Supplementary Materials for
FY2021 First Half Financial Results
Results for the six months ended September 30, 2021
FY2021: Fiscal year ending March 31, 2022

December 3, 2021

Ryosan Company, Limited

Financial Results for H1 FY2021
Business Plan & Actions

NoticeBusiness forecasts and future-oriented statements contained in thisdocument are based on information currently possessed by Ryosan
Company, Limited (“Ryosan”) and on certain assumptions which are judged
to be rational. Actual business performance may differ greatly depending ona variety of factors, including but not limited to:••••Economic conditions in key markets (Japan and the rest of Asia)
Rapid changes in consumption trends and product supply and demand
Sharp fluctuations in the dollar-yen exchange rate
Substantial fluctuation in prices in capital markets

2

Financial Results
For H1 FY2021

Consolidated Financial Statements

 In the consolidated first half under review (first half of the 2021 fiscal
year: H1 FY2021), net sales improved to ¥124.2 bil (+27.8% from thesame period of the previous fiscal year (“YoY”)). Operating income morethan tripled to ¥4.0 bil (+227.2% YoY).
FY2020(Unit: ¥bil)

H1FY2021
July 28, 2021
Forecast for H1

H1 BusinessResults

Change(FY21-20)

Comparison
with Forecast

Net sales

97.1

121.0

124.2

＋27.8%＋2.7%

Gross profit

8.1

11.0

11.6

＋42.5%＋5.7％

Operating income

1.2

3.6

4.0

＋227.2%＋13.8%(% of net sales)(1.3%)(3.0%)(3.3%)(＋2.0pt)(＋0.3pt)

Ordinary income

1.6

3.7

4.0

＋142.3%＋9.7%(% of net sales)(1.7%)(3.1%)(3.3%)(＋1.6pt)(＋0.2pt)

1.4

2.7

2.9

＋95.9%＋7.7%(1.5%)(2.2%)(2.3%)(＋0.8pt)(＋0.1pt)

63.39

115.24124.17＋95.9%＋7.7%

106.92－109.80＋2.7%－

Net profit(% of net sales)
EPS (¥)
US dollar average rate (¥)

3Factors in Increase/Decrease of Net Sales and Ordinary Income

Financial Results
For H1 FY2021

 Net sales increased to ¥124.2 bil (+¥27.1 bil YoY) as sales in the automotive sector and new
businesses increased.
 Ordinary income increased to ¥4.0 bil YoY. Although increases in SG&A expenses and forex
costs were recognized, sales volume expanded, profitable product sales were made to theIndustrial Equipment segment and provisions for non-active inventories were reduced.
Figure 1. Net Sales (¥ bil)Figure 2. Ordinary Income (¥ bil)
Gross Profit +3.5

Forex
New
business+3.1

Inventory
Profitable costs
products +0.3+0.9
Distribution
Sales
volumeBusiness –0.2
development+2.3
costs
Forex
–0.4
–0.5

124.2 +27.1+6.0
Telecommunications
Industrialequipment
Automotive+2.0

4.0 +2.4

SG&A+4.0–0.6
1.6

97.1+12.0

自 動 車 向け 産 業 機 器向け
H1 FY202 0 年 度上期

情報通信

新 規 ビ ジネス

為替等

2 1 年 度上期
H1FY21

2 0 年 度上期 販 売 数 量増 高 付 加 価値
H1FY20在庫

新 ビ ジネス物流

度上期
H12 1 年FY21為替差益

4

Financial Results
For H1 FY2021

Segment InformationIn the Device Business, net sales increased to ¥109.6 bil (+27.5% YoY) amid a wide-ranging recovery indemand. Operating income increased to ¥3.4 bil (+172.1% YoY), mainly due to sales of profitable products.
In the Solution Business, net sales increased to ¥14.6 bil (+30.2% YoY) as business expanded in the automotive
sector and in the major project in the system equipment sector. These increases led to a rise in operating
income to ¥0.6 bil (+231.3% YoY) in addition to a reduction in SG&A expenses.
FY2020(Unit: ¥bil)
DeviceBusiness

Change (FY21-20)

85.9

109.6

＋27.5%

1.2

3.4＋172.1%(1.5%)(3.2%)(＋1.7pt)

