1SANSHIN ELECTRONICS CO., LTD.

Business Activities

As a general electronics trading company committed to being “customers’ best
partner,” Sanshin Electronics runs two major businesses: device business andsolution business.

― Addressing diversified market needs through a wide product lineup ―We cover a wide array of manufacturers, from both domestic
and overseas major semiconductors/electronic parts makers all
the way to emerging manufacturers that are currently
developing products with excellent performance. In a time whenmarket needs are constantly diversifying, we respond to ourcustomers’ requests through a full lineup and detailed system ofboth domestic and overseas sales.

― Building up social infrastructures interconnected through ICT ―With information and telecommunications network at thecore of our operations, we are committed to proposing andbuilding up the optimal system to fit our customers’ needs.
We provide our customers with a safe and reliableinfrastructure through bundled services, including a support
menu, after the system implementation.

2

SANSHIN ELECTRONICS CO., LTD.
3

First Half of the Year Ending March 2019
Consolidated Performance Summary

SANSHIN ELECTRONICS CO., LTD.

Unit: ¥100 million■ Despite a decrease in net sales, operating profit increased due to improvement of the gross profit margin and a decrease in selling, generaland administrative (SG&A) expenses.
■ Ordinary profit decreased due to an increase in interest expenses and recording of commission for purchase of treasury stock.
■ Net profit increased compared with the same period of the previous fiscal year, where special retirement benefits associated with voluntary
retirement were recorded as extraordinary losses.

03/18 1st half 03/19 1st half
Achievement
YoY Change Forecast*1), 2)
ResultResultRatio

Net Sales
Gross Profit on Sales
SG&A Expenses
Operating Profit
Ordinary Profit
Net Profit Attributable to
Shareholders of Parent Company

Interim Dividend Per Share
Exchange Rate
(1 US dollar)

789.1
7.0%

724.2

92%

7.5%
55.1

6.1%

98%

6.5%

0.8%

97%

1.0%

0.8%

107%

0.8%

0.5%

98%

50.1

94%

5.3

133%

4.5

122%

0.7%
7.1

6.3

55.4
6.8%

47.2

6.6

99%

7.5%
54.2

48.5

735.0

0.6%
5.5

87%

0.6%

0.4%

3.6

4.3

122%

3.0

144%

¥10

¥15

+¥5

¥15

±¥0

¥111.07¥110.27-¥0.80¥105.00¥5.27*1) Figures for forecasts other than dividends are based on results announced for the period ended March 31, 2018
(announced on May 14, 2018).
*2) The forecast for dividends was revised at the announcement on August 3, 2018.
*3) Figures in the YoY Change section and Achievement Ratio section for interim dividend per share and exchange
rate represent increases or decreases in amount.

4

SANSHIN ELECTRONICS CO., LTD.

First Half of the Year Ending March 2019Year-to-Year Comparison of Consolidated Ordinary Profit● Decrease in gross profit
Approx. ¥0.08 bn
・Approx. ¥0.45 bn decrease resulted from ¥6.5 bn fall in net sales
・Increase (+0.5 P) in gross profit margin Approx. ¥0.37 bn

Ordinary
Profit¥0.63 bn

03/18 1st Half
Result● Increase in non-operating
expenses
Approx. ¥0.13 bn
・ Interest expenses
Approx. ¥0.05 bn
・ Commission for purchase oftreasury stock Approx. ¥0.06 bn○Reduction in
SG&A expenses
Approx. ¥0.13 bn

Ordinary
Profit¥0.55 bn

03/19 1st Half
Result5

First Half of the Year Ending March 2019
Consolidated Performance Summary by Segment

SANSHIN ELECTRONICS CO., LTD.

