FY2011 Results Meeting
Fiscal year ended March 31, 2012

May 24, 2012

Ryosan Company, Limited

Code : 8140 / Stock listings: Tokyo Stock Exchange (First Section)
URL : http://www.ryosan.co.jp/eng/

Results for FY2011 and Forecasts for FY2012"Management Efforts" for FY2012

Efforts by the Technology Division

NoticeBusiness forecasts and all statement related to the future contained in thispresentation are based on information currently possessed by the Company and on
certain assumptions which we judge to be rational. Actual business performance
may differ greatly depending on a variety of factors. The following is a list ofmajor factors:
・Economic conditions in key markets (Japan and the rest of Asia), rapid changes
in consumption trends and supply-demand balance for products
・Sharp fluctuations in the dollar-yen exchange rate

An Electronics Systems Coordinator・Substantial fluctuation in prices in capital markets

Results for FY2011 and Forecasts for FY2012

An Electronics Systems Coordinator-3-

Overview of Consolidated Results
Unit: 100 millions of yen

FY2010FY2011
Of Total

Of Total%

2,161

Net sales

FY2012(forecasts)% Chg. YoY

Of Total%

2,178

+0.8%

2,250% Chg. YoY%
+3.3%

Gross margin

190

8.8

167

7.7

△11.9%

181

8.0+7.9%

SG & A expenses

1296.0132

6.1+2.4%135

6.0+1.8%

Operating income

60

2.8

35

1.6

△42.2%

46

2.0+31.0%

Ordinary income

68

3.2

44

2.1

△35.0%

54

2.4+20.6%

Net income

41

1.9

180.9

△54.0%

35

1.6+84.3%

Earnings per share(100 millions of yen)

¥119.85¥104.59(100 millions of yen)

Net sales

2,500¥55.902,000(100 millions of yen)

Operating income

8050

Net income

4060

30

1,50040
1,0002,1782,161

2,25020602035100

FY2010FY2011FY2012(Forecasts)

3546500041180

FY2010An Electronics Systems Coordinator

FY2011-4-FY2012(Forecasts)

FY2010FY2011FY2012(Forecasts)

Overview of Results by Business Segment
Unit: 100 millions of yen

FY2010FY2011

Operatingmargin
(%)

Sales

Semiconductors
Electronic
Components
Electronic
Equipment

Operatingmargin
(%)

1,237

Operating income

45

Sales

600

Operating income

22Sales

258

FY2012 (Forecasts)

1,323
243.7

1.8554183.7

3.3246

＋ 6.9

1,370

△47.637△ 7.7565△19.720△ 4.6255△ 3.29△15.860

Chg. YoY(%)＋ 3.5
2.7＋54.0＋ 2.0

3.5+10.8＋ 3.4

Operating income

9Sales64

Operating income

47.524.1△54.658.3＋127.3

Unallocable Operating expenses▲21-▲17--▲25--Sales

2,161＋ 0.82,250△42.246

Ryosan Products(Heat sinks)

8

Operatingmargin(%)

Chg. YoY(%)

3.5

3.6542,178

Consolidated
Operating income

60

An Electronics Systems Coordinator35

2.8-5-

1.6

3.5+ 2.5＋10.1＋ 3.3
2.0＋31.0Consolidated Statements of Cash Flows

Major causes for increases/decreases

Cash flow
FY2010FY2011

・Income before income taxes and minority interests:(Unit: millions of yen)

Operating CF△7,797△ 8,356

Investing CF

△ 474

△ 936

Financing CF

929

4,321 million yen
・Increase in notes and accounts receivable-trade△12,427 million yen
・Increase in inventories:△1,683 million yen

・Purchase of insurance funds:△203 million yen

・Purchase of noncurrent assets:△501 million yen

419
・Increase in short-term loans in foreign currency:

Free CFBalance of cash and cash
equivalents△8,27143,239

An Electronics Systems Coordinator△ 9,292
34,113-6-

4,319 million yen
・Payment of year-end dividends:△2,056 million yen

・Purchase of treasury stock:△1,720 million yen

Trends in Consolidated Financial Position(100 millionsof yen)

