Optorun Co., Ltd.
Financial Results (Third Quarter 2019)Table of Contents

I. Financial summary for results of Q3 ending
December 2019

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I.

Financial summary for results ofQ3 ending December 2019
 Financial result highlights (consolidated) Orders received and order backlog (total for 2019Q3)
 Operating profit (total for 2019 Q3)
 Sales (2019 Q3)
 Orders received and order backlog (2019 Q3)
 Operating profit (2019 Q3)
 Financial condition

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Financial Result Highlights (consolidated)

●●●
●
●

Customers seem to be holding back on capital investment due to lengthening of the US-China trade conflict,leading to a decline in sales over the same period a year earlier. Lower sales in Q3 was reflected in thisdecline.
Operating profit margin remained almost unchanged from the previous year.
Smartphone sales grew thanks to brisk sales in the US, China, and South Korea.
We also secured sales for camera lenses, IoT, and LED applications.
Compared with the 2019 earnings forecast, the achievement rate in Q3 was 73% for sales, 81% for ordinary
profit, and 89% for net profit.

[Comparison of business results](million yen)

[Sales by category]Q3 total ended Q3 total ending
December 2018 December 2019 Year-overyear

Sales

38,04033,750-11.3%

Operating profit

10,4168,801-15.5%(Operating profitmargin)(27.4%)(26.1%)-1.3%

Ordinary profit

10,9139,148-16.2%

Smartphone
Camera lensQ3 total ended
December 2018

Q3 total ending
December 2019

38,04033,750(million yen)(million yen)

Vehicle-mount, biometricauthentication, etc.

Other
Quarterly net
profit attributabletoshareholders ofparent company

7,9527,469-6.1%

R&D expenses

2,358

2,241-5.0%

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Orders received and order backlog (total for 2019 Q3)

Orders received and order backlog(million yen)Orders received

Order backlog<Total orders received in 2019 Q3>● Orders fell 35% from a year earlier, reflecting
declines in orders in the Q1 and Q3 2019.
Customers are holding back on capital
investment due to trade conflict between theUS and China.
● The order composition was 5：4：1 for vapor
deposition equipment : sputtering equipment :parts service.
● Orders for smartphones were secured fromChina and South Korea. We are expecting
future orders from the US.
● Orders from Chinese camera lensmanufacturers have been strong.
● We secured orders for our IoT products in thebiometric authentication and vehicle-mountfields.

2017/122018/122019/12

Q3 total

Q3 total

Q3 total● We also secured orders for new equipment.
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Operating profit (total for 2019 Q3)

Operating profit<Total operating profit for 2019 Q3>(million yen)

● Operating profit margin remained
high at 26.1% (-1.3% YOY)
● Cost ratio was almost unchanged
from a year earlier at 59.0%.
● SG&A expenses increased by1.3%, reflecting lower sales.

2017/122018/122019/12

Q3 total

Q3 total

Q3 total
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Sales (2019 Q3)
Net sales(million yen)

<Sales for 2019 Q3>● Sales were down from a year earlier. Equipment
sales were for customers in China, South Korea,and Japan.
● Sputtering equipment accounted for half of sales.
● Smartphone products for non-North American
customers included higher performance 3D,
casing-back-glass, decorative film, and camera
modules.
● For camera lenses, sales for antireflection film
deposition equipment for enhanced smartphonefunctionality has been strong.
● In the IoT applications, we secured sales forvehicle-mount, biometric authentication, andoptical communications.
● In LEDs, sales of LED lighting, etc. were strong.

● Sales of new equipment were accounted for by
DBR equipment for LEDs and film deposition
equipment for vehicle-mount instrumental panels.

6Orders received and order backlog (2019 Q3)
Orders received and order backlog(million yen)Orders received

Order backlog<Orders received in 2019 Q3>● Orders fell from a year earlier.
● From the latter half of Q2 to Q3, theimpact of trade friction between theUS and China was remarkable, andorders slowed again as customers
adopted a wait-and-see attitude.
● However, needs for new technology
and high-performance film deposition
remain strong, and needs for highperformance film deposition
equipment are potentially strong.
● Looking ahead to 2020, it seems that
US, Chinese, South Korean, andJapanese companies are keen toplace orders.
7Operating profit (2019 Q3)
Operating profit(million yen)

Operating profit

Operating profit margin<Operating profit for 2019 Q3>● Operating profit margin was 19.9%(-10.9% YOY)
● Cost ratio was 59.3%, almost
unchanged from a year earlier.
(59.2% YOY)

● SG&A expenses were +10.8%,
reflecting lower sales.

8Financial condition(million yen)
As of end December 2018
AmountPercentage

As of end September 2019
AmountPercentage

Change48,142

86.5%

49,362

86.3%+1,219Cash and deposits

15,74028.3%

28,181

49.3%+12,440

Trade notes and accounts
receivable

6,837

12.3%

4,3027.5%-2,534Inventories

24,48744.0%

16,24728.4%-8,239Allowance for doubtful
accounts

-420

-0.8%

-364

-0.6%

+55

Other

1,497

2.7%

995

1.7%

-502

Non-current assets

7,501

13.5%

7,819

13.7%

+317

Total assets

55,644100.0%

57,181100.0%+1,537

Current liabilities

25,922

46.6%

22,97740.2%-2,944

1,652

3.0%

3,428

6.0%

+1,776

756

1.4%

527

0.9%

-229

Accrued corporate taxes

1,143

2.1%

457

0.8%

-686

Advances received

20,10836.1%

16,61129.0%-3,497

Other

2,261

4.1%

1,953

3.4%

-307

1,658

3.0%

1,626

2.8%

-31

Long-term interestbearing debt

233

0.4%

185

0.3%

-47

Other

1,425

2.6%

1,440

2.5%

+15

Total liabilities

27,581

49.6%

24,60443.0%-2,976

Total net assets

28,062

50.4%

32,57757.0%+4,514

Total liabilities and net
assets55,644100.0%

57,181100.0%+1,537

Current assets

Trade notes and accounts
payableShort-term interestbearing debt

Non-current liabilities• Cash and deposits increased as accounts
receivable collection progressed• Decrease in inventories due to posting of sales
for which products were accepted• Decrease in advances received due toposting of sales

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