Unit: ¥100 million■ Changes in the Business Environment→Overall, the global economy is strong. The Japanese economy continues to show signs of a gradual recovery due to improvements incorporate earnings, the employment environment, etc.
→Conversely, there is heightened uncertainty for the future due to trends in trade policy and monetary policy in the U.S., as well as
geopolitical risk in Europe.
→ Growth of markets related to IoT, AI, M2M, driving support systems for automobiles etc.; steady growth of IT investment in cloudsystems, etc.
■ Device Business→Net sales decreased in the information/communications field and in the social/industrial field.
→Despite efforts to improve the gross profit margin and to reduce SG&A expenses, segment profit was down due to a decrease in net sales,
an increase in interest expenses, and an increase in overall company expenses.
■ Solution Business→Net sales were strong in the public sector.
→Segment profit was down due to a decrease in the gross profit margin caused by changes in sales mechanisms, delay in high-revenue
projects, increases in SG&A expenses, and overall company expenses.

03/18 1st half 03/19 1st half
YoY Change
ResultResultNet Sales

8.3

110%

84%

1.2

225%

67.1

124%

68.5

98%

4.7

103%

5.5

85%

Segment
5.7%
4.2%
3.1
2.8
ProfitExchange Rate (1 US dollar)¥111.07¥110.27

90%

3.3

85%

-¥0.80¥105.00¥5.27

Segment
ProfitNet Sales
Solution
Business

Operating Profit

89%

9.1

111%

3.2

2.7

54.1

Achievement
Ratio
99%

Operating Profit

657.1

*1)

666.5

DeviceBusiness

735.0

Forecast

1.1%

1.4%
8.2

0.4%

1.2%

0.4%

8.4%

0.2%

7.0%
4.5

8.1%
4.8%

*1) Figures in the YoY Change section and Achievement Ratio section for exchange rate represent increases
or decreases in amount.

6

First Half of the Year Ending March 2019Year-to-Year Comparison of Consolidated Net Sales

SANSHIN ELECTRONICS CO., LTD.

Unit: ¥100 million-8％【Year-to-Year Comparison of Fluctuations】

789
Solution Business

54

724

Digital AV Sector

89

67

＋13

83

-6

65

±0

TOY Sector
Social/Industrial,
andVehicle-mounted
Systems andOther Sector

65■ Solution Business○Those for public systems remained solid■ Digital AV Sector●Those for TVs/audio products decreased

251
210

-41

■ TOY Sector●Decrease in semiconductors for gaming consoles○Increase in electronic parts for gaming consoles■ Social/Industrial, and Vehicle-mounted Systems
and Other Sector●Those for social infrastructure decreased

Information/
Communication
Sector■ Information/Communication Sector
330

03/18 1st Half
18年3月期1H

299-31●Those for mobile devices decreased

03/19 1st Half
19年3月期1H
7

SANSHIN ELECTRONICS CO., LTD.
8SANSHIN ELECTRONICS CO., LTD.

Summary of V70 Medium-Term Management Plan (Announced on May 15, 2017)

In order to provide compelling value to all of our stakeholders, including employees,
customers, suppliers and shareholders, Sanshin Electronics will establish a strong revenue base thatcan overcome changes in the business environment◆
・◆・The following measures to be implemented in the three terms extending from the fiscal year ended
March 31, 2018 to the fiscal year ending March 31, 2020
◆Increase in dividend payout ratio to around 100% (in progress)◆Acquisition of treasury stock up to ¥20 billion (10 million shares) in total for the three terms (finished)

ROE of 5% by the final year (fiscal year ending March 31, 2021)

Consolidated ordinary profit of ¥3 billion in the final year
9

SANSHIN ELECTRONICS CO., LTD.

Summary of V70 Medium-Term Management Plan (Quantitative Target)

Unit: ¥100 million

5.0%
4.0%
2.6%
1.5%
0.8%

1.5%
-0.6%

1,991

1.1%

1.1%

1.5%

1.7%

-2.5%
1,677

1,573

15.0

1,740

1,690

1,660

17.9

19.0

25.0

30.0

03/18 Term

03/19 Term
Forecast

03/20 Term
Target03/21 Term
Target-9.5
03/16 Term

03/17 Term

*Forecasts for ROE after the fiscal year ending March 2019 reflect the result of TOB implemented from May
15 to June 11 of the current year.

10

SANSHIN ELECTRONICS CO., LTD.

