FY2008 Results Meeting
FY2008 : Year ended March 31, 2009

May 14, 2009

Ryosan Company, Limited

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

NoticeThis presentation contains forward-looking statements regarding businessperformance, which may differ substantially from actual results, depending on
certain risks and uncertainties, the most significant of which are listed below.

zEconomic conditions in key markets (Japan and the rest of Asia),
rapid changes in consumption patterns and supply-demand balance for productsz

Sharp fluctuations in the ¥/$ exchange ratez

Substantial fluctuation in prices in capital markets

Consolidated results for FY 2008
FY2007

FY2008

Of Total¥ 100 million％

FY2009(Forecasts)

Of Total % Chg. YoY¥ 100 million

Net sales

2,860

2,208

Gross margin

251

8.8

196

SG&A expenses

144

5.0

Operating income

107

Ordinary income％％

Of Total % Chg. YoY¥ 100 million％％(22.8)

1,700

8.9(22.1)

149

8.8(24.1)

134

6.1

(6.8)

115

6.8

(14.7)

3.8

61

2.8

(42.8)

34

2.0(44.7)

112

3.9

72

3.3

(35.6)

38

2.2(47.7)Net income

67

2.4

39

1.8

(41.8)

22

1.3(43.9)

Earnings per share¥187.15(¥75)¥63.83¥111.83(23.0)(¥48)
1

Segment results for FY2008
Unit : ¥ 100 million

FY2007

FY2008OP
MarginSemiconductors
Electronic
Components
Electronic
Equipment
Ryosan Products(Heat sinks)

Sales
Operating income

Sales
Operating income

Sales
Operating income

Sales
Operating income

Unallocable Operating expenses

Consolidated

Sales
Operating income

OP
Margin

FY2009(Forecasts)
OP
Margin% Chg. YoY% Chg. YoY％(21.5)
1,489
1,169
72 4.9%48 4.2% (32.7)(26.4)
1,031
759
44 4.328 3.7 (35.9)(16.9)
256
213
10 3.94 2.1 (56.1)(19.9)
83
67
7 8.8
5 7.7 (30.3)(30.9)
808
28 3.5% (42.7)(23.1)
584
22 3.8 (22.1)
+20.5
257
6 2.3 +35.4(24.1)
51
5 9.8 (2.7)

▲ 26

▲ 27

％

-

▲ 25

-

％

-

-

(22.8) 1,700(23.0)
2,860
2,208
107 3.8%
61 2.8% (42.8)
34 2.0% (44.7)％

2

Consolidated results Trend
Net sales(¥100 million)

3,500

3,262

3,170

Gross Profit margin

Net sales(¥100 million)

SG&A expenses margin
Operating income margin

3,106

3,000

2,860

2,500

2,208
2,000

8.7

8.2

8.0

1,500

5.5

4.9

4.9

8.8

8.9

1,700
8.8
6.8

6.1

Ratio ofsales (%)

10.0
9.0
8.0
7.0

5.0

6.0
5.0

1,000

4.0
500

3.2

3.3

3.1

3.8

3.0

2.8

2.0

2.0
0

FY2004

FY2005

FY20066th MidMid-term Management Plan

FY2007

FY2008FY2009（Forecasts）

7th MidMid-term Management Plan

3

Trends in cash Dividends per Share and Earnings per Share (EPS)Dividends per Share (¥)
Dividend ratio

EPS (¥)EPS (¥)

200

94.0%
150

187
178

174

158
100

37.8%

45.8%

39.2%

42.7%

111
80

50

71.5%

［Target Dividend ratio］･7thMid-term management
Plan : 40% or more･6th Mid-term management
Plan : 30% or more

80

80

70

63
60

［Target EPS］
･7th Mid-term management
Plan : ¥200 or more（FY2009）･6th Mid-term management
Plan : ¥150 or more （FY2006）

60
0
FY2004

FY2005

FY20066th MidMid-term Management Plan

FY2007

FY2008FY2009 (Forecasts)

7th MidMid-term Management Plan

4

[Reference]

Trends in Net Income, Dividends, and Acquisition of Treasury Stock(¥100
million)70

