FY2014 (55th)
Results Briefing

March 12, 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, Hong
Kong, Taipei, Bangkok, Kuala
Lumpur, Singapore, Silicon Valley

Number ofemployees: (As at January 31, 2015)
Consolidated: 510
Non-consolidated: 455*Whole group: 594

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

Sales by product (FY2014)38%
ISO 9001 / 14001 / 27001 :All offices and subsidiaries in Japan(excluding Satellite Office)62%
Semiconductors/Devices
ICT/Solution

2

FY2014 Business results*The FY2013 data has been adjusted based on the current classification for disclosure.

3

P/L: Higher sales and profit than the previous year
(Unit: 100 million yen, %)FY2013
ActualFY2014
Plan
Actual

YoY

Diff
+4.9%

Comments

Sales

979

1,050

1,101+12.5%

Gross profit

82.8

89.0

88.0

+6.3%

(%)

8.5%

8.5%

8.0%

Higher than previous year in both
semiconductors/devices and ICT/solution
Higher than the previous year in terms of the amount(1.1% )
in along with an increase in sales, despite the lowered
profit rate due to the increasing ratio of low-profitableorders

SG&A

66.3

67.0

67.5

+1.8%

+0.7%

Operating income

16.522.020.5+24.3%(6.6% ) Below the plan but much higher than the previous

(%)

1.7%

2.1%

1.9%

Non-operating income

4.3

3.0

4.4

+4.4%

+48.2%

Ordinary income

20.8

25.0

25.0

+20.3%(0.1% )

(%)

2.1%

2.4%

2.3%

year (exceeding 2 billion yen)

Extraordinary income

0.2

1.9 +833.4%

Income before income taxes

21.0

26.9

+28.2%

Income taxes

7.6

10.1

+33.1%Net profit

13.4

16.8

+25.4%

15.0

Higher investment income than the plan

Gain on sale of investment securities+12.3%
Higher than both the previous year and the plan(%)

1.4%(ROE)

2.2%

1.4%

1.5%
2.6%

4

Sales by segment: Higher than the previous year in both segments(Unit: 100 million yen, %)FY2013

FY2014

YoY

Diff

1,101
681

+12.5%+15.6%

+4.9%
+8.2%

120

135

+68.8%+12.3%

Increase in LCD for communication devices

77

81

87

+13.3%+8.0%

Higher than both the previous year and theplan due to the growth of products for gamemachines and TVs

644437(42.3% )(15.6% )Decreased due to a change in thecommercial flow

ActualPlanActual

Semiconductors/Devices

979
590

1,050630

Communications

80

Digital consumer electronics
and other home electronics
Vehicle installation

By application

Total

PC and peripherals

176

175

217

+23.8%+24.2%

Higher sales in products for PCs due to thespecial demand as well as for peripheralssuch as OA devices

Industrials and others

192

210

205

+6.4%

(2.6% )

Lower than the plan but remains stable,
mainly products for FA and heavy electric

389

420

420

+7.8%

(0.1% )

PC/Server/Network141

153

140

(0.8% )

(8.4% )

Almost sale as the previous year due tosome deferred orders and less large orders

I/O Equipment

676764(3.8% )(4.1% )

Lower than the previous year partly due tothe business closure of a supplier

Software/embedded devices

181

200

215

+18.7%+7.6%

Higher sales in software for PCs andembedded devices for industrial use

ICT/Solution

By productComments

5

Quarterly change in sales: Remains highRemains the level before Q3/FY2014 throughout the year in bothsegment (Semiconductors/Devices and ICT/Solution)(Unit: 100 million)

301

292
277
263

223

235

224

224

238

205

201

270

172
159
146188Semiconductors/Devices

ICT/Solution

161

173

102

96

104

Q2

Q3

Q4147

125

129

Q1

Q2

Q3

FY2012

Q480

9091

Q1Q2Q3

FY2013

Q4118

Q1FY2014

6

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

1,101Higher sales than the previous year
in both Japan and Asia

979

907



Japan:
Significant increase due to the special
demand for PCs, as well as the strong sales
in semiconductors for LCD and industrial
equipment.

Asia (Singapore, Hong Kong, Shanghai):
Increase mainly supported by a new orderfor LCD for communication devices as wellas the stable sales of semiconductors forgame machines.

Japan810

169

194

FY2013

FY2014WholeWholeAsia

7

B/S: Change from FY2013 (as at January 31, 2014)(Unit: 100 million yen)

829

799
Cash inhand andat banks

116
112

128

130

Notes andaccounts
payable trade

Continue to maintain the strong
financial position

4638
Notes andaccounts
receivable- trade

344

302

133

631

Inventories

Other
current
assents

Otherliabilities

656
145



Account receivables – trade /Inventories:
Increased due to higher sales

Net assets:
Increased due to a higher net profitEquity ratio:
79.0%

Net assets

9646155

178

Assets Liabilities
and netassets

Assets Liabilities
and netassets

Jan 2014

Jan 2015

Fixedassets

8

FY2015 Business plan

9

FY2015 P/L (Plan): Target a further increase in sales and profit
 Sales:
Growth in both segments (Semiconductors/Devices and ICT/Solution)
 Gross profit:
Despite no change in the gross profit rate, but an increase in terms of theamount supported by higher sales
 Operating income:An over 20% increase to compensate higher SG&A(Unit: 100 million yen, %)FY2015 (Plan)

FY2014
TotalH1H2Total

FY15 - FY14

FY15/FY14Sales

1,101585635

1,220+119+10.8%

Gross profit

88.0

46.5

51.5

98.0

+10.0

＋11.3%

(%)

8.0%

7.9%

8.1%

8.0%

SG&A

67.5

35.5

37.5

73.0

+5.5

+8.2%

Operating income

20.5

11.0

14.0

25.0

+4.5

+21.7%

(%)