Actions for Attainment of the V70 Medium-Term Management Plan

Increase of value and profit rate by reforming the business portfolio

Device Business・Accelerate shift to core device business using technological ability→Expand sales of vehicle-mounted systems and in mass market, increase grossprofit margin
・Focus on strategic device business→Enhance initiatives for IoT, next-generation game consoles, NW, and wirelessmarkets→Deepen solution provision type businesses by cooperation with SIers

Challenge new business fields by providing new services, increasing
customers, and expanding service area
Solution Business・Provide new cloud services
・Focus on increasing customers and expanding service area
→Acquire new business triggered by expanded sales of AI/IoT→Acquire Sanshin DC projects based on cooperation with outside partners

Further strengthening for the effectiveness of governance system
Corporate
Governance・Strengthen the functions of External Directors→Increase the effectiveness of monitoring function and advisory function
・Continue the performance-based stock compensation plan
→Share benefits and risks with shareholders

11

SANSHIN ELECTRONICS CO., LTD.

To strengthen our business capability, with the aim of establishing a strong revenue base that canovercome changes in the business environment, contribution to a value increase of each business areafrom technical ability, human resources, and capital policy

DeviceBusiness(1) Strengthen our ability in applied technology with full knowledge of the development styleunique to each customer(2) Acquire development technology for fully eliciting device features and enhance technical teams

Solution
Business(1) Focus on the development of specialists that enable system provision in terminals as well as thecloud(2) Accelerate the development of field application engineers and project managers

Direction ofcapital policy(1) Expand return to shareholders in order to achieve ROE of 5% (a V70 quantitative target), seek toimprove further capital efficiency, and implement acquisition of treasury stock via TOB(2) Seek to maximize shareholder value moving forward, improve capital efficiency, and perform athorough balanced review of growth investment, dividends, and acquisition of treasury stock

Establishment of the Group’s management system that contributes to the enhancement of corporate value
Examination of a management system based on the precondition of agile execution of M&A and efficiency increase of both businesses.

Further increase of effectiveness of the governance system
Strengthening of functions of External Directors

Operation of a performance-based compensation
plan for Directors (excluding External Directors)
12

SANSHIN ELECTRONICS CO., LTD.

V70 Medium-Term Management Plan
List of Progress of Priority Measures

Medium-Term Management Plan
measures
I.
Returning to
profitability inthe device
businessII.
Strengtheningof revenue baseof the solution
business

OthersProgress in the first half of the year ending
March 2019

Reform of businessportfolio

Despite delay in establishing IoT-related business,
improving the gross profit on sales structure for coredevices and strategic devices

Enhancement in
profitability of existing
business

Smooth expansion for some handled products despite
issues remaining in terms of increasing scale

Expansion of cloudservice portfolio

Bright prospects exist for establishing a revenue base forthe DC business; started cloud backup services andsequentially implemented new menus

Maximization ofsynergy effects
between business units

Achieved a certain level of results between units;currently taking action (including cooperation with thedevice business) to increase scale

Cost structure reform

Increased efficiency through outsourcing of ourcompany’s distribution center and response to financial
risk for corporate pensions

Assessment

tender offers for treasury stock
Enhancement of capital Made
→Ordinary shares: 9 million shares ; Tender offer
efficiency
amount: ¥19.7 billion

13

1st Half Period
Progress for Priority Measures (Device Business)

SANSHIN ELECTRONICS CO., LTD.

Heighten the ratio of the core device business + strategic device business; strengthen the profit structure
1H performance in 03/19 term (YoY)

Gross Profit on Sales
Composition Transition

71%
69%

64%
60%

Strategic device
business

Net sales

73%

Composition ratio of the coredevice business + strategic
device business

GrossprofitGross profit
marginCore device business

-5％

+1％

+0.44P

Strategic device
business

+29％

+28％

-0.08P■ Gross profit on sales(1) The composition ratio for core + strategic devices improved
steadily■ Core device business(1) Although net sales decreased year-on-year, the gross profit
margin improved→Net sales will grow throughout the term(2) Net sales for vehicle-mounted systems decreased by 4% yearon-year→Started sales of products from new suppliers; also acquired
one new commercial distribution company→Throughout the term, sales will increase due in part tocontributions from new suppliers/commercial distribution(3) Rapidly increased sales for storage; steadily increased mass
marketCore device
business

