Earnings presentation materials(Year ended Dec 31, 2021)

Optran Co., Ltd.
February 15, 2022

1

Agenda01

FY2021 Results

02

Forecast for Fiscal 2022

2

Fiscal 2021 Results31. Key points

Performance in 2021
 Sales and profit exceeded forecasts.
 Gross profit margin ratio increased year on year (newequipment/sales ratio: 33%)
 Net income was 6.3 billion yen (down 6% from 2020)
 Orders received increased 23% from the previous
year with Smartphone, IoT, and LED, being themajor contributors.
 Orders for ALD equipment are steadily building up.
4

2. Performance Highlights (2021)
Year ended December
31, 2021
Forecast (Aug. 24)

Year ended December
31, 2021
Actual results

YoY change

Comparison
with forecast

374

303

308

△17.6%

2.0%

146

129

133

△8.8%

2.8%

(39.2%)(42.6%)(43.3%)

――

86

68

70

△18.6%

3.3%(23.0%)(22.4%)(22.7%)

―

―

86

71

79

△8.2%

11.3%

(23.0%)(23.4%)(25.6%)

――

67

56

63

△6.9%

13.0%

(18.1%)(18.5%)(20.5%)

――

31

3130

△2.7%

△1.3%

(8.4%)(10.3%)(9.9%)――7―

926.9%―Orders received

286―

354

23.9%―

Order Backlog

235―

281

19.3%―[Unit: 100 million yen]

Net sales
Gross profit
Operating profit
Ordinary profit
Net profit
R&D expenses
CAPEX

Fiscal Year Ended
December 2020
Actual results

5

3. Sales and Orders Received by sector
Sales by sector
Smartphone
Camera lens(¥100 million)

400
350

193689250

0Camera Lens

IoTLED

Other

355

350

40

308

300

286

36

250

20
24

94

200

71

150

24

13

139

148

2020/122021/12

35205

51

101

100

126

2020/12Smartphone

400

1550

Other

(¥100 million)

24

150
100LED374300

200

IoT

Orders by sector

2021/125006

4. Net Sales and Orders by Equipment type
Sales by equipment
Evaporation(%)

1009080

Supatter

0.1
0.3

ALD

Other

0.5
1045

70

Orders received by equipment(%) Evaporation

0.4

903

1750

50

404055

30

20

20

10

1000
2020/122021/1236247060

54

Other

0.360

30

ALD

10080

34

Spatter

5958

2020/122021/127

5. Breakdown of Net Sales (quarterly)
Smartphone(¥100 million)

Camera Lens

IoTLED

OtherALD

New equipment(excluding ALD）

140

714120100

78060402006106324277427337977 73

8411430193287201924
3431 1592752

402192020
1Q

42020
2Q

3420203Q

33182020
4Q

12021
1Q

172352021
2Q

1082021
3Q

29
92021
4Q
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6. Gross profit and Operating profit (quarterly)
Operating profit

Gross profit margin

50.0%
45.0%

46.3%
42.2%
38.7%

40.0%

39.3%

Operating profit margin(¥100 million)

50

44.3%

42.5%

40.9%

37.8%

4540

35.0%

35

30.0%

30

25.0%

23.6%

20.9%

23.6%

24.0%

24.3%

24.8%
21.8%

20.0%

19.7%

2520

15.0%

15

10.0%

105.0%

50.0%

1620

1830

16171322

2020/12 1Q

2020/12 2Q

2020/12 3Q

2020/12 4Q

2021/12 1Q

2021/12 2Q

2021/12 3Q

2021/12 4Q

097. Orders received (quarterly)
Smartphone(¥100 million)

Camera Lens

IoT

LED

Other

ALD

New equipment(excluding ALD）

140
120
100

912

1
1714

480

1160
40

10

1 2
2687
47

20020

2020
1Q

9428
2020
2Q

39

17117214 7
12020
3Q

1215
2 129 72020
4Q

43322723

34 16102021
1Q

12921

13

102021
2Q

164

363

0.6
1418
72021
3Q

2426

2021
4Q
10

8. Consolidated Balance Sheets as of Dec 31, 2021
Liabilities and net assets

Assets646(¥100 million)(¥100 million)

646

32

600

600

543
500

Cash anddeposits

322

500

4Inventories

400

1789

Notes and accounts
payable

227

400

543

11498
35

25

Notes and accounts
payable15

Short-term loans payable
Advances received
Other current liabilities

300

97

Other current
assets60

Non-current
assets

128

200

300

200

111
100

395460Net assets

20

9100

970Non-current liabilities

2020 121152022 1202020 122022 12119. Cashflows(¥100 million)
Fiscal Year EndedDecember 2020