1.9%

1.9%

2.2%

2.0%

Ordinary income

25.0

13.0

16.0

29.0

+4.0

+16.1%Net profit

16.8

8.5

10.5

19.0

+2.2

+12.8%

(%)

1.5%

1.5%

1.7%

1.6%

(ROE)

2.6%

2.9%

10Semiconductors/Devices (sales by application)(Unit: 100 million yen)750

+6,900 million yen(Increase in products forcommunications and industrials)

681
165
Communications
135

90

Digital consumer
electronics and other
home electronics

87
40



Communications:
Sales in LCD for communication devices
expected to be growing further

PC and peripherals:
A possible decrease in PCs which wascontributed by the special demand in FY2014
to be compensated by the strong sales inperipheralsIndustrials and others:
Sales in products for FA and heavy electric
expected to be increasing

Vehicle installations

37200
PC and peripherals
217

255205FY2014FY2015

ActualPlan

Industrials and others

11

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

470

+5,000 million yen(Driven by the businesses forenterprises)

420

185
140

PC/Server/Network

64

75

I/O equipment

215

210

Software/
Embedded

FY2014FY2015

ActualPlan



PC/Server/LAN:For the businesses for enterprises, target toincrease the scale as well as to improve theprofitabilitySoftware/Embedded devices:
A possible decrease in software due to the endof special demand for PCs to be compensatedby higher sales of products for industrial use,
mainly embedded products

12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 a
net profit of each period through dividend payment and payback

252.9%

Payback

Dividend

147.2%

176.5%

182.8%

Payout ratio(Unit: 100 million yen)

105.4%

100.0%
45.0%
11.4

8.3

8.2

8.2

7.9

7.6

7.7

7.7

7.6

7.6

6.5
Planning
30 yenpershare

Nopayback

FY200930 yen 950,000
sharespershare paid back

30 yen 890,000
sharespershare paid back

30 yenNoperpayback
share

30 yen600,000
persharesshare paid back

30 yenNo
perpayback
share

FY2010FY2011FY2012FY2013

FY201430 yenpershare

FY2015 (Plan)

13

Medium-term actions

14

Acceleration of the medium-term vision
Medium-term vision
Become the solution partner creating an impression
to the “all-connected smart society”
Basicstrategy I

Reinforce and expand the core businesses=> Increased sales

Basicstrategy II

Develop high-value added businesses=> Higher profitability

Basicstrategy III

Accelerate the global strategy=> Expanded overseas businesses

Set the way to achieve sustainable growth byaccelerating actions under the medium-termbusiness plan15

Basic strategy I: Reinforce and expand the core businesses
Customers’ businessBusinessplanning

Product
planning

Design &Development

ExpandProcurement

Massproduction

Current business areas(Contact with customers)

Sale

Maintenance

ExpandMarketing reform
Interaction with partner companies

Shift from a “supplier” to a “business partner” by expanding theoverlapped business areas with customers
16Basic strategy II: Develop high-value added businesses
IoT
business“Field & Mobile Work Innovation” which brings
innovation to all industries (customers)
Partner companies

Create a new value toallBusinessplanning

ProductplanningLess cost
Better operating speed/ rate
Better quality
Improved safety
Energy saving
Value-creating
communication

Medicalinstitutions
Equipment
maintenancePublictransportation

Manufacturing
sites

Distributors/Retailers

Construction

17

Example of “Field & Mobile Work Innovation”
 (Outdoor/Small) Construction site & factory (Outdoor/Large) Community
Wi-Fi access point

Wi-Fi access point

Wi-Fi access point

Wi-Fi access point

Surveillance camera

Digital signage
PCSurveillance camera

Smart phone

Environment sensor

Develop a safe community linked with surveillancecameras, digital signage, etc.

 (Indoor/Large) Shopping mall
Wi-Fi access point

Help to improve operating efficiency (e.g. process
check and safety control) (Indoor/Small) Hospital & Nursing facilities
Illuminance sensor
Wi-Fi access point

Wi-Fi access pointDigital signage

TabletSurveillance camera

Smart bed

Smart phone

Propose a marketing methodology by using digital
signage and surveillance cameras to improve services

Monitor and record the conditions of patients and beds on a realtime basis with a sensor to reduce workloads of nurses

18Basic strategy III: Accelerate the global strategy
Up to 2014<<Launch self-businesses>>Alliance with Digital China
Started new businesses for local customers(e.g. smart phone, TV)
Started the ODM contract design businessfor LC

2015 onwards<<Contribute to sales through selfbusinesses>>
Expand the scale and improve theprofitability of self-businesses
Collaborate with local players in Thailandand China
Develop the ICT business overseas
Achieve low-cost operation(e.g. review of the global logistics system)

19

Summary<FY2014 Business results>
Sales: Higher than both the previous year and the plan
Operating income: Lower than the plan but higher than the previous year,
Net profit: Higher than both the previous year and the plan due to higher
non-operating income than expected and extraordinary profit<FY2015 Business plan>
Target an increase in sales and profit three periods in a row under theannual plan of “Sales: 122 billion yen, Operating income: 2.5 billion yen”
For return to shareholders, the basic policy is “100% of the payout ratio”<Medium-term actions>
Promote the three basic strategies to set the way to achieve sustainablegrowth, especially “Develop high-value added businesses” by accelerating
the actions for “Field & Mobile Work Innovation”

20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
Suzuki / Uno
Corporate Strategy Office
Corporate Planning Department
Ryoyo Electro Corporation
Tel: +81-3-3546-5088
URL: http://www.ryoyo.co.jp
e-mail: irmanager@ryoyo.co.jp

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