Net Income

Acquisition of Treasury Stock

Dividends

Concept of an overall distribution ratio

85％
57

128％
50

28

22

47

50

59％

40
30

88％
25

20

13

28

57

21

33
58 11

33

65

67

63

94％
39

37 10

29

25

21

11

11

14

@¥30

@¥30

@¥40

@¥60

@¥70

@¥80

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

10
0

46％

57％

84％

60

39％

5th MidMid-term Management Plan

27

28

22
20

6th MidMid-term Management Plan@¥80
FY2007@¥60@¥80

FY2008 FY2009 (Forecasts)

7th MidMid-term Management Plan

《 Trends in Acquisition of Treasury Stock 》
Amount(￥100 million)
Number of stocks（1,000 shares）

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

13.2

10.1

33.1

11.3

-

924

895

2,001

483

-

FY2009(Forecasts)

FY2007

FY2008

T otal

-

28.8

22.5

-

119.0

-

1,000

1,000

-

6,303

5

Semiconductors Sales Breakdown (By Product)
Unit : ¥ 100 million

FY2007
Of Total

FY2009(Forecasts)

FY2008
Of Total% Chg. YoY

117 7.9%
96 8.2% (17.9)%
Memories (Others)
9 0.6%
6 0.5% (33.3)%
126 8.5% 102 8.7% (19.0)%(Microcomputer)338 22.7% 273 23.4% (19.2)%
System LSIs (ASIC / ASSP)
609 40.9% 458 39.2% (24.8)%
947 63.6% 731 62.5% (22.8)%(LCD drivers ICs)
92 6.2%69 5.9% (25.0)%(Compound Semiconductor
123 8.3% 108 9.2% (12.2)%
Devices)
Discrete（Others）
201 13.5% 159 13.6% (20.9)%
416 27.9% 336 28.7% (19.2)%
Total
1,489
1,169
(21.5)%(DRAM)Of Total% Chg. YoY

52 6.4% (45.8)%
16 2.0% +166.7%
68 8.4% (33.3)%
194 24.0% (28.9)%
316 39.1% (31.0)%
510 63.1% (30.2)%
30 3.7% (56.5)%
73 9.0% (32.4)%
127 15.7% (20.1)%
230 28.5% (31.5)%808(30.9)%
6

Semiconductors Sales Breakdown (By Product)《 FY2008 Results 》
Semiconductors sales
Breakdown(¥ 100 million)
Memories 126［System LSIs］ Sales of system LSIs for flat-screen televisions increased. Sales ofsystems LSIs for digital audiovisual products as well as microcomputersfor car audio equipment decreased.

(24)
102

(34)

System947 (216)
LSIs

68
731

FY07

［Discrete］ Despite an increase in sales of LCD drivers for PNDs, sales of LCD drivers
for DSCs as well as discrete semiconductors for automotive and electronic
applications decreased.

(221)
510

Discrete 416［Memories］ Sales of DRAMs for memory modules increased, while sales of DRAMs
for car navigation application decreased.

(80) 336 (106)FY08《 FY2009 Forecasts 》［Memories］ Sales of DRAMs for memory modules and DSCs are forecast to decrease.

230

FY09
(Forecasts)［System LSIs］ While sales of ASSPs for cell phones are anticipated to increase, sales of
microcomputers for car audio equipment as well as system LSIs for
digital audiovisual products are expected to decrease.
［Discrete］ Sales of LCD drivers for PNDs as well as compound semiconductor devices
for digital audiovisual products are forecast to decrease.

