Optorun Co., Ltd

Financial Results(2Q 2021）

Table of Contents

Ⅰ . Summary of Financial Results for the Second
Quarter of the Fiscal Year Ended December 2021

P3

II. Direction of Business

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2

1.
2.
3.
4.
5.
6.
7.

Financial Highlights (cumulative for the second
quarter of 2021)
Breakdown of net sales (quarterly)
Operating income and profit margin (quarterly)
Orders received (quarterly)
Consolidated Balance Sheet (2Q 2021)
Status of CF
Business Outlook

3

1 Financial Highlights (1st Half of 2021)


Sales in the first half of FY2/21 were ¥14.9 billion, down 9.9% yoy. IoT sector sales showed strong growth.
Sales of new-type equipment and cost reduction efforts contributed to a significant COGS ratio improvement over the same period ayear ago. SG&A expenses were almost on track with the plan. Currency factors resulted in ordinary income remaining at the samelevel a year ago, with each profit margin ratio improved.
Orders received declined 12% yoy to ¥16.5 billion as a result of customers’ postponing of capital investment due to the global
shortage of semiconductors. New-type equipment orders, especially ALD equipment, continue to be strong.
2021 is the year of enhanced sophistication of optical thin-film technology and commercialization of new semiconductor-related
thin-film deposition technology. The company is accelerating its wide-ranging R&D activities, including the development of 3Dtechnology, the development of 5G compatible optical communications, and the development of biosensors in the healthcare field.
(¥100 million) 【Sales by Business Segment】[Performance Comparison]
2Q 2020

2Q 2021

YoY change

Net sales

165

149

△9.9%

Gross profit

66

67

1.5%

(40.1%)(45.2%)

30

33(18.1%)(22.3%)

36

34(22.0%)(23.0%)

39

39(23.8%)(26.2%)

28

27(17.4%)(18.3%)

17

17(10.3%)(11.9%)

4

4

△3.2%

Orders received

188

165

△12.4%

Order Backlog

347

251

△27.6%(Gross profit Margin)
SGA expenses(SGA expenses ratio)
Operating profit(Operating profit Margin)
Ordinary profit(Ordinary Profit Margin)
After Tax profit(After Tax profit Margin）
Research and development
expenses(Ratio of R&D Expenses to Net
Sales)
Capital expenditures

10.7%
△6.1%
△0.9%

[Amount of orders received by field]

200

200

180

180

160

165

8
14

120

37

16
8

100

11

50

140

80
△5.1%

3.7%

60
40

160

149

140
120

69

20
0

3

38
19

2021/12 2Q total

165

8
21
61

80
60
40

7

115
66

20
0

2020/12 2Q total

11

100

5
93

188

2020/12 2Q total

2021/12 2Q total

4

2 Breakdown of Quarterly Net Sales
 IoT sector sales were solid (38% of sales). Biometric identification application (for wearable
watches) contributed to the increase.
 Sales for smartphones sector were mainly for camera modules and decorations.
 New-type equipment constituted 21% of total sales (ALD, new sputtering equipment, opticalcommunications, LED)
【Sales by Business Segment】(¥100 million) 【Sales of New Equipment】

140

128

7
14

120
100

97

7

80

68

40

63
10
6

20

40

60

0

2020 1Q

4

80

27

7

4

27

52

Smart phone

77

2020 3Q

2020 4Q

Camera lens

IoT

80

7

68

9

34

2020 2Q

97

100

3

8

128

120

24
3

(¥100 million)

140

19

4

4

30
3

2

33

35

2021 1Q

2021 2Q

LED

Other

80

80

68

80

68

60
40

74

20
0

9

21

18

19

17 21%

2020 1Q 2020 2Q 2020 3Q 2020 4Q 2021 1Q 2021 2Q

Sales of new equipment

53 Operating income and profit margin(quarterly) The gross profit margin for the second quarter of 2021 remained high (44.3%) thanks tothe contribution of new-type equipment.
 Q2 operating profit margin of 21.8% resulted from an increase in SG&A expenses due
to R&D activities(¥100 million)