11.2

14.6

＋30.2%

0.2

0.6＋231.3%(1.8%)(4.5%)(＋2.7pt)

Adjustment

–0.2

–0.0

Net sales

97.1

124.2

＋27.8%

1.2

4.0＋227.2%(1.3%)(3.3%)(＋2.0pt)

Net salesOperating income

Net sales
Operating income(% of net sales)

Total

H1 Result

H1(% of net sales)
Solution
Business

FY2021

Operating income(% of net sales)

Note: Reporting segments are changed as of FY2021.
Previous reporting segments
SemiMemory, system LSIs and discrete
conductor
semiconductors
ElectronicDisplays, power supplies andcomponent electro- mechanical components
ElectronicSystems equipment and facility
equipment
equipment

New reporting segments
Semiconductors (memory, system LSIs and discrete
Devicesemiconductors) and electronic components (displayBusinessdevices and electromechanical components)Solution
Systems equipment1 and solutions2Business1. This product category combines systems equipment
and facility equipment from the former Electronic
Equipment business with power supplies from theformer Electronic Component business.
2. Previously, the profit from solutions was included ineach reporting segment.

5Trend in Net Sales and Operating Margins by Quarter

Financial Results
For H1 FY2021

 Quarterly net sales have stayed above ¥60 bil since Q3 FY21.
 Operating margins have remained above 3% since Q1 FY21 as sales
increased and profit margins improved.
Net Sales (Unit: ¥Bil)Op. Margin

70Device

53
43

Solution

5.0%

Op. Margin

61616162

6763.5%754.0%

3.1%

52.7%

2.8%

54543.0%

35

1.8%
47

54

2.0%

5438

1.0%

0.6%

00.0%
Q1
1Q

Q2
2Q

Q3
3Q

FY2020

Q4
4Q

Q1
1Q

Q2
2Q

FY2021

6

Financial Results
For H1 FY2021

Segment Trend Information

 There are no major changes in regional trends to report. By application, the share of sales in theautomotive sector increased amid to the recovery from the COVID-19 pandemic. The share of sales in theindustrial-equipment sector also increased due to increased sales in that sector. In sales by product, theshare of the electrotechnical-component sector decreased amid the normalization of staying-at-homedemand.
By Region

By Product

4%

5%

Other

44%

44%

Asia

52%

H1 FY20

51%■ Device ■ Solution

3%

4%

System solutions

9%
3%

8%
3%

Systemequipment

26%

24%

Electrotechnicalcomponents

5%

6%

Memory17%

18%

Discretesemiconductors

37%

37%

System LSIs

H1 FY20H1 FY21

Display devices

Japan

H1 FY21

By Application
Other

5%

4%

13%

13%

Information &communication16%

17%

Industrial equipment

20%

19%

Consumer

46%

47%

H1 FY20H1 FY21

Automotive

7Financial Results
For H1 FY2021

Consolidated Balance Sheet/Consolidated Statement of Cash Flow In the consolidated balance sheet as of the end of September 2021, inventory increased by¥11.3 bil amid customers’ production adjustments, demands for BCP-purpose inventories andcountermeasures for EOL products. These factors led to an increase of total assets by ¥7.5 bil
to ¥155.5 bil, and decrease of operating cash flow of ¥5.1 bil.
Consolidated Balance Sheet(Unit: ¥bil)

As of Sep. 30,2020

As of Mar.
31,2021

As of Sep. 30,2021

Increase/
Decrease

Accounts payable

137.8
122.3
55.5
40.6
15.5
52.3
26.1

148.0
132.4
71.0
35.7
15.5
58.4
32.9

155.5
140.1
71.3
47.0
15.3
64.7
36.0

＋7.5
＋7.7
+0.3
+11.3
–0.2
＋6.3
+3.8

S/T loans payable

20.4

18.5

21.6

+3.1

85.5
62.1%

89.6
60.5%

90.7
58.3%

＋1.1
–2.2ptTotal assets
Current assets
Accounts receivable

Inventories
Non-current assets
Liabilities

Net assets
Net assets to total assets (%)

Consolidated Statements of Cash Flow
(Unit: ¥Bil)