Volume salebusiness
Decreasing
trend
03/16 Term 03/17 Term 03/18 Term 03/19 Term 03/19 1st Half
ResultResultResultForecast
Result■ Strategic device business(1) Net sales expanded smoothly; maintained roughly the sameamount of gross profit margin→Expanded dedicated LSI, wireless IC, and power
semiconductors→Started sales of products from new suppliers (secure chip)(2) Net sales related to IoT increased by 55% year-on-year→There is a slight delay from initial plan; quantitative issues
exist

14

SANSHIN ELECTRONICS CO., LTD.

1st Half Period
Progress for Priority Measures (Solution Business)

Expand new business fields based on internal/external co-creation and collaboration with outside partners■ Cross-selling(1) In-depth customer cultivation has been implemented based on AP X
video systems(2) Currently expanding with device business with focus on AP■ Expanded sales for AI(1) Currently expanding sales of NEC applications to manufacturers(2) In the second half of the year, sales will be expanded toplants/inspection facility manufacturers■ Expanded sales for IoT(1) Currently holding business discussions for multiple collaborative
projects with SI corporations(2) Started demonstration testing for collaborative projects with thedevice business

Problem-solving by adopting newtechnology and optimal carriers

・SIer Cloud (AWS, MS, etc.)
・Major carriers
・Sanshin Call Center
・Video contents distribution■ Sanshin Data Center(1) Implemented collaborations with dedicated cloud vendors→Services were provided through combinations of Sanshin originalmenus(2) Status of cloud service contracts→Increased to contracts with over 50 companies, up more than 30%
compared to the end of the fiscal year ended March 2018
(3) Cloud service menu
→Expanded operation services and backup service→File box and security measures will be released in the future(4) Private cloud service→Private cloud services were provided by Sanshin via one-stop service(device to operation)→Environment for virtual redundant infrastructure was developed→Transition from proprietary-type to shared-type will be reviewed

15

SANSHIN ELECTRONICS CO., LTD.
16

Year Ending March 2019
Full-Year Business Forecasts

SANSHIN ELECTRONICS CO., LTD.

Unit: ¥100 million■ We forecast an increase in sales and profit due to an increase in net sales, despite factors such as
an increase in interest expenses due to rising U.S. interest rates.
03/15 Result

03/16 Result

03/17 Result

03/18 Result

03/19 Forecast

YoY Change

Net Sales

2,190.9
1,990.8
1,676.6
1,572.6
1,660.0
6.3%
6.1%
6.4%
7.3%
7.3%
Gross Profit on Sales
137.2
122.3
106.9
114.5
120.5
4.8%
5.2%
5.9%
6.2%
6.0%
SG&A Expenses
104.6
103.2
98.8
96.8
99.2
1.5%
1.0%
0.5%
1.1%
1.3%
Operating Profit/Loss
32.6
19.1
8.0
17.6
21.3
1.4%
0.8%
-0.6%
1.1%
1.1%
Ordinary Profit/Loss
31.2
15.0
-9.5
17.9
19.0
0.5%
-0.9%
0.6%
0.8%
Net Profit/Loss Attributable 0.9%
20.0
9.8
-15.8
9.5
13.5
to Shareholders of Parent
ROE
Annual Dividend Per
Share
Payout Ratio
Exchange Rate
(1 US dollar)

106%
105%
102%
121%
106%
143%

3.1%

1.5%

-2.5%

1.5%

2.6%

+0.7P

¥40

¥40

¥25

¥33

¥70

+¥15

56.3%

115.3%－

98.2%

100.1%+1.9P¥109.93¥120.14¥108.42¥110.86¥107.64-¥3.22*Figures in the YoY Change section for ROE, annual dividend per share, payout ratio
and exchange rate represent increases or decreases.
17

Year Ending March 2019
Full-Year Business Forecasts by Segment

SANSHIN ELECTRONICS CO., LTD.