7

Semiconductors Sales Breakdown (By suppliers)
Unit : ¥ 100 million

FY2007

FY2008FY2009(Forecasts)% Chg. YoY

NEC Electronics
Elpida Memory
NXP Semiconductors
Others

Total

1,183
89
95
123
1,489

875
73
77
144
1,169

(26.0)%(18.0)%(18.9)%+17.1%(21.5)%% Chg. YoY

623
34
57
94
808

(28.8)%(53.4)%(26.0)%(34.7)%(30.9)%《 FY2008 Results 》［ NEC Electronics］ Sales of system LSIs for digital audiovisual products as well as microcomputers for car audio equipment decreased.
［Elpida Memory］ Sales of DRAMS for memory modules increased, while sales of DRAMS for car navigation application decreased.
［NXP Semiconductors］ Sales of electromagnetic tape RFIDs and related products decreased.
［Others］ Sales of system LSIs for flat-screen televisions and LCD drivers for PNDs increased.
《 FY2009 Forecasts 》［ NEC Electronics ］ Sales of microcomputers for car audio equipment as well as system LSIs for digital audiovisual products are
forecast to decrease.
［ Elpida Memory ］ DRAM sales for memory modules and for DSCs are projected to decrease.
［ NXP Semiconductors ］ Sales of system LSIs for LTOs (backup tapes) and communication modules are anticipated to decrease.
［ Others ］ While sales of ASSPs for cell phones are anticipated to increase, sales of LCD drivers for PNDs are expected to decrease.

8Electronic Components Sales Breakdown (By product)
Unit : ¥ 100 million

FY2007

FY2008FY2009（Forecasts）% Chg. YoY

Display Devices
Power Supplies
Mechanical Components
Total
Electronic Components
Sales Breakdown(¥ 100 million)

193
107
459
759

(46.7)%(18.9)%(14.5)%(26.4)%

153
64
367
584

(20.7)%(40.2)%(20.0)%(23.1)%《 FY2008 Results 》［ Display Devices ］ Sales of LCDs for PNDs and DSCs as well as related products decreased.
［ Power Supplies ］ Sales of rechargeable batteries for DSCs as well as related products
decreased.

Display 362
Devices
(169)

193
Power
(40)
132
(25)
Supplies
107 (43) 153
64
Mechanical 537
Components

362
132
537
1,031

% Chg. YoY(78) 459 (92)367

［Mechanical Components］ While sales of mechanical components for game consoles increased,mechanical component sales for automotive application and cell
phones decreased.
《 FY2009 Forecasts 》［ Display Devices ］ Sales of LCDs for DSCs as well as related products are forecast to decrease.
［ Power Supplies ］ Sales of rechargeable batteries for game consoles are anticipated to decrease.
［ Mechanical Components ］ Sales of components for game consoles are projected to decrease.

FY07

FY08

FY09
(Forecasts)
9Electronic Equipment Sales Breakdown (By product)
Unit : ¥ 100 million

FY2007

FY2008FY2009（Forecasts）% Chg. YoY

174
82
256

System Equipment
Facilities Equipment
Total
Electronic Equipment
Sales Breakdown

152
61
213

(12.6)%(25.6)%(16.9)%% Chg. YoY

187
70
257

+23.0%+14.8%+20.5%《 FY2008 Results 》［ System Equipment ］ Sales of systems equipment for arcade games as well as
related products decreased.

(¥ 100 million)［ Facilities Equipment ］ Despite an increase in laser repair equipment sales, salesof magnetic head manufacturing equipment decreased.
System174
Equipment(22)

Facilities
Equipment

82 (21)
FY07

152

＋35

187

70
61 ＋9
FY08

《 FY2009 Forecasts 》［ System Equipment ］ Sales of OA systems equipment are forecast to increase.
［ Facilities Equipment ］ While sales of laser repair equipment are anticipated todecrease, solar photovoltaic power generation andmagnetic head manufacturing equipment are expected toincrease.

FY09(Forecasts)
10

Ryosan Products Sales Breakdown (By area)
Unit : ¥ 100 million

FY2007

FY2008FY2009（Forecasts）% Chg. YoY

58
25
83

Domestic
Overseas
Total
Ryosan Products Sales
Breakdown(¥ 100 million)

Domestic 58(9)

49 (9)
40

Overseas

25 (7)

FY07

18 (7) 11
FY08

FY09
(Forecasts)