AmountYear ended December 31, 2021

AmountIncrease/decrease

Main reason△5106112

From the collection of receivables

CF from investment activities△10314

From the sale of investments

CF from financial activities△24△27△2

By paying dividends

Of cash and cash equivalents
Translation adjustments△11214

Net increase (decrease) in cash
and cash equivalents

△4295

137

Cash and cash equivalents atbeginning of year

269

227

△42

Cash and cash equivalents at endof year

22732295

CF from sales activities

12Forecasts for Fiscal 2022

131. Consolidated Forecast for the Year 2022(¥100 million)

Year ended December Year ended December
31, 2021
2022
YoY change
Actual results
Forecast
Net sales

309

319

3.3%

Operating Profit

7065

△7.5%

(21.1%)(20.3%)

Ordinary income

7863△20.3%Net Profit

62

46△27.3%

Dividend forecast

5042―(Operating Profit margin)

USD
Planned exchange rate―

RMB yuan
110.018.2*USD appreciation by JPY1.0 will result in approximately JPY100 million positive impact on net sales.
142. Assumptions for Consolidated Results Forecast
1.Operating Environment
 In addition to smartphones, AR/VR, automobiles, optical communication networks, biosensors, and flat
panel displays are medium-to long-term growth driving application areas. In particular, the overall market
trend of integration of semiconductors and optical technologies is a significant growth opportunity.
 The 2022 sales forecast takes into account the factors such as the spread of the Covid variant, the shortageof semiconductors, and the supply chain constraint.

2.Gross margin With the target sales ratio of new equipment set at 35% alongside the continuous manufacturing cost
reduction efforts, the gross margin ratio target is set at the same level as the previous fiscal year.

3.Operating income ¥6.5 billion is expected due to some expenditures focusing on medium-term growth.
 R&D expenses: ¥3.4 billion (up ¥300 million from the previous fiscal year)→We will strengthen R&D activities by raising R&D sales ratio to just over 10% (up 0.9% y-o-y).
 Other SG&A expenses: ¥3.9 billion (yoy increase of ¥700 million)→Expenses associated with acquisition of R&D facilities in Japan and personnel costs in relation to thefull-scale operation of the newly set-up ALD subsidiary.

4.Operating income and net income
 The foreign exchange gains and extraordinary gains recorded in the previous fiscal year are not includedin the forecasts for this fiscal year.
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3. CAPEX, Depreciation & R&D ExpenseCapex(¥100 million)

Depreciation

R&D expenses

60
50
4030

53
20

31

34

30

100722020

93320212022

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4. Trends in the growth market

Smartphone Orders received in 2022 are expected to come largely fromcamera modules application.
 Orders for ALD will continue for high-resolution and wideangle lenses.

AR/VR Continuing to grow in orders received.
 Strong appetite in North America and Asia envisioning thefull-fledged growth of the end market.

Automotive

 Diverse demands continuing for automobile cameras, headsup displays, instrument panels, sensors, and other products.

5G

 Demand in optical communication network sector remains
strong with growth likely to see some plateau.
 RF filter-related product development is ongoing.

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5. Medium-term strategy
1.Growth by riding on the market trend of "Semiconductor-Optical Fusion/3D"
Customers’ pursuit of advanced functions in the application market, coupled withexpanding needs for optical thin films and etching, will provide significant growth
opportunities. Product development for Mini/Micro LED, FPD, Automotive,AR/VR, Authentication, Optical Communication, and Healthcare to be made for
future growth.
2.Establishing a competitive advantage as the global leader
 Establish competitive advantages in cost and quality to expand market share.
3.To build the infrastructure that supports growth Enable sustainable growth by strengthening infrastructure (domestic R&D facilities,etc.), human resources development, and risk resilience.
4. Efforts for SDGs/ESGs
 Work on improving the production efficiency and energy efficiency of ourcustomers as part of SDGs efforts within our business domain.
 Implement initiatives to comply with TCFD framework.
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6. Shareholders’ Returns
 A dividend of 42 yen per share planned for this fiscal year.
 Maintain dividend level as much as possible in line with the past with a focus onshareholders’ return.

Dividend Policy
To return profits to shareholders asmuch as possible while securing thenecessary internal reserves to R&D
expenditure, production enhancement
and new business development.
Stable dividends with a payout ratio ofabout 30%.

(Yen)

Dividends per share(%)

100

45.0

90

39.5

80
70
60

29.3

27.7 31.4

40.0
35.0

33.7

30.0
25.0

50
20.0

40
30

55

60

20

15.0

50

50

42

10.0
5.0

100
2018/122019/122020/122021/120.0
2022/12(Preliminary)19

7. Topics
 Started operation of the newly built 3rd Building of Shanghai Optorun.
 R&D functions are consolidated into the 3rd building to enhance R&D capabilities.

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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 February 14, 2022, and certain assumptions
that we judged reasonable. However, the information contained in this document may bechanged without notice due to changes in the business environment.
The materials and information provided in this publication include so-called forward-lookingstatements. These forward-looking statements are based on current expectations, projections
and risky assumptions, and contain uncertainties that may cause results that differ materiallyfrom these statements.
These risks and uncertainties include general industry and market conditions, generaldomestic and international economic conditions such as interest rates and currency
fluctuations.
We are not obligated to update or revise the forward-looking information contained in thisreport 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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