50.0%
45.0%

46.3%
42.2%

40.0%

38.7%

39.3%

44.3%

37.8%

50
45
40

35.0%

35

30.0%

30

25.0%

23.6%

20.9%

23.6%

24.0%

24.3%

21.8%

25

20.0%

20

15.0%

15

10.0%

10

5.0%
0.0%

16

20

18

30

16

17

2020/12 1Q

2020/12 2Q

2020/12 3Q

2020/12 4Q

2021/12 1Q

2021/12 2Q

Operating income

Gross profit margin

50

Operating income margin6

4 Orders received (quarterly) Orders received in the Q2 2021 were ¥7.3 billion (down 19% from Q1) due to the impact of theworldwide shortage of semiconductors.
 Smartphone sector continued to perform strongly. IoT sector orders came in mainly for automotive,
optical communication, and biometric system applications.
 Orders for new-type equipment, including ALD, remained strong (37% of total orders).
[Amount of orders received by field]

140
120
100

(¥100 million)

140

125

125

1

9
12
14

120

4
11

63

2 1

60

87

0

26
4

20

28
2020 1Q

100

91

80

40

(¥100 million)[New Equipment Orders]

Smart phone

43

9
17
14

2020 2Q

53

13
12
15

2

2020 3Q

9

10

39

3

2

IoT

32

80

4
34

2021 1Q

2021 2Q

LED

Other

43

40
20
0

73

63

60

21
3

2020 4Q

Camera lens

73

91

53

47
18

8

19

37

27

2020 1Q 2020 2Q 2020 3Q 2020 4Q 2021 1Q 2021 2Q

Orders for new equipment

737%

5 Consolidated Balance Sheet (Q2 2021)
 ¥8.8 billion increase in cash and deposits (due to collection of receivables) and ¥1.4 billion
increase in advance receivables (due to increase in orders).
[Liabilities and Net Assets][Assets](¥100 million)(¥100 million)

598

600

600

543
500

500

227

400

Cash and deposits

315

Bills receivable and

400

598
543

4 17
89
11

25

30 4
103
29

Bills for12 accounts

Short-termpayableinterest-bearing

account receivable

300

Inventories

97

200

100

0

111

44
120
12

9

102

End of

End of June

December

2021

2020

300

3

200

Fixed assets

Investment

94

3

debts
Advances
received

Other current
assetspayment and

395

417

Other current
liabilities
Fixed liabilities

100
Net assets

securities

0

End of

End of June

December

2021

2020

8

6 Status of CF(¥100 million)
Cumulative 2Q for
FY12/20
AmountAccumulated 2Q in FY12/21
AmountIncrease/dec
reaseMain reason

6

107

100

CF from investment activities

△4

△4

0

For the acquisition of tangible fixed assets

CF from financial activities

△25

△21

3

For the payment of dividends

Of cash and cash equivalents
Translation adjustments

△1

6

8

Net increase (decrease) in cash
and cash equivalents

△24

88

112

Cash and cash equivalents at
beginning of year

269

227

△42

Cash and cash equivalents at
end of year

245

315

70

CF from sales activities

For collection of receivables

97 Business Outlook The global shortage of semiconductors has pushed our customers' capital investment
activities back across the sector, impacting our incoming orders.
 While the outlook is uncertain, this trend may continue throughout the fiscal year, andwe are watching the trend in orders from the third quarter onwards. We will promptly
disclose any revisions to our forecasts if necessary.
 Our R&D activities to develop new products to meet future market demand are steadily
producing results across a wide range of fields, as we aim to achieve sustained mid/longterm growth.
(¥100 million)
Fiscal Year Ended
December 2020
Actual results

Year ended December
31, 2021
Forecast

YoY changes a l e s

374

381

+1.6%

Operating profit

86

90

+4.3%

(Operating Profit
R a t
i o
)

(23.0%)(23.6%)

Ordinary profit

86

90

+4.5%

Profit attributable toowners of parent
p r o f i t
N e t

67

70

+3.0%

N e t

―

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1.
2.
3.
4.
5.
6.