49
18
67

(15.5)%(28.0)%(19.9)%% Chg. YoY

40
11
51

(18.4)%(38.9)%(24.1)%《 FY2008 Results 》［ Domestic ］ Sales of heat sinks for FA equipment and automotive
application as well as related products decreased.
［Overseas ］ Sales of heat sinks for audio application and flat-screen
televisions decreased.
《 FY2009 Forecasts 》［ Domestic ］ Sales of heat sinks for FA equipment as well as related
products are forecast to decrease.
［Overseas ］ Sales of heat sinks for flat-screen televisions as well as
related products are anticipated to decrease.
11

Overseas Sales Breakdown
FY2007

FY2008

Of Total¥ 100 million％

FY2009（Forecasts）

Of Total % Chg. YoY¥ 100 million％％

Of Total % Chg. YoY¥ 100 million％％

Consolidated net sales

2,860

−

2,208

−

(22.8)

1,700−(23.0)

Domestic

1,734

60.6

1,368

62.0

(21.1)

1,180

69.4

(13.8)

Overseas

1,126

39.4

840

38.0

(25.4)

520

30.6(38.1)

662

23.1

466

21.1

(29.6)

315

18.5(32.4)（ Chinese Bloc ）12Key Clients《Top 5 (by business)》《Top 40》
Top 1-10

ALPS Electric
CASIO
DENSO

Clients

Fuji Film(alphabeticalorder)HITACHIJVC KENWOOD

ALPINE
Brother Industries
Calsonic Kansei
CHI MEI （T）
Furuno Electric
Mamiya-OP
NEC

NINTENDO

SHARP

Panasonic

Sumitomo ElectricIndustries(Top 10)48%

Top 21-30

Top 31-40

JRC

ADVANTESTNIKON

Fujitsu

OMRON

HOSIDEN

Panasonic Electric
Works

Hyundai (K)

SANYO

Izumi
KONICA MINOLTA

Semiconductor

Electronic
Equipment

Fuji Film
HITACHIJVC KENWOOD
Mitsubishi Electric
PIONEERCASIOCHI MEI （T）
DENSO
Fuji Film
HITACHI( Top 5 )45%

( Top 5 )54%

Electronic
Components

Ryosan ProductCalsonic Kansei
CASIO
Mitsubishi Electric
NINTENDO
Panasonic

DENSO
FUNAC
HITACHI
Mitsubishi Electric
TOSHIBA( Top 5 )36%

( Top 5 )32%

Taiyo Yuden

Mitsubishi Electric

PIONEER

Percentage
Sales of allclients

Top 11-20

SEGA
TAKATATOSHIBA(Top 20)62%

SMK
YAMAHAYASKAWA Electric

YAZAKI meter(Top 30)

68%

Stanley Electric
TDK(Top 40)71%* Rank and percentage share are based on results for FY2008.
* T: Customer in Taiwan, K: Customer in Korea* Customers identified in blue have improved their ranking year on year based on increased sales(alphabetical order)13

Main suppliers

COSEL
1.7%
NEC LCD
Technologies
2.2%

Other suppliers
18.9%

Elpida Memory
3.3%

NEC Electronics
39.6%

NXP Semiconductors
3.5%

Percentage share( By business )Japan Aviation
Electronics Industry

3.9%

NEC
6.4%

Alps
Electric
10.4%

NEC TOKIN
4.5%

Electronic
Equipment（10％）

Electronic
Components

CASIO
COMPUTER
5.6%

（34％）

Ryosanproducts（3％）

Semiconductors（53％）* Percentage share is based on sales of supplier’s products for FY2008.
14

R&D, Capex and Depreciation
Unit:¥ 100 million

12.0
10.0

8.0
6.0
4.0
2.0
0.0

FY2007

FY2008FY2009（Forecasts）% Chg. YoY

■

R&D

■

Capex

■

Depreciation¥ 100 million

5.4
5.1
8.4

¥ 100 million

5.8
3.4
10.0

+8.0%
(34.2)%+19.0%% Chg. YoY¥ 100 million

4.4
8.7
11.6

(24.3)%+157.4%+15.7%
15

Management Issues to be Addressed

Reduction of business costs

Renewal into a new business modelBusiness reconstruction

16

Reduction of Business costs
1. Further reduction of personnel expenses and operating overheads(1)Reduce compensation paid to directors and employees《FY2008》
Directors