2,000

64.1%

65.6%

Net assets to total assets

Net assets

Net assets per share (yen)

68.3%
78.1%
72.5%

1,832

1,831

Total assets

72.0%

1,740
1,615

69.2%
1,670

1,634

1,489

1,500
1,173

1,203

1,189

1,164

1,172

1,177

1,156

1,000

3,348

500

3,3763,398

3,413

3,457

End of Mar.
2010

End of Mar.
2011

End of Mar.
2012

3,296
3,216

0

End of Mar.
2006

End of Mar.
2007

End of Mar.
2008

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End of Mar.
2009

-7-Trends in Net Income, Total Amount of Dividends, and Purchase of Treasury Stock(100millionsof yen)

80

◇The Company purchased 1,000,000 shares of treasury stock in FY2011.
◇With regard to purchasing of treasury stock, the Company plans to makedecisions in consideration of trends in consolidated results and other matters.
Net income

39%

7084%

46%

85%

57%
5760
50Total amount ofdividends
Purchase of Treasury
Stock
Total payout ratio

128%504766%28403057 33

5833656763072%

1127252028391457%

3029201022161%

2127174128

35 2018 13

@¥40

@¥60

@¥70

@¥80

@¥80

@¥80

@¥60

@¥80

@¥40

@¥60

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012(Forecasts)<<Trends in Purchase of Treasury Stock>>
FY2003

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010FY2011

Amount（￥ 100 million）

33.1

11.3--

28.8

22.5-

-

17.2

Number of stocks（10,000 shares）

200.148.3--

100.0

100.0--

100.0

An Electronics Systems Coordinator-8-Trends in Domestic and Overseas Net Sales<Reference>

FY2011: Net sales of DRAM for PCs, etc. decreased.
FY2012: Net sales of system LSIs for DSC and microcontrollers for automotive are expected
to increase.
Overseas (figures in parenthesis are netsales for the Chinese bloc)
Domestic(100 millionsof yen)

2,161

2,178

(201)

(155)

FY2010FY2011-9-

An Electronics Systems Coordinator

2,250(166)

FY2012 (Forecasts)

<Reference>

Main Clients<<Top 5 companies by net sales foreach business segment>><<Top 40 companies by net sales>>Top 1-10
Calsonic Kansei

CASIO
COMPUTER
DENSO

Clients(alphabetical order)

HITACHITop 21-30

Top 31-40

ADVANTESTKONICA MINOLTAHOLDINGS

Fujitsu

ALPINEALPS Electric
Brother Industries

ClarionFuruno Electric

JRC
MiTAC (T)JVC KENWOOD

Panasonic ElectricWorks

Mitsubishi
Electric

Fuji Film

SAMSUNG Group (K)Stanley ElectricFuji Xerox

Sharp

Taiyo Yuden

NECMamiya-OP
NINTENDO

Sumitomo ElectricIndustries

TAKATA

NIKON
OMRON

Sumitomo Wiring
Systems

Panasonic
PIONEER(Top 10)
Net sales
net sales

Top 11-20

50%

TDK(Top 20)

64%

TOSHIBATOSHIBA TEC

SemiconductorsElectronic
Equipment

HITACHI
Mitsubishi Electric
NECNIKONPIONEERDENSO
Fuji Xerox
NECPanasonic
TDK(Top 5)
49%(Top 5)56%

Electronic
Components

RyosanProductsVictor
YAMAHAYAZAKI Group(Top 30)

70%

YASKAWA
Electric

DENSO
Calsonic Kansei
FANUC
Mitsubishi Electric
HITACHINEC
Mitsubishi Electric
Panasonic
Panasonic
PIONEER(Top 40)72%* Honorifics omitted* Ranking and percentage (%) are based on actual sales for FY2011.
* (T) and (K) represent clients in Taiwan and Korea, respectively.
* Blue characters represent the clients for which sales increased by 20% or more year-on-year.
-10An Electronics Systems Coordinator(Top 5)25%(Top 5)44%(alphabeticalorder)<Reference>