Unit: ¥100 million■ Device Business→We forecast that net sales will increase by 5% on a year-to-year comparison, and that the segment profit will recover due tothe increase in net sales.
→We forecast an increase in sales of the products for mobile devices, strong performance in sales of the products for vehiclemounted systems, and establishment of new businesses for strategic devices, etc.
■ Solution Business→ We forecast that net sales will increase by 9% on a year-to-year comparison, and that the segment profit will be ¥1.07 bn,
almost the same level with the previous term.
→We forecast continued expansion in sales for public institutions and recovery in embedded systems, as well as expansion insales for video systems
03/15 Result

03/16 Result

03/17 Result

2,024.5

1,833.3

1,554.8

Net Sales
DeviceBusiness

Operating
Profit/Loss
Segment
Profit/Loss

1.3%
26.6
0.7%

Net Sales
Solution
Business

Operating
Profit/Loss
Segment
Profit/Loss

Exchange rate (1 US dollar)

0.7%

0.4%
13.0

-0.1%

03/18 Result 03/19 Forecast YoY Change

1,437.0
1.1%

6.8
-1.3%

1,512.0

105%

22.2

136%

1.5%
16.2

0.5%

0.5%

14.7

-1.0

-20.3

7.2

8.3

115%

166.4

157.5

121.7

135.6

148.0

109%

14.7

110%

11.0%

11.3%
18.3

9.9%

10.1%
17.8

10.1%

9.8%
12.4

8.8%

10.0%
13.4

7.8%

7.2%

16.5

16.0

10.8

10.6

10.7

101%

¥109.93¥120.14¥108.42¥110.86¥107.64-¥3.22*The figure in the YoY Change section for exchange rate represents an increase or decrease in amount.
18

SANSHIN ELECTRONICS CO., LTD.

Year Ending March 2019Year-to-Year Comparison of Consolidated Ordinary Profit○ Increase in gross profit
Approx. ¥0.6 bn
・ Increase due to ¥8.7 bn increase in net sales
Approx. ¥0.6 bn
・ Gross profit margin remains the same
● Increase in SG&A expenses
Approx. ¥0.24 bn

Ordinary
Profit¥1.79 bn

03/18 Term Result● Increase in non-operating expenses
Approx. ¥0.25 bn

Ordinary
Profit¥1.9 bn

03/19 Term Forecast
19Year Ending March 2019
Full-Year Business Forecast of Consolidated Net Sales

SANSHIN ELECTRONICS CO., LTD.

＋6％

【Year-to-Year Comparison of Fluctuations】■ Solution Business

1,660
1,573
Solution Business
Digital AV Sector
TOY Sector

148

＋12

172

-18

100

-10

136
190

Unit: ¥100 million○ Those for public systems/video
systems/embedded systems will increase■ Digital AV Sector● Those for TVs/digital audio will decrease■ TOY Sector

110● Those for gaming consoles will decrease
Social/Industrial,
andVehicle-mounted
Systems andOther Sector

503

＋1

502

■ Social/Industrial, and Vehicle-mounted Systems
and Other Sector● Those for social infrastructure will decrease○ Those for vehicle-mounted systems will remain
solid, and new businesses will be launched■ Information/Communication Sector

Information/
Communication
Sector

635

18年3月期
03/18 Term

737

＋102

○ Those for mobile devices/storage will increase

03/19 Term
19年3月期予想
Forecast

20

SANSHIN ELECTRONICS CO., LTD.

● Policy on Distribution of Profits
The Company considers profit returns to its shareholders as one of the most important management
issues. The Company’s basic policy is to determine dividends by comprehensively considering the needto maintain a balance between rewarding of shareholders, investment to gain opportunities for growth,
attainment of sufficient retained earnings to enable sustainable growth, and improvement in capitalefficiency. Under this policy, the Company has set a target for its dividend payout ratio of around 50%
on a consolidated basis.