H1 FY20

H2 FY20H1 FY21

Increase/Decrease

Cash flow from operating activities

–6.3

2.5

–5.1

–7.6

Cash flow from investing activities

0.3

0.6

–0.1

–0.7

Cash flow from financing activities

2.0

–3.6

1.1+4.7

Cash and cash equivalents at endof period

20.5

20.6

16.3

–4.3

8

FY2021 Forecast ofBusiness Results

Overview of Business Forecasts

 Net sales is expected to reach ¥234.0 in FY2021 (+6.4% YoY). In the business environmentin H2, demand remains vulnerable to factors such as the COVID-19 pandemic and a shortageof semiconductors.
 Operating income of ¥5.7 bil (+23.1% YoY) is expected, as demand for profitable products isforecast to peak and SG&A expense should increase due to a hike of distribution costs and thenormalization of travel expenses.
FY20(Unit: ¥bil)

H1

FY21 Forecasts

Full Year

H1

Full Year Plan

Change fromPrevious
Fiscal YearNet sales

97.1

219.8

124.2

234.0

＋6.4%

Gross profit

8.1

19.0

11.6

20.7

＋8.8%

Operating income

1.2

4.64.05.7＋23.1%(% of net sales)(1.3%)(2.1%)(3.3%)(2.4%)(＋0.3pt)

Ordinary income

1.6

5.1

4.0

5.8

＋13.2%(% of net sales)(1.7%)(2.3%)(3.3%)(2.5%)(＋0.2pt)

1.4

4.5

2.9

4.2

–8.4%

(1.5%)(2.1%)(2.3%)(1.8%)(–0.3pt)

63.39

195.78124.17

195.78–8.4%

106.92106.06109.80108.40＋2.2%

Net profit(% of net sales)
EPS (¥)
US dollar average rate (¥)

9Overview of Forecasts by Business Segment

FY2021 Forecast ofBusiness Results In the Device Business, net sales is forecasted to be ¥205 bil (+5.3% YoY), as sales expand in
the automotive and industrial-equipment segments and staying-at-home demand isnormalized. Operating income is expected to be ¥5.0 bil (+21.9% YoY), as the demand forprofitable products witnessed during H1 FY2021 is expected to peak in H2.
 In the Solution Business, net sales is forecasted to be ¥29 bil (+14.8% YoY), operating income
to reach ¥0.9 bil (+45.0% (YoY)) and operating profit ratio to be 3.3% (+0.7pt YoY). Major
projects in Information & Communication are starting in H2 with rather low profitability.
FY2020(Unit: ¥bil)
DeviceBusiness

H1

Full Year Plan

H1

Increase/Decrease

194.6

109.6

205.0

＋5.3%

1.2

4.1

3.4

5.0

＋21.9%(0.8%)(2.1%)(3.2%)(2.4%)(＋0.3pt)

11.2

25.2

14.6

29.0

＋14.8%

0.2

0.6

0.6

0.9

＋45.0%(1.8%)(2.6%)(4.5%)(3.3%)(＋0.7pt)

Adjustment

–0.2

–0.1

–0.0

–0.2

Net sales

97.1

21.9

124.2

234.0

＋6.4%

1.2

4.6

4.0

5.7＋23.1%(1.3%)(2.1%)(3.3%)(2.4%)(＋0.3pt)

Operating income
Net sales
Operating income(% of net sales)

Total

Full Year

85.9

Net sales(% of net sales)
Solution
Business

FY2021 Forecast

Operating income(% of net sales)

10Financial Results for H1 FY2021
Business Plan & Actions

11

Business Plan& Actions

Review of H1 FY2021

 The 11th Medium-Term Business Plan began in FY2021. The plan features six key initiatives, inline with Ryosan’s Long-Term Vision.
 This Medium-Term Business Plan shifted Ryosan’s management stance from a rigid defensivemode to an active mode focused on transforming its business.
Ryosan Long-term Vision: RS Innovation 2030

Summary of 11th Medium-Term Business PlanDetailPlans

Three innovations for growthBusinessinnovation
Networkinnovation

Channelinnovation

Implementation of Business
Infrastructure to Achieve the Target
Work processes
Technical capability(Knowledge)

Governance

Personnel (Resources)

Finance

Portfolio
diversification• Review of business opportunities
for acquired commercial rights• Enabling of efficient sales activities
through direct sales promotion