Bonuses cut by 60%

Employees

Bonuses cut by 5 – 10% (per annum basis)《FY2009》
Directors

Compensation cut by 20%; Bonuses cut by 100%

Employees

Cut in salaries and bonuses under consideration17

Reduction of Business costs(2)Rationalize human resource structure and systems《Forecast number of employees on a consolidated basis(as of March 31, 2010)》
1,249 (Down 173, or 12% compared with March 31, 2008)
Note: Number of full-time employees: 1,084 (Down 69, or 6% compared with
March 31, 2008)(3)Reduce operating overheads
Thoroughly eliminate all non-essential items to forge a “lean andtaut management”→ Down ¥1,240 million, or 18% in FY2009 compared with FY2007

18

Reduction of Business costs[Reference]

TrendsTrendsininpersonnel
personnelexpenses
expensesand
andoperating
operatingoverheads
overheads(¥ 100 million)

160.0
144.5

140.0

134.8

▲ ¥2,900 million
115.5

120.0
68.7
100.0

62.0
56.3

80.0

operating overheads

60.0
personnel expenses

40.0

75.8

72.8

FY200708/3期

FY2008
09/3期

59.2

20.0
0.0
FY200910/3期(Forecasts)
19

Reduction of Business costs
2. Minimize losses(1)Proactive measures to prevent the incidence of uncollectible
receivables- Improve the quality of credit inquiry and analysis; unify
domestic and overseas standards(2)Bolster inventory management- Streamline inventory assets- Reduce inventories; eliminate losses on disposal of obsolete
inventories by reinforcing management on an individual
industry type and category basis
3. Eliminate and consolidate domestic offices (April)(35 offices → 27 offices)20

Renewal into a new business model
Paradigm
Paradigmshift
shiftfromfromaaverticalverticalintegration,common
integration,commondestiny
destinybusinessbusiness
model
modeltotoaaself-driven,specialized
self-driven,specializedtrading
tradingbusinessbusinessgroup.
group.
1. Establish two subsidiaries as specialized trading companies
handling a portfolio of robust products- Spin off Saxis Company, Limited and Gyronics Company,
Limited as subsidiary companies and commence business(June)
2. Separate the Engineering Headquarters from the Semiconductor
Business Headquarters (June)

21Renewal into a new business model
ChangeChangeininthe
thestructure
structureofofthe
thesemiconductor
semiconductorbusinessbusiness
The Ryosan Group
Ryosan Company, Limited
1st Semiconductor Business Headquarters
Semiconductor Engineering Headquarters
2nd Semiconductor Business Headquarters
CentrAct Corporation

The Ryosan Group
Ryosan Company, Limited
Semiconductor Business Headquarters[ NECEL ･ Elpida ]Engineering Headquarters
CentrAct Corporation[ ST Micro (formerly Genesis) ]Saxis Company, Limited[ NXP ･ THine ･ Intersil ･ Macronix ]Gyronics Company, Limited[Cypress ･ MICREL ･ Solomon ･ DOESTEK ･ Winbond ]22

Business reconstruction
1. Back to marketing basics: Each and every employee returning to a focus on
meeting sales targets(1) Expand sales of Ryosan products (heat sinks)(2) Increase sale of general-purpose products-

NEC Electronics: General-purpose ASICs, microcomputers, PMDs, compound semiconductor
devices-NXP Semiconductors: logic ICs, Discrete semiconductors-

Winbond: DRAMs-

Macronix: Flash memories(3) Build a structure that focuses on the sale of customized products; review humanresources (June)

2. Create new business opportunities through enhanced collaboration that breaks
through traditional business segment boundaries
3. Cultivate new customers; actively promote measures to acquire trading rights
4. Foster new products resources23Overseas
semiconductor
product businessexpansion
Progress
under growthstrategies①
成長戦略

Overseas semiconductor product business expansion
directionmeasures

Build a solid business base in the semiconductor business as a second resource- Strengthening sales strategies of existing supplier products- Reinforcing product lineup in response to customer needs- Building a business structure that takes into consideration
the characteristics of overseas suppliers

Strengthen Sales Strategies(Existing Suppliers)