Main Suppliers

COSEL
2.0%

Othersuppliers
20.0%

Elpida Memory
2.0%

Renesas Electronics
49.5%

NEC TOKIN
2.3%
Japan Aviation
Electronics
Industry
2.5%
NLT
Technologies
2.5%
ORTUS
Technologies NXP
2.7% Semiconductors[Percentage of net sales
by business segment]
Electronic
Equipment
(11%)

NEC
6.7%

ALPS
Electric
6.8%

Electronic
Components
(25%)

3.0%
* Honorifics omitted* Percentage (%) is based on actual sales of products purchased from suppliers for FY2011.
An Electronics Systems Coordinator-11-Ryosanproducts(3%)

Semiconductors(61%)

Management Efforts for FY2012

An Electronics Systems CoordinatorPartial Amendment of "8th Medium-Term Management Plan"
Withdrawal of "Business Goals of Achieving 300,000 million yen of Net Sales in FY2013"[Reason] A lack of awareness of changes in the business environment◆The domestic business environment has undergone major structural changes since planning
・Diminishing competitiveness of Japanese companies due to the extreme appreciation ofthe yen

・The Great East Japan Earthquake and the floods in Thailand◆Uncertainties are growing in an increasingly unpredictable global economy
・ European sovereign crisis
・The slowdown in the Chinese economy

・The delay in the recovery of the US economy

Since the business environment is expected to change significantly in and after FY2012,
the Company gives the highest priority to rebuild the "sound business structure"aiming to restore 3% of operating income to net sales in FY2013, the last fiscal year ofthe plan.
An Electronics Systems Coordinator-13-Partial Amendment of "8th Medium-Term Management Plan"(100 millions of yen)

3,500

Business Goals and Actual Results
3,000

3,000

2,500

Gap

2,161

2,00064258

54246

60
255

1,500

600

5545651,000

5000100350

Electronic
Equipment

750

Electronic
Components

1,800

Semiconductors

2,250

2,178

1,237

1,323

1,370

FY2010FY2011FY2012FY2013(Forecasts)(Initial business goals)

An Electronics Systems Coordinator-14-Ryosan
Products

Management Efforts for FY2012[Recognition of current situations]
Changes in the business structure◇Changes in the global economic and industrial structure◇Structural changes in the semiconductor industry
・New restructuring of semiconductor manufacturers
・Clear demonstration of the survival of the fittest in semiconductor distributors

The Company's circumstances◇Issues regarding the profit structure
・Decreasing gross profit and increasing personnel costs and other costs◇Issues regarding the financial structure
・Decreasing cash and deposits, and increasing inventories and loans

An Electronics Systems Coordinator-15-

Management Efforts for FY2012[Our Basic Stance]
The Company addresses "Renovation ofManagement Structure"
to survive in a changing externalenvironment.
・Rebuilding the sound business structure
・Building a far-sighted management system

An Electronics Systems Coordinator-16-

Management Efforts for FY2012[Specific Efforts]
Laying the foundation◇Improvement in the profit structure◇Improvement in the financial structure
Reform of the management system◇Rejuvenation of Directors◇Enhancement in corporate governance

Promotion of globalization◇Strengthening the efforts in rapidly growing emerging markets◇Strengthening the response to Japanese clients becoming moreglobalized
An Electronics Systems Coordinator-17-

Management Efforts for FY2012

Laying the foundation~ Restructuring of the profit and financial structure◇Improvement in the profit structure
・The businesses transferred due to changes in businessflows of suppliers are highly unprofitable since theCompany did not conduct sales activities with its own
added value (technical support) for them.

・The Company will improve future profitability byconducting sales activities with technical support to thenew commercial rights.
An Electronics Systems Coordinator-18-

Management Efforts for FY2012

Laying the foundation~ Restructuring of the profit and financial structure◇Improvement in the financial structure
・Worsening of the financial structure due to increasing
inventories (due to the slowdown in the Chinese economy
and the launch of newly transferred businesses)

・The Company will improve months sales in inventory andcash flows by reducing inventories to an adequate level
through strict control of delivery time.