Strengthening of•
local business inChina and HK
Harvesting of prior •investment products•
and making newinvestments

Deepening cooperation with local
partners

Harvesting of businesses frompreceding investments
Discovery of new product lines
and launch of the businesses

Investments to• New businesses using customertransform Ryosan’s
needs as their starting points
line of business
Raising efficiency of• Digitalization of operations
existing businesses• Bolstering internal management
Reinforcing theinfrastructure such as educationalfoundations
systems and risk management
12

Business Plan& Actions

Macroeconomic Environment Global semiconductor sales has been increasing continuously. Global shipments ofelectronic components remain high.
 Production of automotive and brown goods has decreased compared to the same termof the previous fiscal year.
Global Semiconductor Sales (Monthly, Unit:＄bil, Ref: WSTS)

Auto Production in Japan (Monthly, Unit: thousands of units,Ref: JAMA)

50

1,000
100

40

800
80

3060
600

2040
400

1020200
00A
4M
5J
6J7 A8 S9 O
10 N
11 D12 J1 F2 M3A
4M
5FY20206J

J7 A84AS95M

6J

10 N
11 D12 J1 F2 M3
J7 A8 S9 O

4 M
5A

J78 S9A

FY20212021年度

2020年度FY2020

FY2021J6Domestic Shipments of Brown Goods (TVs/Audio)(Monthly, Unit: ¥bil, Ref: JEITA)

Global Shipments of Electronic Components(Monthly, Unit: ¥bil, Ref: JEITA)
400160300

120200801004004A

5M

J6J7 A8S910 N
11 D12 J 1 F 2 M 3O

FY20204A

5M

J6J7 A8FY2021

04A

5M

J6J7 A8 S 9O10 N11 D12 J 1 F 2 M 3

FY20204A

5M

J6

J7 A 8 S 9FY202113

Business Plan& Actions

Business Environment and Analysis
Current Business
Environment

Shortages ofsemiconductors &electric components

Slowdown and delayed
recovery of businessactivities from theCOVID-19 pandemic

Amendment of terms ofbusiness with suppliers

Business Impact
 Order-placement activity is continuing at a high level.
 Counter measures are needed to cases where market
reverses due To demand-supply gap normalization.
 It brings about incentives to rationalize operations
through utilizing direct channel using DX technologies.
 Distribution and other SG&A expenses are increasing.
 Inventory is increasing as cargo piles up due tolockdowns throughout the supply chain.
 Shifts in commercial rights are creating fresh
opportunities.
 Investments are being made to deal with changes insettlement procedures.

14Status Update for Key Business Initiatives
Initiatives

Portfolio
diversification

Strengthening of
local business in
China and HK
Harvesting of priorinvestment products
and making new
Investments
Investments totransform Ryosan’sline of business

Raising efficiency ofexisting businesses
Reinforcing thefoundations

基盤整備

Business Plan& Actions

Results

H2 Actions• Start of building infrastructure
for direct marketing to small &medium-sized customers• Investment to expand new businesswith new customers transferredfrom other distributors• Continued development ofmarketing infrastructure• Expansion of solution business into
the China market• Realization of synergies with local
affiliates• Acceleration of introduction of new
product lines• Realization of business for premarketing of product lines• Co-marketing with local
partners• Pursuit of business synergies
with local affiliates• Reorganization of HQ (merging
semiconductor business andelectric components business)• Set up functions to expand
product lines• Expansion of functions for new
business development• Establishment of task forces for
operation digitization• Review of the human-resource
management framework• Remodeling of the in-house
database• Expansion of sales in promising
fields• Advancement of efforts toaccumulate and analyze data on
customer needs• Advancement of systemdevelopment• Release of new human-resources
framework• Overall design and development for
database integration

15

Business Plan& Actions

Forecast of Return to Shareholders

 In view of the results for H1 FY2021, the interim dividend has beenrevised from ¥30 per share to ¥50 per share (increasing by ¥20).

Dividend per Share
Ordinary Dividend

Special Dividend

Dividend (¥)
100157%

51%

70

Dividend payout ratio

41%
50
4050

2050
30

30303030

Year-end

InterimYear-end

InterimYear-end

0Interim
FY2019FY2020

FY202116