● Predicted Dividends for the Year Ending March 2019
・An annual dividend of ¥70 per share→ ¥15 at mid-term; ¥55 at term-end→ Consolidated dividend payout ratio of 100.1%
・Average consolidated dividend payout ratio from the term ended Mar. 2015 to the term ending Mar.
2019: 141.6%
Under the current V70 Medium-Term Management Plan (closing in the fiscal year ending March 31,2021), as part of measures for enhancement in capital efficiency, the Company is increasing theconsolidated dividend payout ratio to around 100% in the three consecutive terms extending from thefiscal year ended March 31, 2018 to the fiscal year ending March 31, 2021. In addition, the Company isacquiring treasury stock by setting the maximum acquisition cost at ¥20 bn (or by setting the maximum
number of acquired shares at 10 million) in the above three terms. Based on this policy, we made atender offer for treasury stock from May 15, 2018. to June 11, 2018. (ordinary shares: 9 million shares;
tender offer amount: ¥19.7 billion).
21

SANSHIN ELECTRONICS CO., LTD.

03/15 Term
Result03/16 Term
Result03/17 Term
Result03/18 Term
Result03/19 Term
Forecast

1) Consolidated net profit¥2,003 million¥978 million-¥1,575 million¥947 million¥1,350 million

2) Comprehensive profit¥3,993 million-¥1,106 million-¥720 million¥912 million

-

64.5％

66.3％

65.4％

65.7％

50.0％

¥1,127 million(¥40)¥1,127 million(¥40)¥704 million(¥25)¥934 million(¥33)¥1,352 million
(¥70)

56.3%

115.3%-

98.2%

100.1%----¥19.72 billion(9 million shares)

56.3%

115.3%-

98.2%

1,560.8%

8) Cancellation of treasury stock

-

-

-

-

Suspense

9) Total number of shares issued(Excluding treasury stock)

29,281 thousand
shares(28,179 thousand
shares)29,281 thousand shares(28,179 thousand
shares)29,281 thousand shares(28,179 thousand
shares)29,281 thousand shares(28,179 thousand
shares)29,281 thousand shares(19,178 thousand
shares)10) Net profit per share¥71.11¥34.70-¥55.90¥33.62¥70.3911) Net assets per share¥2,328.64¥2,249.40¥2,183.84¥2,191.19¥2,261.51

3) Consolidated equity ratio4) Total dividends(Dividend per share)5) Consolidated payout ratio6) Value of treasury stock acquired(Number of shares acquired)
7) Total payout ratio (4+6)÷1*1) Total dividends include the dividend amount for shares held by trusts related to the performance-based stock compensation plan for
directors (excluding external directors).
2) Net profit per share is calculated based on the average number of issued shares (shares other than treasury stock) during the period.
3) Net assets per share is calculated based on the total number of shares issued (excluding treasury stock) at fiscal year end.
4) The forecast for net profit per share and net assets per share for 03/19 term is calculated based on the total number of shares issued(excluding treasury stock) as of September 30, 2018.
5) The value of treasury stock acquired until 03/19 term is ¥25.75 billion (17,281 thousand shares, of which 7,252 thousand shares were
22
cancelled).

SANSHIN ELECTRONICS CO., LTD.
23

SANSHIN ELECTRONICS CO., LTD.

Unit: ¥100 million■ Regarding the results of the term ended September 30, 2018, total assets were ¥81.0 bn; cash anddeposits decreased mainly due to the purchase of treasury stock; and the equity ratio was 52.7%.
■ The forecast for the year ending March 2019 is total assets of ¥86.7 bn and an equity ratio of
50.0%. Focus will be placed on reducing debt.
1) Balance Sheets
FY endedMar. 18
Result (A)Cash and deposits
Accounts receivable
Inventories
Other assets
Total assets
Accounts payable
Interest bearing
liabilities
Other liabilities
Total net assets
Total liabilities
and net assets
Equity ratio

H1 ended
Sept. 18
Result (B)

B-A
Increase/
Decrease

2) Cash FlowsFY endingMar. 19
Forecast (C)C-A
Increase/
Decrease

171.8

77.2

-94.6

70.0

-101.8

480.7

469.3

-11.4

550.0

69.3

168.9

166.6

-2.3

140.0

-28.9

118.3

97.5

-20.8

107.5

-10.8

939.7

810.6

-129.2

867.5

-72.2

156.3

202.7

46.4

199.7

43.4

138.1

154.4

16.3

208.1

70.0

27.4

26.0

-1.5

26.0

-1.5

617.9

427.5

-190.4433.7-184.2

939.7

810.6

-129.2

867.5

-72.2

65.7%

52.7%

-13.0%

50.0%-15.7%FY endedMar. 17
ResultDecrease (increase) in accounts
receivable-trade
Decrease (increase) in inventories

