Optorun Co., Ltd

Financial Results(2020）2021.2.15

1.
2.
3.
4.
5.

Financial Highlights (2020)
Sales by Business Segment and Region
Sales and Operating Income (Quarterly 2020)
Orders Received (Quarterly 2020)
Quarterly Performance Comparison and Profit Ratio(Quarterly 2020)
6. Consolidated Balance Sheet (2020)
7. Status of CF
8. Forecasts for FY12/21
9. Shareholder Returns
10. Response to the Covid-19 Pandemic
11. Business strategy

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1 Financial Highlights (2020)
Overview: Made significant progresses in developing new products to meet market needs for more sophisticated coating technology including advanced sputtering
coaters and ALD coaters. General order situation for high end coaters were weak due to slow global economy for Covid 19.
 Performance Highlights:(1) Sales outperformed and profit underperformed the FY2020 revised forecasts. CGS-Sales ratio rose slightly due to the impact of the US$ depreciation against Japanese
Yen and RMB. SG&A ratio increased due to increased R&D expenses, sales commissions, etc.
(2) Sales and profit for FY 2020 declined from the previous year.
・Decline of sputtering coater sales and US$ depreciation against Yen and RMB resulted in a higher CGS-Sales ratio.
・Sales of the newly developed coaters exceeded 30% of total revenue.
・Sales and orders with regard to North America smartphone customer were modest in 2020: higher figures are aimed for 2021 and beyond.
・Sales percentage for IoT-and LED related products surged, indicating more diversified application areas for Optorun’s products.
[Exchange Rates][Performance Comparison](¥100 million)
FY2019

FY2020YoY changeFY2020(PerformanceForecast)Comparisonwith forecast

Net sales428374△12.4%370

1.3%Gross profit

176

146

△17.0%

148△0.8%(41.3%)(39.2%)

6860(15.9%)(16.1%)

10886(25.4%)(23.0%)

110

86(25.8%)(23.0%)

9167(21.3%)(18.1%)

Research and development expenses

3131(Ratio of R&D Expenses to Net Sales)(7.4%)(8.4%)

2

7245.1%

Orders received

360

286

△20.7%

Order Backlog

324

235

△27.4%(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）

Capital expenditures―△11.2%―△20.7%―△21.9%(40.0%)
54(14.6%)
94(25.4%)
97―
12.1%

―
△0.7%
―

71(19.2%)29(7.8%)17

CNY 1From Monday12Month

―
△8.2%
―
△11.2%(26.2%)△25.3%

18.00
17.50
17.00
16.50
16.00
15.50
15.00
14.50
14.00

△4.3%

116.00114.00112.00110.00108.00106.00104.00102.00100.00―8.6%―△55.9%

7.30
7.20
7.10
7.00
6.90
6.80
6.70
6.60
6.50
6.40
6.30

USD 1From Monday12Month

CNY-USD 1From Monday12Month2

2 Sales by Business Segment and Region
Sales by Business Segment

Sales by Region33 Sales and Operating Income (Quarterly 2020)

The 4th quarter sales were 59% higher than the 3rd quarter’s: 50% of sales were sputtering coaters and 40% wereevaporation coaters.
Increase in sputtering coaters and decrease in evaporation coaters for the 4th quarter.
The 4th quarter operating profit was 62% above the 3rd quarter level.
In the 4th quarter, the company focused on increasing orders and sales, achieving notable results.
Newly developed coater sales consists of 60% of entire sales in the 4th quarter and main applications are smartphones andLEDs.
Sales of new equipment(¥100 million)
140+59%

120

97

10080

12880

6860

+62% 7440

1620092020/12 1Q

2030

1821182020/12 2Q

2020/12 3Q

2020/12 4Q

44 Orders Received (Quarterly 2020)


Orders received in 2020 were down 20.7% from the previous year. 2020 could be considered as the run-up period for newly developed coaters
including new sputtering coaters and ALD coaters : full-scale orders are expected in 2021.
In the 4th quarter, orders for newly developed coaters accounted for more than 30% of the total.
In addition to smartphones, camera lenses, and LEDs, orders for multiple ALD coaters for smartphones and mini LEDs were received for thefirst time, and full-fledged orders are expected in 2021.
(¥100 million)
400(¥100 million)
140

360
350

27
6

300

67

250

200

104

125
120

286

27
24
71

0

LED

155

14IoT

260

Smart phone

8763

26
4

139

200
2019/12

180

40

100

50

Other

Camera lens

24

150

100

9122020/12

28

153
43

13917
14

12215
2
92020/12 1Q 2020/12 2Q 2020/12 3Q 2020/12 4Q

5

5 Quarterly Performance Comparison andProfit Ratio (Quarterly 2020)

The gross profit margin for the 4th quarter was 37.8% and the operating profit margin was 24.0%.
The CGS-Sales ratio surged as a result of the depreciation of the U.S. dollar against Yen and RMB
Negotiated discounts with coater parts suppliers and reduced man-hours by reviewing coater assembly processes.
Successful control of SG&A expenses for the entire Group, resulting in a favorable operating profit margin.
Further cost reduction efforts are ongoing.
[Performance Comparison](¥100 million)
3Q

4Q

YoY change[Gross Margin]
50.0%
40.0%

Net sales

80

128

59.4%

Gross profit

3148

53.5%

(39.3%)(37.8%)

1217(15.7%)(13.9%)

1830(23.6%)(24.0%)

1629(21.1%)(23.0%)

1325(16.9%)(19.9%)

Orders received

4353

22.9%

5.0%

Order Backlog

310235△24.1%

0.0%(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）

―
40.8%
―
62.0%
―
74.3%
―
87.3%
―

42.2%
38.7%

39.3%

37.8%

30.0%
20.0%
10.0%
0.0%

2020/12 1Q 2020/12 2Q 2020/12 3Q 2020/12 4Q[Operating Profit Ratio]
30.0%
25.0%
20.0%

