someorders which were expected to be recoveringin H2 Digital consumer electronics and other homeelectronics:
Remain stable mainly in products for TVs

 PC and peripherals:
Revised upward in August, but with the sighof product adjustment in some PC products
205

225

215

ActualAnnounced Revised inin Aug
Nov

FY2014FY2015

Industrials and others

 Industrials and others:
Less effects of slowdown of the Chinese
economy than expected, but the situation inQ4 onward is still uncertain

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ICT/Solution (sales by product)(Unit: 100 million yen)

Revised downward by 6,500 million
yen on a whole year basis from theoriginal plan470420405150

140120

PC/Server/Network75

I/O equipment

210

Software/ Embedded

8564215

235

ActualAnnounced Revised inin Aug
Nov

FY2014FY2015

 PC/Server/LAN:In addition loss of some orders in H1,
the large system project which we havebeen focusing on is in a slump
 I/O equipment:
The large-volume project from which
we are expected an order has beenscaled down
 Software/Embedded devices:
Revised upward in August, but with thesigh of product adjustment in some PC
products

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Return to shareholders
 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.
In FY2015 and the subsequent periods, we will target 100% of the payout ratio to anet profit of each period through dividend payment and payback
Dividend per share

FY2015FY2014

Payout ratio

Payback

30 yen114.5%

Not yetdetermined---

600,000 shares

15 yen30 yen44.9%-Interim(Q2)

Yearend

Total(Forecast)-

15 yen(Actual)

15 yen(Actual)

15 yen13

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 Corporate Strategy Office
Corporate Planning Department
Ryoyo Electro Corporation
Tel: +81-3-3546-5088
e-mail: irmanager@ryoyo.co.jp

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