An Electronics Systems Coordinator-19-

Management Efforts for FY2012

Reform of the management system◇Rejuvenation of Directors
・Active promotion of potential younger members◇Enhancement in corporate governance・Appointment of independent outside directors(Supplementary information) "Renewal of the Board of Directors"◇The Company implemented "Renewal of the Board of Directors" inconsideration of "worsening business performance" and "reductionin the year-end dividend."
・The remuneration for officers (January-March 2012) was reduced.
・No Directors with title (Senior Managing Directors or ManagingDirectors) were placed this time.
An Electronics Systems Coordinator-20-Management Efforts for FY2012

Promotion of globalization◇ Strengthening our approach to developing countries with
rapid growth(1) Strengthening of measures to promote sales in the Chinese market
・Establishment of the integrated sales promotion system in China centering on
the Shanghai office[Progress] Business, legal and tax matters have been considered andverified.
The optimum sales promotion system is under consideration.

(2) Making inroads into the Indian market
・Sales promotion activities, particularly to Indian local clients[Progress] A local office (affiliated with Singapore RS) will be established in
the 1st quarter.
It is scheduled to begin full-scale operation.
An Electronics Systems Coordinator-21-

Management Efforts for FY2012

Promotion of globalization◇ Strengthening our business with globalizing Japanesecustomers
Making inroads into the European market
・ Construction of a service/support system for Japanese companies
making inroads to Europe[Progress] Ryosan Europe GmbH (Munich) was established inMarch 2012. It began operation.

An Electronics Systems Coordinator-22-Efforts in Semiconductors BusinessChange in Net Sales
by Product

Efforts in FY2012
Memories◇Focused target markets

System LSIs
Discretesemiconductors(100 millions
Operating income (%) of yen)(100 millionsof yen)

1,323

1,370

1,237

・In-vehicle electrical components
・Social infrastructure
・Communication equipment◇Specific Efforts
Domestic suppliers
・Exploiting and capturing new markets(Smart grids and LED lightening, etc.)
・Deepening relationships with newly transferredclients・Sales promotion to overseas local clients incooperation with local design houses(China, Korea)(3.7%)(2.7%)FY2010(1.8%)

Overseas suppliers

FY2011・Strengthening the sales system for current suppliers(Establishing the divisions responsible for QC
and common operations)
・Acquiring new suppliers(next-generation semiconductors [such asMRAM])

FY2012 (Forecasts)

An Electronics Systems Coordinator-23-Efforts in Electronic Components BusinessChange in Net Salesby Product

Efforts in FY2012◇Focused target marketsDisplay Devices
Power Supplies(100 millionsof yen)

Mechanical Components(100 millionsof yen)

Operating income (%)

600
554

(3.7%)

565◇Specific Efforts
・Improving the product lineup(LED, optical track pads, solar cells,
censors, etc.)
・Strengthening sales promotion inoverseas markets(Shifting to Japanese companies andChinese local companies)
・Exploiting growth areas(In-vehicle electrical components,social infrastructure, informationand telecommunications)(3.5%)(3.3%)FY2010FY2011・In-vehicle electrical components
・Social infrastructure
・Information and telecommunicationsFY2012 (Forecasts)

An Electronics Systems Coordinator-24-Efforts in Electronic Equipment BusinessChange in Net Sales
by Product

Efforts in FY2012◇Focused target markets
Systems Equipment(100 millionsof yen)

Facilities Equipment(100 millionsof yen)

Operating income (%)

258

246

・In-vehicle related・Social infrastructure
・Environmental energy

255◇Specific Efforts
・Improving the product lineup(Taiwanese and Chinese suppliers, mid-sized
venture companies manufacturing facilities
equipment, etc.)
・Introducing new business models(EOL, commissioned processing services,materials [such as noise suppression sheet])・Exploiting markets and clients in growth areas(Social infrastructure, environmental energy,
next-generation semiconductors)
・Response to globalization(Exploiting the Chinese market)(3.5%)(3.5%)(3.6%)FY2010FY2011FY2012 (Forecasts)