Increase (decrease) in accounts
payable-trade
Other
Operating C/F
Investing C/F
Financing C/F
Foreign currency conversion
adjustments
Increase (decrease) in cash and deposits

FY endingMar. 19
Forecast

27.8

33.6

-69.3

68.0

-57.8

28.9

-52.6

-7.6

43.4

7.5

11.9

14.3

50.7

-20.0

17.4

-7.3

-10.5

17.8

52.6

5.8

-137.0-24.6-101.8-0.9
95.1

Increase in cash and deposits fromnewly consolidated subsidiary
Balance of cash and deposits at term-end

FY endedMar. 18
Result

0.4
196.0

171.8

70.0

24

SANSHIN ELECTRONICS CO., LTD.
25

SANSHIN ELECTRONICS CO., LTD.
26

SANSHIN ELECTRONICS CO., LTD.

Year Ending March 2019
Variation in Business Performance for Device Business

Unit: ¥100 million

Net Sales/Segment Profit*Bar Graph: Net Sales*Polygonal Line: Segment Profit

2,025
1,833
1,555
14.7

1,437

1,512

7.2

8.3

03/18 Term

03/19 Term
Forecast

-1.0
-20.3

03/15 Term

03/16 Term

03/17 Term

27

(Device Business)
Full-Year Business Forecasts for Semiconductors

SANSHIN ELECTRONICS CO., LTD.

Unit: ¥100 million【Year-to-Year Comparison of Fluctuations】■ SoCs (System LSIs)

Sales for the Full Year

●Those for gaming consoles will decrease■ Microcomputers

967●Those for gaming consoles will decrease○Those for vehicle-mounted
systems/household electrical appliances willremain solid

+5％
841

Other
Semiconductors 491

705

740

■ Analog & Power Semiconductors●A decrease is expected due to planned
production cease at a supplier■ Other Semiconductors

535

Analog &Power
76
Semiconductors

444

503

415

○Those for mobile devices, storage, motors
and vehicle-mounted systems will increase○An increase in sales of new businesses suchas wireless ICs is expected

325

Microcomputers 141
50
46
140

SoCs

148

259
116
03/16
Term

03/17
Term

301
44
138

202

67

55

23
74
26

03/18
Term

03/19 Term
Forecast

03/19
1st Half

21
64
29
03/19 2nd
Half Forecast

YoY Change
SoCs

-19%

Microcomputers-7%

Analog & Power Semiconductors-5%

Other Semiconductors

+13%

28

(Device Business)
Full-Year Business Forecasts for Electronic Parts

SANSHIN ELECTRONICS CO., LTD.

Unit: ¥100 million

Sales for the Full Year

+6％

【Year-to-Year Comparison of Fluctuations】

866■ Electromechanical Parts

772
714

○Those for mobile devices will increase732■ Other Electronic Parts●Those for social infrastructure will decrease

Other
Electronic Parts

333

537

○We expect new businesses including solution
proposals for modules/finished products

331
401

440
YoY Change

332

195

138

Electromechanical 329
Parts

401

+9%

Other

+1%

439

313
194

03/16
Term

Electromechanical Parts

03/17
Term

03/18
Term

03/19 Term
Forecast

03/19
1st Half

245

03/19 2nd
Half Forecast

29Changes in Net Sales for Device Business

SANSHIN ELECTRONICS CO., LTD.