History of equipment development
Semiconductor-Optical Fusion (Growth)+3D(Differentiation)
Expansion of applications
Equipment line-up
TopicsSustainability Initiatives

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1 History of equipment development
 Optorun is an R&D-driven company constantly striving for cutting-edge technologies
and developing the most sophisticated optical thin-film equipment
 Continuous development of new-type equipment has ensured its high profitability
AR/MR・5G
Automotive,
biometric, andbiosensors

Smartphones
Tablet/LED
Digital camera
Mobile phone
camerasListed on the First Section of
the Tokyo Stock Exchange

2021
2020

Established Optorun USA, Inc.

2019
2018

Established KITO TECHNOLOGYCO., LTD. (Taiwan)

Etching equipment

2017
2014

2013

Opticalcommunication

2011
2010

RPD series sales

NSC-15 sales

SPOC
ALDER sales

2006
Optical Technology (Shanghai) Co.,
Ltd. established.

Establishment
1999

2001
2000

Sales of Generer1300

Sale of Generer2350

Sales of OWLS-1800

OTFC series sales

122 Semiconductor/Optical Fusion (=Growth)+ 3D (=Differentiation)
MarketApproximately 1.5 billion
units (in 2025)
・Advanced functions(wide-angle lenses,
displays, decorations)・Automatic operation
・Sensing

Base station market:
Approximately
11 trillion yen (2025)
・5G penetration

Our technology

Optical device

Thin-film deposition

 3D Lens
 3D panel AR/AG/AS Diffraction grating
Optronics

 Mini/Micro LED
 Laser V
 RF filter Power device
 CMOS Sensor
Biosensor

 Electrochemical
Diffusion of biosensors
Vsensor electrodes Sensor for X-ray※Forecasts are based on the Company’s researchdetector

Evaporators
Sputter
ALD
Etching technology

3

D compatible

Approximately 16
trillion yen (2030)
・Popularization ofsmart glass

Target device

Etching13

3-1 Application broadening (AR/MR) AR glass popularity → Major driver of future growth
Half mirror
Deposition

Wave Guide
Etching, ALD

Ambient light sensor
Evaporator, sputter

3D camera
Sputter
Micro display(micro and mini LEDs)
Etching, ALD
Evaporation deposition equipment

Lens surface

Evaporator, sputter

Sputtering device

Diffraction grating: etching,
ALD
ALD

Etching3-2 Expansion of applications (Automobile) Automobiles turning to mobile devices → Expansion of thin-film
deposition application areas.

・Use of 3D displays for interior decoration
・Increase in the number of optical components
and sensors(3D camera, Lidar, Radar)
Sputtering device

3-3 Extension of applications (5G)
 Expansion of business opportunities in both terminals andtelecom base-stations through the worldwide 5G penetration.
[Terminal]
Example: BAW filter
structure drawing[Communication network base station]

Optical communication
Telephone

FAX

PC(Transmitting(Receiving
Optical fiber Branching
Wave
unit)
unit)

combinerfilter

DWDM filter

Sputter + etch + ALD
Evaporation deposition equipment

The etching and deposition equipment for
RF filter devices are under development.

3-4 Extension of applications (biosensors) Contributing to people's health and safety.
[Biosensor]

Bio-sensor electrodemembrane

Example: medical, environmental, foodDetection of blood glucose, urine,
pesticides, and harmful heavy metals.

Biosensors:
Customers can detect harmful substances at
low cost
Thin Film Bio Sensor

Accelerate commercialization throughjoint development with Japanese
universities.

4 Our equipment lineup(1)OTFC

Film
deposition
method(2)Gener(3)SPOC(4)RPDIon beam assisted deposition

Reactive
PlasmaPlane surface

Plane surface

Filmforming
surface

Plane surface

Membrane
species

AR AS
Wavelength selection
filterLPF SPF IR Cut
BPF
LED DBR
Decorative membrane

Examples ofapplications

Optical device
Smart phone
Surveillance camera
Automotive
Smart Glass (AR/VR)
Medical care
Smart speaker
3D shape

Plane surface

3D curved surface 3D curved
surface
AR AS
Wavelength
selection filter
Decorative
membrane(5)NSC(6)OWLS

Sputtering(7)ALDER(8)Etching

ALD
Atomic layer
deposition

Plasma dry etching

Plane surface

Plane surface

Plane surface

Etching surface

3D curved
surface

Double-sided 3D
curved surface

Full 3D shaped
surface

Plane surface

Supermultilayer film
Wavelength
selection filter
DWDM NBPFCWDM NBPF

LED ITO
LED Buffer

Hard AR AS
Wavelength
selection filter
LPF SPFBPF
Decorative
membrane

Hard AR AS
Wavelength selection
filterLPF SPFBPF
Decorative membraneAR
Protective film

Etching film
・Various types of
insulating film Etching(glass, quartz, sapphire,
SiO2, SiN, etc.)