23.6%

20.9%

23.6% 24.0%

15.0%
10.0%

2020/12 1Q 2020/12 2Q 2020/12 3Q 2020/12 4Q

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6 Consolidated Balance Sheet (2020)
 Cash and deposits decreased by ¥4.2 billion (due to dividend payments, etc.), advances received decreased by¥5.0 billion (due to sales recorded), and net assets increased by ¥4.7 billion.
(¥100 million)
600(¥100 million) [Liabilities and Net Assets]
600[Assets]
565

565543500

500

Cash and deposits

269

400

227
Notes and accounts

400

42200

151

1000

7785

Inventories

97

Other current
assets111
94

End of

End ofDecember

December

2019

2020

Investment

25

1789
25

114
Notes and accounts
payable - trade
Short-termborrowings
Advances received

300

Other current

200

348

Non-current assets

9139

543

18

receivable300

527395liabilities
Non-current
liabilities

100

Total net assets

securities

30

End of

End ofDecember

December

2019

2020

7

7 Status of CF(¥100 million)
FY2019AmountFY2020
AmountIncrease/decrease

CF from sales activities

162△5△167

CF from investment activities△24△1013

CF from financial activities△23△24△1Of cash and cash equivalents
Translation adjustments△2△10

Net increase (decrease) in cashand cash equivalents

112△42△154

Cash and cash equivalents at
beginning of year

157

269

112

Cash and cash equivalents at
end of year

269

227

△42Main reason

Due to an increase in account receivables
From the acquisition of tangible fixedassets
Due to dividend payment

88 Forecasts for FY2021
・Multifaced R&D activities for new optical thin film + new coating technology such as ALD arebeginning to bear fruit.
・The orders are gradually picking up, and the application field of advanced coating performance isexpected to expand.
・We aim to increase both sales and profits by applying new technologies for sputtering andevaporation coaters and completing development of various new coater and equipment types.
(¥100 million)

FY2020
Actual results

FY2021
Forecast

YoY changes a l e s

374

381

+1.6%

Operating Profit8690+4.3%(Operating Profit Ratio)(23.0%)(23.6%)

Profit8690+4.5%

A f t e r Ta x p r o f i t

6770+3.0%

R e s e a rc h a n ddevelopment expenses

3131+0.8%

Costtransfer

211+450%

Real R&D expenditure3342+27.3%

N e tOrdinary―99 Shareholder Returns
 FY2020 dividend (¥50), dividend payout ratio (31.4%)
 Dividend forecast for FY2021 (50 yen), dividend payout ratio (30.7%)
Dividend Policy
While securing necessary internal
reserves for R&D, production capability
enhancement, and new businesses
development activities, we arecommitted to returning profits toshareholders.
We aim for realizing stable dividends
with a dividend payout ratio of about30%,.

8070(%)

Dividends per share(Yen)

29.3

27.7

31.4

30.7

35.0
30.0

60

25.0

50

20.0

40
3055

60

20

15.0

50

50

10.0

10

5.000.0

2018/122019/122020/122021/12(Preliminary)※ 1:1,000 stock split on March 18, 2017, and 1:3 stock split on October 13, 2017

Dividends per share for the period prior to December 2017 reflect the above stock split and are1010 Response to the Covid-19 Pandemic
1.Basic Policies
 We place top priority on the safety and health of all stakeholders, including
Optran Group employees and their families, and implement thoroughinfection prevention measures.
2.Response Since the end of last year, in response to the resurgence of Covid-19, we
have been thoroughly implementing infection prevention measures(combining telecommuting with staggered work hours, checking bodytemperature, wearing masks, and limiting domestic and overseas businesstrips). At present, no cases of employees infected have been reported.
 We are operating our sales and R&D activities close to our customers in across-sectional manner in this pandemic situation where business trips arerestricted. We are also maintaining agility by temporarily transfering R&D
projects between sites to minimize project delays.
1111 Business strategy
As an industry leader, we explore a new stage of technology development and aim toexpand the application of high-grade coating technology.
 Ensure the new film coating technology developed over the past several years to bear fruit in the formof new orders.
 Strengthen marketing activities for new customers in North America, China, etc. and ensure receiving
orders for sputtering and evaporation coater reflecting new film formation technology for high-end
smartphones/automobiles/5G/IoT/LED application.
 Roll out ALD coater and other newly developed coaters that represent new stage of technologicaldevelopment to meet considerable market needs.
 Thoroughly manage expenses by reducing parts procurement costs, controlling assembly man-hours,
and devising new packaging and shipping methods to maintain profitability.
 Put into practice quality control rules throughout the Group to ensure the quality of the new filmdeposition technologies and newly developed coaters.
 Complete the third R&D building on the Shanghai premises and search for new R&D facilities inJapan to enhance the R&D capability of the entire group Aim to expand the Group's business scale through M&A and strategic investment and acquirecompanies with technological synergies to accelerate the technology development.
 Become a "reliable company" that meets social expectation such as ESG/SDGs by way of equipment
downsizing and proactive information disclosure/IR PR, etc..
12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, 2021, and certain assumptions that we judged
to be reasonable. 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-lookingstatements. These forward-looking statements are based on current expectations, projections andrisky assumptions, and contain uncertainties that may cause results that differ materially fromthese statements.
These risks and uncertainties include general industry and market conditions, general domesticand international economic conditions such as interest rates and currency fluctuations.
We are not obligated to update or revise the forward-looking information contained in this reporteven if new information or future events occur.
Contact Information
E-mail:ir-info@optorun.co.jp

TEL:03-6635-9487
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