Net Sales by Supplier

Net Sales by Sector

1,833

1,833

＋5％
1,555
Other

533

1,512
1,437

166

TOY Sector

225

326

494
539

448

312

401

531

＋5％
1,555

301

398

Overseas
Manufacturers

Digital AV
SectorSocial/Industrial
andVehicle-mounted
Systems andOther Sector

1,512

147

1,437

117

190

172
100

110
636
542

503
502

ElectromechanicalParts Manufacturers 330

Renesas EL

439

476
306

262

241

03/16
16年3月期

03/17
17年3月期

03/18
18年3月期

Term

Term

Term

03/19Term
Forecast

Information/
Communication
Sector806

03/16
16年3月期
Term

749

635

03/17
17年3月期

03/18
18年3月期

Term

Term

737

03/19Term
Forecast

30

SANSHIN ELECTRONICS CO., LTD.
31

SANSHIN ELECTRONICS CO., LTD.

Year Ending March 2019
Variation in Business Performance for Solution Business

Unit: ¥100 million

After recording an increase in sales and a decrease in profit, we forecast that, despite of an increase in sales,
profit would remain at the same level with the previous term, but need to focus on building a highly profitablerevenue base.

Net Sales/Segment Profit
166.4*Bar Graph: Net Sales*Polygonal Line: Segment Profit

157.5

148.0
135.6
121.7

16.5

03/15 Term

16.0

03/16 Term

10.8

10.6

10.7

03/17 Term

03/18 Term

03/19 Term
Forecast
32

SANSHIN ELECTRONICS CO., LTD.

Solution Business Forecast for the Full-Year

Sales Composition Ratio
by Supplier

Changes in Net Sales by Product■ Hardware: Public systems/embedded
systems/video systems will increase■ Non-hardware: Spots for NW/public systems will
decrease＋9％*( ) shows anincrease/decrease
from the previous
fiscal year.

Unit: ¥100 million■ Proportion taken by NEC will be maintained at 37%40%; collaboration will be strengthened

148.0
135.6

121.7

Other

60.7%

62.1%

59.7%

NEC

39.3%

37.9%

40.3%

03/17 Term

03/18 Term

03/19 Term
Forecast

57.1
63.8
Non-hardware(-10％)

54.8

90.9
Hardware

66.9

71.8

(＋27％)

03/17 Term

03/18 Term

03/19 Term
Forecast

33

(Solution Business)
Full-Year Business Forecasts by Business Category

SANSHIN ELECTRONICS CO., LTD.

Unit: ¥100 million【Year-to-Year Comparison of Fluctuations】■ NW

Sales for the Full Year

●Infrastructure-related business for private
sector will decrease slightly＋9％■ Public Systems (fire stations & government
agencies)

157.5
148.0

Video Systems 13.2
135.6

AP Software

22.9

121.7

○Sales relating to firefighting, disasterprevention and infrastructure will increase

15.7■ Embedded Systems

13.4○LTO and RAID technologies will increase

21.6
13.6

Embedded
Systems■ AP Software

22.7●Production/SG&A expenses, etc. will decrease

36.4
20.9

26.1

80.9

22.2
28.3

PublicSystems

47.3

36.7

44.4

67.1

9.1

6.6

11.4

10.2

22.7

37.7

03/16
Term

36.2

03/17
Term

15.9

10.2
22.1

NW

■ Video Systems

40.6

03/18
Term

22.3

40.2

03/19 Term
Forecast

18.0

22.2

03/19
1st Half

03/19 2nd
Half Forecast○Portable video transmitters/IPTV systems andother products will increase
YoY Change
NW-1%

Public Systems+21%

Embedded Systems+18%

AP Software-5%Video Systems

+17%

34

SANSHIN ELECTRONICS CO., LTD.

Business cannot
succeed without trust.
It begins and ends
with trust.

Do not just pursue
profit. But act basedon principles, which
can be realized
through selfdiscipline.

Always act sincerely.
Rise to the challengehead-on.

35

Business forecasts and other statements contained in this reference material regarding the future are
predictions based on information available at the time of writing and are not intended as a promiseof performance on the part of the Company. Due to various factors, actual results may differ fromassessment figures. Major factors affecting actual results are mainly those listed below.

 Economic conditions and consumption trends in Japan,
North America and Asia
 Purchaser’s production trends and product development Supplier’s supply situation and product development
 Price drops due to intensifying competition
 Significant fluctuations in exchange rates
SANSHIN ELECTRONICS CO., LTD.
36