Opticalcommunication
devices

LED
Mini / Micro LED

Optical device
Smart phone
3D shape
Automotive
Biosensor

Optical device
Semiconductors
Both sides of the 3D
shape
Smart phone
Smart watch
Biosensor

Optical device
Semiconductors
Mini/Micro LED
Smart phone
3D shape
Biosensor

LED
Mini / Micro LED
AG glass18

5 Topics
1. New China-based subsidiary for ALD business to be set up (disclosed on June 23)
 We invested in Afly, a Finnish start-up, 3 years ago, and succeeded in applying andcommercializing ALD technology in the field of optics through joint technology development.
 As the operation has evolved from R&D phase into business expansion phase, a new subsidiary
based in the main market of China will be established, aiming for full-scale business expansion.

2.Implementation of dry etching equipment for optical devices (June 29)
 In this device, anti-glare machining on the glass surface enables diffuse reflection of incident
light and suppresses reflection of light on the glass surface (reduction of glare and suppressionof reflection of external light).
 The dry etching technology is also environmentally more friendly as it alleviates problems of
wet etching by reducing discharged effluent.
 We are in the process of developing equipment for RF filter devices, etc.
 A web presentation on the new device is scheduled at 10:00 p.m. on Tuesday, August 31.

6 Sustainability Initiatives
We are sincerely addressing the social demands of SDGs and ESGs and reflect
them in our business as a company that is trusted by many people. In the future, wewill strengthen our governance system and enhance information disclosure incompliance with the revision of the Corporate Governance Code.
Environment

Society

Global environmental conservation
・Active procurement of environmentally conscious
parts
・Thorough treatment of industrial wastewater andwater conservation
・Thorough exhaust gas treatment and management
・Reduction of waste and promotion of recycling
・Development of products that conserve energy andresources<Corresponding SDGs item>

Technological contributions toenrich lifestyles

Governance[Example of film deposition]

・Biometric identification of smartphones,・Including lens filters in surveillance cameras
Protection of touch panel and chassis
Biometric authentication for security
・Indispensable for optical communication
・Be used in automotive driving technology
DWDM filter
Devices such as sensors
・Vehicle's instrumental panel
・X-ray equipment
・Improvement of LED brightness and power
・Research support and contribution ofsavingbiosensors
・Prevention of reflection of AR/VR devices※Joint research with Waseda University
Protection of the chassis<Corresponding SDGs item>

Corporate revitalization

Proper management
・Corporate Governance・Compliance・Risk Management[Example of film deposition]

Technological contributions that
contribute to the health and safety ofpeople<Corresponding SDGs item>

・Utilization of human resources regardless ofgender or nationality
・Global development of a diverse workforce<Corresponding SDGs item>
・Initiatives to improve employee motivation
・Occupational Health and Safety

Disclaimer, Precautions, and Contact
Information
The information contained in this document has been prepared on the basis of generally accepted
economic and social conditions as of August 5, 2021, and certain assumptions that we judged to bereasonable. However, the information contained in this document may be changed without notice due
to changes in the business environment.
The materials and information provided in this publication include so-called forward-looking
statements. These forward-looking statements are based on current expectations, projections and risky
assumptions, and contain uncertainties that may cause results that differ materially from thesestatements.
These risks and uncertainties include general industry and market conditions, general domestic andinternational economic conditions such as interest rates and currency fluctuations.
We are not obligated to update or revise the forward-looking information contained in this report even
if new information or future events occur.
Contact Information
E-mail:ir-info@optorun.co.jp TEL:03-6635-9487

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