Bolster strategies

Reinforce Product Strategies□ Expand product lineup

NXP（Philips）□ Continuous promotion of four
projects（TV/Automotive/MMS/IDE（RFID））- Cultivate major semiconductor suppliers- Cultivate suppliers capable of meeting the the needs of
all customers

Other Overseas
Semiconductors

Bolster Business Structure□ Expand sales of Taiwan memories（Winbond/Macronix/Kingston）□ Expand sales of ASSPs withcompetitive advantage（Solomon(LCD drivers）/
Genesis(exclusive TV use）/
Dibcom(DVB-H/T）/（Winbond（ISP））□ Build a business structure that takes into
consideration the characteristics of overseas suppliers- Establish a structure that complements the supplierbottleneck- Create specialist sales and marketing teams by individual
supplier24

Progress under growth strategies ①[measures] Reinforcing product lineup in response to customer needs
・MICREL (Network ICs)
・Intersil(Analog ICs)・Cypress (SOC/CMOS sensors)
・Wolfson (ICs for audio application)
・ST Micro (ICs for televisions) Note: ST Micro merged with the former Genesis
・THine(Signal processors) Note: THine acquired the business from Winbond[measures] Building a business structure that takes into consideration
the characteristics of overseas suppliers・Establish subsidiaries through corporate spinoff by individual productCentrAct (ST Micro [formerly Genesis] ）Saxis(NXP ･ THine ･ Intersil ･ Macronix) : Focusing on general-purpose devices
Gyronics Cypress ･ MICREL ･ Solomon ･: Focusing on ASSPs
DOESTEK ･ Winbond
25

China bloc conception including Hong Kong, China, Taiwan and
Progressunder
growth strategies ②
Korea
business
expansion
China bloc conception including Hong Kong, China, Taiwan and Korea business expansion
direction

Capture local companies in the expanding China market

measures- Expand local business by strengthening collaboration with NEC Electronics China- Develop business through cooperation with Chinese companies
Partners(Suppliers)

China bloc
(Customers)

China Market(Structure and Final Products)

Digital TV
Electricity Meters

Existing
Business
Domains

Device Manufacturers

STB
Car Audio
Air conditioners(including inverters)

Chinesecompanies

TargetDomains

White goods(Refrigerators, washing machines,
rice cookers, microwave ovens)

Board
Assembly,etc.

Hong Kong
companies
Chinese companies

Taiwanesecompanies
Automobiles and electronicequipment

Expand sales

Hong Kong companies

Expand sales

Koreancompanies

Taiwanese companies

Korean companies

The Ryosan GroupNew Domains

Collaboration

NECElectronics
China

Chineselocal companies
Cooperation

Devicesoftwareassembly, etc.

26

Progress under growth strategies ②[measures] Expand local business by strengthening collaboration
with NEC Electronics China-Expand sales of Blu-ray players, DVDs, digital televisions and inverter air conditioners-Establish a joint research and development facility with Changhong Electric and
NEC Electronics (China) to gain advances in the STB field-Establish a joint research and development facility with FAW Qiming Information Technology,
a subsidiary of the FAW Group, and NEC Electronics (China) to capture increased market sharein the automotive and electronics fields[measures] Develop business through cooperation with Chinese companies-Develop low-end STB with a local design house to enhance position in the STB domain-Develop software at local design houses to expand sales of microcomputers for fan controlof air conditioners-Develop inverter boards at local compressor manufacturers and design houses to expand
presence in the refrigerator inverter field
27

Policy relating to the appropriation of profits to shareholders[Fundamental policy]
Ryosan’s fundamental policy is to ensure a stable and sustainable increasein the appropriation of profits to shareholders.

[Appropriation objectives]-Consolidated dividend payout ratio

40% or more

-Purchase of treasury stock

One million shares each year
between FY2007 and FY2009[FY2009 shareholder appropriation ]◆Cash dividends
Annual: ¥60 per share (dividend payout ratio: 94%)
◆Purchase of treasury stock
An aggregate two million shares purchased between FY2007 and FY2008
Plans to purchase one million shares in FY2009 suspended28