An Electronics Systems Coordinator-25-Efforts in Ryosan Products BusinessChange in Net Salesby Product

Efforts in FY2012◇Focused target markets
Domestic(100 millionsof yen)(100 millionsof yen)Overseas
Operating income (%)

64

Domestic・Energy・FA, servo
・In-vehicle electrical ・Heavy electricalcomponents
machineriesOverseas

60

・Air conditioners ・OA ・In-vehicle electricalcomponents

54◇Specific Efforts(8.3%)(7.5%)(4.1%)FY2010FY2011FY2012 (Forecasts)

An Electronics Systems Coordinator-26-・Focusing resources on appealing markets
Domestic: In-vehicle electrical components, heavy
electrical machineries, FA, energy,
infrastructure, amusement, etc.
Overseas: Higher value-added products such as
air conditioners, in-vehicle electricalcomponents
・Business expansion by introducing new products andtechnologies(Liquid cooling, improving Wave Cooler functions, newmaterials, etc.)
・Improving profitability in factories, strengthening theoverall optimum production system, and promoting
globalization

Efforts by the Technology Division

An Electronics Systems CoordinatorEfforts by the Technology Division[Focused Activities in the Technology Division]・Expanding the strongest areas andenhancing the system technical capabilities
・Extending the technology for growthmarkets and expanding globally

An Electronics Systems Coordinator-28-

Efforts by the Technology Division
Areas of technical activities ①
Supports from beginning business meetings to mass production~ Shares activities with suppliers in each area ~Device development

Suppliers

Product planningMass production /Quality assurance /Solution development and turn key development Complaints analysis(Note) Solution development: IP development, middleware development, improving the developing environment
Solution construction Business meetings

△◎◎◎
○

DW

Complaints
handling

○ △

◎◎◎
◎

DI

Commissioned
Development
Technical
support at thetime of setdevelopment△

System proposal

Turn keycustomize○ △○ △Device proposal

Referencecustomize

Elementaltechnology
development(Sharing withsuppliers)

Informationcollection

DI and DW
activities

Development/Support[Examples]
Microcontrollers

ASICA&PSOC◎◎◎◎◎◎◎◎◎◎○○○○◎: handled mainly by the Company ○: handled by the Company in cooperation or shared with suppliers△: developed mainly by suppliers and customized by the Company-29An Electronics Systems CoordinatorEfforts by the Technology Division
Areas of technical activities ②

Strengthening value-added areas
by improving and enhancing supported systems

System technicalcapabilities(Value-addedareas)

Supported areas in FY2011
Expanding supported areas

Improving and enhancing
supported systems

Turn key
development
Set handling
Reference development
Elemental technology
development

System proposal
Commissioned development(Software development, ASIC development)
Technical support (handling questions regarding detailed
product information at the time of acquiring clients),
development of reference corresponding to devices
Device proposal, technical contact, questions handling
In-vehicle
audio
An Electronics Systems Coordinator-30-

Heavy Household Telecomm
electrical lighting unications
LTEmachineries

Digital AV
STB

Efforts by the Technology Division
Main accumulated technologies
Improving and enhancing advanced technologies in growth areas (carelectronics, social infrastructure, etc.)
SystemsSystem technologies and elementaltechnologies

Main targeted clients

In-vehicle
electricalcomponents

In-vehicle LAN (Ethernet AVB controltechnology), functional security
Various ECU (Body, EPS, ACC), car-mountedcameras
Display audio (Mirror link, Linux OS)

Domestic and overseas manufacturers of
in-vehicle equipment

Greenequipment

Smart grids, household power management
systems
Power-saving LAN control technology (for offices)
LED/organic EL lighting technology
AC-DC power

Domestic and overseas manufacturers ofsmart meters, solar cells, and LED lighting

Communicati
on equipment

LTE control technology
Wireless telecommunication technology (Bluetoothlow energy)
RFI technology (Keyless entry system)

Manufacturers of cell-phone handsets, carmounted navigation system, and OA
equipment

An Electronics Systems Coordinator-31-